Lanham and Department of Family and Community Services - [2002] AATA 141

DECISION AND REASONS FOR DECISION [2002] AATA 141

ADMINISTRATIVE APPEALS TRIBUNAL )

) No W2001/403

GENERAL ADMINISTRATIVE DIVISION       )
           Re      STEPHEN GEORGE LANHAM
  Applicant
           And    SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
  Respondent

DECISION

Tribunal Associate Professor S D Hotop, Senior Member

Date5 March 2002
PlacePerth

Decision The Tribunal sets aside the decision under review and, in substitution therefor, decides that the applicant is qualified for a youth allowance under s 540 of the Social Security Act 1991, with effect from 19 February 2001.

..........(sgd S D Hotop)............
Senior Member
CATCHWORDS
SOCIAL SECURITY – Youth Allowance – applicant completed 3-year Bachelor of Commerce degree course from 1996 to 1998 – applicant employed as accountant from 1999 to 2000 – applicant enrolled in 3-year Bachelor of Arts (Mass Communication) degree course in December 2000 and commenced study in February 2001 – applicant first claimed youth allowance in February 2001 – whether applicant qualified for youth allowance – whether applicant satisfies activity test – whether applicant undertaking full-time study – Departmental policy requirement that applicant demonstrate that job prospects will be significantly improved by undertaking second bachelor's degree course – whether Departmental policy valid and effectual.

Social Security Act 1991 ss 540, 541(1), 541B
Youth Allowance (Satisfactory Study Progress Guidelines) Determination 1998

Re Aston and Secretary, Department of Primary Industry (1985) 8 ALD 366
Re Becker and Minister for Immigration and Ethnic Affairs (1977) 1 ALD 158
Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409
Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634
Green v Daniels (1977) 13 ALR 1
Re MT, KM, NT and JT and Secretary, Department of Social Security (1986) 9 ALD 146
Re Secretary, Department of Social Security and Bosworth (1989) 18 ALD 373

REASONS FOR DECISION

5 March 2002 Associate Professor S D Hotop, Senior Member

Stephen George Lanham ("the applicant") has applied to the Tribunal for review of a decision of the Social Security Appeals Tribunal ("SSAT"), dated 10 October 2001, which affirmed a decision of an Authorised Review Officer ("ARO") within Centrelink, dated 25 May 2001, that the applicant is not qualified for a youth allowance ("YA") under s 540 of the Social Security Act 1991 ("the Act").
At the hearing the applicant appeared in person without representation, and the Secretary to the Department of Family and Community Services ("the respondent") was represented by Mr A Jones of the Advocacy and Administrative Law Team within Centrelink. The Tribunal had before it the documents ("T documents") lodged by the respondent pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 ("the AAT Act") and certain documentary exhibits tendered by the respondent. The parties merely made submissions on the relevant legal issues and did not present any oral evidence.
The Factual Background
The relevant background facts, which are not in dispute and which are found by the Tribunal on the basis of the T documents, are as follows.
The applicant, who was born on 24 December 1978, commenced study for the degree of Bachelor of Commerce (a 3-year course) at The University of Western Australia in 1996 and successfully completed that degree course in 1998.
For the next two years (1999-2000) the applicant was employed by a large firm of Chartered Accountants in Perth as a tax accountant.
In December 2000 the applicant enrolled as a full-time student in the Bachelor of Arts (Mass Communication) degree course (a 3-year course) at Curtin University of Technology, commencing in February 2001.
On 21 February 2001 the applicant first claimed YA. In the relevant claim form the applicant indicated that:

he was presently undertaking full-time study for the abovementioned Bachelor of Arts (Mass Communication) degree course at Curtin University of Technology, having commenced on 19 February 2001, with an expected completion date in November 2003;
he had completed the Bachelor of Commerce degree course at The University of Western Australia during the period 1996-1998;
he had subsequently been employed as an accountant.

On 22 February 2001 the applicant's claim for YA was rejected by a delegate of the respondent. That decision was confirmed on review by the delegate (although on a different ground) on 2 April 2001. The delegate's decision was subsequently affirmed by an ARO (on 25 May 2001) and by the SSAT (on 10 October 2001). The ground on which the applicant's claim for YA was ultimately rejected by the delegate, and subsequently by the ARO and the SSAT, was that the applicant had failed to demonstrate that his "job prospects" would be "significantly improved by undertaking a second course at the same level" or that such second course was "complementary to [his] current qualifications", as required by para 3.2.10.110 ("YA Full-time Students Satisfactory Progress – Study at the Same Level") in the Department of Family and Community Services Guide to Social Security Law.
The Legislation
The relevant provisions of the Act are as follows:
"Part 2.11 – Youth Allowance
Division 1 – Qualification for youth allowance
Subdivision A – Basic qualifications
540 Qualification for youth allowance – general rule
Subject to this Subdivision, a person is qualified for a youth allowance in respect of a period if:
(a)either of the following applies:
(i)throughout the period the person satisfies the activity test (see Subdivision B) or is not required to satisfy the activity test (see Subdivision C);
(ii)the person is a CDEP Scheme participant (see section 1188B) in respect of the period;
(b)throughout the period the person is of youth allowance age (see Subdivision D); and
(c)throughout the period the person satisfies any requirements relating to Youth Allowance Activity Agreements that apply to the person under Subdivision E; and
(d)throughout the period, the person:
(i)is an Australian resident; or
(ii)is exempt from the residence requirement within the meaning of subsection 7(7).
…
Subdivision B – Activity test
541 Activity test
General
541(1) Subject to section 541A and subsection (3) of this section, a person satisfies the activity test in respect of a period if:
(a)the person satisfies the Secretary that, throughout the period, the person is undertaking full-time study (see section 541B); or
(b)the person satisfies the Secretary that, throughout the period, the person is actively seeking, and willing to undertake, paid work in Australia (other than paid work that is unsuitable for the person); or
(c)the person takes reasonable steps, throughout the period, to comply with the terms of a Youth Allowance Activity Agreement applying to the person; or
(d)the person takes reasonable steps to comply, throughout the period, with a requirement of the Secretary notified to the person under subsection (2).
…
541B Undertaking full-time study
General
541B(1) For the purposes of this Act, a person is undertaking full-time study if:
(a)the person:

(i)is enrolled in a course of education at an educational institution; or

was enrolled in the course and satisfies the Secretary that he or she intends, and has (since no longer being enrolled) always intended, to re-enrol in the course when re-enrolments in the course are next accepted; or
was enrolled in the course and satisfies the Secretary that he or she intends, and has (since no longer being enrolled) always intended, to enrol in another course of education (at the same or a different educational institution) when enrolments in the other course are next accepted; and
(b)the person:

(i)is undertaking in the particular study period (such as, for example, a semester) for which he or she is enrolled for the course; or

intends to undertake in the next study period for which he or she intends to enrol for the course;
either
in a case to which subsection (1A) does not apply – at least three-quarters of the normal amount of full-time study in respect of the course for that period (see subsections (2) to (4)); or
in a case to which subsection (1A) applies – at least two-thirds of the normal amount of full-time study in respect of the course for that period (see subsections (2) to (4)); and
(c)the course in question is an approved course of education or study (see subsection (5)); and
(d)in the Secretary's opinion, the person is making satisfactory progress towards completing the course.
…
Meaning of satisfactory progress
541B(3A) In forming an opinion about whether a person is making satisfactory progress for the purpose of paragraph (1)(d), the Secretary is to have regard to the guidelines.
541B(3B) The Minister, by determination in writing:

(a) is to set guidelines for the exercise of the Secretary's discretion under subsection (3A); and

(b) may revoke or vary those guidelines.

541B(3C) Guidelines made for the purpose of subsection (3A) are disallowable instruments.
…".

Pursuant to s 541B(3B) of the Act the Minister made the Youth Allowance (Satisfactory Study Progress Guidelines) Determination 1998 ("the Determination"), with effect from 1 July 1998. The purpose of the Determination is, as stated in s 1.3 thereof, "to set out the guidelines for the exercise of the Secretary's discretion, under subsection 541B(3A) of the Act, to form an opinion about whether a person is making satisfactory progress for paragraph 541B(1)(d) of the Act". Division 1 of Part 2 of the Determination sets out the guidelines regarding "satisfactory progress" in relation to various categories of full-time courses of study. Division 2 then sets out the guidelines regarding satisfactory progress in relation to two different circumstances involving "(a)dditional study at the same level", namely, "(s)tudy following failure of a previous course" and "(s)tudy following withdrawal from a previous course".
Departmental Policy
The Guide to Social Security Law prepared by the Department of Family and Community Services relevantly states:
"3.2.10.110 YA Full-time Students Satisfactory Progress – Study at the Same Level
Study at the same level
If a student wishes to do more than one course at the SAME LEVEL the following conditions may apply depending on whether the student has:

completed previous course (see table 1),
withdrew (sic) from previous course (see table 2), or
failed first and second course (see table 3).
To remain eligible for YA a student must be making satisfactory progress in their course. Satisfactory Progress is completing a course within the allowable time rules (3.2.10.100). Study in previous courses is not counted when calculating allowable time for the current course.
Note: Allowable time rules for Austudy do not apply to YA.
…
Table 1: Previous course completed
If the first course was  Then…
completed and the
duration of the second
course is
1 year or less  - the student can undertake any number of courses at the same level if they complement each other and lead to a qualification and/or will demonstrably improve a customer's employability, and
- a PFWA is not required.
more than 1 year  - the student needs to demonstrate that                  their job prospects will be significantly                 improved by undertaking a second   course at the same level and/or it is   complementary to their current   qualifications.
- if the second course is approved by the          officer then allowable time is reset to   zero and customer must complete the            second course within the allowable time               rules for that course. The customer must                sign a PFWA saying they will complete               the second course within the allowable             time for that course.
…".

The Issue

It is common ground that the applicant fulfils the conditions of qualification for YA specified in paras (b), (c) and (d) of s 540 of the Act. The question is, however, whether the applicant also fulfils the condition specified in para (a) of s 540 – more specifically, whether throughout the relevant period he "satisfies the activity test" (see subpara (i)). The answer to that question will be in the affirmative if, in terms of (relevantly) s541(1)(a) of the Act, the applicant satisfies the respondent that, throughout the relevant period, he is "undertaking full-time study", within the meaning of s 541B of the Act. As regards the conditions specified in paras (a)-(d) of s 541B(1) of the Act, it is common ground that the applicant fulfils the conditions specified in paras (a) (subpara (i) thereof), (b) (subparas (i) and (iii) thereof) and (c). The ultimate matter in dispute in this case is whether the applicant also fulfils the condition specified in para (d) of s 541B(1) – namely, whether, in the respondent's opinion, the applicant is making "satisfactory progress" towards completing the relevant course of education or study in which he is enrolled.
Consideration and Findings
The only basis on which the respondent contends that the applicant does not fulfil the condition specified in para (d) of s 541B(1) of the Act is that he is not making "satisfactory progress" towards completing the relevant course of education or study (namely, the Bachelor of Arts (Mass Communication) degree course at Curtin University of Technology in which he enrolled in December 2000 and which he commenced in February 2001) because he has failed to demonstrate that his "job prospects will be significantly improved" by undertaking that course or that that course is "complementary to [his] current qualifications", as required by the Department of Family and Community Services Guide to Social Security Law (para 3.2.10.110 "YA Full-time Students Satisfactory Progress – Study at the Same Level"). The applicant, however, submits that para 3.2.10.110, to the extent that it purports to impose the abovementioned requirement, is invalid and ineffectual, and that he fulfils all the relevant conditions of qualification for YA specified in the Act and is therefore qualified for YA in respect of the period commencing on 19 February 2001 throughout which he is undertaking full-time study.
The Legislation
None of the relevant provisions of the Act (in particular ss 541(1) and 541B(1)) precludes a person, who has completed an approved course of education or study and is undertaking full-time study (within the meaning of s 541B(1) of the Act) in another such course at the same level, from satisfying the activity test by reason of undertaking full-time study in the latter course. Nor do those provisions impose any special conditions or requirements which must be satisfied by such a person before that person may be considered to be "making satisfactory progress" (within the meaning of s 541B(1)(d) of the Act) towards completing the latter course. The Determination, on the other hand, deals specifically with the matter of "satisfactory progress" towards completing an approved course of education or study and (in Part 2) sets out guidelines for the exercise of the discretion in forming an opinion about whether a person is making "satisfactory progress" within the meaning of s 541B(1)(d) of the Act. Division 2 of Part 2 of the Determination specifically addresses the matter of "(a)dditional study at same level", but sets out guidelines in relation to only two circumstances involving the undertaking of additional study at the same level, namely, (1) where a person has failed to successfully complete a course and subsequently undertakes study in another course at the same level, and (2) where a person has withdrawn from a course and subsequently undertakes study in another course at the same level. The Determination is silent, however, as regards the circumstance (as in the present case) where a person has successfully completed a course and subsequently undertakes study in another course at the same level.
In short, neither the Act nor the Determination in terms precludes the applicant from being qualified from YA under s 540 of the Act in respect of his undertaking full-time study for the Bachelor of Arts (Mass Communication) degree course in 2001. On the contrary, the applicant, in accordance with the literal terms of ss 541(1)(a) and 541B(1) of the Act, satisfies the activity test by reason of his undertaking full-time study for the Bachelor of Arts (Mass Communication) degree course in 2001 and was qualified for YA in terms of s 540 of the Act when he claimed YA in February 2001.
Departmental Policy
The question then arises as to whether the Departmental Guide to Social Security Law (para 3.2.10.110 "YA Full-time Students Satisfactory Progress – Study at the Same Level") may operate to, in effect, impose an additional condition or requirement which must be satisfied before a person (such as the applicant), who has successfully completed an approved course of education or study and subsequently commences study in another such course at the same level, may be regarded as making "satisfactory progress towards completing the course", within the meaning of s 541B(1)(d) of the Act, for the purposes of satisfying the activity test in accordance with s 541(1)(a) of the Act, and qualifying for YA under s 540 of the Act. The relevant additional condition or requirement, which para 3.2.10.110 purports to impose, is that the student must demonstrate that their "job prospects will be significantly improved by undertaking a second course at the same level" or that such course is "complementary to their current qualifications".
The relevance of Ministerial policy or Departmental policy to the Tribunal's decision-making function under s 43 of the AAT Act has been the subject of comment by the Federal Court of Australia and by the Tribunal. In Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409 Bowen CJ and Deane J said (at 420):
"…Clearly, in considering whether a deportation order should be made in respect of the plaintiff in the present matter, the Minister was entitled to be guided by any general relevant government policy which was not inconsistent with the provisions or the objects of the Migration Act. Indeed, the consistent exercise of discretionary administrative power in the absence of legislative guidelines will, in itself, almost inevitably lead to the formulation of some general policy or rules relating to the exercise of the relevant power.
…
In a matter such as the present where it was permissible for the decision maker to take relevant government policy into account in making his decision, but where the tribunal is not under a statutory duty to regard itself as being bound by that policy, the tribunal is entitled to treat such government policy as a relevant factor in the determination of an application for review of that decision. It would be contrary to common sense to preclude the tribunal, in its review of a decision, from paying any regard to what was a relevant and proper factor in the making of the decision itself. If the original decision maker has properly paid regard to some general government policy in reaching his decision, the existence of that policy will plainly be a relevant factor for the tribunal to take into account in reviewing the decision. On the other hand, the tribunal is not, in the absence of specific statutory provision, entitled to abdicate its function of determining whether the decision made was, on the material before the tribunal, the correct or preferable one in favour of a function of merely determining whether the decision made conformed with whatever the relevant general government policy might be."

In Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 the Tribunal (President Brennan J) said (at 645):

"In my view, the Tribunal, being entitled to determine its own practice in respect of the part which ministerial policy plays in the making of Tribunal decisions, should adopt the following practice.
When the Tribunal is reviewing the exercise of a discretionary power reposed in a Minister, and the Minister has adopted a general policy to guide him in the exercise of the power, the Tribunal will ordinarily apply that policy in reviewing the decision, unless the policy is unlawful or unless its application tends to produce an unjust decision in the circumstances of the particular case. Where the policy would ordinarily be applied, an argument against the policy itself or against its application in the particular case will be considered, but cogent reasons will have to be shown against its application, especially if the policy is shown to have been exposed to parliamentary scrutiny.
The general practice of the Tribunal will not preclude the Tribunal from making appropriate observations on ministerial policy, and thus contributing the benefit of its experience to the growth or modification of general policy; but the practice is intended to leave to the Minister the political responsibility for broad policy, to permit the Tribunal to function as an adjudicative tribunal rather than as a political policy-maker, and to facilitate the making of consistent decisions in the exercise of the same discretionary power.
The general practice will require the Tribunal to determine whether the policy is lawful, not in order to supervise the exercise by the Minister of his discretion, but in order to determine whether the policy is appropriate for application by the Tribunal in making its own decision on review."

In an earlier decision of the Tribunal – Re Becker and Minister for Immigration and Ethnic Affairs (1977) 1 ALD 158 – President Brennan J had (at 162-163) distinguished between policies formulated at the Ministerial or political level and policies formulated at the Departmental level and clearly implied that policies in the former category should be given substantially greater weight by the Tribunal than those in the latter category. See also Re Aston and Secretary, Department of Primary Industry (1985) 8 ALD 366 at 375-378. The relevant policy in the present case clearly falls into the category of policy formulated at the Departmental level.

The matter of the appropriate weight to be given by the Tribunal to Ministerial or Departmental policy, however, arises only where that policy is in accordance with the governing legislation and is not otherwise unlawful or ultra vires. In the present case the Tribunal is of the opinion that the relevant Departmental policy (3.2.10.110 "YA Full-time Students Satisfactory Progress – Study at the Same Level") is not in accordance with Division 1 of Part 2.11 of the Act. Division 1 of Part 2.11 of the Act contains the provisions (relevantly, ss 540, 541(1)(a) and 541B(1)) of the Act which set out the conditions or requirements, the fulfilment of which by a person throughout the relevant period qualifies that person for YA in respect of that period. The critical condition or requirement for present purposes is that the person, throughout the period, is "undertaking full-time study", within the meaning of s 541B of the Act: see ss 540(a)(i) and 541(1)(a) of the Act. Section 541B(1) of the Act sets out the conditions or requirements, the fulfilment of which by a person will thereby fulfil the condition or requirement (specified in s 541(1)(a)) that the person be undertaking full-time study. Paragraph 3.2.10.110 ("YA Full-time Students Satisfactory Progress – Study at the Same Level") in the Departmental Guide to Social Security Law purports to impose a condition or requirement which must be fulfilled by a student (for the purposes of their being qualified for YA) who has completed an approved course of education or study and who "wishes to do more than one course at the SAME LEVEL", namely, that the student must "demonstrate that their job prospects will be significantly improved by undertaking a second course at the same level and/or it is complementary to their current qualifications". That condition or requirement, in the Tribunal's opinion, is not in accordance with s 541B(1) of the Act. It clearly bears no relation to the conditions specified in paras (a)-(c) of s 541B(1). It purports (by reason of the heading of para 3.2.10.110, namely, "YA Full-time Students Satisfactory Progress – Study at the Same Level" (emphasis added)), however, to relate to the condition specified in para (d) of s 541B(1). In the Tribunal's opinion, however, it does not, in substance, bear any relation to that paragraph either. The abovementioned condition or requirement set out in para 3.2.10.110 of the Departmental Guide to Social Security Law does not relate to the making of "satisfactory progress towards completing the course" of study being undertaken by the student; instead, it relates solely to the nature and character of that course and, in particular, its value as regards improving the student's "job prospects". In short, para 3.2.10.110 in effect purports to impose a substantive condition (additional to those specified in s 541B(1) of the Act) which must be satisfied before a person may be regarded as "undertaking full-time study", and as thereby satisfying the "activity test" pursuant to s 541(1)(a) of the Act, for the purposes of qualifying for YA under s 540 of the Act. That condition, being neither specified in, nor contemplated by, s 541B(1) of the Act or any other provision in Division 1 of Part 2.11 of the Act, is not in accordance with, and goes beyond, the relevant provisions of the Act.
Subsection (3A) of s 541B of the Act provides that, in forming an opinion about whether a person is "making satisfactory progress" for the purposes of para (d) of subs (1) of s 541B, regard is to be had to "the guidelines" – namely, the guidelines formulated by the Minister by determination in writing made pursuant to subs (3B) of s 541B. As previously noted, however, the guidelines set out by the Minister in the Determination, which commenced on 1 July 1998, are completely silent as regards the making of "satisfactory progress" in a case where a person, having successfully completed a course of study, is undertaking another course at the same level. There is nothing in the Determination, therefore, which authorises or contemplates, either expressly or by necessary implication, the imposition of the abovementioned condition or requirement set out in para 3.2.10.110 of the Departmental Guide to Social Security Law.
Accordingly, the Tribunal finds that the abovementioned condition or requirement set out in para 3.2.10.110 of the Departmental Guide to Social Security Law is not in accordance with, and goes beyond, the relevant provisions of Division 1 of Part 2.11 – in particular, ss 540(a)(i), 541(1)(a) and 541B(1) – of the Act and is therefore invalid and ineffectual. Likewise, the Tribunal finds that the decision under review, whereby the applicant's claim for YA in February 2001 was rejected on the sole basis that he did not fulfil that condition or requirement set out in para 3.2.10.110 of the Departmental Guide to Social Security Law, is invalid and ineffectual and must, therefore, be set aside: see Green v Daniels (1977) 13 ALR 1; Re MT, KM, NT and JT and Secretary, Department of Social Security (1986) 9 ALD 146; Re Secretary, Department of Social Security and Bosworth (1989) 18 ALD 373.
Conclusion
The Tribunal finds, in conclusion, that the applicant, when he first claimed YA in February 2001, fulfilled all the relevant conditions or requirements specified in ss 540, 541(1) and 541B(1) of the Act for the purposes of qualification for YA. The only relevant statutory condition or requirement about which there was dispute in this case is that specified in para (d) of s 541B(1) of the Act, and the only basis for that dispute was the abovementioned condition or requirement set out in para 3.2.10.110 of the Deparmental Guide to Social Security Law. Given the Tribunal's above finding that that condition or requirement is invalid and ineffectual, the abovementioned basis for dispute regarding the fulfilment by the applicant of the condition or requirement specified in para (d) of s 541B(1) of the Act does not exist. There being no other basis for suggesting that the applicant did not fulfil the condition or requirement specified in para (d) of s 541B(1) of the Act, the Tribunal finds that the applicant has fulfilled that condition or requirement as from the time he commenced his study for the Bachelor of Arts (Mass Communication) degree at Curtin University of Technology on 19 February 2001.

Decision

For the above reasons the Tribunal sets aside the decision under review and, in substitution therefor, decides that the applicant is qualified for YA under s 540 of the Act, with effect from 19 February 2001.
I certify that the 22 preceding paragraphs are a true copy of the reasons for the decision herein of Associate Professor S D Hotop, Senior Member
Signed:         ...............(sgd V Wong)...............................
  Associate
Date/s of Hearing  21 February 2002
Date of Decision  5 March 2002
Counsel for the Applicant        In person
Counsel for the Respondent    Mr A Jones, Advocacy and Administrative Law Team, Centrelink.

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Citations

Lanham and Department of Family and Community Services [2002] AATA 141

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