FTXB; Secretary, Department of Social Services and (Social services second review)

The Administrative Appeals Tribunal (AAT) considered a dispute concerning the rate of youth allowance payable to the respondent. The Secretary of the Department of Social Services had determined that the respondent had been overpaid youth allowance, creating a debt to the Commonwealth. The core of the dispute revolved around the proper application of the income test provisions within the *Social Security Act 1991* (Cth), specifically section 1067G-H23, which dictates when "ordinary income" is to be taken into account for the purposes of calculating youth allowance.

The legal issues before the Tribunal were: first, the meaning of "ordinary income," "first," "earned," "derived," and "received" as used in section 1067G-H23 of the Act; and second, how these terms, read as a whole, should be applied to the respondent's circumstances. The respondent, who was studying and working as a casual employee with irregular shifts, received youth allowance in fortnightly instalments. He had mistakenly underreported his gross income from wages for certain fortnightly periods. While it was common ground that he earned the income before receiving it, the precise timing of when that income was "first earned, derived or received" for the purposes of the Act was contested.

The Tribunal reasoned that the ordinary meaning of the words in section 1067G-H23, when read in context, indicated that income should be attributed to the period in which it was earned. Applying this to the respondent's employment, where he was paid weekly for work performed in the preceding week, the Tribunal determined that the income was first earned on the Sunday of the week in which the work was performed. This interpretation was supported by general principles of statutory interpretation, including the practical consequences of competing interpretations and the beneficial nature of the Act, while also considering relevant principles from taxation and employment law.

The Tribunal concluded that the respondent had been overpaid youth allowance due to the underreporting of his income. Consequently, the Tribunal affirmed the Secretary's decision that the respondent owed a debt of $806.16 to the Commonwealth.