Lu-Zaw; Secretary, Department of Employment and Workplace Relations and
[2007] AATA 82
•14 March 2007
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2007] AATA 82
ADMINISTRATIVE APPEALS TRIBUNAL )
) No A2006/166
GENERAL ADMINISTRATIVE DIVISION ) Re SECRETARY, DEPARTMENT OF EMPLOYMENT AND WORKPLACE RELATIONS Applicant
And
SUANN LU-ZAW
Respondent
DECISION
Tribunal Mr S. Webb, Member Date14 March 2007
PlaceCanberra
Decision The decision under review in relation to Mr Lu-Zaw’s entitlement to newstart allowance is set aside and in substitution thereof the Tribunal decides that Mr Lu-Zaw was not qualified for newstart allowance on 20 October 2005. The decision is otherwise affirmed.
..............................................
Mr S.Webb, Member
CATCHWORDS
SOCIAL SECURITY – Newstart allowance – Meaning of 'unemployed' – Activity test – Approved activity voluntary work exemption – Alleged activity test breach – Notice requirements for cancellation of exemption – Administrative error – Decision affirmed.
Social Security Act 1991 (Cth) ss 23, 593, 595, 602, 603, 603A, 603AA, 605, 607
Social Security (Administration) Act 1999 (Cth) ss 63, 236, 237
REASONS FOR DECISION
14 March 2007 Mr S. Webb, Member 1. Suann Lu-Zaw was granted an unpaid voluntary work exemption from the newstart allowance activity test and entered an activity agreement on that basis. The Applicant Secretary purported to withdraw the exemption and required Mr Lu-Zaw to attend interviews with Centrelink and with Quest Employment and Training Solutions. Mr Lu-Zaw failed to attend interviews with Quest. An administrative breach penalty was imposed and his newstart allowance was subsequently cancelled. These decisions were set aside on review by the Social Security Appeals Tribunal (SSAT).
2. Before dealing with the issues it is convenient to set out the facts as found.
(a)Mr Lu-Zaw was born on 22 November 1951. He was over 50 years old in 2005.
(b)On 12 April 2002 Centrelink approved the Metaschool of Bodiology as a voluntary work provider.
(c)Mr Lu-Zaw was granted an exemption from the newstart allowance activity test on the basis of his voluntary work for the Metaschool in 2002. He entered into a newstart activity agreement (a participation agreement) on that basis. It is not disputed that the exemption and the participation agreement were reviewed and renewed annually until 2005. I note that Mr Lu-Zaw has conducted the business of the Metaschool from his place of residence since 2002.
(d)On 13 July 2004 Mr Lu-Zaw entered into a further participation agreement[1] on the basis of his voluntary work and activity exemption.
[1] Documents filed pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (Cth), T11.
(e)On 8 August 2005 Centrelink wrote to Mr Lu-Zaw requiring him to attend an interview with his Centrelink personal adviser to discuss his current situation.[2] On that day a Centrelink officer noted that “need to discuss the voluntary work approval [with Mr Lu-Zaw]….. has been doing voluntary work for too long. Have cancelled [voluntary] work approval”.[3]
[2] T19.
[3] T72 folio 275.
(f)On 12 August 2005 Centrelink wrote to Mr Lu-Zaw requiring him to attend an interview with Quest on 25 August 2005 to negotiate a new job search plan as part of a newstart activity agreement.[4]
[4] T21.
(g)Mr Lu-Zaw did not attend the interview with Quest.
(h)On 29 August 2005 Centrelink wrote to Mr Lu-Zaw requiring him to contact Centrelink to discuss the reasons for his failure to attend the interview before 5 September 2005.[5]
[5] T22.
(i)Mr Lu-Zaw attended the interview with his Centrelink personal adviser on 1 September 2005. It appears that the adviser informed him that his exemption from the newstart allowance activity test had been withdrawn[6] and requested information about the Metaschool.[7] Mr Lu-Zaw informed the adviser that he was complying with his participation agreement and he would not act on advice concerning his exempt status until he received formal notification of the change.[8]
[6] T72 folios 273-274.
[7] T23.
[8] T72 folio 274.
(j)On 2 September 2005 Mr Lu-Zaw lodged a Voluntary Work Verification of Approved Voluntary Work form.[9]
[9] T18.
(k)On the same day Centrelink authorised a letter to Mr Lu-Zaw requiring him to attend an interview with Quest to negotiate a new job search plan. The letter was produced and sent on 3 September 2005.[10] Mr Lu-Zaw asserts that he did not receive this letter.
[10] T25.
(l)Mr Lu-Zaw failed to attend the interview with Quest on 16 September 2005.[11]
[11] T26.
(m)On 21 September 2005 Centrelink wrote to Mr Lu-Zaw requesting financial information in relation to the Metaschool.[12] On the same day Centrelink wrote to Mr Lu-Zaw informing him that his newstart allowance had been temporarily stopped as a result of his failure to attend an interview.[13]
[12] T27.
[13] T28.
(n)On 22 September 2005 Centrelink wrote to Mr Lu-Zaw informing him that an administrative breach penalty of 16 percent would apply to his newstart allowance from 5 October 2005 to 4 January 2006 as a result of his failure to attend the interview with Quest on 16 September 2005.[14]
[14] T30.
(o)On 23 September 2005 Centrelink wrote to Mr Lu-Zaw informing him that his “proposed voluntary work has not been approved because the nominated work you have applied to undertake does not fall within the guidelines for voluntary work”.[15] On 27 September 2005 Mr Lu-Zaw requested reconsideration of this decision.[16]
[15] T31.
[16] T33.
(p)On 29 September 2005 Mr Lu-Zaw lodged a statement concerning his reasons for not attending the interview with Quest on 16 September 2005.[17]
[17] T34.
(q)On the same day he attended a telephone interview with Centrelink as a result of which a new participation agreement was entered into on the basis of his voluntary work with the Metaschool.[18]
[18] T35.
(r)On 5 October 2005 Centrelink wrote to Mr Lu-Zaw requiring him to attend an interview with his Centrelink personal adviser on 24 October 2005 to discuss his current circumstances.[19]
[19] T37.
(s)On 10 October 2005 Centrelink wrote to Mr Lu-Zaw informing his request for approval of voluntary work at the Metaschool would not be granted.[20]
(t)On 11 October 2005 Centrelink wrote to Mr Lu-Zaw affirming the decision to impose an administrative breach penalty.[21]
(u)On 19 October 2005 Mr Lu-Zaw wrote to Centrelink requesting that the breach penalty and payment suspension be lifted.[22]
(v)On 20 October 2005 Mr Lu-Zaw attended a Centrelink interview.[23] On the same day Centrelink wrote to Mr Lu-Zaw informing him that his newstart allowance payments were cancelled from 21 September 2005 as a result of his failure to meet the activity test.[24]
(w)On 28 October 2005 Mr Lu-Zaw requested review of the decisions to impose a breach penalty and to cancel his newstart allowance, and to refuse approval of voluntary work at the Metaschool.[25]
(x)On 1 November 2005 Centrelink wrote to Mr Lu-Zaw informing him the decisions were affirmed.[26]
(y)On 2 November 2005 Centrelink wrote to Mr Lu-Zaw informing him that the decision not to approve the Metaschool for voluntary work purposes was affirmed.[27]
(z)On 14 November 2005 an authorised review officer affirmed the decision to apply an administrative breach penalty and varied the decision to cancel Mr Lu-Zaw’s newstart allowance with the effect that his allowance was cancelled from 20 October 2005 and not 21 September 2005.[28]
(aa)Subsequently Mr Lu-Zaw re-applied for newstart allowance on 15 November 2005 and, ultimately his application was successful.
(bb)On 6 June 2006 the SSAT decided to set aside the authorised review officer’s decision, deciding instead that an administrative breach penalty should not have been applied as a result of Mr Lu-Zaw’s failure to attend the interview on 16 September 2005 and that he remained qualified for newstart allowance on 20 October 2005 until the allowance was re-granted in November 2005.[29]
[20] T40.
[21] T41.
[22] T44 and T45.
[23] T72 folios 265-266.
[24] T46.
[25] T47 and T48.
[26] T48 and T49.
[27] T50.
[28] T54.
[29] T2.
3. In the circumstances it is for this Tribunal to determine whether the SSAT decision is the correct or preferable decision. The issues are:
(a)Was an administrative breach penalty correctly imposed for failure to attend an interview and, for that purpose, did Mr Lu-Zaw have a reasonable excuse for failing to attend the interview with Quest on 16 September 2005?
(b)Was Mr Lu-Zaw qualified for newstart allowance on 20 October 2005 and in particular, was he unemployed and did he fail to satisfy the activity test?
administrative breach penalty
4. The Secretary contends that the administrative breach penalty was correctly imposed and it was reasonable in all the circumstances. The Secretary says that an administrative breach rate reduction period applied to Mr Lu-Zaw as a result of his failure to attend the interview with Quest on 16 September 2005. In the Secretary’s submission Mr Lu-Zaw was properly notified of the appointment, which was reasonable, but he chose not to attend without a reasonable excuse.
5. As will appear, I do not agree.
6. Section 63 of the Social Security (Administration) Act 1999 (the Administration Act) as it stood at the time of the decision under review provided that the Secretary may notify a person who is receiving newstart allowance that he or she is to attend a particular place for a particular purpose within a specified time.[30] If the person does not comply with the notice and the requirement was reasonable, newstart allowance is not payable and an administrative breach rate reduction period applies in certain circumstances.[31] Those circumstances are, relevantly, that the person is receiving newstart allowance and is not subject to a requirement by the Secretary to participate in the Personal Support Program[32] (PSP) administered by the Department, and the person is not party to a newstart activity agreement under which the person is required to participate in the PSP.[33] The Secretary has discretion to determine that despite non-compliance, newstart allowance is payable or an administrative breach rate reduction period does not apply if the person had a reasonable excuse for not complying with the notice.[34]
[30] Subsection 63(3).
[31] Subsection 63(5).
[32] Social Security Act 1991 (Cth), subs 23(1).
[33] Subsection 63(5A).
[34] Subsection 63(9).
7. The Secretary’s notice requiring Mr Lu-Zaw to attend the interview with Quest on 16 September 2005[35] is a notice pursuant to subs 63(3) of the Administration Act. It is clear that Mr Lu-Zaw did not comply with the notice. He claims he did not receive the notice. However, I accept that the notice was despatched in the normal way by pre-paid post. Thus, even if Mr Lu-Zaw did not receive the notice it is taken to have been given to him pursuant to subs 23(12) of the Social Security Act 1991 (the SS Act).
[35] T25.
8. I note in passing that it is not clear to me that the preconditioning circumstances for non-payment of newstart allowance and imposition of an administrative breach rate reduction period are satisfied in Mr Lu-Zaw’s case. Plainly enough he was receiving newstart allowance. However, it is not clearly established on the evidence that Mr Lu-Zaw was not required by the Secretary or by a newstart activity program to participate in the Personal Support Program administered by the Department. These matters were not ventilated during the proceedings and the precise nature of the ‘Personal Support Program’ and any requirements upon Mr Lu-Zaw remain opaque and up in the air. Nevertheless, it is not necessary to go further in relation to the preconditioning circumstances and any deficiencies therein, as the issue is resolved on other grounds, as will become clear.
9. Did Mr Lu-Zaw have a reasonable excuse for not attending the interview? In order to answer this question it is necessary to consider the circumstances at the time. On 1 September 2005 Mr Lu-Zaw was informed verbally that the activity test exemption on the basis of unpaid voluntary work for the Metaschool had been withdrawn.[36] At that time there was in force a newstart activity agreement the effect of which, in Mr Lu-Zaw’s submission, was that he did not have to attend interviews with Job Network Providers such as Quest. He says, it was for that reason that he did not attend the interview on 16 September 2005, but did attend all of the interviews with his Centrelink personal adviser as he was required to do. The Secretary maintains that Mr Lu-Zaw’s explanation is not reasonable because he knew that his voluntary work exemption had been withdrawn and the newstart activity agreement required him to “fully participate in Intensive Support after discussing it with [his] Job Network member”.
[36] T72 folios 273-274.
10. Under subs 236(1) of the Administration Act a decision under the social security law must be in writing. It appears that a Centrelink officer decided to cancel Mr Lu-Zaw’s voluntary work approval on 8 August 2005 and made a note to that effect on Centrelink’s computer file for Mr Lu-Zaw.[37] It is possible that the officer’s note of his decision in the Centrelink computer file is sufficient for the purposes of subs 236(2) of the Administration Act. Even if that is the case, as of 16 September 2005 Mr Lu-Zaw had not been given formal notice of such a decision and the reasons for it pursuant to s 237 of the Administration Act. If a government agent makes a decision concerning the rights or entitlements of an individual, the rules of procedural fairness and natural justice, which are well understood, require that the individual should be provided with notice of the decision, the reasons for it and their rights of review or appeal. That is especially so in circumstances in which the individual relies for their sole income on income support payments from the government and the decision in question may adversely affect those payments. The decision and notice provisions of the social security law, as expressed in the sections to which I have referred, protect against the arbitrary and unfair exercise of power without proper accountability and administrative procedure. Failing to properly and formally notify a newstart allowance recipient of a significant change in their activity test requirements may result in unfairness to the person involved and may found a reasonable excuse for a subsequent failure to comply with a notice. In this case Centrelink sent Mr Lu-Zaw notice of the decision to cancel his voluntary work approval on 23 September 2005,[38] seven days after the scheduled interview.
[37] T72 folio 275.
[38] T31.
11. Concerning the requirements of the newstart activity agreement to which Mr Lu-Zaw was a party which was then in force,[39] the requirement on Mr Lu-Zaw to participate in intensive support after discussing it with his Job Network provider appears plain enough. The agreement was made on 13 July 2004. In February 2005, on review of the agreement, Mr Lu-Zaw was required and failed to attend an interview with Quest and his newstart allowance payments were suspended and a breach was raised. However, the breach was not applied and the suspension was raised because “Job seeker exempted from activity test … Participation report is invalid … No attempt was made to reconnect to the Job Network”.[40] Whether that outcome was correct or not, and it is plainly not consistent with the approach contended by the Secretary in these proceedings and the requirements of the newstart activity agreement on its face (and I note the substantial difficulties facing a person such as Mr Lu-Zaw, whose first language is not English, understanding the apparently contradictory content of that agreement), it is hardly surprising that when Mr Lu-Zaw faced similar requirements in August 2005 to those he experienced only six months previously, he expected a similar outcome: that he was not required to attend an interview with Quest because of his voluntary work exemption from the activity test. I note in passing that Mr Lu-Zaw asserts that the July 2004 activity agreement was replaced by a Verification of Voluntary Approved Work form he purportedly lodged at the Braddon Centrelink office on 28 February 2005.[41] However, the approval process for voluntary unpaid work pursuant to s 603AA is not the same, and should not be confused with the process for entering into or renegotiating an activity agreement pursuant to Subdivision C of Part 2.12 of the SS Act.
[39] T11
[40] T12 folio 81 and T2 folio 10.
[41] Exhibit R2.
12. Thus, in those circumstances, I am satisfied that Mr Lu-Zaw had a reasonable excuse for not complying with the Secretary’s notice requiring him to attend an interview on 16 September 2005 with Quest.
13. That being so, I am satisfied that it is appropriate to exercise the discretion set out at subs 63(9) of the Administration Act and determine that newstart allowance was payable to Mr Lu-Zaw and an administrative breach rate penalty period did not apply to him in the period from 5 October 2005 to 4 January 2006 as a result of his failure to attend the aforementioned interview. It follows that that part of the SSAT decision will be affirmed.
14. Insofar as the Secretary asserts that Mr Lu-Zaw’s failure to attend the interview on 16 September 2005 was not reasonable because it is alleged that he was resisting negotiating a new activity agreement,[42] I do not agree. Mr Lu-Zaw attended the interview on 1 September 2005 with his Centrelink personal advisor to develop a practical plan of action with a view to negotiating a new agreement. At that interview it appears that Mr Lu-Zaw stated that he would not attend the interview and would not appeal the decision concerning the cancellation of his voluntary work exemption until he was provided with written reasons for the decision.[43] On that evidence it can be seen that Mr Lu-Zaw did not fail to enter into a new activity agreement pursuant to s 607 but was simply asking for reasons for the decision to cancel his voluntary work activity test exemption before doing so. I am satisfied that it was reasonable in the circumstances for Mr Lu-Zaw to seek and be provided with reasons for the decision to change the basis of his qualification for newstart allowance, which had been accepted and in place since 2002, before entering into a new agreement on different terms. It would be unreasonable, in the circumstances, to penalise Mr Lu-Zaw for Centrelink’s delay in providing him with formal notice of the decision and the reasons for it.
[42] Subsections 593(1) and 605(2) of the SS Act.
[43] T72 folio 274.
cancellation of payment
15. Was Mr Lu-Zaw qualified for newstart allowance on 20 October 2005? Mr Lu-Zaw maintains that he was qualified for newstart allowance at that time because he was complying with his activity agreement by performing at least 32 hours voluntary work per fortnight at the Metaschool and was not, therefore, required to satisfy the activity test pursuant to subs 603AA(i) of the SS Act. Furthermore, at the time, he was actively contesting and seeking reasons for the decision to withdraw approval for his voluntary work at the Metaschool.
16. Under s 593 of the SS Act a person is qualified for newstart allowance if, relevantly, the person is unemployed[44] and satisfies the activity test if they are required to do so,[45] and if the person is a party to an activity agreement the person is prepared to enter into a new agreement[46] and does so if required,[47] and takes reasonable steps[48] to comply with the terms of the agreement,[49] and satisfies other requirements.[50]
[44] Sub-paragraph 593(1)(a)(i).
[45] Subsection 593(b).
[46] Subsection 593(d).
[47] Subsection 593(e).
[48] Subsections 593(2A) and (2B).
[49] Subsection 593(f).
[50] Subsection 593(g) and (i).
17. Centrelink entered into a newstart activity agreement with Mr Lu-Zaw on 29 September 2005, purportedly in error. Under the agreement Mr Lu-Zaw was required to undertake more than 32 hours voluntary work at the Metaschool per fortnight.[51] In the Secretary’s submission compliance with the requirements of an activity agreement and satisfying the activity test in order to qualify for newstart allowance are separate but interrelated matters. I agree. As I understand the Secretary’s submissions, Mr Lu-Zaw failed to satisfy the activity test requirements because he was not unemployed and was not actively seeking and willing to undertake paid work. Furthermore the activity agreement had not validated Mr Lu-Zaw’s voluntary work and his activity agreement came to an end when his newstart allowance was cancelled on 20 October 2005.
[51] T35.
18. The simple fact is that the approval of Mr Lu-Zaw’s voluntary unpaid work at the Metaschool was withdrawn on 8 August 2005 and he was formally notified on 23 September 2005. No further approval was granted despite Centrelink entering into the particular terms of the activity agreement which commenced on 29 September 2005. The force of that agreement did not exempt Mr Lu-Zaw from the activity test pursuant to subs 603AA(1). For that section to apply the voluntary work must be approved voluntary work for an approved organisation. I am satisfied that the voluntary work Mr Lu-Zaw was undertaking at that time was not approved voluntary work for an approved organisation. It follows that he was required to satisfy the activity test. Sections 602, 603 and 603A do not assist Mr Lu-Zaw in the circumstances. Thus, in order to satisfy the activity test Mr Lu-Zaw must satisfy the Secretary, and in those shoes this Tribunal, he was actively seeking and willing to undertake suitable paid work.[52]
[52] Subsection 601(1).
19. By Mr Lu-Zaw’s own evidence he was not actively seeking paid employment and was undertaking voluntary unpaid full time work at the Metaschool at the time. It follows that he did not satisfy the activity test and he was not, therefore, qualified for newstart allowance at that time. Thus the decision under review dealing with the cancellation of Mr Lu-Zaw’s newstart allowance on 20 October 2005 will be set aside.
decision
20. The decision under review in relation to Mr Lu-Zaw’s entitlement to newstart allowance is set aside and in substitution thereof the Tribunal decides that Mr Lu-Zaw was not qualified for newstart allowance on 20 October 2005. The decision is otherwise affirmed.
I certify that the 20 preceding paragraphs are a true copy of the reasons for the decision herein of Mr S. Webb, Member.
Signed: .....................................................................................
Joe Meagher, AssociateDate/s of Hearing 10 January 2007
Date of Final Submissions 8 February 2007
Date of Decision 14 March 2007
Representative for the Applicant Self
Solicitor for the Respondent Centrelink Legal Services Branch
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