Krivoshev and Secretary, Department of Education, Employment and Workplace Relations

[2012] AATA 23

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2012] AATA 23

ADMINISTRATIVE APPEALS TRIBUNAL     )

)           Nos 2011/1692-1694

GENERAL ADMINISTRATIVE DIVISION		)
Re		NICHOLAS KRIVOSHEV

Applicant

And SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal Dr T Schafer, Member

Date17 January 2012

PlaceSydney

Decision The decisions under review are affirmed.

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

Dr T Schafer
  Member

CATCHWORDS

SOCIAL SECURITY -  Newstart allowance – whether medically exempt from activity test – whether connection/reconnection failure and reconnection penalty – whether non-payment period should apply – decisions under review affirmed

Social Security Act 1991: ss 593, 603C

Social Security (Administration) Act 1999: ss 42E, 24H, 42L, 42M, 42NC, 42P, 42T, 42U, 145

Guide to Social Security Law: 3.2.11.10, 3.1.13.60

Social Security (Administration) (Persistent Non-compliance) (DEEWR) Determination 2009 (No.1): Para 4

Social Security (Reasonable Excuse – Participation Payment Obligations) (DEEWR) Determination 2009 (No.1): Para 5

REASONS FOR DECISION

17 January 2012 Dr T Schafer, Member        

1.Mr Krivoshev has applied to this Tribunal for review of the decisions of the Social Security Appeals Tribunal (SSAT) dated 12 April 2011 which affirmed decisions of Centrelink authorised review officers (AROs) in relation to his newstart allowance dated 28 February 2011, 22 March 2011 and 29 March 2011.

2.The ARO’s decision of 28 February 2011 affirmed a decision made by Centrelink on 29 December 2010 to refuse Mr Krivoshev a medical exemption from newstart allowance activities on the grounds that his medical conditions do not preclude him from working.

3.The ARO’s decision of 22 March 2011 affirmed decisions made by Centrelink on 9 February 2011, 23 February 2011 and 9 March 2011 to apply a connection/reconnection failure to Mr Krivoshev’s newstart allowance, due to his failure to attend the following connection/reconnection appointments in a six month period:

(a)a connection appointment on 27 January 2011;

(b)a reconnection appointment on 11 February 2011; and

(c)a reconnection appointment on 24 February 2011.

4.In respect of the decision on 22 March 2011, the ARO affirmed Centrelink's decision to impose a reconnection failure penalty of $905.85.

5.The ARO’s decision of 29 March 2011 affirmed a decision made by Centrelink on 24 March 2011 to impose a serious failure and eight week non-payment period to Mr Krivoshev’s newstart allowance because he had persistently failed to meet participation requirements.

Issues

6.The issues which the Tribunal must decide in relation to Mr Krivoshev's application are:

(a)Whether or not Mr Krivoshev was exempted from the newstart activity test from 18 December 2010 to 18 February 2011 based on the medical certificates issued by his treating doctor; and

(b)if not exempted, whether Mr Krivoshev committed connection/reconnection failures on 27 January 2011, 11 February 2011 and 24 February 2011, and

(c)if so, whether the reconnection failure penalty of $905.85 was correctly calculated; and

(d)whether the connection/reconnection failures on 27 January 2011, 11 February 2011 and 24 February 2011 constitute a serious failure due to persistent non-compliance with his newstart obligations and

(e)if so, whether an eight week serious failure non-payment period ought to apply.

Facts

7.Mr Krivoshev has been receiving newstart allowance since 2 March 1998.

8.On 20 May 2009, Centrelink prepared a job capacity assessment (JCA) report which stated that Mr Krivoshev's capacity for work at the time was assessed at 23 to 29 hours per week.  The report also stated that Mr Krivoshev's future capacity for work within 2 years without intervention was assessed at 23 to 29 hours per week and his future capacity for work within 2 years with intervention was assessed at 30+ hours per week.

9.On 8 April 2010, Mr Krivoshev signed an Employment Pathway Plan and Centrelink was referred for assessment of his Job Seeker Classification Instrument (JCSI) Personal Factors.

10.On 19 April 2010, Mr Krivoshev participated in a face-to-face assessment with a Centrelink registered psychologist.  A JCA report was prepared which stated that Mr Krivoshev's baseline capacity for work at the time was assessed at 23 to 29 hours per week.  The report also stated that Mr Krivoshev's future capacity for work within 2 years without intervention was assessed at 23 to 29 hours per week and his future capacity for work within 2 years with intervention was assessed at 30+ hours per week.

11.On 2 June 2010, Centrelink sent Mr Krivoshev a letter advising him that his request for exemption from the activity test had been rejected because it was deemed that he was able to do suitable paid work for at least 8 hours per week.

12.On 14 October 2010, Mission Australia Employment Solutions sent Mr Krivoshev a letter advising him to attend an appointment on 1 November 2010.  The letter stated, relevantly:

If you do not attend this appointment and review/enter into an Employment Pathway Plan and you do not have a valid reason, this could result in a connection failure.  You will then be required to attend a reconnection appointment and if you do not attend that appointment a penalty amount may be deducted from your payment.  You will lose your payment for a longer period if you are deliberately avoiding your obligations. (ST6/300-301).

13.On 8 December 2010, the SSAT set aside the decision to apply a reconnection failure penalty for Mr Krivoshev's failure to attend a connection appointment on 12 May 2010 and a reconnection appointment on 28 May 2010.  This is because the Centrelink letter advising Mr Krivoshev that he was not exempted from the activity test was sent on 2 June 2010, after the appointments in May 2010.  The SSAT found that Mr Krivoshev had a reasonable excuse because he believed that his medical certificate exempted him from the activity test.  The SSAT pointed out, however, that Mr Krivoshev was expected to satisfy the activity test and attend future appointments and commitments with his employment services provider.

14.On 20 December 2010, Mission Australia Employment Solutions sent Mr Krivoshev a letter advising him that he was required to attend an appointment on 12 January 2011 to negotiate and enter into an Employment Pathway Plan.

15.On 29 December 2010, Mr Krivoshev lodged a medical certificate with Centrelink.  The medical certificate, which was signed by his treating doctor on 20 December 2010, stated:

Fitness for work/study:  In my opinion this person is/has been unfit for work/study and appointments from 18/12/2010 - 18/2/2011 inclusive.

Can the patient currently do their usual work/study? YES

Can the patient do any other work for 8 hours or more per week? YES

16.Based on the information in the medical certificate that Mr Krivoshev could work for 8 hours or more per week, Centrelink advised Mr Krivoshev that he was not exempted from the activity test.

17.Mr Krivoshev did not attend an appointment with Centrelink on 12 January 2011.

18.On 25 January 2011, Centrelink decided that Mr Krivoshev had a reasonable excuse for not attending the appointment on 12 January 2012.  However, he was advised again that he was not exempted from the activity test and was advised that he was required to attend an appointment on 27 January 2011.

19.Mr Krivoshev did not attend the appointment on 27 January 2011.

20.On 9 February 2011, Centrelink decided that Mr Krivoshev did not have a reasonable excuse for not attending the appointment on 27 January 2011.  On the same day, he was advised by telephone that he was required to attend an appointment on 11 February 2011.

21.On 23 February 2011, Mr Krivoshev lodged a medical certificate, which was signed by his treating doctor on 18 February 2011.  The certificate stated:

Fitness for work/study: In my opinion this person is/has been unfit for work/study and appointments from 18/2/2011 – 18/5/2011 inclusive.

Can the patient currently do their usual work/study? YES

Can the patient do any other work for 8 hours or more per week? YES

22.Mr Krivoshev did not attend the appointment on 11 February 2011.

23.On 23 February 2011, Centrelink decided that Mr Krivoshev did not have a reasonable excuse for not attending the appointment on 11 February 2011.  Mr Krivoshev was advised that he would be subject to a reconnection failure penalty.  On the same day, he was advised by telephone that he was required to attend an appointment on 24 February 2011.

24.Mr Krivoshev did not attend his appointment on 24 February 2011.  On 24 February 2011, Centrelink sent Mr Krivoshev a letter advising him that a penalty of $905.85 would be deducted from his newstart allowance.

25.On 9 March 2011, Centrelink decided to apply a reconnection failure on Mr Krivoshev's newstart allowance.  On the same day, he was advised by telephone of the requirement to attend an appointment on 10 March 2011.

26.On 10 March 2011, Centrelink sent Mr Krivoshev a letter advising him that his request for exemption from the activity test has not been granted.  On the same day, Mr Krivoshev attended his appointment and his reconnection failure period was ended.

27.On 11 March 2011, the SSAT received Mr Krivoshev's application for review.

28.On 14 March 2011, Centrelink sent Mr Krivoshev a letter advising him that he was subject to a reconnection failure penalty from 11 February 2011 to 9 March 2011.

29.On 22 March 2011, Centrelink sent Mr Krivoshev a letter advising him that he may have persistently failed to meet his participation requirements and that he may lose his payment if he does not have a reasonable excuse for his actions.

30.On 22 March 2011, a Centrelink ARO affirmed the decision that Mr Krivoshev committed a connection failure on 27 January 2011, a reconnection failure on 11 February 2011 and on 24 February 2011, and the decision to apply a reconnection penalty of $905.85 on his newstart allowance.

31.On 24 March 2011, Centrelink decided that Mr Krivoshev committed a serious participation failure due to persistent non-compliance.  An eight week non-payment period from 7 April 2011 to 1 June 2011 was imposed.  On the same day, Centrelink sent Mr Krivoshev a letter advising him that his payment would stop from 7 April 2011 and his first payment after the non-payment period would be on 16 June 2011.

32.On 29 March 2011, a Centrelink ARO affirmed the decision to apply a serious participation failure and an eight week non payment period.

33.On 12 April 2011, the SSAT affirmed the decisions of the ARO and Centrelink to:

(a)refuse Mr Krivoshev a medical exemption from the newstart allowance activity test on the grounds that his medical condition did not preclude him from working;

(b)apply a connection failure to Mr Krivoshev’s newstart allowance, due to his failure to attend the following connection appointments in a six month period:

(i)a connection appointment on 27 January 2011;

(ii)a reconnection appointment on 11 February 2011; and

(iii)a reconnection appointment on 24 February 2011.

(c)impose a reconnection failure penalty of $905.85; and

(d)impose a serious failure non-payment period of eight weeks to Mr Krivoshev’s newstart allowance because he had persistently failed to meet participation requirements.

34.On 20 April 2011, Centrelink sent Mr Krivoshev a letter advising him that his newstart allowance would be paid from 7 April 2011 pending review of the decision to impose an eight week non payment period.

35.On 29 April 2011, Centrelink sent Mr Krivoshev a letter advising him that the because the decision to impose an eight week non-payment period had been affirmed, he would not be paid any newstart allowance from 5 May 2011 to 29 June 2011.

36.On 5 May 2011, Mr Krivoshev lodged an application for review with the Tribunal.

37.On 26 May 2011, Mr Krivoshev lodged an application to stay the SSAT decision imposing an eight week non-payment period.

38.On 30 May 2011, the Tribunal made an order staying the SSAT decision, pending the Tribunal's decision.

39.On 10 June 2011, Centrelink paid Mr Krivoshev $949.80, representing non-payment of Mr Krivoshev's newstart allowance for the period from 5 May 2011 to 1 June 2011.

40.On 4 August 2011, Centrelink paid Mr Krivoshev $905.85, representing a refund of the reconnection failure penalty.

Relevant Legislation

41.Section 593 of the Social Security Act 1991 (the Act) sets out the criteria for qualification for newstart allowance:

593  Qualification for newstart allowance

(1)  Subject to sections 596, 596A, 597 and 598, a person is qualified for a newstart allowance in respect of a period if:

(a)  the person satisfies the Secretary that:

(i)  throughout the period the person is unemployed; or

…

(b)  in the case of a person to whom subparagraph (a)(i) applies—throughout the period, or for each period within the period, the person:

(i)  satisfies the activity test; or

(ii)  is not required to satisfy the activity test; and

(c)  if subsection 605(1) applies to the person, at all times (if any) during the period when a Newstart Employment Pathway Plan is not in force in relation to the person, the person is prepared to enter into such a plan; and

(d)  if subsection 605(1) or (2) applies to the person, at all times during the period when a Newstart Employment Pathway Plan is in force in relation to the person, the person is prepared to enter into another such plan instead of the existing plan; and

(e)  if the person is required by the Secretary to enter into a Newstart Employment Pathway Plan in relation to the period, the person enters into that plan; and

(f)  while the plan is in force, the person satisfies the Secretary that the person is complying with the requirements in the plan; and

(g)  throughout the period the person:

(i)  subject to subsection (2B), is at least 21 years of age and has not reached the pension age; and

(ii)  is an Australian resident or is exempt from the residence requirement within the meaning of subsection 7(7); and

(i)  the person was not in receipt of a youth allowance during the period.

… (Original emphasis.)

42.Section 603C of the Act states the circumstances that must exist for a person not to be required to satisfy the newstart allowance activity test and defines work:

603C  Incapacitated person not required to satisfy activity test

(1)  Subject to this Subdivision, a person is not required to satisfy the activity test in respect of a period if:

(a)  throughout the period the person is incapacitated for work because of sickness or an accident; and

(b)  the incapacity is caused wholly, or virtually wholly, by a medical condition arising from the sickness or accident; and

(c)  the incapacity is, or is likely to be, of a temporary nature; and

(d)  if this Subdivision had not been enacted and paragraphs 593(1)(b), (c), (d) and (e) were disregarded, the person would qualify for newstart allowance; and

(e)  the person has, whether before or after the commencement of this section, given the Secretary a certificate of a medical practitioner, in a form approved by the Secretary, stating:

(i)  the medical practitioner’s diagnosis; and

(ii)  the medical practitioner’s prognosis; and

(iii)  that the person is incapacitated for work; and

(iv)  the period for which the person is incapacitated for work; and

(f)  the Secretary is satisfied that the incapacity has not been brought about with a view to obtaining an exemption from the activity test.

(1A)  The Secretary must comply with the guidelines (if any) determined and in force under subsection (1B) in deciding the following:

(a)  whether paragraph (1)(a), (b) or (c) applies to a person in respect of a period;

(b)  whether, for the purposes of paragraph (a) of the definition of work in subsection (2), work is of a kind that a person could be reasonably expected to do.

(1B)  The Minister may, by legislative instrument, determine guidelines to be complied with by the Secretary in making a decision referred to in subsection (1A).

(2)  In this section:

work, in relation to a person, means work (whether full‑time, part‑time, permanent or casual) that:

(a)  is of a kind that the person could, in the Secretary’s opinion, be reasonably expected to do; and

(b)  is for at least 8 hours per week on wages that are at or above the relevant minimum wage. (Original emphasis.)

43.The Guide to Social Security Law (the Social Security Guide), at 3.2.11.10, deals with exemptions arising from temporary incapacity.  It states, relevantly:

Summary

Social security law provides for a temporary incapacity exemption from the activity test for any job seeker who has an inability to work for 8 hours or more per week due to a medical condition, which is supported by medical evidence and is unable to undertake any program of assistance or suitable activity.

To apply for an exemption, a job seeker must provide the delegate with an approved medical certificate that is signed by a medical practitioner and states the medical practitioner's diagnosis and prognosis, that the person is incapacitated for work for 8 hours or more per week due to a medical condition and the period for which the person is incapacitated for work.

Where the delegate is of the view that the temporary incapacity does not prevent the job seeker from undertaking some type of activity, consideration should be given first to adjusting or reducing the job seeker's usual requirements in preference to exempting the job seeker from the activity test.

For example, many job seekers who are injured or have an episodic medical condition may still be able to take part in services to help them prepare for a job, even if they are temporarily unable to work or participate in their usual work experience, training or study activity.

If job seekers are able to participate in job preparation or another suitable activity, they will be expected to do so. Participating in suitable activities will help job seekers' to remain active and be job ready when they recover from the temporary condition. Requirements will be flexible to ensure they do not exceed job seekers' capacity.

However, if it is not appropriate for the job seeker to undertake job preparation or any other activity, an exemption may be applied.

Example: A person recovering in hospital, including recovery from surgery, would not be able to undertake any suitable activities.

Assessment of a medical certificate & referral for an assessment of work capacity

A job seeker who submits a medical certificate may require an assessment of their work capacity (via the ESAt process) to inform a decision on their ability to participate in a suitable activity.

Taking into account the job seeker's medical condition(s), the job seeker's work capacity will be assessed to determine if the job seeker has temporary reduced work capacity or partial capacity to work (1.1.P.56). If the job seeker has a temporary reduced work capacity, the assessor will specify the duration of the reduced work capacity. The assessor will provide recommendations on what, if any, suitable activities the job seeker could undertake, taking into account their capacity for work. Where possible, the assessor will also directly refer the job seeker to that activity.

A new referral to an assessor will not normally be required if the job seeker already has a current assessment of their work capacity, and if there has not been any significant change in their medical condition(s) since that assessment. An assessment is current if it was completed in the last 2 years.

Duration of exemption

An exemption can only be granted for the period stated on the medical certificate or for a maximum of 13 weeks, whichever is the lesser. A further exemption can be granted, if the job seeker continues to meet all criteria for a temporary incapacity exemption, i.e. the incapacity is temporary and the job seeker is unable to work 8 or more hours per week or undertake any suitable activity.

If the circumstances on which the initial period of exemption were based remain in effect (as substantiated by an additional, valid medical certificate), then it may be appropriate for the delegate to grant subsequent exemptions from participation requirements for one or more further periods (also not exceeding 13 weeks).

…

Not eligible for an activity test exemption

After consideration of all evidence (possibly including an assessment of a job seeker's medical condition(s) and work capacity), a delegate may determine that a job seeker has a reduced work capacity (work capacity of less than 30 hours per week) due to their temporary medical condition, but is able to work at least 8 hours per week and/or undertake suitable activities. These job seekers are not eligible for an activity test exemption. They will be required to meet appropriate activity test requirements, which take into consideration their individual circumstances and any barriers they may have, particularly their medical condition.

Example: While a person attends their own medical rehabilitation due to injury, their other activities with their employment services provider may be reduced or modified.

Job seekers with temporary reduced work capacity of 0-7 or 8-14 hours per week can meet their requirements by attending a quarterly interview with Centrelink, if their period of reduced work capacity is 13 weeks or longer, and meeting the terms of their EPP. They can volunteer to accept a referral to a suitable program of assistance but cannot be penalised for not accepting a referral. When their temporary reduced work capacity period ends, they are required to meet their usual activity test requirements.

Activity test requirements for job seekers not eligible for an exemption who are able to work 15 or more hours per week may include:

referral to an employment services provider, or continuation in a particular program,

undertaking an appropriate level of job search (usually 1 to 4 job contacts per fortnight),

undertaking another suitable activity that has been included in the job seeker's EPP, or

continuing with existing activity test requirements that have been modified or reduced (varied) in the job seeker's EPP.

It is expected that most job seekers who are temporarily ill or injured have existing EPPs in place that can be varied.

Example: The number of job searches may be reduced from 10 per fortnight to 2 while a job seeker recovers from an injury.

In other instances, new activities may become suitable during the period of reduced capacity.

Example: A job seeker may attend a quarterly interview with Centrelink.

In other cases, where a job seeker has been assessed via the ESAt process, the assessor may recommend to the job seeker a short term intervention that responds specifically to their injury or illness.

Example: The job seeker may be recommended to undertake a pain management course. 

… (Original emphasis.)

44.Section 42M of the Social Security (Administration) Act 1999 (the Administration Act) makes provision for the Secretary to determine whether a person has committed a serious failure for persistent non-compliance and for the making of a legislative instrument which identifies the matters to be taken into account by the Secretary in making such a determination:

42M  Serious failure for persistent non‑compliance

(1)  The Secretary may determine that a person commits a serious failure if:

(a)  the Secretary is satisfied that the person has, up to the day the Secretary makes the determination, persistently failed to comply with his or her obligations in relation to a participation payment (including by committing no show no pay failures, connection failures or reconnection failures); and

(b)  the person receives a participation payment for the instalment period in which the Secretary makes the determination.

Note 1:       A participation payment is not payable for 8 weeks for a serious failure (see section 42P).

Note 2:       For the day the Secretary makes the determination, see section 42Y.

(2)  In determining whether a person commits a serious failure under subsection (1):

(a)  the Secretary must not take into account failures that were outside the person’s control; and

(b)  the Secretary may only take into account any other failures that occurred intentionally, recklessly or negligently.

Limitations on determining persistent non‑compliance serious failures

(3)  The Secretary must not determine that a person commits a serious failure under subsection (1):

(a)  while the person is in a serious failure period for another serious failure determined under subsection (1); or

(b)  if the person is a new apprentice.

Legislative instrument

(4)  The Minister must, by legislative instrument, determine matters that the Secretary must take into account in deciding whether a person persistently failed to comply with his or her obligations in relation to a participation payment.

(5)  In deciding whether a person persistently failed to comply with his or her obligations in relation to a participation payment, the Secretary must take the matters determined under subsection (4) into account.

(6)  To avoid doubt, subsection (5) does not limit the matters that the Secretary may take into account in deciding whether the person failed to comply with his or her obligations. (Original emphasis.)

45.Sections 42E and 42H of the Administration Act concerns connection and reconnection failures:

42E  Connection failures

(1)  The Secretary may determine that a person commits a connection failure if:

(a)  the person commits any of the failures mentioned in subsection (2); and

(b)  the person receives an instalment of a participation payment for the instalment period in which the person commits the failure.

Note:          A reconnection requirement may be imposed for a connection failure (see section 42G).

(2)  For the purposes of subsection (1), the failures are the following:

(a)  the person fails to comply with a requirement that was notified to the person under subsection 63(2) or (4), and the notice did not inform the person of the effect of section 64;

(b)  the person fails to comply with a requirement, under section 501, 544A, 605 or 731L of the 1991 Act, to enter into an employment pathway plan;

(c)  the person fails to attend an appointment that the person is required to attend by an employment pathway plan that is in force in relation to the person;

(d)  the person is issued with a notice under subsection 42F(1) and fails to comply with it within the period specified in the notice;

(e)  the person fails to comply with subsection 42F(2);

(f)  the person fails to comply with a requirement included in an employment pathway plan that is in force in relation to the person to undertake a certain number of job searches per fortnight;

(g)  the person fails to comply with a requirement included in an employment pathway plan that is in force in relation to the person:

(i)  to keep a record of the person’s job searches in a document referred to in the plan as a job seeker diary; and

(ii)  to return the job seeker diary to the Department at the end of the period specified in the plan.

(3)  The Secretary may determine that a person commits 2 or more connection failures on a day.

Limitations on determining connection failures

(4)  Despite subsection (1), the Secretary must not determine that a person commits a connection failure if:

(a)  the person satisfies the Secretary that the person has a reasonable excuse for the failure; or

(b)  both of the following apply:

(i)  the person’s failure is a failure to comply with a requirement under section 544A of the 1991 Act to enter into an employment pathway plan;

(ii)  a youth allowance is not payable to the person for the instalment period in which the person commits the failure because of section 547AA of that Act; or

(c)  both of the following apply:

(i)  the person’s failure is a failure to comply with a requirement under section 605 of the 1991 Act to enter into an employment pathway plan;

(ii)  a newstart allowance is not payable to the person for the instalment period in which the person commits the failure because of section 615 of that Act; or

(d)  the person is a new apprentice; or

(e)  in the case of a failure under paragraphs (2)(d) to (g)—the person is receiving parenting payment.

Note: The Secretary must take certain matters into account for the purposes of paragraph (4)(a) (see section 42U). (Original emphasis.)

42H  Reconnection failures

(1)  The Secretary may determine that a person commits a reconnection failure if:

(a)  the person is required to comply with:

(i)  a reconnection requirement; or

(ii)  a further reconnection requirement; and

(b)  the person fails to comply with the requirement.

Note:          A further reconnection requirement may be imposed, and a penalty amount is deducted from the person’s participation payment, for a reconnection failure (see sections 42J and 42L).

(2)  The Secretary may determine that a person commits 2 or more reconnection failures on a day.

Limitation on determining reconnection failures

(3)  Despite subsection (1), the Secretary must not determine that a person commits a reconnection failure if the person satisfies the Secretary that the person has a reasonable excuse for the failure.

Note:          The Secretary must take certain matters into account for the purposes of subsection (3) (see section 42U).

Reconnection failure period

(4)  If the Secretary determines that a person commits a reconnection failure, the person commits the failure during the period (the reconnection failure period) that:

(a)  begins on the day the person commits the failure; and

(b)  ends on:

(i)  the day before the person complies with any further reconnection requirement imposed on the person in relation to the reconnection failure; or

(ii)  if the person fails to comply with a further reconnection requirement imposed on the person in relation to the reconnection failure, and the person satisfies the Secretary that the person has a reasonable excuse for the failure—the day before the person fails to comply with the requirement.

Determining an instalment period

(5) The Secretary must include in a determination under this section the instalment period in which a penalty amount (see section 42T) for the reconnection failure is to be deducted from the person’s instalment of a participation payment, provided that the penalty amount may not be deducted until at least the instalment after the first instalment made following notification to the person of the reconnection failure. (Original emphasis.)

46.Social Security (Reasonable Excuse – Participation Payment Obligations) (DEEWR) Determination 2009 (No.1) relevantly states:

5              Matters to be taken into account in determining if a person had a reasonable excuse

(1)   For:

(a)    subsections 550 (2A), 550B (2A), 576 (2A) and 576A (2A) of the 1991 Act; and

(b) subsection 42U (1) of the Administration Act;

the matters set out in subsection (2) are matters that the Secretary must take into account in determining whether a person has a reasonable excuse.

(2)   The matters are:

(a)    that the person did not have access to safe, secure and adequate housing, or was using emergency accommodation or a refuge, at the time of the failure; and

(b)    the literacy and language skills of the person; and

Example for paragraph (b)

If the person is unable to comprehend a requirement or an instruction, despite the requirement or instruction being delivered in a form that the person is most likely to comprehend.

(c)    an illness, impairment or condition of the person that requires treatment, including an illness that is episodic or unpredictable in nature; and

(d)    a cognitive or neurological impairment of the person; and

(e)    a psychiatric or psychological impairment or mental illness of the person; and

(f)    a drug or alcohol dependency of the person; and

(g)    unforeseen family or caring responsibilities of the person; and

(h)    that the person was subjected to criminal violence (including domestic violence and sexual assault); and

(i)    that the person was adversely affected by the death of an immediate family member or close relative; and

(j)    if:

(i)    the person has been imprisoned for a continuous period of more than 14 days; and

(ii)    the person has been released; and

(iii)  the person was released not more than 28 days before the failure was committed;

the person’s imprisonment or release from imprisonment.

(3) However, the Secretary must not take into account a matter if the Secretary is not satisfied that the matter had a significant effect on the person’s capacity to comply with the requirement, or the provision of the 1991 Act or the Administration Act, to which the failure relates.

(4)   Without limiting paragraph (2) (a), a person is taken not to have access to safe, secure and adequate housing if:

(a)    the housing to which the person has access:

(i)    damages, or is likely to damage, the person’s health; or

(ii)    threatens or is likely to threaten the person’s safety; or

(iii)   does not provide the person with access to a reasonable level of personal amenities or the economic and social support that housing normally affords; or

(b)    in the circumstances, the adequacy, safety, security or affordability of the housing to which the person has access is adversely affected or may be adversely affected; or

(c)    the person does not have a right to remain, or a reasonable expectation of being able to remain, in the housing to which the person has access. (Original emphasis.)

47.Social Security (Administration) (Persistent Non-compliance) (DEEWR) Determination 2009 (No.1) states relevantly:

4              Matters to be taken into account in determining persistent non-compliance

(1)   For subsection 42M (4) of the Act, the following matters are matters that the Secretary must take into account in deciding whether a person persistently failed to comply with his or her obligations in relation to a participation payment:

(a)    the findings of the most recent comprehensive compliance assessment in respect of the person (current comprehensive compliance assessment);

(b)    whether, during the following period (assessment period), the person has committed 3 or more failures (whether those failures are of the same kind or of different kinds):

(i)    the period of 6 months before the start of the current comprehensive compliance assessment; or

(ii)   if the person has incurred a serious failure period in the period of 6 months before the start of the current comprehensive compliance assessment — the period from the end of that serious failure period until the start of the current comprehensive compliance assessment;

(c)    if the person committed 3 or more failures during the assessment period:

(i)    the number of failures; and

(ii)   whether or not the failures demonstrate a pattern of non-compliance or should be viewed as a single instance of non-compliance;

Example
A job seeker who incurred three no show no pay failures for missing three consecutive days of an activity several months ago but has fully met their requirements since then would not necessarily be considered to be persistently non‑compliant on the basis of those failures.

(d)    the extent to which the person has otherwise complied with his or her obligations in relation to a participation payment during the assessment period.

Note 1   The Secretary must not take into account failures that are outside the person’s control, and may only take into account failures that occurred intentionally, recklessly or negligently: subsection 42M (2) of the Act.
Note 2   The matters in subsection (1) are not exhaustive. The Secretary may take other matters into account in determining whether a person persistently failed to comply with his or her obligations: subsection 42M (6) of the Act.

(2)   However, subsection (1) does not require the Secretary to take into account a matter if, in the particular case, the matter is not relevant to whether a person persistently failed to comply with his or her obligations in relation to a participation payment. (Original emphasis.)

48.Section 42U of the Administration Act states:

42U  Legislative instruments relating to reasonable excuse

(1)  The Secretary must, by legislative instrument, determine matters that the Secretary must take into account in deciding whether a person has a reasonable excuse for committing:

(a)  a no show no pay failure (see paragraph 42C(4)(a)); or

(b)  a connection failure (see paragraph 42E(4)(a)); or

(c)  a reconnection failure (see subsection 42H(3)); or

(d)  a serious failure (see subsection 42N(2)).

(2)  To avoid doubt, a determination under subsection (1) does not limit the matters that the Secretary may take into account in deciding whether the person has a reasonable excuse. (Original emphasis.)

49.Section 42L of the Administration Act states:

42L  Deduction of penalty amount

If the Secretary determines that a person commits a reconnection failure, the person’s penalty amount (see section 42T) for the reconnection failure is to be deducted from the person’s instalment of a participation payment for the instalment period determined under subsection 42H(5).

Note:          The balance of the penalty amount is to be deducted from instalments of the participation payment for any later instalment periods, or from any instalments of any other participation payment paid to the person (see section 42V). (Original emphasis.)

50.Section 42T of the Administration Act states:

42T  Legislative instrument determining method for working out penalty amount

(1)  The Minister must, by legislative instrument, determine a method for working out a person’s penalty amount for a no show no pay failure or a reconnection failure.

(2)  The method determined for a no show no pay failure that a person commits on a day must not provide for a penalty amount for the person that is more than the following:

(3)  The method determined for a reconnection failure that a person commits must not provide for a penalty amount for the person that is more than the total of the daily rates of the participation payment payable to the person during the reconnection failure period (before deducting a penalty amount).

(4)  In addition, the method determined for a no show no pay failure or a reconnection failure must relate to:

(a)  for a person’s no show no pay failure—the amount of the participation payment paid to the person on the day on which the person commits the no show no pay failure; or

(b)  for a person’s reconnection failure—the amount of the participation payment paid to the person during the reconnection failure period.

(5)  The method determined by the Minister for working out a person’s penalty amount must not affect any rent assistance, pharmaceutical allowance or youth disability supplement payable to the person.

(6)  The method determined may provide for a penalty amount that is nil.

(7)  The legislative instrument may also deal with the amount of a penalty amount to be deducted from an instalment of a participation payment. (Original emphasis.)

51.Section 42NC of the Administration Act:

42NC  Determination about serious failure requirements and severe financial hardship

If the Secretary determines that a person commits a serious failure, the Secretary must also determine that this section applies unless the Secretary is satisfied that:

(a)  the person does not have the capacity to undertake any serious failure requirement; and

(b)  serving the serious failure period would cause the person to be in severe financial hardship. (Original emphasis.)

52.Section 42P of the Administration Act states:

42P Consequences of serious failure

Participation payment not payable during serious failure period

(1)  If the Secretary determines that a person commits a serious failure and has determined that section 42NC applies, a participation payment is not payable to the person during the person’s serious failure period.

Note 1:       The Secretary may end a serious failure period under section 42Q or determine that a participation payment is payable, despite this section, under section 42R.

Note 2: The Secretary may continue the participation payment pending the outcome of an application for review (see sections 131 and 145 of the Administration Act).

(2)  The person’s serious failure period is the period:

(a)  beginning on the first day of the first instalment period that begins after the day the Secretary makes the determination; and

(b)  ending:

(i)  if the Secretary ends the person’s serious failure period under section 42Q—on the day mentioned in that section; or

(ii)  otherwise—8 weeks after the period begins.

Note:          For the day the Secretary makes the determination, see section 42Y.

Serious failure requirements

(3)  If the Secretary determines that a person commits a serious failure, then the Secretary may require the person to comply with a requirement (the serious failure requirement).

Note:          A person who complies with a serious failure requirement may have his or her serious failure period end under section 42Q. A person who fails to comply with a serious failure requirement may commit a no show no pay failure under section 42C. (Original emphasis.)

Consideration

Was Mr Krivoshev exempted from the Newstart Allowance Activity Test?

53.Section 593 of the Act provides that a person qualifies for newstart allowance in respect of a period if the person satisfies the Secretary that throughout the period the person is unemployed, and throughout the period the person satisfies the activity test or is not required to satisfy the activity test.

54.Section 603C(1) of the Act provides that a person is not required to satisfy the activity test if he is incapacitated for work because of sickness or injury and that incapacity is caused wholly, or virtually wholly, by a medical condition arising from the sickness or injury and that incapacity is, or likely to be, of a temporary nature.

55.Section 603C(2) of the Act defines "work" as work that is of a kind that a person could reasonably be expected to do for at least 8 hours per week on wages.

56.The Social Security Guide , at 3.2.11.10 states, that a temporary exemption from the activity test can be applied to a newstart job seeker who has an inability to work for 8 hours per week due to a medical condition which is supported by medical evidence and who is unable to undertake any program of assistance or suitable activity.

57.The medical certificate signed by Mr Krivoshev's treating doctor on 20 December 2010 stated that Mr Krivoshev's plantar fasciitis with spurs was an exacerbation of an existing condition and that, in his opinion, Mr Krivoshev "is/has been unfit for work/study and appointments from 18/12/2010 - 18/2/2011 inclusive".  However, despite this opinion, the treating doctor answered "Yes" to the questions "Can the patient do their usual work/study?” and "Can the patient do any other work for 8 hours or more per week?".

58.Similarly, the medical certificate signed by Mr Krivoshev's treating doctor on 18 February 2011 stated that Mr Krivoshev's plantar fasciitis with spurs was an exacerbation of an existing condition and that, in his opinion, Mr Krivoshev "is/has been unfit for work/study and appointments from 18/2/2011 - 18/5/2011 inclusive".  However, despite this opinion, the treating doctor answered "Yes" to the questions "Can the patient do their usual work/study?” and "Can the patient do any other work for 8 hours or more per week?".

59.Based on the contradictory information provided in the medical certificates, the Tribunal directed that clarification be sought from Mr Krivoshev's treating doctor as to the medical basis for his opinion that Mr Krivoshev was unfit to attend appointments from 18 December 2010 until 18 April 2011, but was nevertheless fit to work for 8 hours or more per week.

60.In the request for clarification, dated 22 September 2011, the following questions were put to Mr Krivoshev's treating doctor:

(1)Please confirm that all of the writing of both of these certificates is yours and that no writing/text has been added after the certificates were issued.

(2)Please explain the medical basis for your opinion that Mr Krivoshev was unfit to attend appointments from 18/12/2010 – 18/2/2011 inclusive, but he was fit to do work for 8 hours or more per week.

(3)On all of the certificates from 18 April 2010 to 18 July 2011, you state that Mr Krivoshev's Plantar Fasciitis with spurs has been an ‘exacerbation of an existing condition’.  Please explain the medical basis for your opinion that Mr Krivoshev's Plantar Fasciitis with spurs condition can be an exacerbation of an existing condition over such an extended period of 15 months.

61.On 10 October 2011, in response to the request for clarification, Mr Krivoshev's treating doctor wrote the following response:

I have found that Mr Krivoshev has always been able to attend his appointments, as he has been able to travel to the Surgery from Cabramatta without any problems.  The patient has always been fit for [s]uitable duties, with restrictions, best not applying for positions that require standing for long periods of time, climbing or walking any distance.  Patients [sic] condition has been of long standing and this has been the restrictions placed on his ability to find suitable employment.  I feel that he is able to work once a suitable position is found.

In answer to your questions

Q1 Correct
Q2 Looks like I should have said that he was unable to look for Work/Study but now I feel that he was able to look for suitable work.
Q3 Plantar Fasciitis can last a long time and is known for remissions and exacerbation

62.According to the above information provided by Mr Krivoshev's treating doctor, during the relevant time, Mr Krivoshev was fit for suitable duties that did not require standing for long periods of time, climbing or walking any distance.  Relevantly, Mr Krivoshev's treating doctor noted that Mr Krivoshev had always been able to attend his appointments at the surgery, so there would appear to be no reason why Mr Krivoshev was unable to attend appointments in respect of his newstart allowance.

63.Based on the medical certificates provided by Mr Krivoshev's treating doctor and the subsequent clarification provided in the treating doctor's letter dated 10 October 2011, the Tribunal determines that Mr Krivoshev was able to work in a position that did not require standing for long periods of time, climbing or walking any distance.  He was also able to work for 8 hours or more per week.  Mr Krivoshev was therefore not exempted from the newstart allowance activity test.

Did Mr Krivoshev commit connection/reconnection failures on 27 January 2011, 11 February 2011 and 24 February 2011?

64.Section 42M of the Administration Act provides that a person commits a "serious failure" if the person receives a participation payment (such as newstart allowance) and, during the period covered by the payment, the person persistently fails to comply with his obligations in respect of the payment.

65.Mr Krivoshev failed to attend appointments on 27 January 2011, 11 February 2011 and 24 February 2011.  Prior to these three appointments, Mr Krivoshev failed to attend an appointment on 12 January 2011, but Centrelink did not impose a connection failure because Mr Krivoshev had not been advised prior to that appointment that his application for exemption from the activity test had been refused.  On 25 January 2011, the appointment which had been scheduled on 12 January 2011 was rescheduled to 27 January 2011. Mr Krivoshev was advised on the same day that he was not exempted from the activity test and was required to attend the appointment.

66.Mr Krivoshev failed to attend the appointment on 27 January 2011.  On 9 February 2011, the 27 January 2011 appointment was rescheduled to 11 February 2011.  Mr Krivoshev was again advised that he was not exempted from the activity test and was required to attend this appointment.

67.Mr Krivoshev did not attend the appointment on 11 February 2011.  On 23 February 2011, Centrelink decided that Mr Krivoshev did not have a reasonable excuse for not attending the appointment on 11 February 2011.  The appointment was rescheduled to 24 February 2011.  Mr Krivoshev was advised that he was not exempted from the activity test and was required to attend the appointment.

68.Subsections 42E(1) and 42H(1) of the Administration Act provide that a person commits a connection failure or a reconnection failure in certain circumstances. Subsection 42E(1) applies in Mr Krivoshev's case because he persistently failed to attend appointments on 27 January 2011, 11 February 2011 and 24 February 2011 and was advised prior to these appointments that he was not exempted from the activity test.

69.Paragraph 42E(1)(b) of the Administration Act provides that for a connection/reconnection failure to apply, a person must have received a participation payment for the period in which the failure occurred. During the period from 27 January 2011 until 24 February 2011, when Mr Krivoshev failed to attend three connection/reconnection appointments, Mr Krivoshev received newstart allowance, which is a participation payment.

Did Mr Krivoshev have a reasonable excuse for not attending the appointments?

70.Subsections 42E(4) and 42H(3) of the Administration Act provide that in determining whether to apply connection/reconnection failures, regard must be given to whether the person had a reasonable excuse.

71.Subsection 5(2) of the Social Security (Reasonable Excuse – Participation Payment Obligations) (DEEWR) Determination 2009(No. 1) sets out the matters that the Secretary must take into account in determining whether a person has a reasonable excuse.  These include, relevantly:

(a)whether the person has access to safe, secure and adequate housing;

(b)the literacy and language skills of the person; and

(c)an illness, impairment or condition of the person that requires treatment, including an illness that is episodic or unpredictable in nature.

72.During the relevant period, Mr Krivoshev appears to have been in stable accommodation.  He is literate and had no difficulty in making submissions before the Tribunal and responding to questions posed by the Tribunal or the Respondent.

73.In relation to the appointments on 27 January 2011, 11 February 2011 and 24 February 2011, Mr Krivoshev was given reasonable notice of each of these appointments and was advised that he was not exempted from the activity test.  The medical certificates Mr Krivoshev lodged with Centrelink stated that Mr Krivoshev was able to do his usual work/study and was able to work for 8 hours or more per week.  In addition, the treating doctor stated in his letter dated 10 October 2011 that Mr Krivoshev was always able to attend appointments at the surgery.  Accordingly, the Tribunal concludes that Mr Krivoshev did not have a reasonable excuse for not attending the appointments on 27 January 2011, 11 February 2011 and 24 February 2011.

Were the failures outside Mr Krivoshev's control or did they occur intentionally, recklessly or negligently?

74.Subsection 42M(2) of the Administration Act provides that in determining whether a person commits a serious failure, failures which were outside the person's control must not be taken into account, and only failures which occurred intentionally, recklessly or negligently must be considered.

75.Mr Krivoshev claimed that he did not attend the appointments on 27 January 2011, 11 February 2011 and 24 February 2011 because he believed that he was exempted from the activity test because he provided medical certificates which stated that he was unfit to attend appointments.  However, Mr Krivoshev was given reasonable notice prior to each appointment that he was not exempted from the activity test and was required to attend the appointments.  The Tribunal concludes, therefore, that the failures were within Mr Krivoshev's control and occurred either intentionally, recklessly or negligently.

76.The Tribunal determines, therefore, that connection/reconnection failures ought to apply in respect of Mr Krivoshev's failure to attend the appointments on 27 January 2011, 11 February 2011 and 24 February 2011.

Was the penalty amount correctly calculated?

77.Section 42L of the Administration Act provides that if a person commits a reconnection failure then a penalty amount for that failure is to be deducted from his Centrelink payments.

78.Subsection 42T(3) of the Administration Act provides that the penalty amount is the amount of participation payment paid to the person during the reconnection period.

79.Subsection 42H(4) of the Administration Act provides that if a person commits a reconnection failure, then the reconnection failure period commences on the date of the failure and ends on the day he complies with any further reconnection requirement.

80.Mr Krivoshev did not attend his reconnection appointment on 11 February 2011, but attended a reconnection appointment on 10 March 1011.  His reconnection failure period is therefore from 11 February 2011 to 9 March 2011 inclusive.  During this period, he was paid newstart allowance at the rate of $33.55 per day.  His penalty amount is therefore $905.85.

81.The Tribunal determines that the penalty amount was correctly calculated.

Did Mr Krivoshev commit a serious failure?

82.Section 42M of the Administration Act provides that a person commits a "serious failure" if the person receives a participation payment (in this case, newstart allowance) and, during the period which the payment covers, the person persistently fails to comply with his obligations in respect of the payment.

83.Subsections 42M(4) and 42M(5) of the Administration Act provide that in considering whether a person has committed a serious failure, the decision maker must take into account the provisions of the Social Security (Administration)(Persistent Non-Compliance) (DEEWR) Determination 2009 (No.1).

84.Based on the Persistent Non-Compliance Determination, a person has committed a serious failure if there are three or more connection/reconnection failures within a six month period.  Accordingly, because Mr Krivoshev failed to attend appointments on 27 January 2011, 11 February 2011 and 24 February 2011, and these appointments all occurred with a six month period, Mr Krivoshev committed a serious failure.

Should Mr Krivoshev serve a serious failure period?

85.If a person commits a serious failure and section 42NC of the Administration Act applies, then the participation payment (newstart allowance) is not payable during the serious failure period. Section 42NC applies unless the person does not have capacity to undertake a "serious failure requirement", and serving the serious failure period would cause the person to be in serious financial hardship.

86.Since the Tribunal has determined that Mr Krivoshev committed a serious failure, Mr Krivoshev's newstart allowance is not payable during the serious failure period. 

87.However, subsection 42P(3) of the Administration Act provides for the serious failure period to end if the person complies with a serious failure requirement. Whilst a "serious failure requirement" is not defined in the Act or the Administration Act, the Social Security Guide, at 3.1.13.60, refers to serious failure requirements as compliance activities such as Work for the Dole, part time work, work experience, approved training and intensive job search. A job seeker undertaking a compliance activity must participate for 25 hours per week for a total of 8 weeks, although other time limits may apply to persons with partial capacity.

88.The Tribunal does not consider that Mr Krivoshev does not have capacity to undertake a serious failure requirement.  The medical certificates Mr Krivoshev lodged with Centrelink stated that Mr Krivoshev was able to do his usual work/study and was able to work for 8 hours or more per week.  Based on this evidence, it is open to Mr Krivoshev to contact Centrelink to determine whether he can undertake a serious failure requirement instead of serving the eight week serious failure non-payment period.

89.The Tribunal considers that Mr Krivoshev may suffer some financial hardship if a serious failure penalty is imposed. However, as stated in paragraph 88 above, he does have the capacity to undertake a serious failure requirement. In this regard, section 42NC of the Act applies and the serious failure penalty ought to be imposed unless Mr Krivoshev agrees to undertake a serious failure requirement. It is open to Mr Krivoshev to contact Centrelink and arrange to undertake a serious participation requirement so that the serious failure period can either not be applied or end early, pursuant to subsections 42P(3) of the Administration Act.

90.In this regard, subsection 42P(2) of the Administration Act provides that the serious failure period begins on the first day of the instalment period that begins after the day the Secretary determines that there has been a serious failure.

91.However, because the Tribunal stayed the decision of the SSAT, payment of Mr Krivoshev's newstart allowance has continued, pending the Tribunal's decision.

92.Subsection 145(4) of the Administration Act provides that where the decision is not changed by the Tribunal, the Secretary can cease the payments until the serious failure period has been served. Payments can only continue until 13 weeks after the Tribunal's decision at the latest and can be stopped at any time within that 13 weeks.

93.Based on the Tribunal's determination that Mr Krivoshev committed a serious failure, Centrelink ought to determine when the serious failure period will commence.  As stated in paragraph 89 above, it is open to Mr Krivoshev to contact Centrelink and arrange to undertake a serious participation requirement so that the serious failure period can either not be applied or end early.

Decision

94.For the reasons stated above, the decisions under review are affirmed.

I certify that the 94 preceding paragraphs are a true copy of the reasons for the decision herein of Dr T Schafer, Member

Signed:          ........[sgd]....................................................................
  Associate

Dates of Hearing       15 September and 26 October 2011
Date of Decision        17 January 2012
Advocates for the Respondent                 Ms S Mantaring and Ms J Maclean