HUSEYIN DERVISH and SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS

[2009] AATA 376

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2009] AATA 376

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2008/4489

GENERAL ADMINISTRATIVE  DIVISION		)
Re		HUSEYIN DERVISH

Applicant

And SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal Prof. T Sourdin

Date22 May 2009

PlaceSydney

Decision The decision under review is affirmed.

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

Prof. T Sourdin
  Member  

CATCHWORDS

SOCIAL SECURITY - youth allowance – financial assessment – imposition of liquid asset waiting period – application of ordinary waiting period – whether applicant was in severe financial hardship – the decision under review is affirmed.

Relevant Acts

Social Security Act 1991 – ss 14A, 19C, 549, 549A, 575A

Administrative Appeals Tribunal Act 1975 – s 37

Relevant Case Law

Re Fawthrop and Repatriation Commission (1994) 36 ALD 140

Re Biddlecombe and Secretary, Department of Family and Community Services [1999] AATA 528

Re Radovanovic and Secretary, Department of Social Security (2000) 61 ALD 530

Re Williamson and Secretary, Department of Family and Community Services [2003] AATA 652

REASONS FOR DECISION

22 May 2009 Prof. T Sourdin, Member

1. Mr Huseyin Dervish (“the Applicant”) was born on 26 March 1992. He applied for youth allowance on 18 April 2008. He was granted youth allowance on 22 May 2008 with a starting date of 25 June 2008 as Centrelink imposed a liquid assets test waiting period (“LAWP”) of 13 weeks pursuant to section 549 of the Social Security Act 1991 (“the Act”).

2.        That decision was affirmed by a Centrelink Authorised Review Officer (“ARO”) on 18 July 2008 and by the Social Security Appeals Tribunal (“SSAT”) on 3 September 2008.  Mr Dervish subsequently sought review by the Administrative Appeals Tribunal. 

3.        Mr Dervish’s father appeared and gave evidence at a hearing on 14 April 2009.  On 8 May 2009, both Mr Dervish and his father gave evidence at an adjourned hearing that was conducted by telephone. Dr Jennifer Maclean  appeared for the Secretary, Department of Education, Employment and Workplace Relations (“the Respondent”).    .

4. The Tribunal took into evidence the documents (T Docs) provided pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 and the Respondent’s Statement of Facts and Contentions dated 27 February 2009 (Exhibit R1).

ISSUES

5.        The issues in this matter are:

·Whether the funds in Mr Dervish’s Commonwealth Bank Account were a liquid asset;

·If the funds were a liquid asset, whether some or all of the liquid asset waiting period should be waived because of severe financial hardship pursuant to section 19C of the Act.

LEGISLATION

6. There is no disagreement that Mr Dervish satisfied the rules for qualification for the youth allowance under section 540 of the Act. The imposition of the liquid assets test waiting period is outlined in section 549 of the Act:

Waiting periods

(1)  A youth allowance is not payable to a person who is qualified for youth allowance while the person is subject to a waiting period.

(2)  For the purposes of this Part, a person may be subject to the following waiting periods:

(a)  a liquid assets test waiting period (see sections 549A, 549B and 549C);
…

7. The definition of the liquid assets test waiting period is contained in section 549A of the Act:

Liquid assets test waiting period

When person subject to liquid assets test waiting period--general

(1)  Subject to this section, if:

(a)  the value of a person's liquid assets is more than the person's maximum reserve on:

(i)  the day on which the person becomes qualified for youth allowance; or

(ii)  the day on which the person claims a youth allowance; and

(b)  the person is not a transferee to a youth allowance;

the person is subject to a liquid assets test waiting period.

Note 1:       For liquid assets and maximum reserve see section 14A

…

8.        The term ‘liquid asset’ is defined in section 14A:

Social security benefit liquid assets test definitions

(1)  In Parts 2.11, 2.11A, 2.12, 2.14 and 2.23A:

"liquid assets" , in relation to a person, means the person's cash and readily realisable assets, and includes:

....  

(b)  amounts deposited with, or lent to, a bank or other financial institution by the person (whether or not the amount can be withdrawn or repaid immediately); and

....

(e)  in the case of a person who:

(i)  has claimed or is receiving a youth allowance or an austudy payment; and

(ii)  is undertaking a tertiary course of education in any year or part of a year;

an amount necessary to cover the reasonable expenses incurred, or likely to be incurred, by the person in that year or that part of a year and that are directly related to his or her undertaking the course, including:

(iii)  up front course fees; and

(iv)  HECS payments; and

(v)  union fees; and

(vi)  costs of text books; and

(vii)  costs of any tools or equipment required to undertake the course, including computer software; and

(viii)  expenses directly related to any field trips undertaken for the purposes of the course; and

(ix)  such other expenses as are approved by the Secretary.

9.        There is no dispute that if monies in Mr Dervish’s bank account are regarded as a ‘liquid asset’, then the calculations and waiting periods prescribed by the Department are correct. There is, however, a dispute about whether the monies that were deposited can be regarded as ‘liquid assets.’

10. The other relevant legislation to be considered relates to financial hardship. Section 575A(3) of the Act states that:

…

(3)  If the Secretary is satisfied that a person is in severe financial hardship because the person has incurred unavoidable or reasonable expenditure while serving a liquid assets test waiting period, the Secretary may determine that the person does not have to serve the whole, or any part, of the waiting period.

11.      Subsection 19C relevantly defines ‘severe financial hardship’ as it affects a person who is not a member of a couple:

(2)  A person who is not a member of a couple and who makes a claim for parenting payment, austudy payment, special benefit, disability support pension, carer payment or one of the following allowances:

(a)  newstart allowance;

(b) …

is in severe financial hardship if the value of the person’s liquid assets (within the meaning of subsection 14A(1)) is less than the fortnightly amount at the maximum payment rate of the payment, benefit, pension or allowance that would be payable to the person:

(f)  if the person’s claim were granted; and

(g) …

EVIDENCE

12.      The matters raised before the SSAT and reflected in the decision of the SSAT of 3 September 2008 were discussed. Mr Dervish and his father largely agreed with the agreed history. Essentially, Mr Dervish and his wife transferred approximately $14,000 to their son’s bank account in July 2008. At that time, the Applicant was aged 16 and I accept that the transfer was made to encourage Mr Dervish Junior to continue with his studies and to provide a supportive structure and funding for his future university education.

13.      Mr Dervish Junior was in Year 11 at the time that the transfer took place and is this year completing his Higher School Certificate. Mr and Mrs Dervish deposited the money for a range of reasons. They not only wanted to encourage their son to pursue further education but they also wanted to provide him with the knowledge that although times within the family had been difficult – they were prepared to make sacrifices to support their son’s education which they highly valued.

14.      Mr and Mrs Dervish have three children apart from the Applicant and have suffered a great deal since the tragic death of a child in 1996. Since that time, Mr Dervish has suffered from depression and has not been able to return to work as an architect. Both he and his wife have done their utmost to support their children during this difficult time. The transfer of the monies by Mr and Mrs Dervish to the bank account of their son was part of their ongoing encouragement to their children and the monies were transferred from their mortgage offset account.

15.      It is also clear that Mr Dervish Junior did not consider that the funds in the bank account were for his use at the time that they were deposited. His parents attended with him to set up the bank account and he made no withdrawal of any funds for his own purposes. In evidence, Mr Dervish Junior made it clear that he understood that the funds could not be touched and that they were for the future to assist with his University education. Whilst Mr Dervish may have considered that it would be possible to purchase books, pay fees and perhaps even purchase a car into the future, he did not consider that the funds could be accessed without parental permission until he had completed school. He also considered that the funds were to be put towards his University education requirements.

16.      A central question that was raised by the Applicant and his father is whether such funds, under these circumstances, can be regarded as the liquid assets of the Applicant? The Respondent submitted that the funds were clearly liquid assets. They were in a bank account, in the name of the Applicant and he had the capacity to access them. On the other hand, Mr Dervish Junior was aged only 16 at the relevant time, he had set up the bank account with his parents’ assistance and both he and his father were clear that the funds were to be reserved for the future.

17.      In the Tribunal’s view, and having regard to the clear legislative definition of a ‘liquid asset’, I must find that the funds deposited in the bank account meet the legislative definition of a liquid asset. Although Mr Dervish Junior did not consider that he could access these funds (and did not – they were subsequently transferred back to Mr and Mrs Dervish with deposits also being made to the accounts of the other children), the legislative test provides that the funds were liquid assets whether or not he considered that they  could be accessed.

18.      Accordingly, I find that the funds meet the definition of a liquid asset.

19. Another matter raised at the hearing although not pressed relates to financial hardship. The test for financial hardship is set out in the legislation that I have referred to previously. Subsection 19C(2) of the Act is quite specific in defining the basis for assessment as to whether Mr Dervish Junior suffered from severe financial hardship. I have also considered and agree with the comments made by the SSAT in respect of these matters. In brief, in the circumstances, I am unable to find that in the period under consideration, Mr Dervish Junior was in severe financial hardship as defined.

20.      To summarise, I find that the LAWP non-payment of youth allowance has been correctly calculated and applied, and that the decision to impose a 13 week waiting period was correct. On the evidence before me, there is no reason to waive any or all of the LAWP as severe financial hardship is not deemed to exist.

21.      One additional matter was drawn to my attention during the hearing. Mr Dervish indicated that he had been advised not to withdraw his money from his son’s account by Centrelink staff. It is clear that Mr Dervish and his son were completely honest with Centrelink regarding the funds in Mr Dervish’s account. It is also clear that had Mr Dervish not deposited funds into his son’s account that no waiting period would have been required. In the context of the matters that I have referred to above, I also note that once my decision is handed down, Centrelink may proceed to consider whether Mr Dervish Junior might be eligible for payment under the Commonwealth scheme for “Compensation for Detriment caused by Defective Administration”, which provides agencies with discretionary authority to compensate where there is no legal entitlement but where a claimant has suffered loss as a result of an agency's defective administration.  No doubt the various matters in my reasons and the matters raised by Mr Dervish Senior as well as other matters can now be considered fully, in order to assess whether Mr Dervish Junior can be compensated for the loss that he has sustained. 

22.      In accordance with the matters noted above, the decision of the Social Security Appeals Tribunal of 3 September 2008 is affirmed.

I certify that the 22 preceding paragraphs are a true copy of the reasons for the decision herein of Prof. T Sourdin, Member.

Signed:         .....................................[sgd]...........................................

Associate

Dates of Hearing  14 April and 8 May 2009

Date of Decision  22 May 2009

Appearance for the Applicant  Self-represented

Appearance for the Respondent               Dr J Mclean, Centrelink Legal Services