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Social Security Reporter |
Disability support pension: continuing inability to work; nature of work to be considered
(Federal Court of Australia)
Decided: 15th April 2010 by Greenwood J.
Harris applied for the disability support pension (DSP) in July 2007 on the basis of his lumbar spine impairment and ankle injury. On appeal to the SSAT and then to the AAT (the Tribunal) it was determined that both conditions were permanent, that they attracted impairment ratings of 10 points and 20 points respectively, and that in respect of the ankle injury Harris had a ‘continuing inability to work’. The Tribunal noted that Harris was strongly motivated to work, and had sought some training to enable him to do so, but that he had only a ‘theoretical residual capability’ to work for the statutory required period of 15 hours per week, but that [at 37]
[h]aving considered the evidence and the realistic options, and that his trade skills will not be of assistance to him in his present condition and for the future, his physical incapacity and limitations ... his capacity for effective employment in positions requiring bending, lifting or administrative work of a prolonged nature are unfortunately, going to be impractical. Even the retail types of positions suggested [by Centrelink] ... are going to be extremely difficult to achieve and prospective employers are likely to be similarly sceptical about the realistic capability of the applicant.
It was contended before the Court that the Tribunal had erred in several ways: by considering whether Harris would be able to obtain work (rather than limiting its consideration to the question of whether his impairment was sufficient of itself to prevent him from doing any work, as statutorily required); by failing to consider the impact of undertaking a training activity upon his ability to work; by finding in the absence of evidence that work in retail positions would require standing for more than one hour at a time (and, therefore, would be unsuitable for Harris to perform); and by failing to provide adequate reasons for its conclusion that Harris had a continuing inability to work.
The critical issue in this matter was whether the AAT had correctly applied the statutory tests in relation to the definition of ‘continuing inability to work’ and ‘work’ for the purposes of determining eligibility for DSP under the Social Security Act 1991 (the Act). In particular the Court was required to determine whether the Tribunal had misconstrued the relevant statutory test by considering whether a person was in fact unable to obtain employment because of his or her impairment.
Section 94 of the Act sets out the eligibility requirements for DSP. It was not disputed in this matter that Harris met the first two requirements of s.94(1) (that the person have an impairment rated at 20 points or more under the relevant Impairment Tables). However, s.94(1)(c) (i) provides further that an applicant must have a ‘continuing inability to work’. This term is defined in s.94(2) to mean –
s.94(2) A person has a continuing inability to work because of an impairment if the Secretary is satisfied that:
(a) the impairment is of itself sufficient to prevent the person from doing any work independently of a program of support within the next 2 years; and
(b) either:
(i) the impairment is of itself sufficient to prevent the person from undertaking a training activity during the next 2 years; or
(ii) if the impairment does not prevent the person from undertaking a training activity – such activity is unlikely (because of the impairment) to enable the person to do any work independently of a program of support within the next two years.
Section 94(3) further provides that in determining whether a person has a continuing inability to work because of an impairment, the availability to that person of a training activity, and the availability of work in the person’s locally accessible labour market, are both to be disregarded.
Section 94(4) then qualifies s.94(2)(b)(ii) by providing that –
s.94 (4) A person is treated as doing work independently of a program of support if the Secretary is satisfied that to do the work the person:
(a) is unlikely to need a program of support that:
(i) is designed to assist the person to prepare for, find or maintain work; and
(ii) is funded (wholly or partly) by the Commonwealth or is of a type that the Secretary considers is similar to a program of support that is funded (wholly or partly) by the Commonwealth; or
(b) is likely to need such a program of support provided occasionally; or
(c) is likely to need such a program of support that is not ongoing.
Section 94(5) of the Act defines ‘training activity’ to mean activities across five designated training areas, and then defines ‘work’ to mean -
s.94(5) ...work (a) that is for at least 15 hours per week on wages that are at or above the relevant minimum wage; and
(b) that exists in Australia, even if not within the person’s locally accessible labour market.
The Court reviewed in some detail the history of the provisions (and predecessor provisions in relation to the Invalid Pension) setting out eligibility for DSP. The Court set out the following analysis in relation to the requirement that Harris have a ‘continuing inability to work’.
Section 94(2) provides a two stage consideration of ‘continuing inability to work’, the first of which requires that the impairment be, of itself, sufficient to prevent an applicant from doing any work independently of a program of support within the next two years (s.94(2) (a)). This involves an examination of the relationship between an applicant’s level of impairment according to the Impairment Tables, and the extent of the contribution of that impairment to preventing the applicant from doing work which is within his or her skills and experience and which exists in Australia. This first stage requires consideration of whether an applicant is able to undertake any work, even if such work is not available within the person’s locally accessible labour market (S.94(5)), and in determining this the actual availability of locally accessible work cannot be considered (s.94(3)(b)). If it is the applicant’s impairment which is the circumstance that causes employers, in those industries in which an applicant is able to work, to be unwilling to provide work of at least 15 hours per week at the relevant statutory rates, a conclusion that work does not exist in the statutory sense and that the impairment is of itself sufficient to prevent the applicant doing any work without retraining, could be sustained.
If the requirements of stage 1 are met, the second stage under s.94(2) then requires consideration of whether the impairment is sufficient of itself to prevent an applicant from undertaking a training activity (specified across five possible areas of training – s.94(5)) in the relevant two year period, or if capable of undertaking such training that the applicant even with such training is unlikely because of the impairment to be able to undertake any work independently of a program of support within the relevant two year period (s.94 (2)(b)).
The Court noted that s.94 of the Act required consideration of whether the impairment was sufficient ‘of itself’ to prevent an applicant from working. In this regard, the Court concluded–
...the phrase of itself [embodies] ....a
consideration of the impact of the impairment in isolation from other matters that may influence the claimant’s attitude to working, is a reference to factors such as the claimant’s motivation or his or her views about whether particular work is acceptable or suitable or below that category of work for which the claimant is skilled and therefore work which he or she may not prefer to undertake although capable of doing so. These discretionary and motivational factors do not represent any qualification upon the phrase any work in determining whether the Secretary is satisfied that a claimant has a continuing inability to work. They are to be disregarded. (Reasons, Para 28 - Secretary Department of Social Security v Pusnjak [1999] FCA 994; (1999) 164 ALR 572 applied.)
The Court accepted that the term ‘any work’ in s.94(2)(a) is qualified as referring to work which the applicant is by reason of his or her existing work skills and experience capable of performing without the need for retraining, and excludes work which is unlawful or which would be in contravention of occupational health and safety legislation.
The Court considered whether the work to be taken into consideration in applying the tests under s.94 is work within a ‘normal’ workplace labour market, where employers in their hiring decisions take account of an applicant’s disability (rather than the workplace of a benign or sympathetic employer willing to make special employment arrangements so as to accommodate an applicant’s particular disabilities and his or her associated limitations). The question then arises – should partial incapacity (or theoretical capacity) to work be treated as total incapacity if the person concerned is unable to exploit any residual capacity for work in remunerative employment? The Court noted the principle espoused in Cardiff Corporation v Hall [1911] 1 KB 1009 that -
It is only after a fair assessment of the extent of the person’s physical or mental impairment and the impact which that impairment is likely to have upon his capacity to undertake suitable paid work that... a proper assessment of the degree of incapacity can be made.
It is the impairment and the impact of that impairment on the ability to attract and retain work that is the key consideration here, and what the Court concluded was that essentially motivational or dispositional factors (such as an applicant’s preference for or against particular work, or whether certain types of employment were considered to be lower status or insufficiently intellectually stimulating) should not be considered in determining whether a person is capable of undertaking work. As concluded by Branson J. in Croker v Secretary, Department of Employment and Workplace Relations [2007] FCA 1635 ‘...A person able to do work of a character undertaken by a very large number of Australian taxpayers....is not, in my view, a person with a continuing inability to work...’ The Court further noted the decision in Hamal and Secretary, Department of Social Security [1993] AATA 283; (1993) 30 ALD 517 that, when considering work for DSP (or its predecessor, the invalid pension) purposes, it is the ‘normal’ workplace against which a person’s abilities are to be judged, not the workplace of the benign or sympathetic employer.
The Court concluded that the appropriate test under s.94(2)(a) was to ask –
Does the impairment of itself considered in isolation from other matters that may influence the person’s attitude to working (such as motivational matters and the like) have such an impact on the person’s capacity for work that it prevents him or her from doing at least 15 hours of work per week that exists anywhere in Australia for persons with such an impairment judged in a normal or open workplace in that part of the labour market relevant to the person’s skills and experience (recognising that such work includes less skilled or unskilled work with no regard to discretionary suitability on the part of the claimant), on wages that are at or above the relevant minimum wage, being work which the person is by reason of his or her existing work skills and experience capable of performing without retraining, independently of a relevant program of support designed to assist the person in preparing for, finding or maintaining such work. (Reasons, para.92)
In summary, the test of ‘inability to work’ requires consideration of the impact of the impairment of itself, regardless of motivational factors, on the person’s capacity to undertake paid work (including lesser or unskilled work) that exists anywhere in Australia, independent of the assistance of a program of support. The Court made a finding of fact in its orders, that -
If a suitable job exists in the Australian workplace involving a suitable line of type activity, suitable in the sense that the workplace job is, tailor-made to the impairment affecting Mr Harris because the workplace job does not involve bending, lifting or twisting type activities, and does not require the person to have a fixed posture requiring the person to stand for more than one hour or sit for more than one hour, Mr Harris, on the balance of probabilities, would be able to do work for 15 hours a week in such a job.
The Court further concluded that there was insufficient evidence upon which the the Tribunal could have concluded that work in the retail industry would require Harris to stand for periods of more than one hour at a time.
The decision under review was set aside and the matter remitted to the AAT for reconsideration in line with the statutory requirements and in line with its findings summarised above.
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URL: http://www.austlii.edu.au/au/journals/SocSecRpr/2010/33.html