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Thursday, 28 August 1980
Page: 885

Mr KERIN (Werriwa) - If the Prime Minister (Mr Malcolm Fraser) won the petulance pentathlon for his performance in relation to the Olympic Games then the Minister for Social Security (Senator Dame Margaret Guilfoyle) must be awarded the accountant's star of merit for working out that one way to cut costs in her Department is to crack down on invalid pension recipients. Honourable members who sit opposite are infamous for their attitudes towards the less fortunate in our society. Hundreds of thousands of poor families with children are being thrust ever deeper into poverty by inflation and by this Government's freeze on certain social security benefits. Let me instance several examples. For five years this Government has frozen the $36 a week benefit for the unemployed under 1 8 years of age. Until this Budget it had frozen for two years the $51.45 benefit for single adults who are unemployed. Now, it has only increased by $2. For lOi years - until this Budget in which the

Government has made a small concession - it had frozen the $3 to $6 a week permissible income for the unemployed. In this respect there is a small concession in this Budget but it is long overdue. For four years it had frozen the family allowance. To top it all off the Fraser Government has now decided to hound invalid pensioners.

I wish to make seven points. Firstly, the Fraser Government is reticent to extend any social welfare reform. It acts only when it can no longer decently resist. Secondly, there has been a crackdown on invalid pensioners. Thirdly, the crackdown follows a review of departmental procedures. One need only refer to the Lanigan minute. Fourthly, the crackdown has highlighted glaring injustices to certain individuals. Fifthly, these injustices have exposed the inadequacies of the system used to assess whether people should be on invalid pensions. As all honourable members know a court case is pending on that matter. Sixthly, the processes of review are mysterious and arbitrary. Seventhly, reform of the system is needed.

The Government's ideology towards individuals is marked by an emphasis on free choice, private enterprise and personal responsibility. It prefers to allow people as much as possible to govern their lives without official interference. However, the corollary of this philosophy is that in adversity people are expected to stand on their own two feet with a minimum of Government assistance. Thus the present Government has a pronounced distaste for the concept of the welfare state, viewing it as not only financially burdensome but also morally repugnant. Therefore, such communal concepts as universal health insurance have been replaced by a system of voluntary insurance and grudging subsidies for the aged, chronically ill and socially disadvantaged.

The harshest aspect of this doctrine of individual responsibility is the stigma of dole bludger or welfare parasite that this Government loves to fasten on those who are driven by economic circumstances or personal misfortune to depend on social security benefits. One of the worst examples of social injustice perpetuated recently has been the blatant victimisation of invalid pensioners. It is ironic that Liberal Party policy states categorically that it aims to protect citizens 'against arbitrary bureaucratic decisions by the use of an ombudsman and effective tribunals for appeal against the exercise of administrative discretions'. Obviously, invalid pensioners are an exception. There has been a crackdown on invalid pensions. There is no sense honourable members opposite saying that there has not.

Let me now outline what has happened in my electorate in an effort to show that this Government has callously and inhumanely cracked down on invalid pensions in order to save a miserly amount. As always the poorest, the weakest and most vulnerable are being attacked by the Government and the Department of Social Security, a Department established to protect them. Since June I have had a succession of people visiting my electorate office about the receipt of a circular from the Department of Social Security stating that their invalid pensions would cease by a certain date due to re-assessment. They were advised to register with the Commonwealth Employment Service for employment. Some of the people I interviewed had been receiving the invalid pension for up to 10 years, and the letter came as rather a shock. The decisions conveyed in the letters to the invalid pensioners were made without any further medical examinations, and were merely a result of some bureaucratic arbitrary decision.

One person who saw me had had an accident at work about 10 years ago. He underwent serious surgery, and then about six years ago he had a car accident and further intensive medical treatment. This person cannot sit or stand for long periods and has permanent back injuries. Not only will this person face the intolerable unemployment situation in my electorate, which at present amounts to about 7,000 people out of work, with about 100 vacancies each month, but 10 years of invalidity have cut him off from the world to the degree that he has difficulty communicating in English and can speak only Yugoslav. One could mention dozens of documented cases from all over Australia. There has been a crackdown on invalid pensioners, but I will not spend time today instancing cases of poor individuals who have been affected by the Government's policy. It is obvious to all honourable members from the publicity over recent months that there is a widespread crackdown taking place throughout Australia.

The loss of the invalid pension deals the seriously disabled a shocking financial blow. A single person receiving unemployment benefit, which is the only recourse for most rejected invalid pensioners in my electorate, loses $9.55 a week in income. A wide range of fringe benefits is also lost, including free health care, free pharmaceuticals, rebates on telephone rental, if the person has one, and rates and electricity charges. These fringe benefits, especially the free health care and pharmaceuticals, are worth up to $50 a week for the seriously disabled who require constant medication and health care. I point out that two of the people singled out in my electorate are under constant and active medical care, yet they have been rejected. In addition, rejected invalid pensioners have to get themselves to a CES office every two weeks and prove that they have applied for jobs. We all understand what the new work tests involve. Unemployment benefit recipients every now and then have to prove that they have gone to local employers, that they are answering newspaper advertisements, and that they are engaging in a lot of activity on their own behalf to get a job. I do not know how people who are crippled, who cannot sit in trains, who cannot drive, are going to undertake this process. I hope that the idea is not to get people off the invalid pension, on to the unemployment benefit, and then to move them off that and on to sickness benefit or something else. If that is the idea, it would be a very cruel process.

During the autumn session my colleague Senator Grimes asked the Minister for Social Security how many people with 80 per cent incapacity, whatever that may mean, had been placed by the CES in the last year. The Minister, Senator Guilfoyle, did not know because the CES does not classify handicapped people in terms of percentage incapacity. However, she did admit that her Department employs only six paraplegics and one quadraplegic in a total staff of over 1 1 ,000, despite its overall responsibility for programs for the handicapped. Not so long back I think it was Senator Carrick who announced that the Government would try to employ disabled people in the various government departments. At this stage, only a handful of people have been employed in government departments, which largely perform sedentary work. That shows how hard it is for disabled people to get work in the wider community. I think that at this time the Department of Defence employs the greatest number of disabled people.

A CES report for 1978-79 revealed that of the 46,541 handicapped people registered, 9,873 got work. For the past three years, only 20 per cent of registered handicapped have found jobs, and fewer handicapped people have been registering for work. One invalid pensioner noted:

I am genuinely overwhelmed by the societal no man's land my pension application and my diabetes has landed me in during the last seven months. It is all I can do just to preserve some dignity and self respect,, to persist in writing out another application for work when yet another employer opts for a healthier person to do the same job for which you've applied, given your qualifications and training.

Section 23 of the Social Services Act 1947 states that a person must be 85 per cent incapacitated to work and permanently incapacitated in order to qualify for an invalid pension. The law does not state what factors a doctor or bureaucrat should take into account when making an assessment. Senator Guilfoyle attempted to cover up the crackdown in three contradictory moves. Firstly, she stated that the law governing invalid pensions had not changed. She then changed ground slightly to assert that a confidential memo sent last May to Department of Social Security State offices from Mr Lanigan, the head of the Department, had merely clarified the law. She then proceeded to claim that the dramatic increase in lost pensions was part of the normal review process. The Australian Council of Social Service has taken up this cause Australia-wide on behalf of invalid pensioners and other beneficiaries with respect to this arbitrary process. At some time a meeting was held between the Minister and this organisation, and some agreement was reached. I seek leave to incorporate in Hansard a letter from ACOSS to the Prime Minister showing the areas where there is still some contention.

Leave granted.

The letter read as follows -


1 49 Castlereagh Street Sydney, N.S.W., Australia 2000 P.O. Box El 58 St James, N.S.W. Australia 2000 Telephone (02) 235 8188 29 July 1980

The Rt. Hon. Malcolm Fraser, C.H., M.P.

Prime Minister, Parliament House, Canberra, A.C.T. 2600

Dear Prime Minister,

I refer to the Sydney Morning Herald article (28.7.80), in which you were quoted as saying that the Federal Government was not cracking down on invalid pensions and that 'one Of the things we have done is to make sure that arbitrary decisions of government or bureaucrats can't deny the people of Australia rights to the sorts of benefits to which they would Otherwise be entitled'.

During the meeting on July 15, between ACOSS representatives and the Minister for Social Security and senior officers of her department, the Minister also referred to the need for clarification' and 'consistency' of eligibility within the existing law. At that meeting also the Minister assured ACOSS that there would be no overall review or 'crackdown' on those pensioners granted a pension not 'subject to review'.

Despite the flavour of some press reports of that meeting, various important issues of concern remain outstanding for this Council.

First, the Minister referred to the legal opinion by Hulme and Griffith (April 1979) as a 'clarification' of the existing Social Security Act.

The Council considers that this opinion and further instructions by the Department represent a change in the interpretation of the Act towards a much more narrow interpretation, based on strict legal and medical factors only.

In particular we challenge the Hulme and Griffith opinion that the 'availability of work is irrelevant' since the words of the Act read 'incapacity to work'.

Moreover the Hulme and Griffith opinion and current directives to Commonwealth Medical Officers and other general practitioners involved in assessing eligibility, have moved from a notion of 'incapacity' to a much narrower and only clinically based criterion of 'impairment'.

It is our opinion that much more multi-faceted criteria should be used - including the availability of work for persons with certain disabilities.

Our view in this matter has been supported not only on the grounds of a compassionate administration of the law, but as a sound legal interpretation of the Act.

The fact that there has been a tightening up in the interpretation and procedures for determining who should be eligible for invalid pensions has been confirmed by Commonwealth Medical Officers, private practitioners, and social workers who have contacted ACOSS in recent weeks. This change in interpretation has been reflected in the case studies being presented to ACOSS and other agencies of people being taken off or refused invalid pensions, and the much longer waiting periods involved in any application.

The Council has also been informed that some persons (particularly the mentally handicapped) are presently being discouraged by Department of Social Security counter staff in applying for invalid pensions, and are automatically applying for unemployment or sickness benefits.

The Council is presently seeking legal advice from senior counsel in regard to the Hulme and Griffith opinion. This advice will be available soon in the anticipation that a legal challenge will be made seeking a further interpretation of the Social Security Act. In this regard we note and endorse your comment that you 'hope and expect the policy to be administered with compassion and concern' (SMH 28.7.80) .

Secondly, while the Council welcomed the Minister's assurance that there would be no general review of those pensioners 'not subject to review' we are still concerned by several aspects.

Since the meeting with the Minister we have received several case studies/complaints from persons who have been taken off the pension but who at the time of being granted the pension were not told that their pension was 'subject to review'. Their condition has deteriorated since their original application.

The Council has also received at least one case study of a person working in a sheltered workshop who was removed from the invalid pension even though a delegation of disabled persons to the Sydney office of the Department of Social Security (17.7.80) was told that such persons would not be reviewed.

As yet the Council has not received information from the Department of Social Security as to the percentage of invalid pensioners granted a pension 'subject to review' (or details as to their disability category). It should at all times be a basic right for pensioners that they should be told whether their pension is subject to review and during what time scale.

In this regard we are also concerned by a Health Department Instruction circulated by the Department of Social Security (February 1980) which stated that 'the Director General of Social Security has also drawn attention to the need for review of the continuing entitlement of existing invalid pensioners' and 'Directors of Medical Services in his Department will be asked to survey existing invalid pensioners'.

We emphasise again that our concern is not only about any review of those people currently on invalid pensions, but also about the impact of any change in interpretation of the Social Security Act for those applying for pensions.

One complaint brought to ACOSS by social workers, referred to changes in the assessment and evaluation procedures by the Commonwealth Medical Officer and Rehabilitation Service, which are now causing long delays (of four months or more), in processing claims for invalid pensions. Such delays bring added emotional stress and financial hardship to disabled persons and their families. The changes are considered administratively inefficient, and contrary to good rehabilitation principles.

A third major area of concern is the lack of an independent appeal structure. If an invalid pensioner appeals his case, he is presently transferred to the Department of Health and reviewed by a medical officer within that Department. The Council notes that a listed specialist can be made available for the pensioners under review. However, the final decision regarding the appeal is made within the Departments of Health and Social Security. Invalid pensioners appealing on medical decisions do not have access to any independent appeal structure, with other than the possibility of a purely medical review. The Council is strongly of the opinion that an independent appeal structure, including other than medical advice, is required. This requires access to a lower level appeals tribunal as well as to the Administrative Appeals Tribunal.

It is also of major concern to the Council that no reasons are provided to people as to why they have been taken off the pension. They are asked to provide additional medical evidence but do not know on what grounds the previous medical/ specialist opinions have been challenged.

In this regard we also draw your attention to the need for advice and assistance services in assisting people in preparing their appeals and/or knowing their entitlements.

The fourth major area of concern is the inadequacy of unemployment and sickness benefits. In particular we stress the need to remove the gap between what an invalid pensioner and what a sickness and unemployment beneficiary receives. Our pre-budget submission draws attention to the need to provide fringe benefits to all beneficiaries after one month on benefits.

Such fringe benefits provide free pharmaceuticals, free optometrical consultations, free medical treatment by doctors, telephone rental concessions, hearing aid services, transport concessions. Obviously all these are extremely valuable for handicapped persons.

The Minister for Social Security has herself noted the present anomalies in this regard.

Attention is also drawn to the following anomalies and gaps between the entitlements of pensioners and beneficiaries. the unemployment benefit for a single person is lower than the invalid pension ($5 1.45 compared to $61. 05) unemployment and sickness beneficiaries face a much harsher income test (only allowed to earn $6.00 pw before any extra money reduced $ for $ compared to $20.00 pw and 50c in $ taper for pensions). The Council urges that the harsh income test for beneficiaries be made equal to that of pensioners. that unemployment and sickness beneficiaries are not presently eligible for supplementary rent assistance ($5.00 pw) that disabled unemployment and sickness beneficiaries are presently not eligible for incentive allowance of $5.00 pw for those working in sheltered employment.

We urge that the provision of fringe benefits to beneficiaries and the provision for the other allowances and increased benefits, listed above, be given highest priority in this year's budget allocation.

Finally, we draw attention to the lack of opportunity of access to employment for the physically and mentally disabled. A range of social and physical barriers presently deny any opportunity or access to work. We urge that various employment programs be implemented to deal adequately with the special needs of all long term unemployed and the mentally and physically disabled, and to encourage the availability of work for such persons.

As one example of this the particular difficulties faced by the disabled in obtaining employment in the Commonwealth Public Service should be reduced and a program of positive discrimination implemented.

We would appreciate your earliest response to the issues we have raised on behalf of a particularly vulnerable sector of the community. We hope it will be possible to resolve the current unfortunate situation without the need for more extensive community and legal action.

Yours sincerely,

MURRAY GEDDES President c.c. Minister for Social Security.

Mr KERIN - I thank the Minister. Anyone can see that the spate of lost invalid pensions is much more than that. I concede that a single member of parliament cannot know the full dimensions of a problem, but it is relatively obvious that there has been a crackdown. This came about because in May last year Mr Lanigan sought legal opinion from outside the Government to clarify the definition of 85 per cent incapacity, and apparently accepted the most restrictive, that from tax avoidance lawyers Mr S. E. K. Hulme and Mr Gavan Griffith. The confidential Lanigan departmental minute entitled 'Control of Invalid Pensions', dated 23 May 1979, claimed a 9.4 per cent increase in invalid pensions for the year - higher than the so-called normal growth. Firstly, the number of invalid pensioners for the year ended June 1979 was 7.7 per cent above the previous year, not 9.4 per cent; and secondly, Mr Lanigan did not define what he meant by normal growth. It is certainly pertinent to this debate that invalid pensions have risen by less than any other pension or benefit over the past 10 years. The same Lanigan minute stated:

.   . CMOs are not always able to tell, from the kind of consulting room examination they are able to provide, whether or not a person who claims such unprovable ailments as bad backs or neurotic problems is really ill enough to be granted a pension.

Thus a doctor cannot prove beyond doubt that a patient is eligible or ineligible for an invalid pension. The patient is at the mercy initially of the Commonwealth Medical Officer, and then senior Health Department officials and Mr Lanigan or the Department, who can veto the medical verdict without ever conducting a medical examination. Recently one invalid pensioner suffering from a chronic heart condition informed me that the extent of his medical examination by a Commonwealth Medical Officer was to touch his toes. The CMO then pronounced to my constituent that he did not pass the 85 per cent incapacity test.

In February and March this year, as a result of Mr Lanigan's legal inquiries, new procedures were outlined in Social Security instructions headed 'Invalid Pensions - Revised Procedures'. The minutes were numbered 80/16 of 25 February 1980 and 80/22 of 17 March 1980. These Revised procedures were to adjust the confidential Department of Health publication Handbook for the Guidance of CMOs', which amounts to an interpretation of the law. The handbook used to charge doctors specifically to take into account social and environmental factors and the 'availability of work within travel or educational capacity' when assessing a person's eligibility for an invalid pension. Social Security instruction 80/ 16 of 25 February 1980 reversed this. It states:

All references to environmental or social factors which may enable a doctor to certify that a person is permanently incapacitated for work have been removed.

There is no sense in the Government using a legal interpretation as the reason for its action. It is for the Minister and the Government to evaluate the justice of the legality and move to amend the law if it is seen as unjust. But by this means the criteria for eligibility for invalid pensions has been narrowed to a more strictly medical interpretation of the law. It means that a 60-year-old man who cannot speak much English, lives in an area of high unemployment like Liverpool, and who has been in receipt of the invalid pension for 10 years can still be rejected on so-called medical criteria.

The whole question of 85 per cent incapacity as criteria for eligibility for an invalid pension needs to be reviewed. It is interesting that the First Assistant Director of the Department of Social Security in Victoria, speaking in early August at a rally organised by the Combined Pensioners Association in that State, called for the present system requiring 85 per cent incapacity to be abolished. The subjectivity of 85 per cent incapacity can never be clarified, legally, medically or by any other means. Another significant change in procedure is that senior Health Department officers have been appointed to double check all assessments made by CMOs, whether these assessments are for application or review. I seek leave to incorporate in Hansard a letter from the Department of Health.

Leave granted.


(Victorian Division)

Australian Government Centre Cnr. Spring and Latrobe Streets Melbourne, Victoria 3000

Dear Doctor,

Invalid Pensions - Revised Procedures

Your attention is drawn to revised procedures relating to Invalid Pensions to be implemented following a recent review by Department of Social Security and Department of Health. The rationale for these procedures is to develop a more accurate assessment of each application, so as to reduce the likelihood of incorrect or inappropriate recommendation for an invalid pension.

For this reason the instructions in section 35 of the CMO Handbook (pages 35. 1 to 35.3) have been amended, and supercede the current instructions contained in paragraphs 1 to 4 of sub-section A and paragraphs 1-6 of sub-section B. A copy of these amendments is enclosed for your guidance. A reprint of this section for the CMO Handbook will be forwarded when available.

The changes made in the amendments are intended to bring forcibly to the attention of the examining CMO the fact that to certify that a person is permanently incapacitated for work he must find the person to be no less than 85 per cent incapacitated for work. All references to environmental or social factors which may influence a Doctor to certify that a person is permanently incapacitated for work have been removed. In addition, conditions in the labour market which may make it difficult for a claimant to obtain work are not relevant to the medical assessment.

In conjunction with the revised procedures, a new medical report form SA16 will be used. This requires a more detailed and careful examination of each applicant for an invalid pension, from the CMO. From now on, all medical report forms SA16 will be vetted and reported upon by a senior medical officer in the Victorian Divisional Office before the forms are referred to the Director-General of Social Security for final determination. The senior medical officer will have to satisfy himself that on the evidence available before him the recommendation of the examining CMO is in accord with the new criteria for invalid pensions as contained in the amendments. Consequently, examining CMOs are requested to include as much as possible relevant clinical comments and examination findings.

Examining CMOs are requested not to divulge to the applicants their recommendations, as apart from any action the vetting senior medical officer may take, ultimate determinations of all claims are made by the Director-General of Social Security.

Section C of the new form contains a box for coding of the major disability. This should be completed using the simplified code in the CMO Handbook pages 35.7-35.9 (Sub-section G).

A specimen form SA16 is enclosed for your information.

Yours faithfully, (R.C.Webb) Director (Victorian Division)


Since printing of the new Form SA16 it has been agreed that the details required in Part II and Part III (2nd Page) are more complicated than required. This will be corrected when the forms are re-designed and reprinted. However as an interim measure a simplified questionnaire in lieu of these parts will be included with the existing Form SA 1 6 and this should be completed by the claimant.

Mr KERIN - I thank the House. On 23 May 1980 the Minister for Social Security could not say how many reviews of the positions of invalid pensioners had taken place in the past four years because this type of information would cause a considerable amount of clerical effort. This type of excuse is not much solace to the people who no longer receive the pension. Assurances by the Minister that those already on pensions are not at risk are meaningless unless full comparative figures on the numbers of medical reviews and cancellations following them each year are made available. I had another three people tell me of their troubles last week.

Senator Grimesplaced a question on the Notice Paper regarding pension review procedures and received an obscure answer from the Minister. I have written to the Minister requesting information on the review procedures within her Department and that of the Department of Health, and was fobbed off. Pension eligibility and review procedures need to be clear and uncontestable. Invalid pensioner applicants and appellants should be given the right to present their cases to panels of independent medical and social experts. The present system of claiming and appealing is very obviously weighted against the pensioner. I would like to leave the final word on this matter to Professor Ronald Sackville of the University of New South Wales, author of Law and Poverty in Australia.

MrDEPUTY SPEAKER (Mr Millar)Order! The honourable member's time has expired.

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