De Gregorio and Secretary, Department of Employment and Workplace Relations

[2007] AATA 1447

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2007] AATA 1447

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q 200600604

GENERAL ADMINISTRATIVE DIVISION		)
Re		LYDIA De GREGORIO

Applicant

And SECRETARY, DEPARTMENT OF EMPLOYMENT AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal Deputy President P E Hack SC

Date7 June 2007

PlaceCairns

Decision The decision under review is affirmed.

..............................................

Deputy President

CATCHWORDS

SOCIAL SECURITY – payments and allowances – unemployment allowances – qualification – applicant was self-employed and running own business even though financially unsuccessful – applicant was not unemployed – activity test not satisfied – decision under review affirmed

Social Security Act 1991 – ss 593(1), 595(1), 601

Secretary, Department of Employment and Workplace Relations v Joss (2006) 152 FCR 541

REASONS FOR DECISION

7 June 2007 Deputy President P E Hack SC    

1.This is an application by Ms Lydia De Gregorio to review a decision by Centrelink made on 7 June 2006 to cancel her Newstart allowance payments with effect from 25 May 2006.

2.That decision was made because the view was taken that Ms De Gregorio was not unemployed at the time of the cancellation. The decision was affirmed on internal review and by the Social Security Appeals Tribunal.

3.By virtue of s 593(1) of the Social Security Act 1991 (C’wlth.) a person is qualified for Newstart allowance for a particular period if, relevantly, the person satisfies the Secretary (or this Tribunal in the stead of the Secretary) that throughout the period the person was unemployed and, in such a case, satisfies the activity test. The mechanism for satisfying the activity test is set out in s 601 of the Social Security Act. Subject to irrelevant exceptions s 601(1) provides that a person satisfies the activity test for a period if, throughout that period, the person is actively seeking, and willing to undertake, paid work in Australia (other than unsuitable work).

4.It is, as well, relevant to note s 595(1) of the Social Security Act. That sub-section operates where a person undertakes paid work during a period and the Secretary is of the opinion, having regard to the nature and duration of the work and other matters regarding the work considered relevant, that the work should be disregarded. Where those matters are satisfied the Secretary may treat the person as being unemployed during that period.

5.The decision in issue here was made (and is sought to be affirmed) on two bases – that Ms De Gregorio was, at the relevant time, self-employed and not unemployed and that she did not satisfy the activity test.

6.On 3 February 2006 Ms De Gregorio lodged with Centrelink a document that recorded that on 30 January 2006 she had commenced self-employment operating a family day care business described as “Happy Dinosaurs”. In the months that followed that business took up more and more of her time although it never became financially successful.

7.In the period leading up to the decision to cancel her Newstart allowance Ms De Gregorio lodged a written application for payment for Newstart allowance with Centrelink on each of 10 May 2006, 24 May 2006 and 7 June 2006. In the first of these, which covered the period 13 April 2006 to 10 May 2006, she indicated that in that period she had not participated in a Centrelink approved activity. In the other forms, which covered the succeeding fortnights, she indicated that she did not look for work during either of these periods as she was working in her own business.

8.In these circumstances I have no hesitation in concluding that Ms De Gregorio did not satisfy the activity test. That required her to be actively seeking, and willing to engage in, paid work. The forms completed and signed by Ms De Gregorio make it plain that she was neither seeking, nor willing to engage in, paid work at least in the period from 13 April 2006 onwards because of her commitment to her own business. On that basis she did not satisfy the activity test. That being so she did not satisfy s 593(1)(b) of the Social Security Act and was not qualified to receive Newstart allowance.

9.Additionally it is my view that Ms De Gregorio was, in the relevant periods, not unemployed as that expression is used in s 593(1)(a)(i) and thus not capable of satisfying that requirement for qualification for Newstart allowance. The intensity with which she applied herself to employment in her own business, commendable as that may be, means that it is impossible to regard her as being unemployed during that period. In that regard I refer to the discussion by Graham J of the dichotomy between self-employment and unemployment in Secretary, Department of Employment and Workplace Relations v Joss [1] where his Honour said:

“It may well be that viewed as a question of fact and degree and having regard to the intensity with which a person applies him or herself to a particular enterprise, one may conclude that a person is not self-employed at all. But, once it be found that the person is self-employed it seems to me impossible to conclude that such a person was, at the same time, unemployed.”

[1] (2006) 152 FCR 541, p. 547 at par. [35].

10.It is finally necessary to refer to s 595(1) and the discretion in that section to treat a person as being unemployed, notwithstanding that the person undertakes paid work. I doubt whether this sub-section has any application to a person in the position of Ms De Gregorio. The language of the statute (and the policy manual) suggests that it has application to occasional and incidental periods of paid work rather than the type of sustained and full-time employment engaged in by Ms De Gregorio in her own business. Even if the sub-section were to have application I would not regard this matter as one where the exercise of the discretion was warranted.

11.It follows that I would affirm the decision under review.      

12.I add, for completeness, that there is no suggestion at all that Ms De Gregorio acted other than with complete honesty in her dealings with Centrelink. It is commendable that she has tried, in this way, to break away from unemployment. It is most unfortunate that she appears to have had an inadequate explanation of the interplay between unemployment and self-employment at the time of commencing her enterprise. Perhaps Mr McQuinlan, who appeared for the Secretary, might convey the desirability of clear and cogent explanations to his superiors. It would be unfortunate if persons like Ms De Gregorio were discouraged from commencing their own enterprises because of experiences such as hers.

I certify that the 12 preceding paragraphs are a true copy of the reasons for the decision herein of Deputy President P E Hack SC

Signed:         .....................................................................................
  Lynne Stalley, Administrative Assistant

Date of Hearing  7 June 2007
Date of Decision  7 June 2007
The Applicant appeared in person    
Solicitor for the Respondent       Advocate, Centrelink Legal Service