Lowry and Secretary, Department of Employment and Workplace Relations

[2006] AATA 205

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2006] AATA 205

ADMINISTRATIVE APPEALS TRIBUNAL        Nº V2005/1176

GENERAL ADMINISTRATIVE DIVISION

Re:         ANDREW LOWRY

Applicant

And:       SECRETARY,
  DEPARTMENT OF EMPLOYMENT

AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal:       Regina Perton, Member

Date:             7 March 2006

Place:            Melbourne

Decision:The Tribunal affirms the decisions under review.

(sgd) Regina Perton

Member

SOCIAL SECURITY – Newstart allowance – activity agreement – failure to sign agreement – rate reduction period – further rate reduction period – 8 week activity test non-payment period – decision affirmed  

Social Security Act 1991 s 631

Social Security (Administration) Act 1999 ss 16, 67, 68, 72, 123H, 144, 179, 181

Re Reine and Secretary, Department of Family and Community Services (2005) 85 ALD 166

REASONS FOR DECISION

7 March 2006  Regina Perton, Member

1.      Andrew Lowry, a recipient of Newstart allowance (NSA), is in dispute with Centrelink, which administers NSA for the Department of Employment and Workplace Relations.  The dispute before the Tribunal arises as a result of Centrelink requiring Mr Lowry to sign a Preparing for Work Agreement (the agreement).  Mr Lowry refused to sign the agreement.   As a result, Centrelink first decided to reduce Mr Lowry’s NSA payments by 18%, then by 24% and then to impose an eight week non‑payment period.  The start of the non-payment period has been deferred during the review process. 

2.      The Social Security Appeals Tribunal (SSAT) reviewed the three Centrelink decisions.  On 1 December 2005, the SSAT affirmed the decision that an 18% rate reduction period be imposed from 22 July 2005 until 19 January 2006.   The SSAT varied the decision to impose a rate reduction period of 24% between 26 August 2005 and 23 February 2006 by advancing the date of commencement by three days.  The SSAT decided that the 24% reduction period should apply from 29 August 2005 to 23 February 2006.  The SSAT affirmed the decision to impose an eight week non‑payment period.

3.      The issues before the Tribunal concern Mr Lowry’s refusal to sign the agreement and whether the sanctions imposed as a result of that refusal, namely two reductions in his NSA payments and subsequently, the imposition of a non‑payment period of eight weeks, were correct.

BACKGROUND

4.      Andrew Lowry, who is 34 years old, has been receiving NSA since 18 June 1993.  For the first few years, he earned some income from part-time work.   Long term recipients of NSA are required to participate in an approved activity each year as part of the Government’s Mutual Obligation Initiative (MOI).  The MOI applies to NSA recipients who are aged between 18 and 49 years of age and have been in receipt of payments for 6 months or more.

5.      Centrelink scheduled an interview for Mr Lowry on 20 June 2005 at the Moorabbin office of Skillsplus (Peninsula) Inc (Skillsplus), a Job Network Member.  Mr Lowry attended the interview which concerned his future participation in a Work for the Dole program (the program).  Centrelink records indicate that Mr Lowry was not happy with the range of suggested activities.  He tentatively agreed to undertake a particular activity but refused to sign the relevant agreement.  Mr Lowry stated that he refused to sign because it was an abuse of his civil rights.  He does not believe that the Government should force him to sign a contract. 

6.      On 1 July 2005, Centrelink imposed an 18% rate reduction of NSA for 26 weeks from 22 July 2005 until 19 January 2006 because of Mr Lowry’s failure to sign the agreement.  On 26 July 2005, Mr Lowry attended a further interview at Skillsplus but again refused to sign an agreement.  On 1 August 2005, Centrelink wrote to Mr Lowry indicating that he may not have met the activity test by failing to enter into a Work for the Dole project on 26 July 2005.  Mr Lowry was required to contact Centrelink within 7 days to arrange an appointment if he wished to avoid a reduction in, or cancellation of, his NSA.   He failed to contact Centrelink during that period. 

7.      On 10 August 2005, an authorised review officer of Centrelink (ARO) affirmed the decision to impose an 18% rate reduction period for 26 weeks, from 22 July 2005 until 19 January 2006.

8.      On 15 August 2005, Centrelink wrote to Mr Lowry to inform him that as a result of his second breach of the activity test within a 2 year period, his NSA payments would be reduced by 24% from 26 August 2005 to 23 February 2006.  Mr Lowry was informed that the breach arose because you delayed entering into a Preparing for Work Agreement with your Community Work Coordinator.   

9.      On 15 August 2005, Mr Lowry attended another interview at Skillsplus but again refused to sign an agreement.  The Skillsplus officer allowed him a few more days to sign but he did not do so.  On 21 September 2005, Centrelink wrote to Mr Lowry informing him that his NSA payment may be reduced because of his failure to enter into an agreement on 15 August 2005.  Mr Lowry was asked to contact a specific Centrelink officer within 7 days to arrange an appointment to discuss the issue.  He failed to respond within that period.  Centrelink officers made several unsuccessful attempts to contact Mr Lowry by telephone in early September 2005. 

10.     On 8 September 2005, Mr Lowry lodged an application for review with the SSAT concerning the decision to reduce his NSA payment by 24%. 

11.     On 9 September 2005, Centrelink wrote to Mr Lowry again, telling him that his NSA had been temporarily stopped from that day as he had not responded to the request to contact Centrelink.  He was urged to contact Centrelink as soon as possible if he still needed to receive NSA.   

12.     On 21 September 2005, Centrelink wrote to Mr Lowry advising him that as he had incurred two or more activity test breaches within a two‑year period, he was subject to an eight week non-payment period that was to be applied from 4 October 2005 to 28 November 2005.   A Centrelink social worker contacted Mr Lowry on 22 September 2005 to see if there were any exceptional or extenuating circumstances.  Mr Lowry advised the social worker that he did not intend to comply with the requirement to sign the agreement.

13.      On 10 October 2005, an ARO affirmed the decision to impose a 24% rate reduction period from 26 August 2005 to 23 February 2006.   On 10 October 2005, a different ARO affirmed the decision to impose an 8 week non-payment period.

14.     On 1 December 2005, the SSAT reviewed the decisions concerning the rate reduction and the non-payment period, varying the start date of the 24% reduction by 3 days, but otherwise affirming the decisions.

15.     On 30 December 2005, Mr Lowry lodged an application for review with the Tribunal.  On 9 January 2006, the Tribunal ordered that the operation of the decision to suspend NSA be suspended pending the hearing and decision of the application for review.

EVIDENCE

16.     Mr Lowry told the Tribunal that he did not sign the agreement because no-one should be forced to sign a contract against their will.  He said he was standing up for his civil rights.  He described the program as a way to punish and monitor the unemployed.  He said that the work and training he was offered under that program would not help him to gain employment.  He questioned how limiting or suspending his payments would help him to get a job.  He said that the stress and financial consequences of such sanctions produced the opposite result, namely being unable to concentrate on and/or afford to attend interviews and look for work.  He said that he will have to move out of the flat he had been renting for the past seven years because of the impact of the rate reductions and suspension. 

17.     Mr Lowry said that he was currently undertaking a computer course on Monday mornings, which he found useful.  He described his educational background, his studies in animal technology, his time spent as a musician, his expertise with reptiles and his love of the Australian bush.  He said that he has written a book which he is trying to have published.

18.     Ms Verina Cogden of Skillsplus described the interviews she had conducted with Mr Lowry and her unsuccessful attempts to have him sign an agreement.

CONSIDERATION OF THE ISSUES

19. Section 593 of the Social Security Act 1991 (the Act) sets out the qualifications for NSA.  Section 605 of the Act says that a person who is receiving NSA may be required to enter into an NSA activity agreement, except in certain limited circumstances that do not apply to Mr Lowry.   Section 606(1) of the Act sets out a range of activities which an NSA recipient may undertake which include job search, a vocational training course, paid work experience and participation in various programs.  Section 606(3) requires Centrelink to have regard to a person’s capacity to comply with a proposed agreement taking into account the following matters under s 606(4):

(a)the person's education, experience, skills, age, disability, illness, mental and physical condition; and

(b)the state of the local labour market and the transport options available to the person in accessing that market; and

(c)the participation opportunities available to the person; and

(d)the family and caring responsibilities of the person; and

(e)the length of travel time required for compliance with the agreement, by reference to what constitutes unreasonably difficult commuting for the purposes of paragraph 601(2A)(g); and

(f)the financial costs of compliance with the agreement, such as travel costs, and the capacity to pay for such compliance; and

(g)any other matters that the Secretary or the person considers relevant in the circumstances.

20.     Section 607 of the Act sets out the consequences if a person who has been given notice of a requirement to enter into an agreement fails to do so.  It requires that the person be given notice in writing of the failure to enter into an agreement.  The penalties for failing to enter into the agreement are set out in s 625 of the Act: 

625(1)     Subject to subsection (2), if:

(a)a person is required to enter into a Newstart Activity Agreement in order to qualify, or to continue to qualify, for a newstart allowance; and

(b)the person fails to enter into a Newstart Activity Agreement (the failure );

a newstart allowance is not payable to the person because of the failure.

625(1A)   If a newstart allowance becomes payable to the person after the time it ceases to be payable under subsection (1), then:

(a)if the failure is the person's first or second activity test breach in the 2 years immediately before the day after the failure—an activity test breach rate reduction period applies to the person; or

(b)if the failure is the person's third or subsequent activity test breach in the 2 years immediately before the day after the failure—an activity test non-payment period applies to the person.

21.     The rate reductions are set out in s 630A and Division 4 of Part 2.12 of the Act.  For the first breach the reduction in NSA is 18% for a period of 26 weeks; for the second breach, the reduction in NSA is 24% for a period of 26 weeks; and for the third breach, the act imposes a suspension of payment for an eight-week period.     

22.     Mr Lowry has acknowledged that he failed to sign an NSA agreement.  Mr Lowry stated that it was a breach of his civil rights to require him to enter into a contract to undertake a Work for the Dole Program.  In Reine and Secretary, Department of Family and Community Services (2005) 85 ALD 166, Deputy President Forgie undertook a comprehensive analysis of whether a requirement to enter into an agreement breached Australia’s international treaty obligations, or was inconsistent with other Commonwealth legislation, or was unconstitutional and/or was an unconscionable contract. She found that the legislation requiring an NSA recipient to enter into an agreement was lawful.

23.     The Tribunal is satisfied that taking into account the matters in s 606 of the Act, it was reasonable to require Mr Lowry to enter into an agreement.  Mr Lowry deliberately chose not to sign an agreement.  He was warned of the consequences.  The Tribunal finds that the breaches were appropriately imposed.

24.     Centrelink has informed Mr Lowry that if he were now to enter into an agreement, he could take advantage of clean slating i.e. foregoing the penalties imposed.  To date, he has chosen not to do so. 

DECISION

25.     The Tribunal affirms the decisions under review.

I certify that the twenty-five [25] preceding paragraphs are a true copy of the reasons for the decision of:

Regina Perton, Member

(sgd)       Catherine Thomas

Clerk

Date of hearing:  16 February 2006

Date of decision:  7 March 2006
Representative of applicant:        Self-represented
Advocate for respondent:            Mr S Meehan, Centrelink