Schellhorn and Repatriation Commission
[2006] AATA 697
•11 August 2006
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2006] AATA 697
ADMINISTRATIVE APPEALS TRIBUNAL )
) No N2005/1015
GENERAL ADMINISTRATIVE DIVISION ) Re JOACHIM SCHELLHORN Applicant
And
REPATRIATION COMMISSION
Respondent
DECISION
Tribunal Senior Member R. Hunt and Member Dr I. Alexander Date 11 August 2006
Place Sydney
Decision The decision under review is affirmed. …………………………………..
Ms R. Hunt
Senior Member
CATCHWORDS
VETERANS’ AFFAIRS – disability pension – special rate of pension – incapacity from war-caused injury ‘alone’ did not prevent the veteran from undertaking remunerative work – incapacity not substantial cause of inability to obtain remunerative work – decision under review affirmed
Veterans’ Entitlements Act 1986 ss 19(5C), 19(9), 24(1)(c), 24(2)(a), 24(2)(b)
Flentjar v Repatriation Commission (1997) 48 ALD 1
Repatriation Commission v Hendy [2002] FCAFC 424; (2002) 76 ALD 47
Banovich v Repatriation Commission (1986) 69 ALR 395
Repatriation Commission v Buckingham [1996] FCA 37Starcevich v Repatriation Commission (1987) 18 FCR 221
Magill v Repatriation Commission [2002] FCA 744
Hall v Repatriation Commission (1994) 33 ALD 454
Rehabilitation Commission v Braund (1991) 23 ALD 591
Conway v Repatriation Commission (2003) 37 AAR 461
Jackman v Repatriation Commission (unreported), FCA, Tamberlin J, 30 June 1997
Westfield Holdings v Adams [2001] NSWIRComm 293Leane v Repatriation Commission (2004) 81 ALD 625
Repatriation Commission v Buckingham [1996] FCA 37
11 August 2006
REASONS FOR DECISION
SUMMARY
1. Mr Schellhorn, the applicant, is seeking review of a decision of the Veteran’s Review Board (VRB) rejecting his claim for an increased rate of disability pension. After considering the material before us, we are satisfied on the balance of probabilities that Mr Schellhorn has been correctly assessed at 100% of the General Rate of pension. We are not satisfied that Mr Schellhorn meets all the additional requirements for the special rate or intermediate rate of pension. This means that Mr Schellhorn’s claim has been unsuccessful and that the decision under review is affirmed. Our full reasons are set out below.
BACKGROUND
2. Mr Schellhorn was born on 21 September 1945 in Berlin, Germany. In 1955 Mr Schellhorn’s family migrated to Australia. In 1961 Mr Schellhorn completed his Intermediate Certificate and then went on to do a 5 year apprenticeship as a technician with the Post-Master General’s Office, now Telstra.
3. On 16 April 1968, Mr Schellhorn commenced operational service in Vietnam and he served there until 23 December 1968. During his service, Mr Schellhorn served with the Mechanical Engineers Air Squadron 3rd Cavalry Regiment. Mr Schellhorn was a radio mechanic based at Nui-Dat. In civilian life, Mr Schellhorn was apprenticed to the Post mater General (PMG). On his return from duty in 1968, Mr Schellhorn resumed his employment with the PMG, which later became known as Telstra. He told the tribunal that, on returning to work, his duties were substantially the same as they had been before he left for his war service. Mr Schellhorn met his wife, Kay, while an apprentice and, following his return from Vietnam, he married her in 1969.
ISSUES
4. The issues before the tribunal are as follows:
(a)Whether Mr Schellhorn’s disability pension has been correctly assessed;
(b)Whether Mr Schellhorn satisfies the requirements for the Special Rate of pension; and
(c)Whether Mr Schellhorn satisfies the requirements for the Intermediate Rate of pension.
CONSIDERATION OF CLAIM AND LEGISLATION
5. Mr Schellhorn lodged his claim for the special rate on 2 April 2004. He was then aged 58 and had retired from the workforce after receiving a redundancy payout in 2000. Mr Schellhorn did not present any claim that he had sought work during the assessment period which commenced on 2 April 2004. He has three disabilities accepted by the Department of Veterans’ Affairs as war caused:
·Sensori-neural deafness
·Post traumatic stress disorder
·Alcohol abuse
6. Mr Schellhorn is currently receiving a disability pension assessed at the 100% rate. Apart from contending that it was open to the tribunal to re-assess Mr Schellhorn at the 70% rate the department made no submissions on this point. The tribunal sees no reason to change the assessment from 100%.
7. Mr Schellhorn made his application for the special rate of pension on 2 April 2004. The assessment period commences at the time of application to the primary decision maker and not the time when he gave up work. See ss 19(5C) and 19(9) of the Act and Rehabilitation Commission v Braund (1991) 23 ALD 591 and Jackman v Repatriation Commission (unreported, FCA, Tamberlin J, 30 June 1997, No NG521 of 1996). Therefore, we have made our assessment during the period between the date of application and the date of determination. The determination was made on 6 May 2004.
CONSIDERATION OF CLAIM AND EVIDENCE
8. Mr Schellhorn was aged around 23 when he returned from Vietnam and recommenced employment with Telstra in 1968, having been born in 1945. He took a redundancy package in 2000 when he was aged around 55. In considering the first question, as to the relevant ‘remunerative work that the veteran was undertaking’ within the meaning of s24(1)(c), we looked at the type of work that Mr Schellhorn was undertaking rather than the particular job; the phrase ‘remunerative work that the veteran was undertaking’ refers to the type of work or field of remunerative activity that the veteran was undertaking: Banovich v Repatriation Commission (1986) 69 ALR 395 at 402; Starcevich v Repatriation Commission (1987) 18 FCR 221 at 225. In Starcevich at 225 Fox J spoke of the “substantial remunerative work that [the veteran] has undertaken in the past”.
9. However, Mr Schellhorn gave oral evidence that he performed little work of any kind at Telstra when he returned to his duties after serving. He spent much of the day sitting at work and going to lunch. Mr Schellhorn’s evidence was to the effect that he was placed in a protective environment and that his supervisor did not have great expectations of his performance at work. He told the tribunal that he was not capable of much useful work as a result of the effect on him of his war service in Vietnam.
10. On 8 June 2001, Mr Schellhorn reported in a Veterans’ Affairs Employment Questionnaire, a form designed to assist in the determination of benefits for veterans, that he had been engaged as a Principal Telecommunications Technical Officer with the Telstra Corporation. Mr Schellhorn reported that he was employed by Telstra from 15 January 1962 until 22 November 2000 – 39 years. In the report Mr Schellhorn stated that he ceased work with Telstra due to being made redundant. Mr Schellhorn was aged 55. In the report Mr Schellhorn stated that he believed that he was prevented from getting a job or being employed. He wrote in box 9:
‘My PTSD (Post Traumatic Stress Disorder) and hearing problems prevent me from adapting to change, new skills and travel by public transport. The thought of having to start all over brings on bad panic and anxiety attacks” (T. Docs pp28-29).
11. On 22 June 2001, Telstra’s payroll services advised that Mr Schellhorn was employed from 15 January 1962 until 23 November 2000 in the role of Principal Telecommunications Technical Officer. The reason for the termination of his employment was stated as being redundancy.
12. Mr Schellhorn told the tribunal that he accepted a redundancy from Telstra primarily to get away from work. He said he believed that the alternative to taking the redundancy was “get[ting] the sack”. Mr Schellhorn further stated that if he had not been offered the redundancy he would not have remained at Telstra ‘[for] very long at all’. He told the tribunal that he ‘would have had to resign if I didn’t get sacked’.
13. In his evidence Mr Schellhorn recounted that on returning to work after his service in Vietnam his duties remained largely unchanged from what they had been. Mr Schellhorn said that, as part of his work for Telstra, he had been required to attend Telstra’s organised training courses. Mr Schellhorn described these as being, for the most part, motivational courses. He said that there were also some courses on subjects such as computer operating. He said that these seemed to be designed to bring workers up to speed with the changing technology.
14. Mr Schellhorn told the tribunal he coped ‘pretty well’ with the courses and technical training and was able to understand and concentrate during the courses. He said, however, that by around 1987 his ability to keep up with Telstra’s technical training ceased. He gave evidence that:
When the technology did the major shift, actually a little bit after 1987 when it all started to become computerised I just – I found you would go to these courses and I would come out of them and someone would say, “what happened” and I do not know I just could not absorb it any more, could not retain it, did not want to be part of it”.
15. Mr Schellhorn gave further evidence that, post 1987, he had difficulty concentrating in courses, retaining what was said in the courses and applying what was said in the courses. He said that by the late 1990s, when he first made a claim, he had realised that he had trouble retaining information. He said “nothing [was] sticking anymore”. By this time, Mr Schellhorn said, work had become a problem. He had also started drinking heavily and described himself as having “a short fuse”.
MEDICAL EVIDENCE
16. The tribunal was furnished with a number of reports from various medical practitioners that Mr Schellhorn had consulted. Medical evidence was submitted by four specialists, two consultant psychiatrists and two occupational physicians, all with different opinions as to Mr Schellhorn’s incapacity, from war caused injury.
17. Dr Subhas, Mr Schellhorn’s treating psychiatrist, in correspondence dated the 27 January 2005, stated that he had been seeing Mr Schellhorn “every couple of months since 1999” and that up till November 2000 with support Mr Schellhorn continued to work with Telstra but with great difficulty. Notwithstanding the redundancy, Dr Subhas indicated that the way Mr Schellhorn “was functioning at the time I would have recommended that he stop working.”
18. In a more detailed report, dated 12 October 2004, Dr Subhas referred to continuing problems with binge drinking, symptoms consistent with chronic PTSD and difficulties as a result of sensori-neural hearing loss associated with tinnitus. In the report he stated:
“For the last few years, Mr Schellhorn has had difficulty staying in employment, which led to his taking a redundancy package in November 2000. Probably, one of the reasons he survived working so long for Telstra for nearly forty years, was because he was usually left on his own, doing his own work and did not have much to do with the public… Mr Schellhorn should be considered for the TPI pension…” ( T. Docs pp77-79)
19. In giving oral evidence at the hearing, Dr Subhas told the tribunal that he first saw Mr Schellhorn in early 1994. He then saw Mr Schellhorn some 5 years later in 1999 when he was referred by his general practitioner. Dr Subhas said, since this time, Mr Schellhorn had seen him every two to three months and that this was mainly for psychotherapy, supportive psychotherapy and to look at Mr Schellhorn’s problems (no details were given as to the precise nature of these problems).
20. Dr Subhas confirmed his opinion that he would have recommended that Mr Schellhorn cease working in November 2000 but that the offer of a redundancy solved the matter. He also asserted that Mr Schellhorn would not have been able to continue working much longer despite his positive employment record. Dr Subha’s opined that Mr Schellhorn was “unemployable the way he is today.” Although Dr Subhas, as Mr Schellhorn’s treating psychiatrist , could be viewed as an advocate for Mr Schellhorn, the fact that that he has seen Mr Schellhorn on many occasions over a number of years places him in a unique position to assess his ability to undertake remunerative work. By 2 November 2002, Dr Subhas wrote to Dr C.C. Ho that “Mr Schellhorn has come a long way and he seems to be coping a lot better than he did three years ago”.
21. Before preparing his report of 11 January 2006 Dr Robert Lewin, a consultant psychiatrist, saw Mr Schellhorn on the 25 November 2005 over a period of approximately an hour and a quarter. Dr Lewin concluded that:
“…Given the history of Anxiety Disorder over a prolonged period of time, I consider it unlikely that Mr Schellhorn would be capable of working on a fulltime basis. It is possible (bold added) he would be able to work half time. In my opinion he is currently capable of working on a part time basis, perhaps three or four half days per week. On that basis I consider him fit for work between 10-15 hours per week”.
Dr Lewin goes on to say:
“Based upon the psychiatric condition alone, it is my opinion that Mr Schellhorn is fit for work on a part time basis, particularly if he is able to manage the hours of work and the job situation himself…”.
22. Dr Lewin clearly acknowledges that Mr Schellhorn’s war caused disabilities impact on his ability to work. Dr Lewin does not explain how he is able to make such a specific estimate of time and he also significantly qualifies the circumstances of the work without really considering “the kind of remunerative work that he had been undertaking” for the purposes of s 24(1)(C).
23. Dr Chase, occupational physician, after seeing Mr Schellhorn on one occasion, on 10 October 2005, provided a report dated 22 October 2005 in which he stated:
“Given the proper supportive environment (bold added) Mr Schellhorn could probably work more than 20 hours per week but as he has been out of the workforce for a prolonged period of time and taking into account his age and his ongoing psychiatric problems, he is probably capable of working eight or more hours per week but less than 20 hours per week”
24. He went on to say:
“While I believe that he is capable of returning to work in some capacity, his current problems and inability to work full hours are related to his accepted disabilities. …..If he were to return to work on reduced hours and in a supportive environment he would be able to cope. However I think if he were in a higher stress environment and particularly if the support of his wife were reduced, or if he were subjected to an environment where he may be tempted to increase his alcohol intake, that could well cause a deterioration in his mental state once more.”
25. In his oral evidence, Dr Chase confirmed his opinion that Mr Schellhorn is not capable of working fulltime but is capable of working part time with an “appropriate low stress work environment”. He said “I think he could work between 8 and 20 hours, but no more” and stated “the main issue has been a psychiatric”. In response to a question from the tribunal with regard to his assessment of Mr Schellhorn’s ability to work between 8 and 20 hours, Dr Chase said:
“Well, of course it’s arbitrary because that’s the question that’s put to me as to whether it’s more than eight or less than twenty.”
26. The final opinion is that of Dr Phillipa Harvey-Sutton, occupational physician. In a report dated 6 January 2006 Dr Harvey–Sutton opines that Mr Schellhorn has essentially been able to be kept at work over the years because he was in a ”sheltered work environment” and that he is now unable to work 8 hours or more per week. Dr Harvey–Sutton confirmed her opinion in oral evidence.
27. On 6 January 2006 Dr Philippa Harvey-Sutton also reported:
I am of the opinion that it was consistent that he was not medically retired from Telstra for a psychiatric condition as to be medically retired would have required psychotic or similar symptomology to be eligible for medical invalidity retirement (Report of Dr Harvey-Sutton, p6).
As to the issue of whether he could work 8 hours or less or 8 hours to 20 hours, I am of the opinion, that he would not be able to adapt to a new employer and thus meets the criteria for Special Rate of Pension, unable to work for 8 hours or more per week (Report of Dr Harvey-Sutton, p7).
28. The medical evidence points to a number of conclusions:
·Mr Schellhorn is incapable of undertaking remunerative work for more than 20 hours per week.
·Mr Schellhorn’ s incapacity to work is primarily due to his war caused injuries.
·Mr Schellhorn’s capacity to undertake remunerative work for more than 8 hours is disputed. Two of the four specialists suggest that he is able to work for more than 8 hours but, in our view, their assessments are somewhat speculative.
·If Mr Schellhorn were capable of undertaking any work, then the kind of remunerative work he could undertake becomes a relevant issue. Both specialists whose opinion it is that he is a capable of working more than 8 hours significantly qualify their opinions as to the kind of work and the conditions under which this is sustainable.
ANALYSIS
29. For Mr Schellhorn’s claim to a special rate of pension to succeed, the evidence before the tribunal must discharge a number of tests in his favour. Pursuant to s 24(1) of the Veterans Entitlements Act 1986 (the Act):
(a)Mr Schellhorn’s degree of incapacity from war-caused injury or war-caused disease, or both, must be at least 70% (s24(1)(a));
(b)Mr Schellhorn’s incapacity from war-caused injury or war-caused disease, or both, must be of such a nature as, of itself alone, to render Mr Schellhorn incapable of undertaking remunerative work for more than 8 hours a week for the special rate (s 24(1)(b)), or 20 hours a week for the intermediate rate (s 23(2)(b));
(c)Mr Schellhorn’s incapacity from war-caused injury or war-caused disease, or both, alone must prevent him from continuing to undertake the kind of remunerative work that he had been undertaking (s 24(1)(c)).
30. In considering the third test, test (c) above, the Full Federal Court in Flentjar v Repatriation Commission (1997) 48 ALD 1 at pages 4-5 set out how to approach this task. Branson J, with whom Beaumont and Merkel JJ agreed, described the issues as:
(a)What was the relevant ‘remunerative work that the veteran was undertaking’ within the meaning of s 24(1)(c) of the Act?;
(b)Is the veteran, by reason of war-caused injury or war-caused disease, or both, prevented from continuing to undertake that work?
(c)If the answer to question (b) is ‘yes’, is the war-caused injury or war-caused disease, or both, the only factor or factors preventing the veteran from continuing to undertake that work? and
(d)If the answers to questions (b) and (c) are, in each case, ‘yes’, is the veteran by reason of being prevented from continuing to undertake that work, suffering a loss of salary, wages or earnings on his own account that he would not be suffering if he were free of that incapacity?
31. A “no” answer to any of questions (b), (c) or (d) precludes the grant of the special rate of pension. Her Honour went on to say that question four involved consideration of what the veteran would have done if he had none of his service disabilities. In approaching that question, we must:
“take into account any factor that plays a part or contributes to a veteran’s being prevented from continuing to engage in remunerative work”.
32. Pursuant to s 24(2)(a), Mr Schellborn will fail the loss test if:
(a)he has ceased to engage in remunerative work for reasons other than incapacity from war-caused injury or disease; or
(b)he is incapacitated or prevented from engaging in remunerative work for some other reason.
Degree of Incapacity
33. The first question for the tribunal is whether Mr Schellhorn has the required degree of incapacity. At present, Mr Schellhorn is receiving payment of the disability pension at 100% of the general rate. The Repatriation Commission submitted that Mr Schellhorn could be re-assessed and given a rating of 40 points with a lifestyle rating of 3. This would equate to incapacity of 70%. However, although re-assessment of the rating is open to the tribunal, we see no reason to change this assessment on the material before us. We find, therefore, that Mr Schellhorn does meet the degree of incapacity from war-caused injury or disease of at least 70% as required under s 24(1)(a).
Incapacity for remunerative work from war-caused disabilities
34. Mr Schellhorn must satisfy us on the balance of probabilities (s 120(4)) that he is incapable of undertaking remunerative work for more than 8 hours a week to qualify for the special rate (s 24(1)(b)), or 20 hours a week to qualify for the intermediate rate (s 23(2)(b)).
35. We are satisfied without any doubt that he is not able to undertake more than 20 hours of work per week. The medical evidence all indicates that this level of work is beyond Mr Schellhorn. In addition, taking into account Mr Schellhorn’s evidence as well as the medical evidence, we conclude, on the balance of probabilities, that Mr Schellhorn is not able to undertake remunerative work for more than 8 hours per week.
has Mr Schellborn been prevented from continuing to undertake remunerative work by war-caused incapacity?
36. Section 24(1)(c) requires Mr Schellborn to establish that his war-caused injury prevents him form continuing in remunerative work and results in a loss of earnings. Section 24(2) works in conjunction with s 24(1)(c). The effect of paragraph 24(2)(b) was described by Drummond J in Magill v Repatriation Commission [2002] FCA 744 at paragraph [8]:
If…the veteran has not been engaged in remunerative work at the relevant date, he … will still be able to satisfy the ‘alone’ criterion in s 24(1)(c) even though the war-related incapacity is not the sole cause of the veteran’s inability to obtain work, provided the veteran nevertheless meets the requirement of s 24(2)(b).
Those requirements were identified by his Honour at paragraph [7] as being,
· that he has been genuinely seeking to engage in remunerative work, and
· that he would, but for a war-caused incapacity, be continuing so to seek to engage in remunerative work, and
· that that incapacity is the substantial cause of his inability to obtain remunerative work in which to engage.
37. The full court of the federal court, in Leane v Repatriation Commission (2004) 81 ALD 625, took the view that the veteran must have been genuinely seeking to engage in remunerative work during the assessment period. There is no evidence before us that Mr Schellborn did look for work during the assessment period, that is, from April 2004 to May 2004, nor after an initial period following his redundancy in 2000. We accept that Mr Schellhorn was enrolled with Newstart between 4 June 2001 and 8 November 2001 and that this carries an implication that Mr Schellborn was looking for work during this period. He told the tribunal and Dr Chase also recorded that Mr Schellhorn told him that he was unable to deal with the paper work required by Centrelink because of the stress he felt and had, therefore, not sought work since.
38. The full court of the federal court, in Repatriation Commission vHendy [2002] FCAFC 424; (2002) 76 ALD 47, at para 37, considered that making the assessment under s 24(1)(c) is a hypothetical exercise. The court identified time out of work before the assessment period, lack of recent work experience and increasing age as considerations. As recommended by the court in Hendy, we have assessed what Mr Schellhorn:
“probably would have done if he had none of his service disabilities during the assessment period”.
The relevant period for the assessment starts from the time of his application for the increased rate of pension in April 2004. By this time, he had been out of the workforce for four years and was aged 58.
39. Mr Schellhorn gave evidence that he now considered himself retired and thought that he would have been sacked in 2000 if he had not taken the redundancy package Telstra offered. Mr Schellhorn explained his current lack of effort to find work when he said that he considered himself retired. This may not necessarily disqualify him form the special or intermediate rate of pension if we find that his war-caused disabilities are “the substantial cause of his inability to obtain remunerative work”: See Conway v Repatriation Commission (2003) 37 AAR 461 at 486 [at 8 and 9] and the reasoning of Dowsett J set out below. In this connection, we are mindful of Mr Schellhorn’s evidence that he was too stressed to complete the Centrelink paperwork in 2001. Also see Hall v Repatriation Commission (1994) 33 ALD 454 at 461. In Conway v Repatriation Commission, Dowsett J said, at 486 [8]:
As I understand par 24(2)(b), there must be an inquiry as to whether or not the relevant applicant has been genuinely seeking to engage in remunerative work in the past, that is prior to his becoming incapacitated for the purposes of s 24. Then it is necessary to enquire whether or not he would be continuing to seek to engage in remunerative work had he not been incapacitated, and whether the incapacity is the substantial cause of his inability to obtain remunerative work. The “genuinely seeking” test relates to the work history of the applicant rather than to efforts which he might make after he becomes incapacitated.
40. Consideration of “remunerative work that the veteran was undertaking” does not mean looking at a particular job with a particular employer but the substantive remunerative work that the veteran had undertaken in the past. We are not bound to limit our consideration to Mr Schellhorn’s last employment. See Flentjar. The remunerative work must be substantial remunerative work which the veteran has effectively performed: Starcevich v Repatriation Commission (1987) 18 FCR 221 at 225. Therefore, in deciding whether Mr Schellhorn meets the test in respect to “remunerative work that he was undertaking”, we note:
(a)Mr Schellhorn ceased to engage in remunerative work when he accepted a redundancy from Telstra in 2000.
(b)Mr Schellhorn claimed he was not working effectively in 2000, having given evidence that he was not coping from 1987 onwards. Mr Schellhorn further told us he would have been sacked if he had not accepted the redundancy offered.
(c)Dr Lewin reported that Mr Schellhorn missed work from time to time for reasons related to his psychiatric condition but observed that he maintained almost full-time work and worked steadily for the same employer for his adult life (p8-9)
(d)Dr Chase reported on 22 October 2005 that, if Mr Schellhorn had not been offered a redundancy, he “would probably still be employed by Telstra to this day” (p7). Dr Chase added, at p 6, para (n) :
The only thing preventing him from seeking work is the fact that he has not been required to do so”. (p6).
(e)Dr Chase also reported on 22 October 2002:
I do believe that if his work is structured and if he were given working (sic) that was both financially beneficial and supportive it would actually be to his psychological benefit to return to work (p6).
(f)As at 22 October 2005, Dr Chase reported that Mr Schellhorn’s inability to work more than 20 hours per week was related to his accepted disabilities, time out of the workforce and age (p6). In addition, on 25 November 2005, Mr Schellhorn informed Dr Lewin that he considered himself to be retired (p5).
(g)There is no suggestion that Mr Schellhorn’s war-caused disabilities have become any worse during the assessment period. On the contrary, Mr Schellhorn informed Dr Lewin that in the period since 2000 he feels he has improved significantly (p3). He notes some improvement in his ability to function, is less verbally aggressive, and has resumed reading and is able to focus (p4).
(h)After ceasing work with Telstra, Mr Schellhorn received Newstart Allowance from Centrelink between 4 June 2001 and 8 November 2001. Mr Schellhorn presented no evidence he sought work during the assessment period, which commenced on 2 April 2004.
41. The gist of Mr Schellborn’s evidence given to the tribunal was that financial pressures and the inducement of a redundancy package affected his decision to leave Telstra. His age and changes in his workplace influenced his decision to accept the redundancy offered. Mr Schellhorn has told the tribunal that he did not, in the lead time before he accepted the redundancy offer, perform the work for which he was employed. His evidence amounts to an admission that he was kept on by Telstra only because he had the good fortune to be placed in a protective environment. He had been a PMG and then Telstra employee since 1968 and was still there when it was modernised and restructured as Telstra. Mr Schellhorn did various courses and told us he coped quite well with them but he was not putting in the required effort to carry out his duties. In sum, he was a skilled telephone technician but that his skills were becoming less suitable with the advent of changed technology. We also note that Dr Subhas, his treating doctor suggested that it would have been better for his psychiatric health if he continued in employment.
42. Telstra decided to make redundancy offers and Mr Schellhorn took advantage of this opportunity in 2000. He had continued to work for Telstra at a less than adequate standard and thought that he would be sacked if he did not accept the redundancy. However, on balance, we are satisfied that the reason for Mr Schellborn’s not continuing to undertake remunerative work was substantially his war-caused incapacity. This means he comes within the ameliorative provision in s 24(2)(b) which affects the operation of s.24 (1)(c). He is not disqualified from the higher rate of pension on this account.
Is war-caused injury alone causing loss of earnings?
43. Mr Schellhorn, by reason of incapacity from his war-caused disabilities alone, claims he is suffering a loss of salary, wages or earnings. In this respect, we note that in the case of Westfield Holdings v Adams [2001] NSWIRComm 293, the Industrial Relations Commission discussed the difference between redundancy and severance pay. At page 275 in paragraph 144, the Commission drew attention to the purpose of a redundancy or severance payment being to compensate an employee for the loss of non-transferable benefits and for the inconvenience and hardship imposed by the termination. The payment of a redundancy package is recognition of the withdrawal of benefits such as long service leave, length of tenure and the like. The possible receipt of a monetary compensation award does not prevent a veteran being able to establish that he had a loss of salary, wages of earnings. Therefore, we do not regard Mr Schellhorn as being disqualified on this account.
is mr schellhorn incapacitated or prevented from remunerative work for some other reason?
44. Section 24(2)(a) provides that a veteran shall not be taken to be suffering a loss of earnings for the purposes of s 24(1)(c) if he has ceased to engage in remunerative work for reasons other than his war caused incapacity (para (i)) or because he is incapacitated or prevented for some other reason (para (ii)).
45. Drummond J in Magillv Repatriation Commission [2002] FCA 744 explained the interaction of the second limb of s 24(1)(c) with s 24(2)(a). His Honour analysed the effect of s 24(2)(a) on s 24(1)(c). He held para (2)(a) was not an ameliorative provision, unlike s 24(2)(b), but that it emphasised that the veteran will not succeed in a claim if, though suffering a loss of earnings that may be causally related to war-caused injury or disease, there were other reasons for his having ceased to engage in remunerative work or preventing him from engaging in such work.
46. Drummond J went on in Magill to explain the interaction of the second limb of s 24(1)(c) with s 24(2)(a). After noting that these provisions related to loss of earnings, Drummond J set out, at paras 9 to 11:
The second limb of s24(1)(c) provides:
"[T]he veteran is ... by reason thereof [ie, by reason of incapacity from that war-caused injury or war-caused disease], suffering a loss of ... earnings ... that the veteran would not be suffering if the veteran were free of that incapacity ..."
The loss of earnings referred to in this provision may be caused either by a loss of existing employment or by an inability to obtain new employment: Banovich at 402. This second limb must be read withs24(2)(a), which provides:
"[A] veteran who is incapacitated from war-caused injury or war-caused disease ... shall not be taken to be suffering a loss of ... earnings ... by reason of that incapacity if:
(i) the veteran has ceased to engage in remunerative work for reasons other than his or her incapacity from that war-caused injury or war-caused disease, or both; or
(ii) the veteran is incapacitated, or prevented, from engaging in remunerative work for some other reason ..."
Unlike s24(2)(b), which ameliorates the operation of the first limb of s24 (1)(c), s24 (2)(a) only explicates the second limb of s24(1)(c) by emphasising that a veteran will not be able to satisfy that limb if, though suffering a loss of earnings that may be causally related to a war-related injury or disease, there are other reasons that are also causally related to the veteran's having ceased to engage in work or related to the veteran's being prevented from engaging in work.
47. To assist us in determining the full gamut of reasons that are causally related to Mr Schellhorn’s having ceased to engage in work or causally related to his being prevented from engaging in work, we have taken into account the medical opinions summarised above as well as the evidence of Mr Schellhorn. All the medical reports acknowledge that Mr Schellhorn cannot work full time. They disagree as to how many hours he can work. When we asked Dr Chase how he arrived at an opinion Mr Schellhorn could work between 8 to 20 hours, he gave evidence that this was the timeframe he was asked to consider for the purposes of his report. Dr Chase’s report qualified his opinion further by observing that Mr Schellhorn could probably work longer in a supportive environment. Dr Lewin did not explain how he came to the conclusion that Mr Schellhorn could work within another specific time frame of 10 to 15 hours. His opinion was guarded, saying only that it was “possible” he might work a few days per week, if Mr Schellhorn were able to manage the hours of work and the job situation himself. Dr Lewin based his estimate on Mr Schellhorn’s psychiatric condition alone and he did not consider additional factors. Overall, the reports are all qualified to some degree by reference to Mr Schellhorn’s work environment. The reports and evidence before us, on balance, depend on Mr Schellhorn being able to find another protective work environment. In our view, his work at Telstra does not amount to his having engaged in remunerative work in the past of the kind that is expected in s 24 or 23 for entitlement to the special rate or intermediate rate. See Hendy. Unlike that case, there is a basis for concluding that his work in the recent past was less heavy than previously. Mr Schellhorn dates his loss of ability to concentrate from around 1987. Mr Schellhorn said that by around 1987 his ability to keep up with Telstra’s technical training ceased.
48. On the evidence of Mr Schellhorn, he was influenced by financial matters in taking the redundancy and has not sought work since. He has not provided any evidence that he has tried to find work. He considers himself retired. In sum, he has not been genuinely seeking to engage in remunerative work since he left Telstra. This is not only because of his war-caused disabilities. As to whether Mr Schellhorn would, but for a war-caused incapacity, be continuing to seek to engage in remunerative work, and whether war-caused incapacity is the substantial cause of his inability to obtain remunerative work, we have found against Mr Schellhorn. We have balanced his war-caused incapacity against his deciding to accept a redundancy package and his decision to retire when he was offered a redundancy at age 55. We have reached the conclusion that he has not looked for remunerative work since his last position because of these factors and not because of his war-caused disabilities alone.
49. The full court further explained in Hendy that the decision-maker is required to take into account any factor that plays a part or contributes to a veteran’s being prevented from continuing to engage in remunerative work. Examples provided in Hendy include any period of time that elapses after a veteran ceases remunerative work and before the commencement of the assessment period (application and determination) lack of recent work experience, time out of the workforce and increasing age.
50. In our view, this question must be answered adversely as to Mr Schellhorn. In our view, Mr Schellhorn’s war caused condition was not the only factor that prevented him from continuing to undertake remunerative work. His age, period out of the workforce since taking the redundancy and expectation that he would not re-enter the workforce but accept retirement, are factors as well as Mr Schellhorn’s war-caused disabilities. It follows that s 24(1)(c), when read with s 24(2)(a), as advised by the Federal Court in the Magill case, is not met.
51. It is clear that Mr Schellhorn has not sought work for a variety of reasons in the four or more years since he took the redundancy package and is incapacitated from engaging in such work due to age, time out of the workforce and personal inclination. For the purposes of s 24 (1)(c) we do not, therefore, find he should be taken to be suffering a loss of earnings due to his war caused injuries alone.
52. A “no” answer to any of questions (b), (c) or (d) precludes the grant of the special rate of pension in accordance with s 24. Similar requirements cover any entitlement to the intermediate rate and are set out in s 23. See s 23(2)(b) and s 23(3). This means that Mr Schellhorn’s claim for the special rate of pension or the intermediate rate cannot succeed. Also see Repatriation Commission v Buckingham [1996] FCA 37as to the requirements for the intermediate rate according to the s 23 provisions.
Conclusion
53. The decision of the Commission under review should be affirmed.
I certify that the 53 preceding paragraphs are a true copy of the reasons for the decision herein of
Signed: .....................................................................................
AssociateDate/s of Hearing 11 May 2006
Date of Decision 11 August 2006
Counsel for the Applicant Elizabeth Wood
Solicitor for the Applicant Anastasia Toliopoulos
Advocate for the Respondent Katrina Harry
Solicitor for the Respondent Lyn Firth
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