Andersen and Secretary, Department of Employment and Workplace Relations

[2006] AATA 422

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2006] AATA 422

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No   N2006/284

GENERAL ADMINISTRATIVE DIVISION		)
Re		Allan Andersen

Applicant

And Secretary, Department of Employment and Workplace Relations

Respondent

INTERLOCUTORY DECISION

Tribunal Professor GD Walker, Deputy President

Date16 May 2006

PlaceSydney

Decision A stay order is refused.

..............................................

Professor GD Walker
  Deputy President 

CATCHWORDS

APPLICATION FOR STAY ORDER – cancellation of disability support pension – applicant’s conditions of lumbar spondylosis with L4/5 nerve root compression and right knee conditions have not been fully treated and have not stabilised – the applicant’s prospects of success at substantive hearing not great – the applicant is in receipt of Newstart allowance and holds a health care card – public interest considerations do not favour a stay – insufficient grounds for saying that substantive decision in his favour would be rendered nugatory if stay not granted.

Administrative Appeals Tribunal Act 1975 s 41(2)

Social Security Act 1991 ss 94, 94(1), 94(2), 94(3), 94(5)

REASONS FOR DECISION

16 May 2006	Professor GD Walker, Deputy President
Summary

1.      The applicant, Allan Andersen, who is aged 45, was granted disability support pension in 1992 on the basis of a back condition sustained in an assault.  On 21 September 2005, he lodged a medical update of his condition and was assessed by a Health Services Australia medical practitioner who found that while the applicant had a total impairment rating of 20 points, he would within six months be suitable for sedentary duties for 30 hours or more per week.

2.      On 31 October 2005, the respondent, the secretary, Department of Employment and Workplace Relations, cancelled the applicant’s disability support pension.  The decision was affirmed by the Social Security Appeals Tribunal (SSAT) on 27 February 2006 (reducing the applicant’s impairment rating to 10 points).  That is the decision to be reviewed by the tribunal and the subject of the current application for a stay order by the tribunal.

Background

3.      The applicant, Mr Andersen, was born on 18 July 1960 and is aged 45.  On 23 February 1991 he was the victim of an assault, sustaining injuries to his lower back, left groin and left leg.  On 10 September 1992, he applied for disability support pension (DSP) for lower back pain and groin injuries and on 2 February 1993, the SSAT found that he qualified for DSP.

4.      On 30 June 2005, Centrelink asked the applicant to complete a Medical Service Update – Disability Support Pension form (T22 p97).  This was subsequently completed and returned to Centrelink on 21 September 2005.  The applicant also lodged with this form a treating doctor’s report completed by Dr Trevor Kemper of Helensburgh, New South Wales, dated 1 August 2005 (T23 p105).  On 27 October 2005, the applicant was assessed by Dr Naomi Trayer, medical advisor, Health Services Australia (T24 p113).  She assessed the applicant has having lower back pain with a loss of one-quarter range of movement with a permanent impairment rating of 10; right knee pain with a permanent impairment rating of 10; and that he would be fit to undertake work with educational or vocational training for more than 30 hours per week within six months (T24 p120) and that while he could not undertake heavy lifting, his conditions would not preclude sedentary duties (T p127).

5.      On 31 October 2005, Mr Andersen’s disability support pension was cancelled, the decision being affirmed by an authorised review officer on 19 January 2006 after Mr Andersen provided further medical evidence.  Mr Andersen appealed this decision to the SSAT which, on 27 February 2006, affirmed it.  The SSAT found that his total impairment rating for his lower back pain and right knee pain gave him a total impairment rating of 10 points and that he therefore no longer satisfies the requirements to qualify for disability support pension.  The SSAT also found that his conditions of lumbar spondylosis with L4/5 nerve root compression and right knee condition had not been fully treated and had not stabilised.  The SSAT declined to assign an impairment rating to those conditions (T2 p7).

6. On 16 March 2006, the applicant lodged an application for a review of that decision by the tribunal. On 21 April 2006, the applicant filed an application for a stay order under s 41(2) of the Administrative Appeals Tribunal Act 1975.  In making his application, Mr Andersen submitted:

I would like the decision to be STAYED. I want my disability support pension to continue to be paid pending the AAT’s decision.

I have very substantial medical costs due to my disabilities.  I cannot meet these costs without the disability support pension.

Hardship would not be caused to the respondent if my pension was continued.

I have an arguable case before the Tribunal.

7.      The respondent opposes the stay application on the grounds that:

1/        Mr Anderson has applied for Newstart Allowance (NSA) payments; should the application for a stay be granted, and the applicant ultimately succeed on the substantive issue, the applicant would be subject to a debt, under the debt recovery provisions in section 1223 of the Social Security Act 1991.

2/        In his recent application for NSA payments, Mr Anderson notified he has access to $147,000 in liquid assets.  It is submitted therefore, he should not suffer hardship if his application for a stay is not successful.

3/        The SSAT decided Mr Anderson’s current medical conditions relating to his back and knee, are now considered temporary conditions as he has had surgery for his back, and is on the waiting list for an operation on his knee.  It was considered, following both operations, there is a likelihood of significant improvement to both conditions within the next 2 years.  As such, they have not been fully treated, and stabilised.  In the Introduction to Schedule 1B of the SSA, only those medical conditions which have been investigated, treated and stabilised may be assigned points under the Impairment Tables, which means Mr Anderson does not meet the provisions of subsection 94(1)(b).

8.      At the hearing of the stay application, the applicant appeared in person and the respondent was represented by Ken Bullock, advocate, legal services branch, Centrelink.

Applicable legislation

9. The tribunal is empowered to make a stay order in proceedings before the Tribunal pursuant to s 41(2) of the Administrative Appeals Tribunal Act 1975.  This states:

(2)The Tribunal or a presidential member may, on request being made, as prescribed, by a party to a proceedings before the Tribunal (in this section referred to as the relevant proceedings), if the Tribunal or presidential member is of the opinion that it is desirable to do so after taking into account the interests of any persons who may be affected by the review, make such order or orders staying or otherwise affecting the operation or implementation of the decision to which the relevant proceeding relate or a part of that decision as the Tribunal or presidential member considers appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review.

10.     The principal legislation is the Social Security Act 1991 (the Act). Section 94 of the Act provides the qualification criteria for disability support pension:

Qualification for disability support pension

94(1)      A person is qualified for disability support pension if:

(a)  the person has a physical, intellectual or psychiatric impairment; and

(b)  the person’s impairment is of 20 points or more under the Impairment Tables; and

(c)  one of the following applies:

(i)  the person has a continuing inability to work;

(ii)  the Health Secretary has informed the Secretary that the person is participating in the supported wage system administered by the Health Department, stating the period for which the person is to participate in the system; and

(d)  the person has turned 16; and

(e)  the person either:

(i)  is an Australian resident at the time when the person first satisfies paragraph (c); or

(ii)  has 10 years qualifying Australian residence, or has a qualifying residence exemption for a disability support pension; or

(iii)  is born outside Australia and, at the time when the person first satisfies paragraph (c) the person:

(A)  is not an Australian resident; and

(B)  is a dependent child of an Australian resident;

and the person becomes an Australian resident while a dependent child of an Australian resident.

…

Note 2:       for Impairment Tables see section 23(1) and Schedule 1B.

94(2)    A person has a continuing inability to work because of an impairment if the Secretary is satisfied that:

(a)  the impairment is of itself sufficient to prevent the person from doing any work within the next 2 years; and

(b)  either:

(i)  the impairment is of itself sufficient to prevent the person from undertaking educational or vocational training or on‑the‑job training during the next 2 years; or

(ii)  if the impairment does not prevent the person from undertaking educational or vocational training or on‑the‑job training—such training is unlikely (because of the impairment) to enable the person to do any work within the next 2 years.

Note:          For work see subsection (5).

94(3)    In deciding whether or not a person has a continuing inability to work because of an impairment, the Secretary is not to have regard to:

(a)  the availability to the person of educational or vocational training or on‑the‑job training; or

(b)  if subsection (4) does not apply to the person—the availability to the person of work in the person’s locally accessible labour market.

94(4)    For the purposes of subparagraph (2)(b)(ii), if a person has turned 55, the Secretary may, in considering whether educational or vocational training is likely to enable the person to do work, have regard to the likely availability to the person of work in the person’s locally accessible labour market.

94(5)      In this section:

"educational or vocational training" does not include a program designed specifically for people with physical, intellectual or psychiatric impairments.

"on-the-job training" does not include a program designed specifically for people with physical, intellectual or psychiatric impairments.

"work" means work:

(a)  that is for at least 30 hours per week on wages that are at or above the relevant minimum wage; and

(b)  that exists in Australia, even if not within the person’s locally accessible labour market.

Person not qualified in certain circumstances

94(6)  A person is not qualified for a disability support pension on the basis of a continuing inability to work if the person brought about the inability with a view to obtaining a disability support pension or a sickness allowance or with a view to obtaining an exemption, because of the person’s incapacity, from the requirement to satisfy the activity test for the purposes of job search allowance, newstart allowance, youth training allowance, youth allowance or austudy payment.

11.     Schedule 1B of the SSA contains the Impairment Tables for assessing medical conditions.  The introduction to these tables provides, inter alia:

4.        A rating is only to be assigned after a comprehensive history and examination.  For a rating to be assigned the condition must be a fully documented, diagnosed condition which has been investigated, treated and stabilised.  The first step is thus to establish a working diagnosis based on the best available evidence.  Arrangements should be made for investigation of poorly defined conditions before considering assigning an impairment rating.  In particular where the nature or severity of a psychiatric (or intellectual) disorder is unclear appropriate investigation should be arranged.

5.        The condition must be considered to be permanent.  Once a condition has been diagnosed, treated and stabilised, it is accepted as being permanent if in the light of available evidence it is more likely than not that it will persist for the foreseeable future.  This will be taken as lasting for more than two years.  A condition may be considered fully stabilised if it is unlikely that there will be any significant functional improvement, with or without reasonable treatment, within the next 2 years.

6.         In order to assess whether a condition is fully diagnosed, treated and stabilised, one must consider:

  what treatment or rehabilitation has occurred;

  whether treatment is still continuing or is planned in the near future;

whether any further reasonable medical treatment is likely to lead to significant functional improvement within the next 2 years.

In this context, reasonable treatment is taken to be:

treatment that is feasible and accessible ie, available locally at a reasonable cost;

where a substantial improvement can reliably be expected and where the treatment or procedure is of a type regularly undertaken or performed, with a high success rate and low risk to the patient.

Consideration

12. The issue for the tribunal to determine in this case is whether, pursuant to s 41(2) of the Administrative Appeals Tribunal Act 1975, it is desirable to make a stay order “for the purpose of securing the effectiveness of the hearing and determination of the application for review”.  There are four sub-issues which the tribunal considers relevant to the determination of a stay order: first, the prospect of success or otherwise of the application; secondly, whether there will be prejudice to the parties if the stay is not granted; thirdly, the public interest, and fourthly, whether the review application, if successful, will be rendered nugatory if the stay is not granted (Re Griffiths Grif-Air Helicopters PtyLtd and Civil Aviation Authority (1993) 31 ALD 380 at 385).

13.     As to the first issue, the prospects of success at a substantive hearing, the applicant stated that he opposes the suspension of the DSP until his knee has been treated, which should take some months.  He is on the waiting list for a surgical procedure which in the opinion of his orthopaedic surgeon will give him complete relief.  He is keen to have the operation, but in the meantime as he is not working, he feels he needs the DSP in order to help him to defray his medical and surgical expenses.  He does hold a health care card, but has not enquired into how far that will cover the costs of the knee operation or of pain block surgery which he says he also requires.

14.     Health Services Australia had estimated that with vocational rehabilitation and retraining, Mr Andersen would be fit for suitable work for at least 30 hours per week.  Since then, however, he had undergone surgery to his back, which had been successful.  Nevertheless, by the time he pays rates and other expenses, he believes he needs the DSP to cover his bills, including physiotherapy.

15.     The respondent submitted that in view of the orthopaedic surgeon’s opinion that knee surgery would significantly improve the condition of his knee within the next two years, his knee condition must be regarded as temporary.  Once his back and his knee have completely settled down from their respective surgical procedures, the situation could be reconsidered.  In the meantime, it was not possible to allocate impairment points because schedule 1B of the Act provides that a rating is to be assigned only after the diagnosed condition has been investigated, treated and stabilised.  The condition must be considered to be permanent in the sense of being likely to last for more than two years.  A condition may be considered fully stabilised if it is unlikely that there will be any significant functional improvement, with or without reasonable treatment, within that period.  That was not the case with Mr Andersen’s knee condition, and accordingly he did not satisfy the requirements for the disability support pension.

16. As Mr Andersen does not dispute the prognosis that the knee operation is likely to give him substantial or complete relief, and he himself wishes to have the operation, I agree that on the evidence as it stands Mr Andersen does not meet the eligibility requirements of s 94 and schedule 1B. The situation could change after his knee settles down following surgery, but in the meantime I do not think his prospects of success at a substantive hearing of the present application are great.

17.     The respondent, in his written submissions on the stay application (Exhibit R2), submitted “that it has a strong prima facie case, and that there is a significant issue of principle arising from the case” and that the assigning of 10 points to the applicant’s back and finding his right knee pain to be a temporary condition was the correct decision.  The respondent also submitted:

Should the applicant’s request for a stay be granted, and the respondent ultimately succeeded on the substantive issue, the applicant would be subject to a debt, under the debt recovery provisions in section 1223 of the Social Security Act 1991. Mr Anderson is currently in receipt of $373.40 per fortnight for newstart allowance payments, and his partner receives $276.57 in parenting payment partnered payments, a total of $649.97. The fortnightly rate for disability support pension for a recipient, and their partner, is $822.20. The applicant would therefore accrue a debt at the rate of $182.23 per fortnight to be recovered within a period of three to six months.

18.     The second sub-issue is the question of prejudice to the parties. The respondent submitted that the applicant would not suffer any prejudice because he is still in receipt of social security payments and “could be considered reasonably secure financially by most standards”.  Mr Andersen and his wife are receiving social security benefits amounting to $649.97 per fortnight for themselves and one child.  They own their own home and have no mortgage.  In addition, Mr Andersen receives $124 per fortnight as interest, and has access to $147,000 in liquid assets.  Understandably he would prefer not to draw on those funds for his surgery or for physiotherapy, but the fact remains that the funds are there and available.  Further, Mr Andersen has not investigated how far those costs can be met through his status as the holder of a health care card.

19.     If a stay is granted but he is not successful in the substantive application, he would accrue a debt at the rate of $182.23 per fortnight, to be recovered within a period of three to six months.  That is a risk he is obviously willing to take, but being required to repay a large sum at relatively short notice would at the very least be an unwelcome inconvenience.

20.     The respondent would not suffer hardship as such if a stay were granted, and the effects on the respondent are best considered as part of the third sub-issue, that of the public interest.

21.     No doubt it is in the public interest that persons entitled to a disability support pension should receive it, and that those not entitled should not.  If my assessment of the application’s prospects of success at a substantive hearing is correct, there is a real risk that the applicant may incur a debt which the respondent would then have to recover, at some expense to the taxpayer.  Consequently I do not think that the public interest considerations favour the grant of a stay in this case.

22.     The fourth sub-issue is whether the review application, if successful, would be rendered nugatory if the stay is not granted.  If Mr Andersen is successful at the substantive hearing, the result will be that he will be held to be entitled to payment of the disability support pension for the whole, or an appropriate part, of the period since its cancellation on 31 October 2005.  That would fully compensate him for the intervening loss of income, and although he would have incurred some inconvenience in the meantime, that is insufficient ground for saying that the decision in his favour would be rendered nugatory if the stay were not granted.

23. I find on balance therefore that it is not appropriate to make a stay order under s 41(2).

I certify that the 23 preceding paragraphs are a true copy of the reasons for the decision herein of Professor GD Walker, Deputy President

Signed:         .....................................................................................
  Associate

Date/s of Hearing  11 May 2006
Date of Decision  16 May 2006
Representative for the Applicant               Self-represented
Representative for the Respondent          Mr K Bullock, Advocate, Centrelink