Hanna Kisso and Secretary, Department of Social Services
[2014] AATA 911
•9 December 2014
[2014] AATA 911
Division GENERAL ADMINISTRATIVE DIVISION File Number
2014/4817
Re
Hanna Kisso
APPLICANT
And
Secretary, Department of Social Services
RESPONDENT
DECISION
Tribunal Miss E A Shanahan
Date 9 December 2014 Place Melbourne The Tribunal affirms the decision under review.
[sgd]........................................................................
Miss E A Shanahan
SOCIAL SECURITY – pensions, benefits and allowances – newstart allowance – applicant self‑employed – conducting retail business and working 48 hours per week – trading at a loss – employed or unemployed – exercise of discretion to find unemployed despite engagement in a business – decision affirmed
Legislation
Social Security Act 1991 s 593, s 595
Social Security (Administration) Act 1999 s 80
Cases
Re McKenna and Director-General Social Services (1981) 3 ALD 219
Re Milne and Secretary, Department of Education, Employment and Workplace Relations [2010] AATA 1027
Re Polke and Secretary Department of Education, Employment and Workplace Relations [2010] AATA 776
Re Singh and Secretary, Department of Education, Employment and Workplace Relations [2010] AATA 720
Secretary, Department of Employment and Workplace Relations v Joss [2006] FCA 884
REASONS FOR DECISION
Miss E A Shanahan
9 December 2014
On 11 July 2014 Mr Kisso’s newstart allowance (NSA) was cancelled by a Centrelink officer because Mr Kisso was self-employed in his business and working six days per week. He was therefore not considered to be unemployed. Mr Kisso had been receiving NSA since March 2011. Mr Kisso sought review of the cancellation. This was conducted by an authorised review officer (ARO) who affirmed the decision on 24 July 2014. Mr Kisso then sought review of the ARO’s decision by the Social Security Appeals Tribunal (SSAT). The SSAT heard his application on 27 August 2014. The SSAT affirmed the decision under review finding that Mr Kisso was self-employed and therefore did not satisfy the definition of unemployed, in order to qualify for NSA.
The SSAT did consider whether it should exercise the discretion to consider Mr Kisso as being unemployed, in accordance with s 595 of the Social Security Act 1991 (the Act), but determined that he did not attract that discretion.
On 17 September 2014 Mr Kisso lodged an application for review of the SSAT decision by the Administrative Appeals Tribunal.
Mr Kisso was self-represented at the hearing and Ms Ailsa Bramley an advocate appeared for the Secretary, Department of Social Services (the Secretary). The Tribunal was provided with documents filed pursuant to s 37 (T-documents) of the Administrative Appeals Tribunal Act 1975 which are assigned Exhibit number R1.
BACKGROUND TO THE APPLICATION
Mr Kisso was born in Syria, where he was educated to university level and qualified as an electrical and construction engineer. Following his arrival in Australia, he undertook a two-year course in engineering which gained him a licence to practise as an engineer in Australia. He worked in this capacity for slightly more than two years but experienced difficulties being paid for his contractual work. He abandoned his career as an engineer.
In 1993 he established a retail business, originally in partnership with his wife, selling clothing and predominantly children’s shoes. From 1993 to 2011 this was a profitable business. In 2010 he was forced to move his business from a shopping centre to new premises.
Mr Kisso’s business, Brands Highway, is now run from a small shopping strip in Watsonia approximately 860 metres from his home. This has enabled him to walk to and from work and to dispose of one of the two cars he owned. The shop is open from 9.30 am to 5.00 pm Monday to Friday and from 9.30 am to 2.00 pm on Saturdays. Mr Kisso mans the shop except when he has appointments, such as those with his job provider, Job Services Australia. During these periods his wife, from whom he is separated but is living with under the same roof, will assist him. However, this is usually limited to a maximum of six hours per week.
Mr Kisso told the Tribunal that in the past three years the turnover in his business had been $50,000 and his expenses $33,000. Now he cannot afford to buy new stock and the stock that he has is considered to be out-of-date in terms of colours and design, although most of the goods are of good quality. Mr Kisso stated that if he had an intake of $1,000 per week, $600 of this would be absorbed by costs and $150 of the $400 remaining would be spent on new stock. In 2011/12 he spent $39,000 on new stock in an unsuccessful attempt to activate the business
In the tax year 2013/14 Mr Kisso spent $937 on the purchase of new goods. In addition, he traded some of his existing goods with a wholesaler. He reduced all his personal expenditure such as eating in restaurants, and he disposed of one of his cars. He still has a mortgage of $141,000 on his home the value of which he estimates to be $400,000.
The Australian Taxation Office (ATO) exempted Mr Kisso from completing business activity statements (BAS) and also cancelled his Australian Business Number (ABN), although this was recently restored.
Mr Kisso has attended all his appointments with his job provider but has not had one job interview in three years. In addition, he has sought work in the retail industry but has been unsuccessful. He believes that employers in the sales area are not interested in employing a 62-year-old male and prefer to employ young persons. Mr Kisso has made enquiries about renting properties in Moonee Ponds and other suburbs where there is more retail activity but cannot afford the rent in these areas.
On six occasions Mr Kisso has attended the Sunday market held in the La Trobe University car park in order to sell his goods. There is a stall fee of $45. His takings were between $15 and $123 per market session. As a result, Mr Kisso made very little profit.
Mr Kisso has also tried to sell all his stock to another retailer but there has been no interest. He cannot store the goods at his home or in a lower-cost storage facility and he would be very reluctant to give away his stock.
The Tribunal asked Mr Kisso when he would qualify for the age pension. According to all his lodged forms he is now 62 years and 6 months old. Mr Kisso’s date of birth in his application for review and on his income tax returns is given as 9 March 1952. However, he informed the Tribunal that this is incorrect and, in fact, he was born on 15 December 1949; which means he will turn 65 in 2014. The government in Syria did not register births in 1949. However, his correct date of birth was recorded in the Syrian Catholic Church, of which his family were members. On official documentation his father changed his date of birth, making him two and a half years younger than he actually was, in order to prevent his being called-up to the army at the age of 18. According to Mr Kisso, this was a common practice in Syria at the time. His father believed that he would cope with army service better at the age of 21 than at 18.
Mr Kisso informed the Tribunal that he was one of 12 children, eight girls and four boys, in the family. He was in the middle of the family and all his siblings are alive. Most of his siblings and relatives live in Sweden.
Ms Bramley suggested that if Mr Kisso could obtain a statutory declaration or other evidence of his date of birth to satisfy the Secretary, then he would be eligible for the age pension and would be able to conduct some business as a retailer. Mr Kisso has been provided with a statutory declaration form and contact numbers for Victorian Legal Aid.
RELEVANT LEGISLATION
The relevant legislation is contained in s 593 and s 595 of the Act:
Subdivision A—Basic qualifications
593 Qualification for newstart allowance
(1)Subject to sections 596, 596A, 597 and 598, a person is qualified for a newstart allowance in respect of a period if:
(a)the person satisfies the Secretary that:
(i) throughout the period the person is unemployed; or
(ii) the person is a CDEP Scheme participant in respect of the period; and
Note:For CDEP Scheme participant see section 1188B.
(b)in the case of a person to whom subparagraph (a)(i) applies—throughout the period, or for each period within the period, the person:
(i)satisfies the activity test; or
(ii)is not required to satisfy the activity test; and
(c)if subsection 605(1) applies to the person, at all times (if any) during the period when a Newstart Employment Pathway Plan is not in force in relation to the person, the person is prepared to enter into such a plan; and
(d)if subsection 605(1) or (2) applies to the person, at all times during the period when a Newstart Employment Pathway Plan is in force in relation to the person, the person is prepared to enter into another such plan instead of the existing plan; and
(e)if the person is required by the Secretary to enter into a Newstart Employment Pathway Plan in relation to the period, the person enters into that plan; and
(f)while the plan is in force, the person satisfies the Secretary that the person is complying with the requirements in the plan; and
(g)throughout the period the person:
(i)is at least 22 years of age and has not reached the pension age; and
(ii)is an Australian resident or is exempt from the residence requirement within the meaning of subsection 7(7); and
(i)the person was not in receipt of a youth allowance during the period.
Note 1:A person may be treated as unemployed (see section 595).
Note 2:The activity test is set out in section 601.
Note 3:For Newstart Employment Pathway Plan see sections 605 and 606.
Note 5:For pension age see section 23.
Note 6:For Australian resident see section 7.
Note 8:A person may not be qualified if the person’s unemployment is due to industrial action (see section 596).
Note 9:A person may not be qualified if the person has reduced the person’s employment prospects by moving to an area of lower employment prospects (see section 597).
Note 12:A person could be in receipt of a youth allowance during a period for which the person would qualify for a newstart allowance, if paragraph (i) was disregarded, because of section 540C (extension of youth allowance to end of payment period).
Note 13:A newstart allowance is not payable in certain situations even if the person is qualified (see Subdivisions C, D, E and F and Part 4.2).
595Persons may be treated as unemployed
(1)The Secretary may treat a person as being unemployed throughout a period if:
(a)during the period, the person undertakes:
(i) paid work that, in the Secretary’s opinion, is suitable for the person to undertake; or
(ii) any other activity;
as a result of which he or she would, but for this subsection, not be taken to be unemployed; and
(b)the Secretary is of the opinion that, taking into account:
(i) the nature of the work or other activity; and
(ii) the duration of the work or other activity; and
(iii) any remuneration received for the work or other activity; and
(iv) any other matters relating to the work or other activity, or to the person’s circumstances, that the Secretary considers relevant;
the activity should be disregarded.
Note:The person may, under subsection 603(3), also be treated as satisfying the activity test.
(1A)However, the work or other activity must not be or include any work or other activity of a kind that the Secretary determines under subsection (1B).
(1B)The Secretary may determine, by legislative instrument, kinds of work or other activity that are not to be taken into account for the purposes of subsection (1).
(2)A person complying with a Newstart Employment Pathway Plan, or with a requirement under subsection 601(1A), may be treated by the Secretary as being unemployed.
(3)In deciding whether to treat a person as being unemployed, the Secretary is to take into account:
(a)the nature of the activity undertaken by the person so as to comply with a requirement under subsection 601(1A) (activity test) or a requirement in a Newstart Employment Pathway Plan; and
(b)the duration of the activity; and
(c)any other matters relating to the activity that the Secretary considers relevant.
In relation to the provision of social security payments, s 80 of the Social Security (Administration) Act 1999 states:
80Cancellation or suspension determination
(1)If the Secretary is satisfied that a social security payment is being, or has been, paid to a person:
(a)who is not, or was not, qualified for the payment; or
(b)to whom the payment is not, or was not, payable; ...
SUBMISSIONS
Mr Kisso argued that while he worked 48 hours per week on average in his retail business, he had not made a profit since 2011; and therefore he should be considered as unemployed and eligible for NSA. He had completed all the activities required by Centrelink and undertaken an employment pathway plan. Despite the assistance of an employment agency he had not received one interview over a period of three years. His own efforts to obtain salaried employment had also been unsuccessful.
The Secretary provided extensive written submissions in which the case law, dating from 1981, on the question of what was meant by unemployment, was discussed.
In Secretary, Department of Employment and Workplace Relations v Joss [2006] FCA 884 the Federal Court considered the meaning of the word unemployed in s 593(1)(a)(i) of the Act. The Court considered the Macquarie and Oxford English Dictionaries definitions of the word. It also considered earlier decisions such as the Tribunal’s decision in Re McKenna and Director-General Social Services (1981) 3 ALD 219. The Court decided that the principle would be better stated as:
... not being engaged in work of a potentially remunerative nature. Undoubtedly a person will be unemployed when they are without work or employment and that situation is both temporary and involuntary.
The Court concluded that a person who is self-employed cannot, at the same time, be unemployed.
In ReSingh and Secretary, Department of Education, Employment and Workplace Relations [2010] AATA 720, Deputy President Forgie considered the principles outlined in Joss as follows:
In Secretary, Department of Employment and Workplace Relations v Joss, ...Justice Graham considered the meaning of “unemployed” as it is used in s 593(1). The following principles can be drawn from his Honour’s judgment and those on which he relied:
(1)“… [T]he word ‘unemployed’ bears its colloquial or popular meaning of not being engaged in work of a [potentially] remunerative nature. This meaning must … be modified to allow for those special cases where a person is not engaged in work of a remunerative nature but whose commitment to some activity … demonstrates a preference for that activity rather than employment …”;
(2)“The question whether the appellant was ‘unemployed’ during the whole or part of the period was essentially a question of fact and degree to be decided having regard to the above principles.”
(3)“In addressing the question of whether or not a person is ‘unemployed’ for the purpose of s 593 of the Act it is not sufficient to confine one’s consideration to the question of whether or not a contract of employment existed between the person claiming to be unemployed and a third party. Other situations which must be considered are those of the self-employed whether they be engaged in endeavours on their own account or as members of a partnership or of a joint venture. One might say that if a person is carrying on business or engaged in work with a view of profit, that person could not be considered to be unemployed.”
(4)“It may well be that viewed as a question of fact and degree and having regard to the intensity with which a person applies him or herself to a particular enterprise, one may conclude that a person is not self-employed at all. But, once it be found that the person is self-employed it seems to me impossible to conclude that such a person was, at the same time, unemployed.”
Similarly, in Re Milne and Secretary, Department of Education, Employment and Workplace Relations [2010] AATA 1027, Senior Member Bean held that Mr Milne, who ran a furniture business 12 out of every 14 days without a profit, was not unemployed. (Mr Milne was under the mistaken impression that he could keep trading and seek employment at the same time to remain eligible for the NSA). Senior Member Bean quoted the decision of Graham J in Joss, in particular his conclusion that: ...it is impossible to conclude that such a person was, at the same time, unemployed.
Based on the authorities quoted, the Secretary contended that Mr Kisso was not unemployed, as he had been engaged for up to 48 hours per week in work of a potentially remunerative nature; and from which he had made a profit in the years between 1993 and 2010.
The Secretary also addressed the question whether the Tribunal should exercise the discretion afforded in s 595 and find that Mr Kisso should be regarded as unemployed in order to qualify for the NSA.
In Re Singh, Deputy President Forgie considered whether she should disregard Mr Singh’s employment in accordance with s 595 of the Act. She stated (at paragraph 137);
... it becomes apparent that Newstart Allowance is payable to provide income support for those who are not engaged in work undertaken as a means of earning a livelihood (whether or not it actually does so) and who are either actively trying to find that work, enhancing or adding to their skills to broaden the opportunities for them to find that work or doing both.
Similarly, in Re Polke and Secretary Department of Education, Employment and Workplace Relations [2010] AATA 776, Deputy President Hack considered s 595. He stated (at paragraph 16):
16.The criteria in sub-paragraphs (i) to (iv) seem to me to run counter to the notion that full time employment of the nature engaged in by Mr Polke is the type of employment that ought be disregarded. Rather, they suggest that sporadic or intermittent work, or work on a week to week basis, might properly be disregarded.
Based on the authorities referred to above, the Secretary argued that the discretion should not be exercised in favour of the Applicant.
TRIBUNAL’S DELIBERATIONS
Mr Kisso has been self-employed since 1991. Since 1993 he has been involved in retail trade, selling clothing and footwear. Until late 2010 or early 2011 his retail business was profitable. Due to a series of unfortunate occurrences, most of which were beyond his control, his business has not traded profitably (or at a reasonable level of profit) since 2011. He has not been able to sell his stock or to interest others in purchasing his business. His attempts to find work himself in other spheres have been unsuccessful; and job seeker activities on his behalf have not led to him having any job interviews.
However, it is quite clear that he has been self-employed for 23 years. As the Federal Court concluded in Joss, a conclusion that binds this Tribunal, a person who is self‑employed cannot at the same time be unemployed.
I have considered whether I should exercise the discretion under s 595 to treat Mr Kisso as being unemployed despite his engaging in a business, so that he might access the NSA. There exists case law and decisions of this Tribunal (including the decision in Joss and that of Deputy President Hack in Re Polke) which suggest that the criteria outlined in s 595 refer to sporadic or intermittent work on a week-to-week basis; and that such work might properly be disregarded in the assessment of eligibility under s 595. Mr Kisso has been working 48 hours per week in his business and has done so continuously since 1993. This cannot be considered sporadic or intermittent work. Therefore, the Tribunal determines not to exercise the discretion in favour of Mr Kisso.
Mr Kisso has been advised, based on the evidence he has given as to his correct date of birth, to obtain a statutory declaration or some form of proof of his date of birth, so that he may qualify for the age pension.
The Tribunal affirms the decision under review.
I certify that the preceding 33 (thirty‑three) paragraphs are a true copy of the reasons for the decision herein of Miss E A Shanahan ........................................................................
Administrative Assistant
Dated 9 December 2014
Date of hearing 24 November 2014 Applicant In person Advocate for the Respondent Ailsa Bramley, Solicitors for the Respondent Program Litigation and Review Branch, Department of Human Services
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