Jackson and Secretary, Department of Employment and Workplace Relations
[2006] AATA 736
•28 August 2006
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2006] AATA 736
ADMINISTRATIVE APPEALS TRIBUNAL № V2006/232
GENERAL ADMINISTRATIVE DIVISION
Re: KEVIN RUSSELL JACKSON
Applicant
And: SECRETARY,
DEPARTMENT OF EMPLOYMENT
AND WORKPLACE RELATIONS
Respondent
DECISION
Tribunal: Mr C. Ermert, Member
Date:28 August 2006
Place:Melbourne
Decision:The decision under review is affirmed.
C. Ermert
Member
SOCIAL SECURITY – Newstart allowance ‑ job search training program –- work agreement – breach of work agreement – activity test breach ‑ activity test breach rate reduction period – reasonable steps to comply
Social Security Act 1991
Secretary, Department of Employment, Education and Youth Affairs v Ferguson (1997) 76 FCR 426
Hamilton and Department of Family and Community Services [2002] AATA 682
Secretary, Department of Employment, Education, Training and Youth Affairs and Ruiz (1996) 41 ALD 627
REASONS FOR DECISION
28 August 2006Mr C. Ermert, Member
1. Mr Jackson has been receiving Newstart Allowance since 4 July 2005. On 10 October 2005 Mr Jackson signed a preparing for work agreement with The Salvation Army Employment Plus (TSAEP), a Job Network Member of the Department of Employment and Workplace Relations (DEWR). One of the terms of this agreement was that he would attend a Job Search training course and activities with TSAEP from Tuesday 11 October 2005 to Friday 11 November 2005.
2. Mr Jackson attended the course on 11 and 12 October 2005. Mr Jackson was not happy with the level of the course and informed a member of the TSAEP staff that he would be leaving that Job Network Member and he would be making contact with DEWR regarding a change to another Job Network Member. There is disagreement between the parties as to whether Mr Jackson was told that he would have to continue attending the TSAEP course until he received DEWR approval to move to another Job Network Member. Mr Jackson contacted DEWR and requested a transfer to a different Job Network Member. Mr Jackson’s request for a transfer was rejected on 9 November 2005.
3. On 26 October 2005 Centrelink, which acts on behalf of DEWR, sent Mr Jackson a letter advising him that he may incur a penalty for not complying with his job search plan activity. On 4 November 2005 Mr Jackson’s Newstart Allowance payments were suspended and an 18 per cent breach penalty applied for the period between 18 November 2005 and 18 May 2006, a period of 26 weeks. This period was later reduced to 8 weeks by Centrelink, but the 26 week‑period was subsequently reinstated by a decision of the Social Security Appeals Tribunal (SSAT) dated 6 February 2006. This hearing is a review of that SSAT decision.
THE ISSUES
4. To qualify for Newstart Allowance a person needs to satisfy section 593 of the Social Security Act 1991 (the Act). One of the requirements of section 593 is that a person must satisfy the Newstart Allowance activity test which is set out in section 601 of the Act. According to section 601(4) a person satisfies the activity test if, throughout the period, the person is taking reasonable steps to comply with the terms of a Newstart Activity Agreement between the Secretary and the person.
5. Section 601(6) of the Act, the section relevant at the time, a person takes reasonable steps to comply with the terms of a Newstart Activity Agreement unless the person has failed so to comply and:
(a)the main reason for failing to comply involved a matter that was within the person’s control, or
(b)the circumstances that prevented the person from complying were reasonably foreseeable by the person.
6. Section 626 of the Act provides that Newstart Allowance not be paid to a person if the person has failed to take reasonable steps to comply with the terms of the Newstart Activity Agreement. Section 644AA of the Act deals with activity test breach rate reductions to be applied.
7.The Tribunal needs to determine the following:
· is the agreement with TSAEP a Newstart Activity Agreement for the purposes of the Act;
· did Mr Jackson breach the agreement;
· did Mr Jackson take reasonable steps to comply with the agreement; and
· if not, was the appropriate rate reduction period imposed.
8. The standard of proof for the consideration of these issues is the balance of probabilities.
Is the TSAEP Agreement a Newstart Activity Agreement?
9.Section 605 of the Act relevantly provides:
605(1) Subject to this section, the Secretary may require a person who is not a party to a Newstart Activity Agreement to enter into such an agreement if:
(a) the person is receiving, or has made a claim for, a newstart allowance;
…
605(4) A Newstart Activity Agreement is a written agreement in a form approved by the Secretary. The agreement is between the person and the Secretary.
10. In the Secretary’s Statement of Facts and Contentions the Secretary contends that Mr Jackson was required to enter into a Newstart Activity Agreement and that the Centrelink Preparing for Work Agreement with TSAEP signed by Mr Jackson on 10 October 2005 (T15) is a Newstart Activity Agreement for the purposes of the Act.
11. I note that the agreement contains the statement “This is an Agreement between me (the job seeker) and the Secretary under the Social Security Act 1991”. This supports the Secretary’s contention. Mr Jackson made no representations on this issue. Therefore, I have no reason not to accept the Secretary’s contention. Accordingly, I find that the agreement signed by Mr Jackson on 10 October 2005 is a Newstart Agreement for the purposes of the Act.
Did Mr Jackson Breach the Agreement?
12.The agreement contains the following statements:
I understand that:
·I am required to undertake the activities included in this agreement when I have made a claim for [Newstart/Youth] Allowance.
…
Attachment A – Job Search Plan
… I agree that I am prepared to carry out all of the activities in the Job Search Plan.
My Job Search Plan activities are:
…
·Attend JST course and activities with TSAEP Springvale from Tuesday, 11 October 2005 to Friday, 11 November 2005;
13. Mr Jackson initialled the Job Search Plan as well as each of the listed activities. He also signed the main body of the agreement.
14. On 11 October 2005 Mr Jackson attended the course, which started at 10 o’clock and concluded at 12 o’clock on that day. He also attended on 12 October 2005 but did not attend the course after that date. There is no disagreement that Mr Jackson did not complete his attendance at the course. Although there is disagreement about the content of subsequent discussions with TSAEP and DEWR staff, there is no evidence that Mr Jackson received approval from anyone to not complete the course.
15. On the evidence before me, it is clear that Mr Jackson did not “Attend JST course and activities with TSAEP Springvale from Tuesday, 11 October 2005 to Friday, 11 November 2005” as required by the agreement. As a consequence, he breached the agreement.
Did Mr Jackson Take Reasonable Steps to Comply with the Agreement?
16. At the date of the SSAT decision that is the subject of this appeal section 601(6) of the Act relevantly provided:
For the purposes of this section, a person takes reasonable steps to comply with … the terms of a Newstart Activity Agreement … unless the person has failed so to comply and:
(a)the main reason for failing to comply involved a matter that was within the person’s control; or
(b)the circumstances that prevented the person from complying were reasonably foreseeable by the person.
17. Mr Jackson contends that he took all reasonable steps to comply with his obligations. Before exiting the course Mr Jackson advised TSAEP that the course was not appropriate for a person with his qualifications as a mechanical engineer and a Bachelor’s degree in business with a major in marketing. Mr Jackson sought to transfer from TSAEP to another Job Network Member. Mr Jackson stated (at Transcript p 10) that he contacted DEWR and:
…advised them that I am not going to going [sic] through this process with this job network member, and I will be seeking a job network member that I feel comfortable with and who can really assist and help me.
Mr Jackson also spoke with Ms M. Nguyen, the TSAEP manager. He stated (at Transcript p 11):
I decided that I could not go through this thing and I said I was virtually wanting to be exited out of this job network member due to the fact that I didn’t request to be associated with the Salvation Army Employment Plus. And she said, “Well, it’s up to you”, and I said, “I will be pursuing this a bit further.” I got in contact with DEWR on the same day. I sent them an email.
18. After further contact with DEWR Mr Jackson received information regarding other Job Network Members “[so] that I could evaluate and try and have an affiliation with them, rather than be told or directed” (at Transcript p11). Mr Jackson continued in his evidence (at Transcript p 11):
In due course the Salvation Army was reluctant to release me till [sic] they got a benefit from me … I eventually did follow it up with the relevant job network members, and I ensured whilst I was doing that I was still complying with my obligations set by Centrelink and by DEWR, and at no time in doing this did I feel that I had hindered myself, nor did I feel that I did not comply with my obligations to Centrelink, DEWR and to the job network member.
19.In his final submissions Mr Jackson said:
But I go back to the reasonable steps under 626 for the breach of subsection (1)(a), that the member for Centrelink has brought up. And I did comply with the aspect of it, and I did provide reasonable steps, which was in my control. But due to the fact that Government Departments – their lack of communication internally is out of my control, thus I cannot control that aspect of it. (Transcript p 28)
20. On this issue Ms J. Hume, a Centrelink advocate representing the Secretary, submitted the following:
It is a requirement of the Act … he takes reasonable steps to comply with his Newstart activity agreement. …a person takes reasonable steps to comply with an agreement unless they fail to comply. And the main reason for failing to comply involved a matter within his control, or the circumstances that prevented him from complying were reasonably foreseeable by him. Now, his reasons for not complying were that he wanted to exit the program. He emailed his job network member requesting to exit. He had telephoned DEWR, he had telephoned Centrelink and he thought his was sufficient.
In our submissions these were all matters that were in his control and were reasonably foreseeable by him. They were a choice he made based on his own perceptions of how the system worked, and it was not reasonable for him to have these perceptions because he was told that he had to attend the program. He denies he was told but I would point to the documentary evidence which are contemporaneous records of conversations that the Salvation Army members had with him. He either knew or ought to have known that he had to attend the program or he would be in breach of his agreement. He made deliberate choices not to attend, thus we submit he failed to take reasonable steps to comply with the activity agreement. (Transcript p 27)
21. In considering this issue I turned to the Federal Court decision of Mansfield J in Secretary, Department of Employment, Education and Youth Affairs v Ferguson (1997) 76 FCR 426). That case dealt with section 45 of the Employment Services Act 1994. However, the relevant provisions are the same as those in section 601(6) of the Act. Mansfield J said:
Once there is a failure to comply with the terms of the agreement, such failure must fall within one or other or both of the subclauses of ss 45(6)(a) and 45(6)(b) before the question under s 45(5)(b) as to the taking of reasonable steps to comply with the terms of the agreement arises. One example of where the failure to comply was not captured within those subclauses is provided by Re Secretary, Department of Employment, Education, Training and Youth Affairs and Ruiz (1996) 23 AAR 211 [sic]. In that case, the beneficiary failed to attend a particular course because, due to his inability to comprehend the explanation of his case manager that in fact there were two separate courses he was required to attend, he attended one believing that was the only one he needed to attend. The main reason for the failure to attend in that case was found to be the inadequacy of the explanation of the case manager, rather than his oversight.
22. The facts in this case are different from the facts in Ruiz. In Ruiz the respondent failed to adequately clarify the requirements and as a consequence it could not be said that the applicant failed to take reasonable steps to comply. In this case the requirement to attend the course and the consequences of non-compliance were clearly stated in the agreement, read and acknowledged by Mr Jackson. There is evidence, in the form of file records of conversations between Centrelink staff and Mr Jackson, to indicate that Mr Jackson was told that his request to exit from TSAEP would not necessarily be accepted (T6 p 35). Mr Jackson denies categorically that he was told about the liability for breach penalties in these telephone conversations. However, I note the terms of the written agreement entered into by Mr Jackson (T15) in which he agreed that one of his Job Search Plan activities is to “attend JST course and activities with TSAEP Springvale from Tuesday, 11 October 2005 to Friday, 11 November 2005”. The agreement also contains the statement:
I understand that:
…
·If I do not keep to the terms of this Agreement including the Job Search Plan, my Newstart Allowance can be reduced or stopped altogether.
23. On the basis of information provided in the written agreement I consider that Mr Jackson was aware of his obligation to attend the course and the possible reduction of his allowance should he fail to attend the course.
24. There is no evidence that Mr Jackson was given approval by anyone to cease his attendance at the course. There is also no evidence of Mr Jackson being given advice by anyone that he could transfer from his Job Network Member without that approval. In his own evidence Mr Jackson referred to and relied upon the DEWR brochure “Job Seekers Your guide to Job Network” (Exhibit A6) which states in part:
You will be asked to choose a Job Network member in your local area.
It is important that you choose a Job Network member that suits you, as they are not all the same. While all Job Network members must provide you with a certain level of service, the ways in which they help you may differ.
25. I find nothing in the brochure to indicate that a person can change from one Job Network member to another without approval.
26. There is no evidence that Mr Jackson was given contradictory advice by any person associated with the Job Network member or DEWR. The file records of the telephone conversations with Mr Jackson, although disputed by him, are consistent with the terms of his agreement, DEWR policies and the provisions of the Act. The written agreement is clear in its statement of requirement and the possible penalty due to non-compliance. It contains no indication that it is permissible for a person to transfer from their Job Network member to another without approval.
27. I consider that Mr Jackson mistakenly believed that by keeping everyone informed of what he was doing he was complying with his obligations. In fact, his obligations were to abide by the requirements of the agreement and not just to keep everyone informed of his intentions and actions.
28. It follows from the above that I accept Ms Hume’s submission that Mr Jackson knew that he had to attend the program or he would be in breach of this agreement and that he made a deliberate choice not to attend. That means that his failure to attend the course was a matter that was within Mr Jackson’s control. Further, there is no evidence of any circumstances that prevented Mr Jackson from complying with the agreement and so there is no issue as to whether those circumstances were reasonably foreseeable by Mr Jackson.
29. I found earlier that Mr Jackson failed to comply with the agreement. I now find that he did not take reasonable steps to comply with the agreement.
Was the Appropriate Rate Reduction Period Imposed?
30. According to section 626(1) of the Act a Newstart Allowance is not payable to a person if:
(a)a person is required to take reasonable steps to comply with the terms of a Newstart Activity Agreement …; and
(b)the person fails to take reasonable steps to comply with the terms of the Newstart Activity Agreement.
31. As Mr Jackson did not take reasonable steps to comply with the agreement his Newstart Allowance became no longer payable under section 626(1) of the Act. Mr Jackson was notified of the suspension of his Newstart Allowance on 4 November 2005.
32. Section 626(1A) of the Act relevantly provides that if Newstart Allowance becomes payable to the person after the time it ceases to be payable under subsection 626(1) then an activity test breach rate reduction applies if the failure is the person’s first or second activity test breach in the 2 years immediately before the day after the failure.
33. It is not in issue that this is Mr Jackson’s first activity test breach. Section 644AA(1) of the Act provides for an activity test breach reduction period of 26 weeks to apply in these circumstances. Section 644AA(1A) of the Act allows the penalty to be reduced to 8 weeks if the person complies with the original requirement within 8 weeks of the breach commencement. Mr Jackson did not comply with the original requirement to attend the job search training course with TSAEP within the 8 weeks from 4 November 2005. Indeed, he did not return to TSAEP at all. The discretion under section 644AA(1A) therefore is not able to be applied.
34. Notwithstanding that, on 8 November 2005 Centrelink reduced the period to 8 weeks under the provisions of section 644AA(1A). This decision of Centrelink was overturned by the SSAT which determined that:
Centrelink mistakenly applied this section in reducing Mr Jackson’s rate reduction to 8 weeks, on 8 November 2005. However, Mr Jackson did not comply with the original requirement to attend the job search training for the period required within 8 weeks of the breach commencement, and there is no discretion to apply this section and reduce his breach from 26 weeks to 8 weeks. (T2)
35. At this hearing Ms Hume submitted that the Centrelink decision to reduce the period from 26 weeks to 8 weeks was an error and that Centrelink officers had no power make such a reduction. Mr Jackson made no submissions on the issue of whether the reduction period should be 8 or 26 weeks. There was no evidence that Mr Jackson, at the earliest opportunity available to him and in any case no later than 8 weeks after the start of the rate reduction period, undertook the Newstart activity. Indeed he did not return to TSAEP at any time after he exited himself from the course on 12 October 2005.
36. Section 644AA(1D) of the Act provides a further discretion to the Secretary. the section includes that:
if the Secretary is satisfied that the failure to undertake the activity was for reasons outside the person’s control, the Secretary may determine that the breach rate reduction period applicable is 8 weeks rather than 26 weeks.
37. Ms Hume submitted that this exception does not apply to Mr Jackson because his failure to attend the program was “his own choice, based on his own misconceptions of the way the system worked, and this was completely within his control” (Transcript p 28). I found earlier that Mr Jackson’s failure to comply with the requirements of the activity were due to reasons under his own control. For the same reasons, I accept Ms Hume’s submissions that Mr Jackson’s failure to undertake the activity within 8 weeks was within his own control.
38. In light of the above, I agree with the submission made on behalf of the Secretary, and with the SSAT, that in this matter there is no discretion available to the Secretary to reduce the period of the activity breach reduction from 26 to 8 weeks. I find that the correct period of the breach rate reduction is 26 weeks.
39. Section 644AE(2) provides that, if the activity test breach is the person’s first breach in the 2 year period, the reduction is calculated as the maximum payment rate multiplied by 0.18, that is a reduction equal to 18 per cent of the maximum payment rate. This rate is not in dispute. As a consequence, the correct rate reduction is at a rate of 18 per cent for a period of 26 weeks.
40. Mr Jackson stated that the actual reductions applied by Centrelink did not occur as described by Ms Hume. I did not explore this issue further as it will be a matter for DEWR to resolve from their detailed records. It is sufficient for me to determine that a breach rate reduction of 18 per cent is to be applied correctly for a period of 26 weeks.
DECISION
41.I find the following:
(a)the agreement with TSAEP (T15) is a Newstart Activity Agreement for the purposes of the Act;
(b)Mr Jackson did breach that agreement;
(c)Mr Jackson did not take reasonable steps to comply with the Agreement; and
(d)the correct rate reduction is one of 18 per cent for the period of 26 weeks.
42.The reviewable decision of the SSAT dated 6 February 2006 is affirmed.
I certify that the forty‑two [42] preceding paragraphs are a true copy of the reasons for the decision herein of
Mr C. Ermert, Member
(sgd) Ursula Noye
ClerkDate of Hearing: 7 July 2006
Date of Decision: 28 August 2006
Representative for the applicant: Self represented
Representative for the respondent: Ms J. Hume, Centrelink Legal Services
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