KENNETH DUNN & COLLEEN DUNN and SECRETARY, DEPARTMENT OF EDUCATION,EMPLOYMENT AND WORKPLACE RELATIONS

[2009] AATA 994

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2009] AATA 994

ADMINISTRATIVE APPEALS TRIBUNAL      )

)No 2009/2797&  2009/2796

GENERAL ADMINISTRATIVE   DIVISION		)
Re		KENNETH DUNN & COLLEEN DUNN

Applicant

And SECRETARY, DEPARTMENT OF EDUCATION,EMPLOYMENT AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal Ms N Bell, Senior Member

Date24 December 2009

PlaceSydney

Decision The decisions under review are affirmed.

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

Ms N Bell, Senior Member   

CATCHWORDS – Social Security- Newstart Allowance – Parenting Payment – Income - Redundancy Lump Sum Payment

Social Security Act 1991 (Cth)

REASONS FOR DECISION

Ms N Bell, Senior Member

1.      

Kenneth Dunn and his wife, Colleen Dunn, were in receipt of Newstart Allowance and parenting payment respectively when, on 13 October 2005, Mr Dunn received a special redundancy payment of $65,939.12 (gross) from the

Brigalow Timber Workers Assistance Fund following Mr Dunn’s redundancy in

May 2005.

2.      Centrelink treated the redundancy payment as income for the following twelve months and cancelled Mr Dunn’s Newstart Allowance and Mrs Dunn’s parenting payment from 13 October 2005.  This decision was reviewed and affirmed by an Authorised Review Officer on 8 June 2006.  Mr and Mrs Dunn appealed the ARO’s decision to the Social Security Appeals Tribunal in June 2006 and April 2006 respectively.  The decisions were again affirmed and now Mr and Mrs Dunn seek review by this Tribunal.

3.      Mr and Mrs Dunn were concerned to know why a couple of their acquaintance, in apparently similar circumstances, had continued to receive social security payments immediately following the receipt a lump sum redundancy payment of a similar amount from the same source. Mr and Mrs Dunn’s payments were reinstated twelve months after their cancellation.

4.      

The Secretary contended that the decision to cancel Mr and Mrs Dunn’s social security payments was correct and in accordance with the rate calculators in

section 1068 (for Newstart Allowance) and section 1068B (for parenting payment) of the Social Security Act 1991.  These sections and the rate calculation provisions contained in them provide for income to reduce a person’s rate of payment.

The Secretary contended that in the Dunns’ case the redundancy payment was ordinary income and took them beyond the maximum amount of ordinary income that can be earned before Newstart Allowance and parenting payment cease to be payable.

issues

5.      Certain lump sum payments are exempt in the definition of “income” in the Act and so are disregarded when the rate of a social security payment is calculated. The issue for me to consider is whether the lump sum redundancy payment received by Mr Dunn was an exempt lump sum.

6.      Given the apparent inconsistency of the decision given to Mr and Mrs Dunn’s acquaintances, I will also consider whether there has been some maladministration that would justify a recommendation for compensation.

is mr dunn’s redundancy payment an exempt lump sum?

7.      “Income” is defined in section 8(1) of the Act as an income amount that is earned, received or given to a person for their own use or benefit, unless excluded under subsections (4), (5) or (8).  These provisions, and in particular subsection (8) , include a large number of different categories of payments, However those provisions do not include redundancy payments.

8.      An amount may also be disregarded as income if it is, under section 8(11), an exempt lump sum determined by the Secretary.  The Secretary has made no determination in relation to the lump sum received by Mr Dunn nor has the Secretary made any determination in relation to redundancy payments generally.

9.      

This means that Mr Dunn’s redundancy payment was properly treated as ordinary income for the purposes of the calculation of the rate of his Newstart Allowance and Mrs Dunn’s parenting payment.  Taking Mr Dunn’s lump sum payment of $65,939.12 over twelve months, in accordance with section 1073 of the Act, he was in receipt of $2,536.12 per fortnight.  This placed him and Mrs Dunn well over the income limits for both Newstart Allowance and parenting payment. It follows that neither Newstart Allowance nor the parenting payment were payable to

Mr Dunn and Mrs Dunn over the twelve month period from the date of the redundancy payment.

should a recommendation for compensation be made?

10.     At my request, the representative for the Secretary made inquiries into the circumstances in which the decision was made to not include as income the redundancy payment of Mr and Mrs Dunn’s acquaintances, which was also a lump sum payment from the Brigalow Timber Workers Assistance Fund. Her enquiries showed that the social security payment received by the acquaintances was a different payment (not Newstart Allowance) and the people concerned were not expected to return to work.  For that reason, the lump sum payment received by them was regarded as “remunerative” and therefore not subject to the provisions of section 1073, which has the effect of deeming the lump sum amount to have been fortnightly income over the following twelve month period. Privacy considerations prevented the full details of the circumstances of these people being disclosed, but I am satisfied that their case was distinguishable from that of the Dunns’.  This is so even though there is a possibility that the authorised review officer was in error in the decision made about how their lump sum payment should be treated.

11.     For these reasons, I do not consider this an appropriate case in which to make a recommendation for compensation.

decision

12.     The decisions under review are affirmed.

I certify that the 12 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member Bell

Signed:................................[sgd].........................................
  Associate: Lloyd Doherty

Date/s of Hearing  13 November 2009
Date of Decision  24 December 2009
Date of written reasons  24 December 2009     
Representative for the Applicants  Self-represented

Representative for the Respondent                  

Stefanie Memmott, Centrelink

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