Adkins and Secretary, Department of Education, Employment and Workplace Relations
[2008] AATA 817
•15 September 2008
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2008] AATA 817
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2007/2491
GENERAL ADMINISTRATIVE DIVISION ) Re CHRISTOPHER ADKINS Applicant
And
SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS
Respondent
DECISION
Tribunal The Hon Robert Nicholson, AO, Deputy President Date15 September 2008
PlaceMelbourne
Decision The decision under review is affirmed.
(sgd) Robert Nicholson
Deputy President
SOCIAL SECURITY – youth allowance – parents’ interest in proprietary company – parents’ refusal to complete some questions in family actual means test form – failure to provide information
Financial Management and Accountability Act 1997 s 44(1)
Financial Management and Accountability Regulations 1997
Social Security Act 1991 ss 10B(3), 10B(5), 23(1), 556(1), 1067G(1)
Social Security (Administration) Act 1999 ss 36(1), 37, 63, 192, 196
Re Ibarcena and Secretary, Department of Family and Community Services [2000] AATA 1141
Re Trieu and Secretary, Department of Family and Community Services [2002] AATA 143
Shiel v Department of Social Security [1999] FCA 1237
REASONS FOR DECISION
15 September 2008
The Hon Robert Nicholson, AO, Deputy President
1. This application comes before the Tribunal as a consequence of a Consent Order made by Gray J in the Federal Court of Australia on 29 May 2007. That order remitted the matter to the Administrative Appeals Tribunal for determination according to law. In a joint submission in relation to the Consent Order, prepared pursuant to Practice Note 26, the history of the matter was described as follows:
(a)On 28 July 2005 the Administrative Appeals Tribunal (AAT), constituted by a Senior Member … made a decision affirming a decision of the Social Security Appeals Tribunal, in turn affirming decisions of delegates of the Respondent Secretary, refusing the Applicant’s claim for youth allowance under the Social Security Act 1991.
(b)The AAT decision followed a hearing held on 5 July 2005…
(c)On 19 December 2005 the applicant filed an Amended Notice of Appeal raising the following grounds of appeal (Ground 1):
The Administrative Appeals Tribunal erred in finding that the Social Security (Administration) Act 1999, s 192 applied in this case to require the designated parent to provide the data sought
Particulars
(i)There was no evidence that a request pursuant to Social Security Social Security (Administration) Act 1999, s 192 was made;
(ii)The Social Security (Administration) Act 1999, s 196 mandates that a s 192 request must be in writing.
(d)On 19 March 2007 the hearing of this matter commenced before his Honour Justice Gray...
(e)On 27 March 2007, the applicant filed a further Amended Notice of Appeal, raising the following additional ground of appeal (Ground 4):
The Administrative Appeals Tribunal erred in law in asking itself the wrong question when it held that as a consequence of the non-completion of the Family Actual Means Test form, Centrelink has insufficient information to make a determination that the applicant was eligible to receive youth allowance.
2. In relation to the circumstances referred to in the first ground of appeal, on 11 October 2007 an officer of the legal services branch of Centrelink issued to the parents of the applicant a notice in accordance with section 196 of the Social Security (Administration) Act 1999 (the Administration Act). The information and documents described in an attachment to the notice related to the income, expenditure, savings and other deductions of the applicant’s father. At the date of the hearing to which these reasons relate, the applicant’s parents had not responded to the notice.
3. The second ground of appeal (ground four) in the Federal Court was agreed to by the parties. That is, it was agreed by them that the Tribunal may have failed to consider whether it (rather than Centrelink) had insufficient information to make a determination that the applicant was eligible to receive the youth allowance. It was on that basis that the order of the Federal Court was made.
4. Accordingly, it is apparent that this Tribunal must consider whether it, rather than Centrelink, has sufficient information to make a determination that the applicant is eligible to receive the youth allowance.
5. The applicant was born on 29 March 1988. On 23 March 2004, when he was a year 11 student at Daylesford Secondary College, he lodged an application for the youth allowance. On 5 April 2004 a Family Actual Means Test form (FAMT form) signed by the applicant’s parents was submitted to Centrelink. On 14 April 2004 a Centrelink officer made a decision to reject the applicant’s claim. On 21 June 2004 an authorised review officer (ARO) affirmed the decision. He found that the FAMT form had been partially completed but the majority of the information, that he required to assess whether the rate of the applicant’s youth allowance would be affected by the Family Actual Means Test, had not been provided.
6. On 23 June 2004 the applicant sought a further review by the Social Security Appeals Tribunal (SSAT). The SSAT concluded that the applicant’s parents had failed to fully complete the FAMT form, with the result that Centrelink was unable to assess whether the youth allowance was payable and therefore had correctly rejected the claim. The applicant now seeks review of the SSAT decision by the Tribunal.
FAMILY ACTUAL MEANS TEST FORM
7. The FAMT form addresses 29 questions to the persons completing it. At the Tribunal hearing, the applicant’s father (accepted by the respondent as representing the applicant for the purposes of the hearing) and counsel for the respondent agreed that the questions which had been not answered were the following:
9.What was the total spending on the principal home?
10.What was the total spending incurred by all family members on all types of transport, including public transport?
11.Total spending for ALL vehicles listed in Question 10 and other transport costs used by the family in the TAX YEAR – only include the percentage applicable for a private use of a business vehicle.
12.What was the total spending on education for all family members?
13.What was (sic) the total general living expenses for all family members living at home or living/boarding away?
14.What was the other spending by all family members not counted elsewhere?
15.What were the accumulated savings for all family members?
16.What were the family member’s accumulated savings from trusts, partnerships or private companies, etc.?
17.What were the total voluntary contributions to superannuation funds made for all family members?
18.Other accumulated savings by family members.
…
25.What was the total amount of Government benefits received by all family members? (do not include payments which are not listed)
Each of these questions contained subparagraphs requiring particularisation of further details.
8. The respondent accepted that the applicant’s parents, being the persons who had completed the FAMT form, had answered questions 19, 20, 21, 22, 23, 24, 26, 27 and 28. Further, no objection was raised by the respondent to the adequacy of the response to any other questions, save 9–18 and 25 listed above.
9. At the hearing, counsel for the respondent accepted that if, within a reasonable period, the applicant’s parents were to provide responses to questions 9–18 and 25, the respondent’s arguments would fall away.
RELEVANT STATUTORY PROVISIONS
Provisions concerning general administration
10. Provisions concerning the general administration of social security law are set out in Part 2 of the Administration Act. Division 2 of the Part contains provisions relating to the determination of a claim.
11. Section 36(1) of the Administration Act provides that:
…the Secretary must, in accordance with the social security law, determine a claim for a social security payment or a concession card, either granting or rejecting the claim.
12. Section 37(1) provides:
…the Secretary must determine that a claim for a social security payment is to be granted if the Secretary is satisfied that:
(a)the claimant is qualified for the social security payment; and
(b)the social security payment is payable.
13. In respect of social security payments, defined by section 37(4)(g) to include youth allowance, it is provided in section 37(3) that:
The Secretary must determine that a claim for a social security payment to which this subsection applies is to be granted if the Secretary is satisfied that:
(a)the person is qualified, or is expected to be qualified, for the payment; and;
(b)the payment would be payable if the person were not subject to a seasonal work preclusion period.
Section 37(6) provides:
The Secretary must determine that a claim for youth allowance or austudy payment is to be granted if the Secretary is satisfied that:
(a)the person is qualified, or is expected to be qualified, for the allowance or payment; and
(b)the allowance or payment would be payable, apart from:
(i)the application of a waiting period; or
(ii)the application of a compliance penalty period; or
(v)the application of an income maintenance period where the rate of allowance or payment payable to the person is nil; or
(vi)if the claim is a claim for youth allowance--the operation of section 547AA of the 1991 Act.
Provision for non-compliance with notice
14. The legal status of the FAMT form derives from section 63 of the Administration Act. Section 63, as relevant to a claimant for youth allowance, and as it was at 23 March 2004, provides:
(1) This section applies to a person if:
(a)either:
(i)the person is receiving, or has made a claim for, a social security payment or;
…and
(b)the person is not a person to whom section 64 applies.
(2)If the Secretary is of the opinion that a person to whom this section applies, other than a person to whom subsection (3) applies, should:
...
(d)give information to the Secretary;
the Secretary may give the person written notice that he or she is required, within a specified time, to:
…
(h)give that information;
as the case may be.
…
(4) If:
(a)a person is receiving, or has made a claim for, a social security payment: and
(b)the Secretary gives the person notice under subsection (2); and
(c)the requirement of the notice is reasonable; and
(d)the person does not comply with the requirement;
the following paragraphs have effect:
(e)if the person is receiving a youth allowance and is neither:
(i)subject to a requirement by the Secretary to participate in the PSP; nor
(ii)a party to a youth allowance activity agreement under which the person is required to participate in the PSP;
the allowance is not payable and if, at a later tine, a youth allowance becomes payable to the person, an administrative breach rate reduction applies to the person;
(f)in any other case, the payment that the person is receiving or has claimed is not payable
…
(7)The Secretary may give a person notice under subsection (2) by sending the notice by prepaid post addressed to the person at the postal address of the person last known to the Secretary. This subsection does not prevent the Secretary from giving the person notice in any other way.
…
(11)A notice under subsection (2) or a notification under subsection (3) must inform the person to whom it is given of the effect of the decision.
Provision for information management
15. Part 5 of the Administration Act contains provisions relating to information management. Section 192 relevantly provides:
The Secretary may require a person to give information, or produce a document that is in the person's custody or under the person's control, to the Department if the Secretary considers that the information or document may be relevant to one or more of the following:
(a)the question whether a person who has made a claim for a social security payment is or was qualified for the payment;
...
(d)the rate of social security payment that is or was applicable to a person;
…
16. The respondent relies upon section 192(d) of the Administration Act; that is, the respondent accepts that the issues remaining relate to the rate at which the youth allowance would be payable, not to whether the applicant is qualified. It is not in contention that the base year is complete.
Provision for financial management
17. The Secretary has a statutory duty under section 44(1) of the Financial Management and Accountability Act 1997 to ensure that the affairs of the agency are managed in a way that promotes proper use of the Commonwealth resources for which the Secretary is responsible.
18. Likewise, regulation 9 of the Financial Management and Accountability Regulations 1997 states that an approver must not approve a proposal to spend public money unless the approver is satisfied, after making reasonable enquiries, that the proposed expenditure is in accordance with the policies of the Commonwealth and will make efficient and effective use of the public money.
Provisions relating to the calculation of the rate of the youth allowance
19. Section 556(1) of the Social Security Act 1991 (the SSA) provides relevantly that the rate of a person’s youth allowance is to be worked out in accordance with the youth allowance Rate Calculator in section 1067G.
20. Section 1067G(1) of the SSA provides that the rate of youth allowance of a person referred to in subsection 556(1) is to be calculated in accordance with the Rate Calculator in this section.
21. The Calculator contains Module G, applying the Family Actual Means Test.
22. In that Module section 1067G-G2 provides relevantly that:
the family actual means test applies to a person who:
(a) claims or receives youth allowance; and
(b) is not independent; and
(c) has a parent who is a designated parent.
23. The respondent does not contest that, in the relevant base year, the applicant qualifies as a person who is not independent.
24. The description designated parent is defined in section 10B(3) of the SSA. Relevantly in paragraph (c) of that subsection, a parent becomes a designated parent:
(c)in the base tax year, the parent had an interest in:
(i)a proprietary company; or
(ii)an unlisted public company; or
(iii)a trust…
25. In the applicant’s claim, his parents answered question 12A (During the Base tax year, did you have an interest in a trust, private company or unlisted public company?) in the affirmative. It is not in contest that this response had the effect of making them designated parents.
26. Section 10B(5) of the SSA provides that:
The savings of a person include the following amounts:
(a)the person's share in any profit retained by a company of which the person is a director, or shareholder, who has a substantial influence over whether company profit is distributed to:
(i)the person or a family member of the person; or
(ii)another company, or a partnership or trust, in which the person or a family member of the person has an interest;
27. Sub-module 4 of Module G contains provisions relating to the calculation of the actual means of a person’s family. The following general provisions commence more detailed and specific provisions for the calculation:
1067G‑G7(1) To work out the actual means of the family of a person (the claimant/recipient ) for the appropriate tax year, first calculate, in accordance with this Submodule, the actual means of the claimant/recipient and the actual means of each family member of the claimant/recipient and then apply the formula in subpoint 1067G‑G13(1) using the results of those calculations.
(2)A reference in any of the following provisions of this Submodule to a relevant person is a reference to the claimant/recipient or a family member of the claimant/recipient.
1067G‑G8(1) Subject to point 1067G‑G9, the actual means of a relevant person for the appropriate tax year is an amount equal to the total spending and savings of the person in that tax year.
28. The actual mode of calculation in contained in section 1067G-G13 of the SSA as follows:
1067G‑G13(1) The actual means of the family of a claimant/recipient for the appropriate tax year is the amount worked out using the formula:
(2)In this section:
after-tax income, in relation to a parent of the claimant/recipient for the appropriate tax year, means the gross income of the parent for that year less any income tax or medicare levy payable in respect of the parent's taxable income for that year.
GAM (gross actual means), in relation to the claimant/recipient's family for the appropriate tax year, means the total of the amounts of the actual means, for that year, of the claimant/recipient and of each of the family members of the claimant/recipient.
NITML (notional income tax/medicare levy), in relation to a parent of the claimant/recipient for the appropriate tax year, means the sum of:
(a)the amount of income tax, before any rebates that would be notionally payable by the parent for that year; and
(b)the amount of medicare levy that would be notionally payable by the parent for that year if none of the parent's children who are children referred to in paragraph 23(15)(b) had a separate net income within the meaning of section 159J of the Income Tax Assessment Act 1936 in that year;
that would result in the after‑tax income of the parent for that year being an amount equal to one‑half of GAM of the claimant/recipient's family for that year.
NPBL (net passive business loss) means the sum of the net passive business losses (if any) of each of the parents of the claimant/recipient in the appropriate tax year.
TNITML (total notional income tax/medicare levy) means the total of the amounts of NITML in relation to each of the parents of the claimant/recipient for the appropriate tax year.
29. Reference was made at the hearing to a Centrelink document titled Information you need to know. In it, under the guide to details of spending required for assessment, the document states:
(a) If you are unable to provide the exact figures, a best estimate will suffice.
NOTICES SEEKING INFORMATION
notice to the applicant
30. On 23 March 2004 a notice under section 63 of the Administration Act was sent to the applicant. It required him to provide information concerning proof of identity, his parents’ tax assessment notice (relevant to the application of the parental income test under section 1067G-F2 of the SSA), the FAMT form and his tax file number.
31. It is clear that this notice met the necessary preconditions in section 63 of the Administration Act for a valid notice, as the following considerations show:
·the applicant was a person who had made a claim for a social security payment (defined in section 23(1) of the SSA to include youth allowance) [section 63(1)(a)];
·the applicant was not a person to whom section 64 of the Administration Act applied because that section at the time applied only to a youth allowance claimant who was temporarily incapacitated for work or lacked the capacity to undertake the course of education for which the claimant was undertaking full-time study. The applicant was not incapacitated and was apparently able to undertake his year 11 studies [section 63(1)(b)];
·the Secretary (through a Centrelink delegate) was of the opinion that the applicant should give information to the Secretary [section 63(2)(d)];
·the delegate gave the applicant a written notice that he was required within a specified time, namely 14 days, to give that information [section 63(2)(d)];
·the notice was sent by prepaid post addressed to the applicant at the postal address last known to the Secretary [section 63(7)];
·the requirement of the notice was reasonable [section 63(4)(c)]; and
·the notice informed the applicant of the effect of section 63 in that it foreshadowed possible rejection of the applicant’s claim if the information was not provided [section 63(11)].
Section 63(4)(d) and (f) of the Administration Act provide that a payment claimed is not payable if the person who receives the notice does not comply with the notice.
Notice to the applicant’s father
32. At the hearing the Tribunal accepted into evidence a letter to the applicant’s father dated 11 October 2007 requiring him to provide much the same information as the applicant had been required to provide. A copy of this letter was sent to the applicant under cover of a letter dated 12 November 2007 in which it was stated the applicant was required to provide the information.
33. The statutory source of power supporting the delivery of this notice is provided by section 192 of the Administration Act, set out above. A written notice was required by section 196 of the Administration Act which:
- may be given personally or by post in any other manner approved by the Secretary (section 196(2)(a)) – the notice in the applicant’s case was sent by post;
- must specify how the information or document is to be given to the Department (section 196(2)(b)(i)) – the notice in the applicant’s case specified that the information was to be provided in writing by annotations on the letter and by provision of certain other documents;
- must specify the period within which the information or document is to be provided to the Department, being a period of not less than 14 days (section 196(2)(b)(iii) and (3)) – the period specified in the notice was approximately four weeks, allowing for mail delivery times;
- must specify the officer (if any) to whom the information or document was to be provided (section 196(2)(b)(iii)) – the Centrelink officer was identified in the letter;
·must specify that the notice is given under this section (section 196(2)(b)(iv)) – the notice did specify that it was given under section 196 of the Administration Act.
Therefore, the notice was valid for the purpose of requiring the applicant’s father to produce the information and documents referred to in it.
OUTLINE OF CONTENTIONS
34. The respondent contends that, because the parents of the applicant have not completed the answers to questions 9-18 and 25 in the FAMT form, it is not possible for this Tribunal (nor has it been possible for the Secretary) to determine the actual means of them in relation to spending and savings: section 1067G-G8(1). It is submitted that as they are relevant persons (see section 1067G-G7(2)), the provisions cannot be applied without their response to the questions.
35. The applicant puts his contentions in a number of varying ways (considered below). Essentially, it is contended for the applicant that his parents have provided a substantial amount of information to Centrelink in connection with other applications, specifically the Newstart and the Parenting Allowance. It is argued that the respondent should be able to extract from that information sufficient to enable it (and this Tribunal) to be satisfied concerning the spending and savings of them.
EVIDENCE OF DEPARTMENTAL OFFICER
36. On the issue of whether the Department could obtain the information sought in questions 9–18 and 25 from its existing records and provide the same to the Tribunal, the respondent called Wayne Lesley Lawrence, a Customer Service Adviser at the Ballarat office of Centrelink. In a written statement tendered through him, he asserted that whilst Centrelink had on record adequate information on the applicant’s father’s business, it does not hold information regarding the family spending, which is what is being sought in the FAMT form. In his oral evidence he extended the information to include the family savings. He testified that the information concerning the parents’ corporate interest covered only assets, income and liabilities. He also testified that a check had been made of the records held with respect to the applicant’s siblings which had shown that, as their independence had been established, no evidence had been obtained from their parents.
37. I do not consider this evidence was affected by cross-examination.
38. I therefore find that there is not available to the Tribunal, from the records of Centrelink, any information concerning the spending and savings of the parents so as to satisfy the requirements of questions 9–18 and 25 of the FAMT form.
APPLICANT’S SPECIFIC CONTENTIONS
39. It is necessary to consider the various specific contentions made for the applicant by his father.
40. The first contention was that the information sought in questions 9–18 and 25 of the FAMT form is already with Centrelink and so available to this Tribunal. The findings I have made following from the evidence of Mr Lawrence establish that is not the case. Even if Centrelink is aware that the applicant’s parents do not have any savings and could identify the total of their spending in the base year, it is the case that it does not have the particulars sought by all the subcategories in questions 9–18 and 25. That information is simply not available because the parents are not prepared to answer the questions.
41. The second contention is that the Department does not have the authority to ask for the elements of disaggregation appearing as sub-categories in questions 9‑18 and 25. I consider the necessary authority derives from the statutory provisions set out above, applied in relation to the two notices described above.
42. The third contention is that the disaggregation in the sub-categories of questions 9–18 and 25 is information which is not relevant and which fails to ask questions having a connection to the issue of rate concerning the youth allowance. This submission overlooks that the information sought in the subcategories is part of the total process by which the Department is placed in the position of assessing the merit of claims and uncovering unmeritorious claims. In this contention the applicant’s case is really contesting policy without any apparent ground of support.
43. The fourth contention is that a best estimate is not within the concept of information (cf the use of that word in section 192 SSA) and so is not the subject of a legitimate request by the Department. This refers to the statement in the document of Information you need to know as well as a statement made at the hearing by counsel for the respondent. He stated that there was no magic in the form and that the request for information could be met by a letter giving the best estimates of the information sought in the form. However, the object of the request is for information, that is, the relevant facts and circumstances (Macquarie Dictionary, Revised Third Edition 2001, p973). The power is being exercised with respect to information. The policy decision to accept a best estimate where the exact information is not available does not therefore affect the legitimacy of the exercise of the power.
44. The fifth contention is that a search of Centrelink’s files on behalf of the applicant disclosed a note stating that the approach to the claim should be that, in the absence of reasonable grounds for denying the claim, it should not be denied. This factual premise has not been proven. Even assuming it is to be correct, the respondent has the authority to require the delivery of such information; so it cannot be unreasonable for it to do so.
45. The sixth contention is that the questions asked in the sub-categories are onerous. Counsel for the respondent recognised that as the case. However, as best estimates were open to be given, that should not inhibit the giving of responses. The seeking of the information being within power, it does not lie with the applicant’s parents to decide whether or not they wish to respond to the information sought. The respondent also submits that there is power for the information to be requested more than once: cf Re Ibarcena and Secretary, Department of Family and Community Services [2000] AATA 1141; Shiel v Department of Social Security [1999] FCA 1237; Re Trieu and Secretary, Department of Family and Community Services [2002] AATA 143. The claim form completed by the applicant expressly stated:
(a)NOTE: While your parent(s)/guardian(s) may have previously provided some of the information being sought, Centrelink needs to ensure that information is current and circumstances have not changed to determine correct entitlement to youth allowance.
46. The factor which is decisively against the applicant’s contentions is that section 63(4)(f) of the Administration Act makes it clear that the payment claimed is not payable where a notice under section 63(2) containing reasonable requirements has been given and not complied with by the applicant.
47. In the context of the statutory provisions referred to above, I do not consider it is open for it to be found that the requirements of the notice were unreasonable. Questions 9–14 relate to family spending. Question 9 addresses accommodation. Question 10 and 11 relate to transport costs. Question 12 relates to education costs. Question 13 concerns general living expenses. Question 14 applies to less obvious forms of spending. Questions 15 to 18 deal with savings. Question 25 relates to the family’s benefit receipts. While much of the information sought in this latter question is already held by Centrelink, the form refers also to benefits from other agencies such as the Department of Veterans’ Affairs. While the scope of inquiry in the FAMT form may arguably be approached in a more constrained way, that does not make the requirements of the notice unreasonable. Given the complexity of Module G for which purpose the form is seeking information, the information sought is not unreasonable.
CONCLUSION
48. It follows from the provision in section 63(4)(f) of the Administration Act that the youth allowance is not payable to the applicant, so that, in the absence of supply of complete information lawfully sought, this Tribunal is not in the position to grant a claim. That statutory provision and the outcome of its application are consistent with the responsibilities of the Secretary for financial management. Even in the absence of such a provision, it is apparent that this Tribunal would not be in the position to properly consider the application of the statutory provisions relevant to application of the Module in the absence of information from the applicant’s father not in Departmental records. It does not assist the applicant that the Tribunal is satisfied the applicant was qualified for the youth allowance. It is necessary that the Tribunal be satisfied as to qualification for the youth allowance and the rate of the allowance before the application for the allowance can be granted.
49. The Tribunal affirms the decision under review.
I certify that the forty-nine [49] preceding paragraphs are a true copy of the reasons for the decision of:
The Hon Robert Nicholson, AO, Deputy President
signed: Olympia Sarrinikolaou
Clerk
Date of hearing: 5 June 2008
Date of decision: 15 September 2008
Advocate for the applicant: Colin AdkinsAdvocate for the respondent: Michael Sassella, Minter Ellison Lawyers
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