Petros and Department of Family and Community Services
[2001] AATA 560
•20 June 2001
CATCHWORDS – SOCIAL SECURITY – Disability Support Pension – whether applicant entitled to receive disability support pension – when applicant first had a continuing inability to work – Australian residency – decision set aside.
Education (General Provisions) Act 1989 – ss 2, 119
Social Security Act 1991 (Cth) – ss 5, 7, 25, 94, 95, Sch 1B
Social Security Act 1947 (Cth)
Social Security (Disability and Sickness Support) Amendment Act 1991 – ss 2, 10, 25, Sch 2
Social Security Legislation Amendment Act (No 2) 1992 – ss 11, 12
Social Security (1994 Budget and White Paper) Amendment Act 1994 – ss 4, Sch 2
Social Security Legislation Amendment Act 1994 (No. 2) – s 5, Sch 1
Social Security Legislation Amendment (No. 1) Act 1995 – ss 4, Sch 4
Social Security and Veterans' Affairs Legislation Amendment Act 1996 – s 3, Sch 2
Social Security and Veterans' Affairs Legislation Amendment (Family and Other Measures) Act 1997 – ss 2, 3, Sch 15 and 16
Re Chami and Secretary, Department of Social Security (1993) 31 ALD 387
Re D'Ambrosio and Secretary, Department of Social Security (1994) 37 ALD 299
Re Hamal and Secretary, Department of Social Security (1993) 30 ALD 517; (1993) 18AAR 137
Secretary, Department of Social Security and Abaroa (1991) 22 ALD 787; (1991) 13 AAR 359
Secretary, Department of Social Security v Raizenberg (1993) 47 FCR 531; (1993) 119 ALR 290; (1993) 31 ALD 461; (1993) 18 AAR 407
DECISION AND REASONS FOR DECISION [2001] AATA 560
ADMINISTRATIVE APPEALS TRIBUNAL )
) Q2000/1031
GENERAL ADMINISTRATIVE DIVISION )
Re SAMIR MICHAEL and FAEZA PETROS
Applicants
And SECRETARY, DEPARTMENT OF FAMILY AND
COMMUNITY SERVICES
Respondents
DECISION
Tribunal Miss S A Forgie (Deputy President)
Date 20 June, 2001
Place Brisbane
Decision The Tribunal:
1.sets aside that part of the decision of the Social Security Appeals Tribunal which is dated 26 September, 2000 and which affirms a decision of the respondent to reject Mr Samir Michael's claim for a disability support pension; and
2.substitutes for that part of the decision a decision that Mr Samir Michael is entitled to a disability support pension; and
3.remits the matter to the respondent to determine the amount of Mr Samir Michael's entitlement to a disability support pension.
S A FORGIE
Deputy President
REASONS FOR DECISION
On 2 November, 2000, the applicants, Mr Samir Michael and his mother, Mrs Faeza Petros, applied for review of a decision of the Social Security Appeals Tribunal ("SSAT") dated 26 September, 2000. Only Mr Michael made submissions in relation to his application to review that part of the SSAT's decision to affirm a decision made by a delegate of the respondent, the Secretary of the Department of Family and Community Services ("the Secretary"), on 6 April, 2000. That decision was to reject Mr Michael's claim for a disability support pension. It had been affirmed by an Authorised Review Officer on 11 August, 2000. Mr Michael and his mother did not pursue their applications in relation to the Secretary's other decisions.
At the hearing, Mr Michael was represented by Ms Heyworth-Smith of counsel and the Secretary by Mr O'Sullivan of counsel. The documents lodged pursuant to s. 37 of the Administrative Appeals Tribunal Act 1975 ("T documents") were admitted in evidence. No oral evidence was given.
THE ISSUE
The issue in this case is whether Mr Michael is qualified to receive a disability support pension. That depends upon when he first had a continuing inability to work and whether he was an Australian resident at that time.
BACKGROUND
There was no dispute between the parties regarding the factual issues in this case. In light of that and on the basis of the material in the T documents, I have made the findings of fact set out in the following paragraphs.
Mr Michael was born in Iraq on 9 May, 1984. In 1996, he and his mother and two older brothers entered New Zealand as refugees. They were subsequently granted visas to remain there permanently and are now citizens of that country. Mrs Petros received a payment in the nature of a social security benefit in New Zealand and cared for her son. They lived in a house with her other two sons.
While in New Zealand, Mr Michael was assessed by a paediatrician, Dr Warwick Smith, who wrote a report dated 16 February, 1999 (T documents, pages 45-46). At that time, Mr Michael was 14 years and 9 months old. In summary, Dr Smith's report stated that Mr Michael suffered from autism, significant intellectual impairment, epilepsy and nocturnal enuresis (bed-wetting). His communication and language skills were at an infantile level and his behaviour less compliant, if not more defiant, than it had previously been. He also demonstrated inappropriate responses to requests to do something. His behaviour was also becoming more uninhibited in sexual aspects. As a consequence of the change in his behaviour, his mother was placed under additional strain. A further assessment dated March 1999-2000 confirmed Mr Michael's behaviour and set out goals to be achieved in relation to it and resources and language to achieve those goals (T documents, pages 47-50).
On 19 February, 2000, Mr Michael arrived in Australia with his mother. Both hold permanent resident visas to remain in Australia. Mrs Petros moved with her son to Australia and to Brisbane in particular so that she could be closer to her daughter, who is married and who assists her in the care of Mr Michael.
On their arrival in Australia, Mrs Petros enrolled her son in school but he has become more active and agitated and has a tendency, at times, to harm himself and others. Since she has been in Australia, Mrs Petros has not been in receipt of any payment under the Act either for herself or in respect of her son as they have been subject to the newly arrived resident's waiting period. Mr Michael has not received any payment. On 6 April, 2000, when he was 15 years and 11 months of age, Mr Michael lodged a claim for a disability support pension. As I have noted previously, his application was refused.
LEGISLATIVE BACKGROUND
Current legislation
Section 94(1) of the Social Security Act 1991 (Cth) ("the Act") sets out the qualifications that a person must meet in order to receive a disability support pension. They are:
"(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."
A "dependent child" is defined in ss. 5(2) to (9) of the Act. Each of those provisions does so in terms of a "young person" who is, in turn, defined as:
"A person is a young person at a particular time if at that time the person:
(a)is under 16 years of age; or
(b)is a student child." (s.5(1B))
A "student child" is a person who has reached 16 years of age but is under 22 years, is receiving full-time education at a school, college or university and is receiving less than $6,403 in income each year (s. 5(1A)).
The general definition of a "dependent child" is found in s. 5(2). It provides that:
"Subject to subsections (3) and (6) to (8), a young person who has not turned 16 is a dependent child of another person (in this subsection called the adult) if:
(a)the adult is legally responsible (whether alone or jointly with another person) for the day-to-day care, welfare and development of the young person, and the young person is in the adult's care; or
(b)the young person:
(i)is not a dependent child of someone else under paragraph (a); and
(ii) is wholly or substantially in the adult's care."
A young person who has not turned 16 years of age cannot be a dependent child if he or she is not in full-time education and is in receipt of income, the rate of which exceeds $107.70 per week as indexed in line with CPI increases (s. 5(3)).
A young person who is over 16 but less than 22 years of age may also be a dependent child if he or she is wholly or substantially dependent on another person, who is not his or her partner, and he or she receives no more than $6,403 each year (ss. 5(4) and (5)). That young person cannot be described as a dependent child if he or she is in receipt of a social security pension or benefit or in receipt of payments under a Labour Market Program (s. 5(6)).
Other qualifications found in ss. 5(7) to (9) to the general definition of a "dependent child" are not relevant in this case.
The circumstances in which a person has a "continuing inability to work" is the subject of s. 94(2). It provides that:
"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."
The word "work" is defined to mean work that is for at least 30 hours per week at award wages or above and exists in Australia even if does not exist in the person's locally accessible labour market (s. 94(5)). In deciding whether a person has a continuing inability to work because of an impairment, the Secretary is generally not to have regard to the availability of educational or vocational training or on-the-job training or to the availability of work in the person's locally accessible labour market (ss. 94(3)(a) and (b)). The only exception to that applies where a person is 55 years of age and that is not relevant in this case (s. 94(4)). Neither "educational or vocational training" nor "on-the-job training" includes programmes designed specifically for people with physical, intellectual or psychiatric impairments (s. 94(5)).
Permanent blindness is also a ground upon which a person may qualify for a permanent disability pension. Only s. 95(1) is relevant and it provides:
"A person is qualified for a disability support pension if:
(a)the person is permanently blind; and
(b)the person has turned 16; and
(c)the person:
(i)is an Australian resident at the time when the person first satisfies paragraph (a); or
(ii)has 10 years qualifying Australian residence; or
(iia)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 (a), 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."
Legislation in force at time of Raizenberg i.e. as at 1 July, 1991
The form in which s. 94 was considered by the Full Court of the Federal Court in Secretary, Department of Social Security v Raizenberg (1993) 47 FCR 531 (Wilcox and Beazley JJ, Einfeld J dissenting) was that appearing in the Act as originally passed:
"(1) A person is qualified for an invalid pension if:
(a)the person is permanently incapacitated for work; and
(b)the degree of the incapacity for work is 85% or more; and
(c)50% or more of the incapacity for work is directly caused by a physical or mental impairment; and
(d)the person has turned 16 and is under the pension age; and
(e)the person either:
(i)is an Australian resident at the time when the person first satisfies paragraphs (a), (b) and (c); or
(ii)has 10 years qualifying Australian residence; or
(iii)is born outside Australia and, at the time when the person first satisfies paragraphs (a), (b) and (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."
The expression "dependent child" was defined in s. 5(2) in terms similar to those in which it is currently defined. A "young person" included persons to the age of 25 years rather than to 22 years as is presently the case (s. 5(1)).
The majority in Raizenberg also set out the predecessors of s. 94 as they appeared in the Social Security Act 1947 ("1947 Act") and other earlier legislation (pages 533-535).
The 1991 amendments
The Social Security (Disability and Sickness Support) Amendment Act 1991 ("the 1991 Amendment Act") repealed s. 94 as originally enacted and replaced it (s. 10). The amendment had effect from 12 November, 1991 (s. 2(2)). It changed the name of the pension from "invalid pension" to "disability support pension" and provided:
"(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% or more under the Impairment Tables; and
(c)the person has a continuing inability to work; 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 paragraphs (a), (b) and (c); or
(ii)has 10 years qualifying Australian residence; or
(iii)is born outside Australia and, at the time when the person first satisfies paragraphs (a), (b) and (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."
The meaning given to the expression "continuing inability to work" was set out in s. 94(2):
"A person has a continuing inability to work if the Secretary is satisfied that:
(a)the person's impairment is of itself sufficient to prevent the person from doing:
(i)the person's usual work; and
(ii)work for which the person is currently skilled;
for at least 2 years; and
(b) either:
(i)the person's impairment is of itself sufficient to prevent the person from undertaking educational or vocational training during the next 2 years; or
(iv)the person's impairment does not prevent the person from undertaking educational or vocational training but such training is not likely to equip the person, within the next 2 years, to do work for which the person is currently unskilled."
To complement s. 94(1)(b), Schedule 1B was inserted in the Act and it set out the Tables for Assessment of Impairment for Disability Support Pension ("Impairment Tables") (s. 25, Schedule 2). The word "work" was defined in the same terms as it currently appears in s. 94(5) of the Act and the substance of ss. 94(3) and (4) were introduced in their current form.
The 1992 amendments
The effect of ss 11 and 12 of the Social Security Legislation Amendment Act (No 2) 1992 ("1992 Amendment Act") was to omit the residency requirements in ss. 94(1)(e)(i) and (iii) at the time that the person first satisfies the requirements of ss. 94(1)(a), (b) and (c) and limit them to be met at the time that the person first met the requirements of s. 94(1)(c), as is presently the case.
The 1994 amendments
The Social Security Legislation Amendment Act (No.2) 1994 amended s. 94 regarding the disability wage supplement (s. 5 and Schedule 1, item 3). None of those amendments is relevant in this case.
The Social Security (1994 Budget and White Paper) Amendment Act 1994 ("1994 Amendment Act") amended the residence requirements in s. 94(1)(e)(ii) so that a person could either have 10 years qualifying Australian residence or have a qualifying residence exemption for a disability support pension (s. 4 and Schedule 2, item 7). Corresponding amendments were made to the remainder of the Act. The first was to insert s. 7(6) providing that a person only has a qualifying residence exemption for a particular social security payment if he or she resides in Australia and holds a visa declared by the Minister under s. 25 of the Act to be an approved visa for the social security payment (s. 4 and Schedule 2, item 3).
The 1995 amendments
The Act was further amended by the Social Security Legislation Amendment Act (No. 1) 1995 ("1995 Amendment Act"). It inserted in s. 94(1)(c) the requirement that "because of the impairment", the person has a continuing inability to work (s. 4, Schedule 4, item 1). It then inserted ss. 94(2) and (3) in the form in which they are presently enacted and made related amendments (s. 4, Schedule 4, items 3-5).
The 1996 amendments
The amendment made by the Social Security and Veterans' Affairs Legislation Amendment Act 1996 is not relevant (s. 3, Schedule 2, Part 4, items 75 and 76).
The 1997 amendments
The Social Security and Veterans' Affairs Legislation Amendment (Family and Other Measures) Act 1997 ("1997 Amendment Act") amended 20% to 20 points in s. 94(1)(b) (s. 3, Schedule 16, item 1). It also repealed s. 94(1)(c) and substituted the following with effect from 1 January, 1998 (s. 2(2)):
"(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
(iii)the person was a recipient of the former payment type known as disability wage supplement who received his or her last payment of that supplement on or after 4 December 1997 and the person makes a claim for disability support pension within 28 days after the day on which that last payment was received; and" (s. 3, Schedule 15, items 16 and 17)
With effect from 1 February, 1998, s. 94(1)(c)(iii) was then repealed (s. 3 and s. 2(11), Schedule 15, item 18).
In substituting this provision, Parliament required that a person have a "continuing inability to work" rather than a "continuing inability to work because of an impairment" as it had done since the 1995 Amendment Act. At the same time, it retained the definition of the term "continuing inability to work because of an impairment" in s. 94(2).
THE SUBMISSIONS
There is no issue between the parties that Mr Michael meets the qualifications set out in ss. 94(1)(a) and (b). There was also no question that he meets that in s. 94(1)(c) in that he has a "continuing inability to work".
There is no question that Mr Michael has a continuing inability to work within the meaning of s. 94(2). The question is whether he was an Australian resident when he first had that inability. He became an Australian resident as that term is defined in s. 7(2) of the Act when he first came to Australia on 19 February, 2000 while being the holder of a permanent resident visa. His residence and his permanent residence visa meant that he satisfied paragraphs (a) and (b)(ii) of the definition of an "Australian resident" in s. 7.
When did Mr Michael first have his continuing inability to work? At the heart of Ms Heyworth-Smith's submission is the proposition that s. 94 requires that a claimant's continuing inability to work must be considered at a time, or from an age, when he or she is expected either to work or to be able to claim social security if he or she can not work. Unlike s. 94 in the form in which it was considered by the Full Court of the Federal Court in Raizenberg, the concept of a continuing inability to work incorporates a temporal element. That temporal element is that the person is prevented from doing any work for the following years. Section 94 as formerly enacted required that a person be permanently incapacitated for work but did not define what was meant by that expression. Under that provision, Ms Heyworth-Smith submitted, it might have been possible to say that a child of 12 has a permanent incapacity for work which will fructify into a right to receive a disability support pension when he or she turned 16 years of age. As presently drafted, it is not possible to say that a child of 12 years of age has a continuing inability to work because the definition of that expression requires that his or her impairment prevent him or her from doing any work in the next two years. In that time, the child would only be aged 14 years and would not be expected to work. Therefore, his or her continuing inability could not be assessed.
At the heart of Mr O'Sullivan's submissions is the proposition that there is no such temporal element. The important requirement of s. 94(2) is that the impairment is "of itself" sufficient to prevent the person working in the next two years. It matters not that other matters, including age, might also prevent the person from doing any work provided that impairment alone would prevent a person from doing work. Whether or not an impairment is of itself sufficient to prevent the person from doing any work within the next two years can be assessed even if a child might not otherwise be expected to work in that two year period. A child's legal entitlement to work or any expectation that he or she would otherwise be working are not necessary to assess his or her capacity or incapacity for work.
CONSIDERATION
At the time the Full Court considered s. 94 in Raizenberg, the section did not define what it meant by "incapacity for work". After reviewing the authorities and the common law, the majority concluded that:
"In our opinion, the phrase 'permanently incapacitated for work' in s 94(1) means loss of earning capacity. We appreciate that it will not always be easy to determine whether there is a loss of earning capacity, and if so its extent, before the person reaches the usual working age. But, if there is a difficulty, this was one deliberately accepted by the Parliament. In any event, the problem may not be as serious as suggested by counsel to the respondent. The loss of earning capacity will often be able to be assessed even though a person has not yet reached employment age, whether that age be identical to the age specified in s 94 or some earlier age, depending upon the legislation in the various States and Territories as to the age that a person may leave school." (page 540)
The majority also found much to recommend itself in Deputy President Gerber's consideration of the issue in Re Secretary, Department of Social Security and Abaroa (1991) 22 ALD 787. They extracted the relevant passages:
"He stated (at 362) that the phrase 'permanent incapacity for work' is not a 'term of art' but rather is:
'… a condition precedent to eligibility for a pension grounded in a medical condition. In the context of the Social Security Act, the incapacity referred to deals with the economic consequences which flow from the impairment, subject only to meeting the statutory requirements … In other words, where one can predicate – whether before or after the age of 16 years – that a person's condition is such that he/she satisfies the qualifying elements set out in s 27, that person is there and then suffering from a 'permanent incapacity for work', which fructifies into an entitlement to an invalid pension on turning 16 years of age, provided the qualifying event occurred at a time when the claimant was an Australian resident. Applied to this case, the applicant was diagnosed as suffering from cerebral palsy at birth whilst he was an Australian resident …
The above view of the section becomes even more compelling when one looks at the alternative "qualification" for a pension – blindness. If an infant is born blind and was an Australian resident at the time of his birth, it qualifies for an invalid pension on attaining the age of 16 years provided it is an Australian resident at that time. Why should the legislature be presumed to place a different – and more onerous – hurdle in the path of infants who are Australian residents and suffer a serious and permanently incapacitating trauma other than blindness? Again, why should I not apply the syntactical presumption noscitur a sociis that both "permanent incapacity for work" and becoming "permanently blind" demand identical conditions precedent?
I reach the same result by applying the rule in Heydon's Case (1584) 3 Co Rep 7a at 7b; 76 ER 637 at 638, also known as the "Mischief Rule", by asking myself: "what was the mischief for which the common law did not provide, and what has Parliament done to remedy it?" I find that the "mischief" for which the common law did not provide was the provision of relief to persons who became permanently incapacitated for work in circumstances set out in the Act. To the extent that the Act contains exclusionary provisions, these are clearly designed to disqualify migrants suffering from disabilities acquired abroad from claiming an invalid pension in this country until they have resided here for 10 years.'" (pages 538-539)
The majority concluded that Ms Raizenberg, who had suffered from cerebral palsy since birth in 1973, was severely disabled and migrated to Australia with her parents in 1988, was not eligible for an invalid pension when she turned 16.
In his dissenting judgement, Einfeld J began with his understanding of the concept of "incapacity for work" as it appears in the Act:
"…I have always understood that the views in Re Panke and Director-General of Social Services (1981) 4 ALD 179 of Davies J, when President of the Administrative Appeals Tribunal, had been generally accepted as the applicable construction to be given to the concept, in social security terms, of 'incapacity for work'. That was that social security legislation is designed to provide financial support for the economic effects of disabling medical conditions. It is not an award of money for the fact of injury or physical or mental disability but an income supplement or replacement for the diminution or extinguishment of the capacity to earn." (page 540)
His Honour pointed to difficulties in assessing a person's permanent incapacity for work, or otherwise, at an early age:
"…There is nothing in the Act to support a concept of someone (in this case presumably a duly qualified person who was present at or soon after the birth of this respondent) assessing permanent incapacity for work at the time of the diagnosis of a disabling condition. There are all types of happenings, including the extent of the condition, the availability of facilities, resources and treatment, and the person's own dedication to improvement which may change in the 16 or more subsequent years. Many people with severe cerebral palsy have become Australian Paralympians at ages of and above 20 and 25 years and, having achieved success, have attracted professional coaching and advertising contracts. Yet at birth they would probably have been assessed as permanently and totally incapacitated for work if a prediction had been made. If incapacity is assessed at birth or at some other time during childhood, what happens if the condition improves and the degree of incapacity reduces, as not infrequently occurs?" (page 541)
Einfeld J went on to refer to a number of authorities to support his conclusion that "incapacity for work" is only a relevant concept where "work" itself is a relevant criterion in the testing or assessment process for entitlement (page 542). He continued:
"…I cannot accept that Ms Raizenberg lost her earning capacity, permanently and in all fields of work that may have been open to her, at birth or whenever her disability was diagnosed and she was not an Australian resident. To use or paraphrase the words of the cases, 'the loss of her capacity to earn wages or any part of her livelihood by working' occurred at the age of 16 years or later when she first had something to 'lose' and when the question of her entitlement to an invalid pension came to be assessed on the basis of several preconditions including a requirement that she then be, as a present fact whatever be the past or future, permanently incapacitated for work. That that also happened to be when the law said that she was entitled to leave school – not be eligible to go to work – is an additional interesting fact. But it is the first time when it can properly be said that the applicant for a pension 'is' permanently incapacitated for work just as at that time only are the other qualifications of s 94 to be assessed …" (page 544)
As to the Secretary's argument that s. 94(1)(e)(iii) served no purpose at all if permanent incapacity for work of a person under 16 years of age can never occur because the person has no work capacity or incapacity until eligible for work, Einfeld J said:
"… In my view that is not even a correct statement of the problem, let alone of its solution, as is demonstrated by the facts of this case. The reason this provision has no application to this case is because when Ms Raizenberg made her application for a pension she had ceased to be a dependent child as defined by s 5(2) of the Act because she had passed her 16th birthday. In other words, she became eligible for consideration for a pension under par (e)(i) because she was a resident who was over 16, and therefore deemed independent, and was permanently incapacitated for work. The fact that a person may first become eligible for work or assessable for work capacity at age 16 does not mean that that is the only age when the assessment may fall to be made. Thus the permanent incapacity for work may equally be determined when the person is 17, 18 or 19 years old or older regardless of the nature and extent of the person's state of health in the past. If whenever it occurs, the person applying for the pension is an Australian resident, a pension will be payable." (page 545)
Ms Heyworth-Smith submitted that the principles adopted by Einfeld J should be applied in the interpretation of s. 94 in its current form. Mr O'Sullivan preferred those of the majority and, referring to the Second Reading Speech given by Mrs Crosio, the then Parliamentary Secretary to the Minister for Social Security in relation to the 1995 Amendment Act (Hansard, House of Representatives, 19 June, 1995, page 1766), submitted that Parliament had not intended any change in the relevant features of the concept of incapacity for work as considered by the majority in Raizenberg .
The history of the legislative amendments to s. 94 shows that the first major change to the section as considered by the Full Court in Raizenberg occurred not in 1995 but late in 1991 with the enactment of the 1991 Amendment Act. It was at that stage that Parliament moved from the criterion that the person must be "permanently incapacitated for work" to a concept that he or she has a "continuing inability to work". Whereas it had not defined the earlier concept, it did so in respect of the latter. Unlike the majority in Raizenberg, Parliament did not choose to couch its definition in terms of loss of earning capacity but in terms of the person's being prevented from doing his or her "usual work" and "work for which the person is currently skilled" (ss. 94(2)(a)(i) and (ii)).
The reasons for the change are found in the Second Reading Speech of the Hon Peter Staples, the then Minister for Aged, Family and Health Services, representing the Minister for Social Security (Hansard, House of Representatives, 31 May, 1991, page 4477). The 1991 Amendment Act was intended, the Minister said, to "… restructure income support for people who are disabled or sick …" and to introduce "… an entirely new strategy – which will help us deal far more effectively with the needs of people with disabilities in the 1990's … (page 4477). Problems, he said, had developed under earlier legislation with concepts such as "permanently incapacitated for work" and "85% incapacity" (pages 4477-4478). The Minister continued:
"The AAT went a considerable way in taking account of socioeconomic factors and the labour market in assessing a person's incapacity for work. We reached the stage where a person could suffer from a minor medical condition but, because of a combination of age, education, lack of skills in English, work history and workers (sic) compensation, could end up receiving invalid pension. Subsequent legislative amendments in 1987 went some way to reducing the impact of socioeconomic factors by introducing a requirement that at least half of the permanent incapacity had to be directly caused by a physical or mental impairment.
At the same time, there were a small but significant percentage of cases of relatively young people, even people in their twenties, who were not manifestly impaired but who were being awarded invalid pension with the expectation that they would continue to receive it on an indefinite basis. The concept of permanent incapacity for work became self-fulfilling and only some 2 per cent of invalid pensioners went off pension because of their return to employment. Overall, there has been minimal movement into the labour market by invalid pensioners.
Another important issue has been the failure of any significant number of invalid pensions to benefit from rehabilitation. Very few were referred or, if referred, accepted for rehabilitation. This was basically due to a lack of motivation which again appears to be linked to the fact that invalid pension was regarded as a permanent payment." (page 4478)
The explanation given in the Second Reading Speech focuses not upon a person's capacity for work but upon his or her inability to work. That change in focus is reflected in the drafting of s. 94 before and after the 1991 Amendment Act. As it came into operation on 1 July, 1991, s.94 permitted up to 50% of a person's incapacity to be attributed to factors other than those caused directly by the person's impairment. After 12 November, 1991, (the date of effect of the 1991 Amendment Act) the person's inability to work had to be capable of being referable entirely to his or her impairment even if there were other considerations leading to his or her inability i.e. the person's impairment "of itself" meant that he or she was unable to work. Taken on their face, the change in Parliament's choice of words from "capacity" to "ability" may be of no consequence for "ability" may be defined in terms, among others, of "capacity" (The New Shorter Oxford English Dictionary, 1993).
When regard is had to s. 94(2) as amended by the 1991 Amendment Act, however, the criteria adopted in the definition of "a continuing inability to work" suggest that the person has been working or is at least of working age at the time his or her ability to work is being considered. In requiring consideration of a person's "usual work", s. 94(2)(a)(i) is focusing upon the person's situation at the time of his or her application and not upon a hypothetical situation in the future. This is the interpretation of the term in previous cases. The Tribunal in Re Chami and Secretary, Department of Social Security (1993) 31 ALD 387 (Senior Member Lewis, Dr Browne and Mr Russell, Members), for example, said of a person who had a number of positions in the past:
"(32) Next we must consider what is usual work. The Shorter Oxford English Dictionary, in part, defines 'usual' to mean 'commonly observed or practised; current, prevalent; Of persons: commonly employed or serving in a particular capacity'. The applicant's most recent work is that of a rigger, but within the context of his work history in Australia he changed jobs rather frequently in search of better paid work. The common theme of most of these jobs was that of a labourer which involved heavy physical work. Therefore, we define his usual work as that of a labourer, that being the work in which he was commonly employed. …" (page 388)
The Tribunal's interpretation was approved by a differently constituted Tribunal in Re Hamal and Secretary, Department of Social Security (1993) 30 ALD 517 (O'Connor J, President, Senior Member Lewis and Dr Campbell, Member). When faced with a situation in which an applicant had never worked and was still attending a tertiary college, the Tribunal in Re D'Ambrosio and Secretary, Department of Social Security (1994) 37 ALD 299 (Senior Member Grimes, Dr Travers and Mr Attwood, Members) said:
"(44) In the tribunal's opinion however, it would be an unjust construction of beneficial legislation to exclude those persons who have not worked and therefore do not have 'usual work' within the definition of the Act. There are clearly shortcomings within the legislation to deal with situations such as that presently before the tribunal. It would seem more fitting to consider, as in this case, that the applicant has no usual work and therefore cannot positively be excluded from receipt of the pension on that ground alone. In such circumstances it is appropriate for the tribunal to proceed to consider whether the applicant satisfies the remaining mandatory requirements of s 94(2)." (page 301)
The requirement in s. 94(2)(a)(ii) that the person's impairment must be of itself sufficient to prevent the person from doing work for which he or she "is currently skilled" also suggests that regard is to be had to the current situation rather than to a hypothetical situation at some time in the future. It does not, however, prevent consideration being given to the situation of a young person who has never worked. In Re D'Ambrosio, the Tribunal considered that a person still attending school could, in the circumstances of that case, be regarded as unskilled (page 301).
That both criterion in s. 94(2)(a)(i) and (ii) must be considered at the time of the application in relation to the situation at that time and not at some future time is underlined by the requirement that a person's impairment must prevent him or her from doing his or her usual work and work for which he or she is currently skilled for at least "two years". Taken in the context of what is being assessed, the two years to which reference is made must be a reference to the two years following the time at which the assessment is being made and not two years occurring at some indeterminate time in the future. That this is so is confirmed when reference is made to s. 94(2)(b). In requiring a consideration of the likely effect of educational or vocational training in fitting the person for work "within the next two years" (emphasis added), s. 94(2)(b) is focusing attention on the two years following the consideration of the issue.
Taking these matters into account, I have concluded that s. 94(2) as amended by the 1991 Amendment Act, required that consideration be given to whether a person fulfilled its requirements at the time the issue was being considered. What is the time of that consideration? In the first instance, it is at the time of the person's application. Consideration at that time was not focused on any hypothetical period at an earlier stage of a person's life when it would not be contemplated that he or she would work at all because of infancy. It did not require that consideration be given to whether or not a person's impairment would, at some time further than two years in the future, be itself sufficient to prevent the person from doing work.
Not all issues are considered at the time of the application. That follows from the fact that s. 94(1)(e)(i) required that consideration be given to when a person "first" satisfied certain criteria. As enacted in 1991 and after the section considered in Raizenberg had been repealed, s. 94 required that the person had to be an Australian resident when he or she first had a continuing inability to work as well as when he or she had a physical, intellectual or psychiatric impairment and that impairment was at least 20% under the Impairment Tables i.e. the person had to be an Australian resident at the time that he or she first satisfied ss. 94(1)(a), (b) and (c). The only exceptions were if he or she had ten years qualifying Australian residence or met the particular requirements of s. 94(1)(e)(iii) (s. 94(e)). In such a requirement, s. 94 separated the concepts of impairment, degree of impairment and continuing inability to work. There is nothing in s. 94 that suggests that the person needed to satisfy each of the three criteria at the same time. The only requirement was that he or she met the residence requirements when he or she first satisfied each of the criteria. That accords with common sense. The fact that a person has an impairment, even greater than 20% under the Impairment Tables, does not automatically lead to the conclusion that he or she will have a continuing inability to work. It does not lead to the conclusion that his or her ability to work will remain static. A person may, for example, be able to work at one time of his or her life even though he or she has an impairment greater than 20% but not be able to work at a later time when the degree of impairment has increased.
Given the focus of the concept of a "continuing inability to work" upon a person's present ability and not upon some hypothetical ability in the future, it seems to me that a consideration of when a person first had that continuing inability must be grounded in a time when it would be expected that the person might work if he or she were able to do so and minded, when faced with the choice of furthering his or her studies, to do so. It would follow that it would not be relevant to consider the person's capacity for work as an infant when there would be no such expectation. That this is what is intended is confirmed by reference to the Minister's Second Reading Speech where the emphasis is upon people's moving into the labour market rather than remaining on what had until then been the invalid pension.
What the person's age might be when that expectation might first arise was not a matter that could be specified precisely. As Mr O'Sullivan submitted, there is no longer a prohibition on working outside school hours once a person is 15 years of age (Education (General Provisions) Act 1989, s. 119) and he or she is no longer required to attend (s. 2(1)). Allowance needed to be made not only for the varying requirements of the States and Territories in Australia but to the situation in overseas countries.
Allowing for the variations in age when a person might be first said to have a continuing inability to work, s. 94(1)(e)(iii) as enacted by the 1991 Amendment Act did not become meaningless. It might be that a person was not an Australian resident but was a dependent of an Australian resident within the meaning of the Act while reaching a stage at which he or she would have been expected to work but was unable to do so because of his or her impairment and so first satisfied s. 94(1)(c) at that time. If the person was working and then had a continuing inability to work, he or she could have feasibly been a dependent child of an Australian resident for his or her salary or wages for work of at least 30 hours each week might, in some countries, have been less than a rate of $107.70 per week (as indexed according to CPI (see s. 5(3)). When the person later came to Australia and became an Australian resident while still a dependent child within the meaning of the Act, he or she satisfied the residency requirements.
The 1992 Amendment Act is significant in that it limited the residency requirements to the time at which a person first had a continuing inability to work. It no longer required that a person be an Australian resident when he or she had a physical, intellectual or psychiatric impairment or when that impairment became at least 20% according to the Impairment Tables. There were no other changes that suggest Parliament intended to change the times at which a person's continuing inability was to be assessed.
The amendments made in the 1994 Amendment Act are not relevant in this case. The 1995 Amendment Act substituted s. 94(2). It no longer defined the expression "continuing inability to work" but now defined the expression "continuing inability to work because of an impairment". That matched its insertion of the words "because of an impairment" in s. 94(1)(c) after the words "continuing inability to work". When read on its own but in the context of s. 94, s. 94(2) does not suggest any change in intention. It adds to the consideration of the person's future prospects a requirement that regard be had to on-the-job training as well as to educational or vocational training. It does not change the earlier requirement that the person's ability to obtain work with such training be assessed within the "next 2 years". Again, it is not addressing a hypothetical situation. The change in s. 94(2)(a) to require a consideration of the person's ability to do "any work" because of his or her impairment rather than his or her "usual work" and "work for which the person is currently skilled" does not alter the time at which the consideration must be undertaken. It does not take it back to a time when the person is an infant but to a time when it would be expected that the person might work if he or she were able to do so and minded, when faced with the choice of other paths such as study, to do so.
That Parliament did not intend to change the time of consideration is confirmed by reference to the Second Reading Speech of the 1995 Amendment Act when the Parliamentary Secretary explained the limited reasons for the amendments:
" The bill also modifies the meaning of the term "continuing inability to work", which is one of the qualification criteria for disability support pension and disability wage supplement. In response to the unanticipated outcome in the AAT case of Loknar, the amendment puts beyond doubt that the necessary assessment must be whether the person is fit for any work, whether skilled or unskilled, that he or she could do without needing preparatory training. Alternatively, if such training were necessary, it would have to be likely to equip the person to do the job within two years.
In a further amendment affecting disability support pension and disability wage supplement, the qualification provisions will address a trend emanating from several recent SSAT and AAT decisions. The amendment will make sure that the person's continuing inability to work is directly caused by an impairment of 20 per cent or more under the act's impairment tables. Factors that are consequences of the impairment, such as attitude and lack of motivation to work, may not be taken into account." (pages 1767-1768)
For the purposes of this case, the 1997 Amendment Act made no relevant changes. Applying the interpretation I have adopted of s. 94, it follows that, in a case such as this where a young person has never worked at the time of his or her application, the time at which I am to consider his or her continuing inability, or otherwise, to work is the time when it would first be expected that the person might work if he or she were able to do so and minded to do so when faced with the choice of furthering his or her studies. Although the Act contemplates that a young person may be earning income at the age of 14 years, the age to which a person is generally expected to attend school is 16. That is the age a person must have reached to be qualified for a disability support pension. It can be expected that a person might work after that age if he is she were able to do so and minded, when faced with the choice of furthering his or her studies, to do so.
That would mean in the circumstances of Mr Michael's case that I would need to consider whether he had a continuing inability to work when he was 16 years of age. At that age, I am satisfied that he had a continuing inability to work and that this was the first time at which he had such an inability. Therefore, he satisfied the residency requirements in s. 94(1)(c) as he was an Australian resident at that time. As Australian residency was the only bar to Mr Michael's entitlement to a disability support pension, I:
1.set aside that part of the decision of the Social Security Appeals Tribunal dated 26 September, 2000 and which affirms a decision of the respondent to reject Mr Samir Michael's claim for a disability support pension; and
2.substitute for that part of the decision a decision that Mr Samir Michael is entitled to a disability support pension; and
3.remit the matter to the respondent to determine the amount of Mr Samir Michael's entitlement to a disability support pension.
I certify that the fifty eight preceding paragraphs are a true copy of the reasons for the decision herein of Miss S A Forgie (Deputy President)
Signed: ..........................................
A R Horne AssociateDate of Hearing 30 May, 2001
Date of Decision 20 June, 2001
Counsel for the Applicant Ms Heyworth-Smith
Solicitor for the Applicant Welfare Rights
Counsel for the Respondent Mr O'Sullivan
Solicitor for the Respondent Australian Government Solicitor
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