Helal Elbehidi and Secretary, Department of Employment
[2015] AATA 228
•24 March 2015
[2015] AATA 228
Division GENERAL ADMINISTRATIVE DIVISION File Number
2014/2275
Re
Helal Elbehidi
APPLICANT
And
Secretary, Department of Employment
RESPONDENT
DECISION
Tribunal Senior Member R W Dunne
Date 24 March 2015 Date of written reasons 17 April 2015 Place Adelaide 1.On 24 March 2015, the Tribunal in an oral Decision affirmed the decision of the Social Security Appeals Tribunal made on 24 April 2014 (which affirmed the decision of an authorised review officer of the respondent made on 14 March 2014) that the applicant was not qualified to receive newstart allowance.
2.The Tribunal has undertaken to provide written reasons for the Tribunal’s Decision.
3.The written reasons are attached.
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Senior Member R W Dunne
CATCHWORDS
SOCIAL SECURITY – pensions, benefits and allowances – application for newstart allowance – applicant’s business not making a profit and he is in financial difficulty – whether applicant was "unemployed" – whether self-employed – self-employment was not “very short term” or “sporadic” – discretion available to treat applicant as being unemployed for newstart allowance – discretion not exercised – decision under review affirmed.
LEGISLATION
Social Security Act 1991 (Cth), s 593, 595
CASES
Secretary, Department of Employment and Workplace Relations v Joss [2006] FCA 884; (2006) 152 FCR 541
Re Secretary, Department of Education, Employment and Workplace Relations and Skarzynski [2008] AATA 1104
De Gregorio and Secretary, Department of Employment and Workplace Relations [2007] AATA 1447
REASONS FOR DECISION
Senior Member R W Dunne
17 April 2015
INTRODUCTION
Mr Helal Elbehidi is the applicant in this case. He lodged a claim for newstart allowance on 9 August 2013 which the respondent rejected. When the respondent’s decision was affirmed by an authorised review officer (“ARO”), the applicant applied to the Social Security Appeals Tribunal (“SSAT”) to have the decision reviewed. The SSAT affirmed the decision and the applicant applied to this Tribunal for review of the decision of the SSAT.
At the hearing Mr Elbehidi represented himself and the respondent was represented by Mr A Parker (from the Program Litigation and Review Branch, Department of Human Services). I admitted the T documents, lodged pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 into evidence,[1] together with the following exhibit:
·copies of the applicant’s etax individual tax returns for the years ended 30 June 2013 and 30 June 2014.[2]
[1] Exhibit R1.
[2] Exhibit A1.
ISSUE FOR THE TRIBUNAL
The issue for the Tribunal is whether the applicant is qualified to receive newstart allowance.
LEGISLATION
The legislation that is relevant in this case is contained in the Social Security Act 1991 (“Act”). Section 593 of the Act contains the general qualification conditions for newstart allowance. Section 593 relevantly reads:
“Qualification for newstart allowance
(1)… 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
…”
Section 595 of the Act gives the Secretary a discretion to treat a person who is not (strictly) unemployed as being unemployed for the purposes of newstart allowance. Section 595 relevantly reads:
“Persons 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.
(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.
…”
BACKGROUND
The material facts in this case are not in dispute and are largely taken from the respondent’s statement of facts, issues and contentions.
Mr Elbehidi operates a pizza shop called “Pharaoh’s Gourmet Pizza”. He has indicated that his business is not making a profit and he is in financial difficulty. This is the reason why he originally applied for newstart allowance. When the ARO affirmed the respondent’s decision on 14 March 2014, he told the applicant that, “[T]he nature of your pizza shop business and degree of your involvement in the day to day running of the business is not consistent with the general understanding of what is meant by a person being unemployed.”
Mr Elbehidi rents shop premises to run his business for which he signed a three year lease. He told the SSAT that he ran out of money in order to advertise his business. The business is open from Tuesday to Sunday each week from 5pm to 8:30pm on Tuesday, Wednesday and Thursday and from 5pm to 9:30pm or 10:30pm on Friday, Saturday and Sunday. There are times outside these opening hours when he has to be at the shop to accept deliveries. He is responsible for opening and closing the shop. He operates the business himself during the opening hours and is responsible for preparation of the pizza and other food that is sold in the shop. He is also responsible for purchasing all the food, drinks and ingredients for the business.
The applicant is now receiving newstart allowance. It was granted to him on 18 February 2015, when he entered into an Employment Pathway Plan with the respondent. As a result, he is now only seeking newstart allowance for the period from 9 August 2013 to 17 February 2015.
Evidence of the Applicant
It was the applicant’s evidence that his business had been successful. The expense budget had doubled through marketing, which was conducted on the internet. However, internet marketing was expensive and he now had to resort to signage outside the shop premises. The signage was simple and only included a picture and phone number. The designer of the signage was not experienced and the picture contained no name.
He said he had been trading in the business since January 2012 and the food menu comprised pizzas, pastas, garlic bread and drinks. Previously, it was necessary for him to sleep at the shop or in his car. He now lived in a housing trust home. He would go to the shop himself at about five o’clock to six o’clock for his dinner.
He had tried to sell the business in September 2013, but the sale was unsuccessful. He said he needed support or assistance through a job provider. The shop contained the equipment to enable him to prepare and sell the food, drinks and salads. Customers would place orders on the telephone or on the internet. He would be the only person to prepare the food order. Chairs were situated in the shop and were available for customers’ seating. His shopping at the weekend was from supermarkets, such as Coles or Foodland, when his shop was not open. To gain experience for working in the business he would be employed by other people (such as Rostrevor Hotel and Primo Restaurant) to gain experience. Cleaning of the premises and equipment was necessary and a friend would assist through work experience.
Mr Elbehidi said he now had an agreement for the sale of the business, which needed to be finalised. Both the premises and the equipment needed to the sold, but the equipment could not be sold separately and would be subject to finance. He could not move the equipment himself and he needed someone to purchase it outright. He emphasised that the business as it was at present had not changed from the time before he commenced receiving newstart allowance. Because of this, he was confident that both the business and the equipment would be sold under the terms of the agreement.
When the applicant was referred to his etax individual tax returns for the years ended 30 June 2013 and 30 June 2014 and the income amounts referred to in the returns, he responded by saying that the expenses incurred in the business for the two years exceeded the income. This gave rise to net loss amounts. As there were net losses, he said that he did not derive an income in either of the tax years involved.
CONSIDERATION
Is the applicant qualified to receive newstart allowance?
The Act sets out conditions under which a person can qualify for each of the payments under the Act. A claim for a payment can only be granted if the person is qualified to receive the payment and the payment is payable. Section 593 of the Act contains the general qualification conditions for newstart allowance. One condition is that the person satisfies the Sectary that throughout the relevant period the person is unemployed, or the person is a CDEP Scheme participant in respect of that period. It is clear that Mr Elbehidi is not a CDEP Scheme participant. So, if he is not unemployed, he is not qualified to receive newstart allowance.
As the term “unemployed” is not defined in the Act it must have its ordinary meaning under the law. The applicant operates a pizza takeaway business, “Pharaoh’s Gourmet Pizza”. He is a sole trader or is self-employed and he works in the business six days each week. In my view, he is not “out of work” or “without work or employment”. Clearly he has work and, on the ordinary meaning of “unemployed”, he is not unemployed.
The meaning of the term “unemployed” has been considered in a number of Federal Court and tribunal decisions. A relevant recent Federal Court decision in which the meaning of the term “unemployed” was considered is Secretary, Department of Employment and Workplace Relations v Joss.[3] In Re Secretary, Department of Education, Employment and Workplace Relations and Skarzynski,[4] Deputy President Jarvis conveniently summarised the effect of Graham J’s decision in Joss as follows:
“36 …His Honour reviewed a number of earlier decisions of the Federal Court and of this tribunal. The following principles that have relevance to the issues arising in the present proceedings are stated in effect in, or may be deduced from, Graham J’s judgment or the authorities to which he referred.
(a)The word “unemployed” bears its colloquial or popular meaning of not being engaged in work of a remunerative nature.
(b)This meaning must, however, be modified to some extent in that the income test provisions of the SS Act recognise that some income may be earned by a person in receipt of newstart allowance resulting in the diminution of the allowance, but not rendering the person ineligible for it.
(c)Work of a remunerative nature encompasses not only the normal employer-employee relationship but also a person who is self-employed.
(d)A person may be employed even though his activities do not produce an income or profit.
(e)The question of whether a person is unemployed is a question of fact and degree, and regard should be had to the intensity with which the person applies himself or herself to particular work or a particular enterprise.”
[3] [2006] FCA 884; (2006) 152 FCR 541.
[4] [2008] AATA 1104.
When referred to his etax individual tax returns for 2013 and 2014, Mr Elbehidi argued that the returns did not show that he derived income in those years and that he was therefore unemployed. I do not accept this argument. It is clear from the returns that he was employed (or self-employed) in a pizza shop business at 2/92-94 Saint Bernards Road, Magill as a sole trader. He derived an income from the shop business, but he also incurred losses arising from incurring expenses in conducting the business. In these circumstances, he was not “unemployed” throughout the relevant period which, as it has transpired, was the period before he commenced receiving newstart allowance on 18 February 2015, that is, from 9 August 2013 to 17 February 2015.
Section 595 of the Act confers a discretion to treat a person as unemployed notwithstanding that he or she has undertaken paid work or another activity which would otherwise prevent them from being considered “unemployed”. The application of s 595 was considered by Deputy President Hack in De Gregorio and Secretary, Department of Employment and Workplace Relations [5] where the learned Deputy President had this to say:
“It is finally necessary to refer to s 595(1) and the discretion in that section to treat a person as being unemployed, notwithstanding that the person undertakes paid work. I doubt whether this sub-section has any application to a person in the position of Ms De Gregorio. The language of the statute (and the policy manual) suggests that it has application to occasional and incidental periods of paid work rather than the type of sustained and full-time employment engaged in by Ms De Gregorio in her own business. Even if the sub-section were to have application I would not regard this matter as one where the exercise of the discretion was warranted.”
[5] [2007] AATA 1447.
In considering the application of s 595 of the Act, I note that Mr Elbehidi commenced to be self-employed on 27 February 2011 on a basis that could not be described as “occasional” or “incidental” and where he attended to the shop business of “Pharaoh’s Gourmet Pizza” for more than 30 hours per week. In these circumstances, I would not regard this matter as one where the exercise of the discretion is warranted.
CONCLUSION
For the reasons outlined in paragraphs 18 and 20 above, Mr Elbehidi is not qualified to receive newstart allowance during the period from 9 August 2013 to 17 February 2015. The circumstances of his case are not such that the discretion in s 595 of the Act should be exercised.
DECISION
The Tribunal affirms the decision under review.
I certify that the preceding 22 (twenty -two) paragraphs are a true copy of the reasons for the decision herein of Senior Member R W Dunne ..........................[Sgd]..............................................
Administrative Assistant
Dated 17 April 2015
Date(s) of hearing
24 March 2015
Applicant
In person
Advocate for the Respondent
Mr A Parker
Solicitors for the Respondent
Department of Human Services
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