Kirkwood and Secretary, Department of Family and Community Servic Es
[2003] AATA 1143
•14 November 2003
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2003] AATA 1143
ADMINISTRATIVE APPEALS TRIBUNAL )
) N2003/716
GENERAL ADMINISTRATIVE DIVISION ) Re Noel Stewart KIRKWOOD Applicant
And
Secretary, Department of Family and Community Services
Respondent
DECISION
Tribunal P.J. Lindsay, Senior Member Date14 November 2003
PlaceSydney
Decision The Tribunal sets aside the decision under review. The matter is remitted to the respondent with the direction that in determining whether Mr Kirkwood has qualified for newstart allowance in relation to his claim on 30 September 2002, he was self-serving the liquid assets test waiting period from 1 February 2002 to 7 April 2002. (sgd) P.J. Lindsay, Senior Member
CATCHWORDS
Social Security – newstart allowance – whether liquid assets test waiting period may be served before claim is made for benefit – concept of ‘self-serving’ liquid assets test waiting period – decision set aside
Social Security Act 1991 ss. 593, 598
Social Security (Administration) Act 1999, s.16
Public Service Act 1999, s.10
REASONS FOR DECISION
14 November 2003 P.J. Lindsay, Senior Member 1. Noel Stewart Kirkwood has applied for a review of a decision by the Social Security Appeals Tribunal (SSAT) concerning payment of newstart allowance. On 7 April 2003 the SSAT affirmed a decision by an authorised review officer at Centrelink that due to the value of his liquid assets, Mr Kirkwood had to wait thirteen weeks from 30 September 2002 prior to receiving newstart allowance.
2. At the hearing in Newcastle, Mr Kirkwood represented himself with assistance from his son, and Mr J Larcombe from Centrelink represented the Secretary to the Department of Family and Community Services (the respondent). Mr Kirkwood gave oral evidence. There were no other witnesses. The Tribunal had before it the documents lodged under s.37 of the Administrative Appeals Tribunal Act1975 (T documents) as well as three documents that Mr Kirkwood prepared by way of response to the SSAT’s decision and as submissions to the Tribunal.
BACKGROUND3.
Mr Kirkwood was born on 8 March 1941 and is an engineering and construction foreman. He is married. His letter of 30 October 2002 to Centrelink (T44) sets out the background to this application:
Please accept this letter as an appeal against the 18 [sic] weeks liquid assets waiting period from 30th September 2002 as assessed by Scott Parker at Maitland Centrelink on 14th October 2002.
The grounds for this appeal are as follows:1. My full time employment ceased 31st January 2002.
2. Centrelink was first contacted 4th March 2002. A notification of Claim Number 280 550 761L was established and an interview was arranged at Maitland Centrelink.
3. At this time I was reviewing retirement and superannuation plans with various providers. One of these providers suggested I should talk to Maitland Centrelink Retirement Advisor Tony Seamer. I spoke to Tony Seamer by telephone. I advised him I had an offer of three months contract work and asked, “How this would affect my liquid assets and leave-waiting periods.” Tony Seamer advised that as this work had no annual leave or long service component it would be regarded as casual work and would have no effect on the waiting periods which would be served concurrent from 1st February 2002. Tony Seamer said to consider this contract work as a bonus and confirmed he had cancelled my Maitland Centrelink interview. One of the superannuation providers “Interplan” spoke by telephone to Robert Noakes at Maitland Centrelink and he confirmed the information given by Tony Seamer.
4. The three month contract work commenced 8th April 2002 and on completion the contract was extended to 27th September 2002.
In order to ensure this contract work would not be considered income support the entire remuneration from 09/04/2002 to 27/09/2002 was sacrificed to superannuation. …
4. On 22 November 2002 Centrelink informed Mr Kirkwood that his appeal was unsuccessful. Centrelink explained its decision as follows (T47):
… a claim was never lodged after your original intention to claim was made on 04/03/02. Because of this, a Liquid Assets Waiting Period was never imposed on you until you claimed again from 30/09/02. This waiting period was then to start from 30/09/02, as this was the date you lodged your claim which was dated from the date you last work in your last job before making this claim (ie from 29/02/02).
The correct decision was made according to your circumstances as a Liquid Assets Waiting Period commences on the date of unemployment or the date on which the last change to that employment occurred. Since you were last employed on a continuous basis with ‘Engineers & Managers Australia P/L’, the last change in that employment occurred on 29/09/02 when you were dismissed.
5. Mr Kirkwood then applied for an authorised review officer to reconsider the matter. On 19 December 2002 Mr Kirkwood spoke with the authorised review officer and informed him that he wished to qualify for the mature age allowance and was keen for this to occur before the introduction of legislative changes expected to commence from 1 July 2003. If he was qualified for the mature age allowance, Mr Kirkwood intended not to pursue the application to the authorised review officer (T48).
6. On 23 December 2002 the authorised review officer affirmed the decision of the original decision maker (T49). In coming to his decision, the authorised review officer acknowledged that he had taken into account three matters that were significant to the applicant:
· that Mr Kirkwood said that he had twice been advised by Centrelink officers that a three month contract would not affect any waiting period for newstart allowance because the contract did not entitle him to annual leave or long service leave;
· the three month contract began on 8 April 2002 and was extended to 27 September 2002;
· under the contract, Mr Kirkwood worked 40 hours a week.
7. The authorised review officer identified the issue for decision to be whether a liquid assets test waiting period and / or some other period applied to Mr Kirkwood’s claim for newstart allowance that he had lodged on 30 September 2002. Mr Kirkwood had advised Centrelink he held $27,840 in liquid assets, which exceeded the maximum reserve allowed for a married person, $5,000. Under the provisions of ss.598(2A) and 598(2B) of the Social Security Act 1991 (the Act) the authorised review officer calculated the liquid assets waiting period as 13 weeks, which is the maximum period. As the applicant’s contract work ended on 29 September 2002, the liquid assets test waiting period started from 30 September 2002. Taking into account the ordinary waiting period that runs from the end of the liquid assets test waiting period, the authorised review officer stated that Mr Kirkwood’s qualification for newstart allowance began on 6 January 2003 (T49-140). Dissatisfied with the decision, Mr Kirkwood appealed to the SSAT but was unsuccessful, the SSAT affirming the authorised review officer’s decision.
issue
8. The issue to be decided by the tribunal is whether Mr Kirkwood had served all or part of his liquid assets test waiting period before his claim for newstart allowance on 30 September 2002.
applicable legislation
9. In broad terms, s.593 of the Act sets out the qualifications for eligibility for newstart allowance, including for example, the requirements to be unemployed and to satisfy the activity test throughout a particular period. Under s.595, the Secretary may treat a person as being unemployed during a period despite their having been in paid work. Subsection 595(1) reads:
If:
(a) a person undertakes paid work during a period; and
(b) the Secretary is of the opinion that, taking into account:
(i) the nature of the work; and
(ii) the duration of the work; and
(iii) any other matters relating to the work that the Secretary considers relevant;
the work should be disregarded;
the Secretary may treat the person as being unemployed throughout the period.
10. Of particular significance to this matter are the provisions of s.598, dealing with the liquid assets test waiting period.
598(1) Subject to subsections (4A), (5), (6), (7) and (8), if:
(a) the value of a person's liquid assets exceeds the person's maximum reserve on:
(i) the day on which the person becomes unemployed; or
(ii) the day on which the person claims a newstart allowance; and
(b) the person is not a transferee to a newstart allowance;
the person is not qualified for a newstart allowance for a period unless the person has served the liquid assets test waiting period in relation to the claim before the beginning of that period.
Note 1: for liquid assets see section 14A.
Note 2: for maximum reserve see section 14A.
Note 3: for transferee to a newstart allowance see subsections 23(6) and (7).
Note 4: for serving the liquid assets test waiting period see subsection 23(10).
598(2) The liquid assets test waiting period in relation to the claim is to be worked out under subsections (2A), (2B) and (2C).
…
The parties do not dispute that the value of Mr Kirkwood’s liquid assets results in the imposition of the maximum 13 week liquid asset test waiting period.
11.As Mr Kirkwood is married, the following provisions are relevant:
598(3A) Subject to subsections (3B) and (4), if the person is a member of a couple, the liquid assets test waiting period in relation to the claim starts on the last occurring of the following days:
(a) the day on which the person became unemployed;
(b) if, when the claim is made, the person's partner is unemployed - the day on which the person's partner became unemployed;
(c) if, when the claim is made, the person's partner is incapacitated for work—the day on which the person's partner became incapacitated for work.
Subsections 598(3B) and (4) are not relevant because the applicant has not been incapacitated for work.
12.Subsection 598(4A) provides:
598(4A) Subsection (1) does not apply to a person if, at any time during the 12 months preceding:
(a) the day on which the person becomes unemployed; or
(b) the day on which the person claims a newstart allowance;
the person or their partner was serving a liquid assets test waiting period that started during that 12 months.
Where a person is in severe financial hardship the respondent has a discretion to waive or shorten the liquid assets test waiting period:
598(5) If the Secretary is satisfied that a person is in severe financial hardship because the person has incurred unavoidable or reasonable expenditure while serving a liquid assets test waiting period, the Secretary may determine that the person does not have to serve the whole, or any part, of the waiting period.
Note 1: For in severe financial hardship see subsection 19C(2) (person who is not a member of a couple) and 19C(3) (person who is a member of a couple).
Note 2: For unavoidable or reasonable expenditure see subsection 19C(4).
…
evidence
13. Mr Kirkwood worked as a mechanical maintenance technician for VAW Kurri Kurri Pty Limited from 30 May 1983 until 31 January 2002, when his position became redundant (T37, T38). Following discussions in February 2002 with a firm of financial planners, Mr Kirkwood approached Centrelink to find out how contract work might affect the liquid assets test waiting period applying to newstart allowance.
14. In cross-examination Mr Kirkwood said that on 15 March 2002 he had a telephone discussion about the matter with one of Centrelink’s financial information services officers. He was told that if the contract work did not entitle him to leave payments, the work would not affect the liquid assets test waiting period or the income maintenance period. His letter of 30 October 2002 to Centrelink (T44) explained that he thought the effect of Centrelink’s advice was that such contract work was regarded as casual work. He understood, therefore, that both the liquid assets test waiting period and the income maintenance period would continue to be served concurrently even if he accepted such a contract. The Centrelink officer told him to consider the contract work a bonus. Based on this advice, the applicant decided he would accept contract work. The Centrelink officer informed him that it was no longer necessary to keep the appointment for an interview on 26 March 2002 regarding newstart allowance and so it was cancelled. Mr Kirkwood’s evidence was that he would have lodged a claim for newstart allowance at the interview. He said that he was given incorrect advice by Centrelink. He stated in a letter dated 20 February 2003 (T50) to the SSAT that his superannuation provider received the same advice from a different officer at Centrelink’s Maitland office.
15. Mr Kirkwood began a three month contract with Engineers and Managers Australia Pty Limited as a maintenance engineer on 8 April 2002. It was subsequently extended to 27 September 2002 (T44). Mr Kirkwood said he did not receive any of his contractual entitlement as wages, but instead salary sacrificed it as a contribution to superannuation. He told the tribunal that he has not worked since the contract ended. His wife works and on average earns around $130 a week. Mr Kirkwood said that after he finished working and until 6 January 2003 when newstart allowance became payable, he spent all his savings on household expenses and then withdrew $10,000 from his superannuation account.
16. Mr Larcombe conceded that the advice given to the applicant by the financial information services officer at Centrelink’s Maitland office was incorrect.
consideration and findings
17. Mr Kirkwood submitted that he was serving a liquid assets test waiting period and income maintenance period from 1 February 2002, the day following his redundancy. The only reason for his call to the Centrelink officer on 15 March 2002 was to establish whether the contract work would affect his self-serving the two waiting periods concurrently. He considered that the ten weeks or so from 1 February 2002 to 7 April 2002 was a period when he self-served part of the liquid assets test waiting period. He wants it to be counted against the thirteen weeks that the respondent found he must serve. He referred to the Department’s Guide to Social Security Law and in particular to section 3.1.2.20 ‘Liquid Assets Waiting Period’ (LAWP). The Guide there states “The LAWP can be self-served where the claim for allowance is made after the LAWP would have expired.” Also relevant in the Guide is section 3.1.2.70 ’Exemptions from Waiting Periods’, which states:
A customer may be exempted from the LAWP if they:
· or their partner have been subject to a LAWP that started within the last 12 months (which includes where only part of a LAWP had been served), OR …
· have self-served the LAWP, OR …
18. The Guide gives s.598(6) as the relevant statutory reference. That provision states:
598(6) Subsection (1) does not apply to a person who becomes qualified for newstart allowance at the end of a continuous period in respect of which the person received income support payments (whether or not the kind of payment received has changed over the period and whether the period or any part of it occurred before or after the commencement of this subsection).
Note 1: For income support payment see subsection 23(1).
Note 2: For the determination of the continuous period in respect of which a person received income support payments see section 38B.
The tribunal, however, finds nothing in s.598(6) that requires the liquid assets test waiting period to be served as a continuous period.
19. Mr Kirkwood submitted that he could not have been expected to know the consequences of the cancellation of the appointment for 26 March 2002. He urged the tribunal to take account of the impact of unexpectedly having to support his household for thirteen weeks from 30 September 2002, which he contended penalised him for accepting paid work and resulted in financial pressures.
20. Mr Kirkwood referred to s.595 of the Act which gives the Secretary a discretion to treat a person as unemployed during a period in which they undertake paid work. As he did not receive wages from his contract with Engineers and Managers Australia Pty Limited, preferring to salary sacrifice his contractual reward to reduce his future dependence on the age pension, Mr Kirkwood submitted that he should be considered unemployed throughout the duration of the contract. Further, it was his submission that the financial services officer, with whom he discussed on 15 March 2002 his intentions regarding contract work, should have informed him about the Department’s policy about casual employment. According to section 3.1.2.50 of the Guide a person who is working in a short-term or temporary job for less than 70 hours per fortnight may continue to be regarded as unemployed provided they are still seeking suitable work. Had he been so informed, Mr Kirkwood was confident he could have arranged the terms of his contract work to meet this interpretation of casual work. Lastly, Mr Kirkwood submitted that the respondent should be held accountable for inaccurate advice and Centrelink’s failing to inform him about his options. Mr Kirkwood referred to s.10 of the Public Service Act 1999 which establishes the value of accountability within the Australian Public Service.
21. For the respondent, Mr Larcombe submitted that a thirteen week liquid assets test waiting period would have commenced from 1 February 2002, when the applicant first became unemployed, had he lodged a claim for newstart allowance at that time. Mr Larcombe submitted that a liquid assets test waiting period can apply only in relation to a claim for newstart allowance for a period. That is, a person cannot be serving a liquid assets test waiting period unless a claim is made. He referred to s.16 of the Social Security (Administration) Act 1999 (the Administration Act) which deals with the manner and form in which a claim is made.
22. Since Mr Kirkwood has made only one claim for newstart allowance, on 30 September 2002, Mr Larcombe submitted that the liquid assets test waiting period must start from that date. In his submission, s.598(4A) has no application. Mr Kirkwood was not serving a liquid assets test waiting period during the twelve months preceding his claim on 30 September 2002 because he did not make a claim for newstart allowance during that period. Further, Mr Larcombe argued that the applicant had not self-served the liquid assets test waiting period because, in his submission, that waiting period must have been served in full by the date of the claim. In this respect Mr Larcombe noted that the Guide states “The LAWP is considered to have been self-served if the claim is made after the LAWP would have expired.”
23. As preliminary points, the tribunal notes that Mr Kirkwood was aware at the hearing that this application does not extend to review of his entitlement, if any, to mature age allowance. Similarly, the tribunal is not concerned with any issue regarding the duration of the income maintenance period that Mr Kirkwood must serve. Further, the tribunal accepts the respondent’s submission that s.598(5) is not applicable. There is no evidence that Mr Kirkwood was in severe financial hardship during the period following his claim for newstart allowance. Finally, the tribunal rejects Mr Kirkwood’s submission that he should be considered to have been unemployed throughout his 40 hour a week contract with Engineers and Managers Australia Pty Limited because he arranged to receive superannuation contributions not wages. His work under contract should not be disregarded for the purposes of qualifying for newstart allowance, merely because of his choice of salary package.
24. The tribunal makes the following findings of fact:
· Mr Kirkwood’s employment with VAW Kurri Kurri Pty Limited ended on 31 January 2002. Thereafter he was unemployed until 7 April 2002 and he commenced working a 40 hour week under contract which did not entitle him to annual leave, sick leave or long service leave. The contract was extended to 27 September 2002, and from then on he was again unemployed.
· Mr Kirkwood’s claim for newstart allowance is subject to a thirteen week liquid assets test waiting period.
· due to advice received from Centrelink on 15 March 2002, Mr Kirkwood did not make a claim for newstart allowance prior to commencing the period of contract work. The tribunal accepts his evidence that he believed the advice was that he could undertake the contract work, at the same time still serve out the remaining part of his 13 week liquid assets test waiting period and then claim newstart allowance at the completion of the contract.
· Mr Kirkwood did not make a claim, that is lodge a written claim for payment of newstart allowance (see s.16 of the Administration Act) until 30 September 2002 (T30).
25. At section 3.1.2.70 the Guide refers to exemptions from the liquid assets test waiting period. In this matter, two exemptions potentially apply. The first covers the situation where a liquid assets test waiting period started within the twelve months preceding the claim. The Guide describes the exemption as including the circumstance where only part of the liquid assets test waiting period was served. The other exemption is referred to in the Guide as ‘self-serving’ the liquid assets test waiting period. The Guide states that the liquid assets test waiting period “ … is considered to have been self-served if the claim is made after the LAWP [liquid assets test waiting period] would have expired.” The Guide does not offer a reason for restricting this exemption to situations where the requisite period has fully expired.
26. The policy underlying both exemptions is apparent from the relevant Minister’s explanatory memorandum to the Social Security (1994 Budget and White Paper) Amendment Bill 1994. It is stated there that the amendments would “ … provide that the liquid assets test waiting period is to apply to claimants of JSA/NSA/SA only once in any period of 12 months instead of each time a claim is made. … The liquid assets test waiting period is applicable each time a person claims benefit. This rule can create a disincentive for some clients to take up casual work. Part 1 of Schedule 1 addresses this issue by providing that the liquid assets test waiting period can only apply once in any period of 12 months.”
27. Mr Larcombe explained the concept of self-serving the liquid assets test waiting period as being a period during which a person holds off making a claim for payment for which they are otherwise qualified. That is, a self-served waiting period runs during a period for which a claim has not yet been made. As an example he referred to a person who is unemployed on 1 March, but who holds off making a claim for newstart allowance until 1 June. Other things being equal, newstart allowance would be payable to them from 1 June for the ensuing period. There would be no requirement to serve the liquid assets test waiting period from the date of the claim, because they have already done so by way of self-serving that waiting period.
28. Mr Kirkwood was unemployed for 9 weeks and 2 days from 1 February 2002 to 7 April 2002, a period that started in the 12 months preceding his claim for newstart allowance. While it is the case that Mr Kirkwood did not make a claim during that unemployment, there is no evidence that he was not otherwise qualified for the payment, except for the liquid assets test waiting period. Indeed his evidence, which the tribunal accepts, is that he would have made such a claim but for Centrelink advice that it was unnecessary. Under s.598(1), however, he would not be qualified for newstart allowance “ … for a period unless [he] has served the [13 week] liquid assets test waiting period in relation to the claim before the beginning of that period.”
29. It appears to the tribunal that section 3.1.2.70 of the Guide treats s.598(4A) as applying only where a person has self-served the full liquid assets test waiting period prior to lodging their claim for newstart allowance. But unlike the Guide, s.598(4A) does not in terms require the liquid assets test waiting period to have been self-served in full. Rather, the subsection states that a person “ … was serving a liquid assets test waiting period that started during that 12 months.” In this case, the 12 month period is the 12 months prior to 30 September 2002, being the day that Mr Kirkwood lodged his claim. To give effect to the policy of encouraging people to take up casual work and taking into account ss.598(1) and 598(4A), the tribunal is satisfied that a liquid assets test waiting period in relation to a claim can be partly self-served during the 12 months prior to the claim. The tribunal finds that the liquid assets test waiting period for Mr Kirkwood’s claim started on 1 February 2002, being the day he became unemployed (s.598(3A)). The tribunal therefore finds that Mr Kirkwood was self-serving the liquid assets test waiting period from 1 February 2002 to 7 April 2002. The liquid assets test waiting period continued from 28 September 2002 when he again became unemployed following some months of casual work.
30. The decision under review should be set aside. The matter is remitted to the respondent with the direction that in determining whether Mr Kirkwood has qualified for newstart allowance in relation to his claim on 30 September 2002, he was self-serving the liquid assets test waiting period from 1 February 2002 to 7 April 2002.
I certify that the 30 preceding paragraphs are a true copy of the reasons for the decision herein of P.J. Lindsay, Senior Member:
Signed: .......................................................................................
AssociateDate of Hearing 30 October 2003
Date of Decision 14 November 2003
Applicant Self-representedRespondent’s representative Centrelink
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