CHIDIAC and SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS
[2011] AATA 681
•30 September 2011
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2011] AATA 681
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2011/2009
GENERAL ADMINISTRATIVE DIVISION ) Re MARIA CHIDIAC Applicant
And
SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS
Respondent
DECISION
Tribunal Miss E A Shanahan, Member Date30 September 2011
PlaceMelbourne
Decision
In accordance with s 42D of the Administrative Appeals Tribunal Act 1975 (Cth) the decision under review is remitted to the Respondent for reconsideration in accordance with these reasons.
[sgd] E A Shanahan
Member
SOCIAL SECURITY – redundancy – income maintenance period – administrative error – payment in lieu of notice – Newstart Allowance application – Healthcare card application – decision varied.
Social Security Act 1991
Social Security (Administration) Act 1999
Re Finch and Secretary, Department of Education, Employment and Workplace Relations [2009] AATA 745
Re Holovka and Secretary, Department of Education, Employment and Workplace Relations [2011] AATA 442
Re Goldfinch and Secretary, Department of Family and Community Services [2000] AATA 837
Re Secretary, Department of Family and Community Services and Bazzi [2000] AATA 794
Re Vaszolyi and Secretary, Department of Education, Employment and Workplace Relations [2009] AATA 268
Re Secretary, Department of Education, Employment and Workplace Relations and Bristow [2009] AATA 1005
REASONS FOR DECISION
30 September 2011 Miss E A Shanahan, Member 1. Ms Chidiac lodged a claim for Newstart Allowance (NSA) with Centrelink on 28 February 2011. Centrelink acts as the service provider for the Department of Education, Employment and Workplace Relations (the Department). On the same day, Centrelink rejected Ms Chidiac’s claim, as she was subject to an income maintenance period (IMP) estimated to end on 22 March 2012. The IMP derived from a redundancy payment of $85,671.96 that Ms Chidiac received on 22 January 2010.
2. At Ms Chidiac’s request an authorised review officer (ARO) reconsidered the decision and affirmed it on 9 March 2011. Ms Chidiac then lodged an application for review of the ARO’s decision with the Social Security Appeals Tribunal (SSAT). On 2 May 2011 the SSAT set aside the decision of the ARO and recalculated the IMP to end five weeks earlier. This adjustment arose from the exclusion by the ARO of the payment in lieu of notice amount in the termination payment and thus from the calculation of the IMP.
3. Ms Chidiac lodged an application for review of the SSAT decision by this Tribunal on 24 May 2011. On 21 June 2010 Ms Chidiac also lodged a claim with Centrelink for compensation for detriment caused by defective administration (CDDA) under the Financial Management and Accountability Act 1997. Centrelink has accepted this claim and paid Ms Chidiac $302.70, representing the pharmaceutical costs incurred between 21 January 2011 and 21 June 2011, the period during which she was entitled to a Healthcare Card but had not received it.
4. Ms Chidiac was self-represented at the hearing. She was assisted by an interpreter in the Arabic language. Mr Mark Hester of the Department of Human Services Legal Division appeared for the Secretary, Department of Education, Employment and Workplace Relations (the Respondent ).
5. In addition to the documents lodged pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 (the T-documents), the respondent provided a copy of Centrelink’s PowerPoint presentation entitled Retrenchment and Looking for Work shown to Pacific Brands Pty Ltd workers before their retrenchment (Exhibit R2) and a copy of the Pacific Brands Pty Ltd Holdings (Hosiery Division) & TCFUA Collective Agreement 2009 (Exhibit R3) (the Agreement). The exhibits were assigned numbers after the hearing.
ISSUES BEFORE THE TRIBUNAL
6. The issues have been identified correctly by the Respondent as being:
a.whether the calculation of the IMP is correct and should include the payments made in lieu of notice and
b.whether Ms Chidiac has experienced severe financial hardship and/or unavoidable expenses, attracting a reduction in the IMP.
BACKGROUND TO THE APPLICATION
7. Ms Chidiac immigrated to Australia from Lebanon 35 years ago. She worked as a machinist with the Hilton company for four and a half years. She joined Pacific Brands as a machinist in May 1983 and continued in this employment until her retrenchment on 22 January 2010. Her retrenchment followed Pacific Brands well publicised restructuring, which entailed the offshore manufacturing of many of its products.
8. In the second half of 2009, Pacific Brands arranged for Centrelink to provide its employees with advice in the form of a Centrelink PowerPoint presentation entitled Retrenchment and Looking for Work (Exhibit R2). Ms Chidiac attended this presentation but did not have any one-on-one discussions with the presenter, Ms M Oberer.
9. Ms Chidiac appears to have noted that one of the slides in the PowerPoint presentation indicated that a Healthcare card could be available 12 months after the termination. She claims to have received a letter from Centrelink to this effect but there is no record of such an advice being sent.
10. Ms Chidiac acted on the advice given at the presentation, that any retrenched worker should obtain independent financial advice. She consulted a financial planner, who advised her to pay off the mortgage on her home. Pacific Brands paid $82,772.56 into Ms Chidiac’s bank account on 22 January 2010. On 28 January 2010 she paid off the remaining $60,000 mortgage on her house, leaving her bank account balance at $35,400.22. In late 2010 Ms Chidiac spent $15,000 on an overseas trip that included a visit to her (now deceased) mother in Lebanon.
11. On 4 February 2010, following her retrenchment, Ms Chidiac had provided Centrelink with copies of her Termination and Pay Advice (T-documents 3), her bank account statement for January 2010 (T-docs 5) and her payroll advice for the week ending 21 January 2010 (T-documents 4). The payslip (T-documents 4) indicated her salary at Pacific Brands had been $19.88 per hour and that she worked a 38 hour week. Her before tax earnings for that particular week was $806.97.
12. The Pacific Brands termination pay advice to Ms Chidiac records:
Entitlements
Week/Hours
Amounts
Annual Leave
67.68 Hours
$1,581.27
Long Service Leave
9.15 Weeks
$6,910.36
Severance
93.35 Weeks
$70,531.09
Age Allowance
2 Weeks
$1511.19
Pay in lieu of notice
5 Weeks
$3,777.98
Sick Leave Entitlement
$68.40 Hours
$1,360.07
TOTAL
-
$77.190.33
13. Following the rejection of Ms Chidiac’s application for NSA, Centrelink advised her that she would not qualify for this payment until 23 March 2012. The ARO who reviewed the decision had found that the IMP was correctly calculated and that, despite her financial hardship, Ms Chidiac’s expenditures were not unavoidable or reasonable. The ARO did note that Ms Chidiac was seeking work but had been unsuccessful, partly due to her health problems. The ARO suggested Ms Chidiac apply for the disability support pension (DSP) and forwarded the relevant claim forms. Pursuant to her lodgement of the SSAT application for a review and a query Ms Chidiac raised, the ARO advised Ms Chidiac that her IMP was for 510 working days or 102 weeks, commencing on 22 January 2010 and expiring on 22 March 2010 (T15, page 40). Presumably this was a typographical error.
14. Ms Chidiac’s application for the DSP was rejected on the grounds that she did not satisfy s 94(1)(b) or s 94(1)(c) of the Act. She was assigned an impairment point rating of 10 under the Tables for the Assessment of Work-related Impairment for Disability Support Pension in Schedule 1B of the Act (the Tables). Ms Chidiac’s medical conditions include well controlled diabetes mellitus, hypercholesterolaemia, headaches of uncertain origin and two years of neck pain, attributed to arthritis. Ms Chidiac calculated her monthly expenditure on medications to be of the order of $200 per month before she obtained a Healthcare card.
15. Ms Chidiac’s evidence before the Tribunal is summarised under the heading Background.
RELEVANT LEGISLATION
16. The term income is defined in s 8(1)(a) of the Act as:
...
available money, in relation to a person, means money that:
(a) is held by or on behalf of the person; and
17. Section 1068-G7 of the Act relates to termination:
1068‑G7 Subject to points 1068‑G7AF to 1068‑G7AR (inclusive), if:
(a) a person’s employment has been terminated; and
(b) as a result the person is entitled to a lump sum payment from the person’s former employer;
the person is taken to have received the lump sum payment on the day on which the person’s employment was terminated.
Ordinary income to include certain sick leave entitlements
18. The income maintenance period (IMP) is defined in s 1068-G7AH:
1068‑G7AH If:
(a) a person’s employment has been terminated; and
(b) the person receives a termination payment (whether as a lump sum payment, as a payment that is one of a series of regular payments or otherwise);
the person is taken to have received ordinary income for a period (the income maintenance period) equal to the period to which the payment relates.
19. The meaning of redundancy and termination payment is considered in s 1068-G7AQ:
1068‑G7AQ In points 1068‑G7AG to 1068‑G7AP (inclusive):
...
redundancy payment does not include a directed termination payment within the meaning of section 82‑10F of the Income Tax (Transitional Provisions) Act 1997.
termination payment means:
(a) a leave payment relating to a person’s employment that has been terminated; or
(b) a redundancy payment.
20. Leave payment is defined in s 1068-G7AR:
1068‑G7AR In points 1068‑G7AA to 1068‑G7AQ (inclusive):
leave payment includes a payment in respect of sick leave, annual leave, maternity leave and long service leave, but does not include an instalment of parental leave pay.
21. The date of commencement of the IMP and its duration is provided for in s 1068‑G7AKA:
1068‑G7AKA Subject to point 1068‑G7AKC, if the person is covered by point 1068‑G7AH, the income maintenance period starts, subject to point 1068‑G7AKB, on the day the person is paid the termination payment.
22. The length of the income maintenance period is defined in s 1068‑G7AQ:
period to which the payment relates means:
(a)if the payment is a leave payment—the leave period to which the payment relates; or
(b)if the payment is a redundancy payment and is calculated as an amount equivalent to an amount of ordinary income that the person would (but for the redundancy) have received from the employment that was terminated—the period for which the person would have received that amount of ordinary income; or
(c)if the payment is a redundancy payment and paragraph (b) does not apply—the period of weeks (rounded down to the nearest whole number) in respect of which the person would have received ordinary income, from the employment that was terminated, of an amount equal to the amount of the redundancy payment if:
(i)the person’s employment had continued; and
(ii)the person received ordinary income from the employment at the rate per week at which the person usually received ordinary income from the employment prior to the termination.
23. Section 1068‑G7AM of the Act provides for circumstances under which all or part of an income maintenance period may not apply:
1068‑G7AM If the Secretary is satisfied that a person is in severe financial hardship because the person has incurred unavoidable or reasonable expenditure while an income maintenance period applies to the person, the Secretary may determine that the whole, or any part, of the period does not apply to the person.
Note 1: For in severe financial hardship see subsection 19C(2) (person who is not a member of a couple) and 19C(3) (person who is a member of a couple).
Note 2: For unavoidable or reasonable expenditure see subsection 19C(4).
Note 3: If an income maintenance period applies to a person, then, during that period:
(a)the allowance claimed may not be payable to the person; or
(b)the amount of the allowance payable to the person may be reduced.
24. Severe financial hardship is defined in s 19C(2) of the Act:
19C Severe financial hardship definitions
...
Meaning of in severe financial hardship: person who is not a member of a couple
...
(2)A person who is not a member of a couple and who makes a claim for parenting payment, austudy payment, special benefit, disability support pension, carer payment or one of the following allowances:
(a)newstart allowance;
(b)widow allowance;
(c)mature age allowance;
(d)sickness allowance;
(e)youth allowance;
is in severe financial hardship if the value of the person’s liquid assets (within the meaning of subsection 14A(1)) is less than the fortnightly amount at the maximum payment rate of the payment, benefit, pension or allowance that would be payable to the person:
(f)if the person’s claim were granted; and
(g)in the case of a person to whom an income maintenance period applies, if that period did not apply.
25. The maximum payment rate referred to above is defined in s 19C(8)(b) of the Act:
Meaning of maximum payment rate
(8)For the purposes of subsections (2) and (3), maximum payment rate:
...
(b)in relation to newstart allowance and, if the person has turned 21, in relation to special benefit—means the rate worked out at Step 4 of the Method statement in Module A of the applicable rate calculator; or ...
26. Section 19C(4) of the Act addresses unavoidable or reasonable expenditure:
Meaning of unavoidable or reasonable expenditure
(4) Unavoidable or reasonable expenditure, in relation to a person who is serving a liquid assets test waiting period or is subject to a seasonal work preclusion period, or a person to whom an income maintenance period applies, includes, but is not limited to, the following expenditure:
(a)the reasonable costs of living that the person is taken, under subsection (6) or (7), to have incurred in respect of:
...
(iii)if an income maintenance period applies to the person—that part of the period that has already applied to the person;
(b)the costs of repairs to, or replacement of, essential whitegoods situated in the person’s home;
(c)school expenses;
(d)funeral expenses;
(e)essential expenses arising on the birth of the person’s child or the adoption of a child by the person;
(f)expenditure to buy replacement essential household goods because of loss of those goods through theft or natural disaster when the cost of replacement is not the subject of an insurance policy;
(g)the costs of essential repairs to the person’s car or home;
(h)premiums in respect of vehicle or home insurance;
(i)expenses in respect of vehicle registration;
(j)essential medical expenses;
(k)any other costs that the Secretary determines are unavoidable or reasonable expenditure in the circumstances in relation to a person.
However, unavoidable or reasonable expenditure does not include any reasonable costs of living other than those referred to in paragraph (a).
27. Reasonable costs of living is defined in s 19C(5) and s 19C(6) of the Act:
Meaning of reasonable costs of living
(5)The reasonable costs of living of a person include, but are not limited to, the following costs:
(a)food costs;
(b)rent or mortgage payments;
(c)regular medical expenses;
(d)rates, water and sewerage payments;
(e)gas, electricity and telephone bills;
(f)costs of petrol for the person’s vehicle;
(g)public transport costs;
(h)any other cost that the Secretary determines is a reasonable cost of living in relation to a person.
(6)For the purposes of paragraph (4)(a), the amount of reasonable costs of living that a person who is not a member of a couple is taken to have incurred, may not exceed:
...
(c)in the case of a person to whom an income maintenance period applies—the amount of allowance or parenting payment (as the case may be) that would have been payable to the person during that part of the income maintenance period that has already applied to the person, if the period did not apply to the person.
28. The Department’s Guide to Social Security Law contains Instruction 4.3.4.40, which deals with hardship provisions for the IMP:
4.3.4.40 Hardship Provisions for the IMP
...
Determining whether the IMP should be waived
To decide whether a customer’s IMP should be waived, the following assessment is made:
§Establish whether the customer is in severe financial hardship,
§Assess the value of the customer’s liquid assets at the date of commencement of their IMP,
§Assess the unavoidable or reasonable expenditure of the customer by adding together:
§the level of reasonable cost of living (mindful of the upper limit) applicable to the customer’s circumstances, incurred since the commencement of the IMP, and
§any unavoidable or reasonable expenditure in addition to the reasonable costs of living that has occurred since the commencement of the IMP,
§Deduct the total amount at step 3 from the customer’s liquid assets assessed at step 2.
§If the amount at step 4 still satisfies the severe financial hardship test, the customer is entitled to have the remainder of their IMP waived.
...
Assessing unavoidable or reasonable expenditure
Unavoidable or reasonable expenditure includes:
§the reasonable costs of living, PLUS
§other unavoidable or reasonable expenditure
The IMP can only be waived if the expenditure that has caused them be in severe financial hardship were unavoidable or reasonable. If the customer is in severe financial hardship because of expenditure that is not considered unavoidable or reasonable their IMP cannot be waived.
...
Determining when the waiver starts
If the customer is entitled to have their IMP waived, it is waived from the date that the customer incurred the unavoidable or reasonable expenditure which caused the severe financial hardship.
SUBMISSIONS
29. Ms Chidiac did not make a formal submission. She informed the Tribunal that she was relying on financial assistance from her siblings to meet everyday cost of living expenses; and that while she had searched for work, she had been unsuccessful. Her neck pain interfered with her ability to use a sewing machine and this had contributed to her failure to obtain suitable employment. Earlier, she said that no one had advised her not to pay off her house mortgage.
30. Mr Hester contended that the payment of five weeks normal salary in lieu of notice should be included in the IMP calculations as it was part of the termination payment received by Ms Chidiac. He relied on the Tribunal decisions of Re Finch and Secretary, Department of Education, Employment and Workplace Relations [2009] AATA 745 and Re Holovka and Secretary, Department of Education, Employment and Workplace Relations [2011] AATA 442.
31. In Re Finch Deputy President Jarvis said, at paragraph 29:
29. The definition of “termination payment” in s 1068A-E12 also includes a redundancy payment. In my view, a payment in lieu of notice could not be said to be a redundancy payment, but is an entitlement arising under her contract of employment when her employment is terminated, for any reason, with less than the agreed prior notice. However, a redundancy payment is a payment made by an employer in consequence of the redundancy of an employee, calculated by reference to a formula that is customarily dependent on the number of years of service of the employee who is being made redundant.
32. In Re Holovka Deputy President Constance agreed with the interpretation of the term termination payment advanced by Deputy President Jarvis in Re Finch but (at paragraph 16) said:
16. ... However in Mr Holovka’s case it is necessary to consider the effect of the terms of the Certified Agreement.
and (at paragraph 18) said:
18. The provision for the Notice Payment is a sub-paragraph of a paragraph headed “REDUNDANCY”. This suggests also that the payment is a part of the redundancy process and properly characterised as a “redundancy payment”, unlike the payment under consideration in the application by Ms Finch referred to above. In the circumstances of this application the nature of the payment should be decided by reference to the agreement under which the payment was made rather than to the description given to it by the employer in the Separation Certificate. In my view it should have been included under the Redundancy section of that certificate.
33. Mr Hester stressed the importance of the Tribunal reaching its decision in light of the existing Agreement.
34. As to whether Ms Chidiac’s financial hardship could lead to the Secretary determining that the whole or only part of the period does not apply to her, Mr Hester submitted Ms Chidiac did not meet the requirements of s 19C(4) in relation to unavoidable or reasonable expenditure or the definition of severe financial hardship in s 19C(2) of the Act. Given that her termination payment for $85,671.98 represented 565 working days, (although according to Centrelink it was 510 days), this exceeded the daily maximum payment rate of NSA from 22 January 2011 onwards. The maximum payment rate for NSA is currently $474 per fortnight.
35. Mr Hester addressed the interpretation of unavoidable or reasonable expenditure, which may reduce the duration of the IMP. He relied on previous decisions of this Tribunal. In Re Goldfinch and Secretary, Department of Family and Community Services [2000] AATA 837, the Tribunal stated (at paragraph 25):
25. The applicant should have made enquiries and the expenditure of all of his money in the absence of such enquires was not reasonable.
and in Re Secretary, Department of Family Community Services and Bazzi [2000] AATA 794, e the Tribunal said that :
... The Tribunal does not consider it unavoidable or reasonable to make sudden and full repayment on debts which were borrowed on the condition of gradual repayment over a period of time.
36. The Tribunal took a similar approach in Re Secretary, Department of Education, Employment and Workplace Relations and Bristow [2009] AATA 1005; where it was considered that a lump sum payment of $2,000 toward a mortgage repayment, in addition to regular repayments, was not an avoidable or reasonable expenditure.
TRIBUNAL’S DELIBERATIONS
37. The issues for the Tribunal as previously identified are:
a.the length of the IMP to be applied to Ms Chidiac and in particular whether the payments in lieu of notice are to be included in this calculation; and
b.whether the whole or part of the IMP does not apply by virtue of Ms Chidiac being in severe financial hardship resulting from unavoidable or reasonable expenditure.
PAYMENT IN LIEU OF NOTICE
38. In Re Finch Deputy President Jarvis said (at paragraph 30):
30. Whilst other paragraphs of Module E of s 1068A of the Act deem certain payments, such as leave payments, to be treated as income of the person receiving the payment for the period to which the payment relates (see for example s 1068A‑E3), no such provision applies to payments in lieu of notice. As mentioned above, s 1068A-E4, which deems certain payments to be income for the period to which the payment relates, only applies where a person has received a “termination payment”. I consider that in the absence of any such deeming provision, a payment in lieu of notice should be treated as a payment of income paid to the person concerned on the day on which it was received. In my opinion, Ms Finch’s IMP should not have included the period to which the payment in lieu of notice related.
Deputy President Jarvis then noted:
32. Centrelink’s internal policy guide states that:
“Leave and redundancy payments can include:
…
• Payment in lieu of notice.”
and stated:
While the tribunal is not required to adhere to a policy guide, it should do so unless there is a cogent reason to do otherwise (Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60), but for the above reasons I consider that the Centrelink guide does not reflect the correct legal effect of the relevant sections of the Act, and I decline to follow it.
39. This Tribunal adopts Deputy President’s Jarvis reasoning as correct.
40. Section 1068-G7AQ of the Act defines the period to which the payment relates:
1068‑G7AQ In points 1068‑G7AG to 1068‑G7AP (inclusive):
payment fortnight means a fortnight in respect of which a sickness allowance or a newstart allowance, as the case requires, is paid, or would be paid, apart from the application of an income maintenance period, to a person.
period to which the payment relates means:
(a)if the payment is a leave payment—the leave period to which the payment relates; or
(b)If the payment is a redundancy payment and is calculated as an amount equivalent to an amount of ordinary income that the person would (but for the redundancy) have received from the employment that was terminated—the period for which the person would have received that amount of ordinary income; or
(c)if the payment is a redundancy payment and paragraph (b) does not apply—the period of weeks (rounded down to the nearest whole number) in respect of which the person would have received ordinary income, from the employment that was terminated, of an amount equal to the amount of the redundancy payment if: ...
41. This indicates that the period is to be calculated with reference to the amount of ordinary income from the employment, at the rate of pay per week. Neither the five week payment in lieu of notice or the two week extra payment in lieu of notice for persons aged more than 45 years can be considered as ordinary weekly income, as such payment would not have been an entitlement except for the termination.
42. In Re Holovka Deputy President Constance, having agreed with Deputy President Jarvis’ interpretation of the term termination payment, considered it necessary to have reference to the terms of the Certified Agreement between the employer and the employees.
43. The termination pay advice issued to Ms Chidiac by Pacific Brands on 22 January 2010 (T-documents 3) is to be interpreted with reference to the Pacific Brands Proprietary Limited Holdings (Hosiery Division) and TCFUA Collective Agreement 2009. Clause 32 of this Agreement is entitled Redundancy - Notice & Severance Pay. In relation to severance pay, it provides:
Three and a half (3.5) weeks for each completed year’s services, calculated on a pro-rata basis.
“Weeks pay” means the ordinary rate of pay for the employee concerned and shall exclude overtime and team bonus payments but will include shift penalty.
44. Clause 32.2 of the Agreement deals with Notice, it states:
32.2.1 An employee who is made redundant will be given the following notice-
Period of Continuous Service
Period of Notice
Less than 1 Year
2 weeks
1 year to 3 years
3 weeks
3 years to 5 years
4 weeks
More than 5 years
5 weeks
32.2.2 An employee over the age of 45 years who has completed at least two (2) years continuous service will be given two (2) additional week’s notice to the notice in 32.2.1.
32.2.3 Payment in lieu of notice stipulated in this clause will be paid to any employee that is made redundant.
45. The Agreement defines the ordinary rate of pay as a weeks pay and considers Notice under a separate hearing. It is clear that payment in lieu of notice can only be attracted by a redundancy. Thus, it cannot be included as the amount of ordinary income from the employment, at the rate per week.
46. The Tribunal is of the opinion that the five weeks payment in lieu of notice and the two weeks aged-based payment in lieu of notice are not the ordinary rate of pay for Ms Chidiac. The amount representing those payments should be subtracted from the total Ms Chidiac received. Accordingly, the IMP should be reduced by seven weeks. It should end on 3 February 2012.
SEVERE FINANCIAL HARDSHIP DUE TO UNAVOIDABLE OR REASONABLE EXPENDITURE
47. Section 19C of the Act gives examples of the sort of expenses considered unavoidable or reasonable but the terms unavoidable or reasonable are not defined. Section 19C(4)(iii)(k) provides that the Secretary may determine any other costs that are avoidable or unreasonable expenditure in the circumstances, in relation to a person.
48. In her application to the SSAT for review of the ARO’s decision, Ms Chidiac stated that her overseas trip, costing $15,000, had been in part to look after her then aged mother. Whether this reason was considered by the Secretary under the above section is unknown. The Tribunal notes that funeral expenses and expenses caused by the birth or adoption of a child are included in the list of unavoidable or reasonable expenditures. Caring for an aged parent prior to their death is not included in the list but falls within similar considerations, which might attract the Secretary’s discretion; and if favourably viewed, lead to a reduction in the IMP.
49. The AAT has considered the term unavoidable or reasonable on several occasions. Mr Hester outlined these occasions in his submission and the Tribunal will not repeat them here.
50. Based on this line of authority, Ms Chidiac’s total discharge of her home mortgage was not an unavoidable or reasonable expenditure. Whether her expenditure of $15,000, in part to care for her now deceased mother, was considered under s 19C(4)(iii)(k) by the Secretary, the Tribunal agrees with Mr Hester’s contention: that the $15, 000 was not unavoidable or reasonable expenditure that reduced the value of Ms Chidiac’s liquid assets to an amount equivalent to the fortnightly maximum payment rate of NSA, for the purposes of s 19C(2) of the Act.
51. Accordingly, the Tribunal opinion that the SSAT’s decision to reduce the IMP by the five week payment in lieu of notice is correct and in addition the extra two weeks age-related payment in lieu of notice should not have been included in the IMP calculation. In the Tribunal’s opinion the IMP should end on 3 February 2012.
I certify that the fifty-one [51] preceding paragraphs are a true copy of the reasons for the decision herein of
Miss E A Shanahan, MemberSigned: ....Dianne Eva
. ClerkDate of Hearing 24 August 2011
Date of Decision 30 September 2011
Advocate for the Applicant Self-Represented
Advocate for the Respondent Mr M Hester, DHS Legal Division
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