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Attachment B - The Work Capacity Test: Application of 24(1)(b) and 28(a)

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  1. The following is additional information/discussion on the specific terms contained in the Work Capacity test.
Hours Worked
Special Rate - 8 Hours Per Week
Intermediate Rate  - 50% of the full-time hours ordinarily worked or 20 hours per week

  1. The veteran's incapacity from accepted conditions must be such that the veteran is unable to work for periods aggregating more than 8 hours per week for Special Rate or 50% of the full-time hours ordinarily worked or 20 hours per week for Intermediate Rate. The fact that a veteran may actually only work 6 hours or 18 hours respectively in a given week is not the test. The question to be answered is: how many hours does the veteran have the capacity to work in a week?  A veteran who has by choice, reduced their working hours to the relevant Special Rate or Intermediate Rate thresholds or below, does not satisfy the requirements of the Work Capacity Test.

  1. The assessment of work capacity is a matter for medical opinion. Where there is a clear basis for a decision to be made, the delegate need not obtain further information in this respect.

  1. In deciding whether the Work Capacity Test is satisfied, the veteran's past history of engagement in remunerative work may be taken into account. In this context, it may be necessary to recognise that the veteran may have tested options of working different hours per week to determine the level of capacity. Taking an average of the number of hours worked over a month (for example) may be more appropriate in determining the overall capacity that a veteran may have to work each week. However, this does not extend to a situation where someone claims to have worked an immense number of hours per week, then not at all, and present that as averaged over a year being less than the relevant working thresholds per week.

  1. In considering whether the limited capacity to work test continues to be met, the level of scrutiny that is appropriate would depend on whether the capacity to work is close to the relevant Special Rate or Intermediate Rate working thresholds and the typical work patterns for the type of work. An infrequent or isolated event which results in the veteran working slightly more than the relevant Special Rate or Intermediate Rate thresholds should not necessarily lead to the conclusion that the Work Capacity Test has not been met.

  1. However, if the available medical evidence indicates that a veteran is incapable of working above the relevant threshold hours, but the veteran's employment records show recurring instances of working in excess of those hours, a delegate would need to seek further clarification from the treating doctor, or refer the veteran to a specialist for advice on their capacity to undertake work, before they make a decision regarding whether this test has been met.
Capacity to Undertake Remunerative Work (s 28)

  1. Determining a veteran's capacity to undertake remunerative work brings s28 into consideration. Under this section, capacity to work has regard only to:
  • the vocational, trade and professional skills, qualifications and experience of the veteran; and
  • the kinds of remunerative work that a person with the veteran's skills, qualifications or experience might reasonably undertake; and
  • the degree to which the accepted conditions have reduced the veteran's capacity to undertake work that might reasonably be undertaken.

  1. Work in this context thus means:
  • work that a person with the veteran's skills, qualifications, and experience might possibly undertake with retraining; and
  • work that is actually undertaken and is not uncommon in the Australian workforce; and
  • work that is of a kind for which remuneration may be attracted.

  1. However, work in this context is not necessarily limited to:
  • the particular type of job that the veteran has previously undertaken; and
  • work readily available to the veteran at this time or in the veteran's local area.

  1. Therefore, for the purposes of the Work Capacity Test, the test is the kind of work a veteran might reasonably be able or expected to do. The veteran's skills are not confined to those acquired in formal training or by virtue of experience in a particular field of employment. They include innate aptitude for tasks, as well as the abilities acquired or developed independently of employment or training. Equally, qualifications are not confined to those obtained as a result of formal training or work experience. However, the skills, qualifications and experience must still be capable of being characterised as being vocational, trade or professional.

  1. The delegate should adopt a common sense approach to this issue.

For example, the veteran has a long work history and experience as an insurance claims assessor with high public contact. The veteran's medical file contains numerous reports from his local medical officer and treating psychiatrist that indicate that the veteran has a decreasing ability to deal with the public, his fellow employees and management. The latest medical report indicates that the veteran has been absent from work for a number of weeks due to his inability to cope with his working environment. The report recommends that the veteran should not return to work or work in any other standard office environment. It further states that the veteran should not be considered for outdoor labouring jobs as his accepted condition of lumbar spondylosis would be further aggravated. The veteran has no other employment skills, previous experience or innate skills that could be considered for the purposes of  the Work Capacity Test. In these circumstances, the delegate could be reasonably satisfied that the veteran does not have the capacity to undertake remunerative work.

Vocational, Trade and Professional Skills, Qualifications and Experience

  1. 'Experience' is not limited to job experience, and 'vocational qualification' may encompass a person's physical fitness. Thus, even though a veteran's job experience has not included physical labour, if he or she is physically and mentally able to do such work, the veteran could be said, in the circumstances of a particular case, to have the skills, qualifications and experience to undertake particular remunerative work involving physical labour. 

For example,the veteran was a clerk with a council and became unable to work in this position. He ceased work and moved away from the city. His new lifestyle included maintaining a rigorous fitness regime. It was held that he was able to use this level of fitness to undertake manual employment and was not entitled to pension at the Special Rate (see Chambers – Full Federal Court).

  1. Depending on the veteran's particular circumstances, if he or she is capable of being retrained within a reasonable period, that must be taken into account because it is a vocational skill. While the Work Capacity Test does not include a requirement for veterans to undergo rehabilitation or retraining, these elements are to be considered in order to establish the kind of work a veteran might reasonably be able to, or be expected to do with retraining or rehabilitation assistance.
Work that the Veteran Might Reasonably Undertake (s 28(b))

  1. This question is not directed to the actual veteran, but to a hypothetical veteran possessing the subject veteran's skills and experience. It is necessary to consider the kind of work for which employers currently employ people.

  1. It is not relevant to have regard to the fact that the labour market might be depressed and the veteran might have difficulty in actually obtaining a job. It is appropriate to consider if that kind of work is rare in the workforce generally. One reason why the general state of the labour market cannot be taken into account is that an incapacity to undertake remunerative work cannot be said to be permanent (or caused by incapacity from accepted conditions) if it is dependent on economic fluctuations. The kind of work must be work that is capable of attracting remuneration.

  1. The 'kind of work' is to be assessed by reference to the nature of the tasks and duties that would be performed, not by reference to any specific job or employer.