Appendix 1 - History of the SOP system | Specialist Medical Review Council

History of the SOP system

This overview entitled ‘History of Repatriation System’, is chapter 3 of the report of the Review of Veterans’ Entitlements (also known as the Clarke Report). The review was commissioned by the Minister for Veterans’ Affairs in early 2002, and the three-person committee chaired by retired Supreme Court Judge the Honourable John Clarke QC submitted its detailed report in January 2003.

CHAPTER THREE

HISTORY OFREPATRIATION SYSTEM

ANTECEDENTS

The obligation of the state to recompense the soldiery for service in its defence is an ancient one, dating at least from the Assyrian empire circa 1200 BC (Lloyd and Rees 1994, p. 7). Resettling veterans on land taken from vanquished barbarians or rival senatorial families was popular in ancient Rome and a linkage between land and resettlement appears frequently in the ensuing centuries, across a number of cultures. In Britain, pensions granted by statute began during the reign of Elizabeth I, with an Act of 1603 conferring the right of pension to a veteran 'maimed in the Queen's service' (Toose 1975, p. 19).
In 1681u nder Charles II, the Chelsea Hospital system was established to provide treatment and convalescence for 'war damaged' or 'time-expired' soldiers. These men were known as 'in-pensioners'. Four years later an 'out pensioner' scheme was established, with a gratu ity for disablement payable at a flat rate for all ranks. In 1806, the amount of pension was made proportionate to the extent of the injury incurred (Toose 1975, p. 19). The debilitating effects of tropical disease were also recognised, in acknowled gment of the role of the military in forging and preserving the empire.
Widows and children of veterans were first provided for in Britain during the Crimean War (1854-56) through the Royal Patriotic Fund Corporation, a body reliant on public subscription with some support from the War Office. Similar funds were established in the Australian colonies in response to the sending of contingents to the Sudan Campaign, the Boxer Rebellion and the Boer War. While those organisations were assiduous in raising funds from the public, they were far less so in the actual distribution of money to veterans, and tended to be derelict in attending to the needs of those for whom they had been established.

EARLY DEVELOPMENT

The Defence Act 1903 made provision for members of the Defence Force or their widows in the event of incapacity or death resulting from wounds or disease acquired while on active service. However, members of the Defence Force employed on active service were specifically excluded from the Commonwealth Workmen's Compensation Act 1912, apparently out of concern about the extent of the probable liabilities that would be incurred in time of war (Toose 1975, p. 20).
Nevertheless, Australia's commitment to the imperial war effort in 1914 necessitated the Commonwealth providing more fully for returned servicemen. Accordingly, in November 1914, the War Pensions Bill was introduced into the Parliament and received bipartisan support. The resulting Act granted pensions to Defence Force members killed or incapacitated as a result of service in warlike operations. Beneficiaries included those who enlisted or were appointed to active service outside Australia, or who served on a ship of war. Home service did not qualify. Disease was also included, with the proviso that it was contracted on active service. In 1915, the Act was amended to include members of the Army Medical Corps Nursing Service accepted or appointed for service outside Australia, and the following year it was extended to members on home service (Toose 1975, pp. 20-21).
Another significant early piece of legislation was the Australian Soldiers ' Repatriation Fund Act 1916, although not for the reasons originally envisaged by its authors. The fund was in principle virtually identical to the failed patriotic funds of the 19th century, reliant on public subscriptions, with some augmentation from the Government, but established by statute rather than by the citizenry. It failed most singularly to achieve anything by way of fundraising, largely because of the prevailing political climate. Nevertheless, it did help shape the early model of the Australian repatriation system.
In early 1917, an executive committee of the trustees of the fund made a series of recommendations to the Prime Minister. They were:

that the entire question of the re-establishment of discharged soldiers and the care of the dependants of soldiers generally should be made the concern of a Commonwealth authority; and
that the Commonwealth authority should devise a substantially uniform system of dealing with returned soldiers and the dependants of soldiers on service or soldiers who died as a result of service in respect of:

immediate amelioration;
care of the totally incapacitated;
vocational training of the partially incapacitated;
employment generally;
assistance towards permanent re-establishment;
care of dependants;
coordination of governmental and private efforts for the expansion of existing industries and promotion of new industries to meet the demand for employment; and
assembling and administration of funds (Toose 1975, pp. 24-5).

The recommendations were debated at an interstate conference shortly thereafter, at which it was decided that the Commonwealth should have definite control over all matters relating to repatriation, and that states should administer land settlement in conjunction with the Commonwealth through the Soldiers' Settlement Board of Australia (Toose 1975, p. 24).
It is worthwhile to note the burgeoning activities of ex-service organisations (ES0s) in this period as more and more Australians returned from Europe. Pre-eminent among those ESOs was the Returned Sailors' and Soldiers' Imperial League of Australia (RSSILA), now known as the Returned & Services League of Australia (RSL). Through exceptionally skilful organisation, building on public sentiment in favour of the returned diggers, the League was able to exert considerable pressure on the Commonwealth Government. In particular, it achieved recognition of compensation as a right, rather than as an act of gratuity, which in tu rn signalled the end of the voluntary system exemplified by the patriotic funds.

THE AUSTRALIAN SOLDIERS' REPATRIATION ACT 1917

3.10 In response to the recommendations of the Trustees, the Vice-President of the Executive Council and soon to be first Minister for Repatriation, Senator Edward Millen, introduced the Australian Soldiers' Repatriation Bill into the Parliament on 18 July 1917. Among other things, the legislation provided for benefits and assistance to discharged servicemen, children under 18 of the deceased or incapacitated, and to widows in special circumstances.3

The Act was proclaimed on 8 April 1918 and the new Department of Repatriation began operations on the same date. The Minister was given overall responsibility for the administration of the Act, and a part-time honorary Repatriation Commission of seven was appointed with power to make recommendations to the Government for regulations granting benefits and assistance.
Millen introduced amendments to the Act shortly afterwards, saying that the Repatriation Department accepts 'as the minimum obligation the responsibility of providing the returned soldier with an opportunity of earning at least a living wage, and that until such opportunity is forthcoming subsistence be granted' (Toose 1975, p. 26).
The Repatriation Commission considered that the achievement of the objectives would entail expenditure on:

sustenance while awaiting employment;
sustenance while undergoing training;
sustenance while undergoing treatment or care in hospitals or special institutions;
sustenance while awaiting the allotment of land, and during the initial period of land occupancy;
medical treatment after discharge, including the provision of artificial limbs and other surgical aids;
emergency grants to cover exceptional necessities;
fees to educational institutions;
tools of trade, professional instruments and personal equipment;
small business plant and livestock;
homes;
passages to and from the Commonwealth;
transportation within the Commonwealth;
allowances to dependants; and
funeral expenses (Toose 1975).

The practical working of the repatriation system was governed by regulation, rather than by the provisions of the Act, principally because there was no precedent for the scheme and policy was therefore unfolding and changing at a rate too rapid to be accommodated within a formal legislative framework.

THE AUSTRALIAN SOLDIERS' REPATRIATION ACT 1920

New legislation in the form of the Australian Soldiers' Repatriation Act 1920 repealed the War Pensions Act 1914 and the Australian Soldiers' Repatriation Act 1917. Administrative changes under the new legislation included the reform of the Repatriation Commission into an incorporated body of three members, with Repatriation Boards (also of three) constituted for each state. The boards were responsible for determining and assessing claims, with an appeal from their decisions available to the Commission. Commissioners were paid for their work for the first time. At the same time, the Repatriation Department assumed responsibility for the payment of pensions from the Treasury (Toose 1975, p. 27)
The new Act also expanded entitlement for pensions through the introduction of the so-called 'occurrence clause' . This gave cover in respect of death or incapacity resulting from any occurrence happening during the period of service. As a result, the death or injury need not have had any causal connection with the individual's service; it must merely have occurred during the period of service (Toose 1975, p. 27).
Perhaps most significantly, the Repatriation Act 1920 introduced the concept of a 'special rate' pension for those totally and permanently incapacitated (TPI) or blinded as a result of war service. Often referred to as 'the TPI pension', its initial rate of payment was £4 per week.4
Amendments to the Act in 1921and 1922 saw the Department accept liability for medical and hospital treatment of servicemen upon their discharge and for the administration of artificial limb factories. Inaddition, a Fif th Schedule to the Act was inserted after representations were made to Minister Millen by the Limbless Soldiers Association. This provided for an extra allowance to this class of veteran that brought their overall benefit to substantially the same level as that of special rate recipients (Toose 1975, p. 29).

THE BLACKBURN ROYAL COMMISSION

On 27 August 1924, a Royal Com mission chaired by Dr C B Blackbu rn was established to inquire if :

... the present method of determining whether an ex-soldier's disability is due to or aggravated by war service [is] adequate to decide the degree to which it is aggravated and what portion of his present incapacity can be regarded as having resulted from war service. (Toose 1975, p. 29)
After consideration, the Royal Commission found that:

In the majority of cases the present machinery for determining disability and assessing pensions is sufficient. There are, however, certain types of disabilities that are, for various reasons, inadequately determined . The inadequacy, to some extent, has been due to defects in the Australian Soldiers' Repatriation Act ... (Toose 1975, p. 29)
The Royal Commission's deliberations and findings on the matter of the appeals system provide an excellent illustration of the evolutionary gulf that exists between accepted policy strictures then and now. For instance, it was accepted that there would be no final body of appeal, but rather that the Repatriation Commission could reconsider a case virtually ad infinitum, provided that the claimant could adduce new evidence on each occasion. Other recommendations included that the Repatriation Commission should not have medical practitioners as members, but only as technical advisers or referees, and that it was proper for a veteran to discuss his file, but most improper for him to actually see it (Lloyd and Rees 1994, pp. 232-5).

THE TWENTIES AND THIRTIES

Throughout the span of the Bruce-Page Government (1923-29) there was no minister appointed with sole responsibility for repatriation. Rather, the job was passed among a number of ministers and attended to only on a part time basis. The absence of any consistent political control of repatriation, in combination with the lack of an appeal mechanism from decisions of the Repatriation Commission, resulted in considerable disquiet among the veteran community. Itwas felt that there were insufficient checks on the freedom of action of both the Department and the Commission.

The Government eventually moved to assuage these concerns in 1929. The Health Minister, Sir Neville Howse, who had general responsibility for repatriation, introduced legislation to establish War Pensions Entitlement and War Pensions Assessment Tribunals. An important principle laid down in the legislation related to the onus of proof. Once the appellant had made out a prima facie case, the onus was on the Repatriation Commission to disprove it (Toose 1975, p. 31).

By the 1930s, a condition known as 'burnt-out digger syndrome' began to attract official attention. A report from the Commonwealth Statistician in 1934 found a 13 per cent excess mortality rate among veterans compared with similarly aged civilians. In response, the Government introduced a service pension payable to returned soldiers at age 60 rather than at 65 (Lloyd and Rees 1994, pp. 251-6). This was the first repatriation income support measure, all previous benefits having been compensatory in nature.

WORLD WAR II

The Australian Soldiers' Repatriation Bill 1940 introduced separate pension bases for troops who served overseas and those who served entirely in Australia. In the former case the 'occurrence clause' had application, but not in the latter. The Seamen's War Pensions and Allowances Act 1940 also came into force that year, providing for compensation and other benefits to Australian mariners (Toose 1975, pp. 35-8).

Three events of significance occurred in 1943. The first was new legislation to pension those who had served in New Guinea on the same basis as those who served overseas. The second was a liberalisation of the standard of proof provisions in the Repatriation Act. This effectively enshrined the reverse criminal standard of proof in legislation. The third was the extension of the area in which the Citizens' Military Force could be used. Previously, the militia was confined to service within Australia. Now it could be used in the South-Western Pacific Zone within an area fixed by proclamation for a period up to six months after the end of the war (Toose 1975, pp. 37, 38).

THE FIFTIES AND SIXTIES

The Repatriation Act was extended through the 1950s to provide benefits, including the service pension, to those who served from 27 June 1950 to 19 April 1956 and were allotted for duty in the operational area in Korea, or from 29 June 1950 to 1September 1957 in Malaya. The Act was later amended in the 1960s to cover Australian armed services personnel serving in the Indonesian Conf rontation. In 1957, the Repatriation (Far East Strategic Reserve) Act 1956 brought members of the Far East Strategic Reserve within the purview of the repatriation system, although the nature of their service was considered not to be the same as that of personnel in World War II or Korea. As a consequence they did not, at that time, receive eligibility for the service pension.

Increasing Australian military involvement in South-East Asia led to the passage of the Repatriation (Special Overseas Service) Act 1962. This legislation

... extended repatriation benefits for [s]pecial service inprescribed areas overseas, where Australian forces were engaged in 'warlike operations'. This provision was instrumental in providing pensions and benefits for Vietnam War veterans. (Lloyd and Rees 1994, p. 319)

A major reform to the war (now disability) pension structure took place in 1965 with the introduction of the intermediate rate, midway between the 100 per cent general rate and the special rate. The intention was to provide a greater level of compensation to veterans who were quite severely disabled, but nonetheless capable of engaging in employment on a part-time or intermittent basis.

The last major reform of the 1960s was the extension of the service pension to those with 'special service' under the Special Operations Act in 1968.

THE SEVENTIES

During the 1970s, peacetime coverage under the Repatriation Act 1920 (to be preserved in the Veterans' Entitlements Act 1986 (VEA)), was extended to serving military personnel (including national servicemen). This created a dual entitlement, as those individuals were already covered by the normal Commonwealth employees' compensation legislation. The situation was intended to be a short-term bridging measure pending the implementation of a new, separate Military Compensation Scheme. Unfortunately, that legislation did not eventuate for another 22 years. The Militany Compensation Act 1994 ended peacetime coverage under the VEA.

Between 1971 and 1975, Justice Paul Toose of the New South Wales Supreme Court undertook a wide-ranging inquiry into all aspects of the repatriation system. A principal recommendation was that the various pieces of legislation be consolidated into one Act. This eventually occurred in 1986 with the passage of the VEA. But Toose's most enduring legacy is the underlying principles of repatriation that he expounded in his report (see Chapter 4).

In 1973, the Commonwealth began to partially exempt the disability pension from the service pension means test. The initial amount was 25 per cent, followed by an increase to 50 per cent in 1975, 60 per cent in January 1982 and finally 100 per cent in November of the same year.

From 1974, virtually all the Commonwealth's training schemes were transferred to the Department of Labour and Immigration. The following year, British, Commonwealth and allied (BCAL) veterans became eligible for the service pension. Between 1976 and 1979, Consumer Price Index (CPI) indexation of the major pensions was introduced, linking them to changes in the CPI. In accordance with a recoµ1mendation of the Toose Report, the Department of Repatriation became the Department of Veterans' Affairs (DVA) on 5 October 1976.

The appeals and review structure changed in 1979 with the establishment of the Repatriation Review Tribunal, which replaced the Entitlements Appeals Tribunal and the Assessment Appeals Tribunal. There were also increased avenues of appeal to the Federal Court and High Court on matters of law.

VETERANS' HEALTH CARE

After World War I, the Repatriation Department assumed responsibility for providing medical treatment for discharged soldiers suffering service-related disabilities. The Department's facilities were limited, and medical treatment was usually provided by arrangement with institutions established during the war by the Defence Department.

With the cessation of hostilities and the return to civilian life of the majority of servicemen, control of the military hospitals, sanatoria and artificial limb factories that had been built in each capital city was transferred progressively to the Repatriation Department. This was completed by 1922. To supplement the centralised outpatient facilities, arrangements were made by the Department for general practitioner and pharmaceutical services in country areas.

Similarly, after World War II, the Repatriation Department took over the much larger and more modern Army hospitals built during the war to meet immediate and post-war needs. These institutions became repatriation general hospitals and certain of the older institutions were retained and used asauxiliary hospitals to provide for special inpatient and outpatient needs.

By the time of the Toose Enquiry in the early 1970s, the continuing relevance of the repatriation general hospitals had come into question, with some submissions arguing that they should be amalgamated with hospitals in the state health systems. They were ultimately transferred to state government or private enterprise control by 1995, and DVA now purchases almost all its medical services from these and other agents.

THE EIGHTIES

Allied veterans were made eligible for the service pension in 1980. It was necessary that they had served in a theatre of war, had at no time been a member of enemy forces and had been residen t in Australia for 10 years.

In the early 1980s there were two pa rticularly significant court cases, Law and Bowman, both of which had far-reaching ra mifications for the repatriation system. The Law case of 1981'effectively conceded cigarette smoking in war-time as a causative element in entitlement' (Lloyd and Rees 1994, p. 358). This decision led to a very significant increase in claims for compensation resulting from smoking-related illnesses.

In Bowman, also in 1981, the Federal Court held with respect to the TPI pension that 'the effect of incapacity on ability to earn could only be gauged by reference to the market in which the applicant might expect to earn'. Also, it was

... sufficient in testing whether an applicant's ability to earn is due to his war-related disability to consider whether he would be equally unable to earn if he were free of this disability. The only hypothesis involved in this would be the consideration of the applicant free of his disability. (Lloyd and Rees 1994, p. 391)

This case significantly broadened potential eligibility for the TPI payment.

In 1981, peacekeeping operations were given coverage under the VEA and in 1982 this was made retrospective to World War II. Also in 1982, Australian, Commonwealth and allied mariners became eligible for the service pension. In the following year, the Commonwealth Government established a royal commission into the effects of the herbicide 'Agent Orange' on Vietnam veterans. Headed by Mr Justice Evatt, the commission ultimately found there was no connection between the spraying of the herbicide and health problems in Vietnam veterans. Similarly, no link was found to account for birth defects in the children of Vietnam veterans. The Commission's findings engendered considerable controversy and the issue is still without final resolution nearly two decades later.

In 1984, an income and assets test was introduced for the service pension and social security income support payments, replacing the sole income test. In May 1985, the Treasurer brought down an economic statement that had a noticeable impact on veterans' benefits. Among other things, the war widow's income support supplement was frozen, grants of dependants' pensions were terminated, and changes to the standard of proof were announced in response to the O'Brien case, in which

... a majority of the High Court held that it was not necessary for the material in a particular case to 'provide some positive reference in favour of the requisite connection between death and incapacity and war service'. (Creyke and Sutherland 2000, p. 402)

Unsurprisingly, this decision led to a subsequent large increase in the number of claims for disability pension. Changes to the standard of proof provided that...

where the Repatriation Commission is reasonably satisfied that the material before it does not raise a reasonable hypothesis of a connection between the death and incapacity of a veteran and the veteran's war service ... a pension shall not be granted. (Lloyd and Rees 1994, p. 400)In addition, the reasonable hypothesis standard was restricted to those who had 'engaged in combat, the civil standard [applying] in other cases' (Lloyd and Rees 1994, p. 400).

In addition, the reasonable hypothesis standard was restricted to those who had 'engaged in combat, the civil standard [applying] in other cases' (Lloyd and Rees 1994, p. 400).

In 1986, Toose's recommendation for a single Act consolidating all repatriation legislation was finally implemented. The VEA left most of the law unaffected, but did attempt to make crucial changes in certain areas relating to the disability and war widow's pensions. In particular, the Minister emphatically restated in the second reading speech that the special or TPI rate of disability pension should not be granted to veterans over the age of 65, except in very rare cases.

To oversee the early years of the VEA, a committee of eminent persons chaired by Justice Toose and known as the Veterans' Entitlements Act Monitoring Committee (VEAMC) was established. While generally finding the operations of the new legislation to be satisfactory, the VEAMC nevertheless recommended increased compensation for frail, aged veterans with high levels of impairment and restricted lifestyles. The result of this was the introduction of the extreme disablement adjustment (EDA), payable to extremely disabled veterans over 65 at effectively 150 per cent of the general rate disability pension.

RECENT DEVELOPMENTS

Australian personnel were involved in several, mainly United Nations- sponsored, activities throughout the 1990s. These tended to be of a peacekeeping or peace-enforcement type, and included deployments to Namibia, the Gulf, Rwanda, Cambodia, Somalia, Bougainville and Timor. The level of access of veterans of these engagements to VEA benefits has primarily depended on whether the service was declared 'warlike' or 'non-warlike'.

In terms of the operation of the VEA, two events took place that directly challenged the way the repatriation scheme had been operating. These were the Auditor-General's Report 1992-93 (Auditor-General 1993), and the Bushell case, which was considered by the High Court in 1992 (Creyke and Sutherland 2000, p. 177). The first made a series of critical findings relating to what were seen as tenuous causal linkages between service and disability. The concerns of the Auditor-General were confirmed by the Bushell decision of 1992.
Essentially, the High Court held that the establishment of a reasonable hypothesis - which the Commission must thereaf ter rebut beyond reasonable doubt to defeat certain claims - could be established if a specialist in a medical field found a causal link, nohvithstanding that every other specialist in that field did not. This decision had the potential to substantially widen the scope of successful compensation claims. In response, the Government appointed a committee of review headed by the Hon Professor Peter Baume, Head of Community Medicine at the University of New South Wales, to examine and make recommendations.

The Baume Report made a number of contentious recommendations on both points. The 'reasonable hypothesis' was considered too generous and the report recommended its replacement with the normal civil 'balance of probabilities' test. Regarding the Bushell decision, Baume recommended that an independent medical body be established to decide what factors caused particular disabilities. As a result, the Repatriation Medical Authority (RMA) and a Specialist Medical Review Council (SMRC) were established in 1994, the first body to formulate Statements of Principles (SOPs) on which medical conditions could be accepted as service related, and the second to hear appeals from decisions of the RMA. The recommendations on onus of proof were not taken up, but the RMA and SMRC were established despite opposition from some sections of the veteran community (Baume 1994).

Between 1995 and 2001, a number of studies were commissioned or undertaken by DVA into the health and mortality rates of Vietnam veterans. In part, these were in response to long-standing claims by Vietnam veterans of health problems and higher death rates peculiar to them. Many new programs targeting benefits and assistance to Vietnam veterans and their families were initiated as a result of these studies. A number of other studies for other veterans or service personnel have since commenced, including cancer and mortality studies for Korean veterans and British atomic test participants, and a health study for Gulf War veterans.

Rehabilitation of disabled veterans was given increased emphasis in 1997 with the introduction of the Veterans' Vocational Rehabilitation Scheme (VVRS), which allowed veterans to undertake training and subsequent employment without jeopardising their pension entitlements. The scheme has been generally well received, with a gradual increase in participation occurring in recent years.

The Military Compensation and Rehabilitation Service (MCRS) was transferred from Defence to DVA in 1999 under a service agreement between the two departments.

That year also saw the extension of the Repatriation Health Card - For All Conditions (Gold Card) to all World War II Australian veterans with qualifying service who were aged over 70. A subsequent extension effective from 1July 2002 granted the Gold Card to all post-World War II Australian veterans aged over 70 with qualifying service. In addition, a Repatriation Pharmaceutical Benefits Card (Orange Card), giving World War II BCAL veterans aged 70 years or more with qualifying service access to the Repatriation Pharmaceutical Benefits Scheme, came into effect on 1January 2002.

The last major review of repatriation legislation before the present one occurred in 2000. The report of Major General R F Mohr into service entitlement anomalies in respect of South-East Asian service between 1955 and 1975 recommended the extension of benefits to veterans of several conflicts not previously covered by the VEA.

CONCLUSION

Australia's repatriation system has often been described by successive governments as either the most, or one of the most, generous in the world. The Committee cannot comment on whether or not that statement is true without exhaustive analysis of other countries' systems and the context in which they operate. However, the Australian repatriation system emerged in its own unique social, political and economic context. Furthermore, it has evolved considerably over the past eight decades or more. The Repatriation Act 1920 was amended approximately 80 times before its replacement by the VEA, and there have been many changes to the latter. Nevertheless, the system's essential elements have remained in place and there can be no doubt that it has been a major institution of social justice in 20th century Australia, touching the lives of many Australians.

Repatriation is a fundamentally benevolent concept. The nation as a whole has always held that 'the right thing' should be done by our veterans. In keeping with this, the scheme has developed in a cautious and incremental fashion.

The Review has sought to maintain this tradition of generosity balanced by fairness.

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