Bennell; Secretary Department of Education Employment and Workplace Relations and

[2008] AATA 211

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2008] AATA 211

ADMINISTRATIVE APPEALS TRIBUNAL      )

) No 2007/3111

GENERAL ADMINISTRATIVE DIVISION		)
Re		SECRETARY DEPARTMENT OF EDUCATION EMPLOYMENT AND WORKPLACE RELATIONS

Applicant

And CRAIG BENNELL

Respondent

DECISION

Tribunal Senior Member M D Allen

Date6 March 2008

PlaceSydney

Decision  For the reasons given orally at the conclusion of the hearing in this matter, the decision under review is SET ASIDE and the Tribunal substitutes in lieu thereof its decision, viz. THAT the decision of the Authorised Review Officer be reinstated.

..................[sgd]..................

M D Allen
  Senior Member

CATCHWORDS

SICKNESS ALLOWANCE – review of decision setting aside decision of social security appeals tribunal imposing a 13-week liquid asset waiting period upon respondent – statutory interpretation – whether life insurance policy constitutes a readily realisable asset – whether life insurance policy has a surrender value – person is not qualified for sickness allowance for a period unless person has served liquid assets test waiting period in relation to claim – decision under review set aside

LEGISLATION

Social Security Act 1991 sections 14, 14(1), 14A(1), 42(2A) and 676

REASONS FOR DECISION

6 March 2008           Senior Member M D Allen 

1. At the conclusion of the hearing of the above matter the terms of the decision intended to be made and the reasons therefor were stated orally. After service upon the Respondent of a copy of the decision that was in fact made, the Respondent pursuant to Sub‑section 43(2A) of the Administrative Appeals Tribunal Act 1975 requested the Tribunal to furnish to the Respondent statement in writing of the reasons of the Tribunal for its decision.

2.      The oral reasons for decision have been transcribed by Auscript, the Commonwealth Reporting Service.  Whereas those oral reasons may reflect the inelegance of an extempore decision, they are in fact the reasons for the said decision.

3.        The said transcript is annexed hereunto and furnished to the Applicant and to the Respondent as it is the reasons for the Tribunal's decision.

I certify that this and the preceding page are a true copy of the decision and reasons for decision herein of:

Senior Member M D Allen

Signed:         [sgd]  Mwela Kapapa         
           .................................................

Associate

Date of Hearing  6 March 2008

Date of Decision  6 March 2008

Solicitor for the Applicant            Centrelink Legal Services Branch

Solicitor for the Respondent       Self-represented 

EXTRACT OF TRANSCRIPT OF PROCEEDINGS                 [10.24 am]

MR ALLEN: In this matter, the facts are in a relatively short compass. The Respondent, Mr Bennell, on 2 April 2007 suffered a subarachnoid haemorrhage and was hospitalised. On his behalf his mother made an application for Sickness Allowance and that was granted on 16 April 2007. There is no dispute that at all relevant times Mr Bennell qualified for the grant of Sickness Allowance, however, a 13 week so-called liquid asset waiting period was imposed. A liquid asset waiting period is defined in section 676 of the Social Security Act 1991 and section 676 reads inter alia that if the value of a person’s liquid assets exceeds the person’s maximum reserve on the day on which the person became incapacitated for work or the day on which he claimed Sickness Allowance, the person is not qualified for Sickness Allowance for a period unless the person has served the liquid assets test waiting period in relation to the claim.

The maximum reserve is worked out under subsection (1) of section 14 of the SSA and I don’t pause to recapitulate that. Liquid assets is defined in subsection 3A of section 676 as the person’s liquid assets. In this matter the Applicant had a life insurance policy with AMP Life Limited and that policy had a surrender value of $8968.61. The question which concerns the Tribunal is whether that life insurance policy constituted a readily realisable asset. Subsection (1) of section 14A of the SSA defines liquid assets in relation to a person as meaning the person’s cash and readily realisable assets and includes (a) the person’s shares and debentures in a public company within the meaning of the corporations law and (b) amounts deposited with or lent to a bank or other financial institution by the person whether or not the amount can be withdrawn or repaid immediately and (c) amounts due and able to be paid to the person by or on behalf of a former employee of the person.

As stated, a liquid assets waiting period was imposed upon Mr Bennell because of the policy held by him with AMP.  There was also a matter of a sum of money in a bank account, but I am not particularly concerned with that.  The matter went before the Social Security Appeals Tribunal who misconceived the definition of liquid assets in the SSA.  They proceeded to deal with paragraph (b) of subsection (1) of section 14A and considered whether AMP was a bank or financial institution.  Their conclusion on that point is not disputed by the Applicant, but they totally ignored the effect of the word “includes” in subsection (1) of section 14A. 

The word “includes” is dealt with at paragraph 656 of Statutory Interpretation in Australia Sixth Edition by Pearce and Geddes.   The learned authors say, relating to the expressions “means and includes”: 

“It is usual to find one or other of these expressions where a word or phrase is being defined in legislation.  The orthodox and it is submitted the correct approach to the understanding of the effect of these expressions is that

“means” is used if the definition is intended to be exhaustive while “includes” is used if it is intended to enlarge the ordinary meaning of the word.” 

Citations omitted.  I would refer also to Bennion on Statutory Interpretation, fourth edition, at page 487 where he states: 

“The purpose of a clarifying definition is to avoid doubts as to whether the term does or does not include specified matters.  It is a familiar device of a draftsman to state expressly that certain matters are to be treated as coming within the definition to avoid argument on whether they did or not.  A term may have a fairly certain meaning yet give rise to uneasiness by the drafter about leaving it to stand alone.  A common remedy is to specify the main ingredients and rely on any others on the term itself.” 

Now, in this matter when looking at subsection (1) of section 14A of the SSA, I see no reasons as to why the orthodox approach referred to by Pearce and Geddes should not be adopted.  The question, therefore, is whether the AMP policy is a readily realisable asset.  Butterworth’s Australian Legal Dictionary, 1997 edition, defines “asset” as:

An item whether tangible or intangible having economic value to its owner which if not already in the form of money can be converted into money to the owner’s benefit.

The Oxford English Dictionary online 2008 referring to the verb “realise” has as meaning, 4, “to convert securities, paper money, etcetera, into cash or property of any kind into money”.  In this matter, as it set out in annexure A to exhibit R1, it can be seen that the policy held by Mr Bennell can be converted into cash pursuant to what is commonly referred to as a surrender value of the policy.  I find, therefore, that the policy with AMP Life Limited having a surrender value was a readily realisable asset and, therefore, comes within the term “liquid assets” and, therefore, the liquid assets waiting period applies. 

I would simply mention for completeness sake, that pursuant to annexure A to exhibit R1 there could have been borrowings on the policy in the sum of approximately $8000, but the rate of interest was usurous, to say the least.  I agree with Mr Bennell’s complaint that the section imposes penalties upon working Australians who have provided for their future.  However, that is a matter which is to be raised in the political arena.  The statutory interpretation is, in my opinion, quite clear.  The decision under review will be set aside and the decision of the Authorised Review Officer substituted. 

END OF EXTRACT