Special rate of pension
The special rate of pension was first introduced in the Australian Soldiers' Repatriation Act 1920 upon the introduction of that Act in 1920. The test to be applied in that Act was:
The Special Rate of Pension may be granted to members of the Forces who have been blinded as the result of War Service, and to members who are totally and permanently incapacitated (i.e. incapacitated for life to such an extent as to be precluded from earning other than a negligible percentage of a living wage).
This test did not change until 1985 when certain Federal Court decisions interpreting these words appeared to be undermining the original intention of those provisions such that veterans who had had a full working life were able to fulfil these requirements, and the special rate of pension began to be seen by some as a type of superannuation scheme for veterans. Clearly, when this rate of pension was introduced in 1920, this was not envisioned. In the Second Reading Speech to the Australian Soldiers' Repatriation Bill 1920, the Minister, Senator Millen said:
"I pass from that to refer to what is done for the benefit of those most seriously stricken men, the totally and permanently incapacitated. These terms are used with varying meaning, but are interpreted literally by the Department of Repatriation. In view of the nature of the war, the number of our men totally incapacitated is fortunately smaller than might have been expected. These men include men who are hopelessly crippled or paralyzed-spine cases-men to whom we can offer no hope of restoration to health.
...
"There is a special schedule in the new Bill for the blinded, and for that class to whom I referred earlier, that is, the totally and permanently incapacitated. Provision is made to allow these a pension of £4 per week. In view of the severity of their affliction, I venture to believe that the Senate will not regard that sum as out of the way.
"... the number of those so seriously injured is very much less than one might have expected, bearing in mind the character of the war. The total number of blinded is not more than 100. ... The maximum number of the totally and permanently incapacitated will not exceed 150."
The Federal Court first examined the special rate provisions in any detail in
Bowman v. Repatriation Commission. In that case, Ellicott J held that the legislation required an assessment of the effect the applicant's incapacity had on his or her ability to earn, and that this could be gauged by reference to the labour market reasonably accessible to the applicant. In some cases it may be obvious that a person's incapacity renders him or her incapable of earning a living wage. In others what a person could earn would depend on evidence of opportunities in the market place. It was not enough simply to form the view that in a physical sense the veteran could still undertake work. The incapacity may have destroyed or impaired the veteran's earning capacity in the market place.On appeal, the Full Federal Court in
Repatriation Commission v. Bowman clarified the special rate test by saying that, in assessing the extent of disablement by reference to earning ability it is fundamental that any inability to earn should be due to the war related disability. If the circumstances proved in a particular case that the veteran could not earn even if he or she were not suffering from the war related disability, then the veteran's claim for the special rate of pension would fail. It would be sufficient in testing whether an veteran's inability to earn is due to his or her war related disability to consider whether the veteran would be equally unable to earn if he or she were free of that disability. Smith v. Repatriation Commission, Davies J held that the test looks to the effect that the war related incapacity has upon the particular veteran. The question was not what a hypothetical person would have been able to do but what incapacity the particular veteran had to earn in the light of the particular veteran's war related incapacity. If there was remunerative work of a type that the veteran could reasonably obtain, then it was proper to identify what type of work that was and to investigate whether the veteran physically could do the work and whether the veteran would be paid for it. If the veteran could not obtain remunerative work, it was proper to consider whether this was due to his or her war related disabilities or to some other cause, such as age. Delkou v. Repatriation Commission, Wilcox J held that a veteran did not have to be totally incapacitated within the meaning of Schedule 1 to the Act (the equivalent of 100% degree of incapacity under the Veterans' Entitlements Act 1986) to qualify for the special rate pension. This was because the concept of total incapacity in Schedule 2 was not the same as that in Schedule 1.In 1985, the special rate test was replaced with substantially the same tests that currently apply. These amendments were in the context of an Economic Statement by the Treasurer in which it was indicated that a tightening up of the criteria for special rate was required. Those tests were first inserted into the Repatriation Act 1920, and were then re-enacted in the Veterans' Entitlements Act in 1986.
The special rate tests introduced in 1985 required that a prerequisite to obtaining this rate of pension was that the veteran had to have a degree of incapacity of 100%. In 1988, legislation was enacted to reduce the requisite degree of incapacity to 70% (with effect from 22 December 1988).
The next major amendments were in 1994 (also in a restrictive budgetary context). Prior to the 1994 amendments of section 24, there were no special rules for veterans who were over 65 years of age. The 1994 legislation introduced restrictive rules for over 65s. However, those rules only apply to claims or applications made on or after 1 June 1994. The pre-1994 rules apply to claims or applications made before that date. Those pre-1994 rules still apply to veterans who are under 65 at the application day (that is, the date on which the claim or application for increase in pension was made) but who turn 65 during the assessment period.
Further amendments were made in 1997 upon the introduction of the Veterans' Vocational Rehabilitation Scheme.