loss of salary or wages, or of earnings on his or her own account
Not only must the veteran be prevented from continuing to undertake the remunerative work that he or she was undertaking, but such circumstances must have resulted in a loss of salary or wages, or of earnings on his or her own account.
In
Banovich v. Repatriation Commission, the Court stated:"In the usual case a loss of salary, wages or earnings will follow any prevention from continuing to undertake the remunerative work which the member was undertaking but there may be exceptional situations under which a person unable to continue that work continues to receive a salary, wages or earnings; in which exceptional case [para 24(1)(c)] would not be satisfied."
In
Repatriation Commission v. Smith, M. J., the Court stated:"the question posed by s.24(1)(c) is one of hypothetical fact. The Tribunal must attempt an assessment of what the [veteran] probably would have done if he had none of his service disabilities."
This explanation of the test was affirmed in
Repatriation Commission v. Flentjar .In
Tomlin v. Repatriation Commission, Whitlam J discussed the hypothetical test in Smith's case and said:"In Smith Beaumont J described (at 337) the question posed by s24(1)(c) as 'one of hypothetical fact'. But his Honour continued: 'The Tribunal must attempt an assessment of what the [veteran] probably would have done if he had none of his service disabilities.' Counsel for the applicant relies on a particular formulation of the 'hypothetical position' that a Full Court of this Court said it was necessary to inquire into for the purposes of s24(1) in Repatriation Commission v. Maley (1991) 24 ALD 43 at 51. But that statement was made in the context of a specific submission, and the Full Court had earlier (at 50) referred to the prospects of the veteran's employment being considered 'on the requisite statutory assumptions'.
"Counsel for the respondent submits, correctly in my view, that neither of these cases suggests that the decision-maker must construct an imagined life for an hypothetical man. The hypothetical fact identified by Beaumont J reflects the language of s.24(1)(c) ...
"The Tribunal was bound to engage in speculation as to what the applicant would have done at the application date if he had none of the war-caused disabilities. In doing so, it may have regard to all the evidence before it, including the fact that the applicant did move to Nambucca Heads."
To some extent, the hypothetical test stated in Smith's case is an oversimplification of the matter. In
Repatriation Commission v. Maley, the Full Court said:"For the purposes of s.24(1) it is necessary to inquire, inter alia, into the hypothetical position which would have obtained if Mr Maley had not suffered his war injuries and had retired at the time when, in that case, he would have retired." (emphasis added)
The Full Court recognised, by the words, "inter alia" that this was not the only test contained in paragraph 24(1)(c). Clearly, if the veteran fails this hypothetical test, then special rate is not payable, but there are two tests within paragraph 24(1)(c) and that they are elaborated in subsection 24(2).
Paragraph 24(2)(a) elaborates on the "loss of salary or wages, or of earnings" criterion as follows:
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(2) For the purpose of paragraph (1) (c) - (a) a veteran who is incapacitated from war-caused injury or war-caused disease, or both, shall not be taken to be suffering a loss of salary or wages, or of earnings on his or her own account, by reason of that incapacity if - (i) the veteran has ceased to engage in remunerative work for reasons other than his or her incapacity from that war-caused injury or war-caused disease, or both; or (ii) the veteran is incapacitated, or prevented, from engaging in remunerative work for some other reason; ...
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The "loss" test is additional to the "prevented from continuing to undertake remunerative work" test: Repatriation Commission v. Boyle. The "loss" test requires that the veteran must not have ceased to engage in remunerative work for some reason other than incapacity from war-caused injury or disease. If something else contributed to the veteran's cessation of remunerative work, then the veteran's consequent loss of salary, wages or earnings cannot be said to be solely due to that incapacity.
Therefore, notwithstanding that a veteran might, at the application day be prevented from continuing to undertake remunerative work that the veteran had been undertaking solely due to his or her incapacity from war-caused injury or disease, if the veteran had already ceased to engage in remunerative work (but not necessarily a particular job) for reasons other than that incapacity and at least partly for that other reason continues to have ceased to engage in that work, then there has not been the requisite loss of salary, wages or earnings solely due to that incapacity. That loss is then also due to the other reason. It should also be noted that paragraph 24(2)(b) does not ameliorate the loss test. It only applies to ameliorate the "prevented from continuing to undertake remunerative work" test.
Subparagraph 24(2)(a)(i) does not mean that a person is necessarily disqualified from a pension at the special rate if that person ceased to engage in remunerative work for a reason other than incapacity from war-caused disabilities. It is important to note that the subparagraph uses the phrase "has ceased to engage", indicating that a non-war-caused reason for ceasing to work continues to apply to the fact that the veteran has ceased to engage in remunerative work: see for example, Hall v. Repatriation Commission. In Banovich v. Repatriation Commission, it was stated:
"the loss referred to in [para 24(1)(c)] may be caused either by a loss of existing employment or by an inability to obtain new employment. ... [T]he phrase 'remunerative work which the [veteran] was undertaking' should be reads as a reference to the type of work which the member previously undertook and not to any particular job. It follows that a member's loss of particular employment for a reason unrelated to a war disability would never destroy a member's subsequent entitlement to claim a special rate pension; the question would remain, at the relevant date for determination of a claim, whether the member was prevented by his or her war-related incapacity-and by that incapacity alone-from continuing in that field of remunerative activity."
Thus, a veteran whose remunerative work involved, for example, short term contracts for different employers may have stopped working in his or her last job because that contract came to an end. In this case, the veteran did not cease working in that last job because of service-related incapacity, but for some other reason. But that does not mean that the veteran would be unable to meet the relevant special rate test if, for example, before the veteran was able to commence the next contract, the service-related incapacity prevented the veteran from working. This is a case, then, where the veteran's normal pattern of work was to go from contract to contract, and it was service-related incapacity, alone, that caused the cessation of that pattern of remunerative work.
However, if a veteran ceased working in his or her normal line of work for some other reason, and has not worked since, unless there is evidence that, at the time the veteran left that job he or she has definite plans to go to another job, but that service-related incapacity intervened to prevent that happening, and it was for that reason alone, that the veteran did not proceed to that other job, it will be very difficult to say that, at the application day, this other reason is not one of the reasons why the veteran has ceased to engage in remunerative work.
The phrase, "loss of salary or wages, or of earnings on his or her own account" does not equate with "income". In Greenwood v. Repatriation Commission and Thomas v. Repatriation Commission, the Federal Court agreed with a statement in Re Fahey and Repatriation Commission in which it was stated that:
"The phrase here relevant, namely, 'earnings on his or her own account', was in our opinion clearly inserted to cover the case of a person who derived not salary or wages, but rather the earnings of a business, profession or trade as a result of remunerative work. ... It would not be correct to subvert the legislative intent by giving 'earnings on his own account' an interpretation so expansive that it, together with 'wages and salary', adds up to mean 'income'."
In
Cavell v. Repatriation Commission, Burchett J held that the question posed by paragraph 24(2)(a) is, "whether, if he was so prevented [from continuing to undertake remunerative work that the veteran was undertaking], he was by reason thereof suffering a loss of earnings that he would not be suffering if he were free of that incapacity".In
Thomas v. Repatriation Commission, Beazley J held that, "The test under s.24(1)(c) is ... that it is necessary to enquire into the hypothetical position which would have obtained if the applicant was not incapacitated due to his war-caused disabilities." See also Repatriation Commission v. Boyle.In
Starcevich v. Repatriation Commission, Fox J stated that the loss had to be substantial. His Honour said:"It seems to me that the intention of para. 24(1)(c) is that the applicant must have suffered substantial loss of remuneration consequent alone upon the incapacity referred to in paras 24(1)(a) and (b). The loss must be real, in the sense that the applicant cannot rely upon any remunerative work that he has undertaken in the past, but it would be unnecessarily restrictive to assess the loss by reference only to the last remunerative work undertaken before the applicant's inability to work became complete. In my opinion, a veteran's entitlement to a pension under s.24 may be based on his being prevented from continuing to undertake substantial remunerative work that he has undertaken in the past, even if that work was followed by work of a different type before the veteran ceased work altogether."
However, Pincus J, in
Gauntlett v. Repatriation Commission, was not necessarily prepared to accept that qualification. He said, "the extent to which the section should be read down so as to exclude from its scope insubstantial or trivial losses, in order to avoid absurdity, is still an open one, and it is unnecessary to determine it in this case."More recently, in
Repatriation Commission v. Fox, W. H., Tamberlin J said:"The alone test requires that the applicant must have suffered substantial loss of remuneration solely as the result of the war-caused incapacity or disease".