Dauguet and Secretary, Department of Employment (Social services second review)

[2017] AATA 1554

Dauguet and Secretary, Department of Employment (Social services second review) [2017] AATA 1554 (18 September 2017)

Division:GENERAL DIVISION

File Number(s):      2017/3930

Re:Candice Dauguet

APPLICANT

AndSecretary, Department of Employment

RESPONDENT

Tribunal:Mr D. J. Morris, Member

Date:18 September 2017

Date of written reasons:        27 September 2017

Place:Melbourne

The Tribunal sets aside the decision under review. The following decision is substituted pursuant to section 43(1)(c)(i) of the Administrative Appeals Tribunal Act 1975:

1.The Applicant remained eligible for newstart allowance on and from 24 January 2017.

2.Special circumstances apply in the Applicant’s case pursuant to section 95(2) of the Social Security (Administration) Act 1999 that section 95(1) of that Act did not apply when determining the Applicant’s eligibility for newstart allowance from 24 January 2017.

3.The Applicant should receive payment in arrears from 24 January 2017.

[sgd]....................................................  D.J. Morris, Member

SOCIAL SECURITY – pensions, benefits and payments – newstart allowance – participation failure – suspension of newstart allowance – automatic cancellation by operation of s 95(1) of the Social Security (Administration) Act 1999 – discretion under s 95(2) to determine that s 95(1) does not apply – whether ‘special circumstances’ – whether appropriate to exercise discretion – decision set aside

Legislation

Administrative Appeals Tribunal Act 1985 (Cth), ss 37, 42A, 42C, 43(1)(c)(i)
Social Security Act 1991 (Cth), s 543B(1)

Social Security (Administration) Act 1999 (Cth), ss 95(1), 95(2)

Cases

Angelakos v Secretary, Department of Employment and Workplace Relations (2007) 100 ALD 9
Re Beadle and Director-General of Social Security (1984) 6 ALD 1

REASONS FOR DECISION

Mr D. J. Morris, Member

Background

1. The Applicant, Miss Candice Dauguet, was born on 1 January 1995. Before she attained the age of 22 years on 1 January 2017 she was in receipt of a youth allowance payment from Centrelink. Under section 543B(1) of the Social Security Act 1991 (the Act), a person has attained the maximum age for youth allowance if the person is not undertaking full‑time study and is at least 22 years old. It was not in contention in this review that Miss Dauguet was not, and is not, undertaking full-time study. From 1 January 2017 the Department of Human Services (the Department) effected an administrative transfer so that Miss Dauguet ceased to receive youth allowance and commenced receiving newstart allowance.

2. On 21 February 2017 an officer of the Department decided to cancel Miss Dauguet’s newstart allowance with effect from 24 January 2017 because she had failed to attend an employment service provider appointment and failed to re-engage with her employment service provider following the earlier failure to attend an appointment.

3. On 14 March 2017, the Applicant asked for the review of the cancellation decision by an Authorised Review Officer (ARO), an officer of the Department not involved in the decision. On 7 April 2017 the ARO affirmed the cancellation decision.

4. The Applicant sought a review by the Social Services and Child Support Division of the Administrative Appeals Tribunal (AAT1), which conducted a hearing on 12 May 2017. At this hearing the Applicant was not present but she was represented by her nominee, Ms Natasha Peric, who is her mother.

5. On 26 May 2017 AAT1 affirmed the decision to cancel Miss Dauguet’s newstart allowance.

   This hearing

6. Miss Dauguet sought a further review by the General Division of the Administrative Appeals Tribunal (the Tribunal). A telephone directions hearing took place on 15 August 2017 in connection with a request by Ms Peric for a stay on the original decision. The Tribunal declined to grant a stay on the basis that, if the Applicant was unsuccessful after a review of the substantive decision, then she would have been paid a benefit for which she was not eligible, would thereby incur a debt to the Commonwealth and, without other sources of income, this would be burdensome for her to repay. Accepting the parties’ oral submissions in the directions hearing that this matter should be considered expeditiously, the Tribunal listed the matter to be heard on 18 September 2017.

7. Before the hearing, the Respondent contacted the Tribunal on 5 September 2017 and requested a further telephone directions hearing to discuss a ‘with prejudice’ offer of settlement dated 28 August 2017 made by the Secretary of the Department of Employment (the Secretary). The Respondent advised the Tribunal in writing that the Secretary was willing to concede Miss Dauguet’s application in full, but had been unable to contact the Applicant or her nominee.

8. The Respondent provided to the Tribunal an unsigned application for a consent agreement under section 42C of the Administrative Appeals Tribunal Act 1975 (the AAT Act). Section 42C(1)(b) of the AAT Act requires that, if parties are seeking that the Tribunal may exercise powers, any agreement must be in writing and signed by or on behalf of parties. Furthermore, the Tribunal must be satisfied under section 42C(1)(c) of the AAT Act that a decision in the terms, or consistent with the terms, of the signed agreement would be within the powers of the Tribunal. As no such document was signed by, or on behalf of, the Applicant and notified to the Tribunal, the hearing proceeded on 18 September 2017.

9. The Secretary was represented by Mr James Henderson. Neither the Applicant nor her nominee appeared. Section 42A(2) of the AAT Act gives a discretionary power to the Tribunal to dismiss an application for review if the Applicant (or the Applicant’s representative) fails to appear. The Tribunal decided not to exercise that discretion for the following reasons: the knowledge that the Secretary had a new position in relation to the decision under review; the Respondent’s new position was beneficial to the Applicant and consistent with the broad position adopted by the Applicant’s nominee at AAT1; the Department had made efforts to contact the Applicant or her nominee to present that proposal to her, and had communicated that position to the Tribunal. In this circumstance, the Tribunal decided to allow the Respondent to put the new position to the Tribunal as set out in the draft agreement sent to the Applicant.

10. The Tribunal took into account a volume of documents submitted to the Tribunal by the Respondent on 19 July 2017 in accordance with section 37 of the AAT Act (T documents).

11. Mr Henderson advised the Tribunal that he had ascertained that, when Miss Dauguet was administratively transferred from youth allowance to newstart allowance, the Department had failed to notify her of this fact. The Respondent therefore submitted that, as a consequence, the original consideration by the ARO and the subsequent review by AAT1 had incorrectly addressed the matter. The ARO and AAT1 started from a premise that was not necessarily fair to the Applicant, because the first contact she received from the Department about being on newstart allowance was a Reporting Statement.

12. The Respondent also urged the Tribunal to take into account the medical evidence provided in the T documents in relation to the Applicant. The Tribunal had before it a medical certificate from Dr Samir Ibrahim, consultant psychiatrist, dated 8 April 2017. Dr Ibrahim stated that the Applicant’s primary condition was ‘intellectual disability’ with a secondary/related condition of schizophrenia. In relation to the primary condition, Dr Ibrahim stated that the Applicant had:

    “poor ability to comprehend intellectually and conceptualise and process any information.”

13. In relation to the secondary/related condition, Dr Ibrahim stated that the symptoms of the Applicant were:

    “paranoid delusion, social withdrawal, aggressive behaviour.”

14. Dr Ibrahim stated that, in his opinion, the Applicant has been unfit for work/study “forever” and, in relation to factors which may have an impact on her participation in the workforce, he stated that she “cannot learn skills or get qualifications and can’t handle gainful employment.”

15. The Respondent also noted that the Applicant’s nominee was on a “restricted servicing arrangement” with the Department. It is important to note that the consequence of the restricted servicing arrangement relating to Ms Peric should be considered in this review in the context of how those arrangements affect the interests of a third party, in this case the Applicant. The Tribunal finds that this restricted servicing arrangement in this case had some impact on the Applicant’s ability to communicate to the Department and on the Department’s ability to respond to, or indeed be apprised of, the advised circumstances from time to time of Miss Dauguet.

16. The Respondent submitted that the Tribunal should find that special circumstances apply in Miss Dauguet’s case so that the provisions of section 95(2) of the Social Security (Administration) Act 1999 (‘the Administration Act’) are satisfied.

17. Section 95(1) and (2) of the Administration Act state:

    Automatic cancellation – failure to provide statement under subsection 68(2)

    (1)       If:

    (a)              a person who is receiving a social security payment is given a notice under subsection 68(2) requiring the person to give the Department a statement or a number of statements; and

    (b)  the notice relates to the payment of the social security payment in respect of a period or a number of periods specified in the notice; and

    (c)              the person does not comply with the notice so far as it relates to a particular period;

    then subject to subsection (2), the social security payment is cancelled, by force of this section, on the first day in that period.

    (2)                If the Secretary is satisfied that, in the special circumstances of the case, it is appropriate to do so, the Secretary may determine in writing that subsection (1) does not apply to the person on and from a day specified in the determination.

    (3)                The day specified under subsection (2) may be before or after the making of the determination.

18. The Tribunal had before it, in the T documents, a letter to the Applicant dated 6 February 2017 from Matchworks Broadmeadows which commenced:

    Dear Candice

    Initial appointment with Matchworks BROADMEADOWS on Monday 20 February 2017

    You must attend the appointment outlined below in return for Newstart Allowance. If you do not attend this appointment and enter into or review your Job Plan as required, your payment may be stopped by Centrelink. You may also lose back pay if you don’t have a good reason for failing to attend or don’t advise beforehand if you are unable to attend. This is a notice under Social Security Law.

19. Attached to the letter was an information sheet from Disability Employment Services setting out the time and location of the appointment and steps Miss Dauguet should take if she was unable to attend the appointment at this time.

20. AAT1 recorded, after hearing evidence from Ms Peric, that there was no dispute Miss Dauguet failed to attend the appointment with Matchworks Broadmeadows on 20 February 2017. AAT1 noted that Ms Peric had in December 2016 lodged a medical certificate by Dr Raouf Megally, the Applicant’s general practitioner, stating that Miss Dauguet was unfit for work or study from 8 December 2016 to 7 March 2017. This certificate listed the conditions of chronic psychosis and intellectual disability, and stated these were permanent conditions. Dr Megally referred Miss Dauguet to Dr Ibrahim.

21. The Tribunal finds that, on the facts, Miss Dauguet did not attend the appointment on 20 February 2017 and did not advise the Department why she did not attend, so she did not comply with a notice under section 95(1)(c) of the Administration Act. Therefore the automatic cancellation provisions of section 95(1) of the Administration Act were activated. The next question to consider is whether the discretion available under section 95(2) of the Administration Act is applicable because of the special circumstances of the Applicant’s case.

    Do special circumstances apply in this case?

22. The Tribunal notes that Dr Ibrahim’s medical opinion as set out in the medical certificate dated 8 April 2017 post-dated the cancellation decision. It is not clear whether this certificate was provided to AAT1.

23. The Tribunal also notes an Employment Services Assessment Report (ESA) conducted with the Applicant on 20 June 2014. The assessor subsequently contacted the Applicant’s treating general practitioner, Dr Megally, who verified that Miss Dauguet is “extremely low functioning on an intellectual level”, that she had become housebound and that she had some personal hygiene issues. The assessor concluded that the Applicant has a reduced functional capacity due to an exacerbation of depression, poor concentration and a reduced ability to sustain activities.

24. The Tribunal finds that that the medical evidence from Dr Megally and the ESA assessor’s conclusions illustrate a consistency in the intellectual and other barriers that face Miss Dauguet in terms of workforce participation. The ESA also included comments by Dr Megally reporting the Applicant’s unwillingness to attend Centrelink premises and, while he recommended a cognitive assessment could be beneficial, such an assessment could be possibly conducted at his practice. The Tribunal is unaware of whether this assessment subsequently occurred. The assessor concluded that with disability specific intervention, it was at that time anticipated that Miss Dauguet’s employment options rather than her functional capacity will increase within two years.

25. The meaning of the term “special circumstances” has been considered judicially and by the Tribunal on many occasions. The Federal Court has found that, to constitute “special circumstances”, the circumstances must be unusual, uncommon or exceptional (see the remarks of Besanko J in Angelakos v Secretary, Department of Employment and Workplace Relations (2007) 100 ALD 9).  

26. The Respondent submitted that the Tribunal decision in Re Beadle and Director-General of Social Security (1984) 6 ALD 1 is relevant to this matter. In that matter the Tribunal stated, at paragraph [12]:

    An expression such as ‘special circumstances’ is by its very nature incapable of precise or exhaustive definition. The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional. Whether circumstances answer any of these descriptions must depend upon the context in which they occur. For it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases. This is not to say that the circumstances must be unique, but they must have a particular quality of unusualness that permits them to be described as special.

27. The Secretary has discretion in section 95(2) of the Administration Act to determine that the automatic cancellation provisions set out in section 95(1) of that Act do not apply. The Tribunal finds that this discretion is enlivened in this case. The Applicant has significantly challenging health conditions, which have been verified over a number of years by her treating general practitioner and, now, by a consultant psychiatrist. Some of the features of her health conditions would objectively make it very difficult for Miss Dauguet to gain, and sustain, any employment. Given his professional qualifications and experience and his personal examination of the Applicant, I attach particular weight to Dr Ibrahim’s specialist assessment of the Applicant’s impairments and his views about her inability to enter the workforce. The Tribunal also notes the advice from the Respondent at the hearing that Ms Peric receives Carer Payments and Carer Allowance in relation to the Applicant.

28. The Tribunal also notes the Respondent’s submission that it would appear that Miss Dauguet was not notified of her transfer from youth allowance to newstart allowance. Noting that the commendable purport behind this change was so that the Applicant would continue to receive income support, it does seem to the Tribunal somewhat harsh that, if she did not know she had been transferred, the Applicant should then have sanctions swiftly exercised for breaching conditions of the new allowance she was on. The Tribunal finds that it is also relevant, in this particular case, that the Applicant has a range of health conditions that objectively would affect her ability to otherwise be aware of this change.

29. As found above, it would also appear to me that because the Applicant’s nominee has a restricted servicing arrangement with the Department, this adds an additional obstacle to the Applicant obtaining correct information. It may be that if the difficulties in contact between the Department and the Applicant’s nominee were not present, better communications may have avoided failure to respond to notices occurring, or an explanation provided.

30. The Tribunal finds that all these circumstances of Miss Dauguet, taken together, combine to constitute the particular quality of unusualness referred to in Beadle that satisfies me that her circumstances are special in terms of enlivening the discretion provided to the Secretary by the Parliament in section 95(2) of the Administration Act.

31. I note Dr Megally’s advice to the ESA assessor that Miss Dauguet may benefit from some contemporary cognitive assessment, notwithstanding the unequivocal view about her psychiatric impairment as outlined, albeit in short form, in the medical certificate of Dr Ibrahim. It would appear that the last IQ assessment of the Applicant was undertaken many years ago. The Tribunal urges the Applicant and her nominee to pursue this course.

32. Taking the whole of the special circumstances of Miss Dauguet into account, the Tribunal does not believe it would be a productive endeavour for the Department to continue to require that the Applicant provide reporting statements in relation to her continuing eligibility for newstart allowance. The Tribunal also considers that, given the Respondent’s concessions about the lack of advice about the transfer to the newstart allowance, the preferable decision to make in this case is that Miss Dauguet is found to have been eligible for newstart allowance on the date it was deemed to have been cancelled, 24 January 2017, and to remain eligible for that benefit.

33. The Tribunal underlines that the construction of section 95 of the Administration Act makes clear that the legislative expectation is that a person receiving a social security payment must comply with notices issued by the Department under section 68(2) of that Act or the benefit is cancelled. That is the standard position, and it is a reasonable expectation that a person receiving public funds should comply with relevant notices issued by the Department administering the particular benefit. The Parliament has included a specific provision in section 95(2) conferring on the Secretary a discretionary power that may be exercised, subject to the Secretary being satisfied of special circumstances applying in a particular case. The combination of circumstances applicable to Miss Dauguet are particularly unusual and special, as outlined in this decision, and the Tribunal stresses that its finding that a determination should be issued under section 95(2) of the Administration Act goes directly to that combination of circumstances. This decision should not be interpreted in any way as derogating from the long-standing general principle that the Tribunal has applied consistently: that there is a reasonable expectation that recipients of social security benefits have an obligation to advise the agency administering the relevant income support payment of changes in their circumstances which may affect their eligibility for a social security benefit, the dates of that eligibility, or the rate at which a benefit is paid.

1. The Tribunal notes the fact that the Respondent carefully reassessed the position from the time of the AAT1 and making of the ‘with prejudice’ offer, which is to the Department’s credit, because it took into account the special circumstances applicable to Miss Dauguet. It follows from this decision that arrangements should be made by the Department for the Applicant to be paid newstart allowance in arrears from the date of cancellation.

   DECISION

2. The Tribunal sets aside the decision under review and substitutes the following decision:

   (i)The Applicant remained eligible for newstart allowance on and from 24 January 2017.

   (ii)Special circumstances apply in the Applicant’s case pursuant to section 95(2) of the Social Security (Administration) Act 1999 that section 95(1) of that did not apply when determining her eligibility for newstart allowance from 24 January 2017.

   (iii)The Applicant should receive payment in arrears from 24 January 2017.

I certify that the preceding 35 (thirty‑five) paragraphs are a true copy of the reasons for the decision herein of Mr D. J. Morris, Member

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

Associate

Dated: 27 September 2017

Date of hearing:

18 September 2017

Date of oral decision:

Date of written reasons:

Advocate for the Applicant:

18 September 2017

27 September 2017

Did not attend

Advocate for the Respondent:

Mr James Henderson

Solicitors for the Respondent:

Department of Human Services