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Ullmer and Secretary, Department of Defence [2011] AATA 542 (4 August 2011)

Last Updated: 4 August 2011

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2011] AATA 542

ADMINISTRATIVE APPEALS TRIBUNAL )

) No 2010/2542

Applicant

Respondent

DECISION

Date 4 August 2011

Place Perth

..........[sgd S D Hotop]........

Deputy President

CATCHWORDS

DEFENCE - Defence Home Ownership Assistance Scheme (DHOAS) – subsidy certificate – applicant separated from Permanent Air Force and transferred to Air Force Reserve in July 2008 – applicant subsequently applied for subsidy certificate – subsidy certificate given to applicant in August 2008 – subsidy certificate expired in August 2009 – applicant did not “perform effective service as a member of the Reserves” in 2008-2009 service year – applicant applied for subsidy certificate in November 2009 – applicant not then a member of the Defence Force for purposes of DHOAS – applicant previously applied for subsidy certificate since he stopped being a member of the Defence Force in July 2008 – subsidy certificate must not be given to applicant in response to 2009 application – decision under review affirmed

 Defence Home Ownership Assistance Scheme Act 2008  (Cth),  s 3 ,  s 5 ,  s 7 ,  s 12 ,  s 16  and  s 17 

Defence Home Ownership Assistance Scheme Regulations 2008, reg 3, reg 4, reg 7 and reg 8

REASONS FOR DECISION

INTRODUCTION

1. On 30 November 2009 Daniel Ullmer (“the applicant”) lodged with the Department of Veterans’ Affairs (“DVA”) an application for a subsidy certificate under the  Defence Home Ownership Assistance Scheme Act 2008  (Cth) (“the Act”).
2. On 2 December 2009 an officer of the DVA determined that the applicant was presently “not eligible” to receive a subsidy certificate and, accordingly, decided to refuse his application.
3. By letter dated 7 December 2009 the applicant requested an internal review of the abovementioned decision of 2 December 2009.
4. On 11 May 2010 a delegate of the Secretary, Department of Defence (“the respondent”) confirmed that decision.
5. On 22 June 2010 the applicant lodged with the Tribunal an application for review of the internal review decision of 11 May 2010.

THE EVIDENCE

6. The evidence before the Tribunal comprised:
   • the “T Documents” (T1-T9, pp 1-78) lodged by the respondent in accordance with s 37 of the Administrative Appeals Tribunal Act 1975 (Cth);
   • Exhibits A1 and A2 tendered by the applicant; and
     • Exhibit R1 tendered by the respondent.

There was no oral evidence.

THE FACTUAL BACKGROUND

7. The relevant background facts are not in dispute and are as follows.
8. The applicant joined the Royal Australian Air Force on 28 January 1997 as a permanent member.
9. On 14 July 2008 the applicant separated from the Permanent Air Force.
10. On 15 July 2008 the applicant transferred to the inactive Air Force Reserve (“Reserves”).
11. On 29 July 2008 the applicant lodged with the DVA an application for a subsidy certificate under the Act (T4).
12. By letter dated 25 August 2008 the applicant was notified by the DVA that his application for a subsidy certificate had been successful (T5). The subsidy certificate dated 25 August 2008, which was enclosed with that letter, stated as follows:

“ ...
This certificate is evidence that you are eligible to apply for payment of subsidy under the Defence Home Ownership Assistance Act (sic) 2008 (Cth) (the Act). You will need to satisfy the requirements of Part 4 of the Act before this certificate expires, for subsidy to become payable on the information in this certificate.
You are eligible as a separated Member.
This certificate may at any time be cancelled by written notice to you if the Secretary of the Department of Defence (or his or her delegate) is satisfied that:

• this certificate was given as a result of a false or misleading statement made by you; or
• at the time the decision to give this certificate was made, you were not entitled to be given this certificate

This certificate commences on 25 August 2008 and ends on the earlier of:

• the date on which subsidy first becomes payable to you; or
• the date on which this certificate is cancelled in the circumstances described above; or
• 24 August 2009.

Payment of subsidy is contingent upon your continued entitlement to subsidy under the Act.
...” (T5, p 62)

13. In the period from 25 August 2008 to 24 August 2009 the applicant did not apply for payment of a subsidy under the Act.
14. In the period from 15 July 2008 to 30 June 2009 the applicant did not complete at least 20 days’ “effective service” as a member of the Reserves.
15. On 24 August 2009 the abovementioned certificate, dated 25 August 2008, expired.
16. On 30 November 2009 the applicant made fresh application for a subsidy certificate under the Act (“the 2009 application”).
17. On 2 December 2009 an officer of the DVA refused to approve the 2009 application, and that decision was confirmed by a delegate of the respondent on 11 May 2010.

THE RELEVANT LEGISLATION

The Act

18. The relevant provisions of the Act are as follows:

“ ...

3. Definitions

In this Act:
...
effective service, in relation to a person who is, or has been, a member of the Defence Force, means service in the Defence Force by the person that:
(a) if the person has, at any time before, on or after the commencing day, stopped being a member of the Defence Force, and, more than 5 years later, again become a member of the Defence Force—does not include service before the person again became a member of the Defence Force; and
(b) in any case—is recognised as effective service in accordance with the regulations.
eligible has the meaning given by section 7.
...
Permanent Forces means the Permanent Navy, the Regular Army or the Permanent Air Force.
Reserves means the Naval Reserve, the Army Reserve or the Air Force Reserve.
...
service year means a year prescribed by regulations made for the purposes of the definition of effective service in this section.
...
5 When a person is a member of the Reserves
Membership of the Reserves
(1) For the purposes of this Act, a person who has been engaged (by enlistment, appointment or transfer) as a member of the Reserves at a particular time (the engagement time) is to be treated as a member of the Reserves until:
(a) the engagement ends; or
(b) during a service year:
(i) the engagement does not end; but
(ii) the person does not perform effective service as a member of the Reserves.

Effect of failure to perform effective service

(2) If a person’s membership of the Reserves ends under paragraph (1)(b) in relation to a service year, this Act applies to the person, and is taken to have applied to the person, as if he or she had:
(a) in the case of a person who was a member of the Reserves at the end of the previous service year—stopped being a member of the Reserves immediately after the end of the previous service year; or
(b) in any other case—not been engaged as a member of the Reserves at the engagement time.
Note: This section may have the following effects:
(a) the time at which a person is taken to stop being a member of the Reserves (or of the Defence Force) may be affected;
(b) there may be a retrospective loss of entitlements in relation to subsidy certificates, the payment of subsidy, service credits and accrued subsidy periods and loan limits;
(c) in particular, an authorisation of the payment of subsidy on the basis of a person’s membership of the Reserves may be revoked retrospectively (see section 44);
(d) if a subsidised borrower who is taken not to have been a member of the Reserves because of the operation of subsection (2) would have been otherwise entitled to subsidy, the authorisation of the payment of subsidy to the person may be varied retrospectively (see section 45).
Example: A person is engaged as a member of the Reserves. The person is given a subsidy certificate under Part 3 on the basis of eligibility as a serving member of the Reserves. The person starts to receive amounts of monthly subsidy accordingly.
However, at the end of the service year, the person has not performed effective service as a member of the Reserves.
Because of subsection (2), this Act applies as if the person was not entitled to be given the subsidy certificate (because he or she was not eligible as a member of the Reserves).
As a result, the original authorisation of the payment of subsidy may be revoked or varied (see sections 44 and 45). Amounts of subsidy to which the person is not entitled (because of the revocation or variation) are recoverable as overpayments under Division 6 of Part 4.
...
7 Eligibility—who is eligible?
A person is eligible if the person is eligible as any of the following:
(a) a serving member (see section 8);
(b) an incapacitated member (see section 9);
(c) a rejoining incapacitated member (see section 10);
(d) a rejoining member (see section 11);
(e) a separated member (see section 12);
(f) an old scheme member (see section 13).
...
12 Eligibility—separated members
A person is eligible as a separated member at a particular time if the person:
(a) on or after 1 July 2008, stopped being a member of the Defence Force; and
(b) was eligible immediately before he or she stopped being a member; and
(c) has not again become a member of the Defence Force.
...
16 Decision to give subsidy certificate—general
Scope
(1) This section applies if a person applies for a subsidy certificate in accordance with section 14.
Decision to give, or to refuse to give, subsidy certificate
(2) The Secretary must give a subsidy certificate to the applicant if:
(a) section 17, 18, 19 or 20 applies; and
(b) either:
(i) the applicant has a service credit (see section 46); or
(ii) for a case in which section 18 (surviving partners) applies—the applicant has a service credit, or would, if the subsidy certificate were in force, have a service credit (because of the operation of section 63).
Note: As soon as a subsidy certificate given under section 18 (surviving partners) comes into force, the surviving partner has the service credit the deceased partner would have had, if he or she had not died (see sections 63 and 64).
(3) The Secretary:
(a) must refuse to give a subsidy certificate to the applicant if subsection (2) does not apply; and
(b) despite subsection (2), may refuse to give a subsidy certificate to the applicant under that subsection if, in relation to a previous entitlement period:
(i) the applicant failed to comply with section 42 (which deals with the disclosure of changes of circumstances); or
(ii) the Secretary has revoked an authorisation of the payment of subsidy to the applicant under section 44.
Note: Part 5 provides for the administrative review of a decision to refuse to give a subsidy certificate to an applicant.

17 Decision to give subsidy certificate—eligible applicants
(1) Subject to this section, the Secretary must give a subsidy certificate to the applicant if the Secretary is satisfied that the applicant:
(a) is eligible; and
(b) does not hold a subsidy certificate that is in force; and
(c) if the applicant is not a member of the Defence Force—has not previously applied for a subsidy certificate since he or she stopped being a member of the Defence Force.
...
Time of application for subsidy certificate – separated members
(3) If the applicant is eligible as a separated member, the Secretary may give a subsidy certificate to the applicant under subsection (1) only if the application for a subsidy certificate is made within 2 years after the applicant stopped being a member of the Defence Force.
...”

The Defence Home Ownership Assistance Scheme Regulations 2008

19. The Defence Home Ownership Assistance Scheme Regulations 2008 (“the Regulations”) relevantly provide as follows:

“ Part 1 Preliminary
...
3 Definitions
(1) In these Regulations:
Act means the  Defence Home Ownership Assistance Scheme Act 2008 .
...
Reserve service means service in one or more of the Reserves.
(2) In these Regulations, a day of Reserve service is a day on which a member was required for, and attended, duty.
(3) For  section 4  (sic) of the Act:
service year means the period from 1 July of one calendar year to 30 June of the following calendar year.
Part 2 Effective Service
Division 1 Preliminary
4 Effective service
For the definition of effective service in  section 3  of the Act, service calculated under this Part is effective service.
...
Division 3 Effective service — Reserves members

7. Purpose of Division

This Division sets out the methods for calculating effective service for a member of the Reserves for the purpose of calculating the member’s:
(a) qualifying service period (Act, paragraph 8 (2) (b)); and
(b) accrued subsidy period (Act,  section 47) ; and
(c) loan limit (Act, section 51).

8. Effective service — qualifying service period

(1) This regulation prescribes the service types and periods that can be used to calculate the effective service that is to be counted in calculating the member’s qualifying service period.
(2) If the member performs Reserve service on 20 or more days in a service year, the member has 1 year of effective service.
(3) If:
(a) the member of the Reserves renders, in a service year, a period or periods of continuous fulltime service; and
(b) the period, or the sum of the periods, of continuous fulltime service is not greater than 6 months;
the member has 1 year of effective service.
(4) If:
(a) the member of the Reserves renders, in a service year, a period or periods of continuous fulltime service; and
(b) the period, or the sum of the periods, of continuous fulltime service is greater than 6 months;
the member has 2 years of effective service.
(5) Subject to subregulation (6), if the member has effective service in more than 1 service year, the member’s effective service for this regulation is the sum of the effective service calculated for each service year.
(6) If the amount calculated under subregulation (5) is more than the number of years of effective service that the member requires for his or her qualifying service period, any service in excess of that requirement is to be disregarded.
...”

ANALYSIS

20. The ultimate issue for the Tribunal’s determination is whether a subsidy certificate must be given, or must not be given, to the applicant, pursuant to  s 16  of the Act, in response to the 2009 application.
21. For the purposes of  s 16  of the Act, it is common ground that:
    • the 2009 application was made in accordance with  s 14  of the Act (see  s 16(1)) ; and
    •  ss 18 ,  19  and  20  of the Act do not apply in this case (see  s 16(2)(a)). 
22. The critical issue for the Tribunal’s determination, for the purposes of  s 16  of the Act, is whether  s 17  of the Act applies in this case.
23. For the purposes of  s 17(1)  of the Act, it is common ground that the applicant:
    • “is eligible” (para (a)); and
    • “does not hold a subsidy certificate that is in force” (para (b)).
24. For the purposes of para (c) of  s 17(1)  of the Act, the questions which arise for determination are:
    • whether the applicant “is not a member of the Defence Force”; and, if so

• whether the applicant “has not previously applied for a subsidy certificate since he stopped being a member of the Defence Force”;

within the meaning of that paragraph.

25. As previously stated, it is common ground that the applicant separated from the Permanent Air Force on 14 July 2008 and transferred to the Reserves on 15 July 2008. It is also common ground that, in the 2008-2009 “service year”, the applicant did not perform 20 or more days of Reserve service. Accordingly, pursuant to para (b) of the definition of “effective service” in  s 3  of the Act, and reg 8 of the Regulations, the applicant did “not perform effective service as a member of the Reserves”, within the meaning of  s 5(1)(b)(ii)  of the Act, during the 2008-2009 “service year”. That being the case, pursuant to  s 5(2)(b)  of the Act, the applicant is taken, for the purposes of the Act, to have “not been engaged as a member of the Reserves at the engagement time”, namely, 15 July 2008. It follows that, for the purposes of the Act, the applicant “stopped being a member of the Defence Force” when he separated from the Permanent Air Force on 14 July 2008 and, accordingly, was “not a member of the Defence Force” when he first applied for a subsidy certificate under the Act on 29 July 2008. It also follows that, at the time when the applicant made the 2009 application, he had “previously applied for a subsidy certificate since he ... stopped being a member the Defence Force”, with the meaning of para (c) of  s 17(1)  of the Act.
26. The Tribunal determines, therefore, that para (c) of  s 17(1)  of the Act is not satisfied in the applicant’s case and that, for the purposes of  s 16  of the Act,  s 17  of the Act does not apply in his case. It follows that  dhoasa2008358 /s16.html" class="autolink_findacts">s 16(2) of the Act also does not apply in the applicant’s case.
27. Accordingly, pursuant to  s 16(3)(a)  of the Act, the obligatory decision in this case is to refuse to give a subsidy certificate to the applicant in response to the 2009 application.

DECISION

28. For the above reasons, the Tribunal affirms the decision under review.

I certify that the 28 preceding paragraphs are a true copy of the reasons for the decision herein of Deputy President S D Hotop.

Signed: .............[sgd D Brodie]....................................

Associate

Date of Hearing 27 July 2011

Date of Decision 4 August 2011

Representative of the Applicant Self-represented

Representative of the Respondent Mr J Carroll

Solicitor for the Respondent Clayton Utz