If an applicant has an application to the AAT in respect of the assessment of disability pension for disabilities A, B and C; the claim or application from which that assessment arose was made before 1 June 1994; and after 1 June 1994, but before the AAT application was heard, the applicant, who was over 65 years of age, made a successful claim for pension in respect of disability D, then the question arises as to the law that applies in respect of the period from the first application day until the date of the AAT's hearing. That is, do the post- or pre-1 June 1994 special rate provisions apply to the assessment of pension?

Subsection 2(2) of the Veterans' Affairs (1994-95 Budget Measures) Legislation Amendment Act 1994 provides:

Section 3 of that Act provides:

Division 4 of Part 2 of that Act amended sections 23 and 24 of the Veterans' Entitlements Act 1986 to provide new criteria for the assessment of pension at the intermediate and special rates of pension.

The relevant amendments to section 24 were to make the previous subsections (1) and (2) apply to veterans who had not turned 65 years of age when the claim or application was made, and that new subsections (2A) and (2B) would apply to veterans who had turned 65 years of age when the claim or application was made. This was achieved by inserting paragraphs (aa) and (aab) into subsection (1), and by paragraphs (a) and (b) of the new subsection (2A).

Paragraphs (1)(aa) and (1)(aab) provide:

Paragraphs (2A)(a) and (2A)(b) provide:

The Explanatory Memorandum to the Bill does not directly address the situation currently being considered, but it says, at p.23:

At page 25, the Explanatory Memorandum to the Bill states:

The method of assessment of pension is broadly stated in section 19 of the Veterans' Entitlements Act 1986. The specific criteria by which pension is assessed is set out in sections 21A to 29 and the Guide to the Assessment of Rates of Veterans' Pensions (GARP), made under section 29.

Subsection 13(1) provides that:

The relevant subsections in section 19 are as follows:

Thus, in assessing pension, the Commission (and the AAT when "standing in its shoes") must determine the rate or rates at which pension would have been payable from time to time during the assessment period, and the rate at which pension is payable from the date of the determination. If the rate of pension is determined, at some time during the assessment period, at the intermediate or special rate, then, subject to section 24A (ie, the veteran's capacity for work improves, etc), the rate at which pension is payable from the date of the determination shall not be lower than whichever of those rates applied, or applied most recently, during the assessment period.

If it had not been for the 1994 amendments, the AAT, in assessing pension for disabilities A, B, C and D, would have:

Thus, if pension would not be payable at the special rate by reason of A, B and C alone, but would be payable once the incapacity from D could be taken into account, then special rate would be granted from the date of the grant of D. The effect is that it is because of the claim in respect of D that pension would be payable at the special rate.

The result would have been no different if the assessment of A, B and C had been finally determined prior to the acceptance of the claim in respect of D. (Indeed, there should be no valid reason for delaying the assessment of pension pending the grant of a new claim because the assessment of disabilities accepted as the result of a new claim must always take into account previously accepted disabilities.)

In the current circumstances, the 1994 amendments provide new criteria for the assessment of pension arising out of claims made on or after 1 June 1994. As with the usual situation described above, the result should be no different if the final assessment of A, B and C were undertaken before the claim in respect of D is determined. The old law is applied to A, B and C, then the new law is applied to the assessment of A, B, C and D. If there is any overlap of assessment periods, then the later determination (assessing A, B, C and D) overtakes the effect of the earlier determination (assessing A, B and C) in relation to the overlapping period because it covers a war-caused disability that had not been covered by the earlier determination.

The difficulty appears to be the fact that if both assessments are made by the AAT at the same time, there must be an overlap of assessment periods, both affected by different law-the first period must take account of the old law, while the second is in respect of a claim affected by the new law.

However, in reality, because an assessment period arises out of a particular claim or application (see the definition of "assessment period" in subsection 19(9)) the first assessment period is one which arises only in respect of those disabilities covered by the first claim or application. When determining a matter that deals with two assessment periods, the first period is cut short by the fact that it is overtaken and supplanted by the second assessment period arising out of the second claim-a type of "novus actus interveniens"-such that there is no "overlap" as such. There cannot be any overlap because subsection 19(7) precludes the granting of a separate and additional pension. The first assessment period has come to an end by the creation of a second assessment period caused by the making of the second claim.

This separation of the assessment periods arising out of the different claims enables both the old law and the new law to be applied in the manner envisaged by the amending legislation. The old law must be applied to the assessment period arising out of the pre-1 June 1994 claim, while the new law must be applied to the assessment period arising out of the post-1 June 1994 claim.