Goonewardena v Secretary, Department of Social Services
[2018] FCA 1387
•10 September 2018
FEDERAL COURT OF AUSTRALIA
Goonewardena v Secretary, Department of Social Services [2018] FCA 1387
File number: VID 995 of 2017 Judge: BROMBERG J Date of judgment: 10 September 2018 Catchwords: SOCIAL SECURITY – application for judicial review of a decision made by the Administrative Appeals Tribunal (“Tribunal”) – whether a termination payment made to an employee in respect of a redundancy “ordinary income” for the purposes of the calculation of a person’s entitlement to a DSP under the Social Security Act 1991 (Cth) (“Act”) – whether a “carer allowance” a “social security benefit” and thus an “income support payment” within the meaning of those terms in s 23(1) of the Act – application dismissed Legislation: Administrative Appeals Tribunal Act 1975 (Cth), s 44(1)
Social Security Act 1991 (Cth), Parts 2.15 and 2.19, ss 8(1A), 23(1), 1064
Social Services and Other Legislation Amendment Act 2014 (Cth), s 48(2) and (4)
Cases cited: Haritos v Commissioner of Taxation (2015) 233 FCR 315 Date of hearing: 21 August 2018 Registry: Victoria Division: General Division National Practice Area: Administrative and Constitutional Law and Human Rights Category: Catchwords Number of paragraphs: 29 Counsel for the Applicant: The applicant appeared in person Solicitor for the Respondent: Mr N Nguyen of Sparke Helmore Lawyers ORDERS
VID 995 of 2017 BETWEEN: WINSTON GOONEWARDENA
Applicant
AND: SECRETARY, DEPARTMENT OF SOCIAL SERVICES
Respondent
JUDGE:
BROMBERG J
DATE OF ORDER:
10 SEPTEMBER 2018
THE COURT ORDERS THAT:
1.The appeal is dismissed.
2.The applicant 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.
REASONS FOR JUDGMENT
BROMBERG J:
Pursuant to s 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth) (“AAT Act”), the applicant (“Mr Goonewardena”) has appealed a decision made by the General Division of the Administrative Appeals Tribunal (“Tribunal”) on 14 August 2017.
That decision affirmed the decision of the Social Services and Child Support Division of the Administrative Appeals Tribunal made on 20 September 2016, to affirm a decision made on 15 October 2015 by a delegate of the respondent (“Secretary”) to pay Mr Goonewardena a reduced rate of disability support pension (“DSP”), as well as a decision made on 12 November 2015, to raise and recover a debt of $948.11 from Mr Goonewardena for an overpayment of DSP for the period 19 December 2014 to 14 October 2015.
The subject matter of the Court’s jurisdiction under s 44(1) of the AAT Act is confined to questions of law. Whether or not an appeal is on a question of law is to be approached as a matter of substance rather than form: Haritos v Commissioner of Taxation (2015) 233 FCR 315 at [62] (Allsop CJ, Kenny, Besanko, Robertson and Mortimer JJ).
Mr Goonewardena is not legally represented. As a matter of form, his Notice of Appeal does not raise any question of law. As a matter of substance and read together with Mr Goonewardena’s written submissions filed prior to the hearing, it may be said that Mr Goonewardena has broadly raised two questions of law. The raising of each of those two questions of law was largely anticipated by the Secretary in the Secretary’s written submissions. That Mr Goonewardena should be permitted to agitate those questions, as though they had been properly raised by the Notice of Appeal, was not opposed by the Secretary. Those questions are:
(1)Is a termination payment made to an employee in respect of a redundancy “ordinary income” for the purposes of the calculation of a person’s entitlement to a DSP under the Social Security Act 1991 (Cth) (“the Act”)? (“first question”); and
(2)Is a “carer allowance” a “social security benefit” and thus an “income support payment” within the meaning of those terms in s 23(1) of the Act (as at 1 January 2015)? (“second question”)
The relevant background facts are not in dispute. Mr Goonewardena qualified for a DSP on 7 March 2003. His rate of payment for the DSP has always been assessed taking into account his wife’s earnings. There is no issue that under the Act, the rate of DSP payable to a person is affected by a person’s income and, where the person is a member of a couple, the income of their partner.
On 26 September 2014, Mrs Goonewardena ceased work having accepted a voluntary redundancy. Mrs Goonewardena received a termination payment of $73,905.41 on 9 October 2014 (“termination payment”).
On 19 December 2014, Mrs Goonewardena purchased an account based income stream from Catholic Super. At that time, Mrs Goonewardena was a recipient of a “carer allowance” having been granted that allowance with effect from 19 November 2014.
By letter dated 15 October 2015, the Secretary notified Mr Goonewardena that his DSP from 15 October 2015 to 28 October 2015 was to be paid at the (lower) rate of $80.49 and from 13 November 2015 at the rate of $81.75 per fortnight, based on a combined annual income (of himself and his wife) of $4,723.24. The rate of annual income and the reduced rate of DSP took into account the termination payment made to Mrs Goonewardena. Whether the Secretary was correct to take the termination payment into account is the subject of the first question raised by Mr Goonewardena.
By letter dated 12 November 2015, the Secretary issued a notice to Mr Goonewardena to recover a debt in relation to an overpayment of DSP for the period 19 December 2014 to 14 October 2015. The letter stated that, for that period, Mr Goonewardena was entitled to $1,605.86 but had been paid $2,553.97. The overpayment was said to have been caused by the termination payment and “as a result of the income stream asset being deemed”. That cryptic explanation appears to be an intended reference to the income received from the account based income stream purchased by Mrs Goonewardena. The second question raised by Mr Goonewardena is concerned with that matter.
THE FIRST QUESTION
Section 1064 of the Act relevantly provided that the rate of a DSP for a person over the age of 21 is to be calculated in accordance with the “Rate Calculator” at the end of that section. The Rate Calculator contains a number of modules. Relevantly, “Module F” is concerned with ordinary income for the purposes of the DSP. Section 1064-F1 provides that Module F applies for the purposes of working out the rate of DSP payable to a person and so applies to that person and, if the person is a member of a couple, to the person’s partner.
Section 1064-F5 is in the following terms:
If:
(a) a person's employment has been terminated; and
(b)the person receives a termination payment (whether as a lump sum payment, as a payment that is one of a series of regular payments or otherwise);
the person is taken to have received ordinary income for a period (the income maintenance period ) equal to the period to which the payment relates.
The phrase “termination payment”, used in s 1064-F5, is relevantly defined in s 1064-F14 to include a redundancy payment.
The Tribunal (at [24]) determined that the termination payment received by Mrs Goonewardena was “ordinary income” for the purposes of s 1064 in the calculation of Mr Goonewardena’s DSP.
On this appeal, Mr Goonewardena challenged that conclusion on the same basis as he did before the Tribunal. He contended that the termination payment was not “ordinary income”. In support of that contention Mr Goonewardena sought to rely upon s 8(1A) of the Act, and in particular paras (e) and (f). That provision is in the following terms:
8(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; and
(ii)if the person is engaged on a continuing basis in that employer/employee relationship--a leave payment to the person;
but does not include:
(c) a superannuation payment to the person; or
(d)a payment of compensation, or a payment to the person under an insurance scheme, in relation to the person's inability to earn, derive or receive income from that remunerative work; or
(e)if the person is not engaged on a continuing basis in that employer/employee relationship--a leave payment to the person; or
(f)a payment to the person by a former employer of the person in relation to the termination of the person's employment; or
(g) a comparable foreign payment; or
(h) an instalment of parental leave pay; or
(i) dad and partner pay.
According to Mr Goonewardena, as Mrs Goonewardena did not continue in her employment with her employer, paras (e) and (f) operate to exclude the termination payment for the purposes of Act’s definition of “ordinary income”.
Mr Goonewardena’s contention is misconceived. The definition of “employment income” provided by s 8(1A) has no application to s 1064 and the calculation of an entitlement to DSP under that section and, in particular, under Module F and s 1064-F5. Section 1064-F5 is clear. It provides that a person who receives a termination payment (which includes a redundancy payment) “is taken to have received ordinary income”.
Mr Goonewardena’s first argument, that a termination made in respect of a redundancy is not “ordinary income” for the purposes of the calculation of an entitlement to a DSP, must be rejected.
QUESTION TWO
The second question raised by Mr Goonewardena concerns whether amendments made by the Social Services and Other Legislation Amendment Act 2014 (Cth) (“Amendment Act”) apply in relation to working out the “ordinary income” applicable to Mrs Goonewardena for the period on or after 1 January 2015.
Schedule 11 of the Amendment Act amended the definition of “income” and “ordinary income” as provided for in s 8(1) of the Act. However, a “grandfathering” provision was included. By reason of s 48(2) of the Amendment Act, the amendments made to those definitions had no application if, amongst other qualifications, “a person was receiving an income support payment immediately before 1 January 2015”. Section 48(4) of the Amending Act provided that “income support payment has the meaning given by subsection 23(1) of the [Act]”. At the time the Amendment Act came into effect, the expression “income support payment” was defined in s 23(1) of the Act as follows:
income support payment means a payment of:
(a) a social security benefit; or
(aa) a job search allowance; or
(b) a social security pension; or
(c) a youth training allowance; or
(d) a service pension; or
(e) income support supplement.
The expressions “social security benefit” and “social security pension” used in the definition of “income support payment” were also defined by s 23(1) as follows:
social security benefit means:
(aa) widow allowance; or
(aab) youth allowance; or
(aac) austudy payment; or
(a) newstart allowance; or
(c) sickness allowance; or
(d) special benefit; or
(e) partner allowance; or
(ea) a mature age allowance under Part 2.12B; or
(f) benefit PP (partnered); or
(g) parenting allowance (other than non-benefit allowance).
social security pension means:
(a) an age pension; or
(b) a disability support pension; or
(c) a wife pension; or
(d) a carer payment; or
(e) a pension PP (single); or
(ea) a sole parent pension; or
(f) a bereavement allowance; or
(g) a widow B pension; or
(i) a mature age partner allowance; or
(k) a special needs pension.
Although the Tribunal’s reasons are brief on the point and difficult to follow, read as a whole and with particular reference to [42], the Tribunal appears to have determined that the exemption provided for by s 48(2) of the Amendment Act had no application to the calculation of the “ordinary income” of Mrs Goonewardena because, at the relevant time, she was not in receipt of an “income support payment” as defined by s 23(1) of the Act. The omission of any express reference to a “carer allowance” in the definition of “income support payment”, “social security benefit” or “social security pension” was regarded by the Tribunal as determinative (at [42]).
It is in this respect that Mr Goonewardena contended that the Tribunal erred. His contention was that although, at the relevant time, Mrs Goonewardena was in receipt of a “carer allowance”, a “carer allowance” is a “special benefit” referred to in para (d) of the definition of “social security benefit” and consequently within the definition of “income support payment”.
Mr Goonewardena’s submission that a “carer allowance” is encompassed within the expression “special benefit” in para (d) of the definition of “social security benefit” was only supported by the contention that it would have been too cumbersome to have listed all allowances or benefits payable under the Act and that “special benefit” was intended as a catch-all category for allowances or benefits not expressly listed.
A “carer allowance” is a specific allowance or benefit which was (at the relevant time) addressed by Part 2.19 of the Act. At that time, a “special benefit” was also a specific allowance or benefit which the Act addressed in Part 2.15. A “special benefit” was a benefit granted at the discretion of the Secretary under s 729(1) if one or other of the conditions specified by s 729(2) was satisfied. There is no basis for concluding that the reference made to that specific and particular benefit in the definition of “social security benefit”, was intended as a catch-all category which included a “carer allowance”.
For those reasons Mr Goonewardena’s second argument must be rejected.
OTHER CONTENTIONS
For the sake of completeness, I should record that there were other contentions made by Mr Goonewardena. I need not list them all but they included a contention that he was subjected to unlawful discrimination, that the “independent officer” who reviewed the impugned decisions of the delegate of the Secretary was not independent and that consequently Mr Goonewardena was deceived and that the Act operated unfairly. None of the other contentions raised by Mr Goonewardena asserted any error by the Tribunal let alone raised a question of law capable of being addressed by this Court pursuant to the jurisdiction given by s 44(1) of the AAT Act. For those reasons I need not deal further with the other contentions raised by Mr Goonewardena.
CONCLUSION
Mr Goonewardena’s appeal must be dismissed.
The Secretary sought the costs of the appeal. Mr Goonewardena contended that each party should bear their own legal costs. That contention was based on assertions that the appeal involved important points of law that are uncertain and that require clarification and related to important rights that effect a vast number of Australians, especially vulnerable and disadvantaged people.
Whilst I accept that an entitlement to a DSP relates to an important right which effects many Australians including disadvantaged Australians, I do not accept that Mr Goonewardena’s appeal involved important points of law that are uncertain and require clarification. As will be apparent from these reasons, the points of law raised by Mr Goonewardena lacked any substance and were based on misconceptions of how the Act operated. There is no reason why costs ought not follow the event so that the successful litigant’s costs are paid by the unsuccessful litigant. I will make an additional order that the Secretary’s costs of the appeal be paid by Mr Goonewardena.
I certify that the preceding twenty-nine (29) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bromberg Associate:
Dated: 10 September 2018
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