Embleton and Repatriation Commission

DECISION AND REASONS FOR DECISION [2002] AATA 161

ADMINISTRATIVE APPEALS TRIBUNAL )

) No Q2000/929

VETERANS' APPEALS DIVISION       )
           Re      JAMES ARTHUR and JANICE LORRAINE EMBLETON
  Applicants
           And    REPATRIATION COMMISSION
  Respondent

DECISION

Tribunal Deputy President DP Breen, Presidential Member

Date13 March 2002
PlaceBrisbane

Decision The Tribunal decides that it does not have jurisdiction to entertain this application for review.

Deputy President DP Breen
PRESIDENTIAL MEMBER

Decision No: 161/2002
CATCHWORDS
VETERANS' AFFAIRS - reduction of pension - early withdrawal of superannuation - effect of bad advice.

PROCEDURE - jurisdiction - self-executing provision - no reviewable decision made.

Veterans' Entitlements Act 1986 ss 5, 46Q, 46R, 57(2)(c), 175(2)
Re Hovell v Repatriation Commission (1994) 35 ALD 167
Re Hildebrand v Repatriation Commission (1996) 42 ALD 133
Re Neil v Repatriation Commission (1998) 50 ALD 320

REASONS FOR DECISION

13 March 2002 Deputy President DP Breen, Presidential Member

This was an appeal against the Repatriation Commission which informed Mr and Mrs Embleton that their pensions would be reduced as a result of an increase in their income on 20 September 2000. The main issue in this matter was whether there was a reviewable decision over which the Tribunal had jurisdiction.
The matter was heard by me in Brisbane on 11 May 2001. Mr Embleton represented himself and his wife. Mr J Stoner, Departmental Advocate, represented the respondent Commission.
The applicants withdrew two sums of money from their superannuation fund in June 2000, firstly, $10,000 as a gift to their son and, secondly, $40,000 for home renovations. Before they made the second withdrawal, they sought advice from the Department of Veterans' Affairs and were told that their pensions would not be affected by the withdrawal. The respondent concedes that incorrect information was given to the applicants. After having made the withdrawal, the Commission informed the applicants that they would be deemed to have an extra $400.57 income per fortnight and their pensions would be reduced accordingly.
Subsection 57(2)(c) of the Veterans' Entitlements Act 1986 does provide the Commission, and so the Tribunal through subsection 175(2), with power to review decisions to reduce rates of pension. This is distinct from any question of paying arrears or cancelling an overpayment. There is clear authority in the cases of Re Hovell v Repatriation Commission (1994) 35 ALD 167 and Re Hildebrand v Repatriation Commission (1996) 42 ALD 133, that the Tribunal does not have jurisdiction to review a decision to raise an overpayment and, by inference, not to pay arrears. The Tribunal's power is limited to jurisdiction to review the original decision to reduce the pension payment.
The question for the Tribunal in this case is whether there was a "decision" to reduce the applicants' pension.
Sections 46Q and 46R of the Veterans' Entitlements Act provide for the treatment of early withdrawals from a superannuation fund with respect to pensions from the Department of Veterans' Affairs. They are as follows:
"46Q    Treatment of superannuation fund investments before pension age
If:
(a)       a person has an investment in:
(i)        a superannuation fund; or
(ii)       an approved deposit fund; or
(iii)      a deferred annuity; and
(b)       the person has not reached pension age; and
(c)the person has not commenced to receive a pension or annuity from the investment;
the investment is treated as follows:
(d)the return on the investment is not treated as ordinary income (see paragraph 5H(8)(i));
Note:The investment is also disregarded for the purposes of the assets test (see paragraph 52(1)(f)).
(e)if the investment is realised, the return is spread across the following 12 months (see section 46R).
46REarly withdrawal from superannuation fund
If:
(a)a person realises an investment in a superannuation fund, approved deposit fund or deferred annuity before the person reaches pension age; and
(b)the amount is not rolled over into:
(i)a superannuation fund; or
(ii)an approved deposit fund; or
(iii)       deferred annuity; or
(iv)an income stream;
the person is taken to receive one fifty-second of the assessable growth component of that amount as ordinary income of the person during each week in the period of 12 months commencing on the day on which the person realises the investment.
Note:   For assessable growth component see subsection 5J(1)."
Section 5 of the Veterans' Entitlements Act provides that "pension age" in this case is 60 years of age.
The provisions of Sections 46Q and 46R are self-executing by nature. The case of Re Neil v Repatriation Commission (1998) 50 ALD 320 considered Section 30D of the same Act, which is a similar provision. Matthews J decided that, because it provided that a person's pension "is to be reduced" in certain circumstances, Section 30D was a self-executing provision which required no decision of the Commission in order to implement it, provided the statutory pre-conditions were present.
Sections 46Q and 46R are of the same nature. Once a person under pension age makes a withdrawal from a superannuation fund and does not roll it over into another fund, they are deemed to have income of one fifty-second of the total amount per week. There is no actual decision of the Commission to deem the income as such; it is simply the operation of the law. Therefore, this is not a matter over which the Tribunal has jurisdiction.
The mere fact that the Commission had referred to the reduction of the pension as a decision and had allowed the matter to proceed through the usual review channels, cannot make what is not a reviewable decision into a reviewable decision.
Even if the Tribunal had found jurisdiction, the applicants accept that the law has been applied correctly to their case. The applicants main complaint is that they were given incorrect advice. This is not a situation the Tribunal can remedy under the Veterans' Entitlements Act. The avenues of appeal to an applicant in this position include an application for compensation as a result of defective administration, judicial review in the Federal Court or an application to the Ombudsman. The Tribunal notes that the applicant already has a claim for compensation awaiting determination. The Tribunal accepts that it does not have jurisdiction over the exercise of the delegated ministerial discretion to award compensation. As such, jurisdiction is not conferred on the Tribunal by an enactment.
For the above reasons, the Tribunal determines that it does not have jurisdiction to entertain this application for review.
I certify that the 12 preceding paragraphs are a true copy of the reasons for the decision herein of Deputy President DP Breen, Presidential Member
Signed:
  Associate
Date/s of Hearing  11.5.01
Date of Decision  13.3.2002
Rep. for the Applicant              Mr JA Embleton appeared for himself and his wife
Counsel for the Respondent    Mr J Stoner, Departmental Advocate

Embleton sought a review of a decision by the Repatriation Commission to reduce his pension on the basis that he had withdrawn superannuation early. The dispute was heard in the Federal Court of Australia. The central issue was whether the Repatriation Commission had the jurisdiction to reduce the pension based on the early withdrawal of superannuation, and whether the decision to do so was reviewable. Additionally, the court needed to determine the applicability of the Veterans' Entitlements Act 1986 provisions in this context.

The court examined whether the provision of the Act that allowed for the reduction of the pension in such circumstances was self-executing or required an administrative decision. It was necessary to ascertain whether the reduction of the pension constituted a reviewable decision that could be challenged. The court also considered relevant precedents such as Re Hovell, Re Hildebrand, and Re Neil to understand the scope of the Commission's powers in making such reductions.

The Federal Court held that the provision in question was self-executing and did not constitute an administrative decision that was subject to review. Therefore, the court did not have jurisdiction to review the decision to reduce the pension. The court relied on the interpretation that the statutory provision automatically applied when certain conditions were met, without the need for an additional administrative decision-making process. Consequently, the reduction of the pension was not a reviewable decision.

The court dismissed the application for review, affirming that the reduction of the pension was valid under the self-executing provision of the Act. There were no further orders made as the application was dismissed on jurisdictional grounds.

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