MacNamara; Department of Family and Community Services
[2000] AATA 838
•19 September 2000
DECISION AND REASONS FOR DECISION [2000] AATA 838
ADMINISTRATIVE APPEALS TRIBUNAL )
) No Q1999/456
GENERAL ADMINISTRATIVE DIVISION )
Re SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
Applicant
And SHARON MACNAMARA
Respondent
DECISION
Tribunal Mr. D.W. Muller, Senior Member
Date19 September 2000
PlaceBrisbane
Decision The Tribunal sets aside the decision of the Social Security Appeals Tribunal and determines that the provisions of section 1068-G7B of the Social Security Act 1991 apply to $4,239.72 of a lump sum payment made to Sharon MacNamara on 21 December 1998.
...............(Signed).......................
D.W. MULLER
SENIOR MEMBER
CATCHWORDS
SOCIAL SECURITY – Newstart Allowance – lump sum payment – sub-contractor – seasonal work – apportionment provisions
Social Security Act 1991: s1068-G7B, 1073(1), 8(11)
REASONS FOR DECISION
Mr. D.W. Muller, Senior Member
This is an application by the Secretary, Department of Family and Community Services, to review a decision of the Social Security Appeals Tribunal (SSAT), which decided that a lump sum payment made to Sharon MacNamara, by the owner of a fishing trawler at the end of a six month long prawn fishing season, was not subject to the apportionment provisions of the Social Security Act 1991 (the Act).
The Tribunal had access to the following material:
(a)The section 37 statement.
(b)The Separation Certificate relating to the cessation of work of Ms. MacNamara on the fishing vessel, "Shearwater".
(c)Ms. MacNamara's claim for Newstart on 7 December 1998.
(d)A document setting out answers to questions from Centrelink to Newfishing Australia Pty Ltd dated 23 June 1999.
(e)Statements and evidence by Ms. MacNamara.
The Tribunal accepts Ms. MacNamara as an honest and reliable witness and finds as follows:
(a)Ms. MacNamara resides on Magnetic Island, which is off the coast from Townsville.
(b)In early March 1998, Ms. MacNamara travelled to Darwin. She entered into a contract with a fishing company, Newfishing Australia Pty Ltd to work as a deck-hand on a prawn trawler from 23 March to 16 June 1998.
(c)The status of Ms. MacNamara was that of a sub-contractor. She was not entitled to regular wages, sick leave, holiday pay or long service leave. She was paid only upon the sale of the catch. She was entitled to a percentage of the proceeds. She had to supply her own equipment, pay her own insurance (health and income protection), supply her own food, pay for her on-shore accommodation and pay her own airfares to and from Darwin, plus any other incidentals.
(d)Ms. MacNamara was paid the following amounts for the period March to June 1998:
21 May 1998 - $1,864.84
27 May 1998 - $4,930.80
26 June 1998 - $3,436.80
20 July 1998 - $4,368.11
(e)Ms. MacNamara flew home to Magnetic Island at the end of June 1998. She returned to Darwin in mid July, to start a new fishing contract on 25 July 1998.
(f)Ms. MacNamara was at sea from late July 1998 to 2 December 1998, when her contract ceased.
(g)Between July 1998 and February 1999, Ms. MacNamara was paid the following amounts pursuant to her contract for the second half of 1998.
20 October 1998 - $4,380.83
21 December 1998 - $5,967.00
18 January 1999 - $ 884.57 (a long service bonus)
For the same period her allowable tax deductions (for expenses and depreciation on equipment) were $2,995.40.
(h)Shortly after 2 December 1998, Ms. MacNamara flew home to Magnetic Island.
(i)On 7 December 1998, Ms. MacNamara claimed Newstart Allowance at the Townsville Centrelink office. Newstart Allowance was initially granted for the period 19 December 1998 to 1 January 1999.
(j)On 4 January 1999, Ms. MacNamara filed a return which declared, among other things, that she had received $5,967.00 on 21 December 1998 for "outstanding wages – for July ? December".
(k)On 7 January 1999, a decision was made by an officer of Centrelink to apportion the lump sum of $5,967 over the 52 week period following upon the receipt of $5,967. This had the effect of deeming that Ms. MacNamara would receive $114.75 per week from the fishing venture for approximately the whole of 1999, thus reducing any weekly payments of Newstart Allowance to which she may have otherwise been entitled during 1999.
Since 1 January 1999, the Act has contained legislation which relates to the way in which seasonal work impacts on social security benefits. There are now provisions relating to such matters as "seasonal work", "seasonal work income", "seasonal work non-benefit period", "seasonal work preclusion period" and benefits "subject to a seasonal work non-benefit period". It is common ground that the provisions relating to seasonal work were not in force at the time when Ms. MacNamara received the payment, the subject of this review and are not relevant to this review.
The provisions of the Act which were in force at the time relevant to this review were:
"Claimant or recipient receives lump sum amount for remunerative work
1068-G7B. If a person whose claim for an allowance has been granted receives a lump sum amount after the claim was made that:
(a) is paid to him or her in relation to remunerative work; and
(b) is not a payment to which point 1068-G8 applies; and
(c) is not an exempt lump sum;
the person is, for the purposes of this Module, taken to receive one fifty-second of that amount as ordinary income during each week in the 12 months commencing on the day on which the person becomes entitled to receive that amount.
1073.(1) Subject to points 1067G-H5 to 1067G-H20 (inclusive), 1067L-D4 to 1067L-D16 (inclusive), 1068-G7AA to 1068-G7AR (inclusive), 1068A-E2 to 1068A-E12 (inclusive) and 1068B-D7 to 1068B-D18 (inclusive), if a person receives, whether before or after the commencement of this section, an amount that:
(a) is not income within the meaning of Division 1B or 1C of this Part; and
(b) is not:(i) income in the form of periodic payments; or
(ii)ordinary income from remunerative work undertaken by the person; or
(iii)an exempt lump sum.
The person is, for the purposes of this Act, taken to receive one fifty-second of that amount as ordinary income of the person during each week in the 12 months commencing on the day on which the person becomes entitled to receive that amount.
1073(2) [Application] Subsection (1) applies to a person who has claimed one of the following allowances:
(a) newstart allowance;
(b) sickness allowance;
(c) youth allowance;
(d) widow allowance;
(e) partner allowance;
(f) mature age allowance under Part 2.12B;
even if the person:(g)has to serve an ordinary waiting period or a liquid assets test waiting period in respect of the allowance claimed; or
(h)is subject to an income maintenance period in respect of the allowance claimed; or
(i)is subject to a seasonal work preclusion period;
during the period of 12 months referred to in subsection (1).
8(11) [Exempt lump sum] An amount received by a person is an exempt lump sum if:
(a)the amount is not a periodic amount (within the meaning of subsection 10(1A)); and
(b)the amount is not a leave payment within the meaning of points 1067G-H20, 1067L-D16 and 1068-G7AR; and
(c)the amount is not income from remunerative work undertaken by the person; and
(d)the amount is an amount, or class of amounts, determined by the Secretary to be an exempt lump sum."
Upon review, the SSAT found that the sum of $5,967.00 received by Ms. MacNamara in December 1998 "constituted remuneration payable to her because of her endeavours during the fishing season". The SSAT applied sub-section 1073(1) of the Act and decided that because Ms. MacNamara's situation fell within s.1073(1)(b)(ii), the apportionment provision did not apply to her.
It was submitted by the representative of the Secretary that the SSAT should have applied the provisions of section 1068-G7B, and that, therefore, the apportionment provision did apply to Ms. MacNamara.
Ms. MacNamara submitted that the payment of $5,967.00 which she received in December 1998 was for work that she had done in the second half of 1998, and that she should not be deemed to have an income of $114.75 per week for the whole of 1999 for the purpose of calculating any benefits to which she might be entitled in 1999.
It is common ground that none of the other provisions to which reference is made in sub-sections 1068-G7B and 1073(1) apply to Ms. MacNamara.
Section 1068 is in Part 3.6 of the Act and refers to the method of calculating the rate of benefits for, among others, newstart allowance. It relates to lump sum payments paid in relation to remunerative work.
Section 1073 is in Part 3.10 of the Act and refers to the general provisions relating to the ordinary income test. It relates to lump sum payments paid in relation to activities which do not consist of remunerative work.
During the latter part of 1998, Ms. MacNamara was engaged in a profit sharing agreement. The payments made to her were remunerative in nature. The provisions of s.1068-G7B apply to her.
Nevertheless, she is entitled to deduct her "costs" of obtaining the "profits". Ms. MacNamara received $10,347.83 in the second half of 1998. Her expenses for that period were $2,995.40. The proportion of her expenses which relate to the lump sum of $5,967.00, were $1,727.28.
The lump sum subject to the apportionment rule should be reduced by $1,728.28, that is, from $5,967.00 to $4,239.72.
The decision under review is set aside and it is determined that the lump sum subject to section 1068-G7B of the Act be $4,239.72.
I certify that the 15 preceding paragraphs are a true copy of the reasons for the decision herein of Mr. D.W. Muller, Senior Member.
Signed: .....................................................................................
R. Hayes, AssociateDate/s of Hearing 7 December 1999
Date of Decision 19 September 2000
Applicant Ms. MacNamara, herself
Respondent Mr. P. Kanowski, Departmental Advocate
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