Dunn and Secretary, Department of Employment and Workplace Relations

[2007] AATA 1032

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2007] AATA 1032

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No N2006/1055

GENERAL ADMINISTRATIVE DIVISION		)
Re		ANDREW DUNN

Applicant

And SECRETARY, DEPARTMENT OF EMPLOYMENT AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal Ms N Isenberg, Senior Member

Date29 January 2007

PlaceSydney

Decision The Administrative Appeals Tribunal affirms the decision under review. 

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

Ms N Isenberg    
  Senior Member

CATCHWORDS

SOCIAL SECURITY - unemployment benefit - Newstart Allowance - activity test breach rate reduction period - unreasonable delay entering into Preparing for Work Agreement - job search plan - the decision under review affirmed

Social Security Act 1991 – sections 593, 601, 604, 605, 606(1-4), 607, 625(1), 625(1A), 644AA, 644AE

Social Security (Administration) Act 1999

Bartlett and Secretary, Department of Social Security (1994) 33 ALD 661

REASONS FOR DECISION

29 January 2007 Ms N Isenberg, Senior Member

DECISION UNDER REVIEW

1.      On 4 May 2006 Centrelink imposed a 24% activity test breach rate reduction period on Mr Dunn on the basis that he had failed to enter into a Preparing for Work Agreement (“PFWA”).  As a result, Mr Dunn did not meet the activity test requirement and incurred an activity test breach penalty. 

2.      Mr Dunn had failed to sign a job search plan (“JSP”) and enter into a PFWA on at least one prior occasion.  That was the subject of an earlier matter before me (No. N2006/737).  At Mr Dunn’s request I considered the present matter separately.

ISSUE BEFORE THE TRIBUNAL

3.      The issue before me is whether the decision to apply an activity test breach rate reduction period on Mr Dunn’s Newstart Allowance (“NSA”), commencing on 18 May 2006 and ending on 15 November 2006, was correct. 

4.      This turned on whether Mr Dunn failed to enter into a PFWA.

LEGISLATIVE FRAMEWORK

5.      NSA payments are made to claimants who are unemployed and are looking for work.  It allows Centrelink beneficiaries to participate in activities designed to increase their chances of finding work.

6. Section 593 of the Social Security Act 1991 (“the Act”) provides that in order to be qualified for NSA a person must satisfy the activity test, that is, they must be “actively seeking and be willing to undertake” work: s601

7. Section 604 of the Act authorises Centrelink to require recipients to enter into Newstart Activity Agreements (“NAA”) by issuing a notice to the person advising them of the requirement and the date and time for negotiating an agreement. Section 605 of the Act sets out that the person in receipt of NSA may be required to enter into a NAA (or another such agreement instead of an existing one).

8. A PFWA is an activity agreement for the purposes of the Act and the Social Security (Administration) Act 1999. PFWAs are designed to ensure that job seekers understand that they must meet their obligations to actively job search and participate in a range of additional activities in return for receiving unemployment payments. Generally speaking, all job seekers aged under 50 who are receiving NSA and are subject to the activity test are required to enter into a PFWA.

9.      An agreement can contain a range of activities: s606(1).  However, any terms in the agreement must be approved by the Secretary: s606(2).  In considering whether to approve the terms of an agreement, the Secretary has to have regard to the person’s capacity to comply with the agreement: s606(3) & (4).

10.      Where a NSA recipient fails to negotiate a NAA agreement, including where there is a failure to agree to the terms of the proposed agreement, and the Secretary is satisfied that the person unreasonably delayed entering into an agreement, a notice can be given to the recipient that they have failed to enter the agreement. After giving such a notice, the person is taken to have failed to enter the agreement: s607.  Such failure makes NSA not payable and also constitutes an activity test breach: s 625(1).

11.      An activity test breach results in an activity test breach rate reduction period being applied to the recipient’s payment of NSA: s 625(1A).  The activity test breach rate reduction period is 26 weeks: s644AA. 

12.     For a second breach, as is the case here, the basic maximum payment of NSA is reduced by 24% throughout the period: s644AE.

13.     In general, in order to negotiate a NAA, a NSA recipient is referred to a Job Network provider.  Job Network services are provided nationally by a network of organisations dedicated to helping job seekers find and keep a job.  One of these is Mission Australia Employment Services (“Mission Australia”).

EVIDENCE

14.     Mr Dunn has received unemployment benefits since 1993.  His situation had been managed by Centrelink - and its service provider Mission Australia - at Fairfield, but was transferred to Cabramatta.

15.     On 11 April 2006 Mr Dunn was sent a notice informing him that he was to attend an interview at Fairfield Centrelink on 20 April 2006. It provided the option of changing the appointment if the time was not suitable.   

16.     Mr Dunn said that he only received the notice on 18 April 2006 and was still caught up with family activities associated with Easter.  He telephoned and changed the appointment to 27 April 2006.  He was sent a notice on 18 April 2006 about the changed appointment.  The notice contained the following:

“…

During this appointment you will be [sic] also have to negotiate and sign a Preparing for Work Agreement. Under the Social Security Act 1991, you must agree to undertake certain activities to help you find work. This is called an Activity Agreement. A Preparing for Work agreement is an Activity Agreement under Social Security Act 1991…You are required under the Social Security (Administration) Act 1999 to keep this appointment. If you don’t keep this appointment or make other arrangements, your payments may be stopped. If you start receiving payments again they may be paid at a reduced rate.

…”

17.     Mr Dunn said that he attended on 27 April 2006, as required.  He said the counter clerk, “a young girl”, told him she was updating his records and that this needed to be done regularly.  She then said he had to complete job seeker diary.  He said he was not obliged to.  The clerk called her supervisor and Mr Dunn repeated that he was not obliged to complete a job seeker diary as these were for new beneficiaries, not the long-term unemployed like him.  He started to get angry, he could feel his blood pressure rising as voices were raised.  He thought it might end in “a slanging match” and felt he might, as he had had on a previous occasion, 4 April 2006, use a few obscenities.  The argument “stalemated” so he left.  This was before there was any discussion of a PFWA.  At no time during the appointment was he shown a draft agreement.

DISCUSSION AND FINDINGS

18.     One of Mr Dunn’s contentions was that certain inferences should be drawn from the fact that other letters and notices to attend appointments (in particular letters sent 14 January 2006 and 12 December 2006) were in different terms to the notice sent on 18 April 2006.  I agree that there appears to be a grammatical error in the notice of 18 April 2006, but its intent is clear.   

19. Section 605(3) provides:

“605(3)          The Secretary is to give a person who is required to enter into a   Newstart Activity Agreement notice of:
  (a)       the requirement; and
  (b)       the places and times at which the agreement is to be   negotiated.”

20. The requirements of what must be in the notice are therefore fairly limited, but are precise. As the notice in question was clear as to the purpose of the meeting, its time and place, I have no hesitation in finding that it was a proper notice in accordance with s605(3).

21. Mr Dunn was also concerned that the notice did not contain information about the penalty provisions for failure to ”negotiate” a PFWA. I note that s605(3) does not require that information. I also note that at the hearing Mr Dunn provided copies of other letters from Centrelink (dated 29 October 2002, 24 July 2003, 10 September 2003, 14 January 2006, 17 April 2006) which all contain references to the penalty for failure to enter into a PFWA. Given this, Mr Dunn should have been well aware of the penalty for failing to enter into a PFWA.

22.     Mr Dunn contended that he is not obliged to provide a job seeker diary, as requested at the appointment on 27 April 2006.  He said the diaries have “been in” for 6 years and he has never been required to complete one.  He is a long term recipient of NSA for which he had applied before the introduction of the diaries.  Further, he said, in order to maintain his NSA he completes a form (SU19) fortnightly wherein he details four jobs he has applied for during the preceding fortnight.  He presumes Centrelink checks these entries and he has never been queried in relation to them.  It is now unreasonable to expect him to detail eight additional jobs per fortnight.

23.     I was referred to the Guide to Social Security, Guideline 6.2.1.70.

24.     The Guideline provides that a job seeker diary is to be issued in respect of new claims (or when an abridged new claim is lodged) or when a review is conducted.  These do not apply to Mr Dunn.

25.     However, a jobseeker diary can also be issued at any time when a job seeker, aged less than 50 – like Mr Dunn – receives an activity test breach.  On 27 January 2006 Centrelink had imposed an 18% activity test breach rate reduction period on Mr Dunn on the basis that he had failed to sign a JSP and enter into a PFWA.  As a result, Mr Dunn did not meet the activity test requirement and incurred an activity test breach penalty.  This was the subject of Mr Dunn’s first matter considered by me (No. N2006/737).  I found that Mr Dunn did not meet the activity test requirement and had thereby incurred an activity test breach penalty of an 18% reduction in NSA.

26.     I therefore find that Centrelink was entitled to require Mr Dunn to complete a job seeker diary in accordance with the Guideline.

27.     I also note that the Guideline specifies that a job seeker diary must be included as a term in the job seeker’s PFWA:

“The requirement to complete the diary must be included as a term in the jobseeker’s PFWA. In deciding whether to issue a diary, consideration must be given to the jobseeker’s capacity to comply and to other factors listed at sections 606(3) and 606(4) of the Social Security Act 1991.”

28.     I was referred by both parties to Bartlett and Secretary, Department of Social Security (1994) 33 ALD 661. There are however, a number of differences in that case. Firstly there was found to be no proper notice under s605(3) in that Mr Bartlett had been “invited” to have his existing agreement reviewed, which, Deputy President Blow decided, did not necessarily mean it was to be superseded. There also was found to be no proper notice under s607(c) that a breach was to be imposed. Deputy President Blow found (at 665), in any event, that before a breach could be imposed “The secretary or his delegate must decide, because of the person’s failure to agree to certain identifiable proposed terms, that person is unreasonably delaying in entering into the agreement”, and that this had not occurred.

29. Deputy President Blow also considered that the requirement that Mr Bartlett produce copies of his job applications was improper if it was to check up on whether he was actually complying with the requirement of the Act in relation to actively seeking work. He was satisfied on all the evidence that Mr Bartlett was not unwilling to enter a NSA.

30.     I note that Bartlett was decided before the introduction of job seeker diaries. 

31.     Section 606(1)(a) allows Centrelink to require a NSA beneficiary to enter into a NAA which has as a term that the beneficiary undertake a job search.  The purpose of the diary, in my view, was nothing more than to evidence that job search had occurred in accordance with the agreement.

32.     That a draft agreement was not produced at the interview on 27 April 2006 is of no consequence.  I find that the purpose of the interview was clear to Mr Dunn.  That he left before terms other than the job seeker diary were discussed is also of no consequence, as it was an essential term of the agreement that was required in order to meet the legislative requirement of s606(1)(a).

33.     Section 606(4) requires Centrelink to take into account a beneficiary’s capacity to comply with the agreement.  Mr Dunn gave evidence that he would do what he was obliged to do, and no more.  He said if he was required to do 12 job applications then he would.  He agreed he could do another eight applications per fortnight if he had to.

34.     Therefore Mr Dunn did not have a reasonable reason for not agreeing to the terms of the proposed PFWA.  Centrelink was therefore correct in imposing a 24% rate reduction – it being a second breach – on Mr Dunn’s newstart allowance.

35.     As I wrote in the earlier decision Mr Dunn is a beneficiary of the social security system.  The legislative scheme places some obligations on recipients if they wish to maintain that benefit.  The obligations imposed on Mr Dunn were entirely reasonable and there was no evidence that his ability to comply was compromised. 

DECISION

36.     The Administrative Appeals Tribunal affirms the decision under review.

I certify that the 36 preceding paragraphs are a true copy of the reasons for the decision herein of Ms N Isenberg, Senior Member

Signed:         ....................[sgd]...................
  Associate

Date of Hearing  18 January 2007
Date of Decision  29 January 2007 
Appearance for Applicant               Mr A Dunn, Self-represented

Advocate for the Respondent        Mr George Lozynsky of Centrelink Legal Services