Kelly; Secretary, Department of Family and Community Services

[2005] AATA 1191

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2005] AATA 1191

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No   V2005/451

GENERAL ADMINISTRATIVE DIVISION		)
Re		SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Applicant

And LUKE KELLY

Respondent

DECISION

Tribunal Mr John Handley, Senior Member

Date5 December 2005

PlaceMelbourne

Decision The decision under review is affirmed.

..............................................

Senior Member 

SOCIAL SECURITY – respondent a full time student – undertaking an honours year of study – whether entitled to Newstart allowance – absence of activity agreement – whether an agreement should have been negotiated requiring respondent to undertake full time study – secretary appeal – decision of SSAT affirmed 

Social Security Act 1991

Administrative Appeals Tribunal Act 1975

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

REASONS FOR DECISION

5 December 2005     Mr John Handley, Senior Member

1.      This application is concerned with whether Mr Kelly was entitled to New Start Allowance (“NSA”) during a period of time when he was a full time student.  The SSAT decided on 18 April 2005 that he did have that entitlement.  The Secretary of the Department of Family Community Services applies by these proceedings to review that decision.  The circumstances of the application are not in dispute and may be briefly summarised as follows. 

2. Mr Kelly is presently 23 years of age. He completed a Bachelor of Environmental Science at Deakin University in July 2004. He then became unemployed and qualified for payment of NSA. He and Centrelink entered into an activity agreement under the Social Security Act 1991 (“the Act”), part of which required him to undertake to seek suitable work and maintain a diary of job searches. Mr Kelly also engaged in some temporary or part time employment (with the knowledge of Centrelink) but when it became apparent that he would have difficulty locating full time employment, he was advised to complete an Honours year with Deakin University. A further year of Honours studies was regarded by the University as forming part of the undergraduate course. Mr Kelly notified an officer of Centrelink at the Moreland office in early October 2004 that it was his intention to enrol as a full time student in the Honours year. That conversation occurred during one of his routine visits to Centrelink where he was required to produce his diary, pursuant to the activity agreement. Mr Kelly said that the officer asked him to notify Centrelink when he became enrolled. Mr Kelly enrolled in the Honours year on 29 November 2004 and he notified Centrelink on 30 November 2004 (T5 p15). He said that a Centrelink officer then indicated to him that the Honours year would be regarded as a “short course” and would be regarded by Centrelink as being “vocational training”. He was not advised that the activity agreement needed to be amended or varied to exempt him from having to make job applications or maintain a diary, during the period in which it would anticipated that he would be in full time studies in 2005 (refer applicant’s evidence at hearing; submission to SSAT 15 April 2005; Statement of Facts and Contentions dated 15 November 2005). Mr Kelly said that at the time that he had the above discussions with Centrelink officers, he did not know that the activity agreement would need to be re-negotiated or varied, nor was he informed by Centrelink that this would be necessary.

3.      He said that he had been advised to undertake the Honours course because it would be more likely that he would secure full time employment after completion.  A number of letters were made available to Centrelink advising that it was likely that Mr Kelly would obtain full time employment upon him completing an Honours year of study, because persons with that qualification have greater appeal to potential employers.  Mr Kelly said that he was a full time student between 9 February 2005 and 26 October 2005.  At the date of hearing he had not received the results of his studies, but he had obtained two jobs with both Melbourne University and Deakin University as a research assistant.  He said that he obtained that employment by reason of him having completed his Honours studies.  He pointed to this employment as proof that undertaking the Honours year of study was more likely to ensure that employment would be obtained.

4. The documents lodged by the applicant pursuant to section 37 of Administrative Appeals Tribunal Act 1975, confirm that on 30 November 2004 Mr Kelly did attend the Centrelink office in Moreland and notified of his enrolment as a full time student with Deakin University in 2005.  A Centrelink officer has recorded that “short course approval”, which required completion by Deakin University, was issued to him (T5 p15).  Another memorandum, of the same date, records that Mr Kelly was not eligible for Youth Allowance (“YAL”) by reason of the level of his parent’s income.  The remainder of the memorandum records that “I adv cus of SHC approval staying on NSA with exemption from LFW cus will have been on NSA for 6 months or longer at time of course start date and course is less than 12 months.  Cus will attend office to discuss” (T5 pp16-17).  This was understood to mean that NSA would be approved because the period of study was less than 12 months. 

5.      On 28 January 2005 another Centrelink officer decided that the Honours course was not considered to be of less than one year but was rather an extension of the undergraduate degree.  When Mr Kelly apparently notified that officer that he had been approved for continuation of NSA payments the officer said that they would make further enquiries.  (T6)

6.      Thereafter, there are a number of memorandums and documents within the T-documents giving varying explanations by Centrelink officers as to why Mr Kelly was not eligible for NSA.  Further, a decision was made to cancel payment of NSA from 9 February 2005, being the first date of the Honours program.  One of the explanations given by a Centrelink officer was that the Honours program was regarded as an extension of the undergraduate course and Mr Kelly had “not run out of Allowable time for YAL”.  That was understood to mean that he would otherwise be entitled to YAL, but was exempted from receiving it by reason of the level of his parent’s income (T10 p25).  Another officer decided on 8 February 2005 that the Honours year was “approved as short course” (T10 p27), but another officer decided on 11 February 2005 that that decision should be “changed” and NSA would be cancelled. 

7.      Mr Kelly has not received NSA from 9 February 2005.  He has not qualified for YAL by reason of his parent’s income and he has not qualified for Austudy by reason of his age. 

legislation

8. Section 593 of the Act provides that a person is qualified to receive NSA if throughout a relevant period the person is unemployed and satisfies the activity test. Section 601(1) of the Act provides that a person will satisfy the activity test in respect of a period if a person is actively seeking and willing to undertake paid work in Australia. Section 601(2) relevantly provides that a person will also satisfy the activity test in respect of a period, if the Secretary is of the opinion that throughout the period the person should either undertake a course of vocational training or participate in another course approved by the employment Secretary which is likely to improve the person’s prospects of obtaining suitable paid work or to assist the person in seeking suitable paid work.

9.      Section 606(1) provides that a Newstart Activity agreement is to require the person to undertake activities approved by the Secretary which are recorded within the subsection (relevantly) as including (b) “a vocational training course”, (e) “measures designed to eliminate any disadvantage the person has in the labour market” or (g) “another activity which the Secretary regards as suitable for the person and that is agreed to between the person and the Secretary”.

10. Section 613(1) of the Act provides that NSA is not payable to a person who is enrolled in a full time course of eduction or of vocational training for a period that starts when the person starts the course and finishes when the person completes the course. However section 613(2) provides that subsection (1) does not prevent NSA being payable during a period where “a person is enrolled in a course that the Secretary has required the person to undertake under s 601(2)” or “the person is engaged in a course undertaken under a Newstart Activity Agreement” or “the person has deferred a course of education”.

submissions

11. Ms Paul on behalf of the applicant Secretary submitted that the Mr Kelly is not entitled to NSA under s 593 or s 601 because he cannot satisfy the activity test. That is to say, whilst he was engaged as a full time student he would have been unable to demonstrate that he was actively seeking and willing to undertake paid work in Australia. Additionally she submitted that Mr Kelly could not satisfy s 601(2); namely, that he was undertaking a course of vocational training or participating in another course approved by the Employment Secretary, which is likely to improve his prospects of obtaining suitable paid work.

12.     Further it was submitted that Mr Kelly could not satisfy s 613(2) because, whilst there were some circumstances where NSA was payable to full time students, the Honours course was not a course that the Secretary “required” Mr Kelly to undertake under s 601(2).  Nor was it a course in which he was engaged under a Newstart activity agreement and nor had he deferred a course of education.

13.     Mr Kelly, who appeared without representation, submitted that he was initially advised by a Centrelink officer that he would remain a recipient of NSA after notification of his enrolment in the Honours program.  He submitted that he would have been able to satisfy s 613(2) if the Secretary had exercised the discretion available under s 613(2) and s 601 by deciding to require that the Honours course be undertaken as a “course of vocational training” or “another course” that would have improved his “prospects of obtaining suitable paid work”.  Additionally it was submitted that the Secretary should have exercised the discretion available under s 606, by deciding that a Newstart activity agreement be completed requiring him to undertake a vocational training course or another activity regarded as being suitable.

14.     It was submitted that a vocational training course within the meaning of s 606 is a “short course” as understood within Centrelink and is consistent with its policy (“the Guide”) at 3.2.8.110, which permits approval of NSA recipients undertaking full time study in a “full time vocational short course of less than 12 months duration” or where the person has “less than 12 months of full time study remaining to complete an undergraduate course and are not eligible for another payment”.  In the present case it was submitted that there was no eligibility for “another payment” those payments being either YAL or Austudy.  In the circumstances, Mr Kelly argued that the Secretary should have decided that a Newstart activity agreement be competed where a requirement or obligation under it was to enter into a vocational training course, being the completion of the Honours year of study at Deakin University.  By not entering into such an agreement it was submitted that Centrelink was in breach of its own policy, because under 3.2.7.40 of the Guide, an activity agreement is “to provide the person with an agreement that is tailored to their needs and that includes specific outcomes”.  An example recorded within the Guide is “full time training may be appropriate for some job seekers in preparation for employment”.  Mr Kelly submitted that the word “training” as it appears within the Guide can include full time study in an Honours year.

conclusion and reasons for decision

15.     In the present case Mr Kelly notified Centrelink on 7 February 2005 – when he requested review by a Departmental officer – that the decision to cancel NSA was in breach of the legislation and in contravention of the Guide.  Mr Kelly pointed to 3.2.8.110 of the Guide, which provided that NSA is generally not payable to full time students but persons in that situation should claim YAL or Austudy.  However, the Guide recognises that full time study could be approved where a person was undertaking a full time vocational short course of less than 12 months or where a person had less than 12 months of full time study remaining to complete an undergraduate course and that person was not eligible for another payment.  In the present case Mr Kelly was not entitled to YAL or Austudy.  That is to say he was not “eligible for another payment”.  The Honours year was less than 12 months of full time study and upon its completion he would have completed an undergraduate course. 

16. Section 601(2) recognises that undertaking vocational training or participation in a course approved by the Employment Secretary, which is regarded as being likely to improve a person’s prospects of obtaining suitable paid work, might still permit a person to satisfy the activity test. Section 606(1), also recognises that a person can qualify for NSA – and the Secretary may negotiate an agreement with such a person – where they are engaged in a vocational training course or in another activity regarded by the Secretary as being suitable. Indeed, use of the words “to require” would suggest that in order to avoid the obligation by s 601(1) of actively seeking and willing to undertake paid work, a person must undertake either a training course or some other activity regarded by the Secretary as being suitable. Similar intent might be found at s 613(2) where despite the preamble prohibiting NSA being paid to full time students, NSA can be paid if a person is enrolled in a course that the Secretary has required the person to undertake under s 601(2), or the person is engaged in a course undertaken in an activity agreement.

17.     The predominant problem I think in this application is the absence of an agreement between the Secretary and Mr Kelly incorporating an undertaking being given by him in response to a requirement by the Secretary that he undertake a course under s 601(2) or a course undertaken under an activity agreement.

18.     An opportunity exists under s 606(5) for an activity agreement to be varied.  An activity agreement did exist between Mr Kelly and Centrelink prior to the cancellation of NSA in February 2005.  For the following reasons I am satisfied that the agreement should have been varied and the Honours course should have been recorded as a course which he undertook to complete under s 601(2) and which the Secretary required him to undertake.  Alternatively the course should have been regarded as a course in which he was engaged and which he would undertake under an activity agreement (refer s 613(2)).  I make that finding because I am satisfied on the submissions and documents read that undertaking the Honours course would improve Mr Kelly’s prospects of obtaining suitable paid work (s 601(2)D).  Alternatively the Honours course could have been regarded as “another activity that the Secretary regards as suitable for the person and that is agreed to between the person and the Secretary” (s 606(1)).  In the latter circumstance - for the reasons given above – the activity agreement could, either by a new agreement or by a variation of the previous agreement, have required Mr Kelly to undertake one of the activities within s 606(1).  In this case the Honours course was either a “vocational training course” or “another activity” that was regarded as being “suitable” within the meaning of s 606(1).

19.     In his submissions to Centrelink on 7 February 2005 (T10 pp30-34), Mr Kelly comprehensively outlined his case for an entitlement to NSA.  He supported that letter with documents he obtained from various agencies who advertised positions for persons with a Bachelor of Science with an Honours qualification (T10 pp35, 37‑39).  Later Mr Kelly supplied Centrelink with letters from Deakin University all confirming that completion of an Honours program would significantly increase the prospect of employment (T12 pp75-77).  Indeed a letter from Dr. John White at Deakin University (T12 p77) confirmed that Honours “is now considered the benchmark by employers looking to take on graduate students”.  He concludes the letter with the paragraph, “We strongly recommend that our students undertake an Honours year to enhance their employability”. 

20.     The decisions made by Centrelink officers in this case were, with respect, in error.  The legislation in my view has been misunderstood.  The customer service officer who made the primary decision on 11 February 2005 decided that the Honours course was not considered to be “a short course as it is an extension of your undergraduate course…”  Additionally it was decided that “As this course is an extension of your undergraduate course then you can only get approval for this course for NSA if you have run out of Allowable Time” (emphasis added). The officer ultimately decided that under “section 613 of the Social Security Act your Newstart Allowance will remain cancelled” (T10 p48). Unfortunately the officer did not have regard to the combined effects of s 601, s 606 and s 613 which does permit a person to be enrolled in a full time course of education and remain qualified for NSA.

21.     The authorised review officer (“ARO”) did acknowledge that full time students can qualify for NSA and that there was less than 12 months of full time study remaining, but decided “it is not clearly going to improve your employment prospects.  In any case you are qualified for YAL by being a full time student” (emphasis added).  That decision is wrong.  Mr Kelly was not entitled to YAL for reasons given earlier.  Additionally the combined effects of s 601, 606 and 613 do not proscribe that full time study must “clearly improve employment prospects”.  The relevant words of s 601(2) are “likely to”.  The ARO (T11 p61) made her decision on 22 February 2005 when there was an abundance of material made available by Mr Kelly from potential employers all indicating that applicants for positions should have an Honours degree.  In fact the letter from CSIRO (T10 p39-40) records that tertiary qualification “with Honours (is) highly desirable”.  Additionally the letters from Deakin University at T12 pages 76 and 77 are all dated prior to the date of the ARO’s decision. 

22.     Of course it cannot be predicted in advance of commencement of the Honours course whether a person will obtain employment.  But Centrelink was entitled to have regard to the expertise of the officials from Deakin University and by the content of the job descriptions made available to it by Mr Kelly.  The use of the word “clearly” imposed a burden upon Mr Kelly, by its ordinary meaning, which is not found within the legislation.  The word “likely”, by its ordinary meaning, imposes a lesser burden.  Indeed the sentiments expressed by the university officials as to the likelihood of obtaining employment with an Honours degree has been manifested by the evidence by Mr Kelly who at the time of hearing – having completed the Honours program but not having yet received his results - had already obtained employment with both Melbourne University and Deakin University as a research assistant.

23.     The legislation does impose certain obligations on unemployed persons but discretions are available to be exercised in favour of full time students in certain circumstances.  In my view a Newstart activity agreement should have been negotiated with Mr Kelly and should have incorporated the Honours year of study.  Assistance to Centrelink officers in the exercise of a permissible discretion is to be found within Centrelink’s own Guide.  In the case of persons who are enrolled in study of between 6 and 12 months, approval of such study activity within a Newstart agreement is permissible if it “would clearly improve the recipient’s employment prospects.  Each case will need to be decided individually taking into account the person’s particular circumstances”.  The ARO appears to have had regard to the Guide because the word “clearly” appears in the above passage but as discussed earlier, that word is not found within the legislation. 

24.     The legislation and the Guide clearly recognise that NSA may be included in an activity agreement as an approved activity.  In my view the Honours year of study in which Mr Kelly was enrolled, should have been included in an activity agreement.  It was not, but through no fault of Mr Kelly.  Centrelink cannot in the circumstances be permitted to succeed in this review by pointing to the absence of such an agreement or the absence of the Secretary having decided, by way of requirement, that Mr Kelly undertake such a course.  The Guide is consistent with the legislation (except for the word “clearly”) and it is appropriate that it be used to assist decision makers in the exercise of a power.  The policy will be used by the Tribunal unless it is unlawful or produces an unjust decision (refer Re Drake v. Minister for Immigration and Ethnic Affairs (No. 2) (1979) 2 ALD 634 at 645).  The policy was not applied in the present case.  It should have been applied, as it was in the case of the person identified in the letter found at page 73 of the T-documents.  In that instance, an Honours student who had completed a Bachelor of Environmental Science was granted NSA.  Centrelink did negotiate an activity agreement and decided that completion of the course would “clearly improve his employment prospects”.

25.     In my view an activity agreement should have been created, or the previous agreement varied, to incorporate the Honours year by way of a requirement on the part of the Secretary and by way of an undertaking on the part of Mr Kelly (s 601(2) and s 613(2)).  Additionally, or in the alternative, the Secretary should have regarded the Honours year of study as “suitable” as an “activity” and which should have been included in an activity agreement (s 606(1) (g)).

26.     In all of the above circumstances the decision of the SSAT should be affirmed.  It follows that Mr Kelly has had an entitlement to NSA from the date of cancellation.

I certify that the 26 preceding paragraphs are a true copy of the reasons for the decision herein of
Mr John Handley, Senior Member

Signed:         .....................................................................................
  Associate

Date/s of Hearing  21 November 2005
Date of Decision  5 December 2005
For the Applicant  Ms K. Paul, departmental advocate
For the Respondent                  self