Gabor v Secretary, Department of Education, Employment and Workplace Relations

[2011] FCA 1080

FEDERAL COURT OF AUSTRALIA

Gabor v Secretary, Department of Education, Employment and Workplace Relations [2011] FCA 1080

Citation:		Gabor v Secretary, Department of Education, Employment and Workplace Relations [2011] FCA 1080
Appeal from:		Gabor and Secretary, Department of Education, Employment and Workplace Relations [2011] AATA 384
Parties:		RENEE D GABOR v SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS
File number:		VID 351 of 2011
Judge:		MURPHY J
Date of judgment:		5 September 2011
Catchwords:		SOCIAL SECURITY – Newstart Allowance benefit paid by Centrelink– disclosure of income to Centrelink – meaning of “income” under Social Security Act 1991 (Cth) – allowance for travel time a payment in the nature of “income” ADMINISTRATIVE LAW – appeal from Administrative Appeals Tribunal – appeal on a question of law - meaning of “question of law”
Legislation:		Administrative Appeals Tribunal Act1975 (Cth) s 44 Income Tax Assessment Act 1997 (Cth) Social Security Act 1991 (Cth) ss 8, 1157JB, 1223
Cases cited:		Comcare v Etheridge (2006) 149 FCR 522 Haldane-Stevenson v Director-General of Social Security (1986) 9 FCR 73 Lambe v Director-General of Social Services [1981] 57 FLR 262 Secretary, Department of Social Security v McLaughlin (1997) 81 FCR 35
Date of hearing:	5 September 2011
Place:	Melbourne
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	34
Counsel for the Appellant:	Appellant appeared in person
Solicitor for the Respondent:	Ms P Heffernan of Australian Government Solicitor

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION	VID 351 of 2011

ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL

BETWEEN:	RENEE D GABOR Appellant
AND:	SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS Respondent

JUDGE:	MURPHY J
DATE OF ORDER:	5 SEPTEMBER 2011
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1.The appeal be dismissed.

2.The Appellant pay the Respondent’s costs of the appeal.

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION	VID 351 of 2011

ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL

BETWEEN:	RENEE D GABOR Appellant
AND:	SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS Respondent

JUDGE:	MURPHY J
DATE:	5 SEPTEMBER 2011
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

1. I have made an order dismissing the appeal, and I deliver the following ex tempore reasons for judgment.

2. The appellant, Renee Gabor, was the recipient of the Commonwealth Government benefit named the Newstart Allowance between at least 19 April 2005 and 8 December 2007. Centrelink administers this benefit for the respondent, the Secretary, Department of Education, Employment and Workplace Relations.  In that period Ms Gabor also worked as a casual employee for various market research companies. 

3. She was required in this work to travel to various locations in her own car.  Her employers made two types of payment to her in respect of her travelling:

   (a)  a travel allowance based on kilometres travelled by way of reimbursement for travel expenses - which I will call the kilometre reimbursement; and

   (b)  an hourly rate for the time taken in travel - which I will call the travel time payment.

4. Ms Gabor regularly reported her income from her casual employment to Centrelink, as required by it.  No suggestion is made that she did not report her income honestly. However, she did not report to Centrelink that she received the travel time payment.  She had the view that such a payment was not part of her taxable income, and that she was not required to declare it as income. 

5. In September 2008 Centrelink discovered that Ms Gabor had not disclosed the travel time payments made to her by her employers.  In October 2008 Centrelink determined that, as a result of her failing to declare the travel time payments, she had received a higher level of Newstart Allowance than she was entitled to.  It advised that she owed the Commonwealth a debt for the resultant overpayment. 

6. Ms Gabor was unhappy with this finding and sought review of the decision by an authorised review officer from Centrelink.  This was unsuccessful.  Ms Gabor then applied to the Social Security Appeals Tribunal.  This application too was unsuccessful.  Ms Gabor lodged an application for review with the Administrative Appeals Tribunal.  The application was heard by the Tribunal constituted by Member Perton.  The Tribunal rejected Ms Gabor’s appeal in an ex tempore decision, but remitted the matter to Centrelink to recalculate the debt. 

7. By notice of appeal, filed 22 March 2011, Ms Gabor appealed the decision of the Tribunal under section 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth) (“the AAT Act”). On 3 June 2011, the Tribunal provided written reasons for its decision at the request of Ms Gabor. On 11 July 2011 Ms Gabor filed an amended notice of appeal by leave. The amended notice of appeal also comprised submissions by Ms Gabor. The Secretary filed detailed submissions, and Ms Gabor filed submissions in reply.

   The Federal Court Rules

8. Order 53, rule 3(2)(b) of the Federal Court Rules, under which this appeal was brought, provided that:

   …
   the notice of appeal … shall… state a question or questions of law to be raised on the appeal
   …

   The Court requires strict compliance with this rule: Lambe v Director-General of Social Services [1981] 57 FLR 262 at 264.

   The questions of law

9. The purported question of law in the amended notice of appeal was stated as follows:

   At all relevant times since 2001 it has been Centrelink’s long settled practice to raise a recoverable debt based on a finding of the difference between the income figures of what the employer had provided, and what the applicant had declared. (The difference).
   Did the tribunal permissively construe the meaning of “recoverable debt” within the context of the Act?

10. The respondent objects to the notice of appeal. It contends that rather than being a question of law it amounts to a broad inquiry as to the construction and operation of the relevant statutory provision.  In Comcare v Etheridge (2006) 149 FCR 522 the Full Court of this Court considered an appeal in which the appellants sought a determination as to:

    the construction and operation of:
    (a)       s 9(1) of the Commonwealth Employee’s Compensation Act 1930… [and]

    (b)ss 27(1) and 104 of the Compensation (Commonwealth Government Employee’s) Act 1971.

11. Those questions were held not to be questions of law. At [19] the Court stated:

    A broad inquiry as to the construction and operation of statutory provisions is not a question of law within the meaning of s 44(1) of the AAT Act.

12. In my view the purported question of law in this matter is an invitation to the Court to consider all aspects of the Tribunal’s finding that Ms Gabor had a debt to the Commonwealth.  Although Ms Gabor’s submissions are somewhat difficult to understand, a perusal of them illustrates the breadth of the inquiry that she invites the Court to embark upon.  It would involve the Court considering the construction and operation of numerous provisions of the Social Security Act 1991 (Cth) (“the Act”) many of which are not apparently closely related to each other, as well as provisions of Division 6 of the Income Tax Assessment Act 1997 (Cth) and their relationship to the Act.

13. I find that the purported questions of law in the amended notice of appeal do not comply with order 53, rule 3(2)(b) of the Federal Court Rules.  However, from the notice of appeal and from the decision of the Tribunal it appears that two questions of law might be said to arise. 

14. If I can find a legitimate question of law, even arguably, I should determine it.  Questions of statutory construction usually involve questions of law, and if they can be identified with some precision I should determine them.  The questions that I consider might be said to arise are:

    1.Whether the monies received by the appellant from her employers for time spent in travelling in her employment is “income” within the meaning of s 8 of the Act; and

    2.Whether on a proper construction of s 1223 of the Act the appellant owes a debt to the Commonwealth.

15. The parties consent to the appeal continuing on the basis that those two questions of law are before the court for determination.  The notice of appeal was amended by consent to raise those two questions only. 

    Whether monies received by the appellant from her employers for time spent in travelling in her employment is “income” within the meaning of s 8 of the Act.

16. That the travel time payment was based on time travelled by Ms Gabor in her employment is one of the factual findings of the Tribunal: see [2] of the decision.  I am bound by that finding.  It was also clear from the records of the employers that were before the Tribunal:  see document T14, pp 124 and 134.  In any event, Ms Gabor accepts that the travel time payment was paid for the hours of travel in her employment, and was not some other type of payment.

17. However, Ms Gabor contends that the travel time payments she received were not income on a proper interpretation and application of s 8 of the Act. I did not find her submissions in that regard easy to follow, but in summary she appears to contend that:

    (a)  she incurred costs in travelling that should be offset against the income;

    (b)  there was a general taxation ruling that allowed such income not to be treated as assessable income;

    (c) the travel time payment was an exempt lump sum within the meaning of s 8(11) of the Act;

    (d) the travel time payment was an exempt expense benefit within the meaning of s 1157JB of the Act; and

    (e) the amount was an amount paid to Ms Gabor to reimburse for the costs of expenses within the meaning of clause 4.3.2.10 of the Social Security Guide, which was based on s 8 of the Act - according to the guide.

18. Section 8 of the Act sets out what constitutes “income” under the Act. It provides:

    (1)       In this Act, unless the contrary intention appears:

    employment income, in relation to a person, means ordinary income of the person that comprises employment income under subsection (1A)…

    …

    income, in relation to a person, means:

    (a)       an income amount earned, derived or received by the person for the person's own use or benefit; or

    (b)       a periodical payment by way of gift or allowance; or

    (c)       a periodical benefit by way of gift or allowance;

    …

    ordinary income means income that is not maintenance income or an exempt lump sum.

    …

    (1A)A reference in this Act to employment income, in relation to a person, is a reference to ordinary income of the person:

    (a)       that is earned, derived or received, or that is taken to have been earned, derived or received, by the person from remunerative work undertaken by the person as an employee in an employer/employee relationship; and

    (b)       that includes, but is not limited to:

    (i)salary, wages, commissions and employment-related fringe benefits that are so earned, derived or received or taken to have been so earned, derived or received; …

    …

    (2)       A reference in this Act to an income amount earned, derived or received is a reference to:

    (a)       an income amount earned, derived or received by any means; and

    (b)an income amount earned, derived or received from any source (whether within or outside Australia).

19. Section 8(11) upon which Ms Gabor sought to rely, provides:

    (11)     An amount received by a person is an exempt lump sum if:

    (a)the amount is not a periodic amount (within the meaning of subsection (11A)); and

    (b)the amount is not a leave payment within the meaning of points 1067G-H20, 1067L-D16 and 1068-G7AR; and

    (c)the amount is not income from remunerative work undertaken by the person; and

    (d)the amount is an amount, or class of amounts, determined by the Secretary to be an exempt lump sum.

20. Section 8(11) is not applicable to Ms Gabor’s case and the travel time payment is not an exempt lump sum. The requirements of s 8(11)(a) to (d) are cumulative. Accordingly, for the travel time payment to be an exempt lump sum, it must be declared as such by the Secretary under subsection (d). The solicitor for the Secretary stated that the travel time payments have not been so declared, and this was not contested by Ms Gabor. In any event, the travel time payment is in my view “income from remunerative work” within the meaning of s 8(11)(c).

21. The Tribunal held at [14] of its decision that the travel time payment was employment income within the meaning of s 8 of the Act. I find no error in the Tribunal’s finding or reasons and affirm its decision in relation to this question.

22. It is therefore unnecessary to deal with the other arguments raised by Ms Gabor, but I will do so in the interests of finality.  In my view, none of the arguments advanced by Ms Gabor on this question of law withstood examination. 

23. The travel time payment was not an exempt expense benefit under s 1157JB of the Act. In order for it to be so, it must be a payment in connection with an expense of a private nature. In my view, the travel time payment was not by nature the reimbursement of a private expense, it was a payment for time taken to travel in employment. Further, the Tribunal made a factual finding that the travel time payment was based on the time taken to travel, which is inconsistent with it being for reimbursement of an expense. I am bound by that ruling.

24. Ms Gabor was mistaken in her reliance on clause 4.3.2.10 of the Social Security Guide.  It is not correct to characterise the travel time payment as a reimbursement of the cost of expenses.  In any event the Tribunal found that the payment was based on time travelled in employment - not on the amount of travel related expense - and I am bound by that finding. 

25. It may be that Ms Gabor incurred expenses in using her own car to travel within her employment.  Insofar as she did, in my view such expenses are intended to be covered by the kilometre reimbursement: see document T14 p 134 which illustrates that Ms Gabor was paid 56 cents per kilometre for each kilometre travelled. 

26. The general taxation ruling that Ms Gabor contends supports her position is not relevant to her case. It is established that the definition of “income” in the Act is different from that in the Income Tax Assessment Act 1997 (Cth).  I agree with French J, as he then was, in Secretary, Department of Social Security v McLaughlin (1997) 81 FCR 35 (“McLaughlin”) when his Honour said at 42:

    The definitions of “income” and “income amount” in the Social Security Act indicate that like their statutory predecessors they are of wide application. This meets the public policy requirement that “public expenditure is directed to those who stand in actual need of the periodic support which income-related pensions provide”…

    Citing Read v The Commonwealth (1988) 167 CLR 57 at 69 as authority, his Honour continued:

    The purpose of the applicable provisions of the Act is to “maintain a basic level of income for those who [are] unable to receive sufficient income to provide for themselves” - Secretary, Department of Social Security v Garvey (1989) 22 FCR 132 at 136.

    The concept of “income” defined in the Social Security Act is entirely different from that embodied in the comparable provisions of the Income Tax Assessment Act 1936 (Cth) – Read v Commonwealth at 69.

27. Ms Gabor relied on the decision of the Full Court in Haldane-Stevenson v Director-General of Social Security (1986) 9 FCR 73 at 75 where McGregor and Pincus JJ, held that in general terms a definition of income in the Act meant net income rather than gross. As was noted in McLaughlin at 43, the words “in general” do not exclude that in particular circumstances the test in the Act is not net income. In my view the facts in Ms Gabor’s case constitute such circumstances.

    Whether on a proper construction of s 1223 of the Act the appellant owed a debt to the Commonwealth.

28. Section 1223(1) of the Act relevantly provides as follows:

    Debts arising from lack of qualification, overpayment etc.

    (1)      Subject to this section, if:

    (a)a social security payment is made;  and

    (b)a person who obtains the benefit of the payment was not entitled for any reason to obtain that benefit;

    the amount of the payment is a debt due to the Commonwealth by the person and the debt is taken to arise when the person obtains the benefit of the payment.

    …

    (1AB)Without limiting by implication the circumstances to which paragraph (1)(b) applies apart from this subsection, a person who obtained the benefit of a social security payment is taken not to have been entitled to obtain the benefit if the payment should not have been made for any one or more of the following reasons:

    …..

    (c)the payment was not payable;

    (d)the payment was made as a result of a contravention of the social security law, a false statement or a misrepresentation.

    …

29. Ms Gabor argues that the entitlement of persons to a benefit under the Act in s 1223 is exceedingly broad. She contends that it is almost impossible for a person to have no entitlement to a benefit and that perhaps the only person in Australia who would not be so entitled was, to use her words, “an undocumented alien.”

30. The interpretation of s 1223 that Ms Gabor proposes – that “entitlement” to a benefit under the Act refers to a general right in the Australian community to benefits under the Act - is untenable. Section 1223 clearly relates to a person who has received a social security benefit, to which benefit that person was not entitled.

31. Ms Gabor also argues that a finding that she is a debtor under the Act involves finding that she had not been forthright with Centrelink about her income or was guilty of an offence under the Act. Each of these contentions involve a misreading of the Act.

32. Section 1223(1) provides that a person who receives a social security benefit to which the person was not entitled owes a debt to the Commonwealth, whatever the reason for the payment of the benefit. The Secretary accepts that the failure to advise Centrelink arose from Ms Gabor’s erroneous view that she was not obliged to notify Centrelink of the travel time payment income. No suggestion is made that she has acted dishonestly or has sought to wrongly obtain a financial advantage by not advising Centrelink of her receipt of the travel time payments.

33. Ms Gabor was obliged by the Act to advise Centrelink of the travel time payments she received. It is common ground that she did not do so. As a result she received a higher amount of Newstart Allowance than she would have, had she declared these payments as income. Ms Gabor’s situation falls squarely within s 1223 and she owes a debt to the Commonwealth. I affirm the decision of the Tribunal in relation to this question.

34. The appeal fails and I will hear the parties as to costs.

I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Murphy.

Associate:

Dated:       20 September 2011