Secretary, Department of Social Security v Amanda Raizenberg [1993] FCA 629; (1993) 119 ALR 290 (1993) 18 Aar 407 (1993) 47 FCR 531 (17 December 1993)

FEDERAL COURT OF AUSTRALIA

SECRETARY, DEPARTMENT OF SOCIAL SECURITY v. AMANDA RAIZENBERG
No. NG1006 of 1992
FED No. 952/93
Number of pages - 18
Social Security - Statutes
[1993] FCA 629; (1993) 119 ALR 290
(1993) 18 AAR 407
(1993) 47 FCR 531

COURT

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
WILCOX(1), EINFELD(2) AND BEAZLEY(1) JJ

CATCHWORDS

Social Security - eligibility for invalid pension - whether applicant for pension "permanently incapacitated for work" - construction of s94(1) Social Security Act 1991 - whether "incapacity for work" is "inability to engage in paid work" or "loss of earning capacity" - relevant time at which incapacity for work is to be assessed - whether age specified in s94 is the relevant time or some earlier age - whether child may be "incapacitated for work"

Statutes - Interpretation - principle that a general provision cannot override a specific provision dealing with the same subject - general and special powers

Social Security Act 1991, s94, s5(2), s(7)

Secretary, Department of Social Security v Abaroa [1991] AATA 59; (1991) 13 AAR 359

Leon Fink Holdings Pty Limited v Australian Film Commission (1979) 141 CLR 672

Wicks v Union Steamship Co of New Zealand Ltd [1933] HCA 58; (1933) 50 CLR 328

Arnotts Snack Products Pty Ltd v Yacob [1985] HCA 2; (1984-1985) 155 CLR 171

Re Panke and Director-General of Social Services (1981) 4 ALD 179

Annas v Director-General of Social Security [1985] FCA 428; (1985) 8 FCR 49

McDonald v Director-General of Social Security [1984] FCA 57; (1984) 1 FCR 354

Re Kadir and Secretary, Department of Social Security [1989] AATA 86; 17 ALD 220

Re Secretary, Department of Social Security and Mancer (1989) 19 ALD 58

Re Frendo and Secretary, Department of Social Security 8 ALN N18

Ball v William Hunt and Sons Ltd (1912) AC 496

Birch Bros Ltd v Brown (1931) AC 605

Ruocco v Surrey County Council (1947) 177 LT 613

Williams v Metropolitan Coal Company Ltd (1948) CLR 431

Thompson v Armstrong and Royse Pty Ltd [1950] HCA 46; (1950) 81 CLR 585

Mills: Workers Compensation (New South Wales)

Butterworths (1979, 2nd ed.)

HEARING

SYDNEY, 27 May 1993
17:12:1993

Counsel for the Applicant: Mr J Hilton

Solicitors for the Applicant: Australian Government Solicitor

Counsel for the Respondent: Ms C Ronalds

Solicitors for the Respondent: Mr P Griffin

ORDER

THE COURT ORDERS THAT:
1. The appeal be allowed.

2. The decision of the Administrative Appeals Tribunal be set aside
and in lieu thereof it be ordered that the appeal to that Tribunal
be allowed, the decision of the Social Security Appeals Tribunal
be set aside and the decision of the Secretary, Department of
Social Security be affirmed.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

DECISION

WILCOX AND BEAZLEY JJ This is an appeal from a decision of the Administrative Appeals Tribunal (the Tribunal) made on 3 December 1992, affirming the decision of the Social Security Appeals Tribunal dated 3 June 1992, that the respondent is qualified to receive an invalid pension from 10 April 1992. The principal issue raised on the appeal is the meaning of the phrase "permanently incapacitated for work" in s94(1) of the Social Security Act 1991 (the Act), and in particular when such capacity may be assessed.

2. Section 94 of the Act, in the form it took for the purposes of this matter, provided:

"(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 dependant child of an Australian resident;
and the person becomes an Australian
resident while a dependant child of an Australian resident;"

"Dependant child" is defined in s5(2) of the Act to mean, inter alia, a young person who has not turned 16.

3. The respondent was born in Canada on 12 November 1973 and immigrated to Australia with her parents as a permanent resident on 6 May 1988. She has suffered from cerebral palsy since birth and is severely disabled. In November 1989, upon turning the age of 16 years, the respondent applied for an invalid pension. The application was rejected by a delegate of the Secretary on the basis that the respondent had not become permanently incapacitated for work whilst an Australian resident, as her "impairment occurred outside Australia". The basis of this decision was that as the respondent's disability was so severe at birth, it was possible to say then that she would always be incapacitated for work. The decision was internally reviewed, but was affirmed. The respondent sought a review by the Social Security Appeals Tribunal, which held that the phrase "permanently incapacitated for work" was concerned with the economic consequences of incapacity and was thus to be assessed at the time determined by the legislature as the age when persons were expected to work or, if unable to do so, to qualify for the invalid pension, namely at the age of 16 years. The Social Security Appeals Tribunal determined that the respondent's incapacity for work, as opposed to her congenital disability, arose after she became an Australian citizen, and as she satisfied the other statutory criteria at that time, she was entitled to an invalid pension. The Department applied to the Administrative Appeals Tribunal for review of this decision. The Tribunal affirmed the decision of the Social Security Appeals Tribunal. The Department appeals to the court on a question of law pursuant to the provisions of s44 of the Administrative Appeals Tribunal Act 1975. The error of law alleged is that the Tribunal wrongly construed and applied the provisions of s94(1) of the Act to the respondent's application for pension.

4. It was common ground before the Tribunal that at the time the respondent made her application for pension, she satisfied the requirements of s94(1)(a)-(d). The Tribunal found that the respondent first satisfied the conditions in pars(a) to (c) upon reaching the age of 16 years, at which time she was an Australian resident. It held, therefore, that the respondent satisfied the provisions of s94(1)(e)(i), that is, she was an Australian resident at the time that she first satisfied pars(a), (b) and (c). The basis of this conclusion was that the respondent was incapable of being regarded as "permanently incapacitated for work" within the meaning of s94(1)(a) until she reached the age of 16 years, being the statutory age at which she was entitled to an invalid pension.

5. Counsel for the applicant submitted that the Tribunal erred in law as this finding was based upon a wrong construction of s94. It was submitted that upon the proper construction of the section, and in particular the provisions of s94(1)(e)(iii), a "dependant child" may become permanently incapacitated for work while he or she is still a child. The Tribunal failed to refer to s94(1)(e)(iii) in its Reasons for Decision. Counsel for the applicant submitted that this omission led the Tribunal into fundamental error, as this sub-paragraph is critical to the proper construction of s94(1) and is determinative of the matter. It was also submitted that the Tribunal's conclusion contradicted the purpose of the residency provisions in s94(1)(e), which were designed to disqualify an immigrant, suffering from an impairment acquired prior to the immigrant's arrival in Australia, from claiming an invalid pension until the person had satisfied the 10 year residency requirement. It was submitted that this construction was supported by the provisions of s7 of the Act which deals with residency qualifications, and by the decision of the Tribunal in Secretary, Department of Social Security v Abaroa [1991] AATA 59; (1991) 13 AAR 359 at 362. Counsel for the applicant further submitted that the history of the Act demonstrates that the imposition of a residency qualification in the case of a person born overseas, who arrives in Australia suffering from a pre-existing disability or impairment, has been a long standing feature of the legislative scheme.

6. The invalid pension was first introduced in Australia by Part IV of the Invalid and Old-age Pensions Act 1908 (the 1908 Act). Part IV came into operation on 19 November 1910. Relevantly, ss20 and 22 provided:

"20. Subject to this Act, every person above the age of
sixteen years who is permanently incapacitated for
work, ... by reason of his being an invalid, ...
shall, whilst in Australia, be qualified to receive an
invalid pension.
"22.(1) No person shall receive an invalid pension unless:
(a) he is residing in Australia on the date when he
makes his claim to the pension;
(b) he has on that date resided in Australia
continuously ... for at least 5 years;
(c) he has, whilst in Australia, become permanently
incapacitated or blind;
...
(2) For the purposes of an invalid pension, a person who is
afflicted with a congenital defect and who is rendered
permanently incapacitated or blind thereby shall be regarded
as having become permanently incapacitated or blind whilst
in Australia if he was brought into Australia before
attaining the age of three years or has resided in Australia
continuously for twenty years."

7. On 11 June 1947, assent was given to the Social Services Consolidation Act 1947, which consolidated the law relating to the payment of various pensions and benefits, including invalid pensions. The provisions of ss20 and 22 of the 1908 Act were, in substance, re-enacted. In 1948, the Social Services Consolidation Act 1947 was amended by the Social Services Consolidation Act (No. 2) 1948. The major relevant amendment effected by that Act was to permit the aggregation of the 20 year period of residence.

8. The next significant amendment was introduced by the Social Services Consolidation Act 1953, assented to on 26 October 1953. By that stage, s22 of the 1908 Act was numbered s25. A new subsection 3 was added to s25 which provided:

"(3) For the purposes of paragraph (b) of sub-section (1.) of
this section, a child born out of Australia during the
temporary absence of his mother from Australia and who, on
his arrival in Australia, is permanently incapacitated for
work or permanently blind shall be deemed to have become
permanently incapacitated for work or permanently blind in
Australia".

Counsel for the applicant submitted that this was a significant provision as it clearly demonstrated that the legislature considered that a child could be permanently incapacitated for work. He submitted that support for this construction, should any be required, was to be found in the Minister's second reading speech where it was stated:

"Another amendment...concerns invalid pensions. Where a claimant
has become permanently incapacitated or permanently blind in
Australia, or during a temporary absence from Australia, he needs
only five years' continuous residence in Australia to qualify for
the pension, but in other cases twenty years' residence in the
aggregate is necessary. A child born to parents while they are
temporarily absent from Australia may be permanently incapacitated
or blind from birth, or may become permanently incapacitated or
blind before the parents return to Australia. In such a case the
child cannot be treated as having become permanently incapacitated
or blind during a temporary absence from Australia. This is
obviously an anomaly, and it is being corrected in the bill by a
short amendment which will enable a child who became permanently
incapacitated or blind in the circumstances which I have mentioned
to be regarded as having become permanently incapacitated or blind
in Australia."

9. Between 1962 and 1974 changes were made to the period of residency required for the purposes of eligibility for pension. Further amendments were made by the Social Security and Veterans' Entitlements Amendment Act 1987. Relevant for present purposes was the addition of a new subs(4) to s25 which provided:

"Where:
(a) a person who was born outside Australia became permanently
incapacitated for work or permanently blind at a time when
the person was not an Australian resident; and
(b) at that time, the person's mother or father was an
Australian resident;
the person shall, for the purposes of this section, be taken
to have become permanently incapacitated for work or
permanently blind while the person was an Australian
resident."

Those provisions however were again amended by the Social Security and Veterans' Entitlements Amendment Act (No. 2) 1987 whereby sub-section (4)(b) was omitted and the following provision inserted:

"(b) at that time, the person was a dependant child of an
Australian resident and the person becomes an Australian
resident while the person is a dependant child of an
Australian resident".

By that stage, s25 had been renumbered s30 by the provisions of the Social Security Amendment Act 1987.

10. Counsel submitted that this amendment to subs(4)(b) clearly indicated that the legislature both recognised and assumed that a dependant child of an Australian resident could be permanently incapacitated for work. This, he submitted, was also clear from the explanatory memorandum which stated:

"Sub-section 30(4) of the Principal Act is intended to deal with
the case of a person born outside Australia to an Australian
resident in the situation where the person becomes permanently
incapacitated for work outside Australia.
This clause would recast paragraph 30(4)(b) to ensure that such a
person can qualify for an invalid pension only if -
. at the time the person becomes permanently incapacitated for
work, the person was a dependant child of an Australian
resident (eg. a child born severely disabled to a woman who
lives in Australia but is temporarily visiting relatives
overseas), and
. the person comes to Australia and becomes an Australian
resident while a dependant child of an Australian resident".

11. In 1991 a new Act, the Social Security Act 1991 was introduced. The intention of the 1991 Act was, amongst other things, to cast the legislation into "plain English". However, it was not intended that the new Act amend or introduce any new policy. As the Minister for Community Services and Health said in the second reading speech:

"Two main aims have been pursued in redrafting the Social Security
Act. The first has been the aim of making each individual
provision as simple and easy to read as possible. The second has
been the aim of making the arrangement of the provisions in the
Act logical and easy to follow. As a result, this Bill contains
many new features at both the individual provision level and at
the overall organisation level."

12. The explanatory memorandum stated:

"The rewrite of the 1947 Act does not involve any major policy
initiatives. The new legislation is intended to reflect existing
policy which is, in turn, reflected by the existing legislation.
Accordingly, this Bill will have no financial impact";

13. Counsel for the applicant submitted that this history of the Act reveals that the imposition of a residency qualification in the case of a person born overseas, who arrives in Australia suffering from a pre-existing disability or impairment, has been a long standing feature of the legislative scheme, subject to a narrowly confined exception in the case of the child of an Australian resident born overseas. Counsel submitted that the effect of the Tribunal's construction of s94(1) was that any impaired child born outside Australia and who arrived in Australia before the age of 16 would be eligible to receive an invalid pension upon turning the age of 16 without having to satisfy the particular conditions in s94(1)(e)(ii) or (iii). It was submitted that such a construction had the effect of enabling the general provisions of s94(1)(e)(i) to be used to circumvent or avoid the limitations and qualifications imposed in the case of a non-resident child by s94(1)(e)(iii), and rendered the provision of the latter sub-paragraph otiose. This construction, he submitted, was contrary to the principle that a general provision could not override a specific provision dealing with the same subject matter.

14. The relevant principle is clear. In Leon Fink Holdings Pty Limited v Australian Film Commission (1979) 141 CLR 672 Mason J, in dealing with the operation of general and special powers, stated at 678:

"It is accepted that when a statute confers both a general power,
not subject to limitations and qualifications, and a special
power, subject to limitations and qualifications, the general
power cannot be exercised to do that which is the subject of the
special power. In Anthony Hordern and Sons Ltd v Amalgamated
Clothing and Allied Trades Union of Australia [1932] HCA 9; (1932) 47 CLR 1 at
p7 Gavan Duffy CJ and Dixon J said:
"... When the Legislature explicitly gives a power by a
particular provision which prescribes the mode in which it
shall be exercised and the conditions and restrictions which
must be observed, it excludes the operation of general
expressions in the same instrument which might otherwise
have been relied upon for the same power".

15. See also Refrigerated Express Lines (A/Asia) Pty Ltd v Australian Meat and Live-Stock Corporation and Ors (1980) 29 ALR 333, per Deane J at 347; Saraswati v The Queen [1991] HCA 21; (1991) 172 CLR 1 per McHugh J at 24. However, we do not think that the principle stated above has any application to this case. This is not an example of a specific statutory provision contradicting or modifying a general provision. The task of the Court is to interpret s94(1)(a) in the light of the whole section. Section 94(1)(e)(iii) simply assists the interpretation of s94(1)(a).

16. The applicant's submission involves a construction of the phrase "permanently incapacitated for work" as meaning "loss of earning capacity". The effect of such a construction is that, in circumstances where a person's physical or mental impairment is so extensive at birth that it is possible to say that that person is permanently incapacitated for work, the person will first be incapacitated for work at birth. Counsel for the respondent submitted however that the phrase, "permanently incapacitated for work" meant an incapacity to engage in full time work on a legal basis for wages. She submitted that in this regard the legislature had adopted an arbitrary age of 16 years, being the minimum age at which a person could apply for pension: s94(1)(d).

17. The phrase "permanently incapacitated for work" is a well worked phrase in the law relating to the award of damages and injury compensation. Counsel for the applicant submitted that the law relating to the award of common law damages recognises that a child may be permanently incapacitated for work, for which compensation may be awarded, notwithstanding that, at the time of the award, the child has not reached employment age: see Todorovic v Waller [1981] HCA 72; (1981) 150 CLR 402, per Brennan J at 465; Rose v Motor Vehicle Insurance Trust (1974) 48 ALJR 352 at 362. Professor Fleming in The Law of Torts (8th Ed) states at 231 that damages are awarded for "the present impairment of capacity to earn in the future". Counsel for the applicant submitted therefore that there was nothing unusual in a statutory scheme which recognised that a child could be "permanently incapacitated for employment" notwithstanding that the child had not reached an age where he or she could be legally employed.

18. Counsel for the respondent however, referred to decisions in the area of statutory workers compensation which, she submitted, indicated that "incapacity for work" requires that there be incapacity at the relevant time. The relevant time for the purposes of workers compensation law is the period for which compensation is claimed. The relevant time for the purposes of s94, she submitted, is the date of the application for pension, which cannot be made until the person is 16 years of age. Counsel for the respondent submitted that the common law authorities indicated that this was the correct approach, and the meaning of incapacity which had been expounded in those cases had been applied for the purposes of incapacity in workers compensation law. In Wicks v Union Steamship Co of New Zealand Ltd [1933] HCA 58; (1933) 50 CLR 328 at 338 Gavan Duffy CJ, Rich, Starke, Dixon, Evatt and McTiernan JJ said that the phrase "permanent and total disablement" means:

"physically incapacitated from ever earning by work any part of
his livelihood. This condition is satisfied when capacity for
earning has gone except for the chance of obtaining special
employment of an unusual kind."

19. See also Williams v Metropolitan Coal Co Ltd [1948] HCA 8; (1948) 76 CLR 431 at 444; Thompson v Armstrong and Royse Pty Ltd [1950] HCA 46; (1950) 81 CLR 585. This concept was applied in Arnotts Snack Products Pty Ltd v Yacob [1985] HCA 2; (1985) 155 CLR 171, where Mason, Wilson, Deane and Dawson JJ held at 177 that for the purposes of s11 of the Workers' Compensation Act 1926 (NSW),

"..."incapacity for work" means a physical incapacity for actually
doing work...and that...compensation is awarded for that
incapacity where it reduces the employee's ability to sell his
labour in the open market..."

20. Counsel for the respondent submitted that this meaning of "permanent incapacity" has also consistently been applied in the Social Security legislation.

21. In Re Panke and Director-General of Social Services (1981) 4 ALD 179 the Tribunal adopted the statement of the High Court in Wicks. Davies J, the then President of the Tribunal, said at 180-181:

"... the term "permanent incapacity for work" in the Social
Services Act must be construed having regard to the scope and
object of that Act. But, having regard to that scope and object,
it appears to me that the Social Services Act is concerned not
with compensation for injury or disease but rather with the
economic effects of a disabling medical condition. ... It follows
that the term "incapacity for work" in the Social Services Act
denotes incapacity to engage in remunerative employment, that is
to say, a lack of capacity for earning".

A like concept was propounded by Senior Member Hall and Dr. Glick who in their reasons said at 192:

"...the concept of permanent incapacity for work in...the Act
necessarily ... involves the notion of the loss of the capacity to
earn a wage".

22. Panke has been applied in numerous decisions of this court and of the Tribunal and approved by the Full Court in Annas v Director-General of Social Security [1985] FCA 428; (1985) 8 FCR 49, where the Full Court said at 53:

"Panke should be regarded as reflecting a correct understanding of
ss23 and 24 of the Act and of the appropriate process of assessing
the degree of incapacity for work".

23. In McDonald v Director-General of Social Security [1984] FCA 57; (1984) 1 FCR 354, in dealing with the meaning of the word "permanent" in the phrase "permanent incapacity" in the Social Security Act 1947, Woodward J, with whom Northrop and Jenkinson JJ agreed on this point, said at 359-360:

"Since the incapacity referred to is not mere physical incapacity,
but incapacity for work, factors such as physical and mental
health, skills, training, qualifications and the state of the
labour market will all be relevant in determining both the degree
of incapacity and its likely duration. The work referred to must
be work generally and not restricted to the person's normal
occupation. I say this, first, because the provisions can apply
to a person over the age of sixteen who has never worked at all
and, secondly, because common-sense dictates that a person who can
earn a legally prescribed wage in an occupation which he is
capable of performing, should not be entitled to a pension simply
because he is incapacitated from performing his normal
occupation."

His Honour then stated that the true test of "permanent incapacity":

"is whether in the light of the available evidence, it is more
likely than not that the incapacity will persist in the
foreseeable future."

24. In Re Kadir and Secretary, Department of Social Security [1989] AATA 86; (1989) 17 ALD 220, the Tribunal applied Panke, holding that "incapacity for work" in the Social Security Act 1947 denoted "incapacity to engage in remunerative employment that is to say, a lack of capacity for earning". In Re Secretary, Department of Social Security and Mancer (1989) 19 ALD 58 the Tribunal also applied Panke. It held that incapacity does not arise at the same time as the disability and that the appropriate time to consider the commencement of incapacity was the age of sixteen years: see also Re Frendo and Secretary, Department of Social Security (1985) 8 ALN N18.

25. Panke involved a claim by an almost 60 year old man for a pension and must be read in light of that fact. The other cases to which we referred also involved adult claims. In Re Secretary, Department of Social Security and Abaroa (supra) Deputy President Gerber disputed the "jurisprudence" in Mancer. 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 s27, 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
become 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."

26. There is much to recommend the reasoning of the Deputy President in Abaroa. He was referring to the position under the 1947 Act (as amended) but the same point may be made about the 1991 Act. Section 94(2) provides that a person is qualified for an invalid pension if:

"(2) ...
(a) the person is permanently blind; and
(b) the person has turned 16 and is under the pension age;
and
(c) the person either:
(i) is an Australian resident at the time when the
person first satisfies paragraph (a); or
(ii) has 10 years qualifying Australian residence; 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 anAustralian
resident while a dependent child of an
Australian resident."

27. In the present case the Tribunal, relying upon Panke and Mancer, held that the correct meaning of "incapacity for work" for the purposes of s94(1) is "inability to engage in paid work". It further stated: "A child under sixteen has no capacity for work that is measurable because they are not capable of engaging in paid work." In coming to this conclusion the Tribunal accepted that sixteen years was the statutory age which the legislature had determined, for the purposes of the Act, as the age at which a person could first engage in paid employment. It found that incapacity was to be assessed at the time the person became eligible for pension. At that time the respondent was an Australian resident, and thus qualified for pension.

28. In our opinion, the Tribunal erred in this construction of the phrase "permanently incapacitated for work" in s94(1) of the Act. The age requirement in s94(1)(d) does not specify the point at which incapacity is to be assessed. It does no more than prescribe the age at which eligibility for pension may arise. Further, the construction given to the phrase by the Tribunal fails to give effect to s94(1)(e)(iii). The history of the legislation reveals that it has always recognised that a child may be incapacitated for work. At the time of the introduction of the 1991 legislation, of which s94 formed part, the Minister stated that the new legislation did not introduce any policy changes and this was also stated in the explanatory memorandum. Interesting though it is to note the interpretation given to the phrase "permanently incapacitated for work" in other contexts, the decisions to which we have referred are of no assistance in determining this case. This case turns entirely upon the proper construction of s.94 of the Social Security Act, a section that provides its own dues to the meaning of the phrase in this context and has its own history.

29. In our opinion, the phrase "permanently incapacitated for work" in s94(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 is 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 s94 or some earlier age, depending upon the legislation in the various states and territories as to the age that a person may leave school.

30. Having regard to our opinion as to the proper interpretation of the provision, the respondent is not yet eligible for an invalid pension. This conclusion follows as a matter of law from the facts found by the Tribunal. There is no point in remitting the matter to the Tribunal for further hearing. The appropriate course is for the Court to make an order determining the matter.

31. In our opinion the appropriate orders are that the appeal be allowed and that the decision of the Administrative Appeals Tribunal be set aside and in lieu thereof it be ordered that the appeal to that Tribunal be allowed, the decision of the Social Security Appeals Tribunal be set aside and the decision of the Secretary, Department of Social Security be affirmed. Counsel for the applicant did not seek an order for costs.

EINFELD J I have had the benefit of considering in draft the judgment of Wilcox and Beazley JJ With profound respect I find myself in disagreement with their Honours' conclusion on the question in issue. I have always understood that the views in Panke of Justice Davies, 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.

2. The majority refers with approval to the views of Tribunal Deputy President Gerber in Abaroa. However, in my respectful opinion, there is a fundamental error of construction in an important section of those remarks. The Deputy President said (and I omit inessential words to assist in interpreting the substance of the remarks):

... where one can predicate ..... that a person's condition
is such that he/she satisfies the qualifying elements .....
in (s. 94), that person is there and then suffering from a
"permanent incapacity for work ....." (his underlining)

3. With all due deference, that is simply not what the legislation says. The relevant right to a pension arises when the person is in fact permanently incapacitated for work, not when the person's medical condition is assumed or "predicated" (perhaps "predicted"?) to create the incapacity. 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 sixteen 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 degree of incapacity improves, as not infrequently occurs?

4. The majority has deftly researched the history of the legislation and discerned an established principle that invalid pensions have always been made available solely to permanent or long term Australian residents with only minor exceptions. Their Honours say that the legislation has always recognised that a child may be incapacitated for work. I have some difficulty with that formulation but even if it is correct, it seems to me with deep respect to beg the very questions to be answered. These are: What is the plain meaning of the Act? And how do the facts of the particular case fit into the words used?

5. Abaroa goes on to explain that a pension becomes payable when the person's permanent incapacity for work "fructifies" into an entitlement at age sixteen "provided the qualifying event occurred at a time when the claimant was an Australian resident". As with the Secretary's argument here, the qualifying event was defined in that determination as the diagnosis of the applicant at birth of cerebral palsy. And all this is premised on a view that the expression "permanent incapacity for work" is not "a term of art".

6. "Fructify" means 'to bear fruit' or 'become fruitful'. I do not think that that is what the legislation prescribes is to happen to permanent incapacity for work to convert it into a "qualifying event" or pensionable entitlement. It does not require a maturing of permanent incapacity for work until it grows or becomes sufficient to justify or support a person. The actual proposition of Abaroa is to the contrary, viz. that permanent incapacity for work has since birth or diagnosis always been enough for a pension and has only to wait, effectively unchanged for sixteen years, to create an eligibility for a pension. In my view section 94 requires a permanent incapacity for work, not on the basis of a diagnosis at birth or any other time, but as an actuality at the time when the incapacity and the other qualifications are all being considered and assessed in the context of eligibility for a pension.

7. I do not know whether the expression 'incapacity for work' is a "term of art" or not but it is one to which the courts have given a great deal of attention over a long period of time. A lot of pain and suffering and a great deal of judicial dissent has occurred before the meaning of the term has become reasonably settled. It would seem to me to be an unfortunate and highly confusing result to hold, as I discern from the reasoning of the majority, that "the meaning which has been given to the phrase in other decisions does not necessarily assist in the interpretation of its meaning in section 94(1)" because "those cases have turned either upon the particular facts or the statutory provision under consideration". My researches suggest that this is not the case and that the phrase has been used and re-used in legislation of overtly different kinds for the very reason that it has acquired a standard meaning in earlier times and places which is desired to be incorporated in the later or different legislation. After all, 'incapacity for work' is only a relevant concept where 'work' is itself a relevant criterion of the testing or assessment process for entitlement. And just as a person who can realistically work is not entitled to an invalid pension, so will such a person be entitled to no (or less than full) compensation. I instance a selection of different expressions of the meaning of the phrase, each one of which demonstrates to my mind its applicability to the present case:

Ball v William Hunt and Sons Ltd (1912) AC 496
In the ordinary and popular meaning ... there is incapacity
for work when a man has a physical defect which makes his
labour unsaleable in any market reasonably accessible to
him, and there is partial incapacity for work when such a
defect makes his labour saleable for less than it would
otherwise fetch: per Earl Loreburn LC at 499.
Now 'incapacity for work' as the phrase is used in the
schedule seems to me to be a compendious expression meaning
inability to earn wages or full wages as the case may be at
the work in which the injured workman was employed at the
time of the accident: per Lord Macnaghten at 499-500.
Birch Bros. Ltd v Brown (1931) AC 605
It is now accepted that by incapacity for work is meant
incapacity to earn wages by working. The personal injury
sustained by the workman may incapacitate him from earning
wages either by rendering him physically unfit to work or by
preventing him for getting work by reason of some handicap
which his injury has imposed upon him in the labour market
notwithstanding that he is as physically fit for his work as
he was before the accident: per Lord Macmillan at 626-627.
Wicks v Union Steamship Co of New Zealand [1933] HCA 58; (1933) 50 CLR 328
The Commission was, therefore, called upon to decide whether
the worker had been permanent and totally disabled, an
expression which, in our opinion, means physically
incapacitated from ever earning by work any part of his
livelihood. This condition is satisfied when capacity for
earning has gone except for the chance of obtaining special
employment of an unusual kind: per the High Court at 338.
Ruocco v Surrey County Council (1947) 177 LT 613
On the basis of the statements of Earl Loreburn and Lord
MacNaghten (in Ball v William Hunt) which have been read,
the test to be applied is in reference not to the fact of
the applicant's ability physically in all respects to do the
work which he did before, but rather to the fact of his
capacity to earn his living as he did before the accident:
per Evershed LJ at 616.
Williams v Metropolitan Coal Company Ltd [1948] HCA 8; (1948) 76 CLR 431
In order to establish a claim for compensation, the worker
must show incapacity resulting from an "injury"; that is, in
this case, resulting from the disease. "Incapacity" means
incapacity to earn wages: Wicks v Union Steamship Co. of New
Zealand Ltd [1933] HCA 58; (1933) 50 CLR 328 at 338. It means "loss or
diminution of the capacity to earn wages in the employment
in which the injured workman was employed": Ball v William
Hunt and Sons Ltd (1912) AC 496 at 500-1: per Latham CJ at
440.
Compensation is not payable for the injury but for the loss
of power to earn caused by the injury, that is for
incapacity for work which results from the injury. The
question is whether the injury has left the worker in such a
position that in the open labour market his earning capacity
in the future is less than it was before the injury: per
Starke J at 444.

Williams was a seminal case in this field. The majority of the High Court was emphatic that 'total incapacity for work' implies loss of earning capacity in all fields of employment open to the worker.

Thompson v Armstrong and Royse Pty Ltd [1950] HCA 46; (1950) 81 CLR 585 (where the
case law is discussed in some detail)
The phrase "incapacity for work" is a set form of words used
in Acts of this type and its meaning is well settled ....
Cardiff Corporation v Hall (1911) 1 KB 1009 shows that the
principle upon which compensation is given under a Workers'
Compensation Act is based on the diminution of earning power
by reason of the injury: per McTiernan J at 601.

8. In his work Workers Compensation (New South Wales) Butterworths (1979, 2nd ed.), C.P. Mills wrote that the intention of compensation statutes, that is, statutes designed to "compensate" people financially for a loss of earning capacity caused by an employment injury (or, as I would argue in a social security context, a physical or mental impairment), is "to compensate (the injured person) for an economic loss" resulting from the physical incapacity for work, not from the state of the labour market. The learned author continued:

... the onus is on the worker in the first place to show
that his economic loss has resulted from his incapacity,
rather than from general economic conditions. At the same
time, incapacity for work involves a consideration of what
work would be open to the worker, if he had not been
injured, but taking into account the work that he would be
qualified for, or capable of doing, were it not for the
injury, and having regard to the normal opportunities for
that kind of work in places reasonably accessible to him.

He said that "compensation is intended for loss of earning capacity, not for loss of earnings ... " even though one will often prove the other.

9. As it seems to me with unfeigned respect, all these expressions are so apposite to the criteria for invalid pensions as to provide no warrant for giving "incapacity for work" a special meaning in social security legislation employing the same expression to reflect the same concepts, and every reason of principle and intent why it should bear the same meaning as in wholly or very largely analogous workers' compensation situations. 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 sixteen 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 but not crucial 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 section 94 to be assessed, viz:

(a) that her degree of incapacity for work is 85% or more
(b) that 50% or more of her incapacity for work is
directly caused by her physical impairment
(c) that she has turned sixteen
(d) that she was an Australian resident when she first
satisfied the relevant requirements

10. Take for example the requirement that 50% or more of her incapacity for work be directly caused by her physical impairment. That element of qualification could simply not be assessed at birth. If it were, it would have to be found that more than 50% of her incapacity for work was caused by the fact that she was a baby. The same applies, albeit in a different way, to the requirement that she be at least 85% incapacitated for work. So is every baby at birth. These faintly absurd consequences of making an assessment of its qualifying criteria at a time earlier than the application for the pension emphasises a construction of section 94 that what is to be considered is not some type of medical or pathological guesswork sixteen or so years earlier but a series of facts as at the age of sixteen or whenever the application for a pension is being considered because the other preconditions also exist. At that time the permanent incapacity for work of an applicant for a pension falls to be considered against the backdrop of the offer of the applicant's services to the labour market becoming a feasible, reasonable and perhaps legal possibility.

11. The Tribunal ignored the provisions of section 94(1)(e)(iii) in this case as completely irrelevant. On the other hand, the Secretary submitted that this provision is crucial to the construction of the whole section, and that the Tribunal's approach contradicted the entire purpose of the residency provisions. In my opinion the Secretary's viewpoint should be rejected and the Tribunal's approach held to be correct. If, as the submission went, these provisions were designed to deny an invalid pension to any migrant whose impairment predated arrival in Australia, that is not what they say.

12. Subparagraph (e) prescribes three alternative indicia of qualification for invalid pensions:

(i) Australian residency at the time of first being
permanently incapacitated for work as defined; or
(ii) 10 years residence here whether permanent
incapacity for work first occurred before or
after arrival or partly before and partly after; or
(iii) a foreign-born child under 16 years who is dependant
on a non-resident Australian, who was not a resident
when permanent incapacity for work first occurred and
who later came to live in Australia as a dependant of
a resident.

13. More specifically, subparagraph (e)(iii) says that a foreign-born child under sixteen who is dependant on an Australian resident is eligible for an invalid pension as soon as the child is first assessed or found to be permanently incapacitated for work after coming to live in Australia, provided that the child is still dependant on the resident. In other words, if a foreigner comes to live here when under sixteen, permanently incapacitated for work and dependant on an Australian resident, the person can receive a pension earlier than otherwise would be the case.

14. The Secretary's argument is that if permanent incapacity for work of a person under sixteen years can never occur because the person has no work capacity or incapacity until eligible for work, the provisions of subparagraph (e)(iii) serve no purpose at all. 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 dependant child as defined by section 5(2) of the Act because she had passed her sixteenth birthday. In other words, she became eligible for consideration for a pension under (e)(i) because she was a resident who was over sixteen, and therefore deemed independant, and was permanently incapacitated for work. The fact that a person may first become eligible for work or assessable for work capacity at aged sixteen 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 seventeen, eighteen or nineteen 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.

15. The Tribunal held that Ms Raizenberg was entitled to the pension from 10 April 1992 when she was eighteen years five months. Having, in the fairly tortured terms of section 94(1), once been, when she was first disabled, the foreign-born non-resident dependant child of non-resident parents, she had become the foreign-born resident non-dependant child of Australian resident parents when she first fell to be assessed as permanently incapacitated for work upon being considered for a pension. It is not at all difficult to list a series of examples of people who would qualify or be disqualified under (e)(iii) with a different set of facts altogether. I earlier mentioned some qualified people. One disqualified person would be a foreign-born resident incapacitated dependant child of one residential and one non-residential parent where the child is dependant on the non-residential parent. There are many other examples both ways.

16. In my opinion the Tribunal was fundamentally correct in its interpretation of section 94 and in its assessment of the respondent's entitlement to a pension. I would dismiss the appeal with costs.