Zepnick; Secretary, Department of Social Services and (Social services second review)

[2017] AATA 959

Zepnick; Secretary, Department of Social Services and (Social services second review) [2017] AATA 959 (27 June 2017)

Division:GENERAL DIVISION

File Number:           2014/6535

Re:Secretary, Department of Social Services

APPLICANT

AndGurthrie Zepnick

RESPONDENT

DECISION

Tribunal:Miss E A Shanahan, Member

Date:27 June 2017

Place:Melbourne

The Tribunal sets aside the decision under review and in substitution decides that the respondent Mr Zepnick did not qualify for the disability support pension at the time of lodgement of his claim on 15 January 2014 or in the 13-week qualification period after that date.   

[sgd] .................................................................

Miss E A Shanahan, Member

SOCIAL SECURITY – benefits, allowances and pensions – claim for disability support pension – medical conditions of chronic fatigue syndrome, sleep apnoea and anxiety with a past history of depression – impairment rating assessment of 10 points – Social Security Appeals Tribunal impairment rating of 20 points for chronic fatigue syndrome – expert medical assessment impairment rating 10 points – decision set aside – respondent not qualified for disability support pension.

Legislation

Social Security Act 1991
Social Security (Administration) Act 1999

Social Security (Tables for the Assessment of Work-related Impairment for Disability Support Pension) Determination 2011

Cases

Re Bobera and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2012] AATA 922

Secondary Materials

Social Security Requirements and Guidelines (Active Participation for Disability Support Pension) Determination 2011

Guide to Social Security Law

REASONS FOR DECISION

Miss E A Shanahan, Member

27 June 2017

1. Mr Zepnick lodged a claim for the disability support pension (DSP) with Centrelink on 26 November 2012. Centrelink rejected this claim and Mr Zepnick did not seek a review of this decision. Mr Zepnick lodged another claim for DSP on 22 November 2013.  A Centrelink officer rejected this claim. Mr Zepnick sought a review of this decision by a Centrelink authorised review officer (ARO).  On 15 January 2014 the ARO affirmed the decision. Mr Zepnick sought review of the ARO’s decision by the Social Security Appeals Tribunal (SSAT). On 11 April 2014 the SSAT set aside the decision of the ARO.  The Secretary of the Department of Social Security lodged an application with the Administrative Appeals Tribunal (the Tribunal) on 18 December 2014, seeking review of the SSAT decision of 11 April 2014.

2. The issue before this Tribunal is whether Mr Zepnick met the criteria for DSP in s 94 of the Social Security Act 1991 (the Act) at the date of application on 22 November 2013, or within the 13-week qualification period after that date (which ended on 21 February 2014) (the relevant period).

3. The hearing on 23 March 2017 was conducted by a video-link as Mr Zepnick had advised the Tribunal that he could not travel to Melbourne as the result of his medical conditions. Ms Bramley, a Senior Government Lawyer, in the Freedom of Information Litigation Branch, of the Department of Human Services appeared for the Secretary, Department of Social Services (the Secretary). Mr Zepnick was self-represented but assisted by his wife, Jodie. The Secretary had provided the Tribunal with Tribunal Documents and Supplementary Tribunal Documents in accordance with s 37 of the Administrative Appeals Tribunal Act 1975 (the T‑documents, Exhibit A1).  Mr Zepnick tendered several medical reports and other documents, a list of which is appended to this decision. Mr and Mrs Zepnick gave evidence before the Tribunal.

4. At the hearing it became clear that there was additional relevant documentary evidence necessary and  available, to clarify some issues and also to satisfy Mr Zepnick’s concerns that not all the evidence available to the SSAT had been made available to this Tribunal.  On completion of the hearing, I asked Tribunal staff to research and provide information regarding historical or medieval re-enactment societies to which Mr Zepnick had referred in his evidence and about which I was unaware.  This research conducted via the internet revealed that Mr Zepnick had a business registered with the Australian Securities Investments Commission (ASIC).  This business is named Zepnix Wargames.  The registration has been active since 1 March 2016. 

5. The Zepnix Wargames website advertised a two-day planned meeting and war-game competitions, organised and promoted by himself, to be conducted over the 2017 Easter break.  At the hearing, Ms Bramley also raised concerns regarding Mr Zepnick’s income tax returns.  Mr Zepnick had undertaken to provide further details in relation to his 2014, 2015 and 2016 tax returns. 

6. In light of the discovery of Mr Zepnick’s continuing involvement in the area of medieval re‑enactment, the Tribunal convened a telephone directions hearing on 10 April 2017, to clarify these issues.

   BACKGROUND TO THE APPLICATION

7. Mr Zepnick is a 39-year old man with a wife and two children.  He suffers from a number of medical conditions. He was diagnosed with chronic fatigue syndrome (CFS) in March 2012.  He was subsequently found to be suffering from obstructive sleep apnoea.  This was definitively diagnosed by a sleep study on 3 December 2012.  Thereafter, he was treated with controlled positive airways pressure (CPAP) with clinical benefit.  He also has hypo-lipidaemias that is asymptomatic but has required treatment with large doses of statins (which in 7 per cent of patients also cause myopathy and weakness).  He has been found to be obese.  He was diagnosed with depression in the early 2000s but has responded symptomatically and remained stable with the use of Fluoxetine (commonly known as Prozac).  In late 2011 he was assessed as being anxious but not depressed. 

8. Mr Zepnick had been employed in a smallgoods factory in Castlemaine for over seven years; initially performing factory work and later administrative and clerical duties.  Despite leaving school in Year 11 he had subsequently completed a Bachelor of Arts degree in Humanities in 1999 and had obtained other qualifications such as a Food Handlers certificate, a First Aid Level 2 certificate, and a Workplace Occupational Health and Safety Certificate.  He had commenced but not completed a Certificate 3 in Childcare.  He was said to possess excellent computer skills and had done some work translating classical Latin into English. 

9. Mr Zepnick had for many years been involved in medieval re-enactment and tabletop war games as a hobby. He had participated in medieval re‑enactment society activities.  He had constructed or at least finished the painting and decoration of soldier figurines used in war games.  Mr Zepnick had hoped to eventually give up work in the smallgoods factory and build up his hobby into a business that would provide an adequate income for himself and his family.  He had  met his wife Jodie, at one of these medieval re‑enactment society meetings.

10. Mr Zepnick has described his symptoms as being severe fatigue, daytime somnolence and some muscle aches and pains.  He sleeps at least 12 hours in every 24, and his symptoms vary in intensity.  More recently he has noted cognitive deterioration, he sits and stares at his computer and his thoughts are blank.

11. Mr Zepnick’s wife Jodie was diagnosed with CFS 20 years ago and has been on DSP since her diagnosis.  She tends to sleep later in the day; whereas Mr Zepnick sleeps generally in the period before lunch.  While he did undertake exercise for two periods of 10 minutes a day, he has now abandoned any exercise programs as they were without benefit. 

12. Mr Zepnick gave evidence that he can perform all personal care and performs a considerable number of activities around the home; for example he does the laundry, hangs out the clothes to dry and then sorts them.  He and his wife do the shopping and he no longer has to use a trolley for support or to carry goods as he is able to carry them without any assistance.  The two children get their own breakfast and make their own lunch and they load the dishwasher every day.  Mrs Zepnick cooks the evening meal using a Thermomix which does not require supervision. 

13. Mr Zepnick still pursues his hobby and paints toy soldiers but will at the most do this for three hours per day and thus he will take four weeks to complete one of these toy figurines.  Prior to his illness, he would have done the same activities in one day.

14. Mr Zepnick gave evidence that all treatment for his conditions had failed including graded exercise, supervised dietary modifications and dietary supplements mainly in the form of vitamins.  He had taken some more controversial supplements in the past. 

15. Mr Zepnick’s current medication was Oxycodone (Endone) every few days for muscle aches and pains.  On some days he would take Targin (also a painkiller) twice daily.  He continues on the anti-depressant first prescribed in about 2000 or 2002. 

16. Given his history of snoring loudly and daytime somnolence, Mr Zepnick had been investigated for obstructive sleep apnoea and these tests were positive; with eight apnoeic episodes per night but a great number of hypo-apnoeic events.  Since using a CPAP machine his symptoms have greatly improved. 

17. At the age of 16 Mr Zepnick experienced similar symptoms to those he now experiences and have been diagnosed as CFS.  His father, who was a nurse, suspected at that time that he may have CFS.  It would appear the earlier symptoms resolved without any further investigation or treatment.

18. Since being diagnosed in 2010 by Dr Oldmeadow, general physician with an interest in CFS, as having the condition Mr Zepnick has seen several other physicians and has undergone intensive haematological and biochemical investigations; all of which have been normal, except for the presence of hyperlipidaemia which has been treated with statins.  As statins can produce severe myalgia, an opinion was sought from a cardiologist, Dr Anthony Jackson.  He provided a report dated 29 November 2016, to the effect that there was no evidence of statin myopathy or myalgia, as all the inflammatory criteria were negative. 

19. Mr Zepnick had stopped working following the diagnosis in late 2010.  As he had a considerable amount of sick leave and annual leave owing to him he availed himself of these leave entitlements but in June 2011 his employer, Western Foods, asked him to resign.  He did so, having accessed his income protection insurance cover with Australian Super.  It would appear that he was paid $3,000.00 a month from 14 January 2011 until 14 January 2013. 

20. Mr Zepnick had also lodged a claim for a total and permanent disablement payment under his Australian Super insurance provision.  Initially, this had been rejected.  Further applications were lodged by Maurice Blackburn Lawyers on his behalf.  He was eventually found to be totally and permanently disabled in November 2015; and was paid the lump sum as insured of $140,000.00 (including interest accrued from the time of his application of $7,000.00).  He had previously received a $20,000.00 advance payment from his superannuation accumulated benefit on the grounds of financial hardship.

21. Mr Zepnick was of the opinion that his symptoms had worsened since the SSAT hearing and decision.  He felt he had more memory gaps than before and he believed his mental arithmetic had deteriorated, as he now had to use a calculator.  He said his level of activity was low but this had been partly impacted on by the family’s move into a rental property in a suburb of Bendigo, which was inadequate in many respects and required them to move again.  He had bought a pushbike and was riding this occasionally.

22. Centrelink checked Mr Zepnick’s income tax returns.  For the financial year 2015/16, Mr Zepnick had had a taxable income of approximately $25,000.00.   Mr Zepnick said they had rented out their more rural property in Harcourt for the sum of $7,000.00 per annum and he had received approximately $7,000.00 in rent for this property. But he could not account for the remaining $11,000.00.  Mr Zepnick undertook to provide his income tax files in due course.

    DOCUMENTARY EVIDENCE BEFORE THE TRIBUNAL

23. The treating general practitioners, Dr Eaton and Dr Stobie, have provided several reports and Dr Eaton’s clinical records were also supplied.  These supported the diagnosis of CFS and sleep apnoea and also provided the results of various investigations and their normal findings.

24. Dr Timothy Stobie of the Kyneton Medical Centre had confirmed Mr Zepnick’s diagnoses in a letter dated 30 June 2016.  They were chronic fatigue syndrome; hypercholesterolaemia; gastro‑oesophageal reflux disease; obstructive sleep apnoea; chronic rhino-sinusitis and asthma.  He was of the opinion that Mr Zepnick’s current symptoms (in 2016) were the same as they had been in November 2013, when he lodged his claim for DSP.  He opined that the condition was expected to persist for at least two years and that treatment for the condition was extremely limited, there being no specific treatment for CFS.  He did not believe that Mr Zepnick was capable of undertaking suitable work of at least 15 hours per week as at 22 November 2013. 

25. As previously stated Dr Anthony Jackson, cardiologist had provided a report opining that there was no evidence that Mr Zepnick suffered from statin related myalgia or myopathy. 

26. Maurice Blackburn Lawyers who had represented Mr Zepnick in his claim for a TPD payment from Australian Super had provided a medical report from Dr Prestage, occupational health physician, dated 17 February 2015.  The report confirmed the diagnosis of CFS, finding that he could not undertake any of his usual work tasks, particularly because of his inability to concentrate, and that while the prognosis was difficult to predict his failure to improve suggested that he would be affected for the long term.  A TPD assessment report prepared by IPAR Rehabilitation Pty Ltd (Exhibit R4) was also provided.  This report identified some transferrable skills and recommended some suitable employment   (such as a proof reader, customer sales representative of a web search evaluator).  It concluded that a return to work would negatively impact on Mr Zepnick’s limited social life, and take away the limited independence he currently enjoyed.

27. Dr Cunnington, a sleep physician, had confirmed the diagnosis of sleep apnoea, existing since at least 2013, in addition to Mr Zepnick’s tiredness resulting from CFS, and that he was not capable of working 15 hours per week, or undergoing further work training (Exhibit R5).

28. Mr Zepnick underwent two job capacity assessments (JCA).  The first  was reported on 11 December 2012 and the second on 8 July 2014.  In the 2012 JCA the conditions considered where chronic fatigue syndrome, morbid obesity and depression.  As none of the conditions were considered to be permanent, fully diagnosed, treated and stabilised an impairment rating was not attracted.  Mr Zepnick was assessed as having work capacity of 15 to 22 hours per week within two years in a lightly-skilled sphere.

29. The JCA of July 2014 (conducted by a physiotherapist) found the CFS to be fully diagnosed, treated and stabilised and attracting a recommended impairment rating under the Social Security (Tables for the Assessment of Work-related Impairment for Disability Support Pension) Determination 2011 (the Impairment Tables) of 5 points given his then described physical capacity.  The conditions of obstructive sleep apnoea and bronchitis were  considered to be well controlled and thus did not attract an impairment rating.  The JCA had detailed Mr Zepnick’s symptomatology at his then functional capacity to the ARO on 16 September 2014.  At that time Mr Zepnick confirmed his symptoms of easy fatigue, poor concentration, poor memory and what he described as a supressed immune system. But he also stated that he could walk 500 metres to the local shops on some days and estimated that he do this on  one to two days out of every seven. Mr Zepnick had said that he slept 12 hours a day; that he required a nap during the day, read on a daily basis, could drive a car, pottered around the house, did the laundry,  made the children’s lunches, and mopped and vacuumed, occasionally.  Over summer, he took the children to the swimming pool twice a week and sometimes he managed to swim a lap himself.  He had tried to walk for 20 minutes a day.  He considered his sleep apnoea to be well controlled and any asthma that he had was well managed.  Similarly, his reflux was managed with diet and Nexium. 

    DOCUMENTATION AND INFORMATION PROVIDED FOLLOWING THE TELEPHONE DIRECTIONS HEARING OF 10 APRIL 2017

30. In relation to his income tax returns, Mr Zepnick was able to advise that because of his age, 10 per cent of the total and permanent disablement lump sum payment he received was considered taxable and this represented the 2015/2016 declaration of a taxable income of approximately $25,000.00.  The $7,000.00 he had referred to as being income from rental of the Harcourt property had in fact included in his wife’s income tax return as that property was in her name. 

31. At the telephone directions hearing, Mr Zepnick confirmed that he was the organiser and sponsor for a war games meeting and competition, which was to occur at an auditorium at Swinburne University on 15 and 16 April 2017 (Easter Saturday and Sunday) and that he had donated the prizes for the competitions.  He also said that he attended medieval re‑enactments in Shepparton, had done so in Ballarat (but not for the last four or five years) and participated in such re‑enactments in Hawthorn once a year.  All of these activities he said failed to produce a profit and he only covered his costs and thus had no income to declare from these activities. 

32. Jodie Zepnick had undertaken to check the medical reports and other documents available to the SSAT which they felt may not have been available to the AAT, particularly in relation to Mr Zepnick’s depression.  However, this check did not reveal any major discrepancies in the evidence provided to the Tribunal. 

33. The T-documents contained several reports from occupational health physicians who had assessed Mr Zepnick.  In particular, Dr Philip Haynes had provided several reports having assessed Mr Zepnick as recently as February 2016 as having a capacity for light sedentary work, four hours per day, five days per week.  Several experts and treating doctors had expressed the opinion that the CFS symptoms may resolve spontaneously but this was difficult to predict both in relation to an individual and within a definite timeframe.  

34. The Zepnix Wargames site advises clients of Mr Zepnick’s relocation from Harcourt to a suburb of Bendigo, and that the new premises had a room displaying all items for sale that could be inspected on making an appointment by telephone. 

    RELEVANT LEGISLATION

35. Section 94 of the Social Security Act 1991 (the Act) provides the criteria for qualification for the DSP and states:

    94  Qualification for disability support pension

    (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 Secretary is satisfied that the person is participating in the program administered by the Commonwealth known as the supported wage system; and  ...

    A severe condition attracting an impairment rating of 20 points is defined as:

    (3B)A person’s impairment is a severe impairment if the person’s impairment is of 20 points or more under the Impairment Tables, of which 20 points or more are under a single Impairment Table.

    Example 1:A person’s impairment is of 30 points under the Impairment Tables, made up of 20 points under one Impairment Table and 10 points under another Impairment Table. The person has a severe impairment.

    Example 2:A person’s impairment is of 40 points under the Impairment Tables, made up of 20 points under one Impairment Table and 20 points under another Impairment Table. The person has a severe impairment.

    Example 3:A person’s impairment is of 20 points under the Impairment Tables, made up of 10 points each under 2 separate Impairment Tables. The person does not have a severe impairment.

    Active participation in a program of support

    SUBMISSIONS

1. Ms Bramley submitted that, based on the evidence before it, the Tribunal should find that; Mr Zepnick’s CFS attracted an impairment rating of 10 points under Table 1 of the Impairment Tables; that his obstructive sleep apnoea was fully diagnosed, treated and stabilised and controlled and attracted a zero impairment rating; and this applied to the  hypercholesterolaemia and gastro-oesophageal reflux, which did not contribute to any incapacity.  Ms Bramley submitted that any incapacity arising from the sleep apnoea was to be assessed under Table 1.  And in addition to the contribution from CFS the overall assessment of an impairment rating of 10 points was correct.  Given the impairment rating based on the current symptomatology (that had existed since 2013), Ms Bramley contended that the impairment rating of 10 was the correct estimate. 

2. Ms Bramley also addressed the requirements for an applicant for DSP to participate in a program of support but as the impairment rating was 10 points the Tribunal did not need to consider this requirement.  However should the Tribunal find otherwise, she advised that Mr Zepnick had not participated in a program of support at any time. 

3. Mrs Jodie Zepnick contended that CFS is a condition which does not attract any proven beneficial treatment; and that it has an unknown course in any individual, including whether or not symptoms will improve.  She relied on those medical reports supporting her husband’s claim that he was unable to work for 15 hours or more per week because of these incapacitating medical conditions. 

   THE TRIBUNAL’S DELIBERATIONS

4. The Tribunal finds that Mr Zepnick meets the requirements of s 94(1)(a) of the Act in that he has the diagnosed conditions of CFS and sleep apnoea. The conditions of gastro‑oesophageal reflux, morbid obesity and depression have been reported as being well-controlled and not contributing to any incapacity for work. His biochemically-proven hypercholesterolemia does not produce any symptoms.

5. Section 94(1)(b) requires that an applicant for DSP have an impairment rating of 20 points or more. Mr Zepnick gave evidence of his symptoms at the hearing before the Tribunal, which he stated are the same as those that he experienced in 2013, fluctuating only in intensity; and that he is able to walk up to 500 meters once or twice a week, performs all personal care and performs a considerable number of tasks around the house on a daily basis, despite his need to sleep and rest for 12 to 15 hours per day. Based on that evidence, and applying Table 1 of the Impairment Tables, in the Tribunal’s opinion Mr Zepnick attracts a rating of 10 which is a moderate functional impact on activities requiring physical exertion or stamina and states:

10

There is a moderate functional impact on activities requiring physical exertion or stamina

(1)     The person:

(a)  experiences frequent symptoms (e.g. shortness of breath, fatigue, cardiac pain) when performing day to day activities around the home and community and, due to these symptoms, the person:

(i)      is unable to walk (or mobilise in a wheelchair) far outside the home and needs to drive or get other transport to local shops or community facilities; or

(ii)      has difficulty performing day to day household activities (e.g. changing the sheets on a bed or sweeping paths); and

(b)  is able to:

(i)      use public transport and walk (or mobilise in a wheelchair) around a shopping centre or supermarket; and

(ii)      perform work-related tasks of a clerical, sedentary or stationary nature (that is, tasks not requiring a high level of physical exertion).

As such, he does not meet the requirements of s 94 of the Act. Therefore, he does not qualify for the DSP; and it is not necessary for this Tribunal to consider s 94(3B) or the requirement for a Program of Support.

1. However, the Tribunal is concerned by the documentary evidence that Mr Zepnick has been paid a Newstart Allowance from 28 November 2012 when, according to the documentation provided by Australian Super, he was receiving income protection payments of $3,000.00 a month.  In addition, while there is no evidence that Mr Zepnick is making a profit from his business Zepnix Wargames, the evidence before the Tribunal suggests that he does have a capacity for sedentary work in this field.  This has not been the subject of assessment by occupational health physicians or any rehabilitation or disablement assessment specialists.

2. The Tribunal, has found that Mr Zepnick’s impairment rating under Table 1 amounts to 10 points and thus he does not satisfy the s 94 eligibility criteria for DSP. It therefore sets aside the decision under review.

I certify that the preceding 42 (forty‑two) paragraphs are a true copy of the reasons for the decision herein of:

Miss E A Shanahan, Member

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

Associate

Dated: 27 June 2017

Date of hearing:	23 March 2017
Date final submissions received:	11 April 2017
Advocate for the Applicant:	Ms Ailsa Bramley - Department of Human Services
Respondent:	In person

APPENDIX

APPLICANT’S EXHIBITS

A1T-Documents and Supplementary T-Docs

RESPONDENT’S EXHIBITS

R1Report of Dr Timothy Stobie dated 30 June 2016.

R2Letter from Dr Anthony Jackson to Dr Timothy Stobie dated 29 November 2016.

R3Report of Dr David Prestage dated 17 February 2015 under covering letter from Maurice Blackburn Lawyers dated 23 November 2015.

R4Total and Permanent Disablement Assessment Report by IPAR Rehabilitation Pty Ltd dated 3 November 2014 under cover dated 30 October 2014.

R5Report of Dr Cunnington, Melbourne Sleep Disorders Centre, dated 20 May 2016.