Castleman v Secretary, Department of Social Security

[1999] FCA 836

FEDERAL COURT OF AUSTRALIA

Castleman v Secretary, Department of Social Security [1999] FCA 836

SOCIAL SECURITY – Social Security Act 1991 (Cth) (“the Act”) – appeal from decision of the Administrative Appeals Tribunal (“the Tribunal”) – activity test – whether applicant’s claim for the newstart allowance was appropriately considered – correct interpretation of ss 593(1) and 601(1) of the Act – whether applicant actively seeking paid work – whether s 601(1) creates an obligation on a person required to satisfy the activity test to seek every kind of paid work which is not unsuitable

WORDS AND PHRASES – “actively seeking paid work”

Social Security Act 1901 (Cth), ss 593(1), 601(1)

Spencer v Secretary, Department of Social Security (1998) 83 FCR 306, considered
Director-General of Social Services v Thomson (1981) 38 ALR 624, cited

HARVEY WILLIAM DAVID CASTLEMAN v SECRETARY, DEPARTMENT OF SOCIAL SECURITY
NG 953 of 1998

BRANSON J
SYDNEY
24 JUNE 1999

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 953 of 1998

BETWEEN:	HARVEY WILLIAM DAVID CASTLEMAN Applicant
AND:	SECRETARY, DEPARTMENT OF SOCIAL SECURITY Respondent
JUDGE:	BRANSON J
DATE OF ORDER:	24 JUNE 1999
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The decision of the Administrative Appeals Tribunal be set aside.

2.The matter be remitted to the Administrative Appeals Tribunal for further consideration according to law.

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

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 953 of 1998

BETWEEN:	HARVEY WILLIAM DAVID CASTLEMAN Applicant
AND:	SECRETARY, DEPARTMENT OF SOCIAL SECURITY Respondent

JUDGE:	BRANSON J
DATE:	24 JUNE 1999
PLACE:	SYDNEY

REASONS FOR JUDGMENT

Introduction

1. This is an “appeal” under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) against a decision of the Administrative Appeals Tribunal (“the Tribunal”) dated 14 August 1994 whereby the Tribunal affirmed a decision of the Social Security Appeals Tribunal affirming a decision of a delegate of the respondent rejecting the applicant’s claim for a newstart allowance.

2. The question of law raised on the appeal is the correct interpretation of ss 593(1) and 601(1) of the Social Security Act 1901 (Cth) (“the Act”).

   Legislative Framework

3. Part 2.12 of the Act is concerned with the newstart allowance. Section 593 establishes qualifications for the newstart allowance. So far as is here relevant, it provides:

   “593(1)… a person is qualified for a newstart allowance in respect of a period if:

   (a)the person satisfies the Secretary that throughout the period the person is unemployed; and

   (b)   throughout the period, or for each period within the period, the person either:

   (i)satisfies the activity test; or

   (ii)is not required to satisfy the activity test; …”

4. Section 601 of the Act is concerned with the “activity test”. So far as is here relevant, s 601 provides:

   “601(1)Subject to subsections (1A) and (3), a person satisfies the activity test in respect of a period if the person satisfies the Secretary that, throughout the period, the person is:

   (a)           actively seeking; and
         (b)           willing to undertake;

   paid work, other than paid work that is unsuitable to be undertaken by the person.

   (1A)The Secretary may notify a person (other than a person who is not required to satisfy the activity test) who is receiving a newstart allowance that the person must take reasonable steps to apply for a particular number of advertised job vacancies in the period specified in the notice.”

   Section 601(3) has no relevance in the circumstances of this case.

   Background

5. The applicant is a certified practicing accountant who has been employed by the Northern Territory University as a lecturer and, before that, by the Australian Tax Office.  He has also completed the study program for a Graduate Diploma of Teaching at the Central Queensland University but at the time of the Tribunal decision had not received the diploma as he had yet to complete a period of practical teaching.

6. The applicant’s original claim for payment of the newstart allowance was rejected on the basis that he did not meet the “activity test obligations”.  The original decision-maker noted that “[the applicant] stated he wouldn’t be prepared to look for all types of work he is capable of doing – doesn’t meet requirements for activity test – claim rejected.”

7. A delegate of the respondent reviewed the original decision and concluded that it was correct “because to receive Newstart Allowance you must be actively seeking all types of work that you are capable of doing.”

8. The Social Security Appeals Tribunal summarised the way in which it applied the law when reviewing the decision of the delegate of the respondent as follows:

   “7.1In order to qualify for newstart allowance under section 593(1) of the Act, a person must, amongst other things, satisfy the activity test as defined in section 601(1) of the Act.

   7.2The Tribunal determined that whilst Mr Castleman was making written attempts to find employment throughout the state in his particular field of expertise, his lack of preparedness to actively seek out other paid work in his local area as required by Centrelink, could not be regarded as actively seeking and willing to undertake paid work as required in section 601(1) of the Act.

   7.3“Paid work” is regarded as any work other than paid work that is unsuitable to be undertaken by the person. This opinion is formed by the Secretary in accordance with the criteria as set out in section 601(2A) of the Act but such criteria do not apply to Mr Castleman’s circumstances.

   7.4Mr Castleman was deemed therefore not to satisfy the activity test as defined in section 601(1) of the Act, and thus failed to qualify for newstart allowance in respect of the relevant period under section 593(1) of the Act.”

9. The Tribunal, in reviewing the decision of the Social Security Appeals Tribunal, found that the applicant was genuinely attempting to obtain employment and that his efforts in seeking employment both state-wide in Queensland and interstate were to be commended.  However it found that he directed his efforts towards applying for positions that he considered appropriate with regard to his qualifications and experience.

10. The Tribunal noted that the applicant had refused to sign a “pre-grant Activity Check List” committing him to look for at least five jobs per fortnight and referred to the application by Centrelink of a policy framed by reference to s 601(1A) of the Act.

11. The reasoning process adopted by the Tribunal is found in the following paragraphs from its written reasons for decision:

    “22.As I see this matter, the Applicant failed to realise, notwithstanding lengthy discussions with Ms Carrow and a Social Worker from Centrelink at Bundaberg, that in looking for paid work that was suitable to be undertaken by him, he could voluntarily restrict his searches to what was the most appropriate work for him to undertake.

    23.As was pointed out by the Tribunal in Re Dikmen and Director-General of Social Security (unreported Tribunal decision No. 1575):

    ‘… I have come to the view that the applicant was not willing to accept employment in a factory or for that matter in any other type of employment other than the area in which she regarded herself skilled and experienced.  The evidence is that she had registered herself for employment with the Commonwealth Employment Office as an analyst and clearly they were unable to find employment for her in that occupation or field.  In consequence it could not be said that she was willing to undertake paid work, that in the opinion of the Director-General, was suitable to be undertaken by her.’

    24.Certainly the Applicant was not required to seek for work only in his local area, and his attempts to find work throughout the state and interstate are to be commended.  Yet he should have realised that he was required to apply for jobs for which he may have been successful, even though he believed himself to be over qualified for the position.  As a qualified accountant, it may have been galling to be employed, for example, behind the counter of a bookshop, but the taxpayer is not required to support a job seeker in his or her search for preferred employment when other jobs within that person’s capability are available.

    25.I note that the Applicant has certain limitations upon the type of occupations for which he could apply, for example, his back condition renders any job containing a physical component unsuitable.  In any event, I would regard it as not being suitable employment if it were suggested that a person who has spent his working life in sedentary occupations be required to undertake labouring type work.

    26.It may well be that by making five applications per fortnight the Applicant would have achieved nothing, but the policy which was lawful required him to make the effort as proof of his bona fides.  By his refusal to even attempt this level of search, he prevented himself from selling his labour on an open market.  This, no doubt, is his prerogative but he is not entitled to be supported by the taxpayer while he restricts his searches for a position to those which he deems appropriate to his qualifications and experience.

    27.As I am satisfied that the Applicant failed to satisfy the Secretary that he was actively seeking and willing to undertake paid work, other than paid work that was unsuitable to be undertaken by him, the decision under review is affirmed.”

    Consideration

12. The newstart allowance is a social security payment. A person must be qualified for a social security payment before it can be paid (s 41 of the Act). The qualifications for the newstart allowance are set out in s 593(1) of the Act. So far as the applicant is concerned, the qualification in dispute is that prescribed by s 593(1)(b)(i); that is, whether the applicant “satisfies the activity test.”

13. The Tribunal in its written reasons for decision misquotes the terms of s 601(1A) of the Act, apparently having referred to the terms of a Bill which was subject to amendment before it passed into law. For this reason the Tribunal acted on the basis that the respondent was entitled to, and had, notified the applicant, as a person who had lodged a claim for a newstart allowance, that he “must take reasonable steps to apply for a particular number of advertised job vacancies in the period specified in the notice.”

14. The respondent concedes that s 601(1A) has no application in the present case: the applicant has not been at any material time “a person … who is receiving a newstart allowance.”

15. Nonetheless, the respondent contends that the decision of the Tribunal should be confirmed.  The submissions of the respondent are, as I understand it, summarised in the following paragraphs from his written submissions:

    “While the Tribunal considered that there was no reason why the policy of five applications per fortnight should not be applied to the Applicant, this is not the basis of the Tribunal’s decision. Rather the Tribunal concluded that the Applicant failed to satisfy the activity test in s 601(1) because he was not prepared to seek work that he considered unsuitable. The Applicant has made quite clear from 6 January 1998 (the date of his “pre-grant interview”) that he was not prepared to seek work that he did not consider suitable. He consistently maintained this position at all review stages, and before the Tribunal. It was on this basis that the Tribunal decided he did not satisfy the activity test in s 601(1). The Tribunal was correct in so holding.” (references omitted)

16. The “activity test” was previously formulated in s 522(1) of the Act in effectively the same terms as s 601(1) of the Act. Section 522(1) was considered by the Full Court of this Court in Spencer v Secretary, Department of Social Security (1998) 83 FCR 306. The Full Court in Spencer’s case rejected a submission that the activity test imported a requirement that the steps taken in an endeavour to obtain work be reasonable or have a realistic prospect of success. The Full Court (Heerey, Madgwick and Merkel JJ) pointed out that the question of reasonable steps only arose when activated by the Secretary who was empowered to notify a person that particular requirements were to be satisfied (cf s 601(1A)). The Full Court did not accept that a reasonable steps requirement or “other objective criterion which might be derived therefrom” was to be imported into s 522(1) (see Spencer’s case at 312).

17. In the present case, the issue for the consideration of the Tribunal was that of whether it was satisfied that in respect of any relevant period the applicant was actively seeking, and willing to undertake, paid work, other than paid work that was unsuitable to be undertaken by him.  In the circumstances of this case it was probably appropriate for the Tribunal to consider the two aspects of this issue separately – ie first, whether it was satisfied that throughout any relevant period the applicant was actively seeking paid work, other than paid work that was unsuitable to be undertaken by him, and secondly if it was, whether it was satisfied that throughout that period it was also satisfied that the applicant was willing to undertake paid work, other than paid work that was not suitable to be undertaken by him.

18. The submission of the respondent that “paid work” is, in the context of s 601(1), the antithesis of unemployment is to be accepted (Director-General of Social Services v Thomson (1981) 38 ALR 624 at 626-627). However, nothing in s 601(1) creates an obligation on a person required to satisfy the activity test to seek every kind of paid work which is not unsuitable for him or her to undertake, or even a range of such work.

19. The requirements of s 601(1)(a) is that the person satisfy the Secretary that he or she is “actively seeking” paid work.  In this context the adverb “actively” imports a requirement of active effort as opposed to indolence or procrastination.  What the person is required to make an active effort about is the seeking of paid work which is not unsuitable for him or her to undertake – not the seeking of any particular class of such work, nor the seeking of any particular mix of such work.

20. If a person were to so limit the categories of work which he or she sought that, although the work being sought was not unsuitable for him or her to undertake, the chance of the work being obtained was low, the Secretary (or as the case may be, the Tribunal) might not be satisfied that the person was genuinely seeking paid work.  Alternatively, were the person to restrict in a marked way the categories of work which he or she sought, the Secretary (or as the case may be, the Tribunal) might not be satisfied that his or her search for paid work was an active search because of the limited demands made on the person’s time by the search actually being undertaken.  However, the written reasons of the Tribunal indicate that it did not give consideration to the above questions, but rather concluded that as the applicant refused to attempt even the level of search involved in the making of five applications per fortnight “he prevented himself from selling his labour on an open market.” This is not a test of eligibility for the newstart allowance created by ss 593(1) and 601(1) of the Act.

21. On the approach which it took, it was not necessary for the Tribunal to give consideration to the issue of whether it was satisfied that throughout any relevant period the applicant was willing to undertake paid work, other than paid work that was not suitable to be undertaken by him.

22. In my view the written reasons for decision of the Tribunal reveal that it misconstrued ss 593(1) and 601(1) of the Act. The matter will be remitted to the Tribunal for further consideration according to law.

I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Branson.

Associate:

Dated:            24 June 1999

Solicitor (Advocate) for the Applicant:	Mr S. Hodges
Counsel for the Respondent:	Mr T. Reilly
Solicitor for the Respondent:	Australian Government Solicitor
Date of Hearing:	3 June 1999
Date of Judgment:	24 June 1999