GUTTRIDGE and SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS

[2011] AATA 394

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2011] AATA 394

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2010/4970

GENERAL ADMINISTRATIVE  DIVISION		)
Re		DANIELLE GUTTRIDGE

Applicant

And SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal Mr S. Webb, Member

Date7 June 2011

PlaceCootamundra, NSW

Decision The decision under review is set aside and the matter is remitted to the Respondent to calculate the correct rate of Ms Guttridge’s Parenting Payment from 22 July 2010.

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

Mr S. Webb, Member

CATCHWORDS

SOCIAL SECURITY - parenting payment - compensation affected payment - partner injured and paid weekly compensation - partner claimed and was qualified for Newstart Allowance before relationship as a couple commenced and during a hiatus in weekly compensation payments - Newstart Allowance ceased when weekly compensation payments resumed -  periodic payments period – partner’s previous qualification for a compensation affected payment prior to commencement of couple relationship not determinative – no evidence partner qualified for a compensation affected payment at the relevant time - decision set aside

Social Security (Administration) Act 1999 (Cth) ss 12, 37

Social Security Act 1991 (Cth) ss 17, 500, 503, 593, 601, 603C, 1068B, 1160, 1173, 1174, 1184K

Re Nicholls and Secretary, Department of Families and Community Services (2003) 37 AAR 186

REASONS FOR DECISION

7 June 2011 Mr S. Webb, Member         

1.Danielle Guttridge qualified for Parenting Payment at the single rate in respect of her three children. Subsequently she became a member of a couple and claimed Parenting Payment at the partnered rate. Her partner had been injured in employment some years previously and was paid weekly compensation for incapacity. Prior to commencing the relationship with Ms Guttridge he attempted to return to work. His weekly compensation payments ceased. Unfortunately, the return to work was not sustainable and he claimed a Newstart Allowance. When the weekly compensation payments resumed, the Newstart Allowance payments ceased. These circumstances were ongoing when the relationship with Ms Guttridge commenced.

2.Centrelink decided that Ms Guttridge’s Parenting Payment was affected by her partner’s weekly compensation payments and determined the rate of her payments accordingly. As a result the rate of Ms Guttridge’s Parenting Payment was less than the rate that otherwise would have applied if her partner had earned the same amount of his weekly compensation payments in paid employment. Ms Guttridge was not happy with this result as it placed the joined family under financial duress and she considered it to be very unfair. She sought review by the primary decision maker, by an authorised review officer, by the Social Security Appeals Tribunal and, presently, by this Tribunal. Her efforts, thus far, have not been successful.

3.As will appear, there are two aspects to the case: the calculation of Ms Guttridge’s Parenting Payment, and consideration of any special circumstances. It appears that there is no disputation about the relevant facts as established on the present materials, as follow.

(a)On 8 November 2005 Ms Guttridge’s partner, X, was injured in employment and was incapacitated for work.

(b)X was not qualified for and receiving a compensation affected payment under the Social Security Act 1991 (the SS Act) at that date.

(c)On 11 September 2008 X informed Centrelink of the terms of his compensation settlement[1].

[1] T4 and T5.

(d)At that time he was being paid weekly compensation[2] in the amount of $532.90[3]. The amount of weekly compensation increased over time and was $589 per week as of 1 June 2010[4].

[2] See definition of ‘compensation’ at section 17(2), Social Security Act 1991.

[3] T4 folio 74.

[4] See T25, T38, T5 and T39 folio 133.

(e)On or about 31 August 2009 X attempted to return to work and obtained employment as a security guard. His weekly compensation payments ceased[5]. It appears that X was not capable of continuing with this employment as a result of his injury and applied for a Newstart Allowance, pending resolution of a claim for resumption of weekly compensation.

[5] T5 refers.

(f)In the period from 31 August 2009 to 1 December 2009 X was paid Newstart Allowance[6]. It appears that he was paid weekly compensation covering this period when his claim for ongoing compensation for incapacity was settled[7] and recovery action was taken by Centrelink[8].

[6] T39 folio 132; T5 refers.

[7] T25 folios 103 to 105.

[8] T5 folio 78.

(g)On 22 July 2010 Ms Guttridge notified Centrelink of her partner relationship with X and requested cancellation of Parenting Payment at the single rate[9].

[9] T6 folio 79.

(h)On 28 July 2010 Ms Guttridge made a claim for Parenting Payment at the partnered rate[10].

[10] T9 folio 82.

(i)On 12 August 2010 Centrelink determined that Ms Guttridge was not entitled to payment of Parenting Payment at the partnered rate as her combined income with X exceeded the allowable limit[11].

[11] T16, T17, T18 and T20.

(j)On 3 September 2010 Centrelink determined that Ms Guttridge was entitled to payment of Parenting Payment at the partnered rate in arrears from 5 August 2010 and a weekly amount thereafter: regular payments of $27.60 from 7 October 2010[12]. This determination was affirmed on 19 August 2010[13], 21 September 2010[14] and 14 October 2010[15]. It is the subject of this application for review.

[12] T30 and T31.

[13] T23 and T24.

[14] T33 and T34.

[15] T2.

calculation

4.It is not disputed that Ms Guttridge qualified for Parenting Payment at the partnered rate under section 500 of the SS Act on 22 July 2010. Under section 503 the rate of the payment is to be calculated by applying the rate calculator at section 1068B, including the income test under Module D. Whether section 1174 of the SS Act applies in Ms Guttridge’s circumstances is at the heart of the present dispute. The section is in the following terms.

1174  Effect of periodic compensation payments on rate of partner’s compensation affected payment

(1)  If:

(a)  a person receives periodic compensation payments; and

(b)  the person is a member of a couple; and

(c)  the person was not, at the time of the event that gave rise to the entitlement of the person to the compensation, qualified for, and receiving, a compensation affected payment; and

(d)  the person is qualified for a compensation affected payment in relation to a day or days in the periodic payments period but, solely because of the operation of this Part, does not, or would not, receive the payment; and

(e)  the person’s partner receives or claims a compensation affected payment in relation to a day or days in the periodic payments period;

the amount (if any) by which the daily rate of periodic compensation payable to the person exceeds the daily rate of the compensation affected payment for which the person is qualified in relation to a day or days in the periodic payments period (the excess amount) is to be treated as ordinary income of the person’s partner for the purpose of the calculation of the amount of the compensation affected payment referred to in paragraph (e).

(2)  The reference in subsection (1) to a daily rate of periodic compensation is a reference to the amount worked out by dividing the total amount of the periodic compensation payments referred to in paragraph (1)(a) by the number of days in the periodic payments period.

(3)  For the purposes of subsection (1):

(a)  the amount that would, apart from this section, be the amount of the partner’s ordinary income in relation to the day or days referred to in paragraph (1)(e) is to be increased by the excess amount; and

(b)  the increased amount is to be taken to be the amount of the partner’s ordinary income in relation to that day or those days, as the case may be.

5.As can be seen, the section applies in cases where a person who is receiving periodic compensation payments is qualified for a compensation affected payment[16] and the partner of this person receives or claims a compensation affected payment. The section operates to increase the partner’s ordinary income by the amount the compensation recipient’s rate of periodic compensation payments exceeds the rate of the compensation affected payment for which that person is qualified during the ‘periodic payments period’[17] in certain circumstances that are specified in conjunctive paragraphs (a) to (e) in section 1174(1), each of which must be satisfied for the section to have operative force.

6.There is no dispute concerning sections 1174(1)(a), 1174(1)(b), 1174(1)(c) and 1174(1)(e); each of the requirements of these sections is made out on the materials before me. Section 1174(1)(d) is comprised of two conjoined limbs, both of which must be satisfied. The first limb requires that the compensation recipient is qualified for a compensation affected payment ‘in relation to a day or days in the periodic payments period’. This is a question of fact, whereby the qualification requirements for compensation affected payments that are set out in the relevant Divisions of the Act must be considered. The term ‘periodic payments period’ is defined in the following way in section 17(1):

periodic payments period means:
(a)  the period to which a periodic compensation payment, or a series of periodic compensation payments, relates; or

(b)  in the case of a payment of arrears of periodic compensation payments—the period to which those payments would have related if they had not been made by way of an arrears payment.

[16] See definition at section 17(1), Social Security Act 1991.

[17] See definition at section 17(1), Social Security Act 1991.

7. The second limb requires that the compensation recipient does not, or would not, receive the compensation affected payment ‘solely because of the operation of this Part’, being Part 3.14 concerning compensation recovery. The deliberate inclusion of the word “solely” requires that the operation of the Part must be the sole cause, and not one of a multitude of causes, of the non-receipt of the payment. The conditional negative “would not” in section 1174(1)(d) requires a decision maker to consider not only whether the compensation recipient does not receive the compensation affected payment for which he or she is qualified, in actuality, but also whether, hypothetically, the person would not receive the payment solely because of the operation of the Part. The statutory hypothesis is limited in its scope to consideration of whether a payment would not be received by operation of the Part and does not extend to the predeterminative question of qualification for a compensation affected payment in the first limb of the section. It is clear, however, that the scope of the statutory hypothesis extends to address a claim for a compensation affected payment by a person, consistent with section 1173.

8.Sections 1173(1) and 1173(2) have the effect of reducing a compensation recipient’s rate of compensation affected payment by the rate of their periodic compensation payments on a dollar for dollar basis.  Relevantly, if a person who is receiving periodic compensation payments ‘receives or claims a compensation affected payment in relation to a day or days in the periodic payments period’, the daily rate of the compensation affected payment is reduced by the daily rate of the person’s periodic compensation.

9.I note in passing that the term ‘periodic payments period’ is defined to include a period that is covered by arrears payments of periodic compensation.

10.It is very clear that X received periodic compensation payments at all relevant times and, therefore, the period in issue in respect of Ms Guttridge’s parenting payment from 22 July 2010 is within the periodic payments period. Parenting Payment is a compensation affected payment.

11.It is established that X claimed and received Newstart Allowance from 31 August 2009 to 1 December 2009 and that the Allowance ceased when his periodic compensation payments resumed. Newstart Allowance is a compensation affected payment. It is clear enough that X qualified for a Newstart Allowance and that the rate of those payments reduced to zero by operation of sections 1173(1) and 1173(2) when his periodic compensation payments were resumed.

12.Thus, at first blush, it appears that section 1174 would apply with the effect that the amount of X’s periodic compensation payments exceed the Newstart Allowance that would be payable but for the operation of Part 3.14.

13.Ms Guttridge says that section 1174 should not have a retrospective effect: X claimed and was paid Newstart Allowance for a short period prior to the resumption of his periodic compensation payments, and these events occurred many months before their relationship as a couple commenced in July 2010.

14.This submission has some force.

15.Section 1174(1)(d) requires that the compensation recipient, in this case X, ‘is qualified for a compensation affected payment in relation to a day or days in the periodic payments period’. Section 1174(1)(e) requires that the compensation recipient’s partner, in this case Ms Guttridge, ‘receives or claims a compensation affected payment in relation to a day or days in the periodic payments period’ and section 1174(3) directs that the increase in the partner’s ordinary income resulting from section 1174(1) is in relation to the day or days referred to in section 1174(1)(e) – ‘that day or those days’.

16.There are three things to say about this. Firstly, the section operates only if the person is a member of a couple: section 1174(1)(b). Thus, in Ms Guttridge’s case, the section can only operate from 22 July 2010 when she became a member of a couple with X. Secondly, the words ‘the person is qualified for a compensation affected payment’ in section 1174(1)(d) are cast in the present tense. The qualification requirement must be satisfied when the person is a member of a couple. Thirdly, therefore, the references to ‘a day or days in the periodic payments period’ in sections 1174(d) and 1174(e), to my mind, refer to the same day or days. The purpose of the section is to apply specific income rules to members of a couple in certain circumstances in respect of periodic compensation and compensation affected payments. The section is essentially preconditioned by one member of the couple being qualified for a compensation affected payment and the other member of the couple receiving or claiming a compensation affected payment. If those circumstances are not present, the section does not apply[18].

[18] Re Nicholls and Secretary, Department of Families and Community Services (2003) 37 AAR 186 at 198-199.

17.To my mind the construction for which the Respondent Secretary contends is not consistent with the express terms of the section. A construction of this kind either assumes that X qualified for a Newstart Allowance, presumably on the basis that he was so qualified on or about 31 August 2009, or it proceeds on the basis that the earlier qualification is sufficient to satisfy section 1174(1)(d).

18.The issue of qualification for the purposes of section 1174(1)(d) cannot simply be assumed; this is a matter for evidence that must be properly determined, applying the reasonable satisfaction standard.

19.Qualification for a compensation affected payment prior to the operation of the section is not sufficient. The word ‘is’ in the phrase ‘the person is qualified’ in section 1174(1) and section 1174(1)(d) cannot be replaced with the word ‘was’, or interpreted in a manner that imports a retrospective element: it is not permissible to proceed on the basis that X qualified at some time in the past, prior to the commencement of his relationship with Ms Guttridge as a couple and, therefore, prior to the operative frame of the section, even though the qualification may have occurred during an earlier periodic payments period.

20.Furthermore, ‘the excess amount’ under section 1174(1) and ‘the increased amount’ under section 1174(3) are calculated on the basis of comparative daily rates of payment and income. It is difficult to see how this could apply under the constructions for which the Secretary contends: if the qualification for a compensation affected payment for the purposes of section 1174(1)(d) occurs prior to the operation of the section, what is the daily rate of that payment that should apply when calculating the excess amount? Either this will be the daily rate that applied at the time the person qualified for the payment or it will be the daily rate that applies when the section applies even though the person may not be qualified for the payment at that time. To my mind neither of these alternatives is permissible.

21.If the legislators had intended the section to apply in circumstances where a person who receives periodic compensation qualified for a compensation affected payment at any time prior to becoming a member of a couple, it would have been a simple matter to express that intention in the terms of the section; but that is not what was done.

22.If there is ambiguity in the terms of the section in this regard, and to my mind there is not, a beneficial construction should be preferred – if the ambiguity concerns when qualification in respect of a compensation affected payment occurs for the purposes of the section, the more beneficial construction is that which I have adopted – qualification at the present time contemplated by the section, when those concerns are members of a couple. Thus, if X was qualified for Newstart Allowance, for example, on a day or days and Ms Guttridge receives or claims Parenting Payment on that day or those days, the section will operate to increase her ordinary income by the excess amount derived in the manner set out in section 1174(1).

23.The key question, therefore, for present purposes, is whether X qualified for a compensation affected payment on a day or days when he was a member of a couple with Ms Guttridge, from 22 July 2010. There is no evidence that X claimed or received a compensation affected payment on or after this date. But that does not mean that he was not qualified for such a payment – one must look to the qualification requirements for relevant compensation affected payments. The general rule is that for a person to be granted a social security payment, a claim must be made. Additionally the person must be qualified and the payment must be payable[19]; but qualification is not preconditioned by a claim.

[19] Sections 12 and 37, Social Security (Administration) Act 1999.

24.The qualification requirements for Newstart Allowance are set out in section 593 of the SS Act; subject to related sections, sections 593(1)(a) to 593(1)(i) must be satisfied. It appears that as of 22 July 2010, X may have satisfied the qualification requirements under section 593(1) but for section 593(1)(b), concerning the ‘activity test’[20]. There is no evidence that X was actively seeking paid work of a suitable kind. Nevertheless, it is likely that he has a permanent medical condition that would prevent him from undertaking full-time work[21]. That being so, and as he made a claim for Newstart Allowance on or about 31 August 2009, it is possible that X may have satisfied the qualification requirements of section 593(1D), but there is no evidence that it would be unreasonable to expect X to satisfy the activity test until an assessment of his capacity to work has been undertaken. There is simply insufficient evidence to establish that X was qualified for a Newstart Allowance as of 22 July 2010 and, for the purposes of these proceedings at least, these matters have not been raised, ventilated or considered.

[20] Section 601, Social Security Act 1999.

[21] T4.

25.Similarly difficulties arise in relation to the possibility that X qualified for a disability support pension – there is insufficient evidence to establish that eventuality to the reasonable satisfaction standard; absent a claim, the matter has not been considered.

26.Thus, it is not established on the present evidence that X qualified for a compensation affected payment on or after 22 July 2010.

27.It follows that the first limb of section 1174(1)(d) is not made out and section 1174(1) is not operative in the particular circumstances.

28.That being so, the decision under review must be set aside and the matter will be remitted to the Secretary to determine the correct rate of Ms Guttridge’s parenting payment. It is not necessary, therefore, to proceed further to address issues concerning unfairness or any special circumstances for the purposes of section 1184K of the SS Act.

I certify that the 28 preceding paragraphs are a true copy of the reasons for the decision herein of Mr S. Webb, Member

Signed:         ...............[sgd].................................................................
           H. Choi (Associate)

Date of Hearing  6 April 2011
Date of Decision  7 June 2011
Representative for the Applicant               Self represented

Solicitor for the Respondent  Ms J MacLean, Centrelink Advocacy Branch