Kelly and Secretary, Department of Social Services (Social services second review)

[2016] AATA 320

Kelly and Secretary, Department of Social Services (Social services second review) [2016] AATA 320 (9 May 2016)

Division	GENERAL DIVISION
File Number	2015/6732
Re	Caroline Kelly
APPLICANT
And	Secretary, Department of Social Services
RESPONDENT

DECISION

Tribunal	Senior Member J F Toohey
Date	9 May 2016
Date of written reasons	18 May 2016
Place	Sydney

For the reasons given orally at the hearing, the Tribunal affirms the decision under review.

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

Senior Member J F Toohey

CATCHWORDS

SOCIAL SECURITY – paid parental leave – whether applicant met the work test – work test period – termination of employment – workers compensation – whether applicant on paid leave during work test period – permissible break – decision under review affirmed

LEGISLATION

Paid Parental Leave Act 2010

Paid Parental Leave Rules 2010

CASES

Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634.

SECONDARY MATERIALS

Paid Parental Leave Guide

REASONS FOR DECISION

Senior Member J F Toohey

18 May 2016

BACKGROUND

1. Carolyn Kelly seeks review of a decision that she did not qualify for paid parental leave (PPL) following the birth of her son on 10 August 2015. 

2. The objectives of the PPL scheme include providing financial support to primary carers of newborn and newly adopted children to allow them to take time off work to care for the child following the birth or adoption, and encouraging women to continue to participate in the workforce: Paid Parental Leave Guide (the Guide) at 1.2.1.10.

3. The facts in this matter are not in dispute.  Ms Kelly suffered a serious injury at work on 7 January 2014.  In June 2014, her employment was terminated.  She looked for other work but was unable, because of her injury, to find suitable employment until March 2015.

4. From June 2014 to November 2015, Ms Kelly was paid weekly workers’ compensation for the incapacity caused by her injury.  (From March to November 2015, she was paid at a reduced rate, taking into account what she was earning in her new employment).

5. On 25 May 2015, Ms Kelly lodged a “pre-claim” claim for PPL.  On 4 June 2015, Centrelink rejected her claim on the ground that she did not meet the work test in the Paid Parental Leave Act 2010 (the Act).  On 16 November 2015, the Social Services and Child Support Division of this tribunal affirmed Centrelink’s decision.

6. For the following reasons, I affirm the decision that Ms Kelly did not qualify for PPL.  

   WHEN IS A PERSON ELIGIBLE FOR PPL?

7. As it applies to Ms Kelly, subsection 31(2) of the Act provides that a person is eligible for PPL for a child on a day if, on that day:

   (a)       the person satisfies the work test (see Division 3); and

   (b)       the person satisfies the income test (see Division 4); and

   (c)       the person satisfies the Australian residency test (see Division 5); and

   (d)       the person is the primary carer of the child (see Division 6); and

   (e)       the person has not returned to work (see Division 7).

8. The only issue in these proceedings is whether Ms Kelly satisfies the work test.

9. Section 32 of the Act sets out the method for working out whether a person satisfies the work test.  In summary, a person must have performed enough paid work or taken enough paid leave in a particular period before the day the child was born.  Section 32 provides:

   Step 1            Work out the person's work test period.

   Note: Work test period is defined in section 33 for primary claimants and secondary claimants and in section 115CD for [Dad and Partner Pay] claimants.

   Step 2 Work out the days in the work test period on which the person has and has not performed qualifying work.

   Note: Qualifying work is defined in section 34.

   Step 3 Work out whether any days on which the person has not performed qualifying work during the work test period fall within a permissible break.

   Note: Permissible break is defined in section 36.

   Step 4 Work out whether there is a period (a qualifying period) of 295 consecutive days in the work test period that are days:

   (a)       on which the person has performed qualifying work; or

   (b)       that fall within a permissible break.

   Step 5 If the person has performed at least 330 hours of qualifying work in a qualifying period, the person satisfies the work test.

10. As it applies to Ms Kelly, the work test period is the 392 days immediately before the birth of her son, that is, from 14 July 2014 to 9 August 2015: s 33(1)(b)(i).

11. As it applies to Ms Kelly, s 34 provides that a person performs qualifying work on a day if she performs at least one hour of paid work or takes a period of paid leave of at least one hour on that day.

12. Paid work is work performed, whether as an employee, a contractor or otherwise, for remuneration or other financial benefit: subsection 35(1).  The Paid Parental Leave Rules 2010 (the Rules) may prescribe what it is, or what is not, taken to be paid work: subsection 35(5). 

13. The Guide at 2.2.2.40 states:

    Paid work includes work performed as an employee, including full-time, part-time, casual, seasonal or contract work, or through self-employment, where the person is engaged in some form of gainful activity for reward or financial gain. Financial reward or gain includes the provision of goods or services for hire or reward under a contract for services, carrying on a business, including as a partnership or enterprise, or working for a trust operating as a business. The fact that a business enterprise has not yet become profitable should not prevent the activity of operating the business from counting as work.

    Paid work includes work for non-cash benefit, e.g. the use of a car, employer contributions of rent on a home or to school fees. Qualifying work may include ongoing or non-going activities, or activities which may not universally be regarded as work for all purposes.

    …

    Paid work does not include income earned for activities which essentially do not involve personal exertion, e.g. passive income, such as income gained from interest or by holding a share portfolio.

14. The Guide represents government policy and should be applied by the Tribunal unless there is good reason not to do so: Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634.

15. During the work test period, Ms Kelly did not perform paid work until she took up her employment in March 2015.  Up until then, she was receiving workers compensation payments; through no fault of her own, because of her injury, she was not performing paid work.  The question, therefore, is whether she was on paid leave while she was receiving workers compensation payments.

16. A period on workers compensation payments may count as paid leave.  Rule 2.24 states that a person is taken to be on paid leave if:

    (a)       the person is on unpaid leave from his or her employer; and

    (b) during the period of unpaid leave the person receives workers’  compensation payments or accident compensation payments from another body in relation to the person’s employment with his or her employer.

17. To satisfy the work test, Ms Kelly had to perform a total of 330 hours of qualifying work on 295 consecutive days during the work test period.  The difficulty for her claim is that, once her employment was terminated in June 2014, she was no longer on leave, whether paid or unpaid, from her employer, meaning she was not performing qualifying work on any day during that period.  She performed qualifying work for approximately 110 days between March 2015 and 9 August 2015. 

18. Section 36 of the Act provides that a person may have a permissible break of not more than 56 consecutive days between two qualifying work days or at the start of the work test period.  The Secretary says, and I agree, that this provision cannot apply to Ms Kelly.  Even if she could have the benefit of a permissible break of 56 consecutive days, she would have performed qualifying work on a maximum of approximately 166 consecutive days, less than the 295 consecutive days required by the Act.  It follows that she was not eligible for PPL for her son.

    CONCLUSION

19. I understand that Ms Kelly feels deeply aggrieved by the way in which the legislation operates in her case.  Had her employment not been terminated, and had she returned to work in March 2015, she would have been on paid leave throughout the period of her workers’ compensation and eligible for PPL.  Alternatively, had it not been for her injury, she would likely have found other employment sooner and been able to perform the necessary amount of qualifying work.

20. Unfortunately for Ms Kelly, while the Act and Rules provide flexibility in the meaning of paid work, paid leave and unpaid leave, including allowing for periods on workers’ compensation, there is no provision that accommodates her particular circumstances. The Tribunal is bound to apply the law and so must affirm the decision to refuse her claim.

I certify that the preceding 20 (twenty) paragraphs are a true copy of the reasons for the decision herein of Senior Member J F Toohey

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

Associate

Dated 18 May 2016

Date of hearing	9 May 2016
Applicant	In person
Solicitors for the Respondent	Ms Gabrielle Doyle, Department of Human Services