Gerlach and Secretary, Department of Family and Community Services

[2005] AATA 887

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2005] AATA 887

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q2004/946

GENERAL ADMINISTRATIVE DIVISION		)
Re		ARMIN GERLACH

Applicant

And SECRETARY, DEPARTMENT
OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Ms MJ Carstairs, Member

Date13 September 2005

PlaceBrisbane

Decision The decision under review is set aside and the following is substituted:    Mr Gerlach did not reduce his employment prospects when he moved to a   new place of residence in Torbanlea, on or about 1 April 2004.

......................[Sgd]................................

MJ Carstairs
  Member

CATCHWORDS

SOCIAL SECURITY – Newstart Allowance - cancellation of newstart allowance payments - reducing employment prospects by relocating residence.

Social Security Act 1991 s634

Re Secretary Department of Social Security and Harding (AAT 10641, 25 August 1995)
Re Borowiecki and Secretary, Department of Social Security (1991) 22 ALD 797

REASONS FOR DECISION

13 September 2005   Ms MJ Carstairs, Member

1.      A person who moves to a new place of residence while receiving newstart allowance, which is a Centrelink payment for the unemployed, faces the possibility of losing their entitlement for 26 weeks, if they have reduced their employment prospects by the move.

2.      In 2004, Mr Armin Gerlach moved from Queanbeyan in the ACT, where he had been unemployed for a number of years, to Torbanlea in Queensland. A delegate of the respondent decided that in the circumstances of this move, the 26 week non-payment period should be applied to Mr Gerlach’s payments.  Mr Gerlach believes that decision was wrong.  He maintains that in fact he improved his employment prospects by the move, and says this is demonstrated by his no longer requiring Centrelink payments because things have turned out so well for him in Torbanlea.

3.      What I have to decide is:

§  whether Mr Gerlach did in fact reduce his employment prospects by moving to a new place of residence; and

§  if he did so, was there a sufficient reason as defined in the legislation for his move.  Where there is sufficient reason, the 26 week penalty is not applied.

4. The relevant legislation is contained in s634 of the Social Security Act 1991  which states:

….., if, in the opinion of the Secretary, a person has reduced his or her employment prospects by moving to a new place of residence without sufficient reason, a newstart allowance is not payable to the person for 26 weeks….

BACKGROUND

5.      Mr Gerlach is aged fifty years of age.  He sustained a work injury in 1984 when he was yard foreman at a brickworks.  He now has ongoing back problems which restrict him to light employment.  He has a number of skills and qualifications including as a forklift driver and a front-end-loader driver.  He is a self-taught computer repairman. 

6.      Mr Gerlach could not find employment in Queanbeyan, despite receiving employment assistance from Mission Australia. 

DID MR GERLACH REDUCE HIS EMPLOYMENT PROSECTS BY MOVING?

7.      Mr Gerlach said that he received the insurance payout for the 1984 injury – some $390,000 – in about January 2004.  He explained that he wanted to use the money to purchase a residential property that would generate income, and he believed that he would be better able to do this in the Torbanlea area of Hervey Bay, where real estate was cheaper than near Canberra.  

8.        Mr Gerlach’s elderly mother already lived in Queensland and she had expressed interest in moving to the Hervey Bay area before he made the decision to purchase the house at Torbanlea.  After he moved there she put her house in Caloundra on the market and has lived in the Hervey Bay area since.

9.      In February 2004 Mr Gerlach bought a large house on two and a half acres and moved to Queensland shortly thereafter.  The house has four separate self-contained living areas, each with a kitchen, and he considered that it would have good rental prospects.  The house also has an area that can be used as a shop with frontage to the street.

10.     Mr Gerlach was able to start a business in computer repairs which he operates from the shop area of the house.  His computer repair business has done well and he has recently taken on an assistant to help him with the paperwork, paying that person $15 per hour.  Mr Gerlach has been advertising his computer business “Computer General” for over a year in the Burrum River News (exhibit A2) and advertises his other services including laminating and photocopying.  He acknowledged that the computer business was not immediately profitable, but it was operating during 2004 and he knew it would do well because there are only two people servicing computers in the area.

11.     In terms of renting out the house, Mr Gerlach said it was now fully tenanted since he carried out repairs during 2004.  Last year he had two tenants so it had taken him until early 2005 to fully tenant the house. 

12.     Mr Gerlach said that by the end of 2004 he could see that his business had taken off.  When he was phoned after the end of the 26 week penalty period and invited to re-apply for newstart allowance he was able to tell Centrelink that he did not require the payment anymore.  His fortnightly income now is $1200, too high to qualify for newstart payments.

13.      

14.     Mr Gerlach makes the point that the real test of whether he had moved to an area where he lowered his employment prospects was whether he was in employment now.  He said that whilst it might be said that the business did not take off immediately it did exist throughout the time and he was fully employed in it.  I think that he is right.

15.     I accept that the unemployment figure of 3.3% in Queanbeyan is substantially lower than for the 16.3% registered in the Torbanlea area.  However I also note that the question posed by the legislation cannot be answered simply on a bald analysis of job market statistics.  The question can only be answered by considering the individual circumstances of each person and whether that particular person’s employment prospects were reduced by the move.  The use of the word prospects in the Act suggests that it is helpful to look at what happens next in the particular person’s working life.

16.     Mr Gerlach said he had some leads for jobs in Torbanlea before he left Queanbeyan, but this work was casual and he was employed for limited hours in a few weeks in April and June 2004 only.  However the owner of that business was prepared to back Mr Gerlach’s computer business.  Mr Gerlach refers to him in places as his partner in the business.

17.     Mr Gerlach also obtained some work with a business called “Agrow Bobcat, Mini-Excavator & Tipper Hire” and the manager, Mr C Avis provided a letter to Centrelink explaining that his firm had discussions early in 2004 with Mr Gerlach offering him full-time employment when he relocated to Queensland.  Mr Avis said that although Mr Gerlach has forklift and front-end-loader tickets, he needed his bob-cat ticket and experience before their firm could take him on full-time.  Mr Gerlach explained that without his newstart allowance he had no money to undertake any training.  He said that after his newstart allowance was cancelled he was living on the rental receipts of $100 from the house which was not then fully tenanted.

18.     Whether a person has reduced his employment prospects is a matter of the facts in each case: Re Borowiecki andSecretary, Department of Social Security (1991) 22 ALD 797. Whilst it was at one time a contentious point whether the employment referred to in s634, but not defined anywhere in the Act, was limited to employment as an employee thereby excluding self-employment, the better view is that adopted by the Tribunal in Re Secretary Department of Social Security and Harding (AAT 10641, 25 August 1995) which concluded that the meaning of employment refers to more than simply master-servant relationships.

19.     On the evidence before me I am satisfied that Mr Gerlach did not reduce his employment prospects as a result of the move to Torbanlea.  He moved from an area where he had no employment, it seems for quite some time.  As the Tribunal said in Re Borowiecki, a narrow view should not be taken where a person moves from a place that had provided him with no employment.  Mr Gerlach is in a much better position than was Mr Borowiecki as he can now demonstrate that the Torbanlea area improved his employment prospects to the extent that he now no longer requires Centrelink support.

20.     I am satisfied that he was actively engaged in looking for work outside of the business that he has now successfully started up.  He was able to obtain some paid employment in the time after he moved to Torbanlea.  The evidence of Mr Avis confirms that Mr Gerlach was making active employment enquiries before he moved and continued to make enquiries with Mr Avis’ business Agrow.  I accept Mr Gerlach’s evidence that he was building up his business in computer repairs during 2004, and this is supported by his application to the Tribunal, dated by him on 14 November 2004, stating that the computer shop was a success and he no longer needed Centrelink assistance.

21.     There was considerable disparity in Mr Gerlach’s evidence from time to time about when exactly he moved to Torbanlea.  He told Centrelink it was May 2004.  He told me that it was soon after purchasing the house, though he then returned to Queanbeyan to pack up his goods.  It seems from the written materials that he was working for Mr Mike Todd in the Torbanlea area in April 2004.  On the evidence before me I find that Mr Gerlach moved from Queanbeyan to Torbanlea by about 1 April 2004.  This finding will affect what arrears are owing to Mr Gerlach, when Centrelink recalculates his entitlement.

DECISION

22.     The decision under review is set aside and the following is substituted:  Mr Gerlach did not reduce his employment prospects when he moved to a new place of residence in Torbanlea, on or about 1 April 2004.

I certify that the 22 preceding paragraphs are a true copy of the reasons for the decision herein of Ms MJ Carstairs, Member  

Signed:         Jeff Mills
  Legal Research Officer

Date/s of Hearing  2 August 2005
Date of Decision  13 September 2005
The Applicant appeared in person
For the Respondent                  Mr J Howard, Departmental Advocate