Ivan Sequeira and Secretary, Department of Education, Employment and Workplace Relations

[2011] AATA 954

[2011] AATA 954

Division	GENERAL ADMINISTRATIVE DIVISION
File Number(s)	2011/1818
Re	Ivan Sequeira
APPLICANT
And	Secretary, Department of Education, Employment and Workplace Relations
RESPONDENT

DECISION

Tribunal	Ms N Bell, Senior Member
Date	23 November 2011
Date of written reasons	20 January 2012
Place	Sydney

The Tribunal affirms the decision under review.

........[Sgd]................................................................

Ms N Bell, Senior Member

Catchwords

SOCIAL SECURITY – Newstart Allowance – termination payment above daily rate of allowance – income maintenance period imposed – whether unavoidable or reasonable expenditure – expenditure neither unavoidable nor reasonable – decision under review affirmed.

Legislation

Social Security Act 1991

REASONS FOR DECISION

Ms N Bell, Senior Member

20 January 2012

1. On 4 June 2010 Mr Ivan Sequeira ceased his employment with Rail Corporation of New South Wales.  He received a termination payment of $17,419.36 gross representing payment for 142 working days.  When Mr Sequeira made a claim for Newstart Allowance an income maintenance period was imposed by Centrelink. The termination payment received by Mr Sequeira amounted to a daily rate of approximately $88, and at the time Mr Sequeira applied for Newstart Allowance the daily rate or allowance was $35.76 and then it increased the next month to $36.  The termination payment received by Mr Sequeira was therefore more than he would have received had he been paid Newstart Allowance; for that reason, an income maintenance period was imposed.

2. The only exception from the application of that income maintenance period is when a person has unavoidable or reasonable expenditure that puts him or her in a position of severe financial hardship.  Mr Sequeira applied his termination payment (a little over $9,000 net) to pay a credit card bill of $3218.66 and to pay an amount of $5000 to his daughter in reimbursement of part of a solicitor’s bill that she had paid on his behalf. 

3. An examination of the credit card account shows that the majority of expenditure was on alcohol and taxi fares.  Mr Sequeira did not make arrangements to repay his daughter by instalments, apart from a final instalment of $3,000 in full repayment of the $8,000 she had paid his solicitor. I note that the legal action was finalised in March 2010.

4. I also note that superannuation funds of $68,379.10 were received by Mr Sequeira in September 2010.  Mr Sequeira confirmed that that money was expended on alcohol, gambling and taxi fares and has previously given evidence to the Social Security Appeals Tribunal that he accepts that that expenditure was not reasonable and was not unavoidable.

5. Mr Sequeira said his daughter had come to his rescue with payments to his solicitor who would not have acted on his behalf without payment.  He said he kept $5,000 of his termination payment in his bank account for the purpose of repaying his daughter in part.  He said it was a commitment he had made to her.  He said he was keen to pay out his credit card because he “had been bitten hard by the banks over the years” and wanted to avoid further charges by the bank.  He said he cut up his credit card after that.

6. Mr Sequeira said he was in Foster House at the time, in the detox section, suffering manic depression.  He said his counsellor at Hornsby Hospital advised him that he needed to get admitted immediately in some place where he could stabilise himself.  He said this followed the breakdown of his 35 year marriage and a string of dental operations resulting in the loss of all of his teeth. These events also gave rise to alcohol abuse.

7. Mr Sequeira said that while he was in Foster House he spoke to a woman from Centrelink called Sarah who told him that “Centrelink look kindly at those who have less than $5000 in the bank.” and told him to remove it.  When he asked who he should give the money to, she said, according to Mr Sequeira, “That’s up to you”.  Mr Sequeira said he immediately went to the bank, withdrew the money and showed “Sarah” the new statement from the bank.  His daughter was not around at the time and so he deposited the money in the safe at Foster House.

8. Mr Sequeira said he had wanted to be admitted to a rehabilitation facility called William Booth but had been told that he could only do that if he was in receipt of a Centrelink payment.  He said he made this known to Sarah.  He said the next week she told him he would not receive a payment.

9. On leaving Foster House Mr Sequeira’s condition became worse.  Over the next few months he drank and gambled and exhausted his superannuation money.

10. Eventually he went to the Housing Minister to make a complaint and her secretary helped him claim for disability support pension and seek a review of the decision to impose an income maintenance period. 

11. I am able to see what a terrible time Mr Sequeira had and all of the difficulties and the pressures he faced together with the difficulty he had making decisions about what to do for himself.  However, his expenditures were neither unavoidable nor reasonable. It would have been reasonable for him to ask his daughter to wait until his income maintenance period was over or to pay her less money and it would have been reasonable to pay a smaller amount of his credit card balance so that it was still operating and wasn’t cancelled but didn’t use up all of his remaining termination payment.

12. While making decisions of that kind may not have been within his capacity at the time, the decisions were not unavoidable.  It was an income maintenance period that was properly calculated, given the gross amount of termination payment Mr Sequeira was given.  Unfortunately, there is no provision which says the period may be waived or disregarded in the special circumstances of the case.  The only exception is where the expenditure of the termination payment was reasonable and unavoidable.

13. I have heard Mr Sequeira’s evidence, which I note has been consistent throughout the proceedings.  While his difficulties are perfectly understandable, and I can understand how he made the decisions about money that he made, they take him beyond the exception in the provisions.  He remains subject to the income maintenance period imposed, the calculation of which I have followed and I accept. 

14. I encourage Mr Sequeira to look into an application for compensation for defective administration.  That application will involve exactly the same explanation he gave me today about what happened at the time, why he made the decisions he made, what his state of mind and his physical state was, as well, and what has flowed from that.

15. Mr Sequeira has given evidence of conversations he had with a Centrelink officer called Sarah whilst he was at Foster House and of certain advice given to him by her. Part of that advice, as reported by Mr Sequeira, was about amounts and savings that would be taken into account in calculating an income maintenance period.  Another aspect was that he should withdraw funds from his bank account.  On looking at the T-Documents, it is apparent that an officer of the name of Sarah Breen attended on Mr Sequeira at Foster House.  There are other later entries or file notes by the same officer; none of them document the advice that Mr Sequeira recalls.  I do note Mr Sequeira’s evidence of his reliance on this officer’s advice.

16. The Tribunal affirms the decision under review.

I certify that the preceding 16 (sixteen) paragraphs are a true copy of the reasons for the decision herein of Ms N Bell, Senior Member.

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

Associate

Dated 20 January 2012

Date(s) of hearing	23 November 2011
Applicant	In person
Solicitors for the Respondent	Glenda Heggen, Centrelink Program Litigation and Review Branch