Mann and Department of Education, Training and Youth Affairs - [2001] AATA 255

DECISION AND REASONS FOR DECISION [2001] AATA 255

ADMINISTRATIVE APPEALS TRIBUNAL)
Nº V2000/754
GENERAL ADMINISTRATIVE DIVISION)

Re: TIMOTHY ASHLEY MANN

Applicant

And: SECRETARY TO THE
DEPARTMENT OF EDUCATION,
TRAINING AND YOUTH AFFAIRS

Respondent

DECISION

Tribunal:       Mr J.T.C. Brassil, am, Member
Date:             28 March 2001
Place:            Melbourne

Decision:The Tribunal decides to affirm the decision under review.

(sgd) J.T.C. Brassil
Member
EDUCATION — AUSTUDY allowance — actual means test — designated parent — notional parent – decision affirmed

Student and Youth Assistance Act 1973 Regulations 12F(2), 12J,

12K(1),12L(1)(e), 12 N(1A)(j)

REASONS FOR DECISION

28 March 2001 Mr J.T.C. Brassil, am, Member

This is an application for review of a decision made by a delegate of the respondent made on 6 March 1998 that Timothy Mann was ineligible for AUSTUDY allowance in 1997 because his parents' actual means were more than the after tax income of a notional parent. This decision was affirmed after reconsideration by another officer on 3 June 1998. The Social Security Appeals Tribunal (SSAT) affirmed the decision on 9 September 1998. An extension of time to appeal to this tribunal was granted by Senior Member John Handley on 17 July 2000.
By agreement of the parties this appeal was determined on the papers. In a letter to the Tribunal seeking an extension of time for appeal the applicant's father, the Reverend Blythe Mann, stated that the SSAT determination was correct in law but sought a review.
Documents submitted pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 ("T documents") were available for consideration. Included in the T documents was the decision of the SSAT (T2) and relevant papers and documents.
Facts
The applicant Timothy Ashley Mann was in 1997 a medical student at the Flinders University in South Australia. His application was for continuation of AUSTUDY allowance at the away from home rate.
His parents, the Rev Mann and Mrs Irene Mann, were residents at Flora Hill in Victoria. The Rev Mann was the Church of Christ minister there and Mrs Mann was a part-time teacher of piano during school terms.
The application dated 1 February 1997 (T3) included sections giving details about his parents and their income and, in the Actual Means Test (AMT) section, details about the expenditure of his parents. These sections were dated 9 February 1997 and 15 February 1997 respectively. Some of the information was, necessarily, estimates of expected amounts.
A Fringe Benefit Amendment Form (T7) was completed and submitted by the parents on 11 February 1997. An AMT Additional Information Form (T6) was completed by the parents on 11 March 1997 and submitted with copies of the Taxation Assessments for the 1996 taxation year.
The parents were renting accommodation at the time of the application but, unexpectedly, found they had to move out on 10 July 1997. Rather than rent they decided to purchase a home. They already owned a property at West Lakes which was rented. Both houses were used as security for the single loan taken out for the purchase of the new property in Spring Gully, also in the Bendigo area..
The AMT amount calculated in this case (T25) was $40,211 but a concession for student income of $1,712 was granted resulting in a net actual means amount of $38,499.
The benchmark amount for AUSTUDY was calculated in conformity with the regulations to be $33,459. According to Centrelink (T25) the amount was found by deducting from the cut-off level at which no AUSTUDY allowance would be paid to a comparable PAYE family, $46,958, the notionally payable income tax and Medicare levy for an equivalent single income earner, in this case $13,498. [The Tribunal notes that the benchmark amount on that basis should be $33,460 but the difference of one dollar does not have any significance]
The AMT calculation was challenged on behalf of the applicant and a review followed. After representations about apparent anomalies to his local MP by the Rev Mann the Minister then responsible (T15) explained how the regulations for 1998 had been changed to avoid such anomalies. This was of no assistance in this case as David Lane of Centrelink (T25) informed the Rev Mann the legislative changes were not retrospective.
Legislation
The applicable legislation is the Student and Youth Assistance Act 1973 ("the Act") and the relevant regulations enacted under the Act.
Subdivision B concerns the Actual Means Test and the concept of a designated parent. Regulation 12K (1) prohibits a student from receiving an AUSTUDY allowance "for a period of eligibility in a year of study, unless the Secretary is satisfied that, for that period, the actual means of the designated parent are less than the after tax income of the notional parent". Regulation 12J provides the subdivision applies to a student who has a parent who is a "designated parent" within the meaning of regulation 12L.
Regulation 12L (1)(e) includes in the definition of a "designated parent" a self-employed person other than one involved in a primary production business owned by that person and regulation 12L (2) defines a "self-employed person" as a person "who works for gain or reward otherwise than under a contract of employment or apprenticeship, whether or not that person employs one or more other persons".
Regulation 12N (1A)(j) excludes from the actual means of a designated parent expenditure from the income from a business activity for that business activity and regulation 12F (2) defines business to include "the provision of professional services" and "business activity" in relation to a person to require that the person is engaged in that business for at least 17.5 hours in each week.
Issues before the Tribunal
As the Rev Mann is a PAYE wage earner the Tribunal must determine whether Mrs Mann is a "designated parent" for the purpose of the regulations. If this is found then the AMT will apply in accordance with the 1997 regulations.
The SSAT (T2 at para 7) noted that the Rev Mann had conceded that if the AMT did apply then their expenditure was clearly above the permitted level. The threshold issue therefore is whether Mrs Mann is to be defined as a "designated parent".
Consideration of the Issues
While the applicant's parents wish a review of the issues they have raised in respect of the application of the 1997 Regulations that is not properly within the jurisdiction of this Tribunal. It is clear that there were anomalies and, to some extent, these have been reduced if not removed by the later amendments of the Regulations. It is also clear that the changes were not retrospective thus the original 1997 Regulations apply.
It could be regarded as unfortunate that the regulations, if the AMT applies, treats as expenditure the purchase of the new property by the Mann family. This may have not been the intention of the regulations but it certainly had that effect in their case.
On the evidence presented to the SSAT clearly Mrs Mann worked in a business activity for less than 17.5 hours per week in the provision of her professional services as a teacher of pianoforte. As a result she cannot be given the benefit of regulation 12N (1A)(j). The income earned, together with the expenditure previously discussed, will be included in the determination of the actual means in this case if Mrs Mann is a "designated parent". It has been conceded that for the purposes of the AMT the actual means so calculated will exceed that of the notional parent.
Regulation 12J requires that the AMT applies if the student had a "designated parent". Regulation 12L (1)(e) provides that a self-employed person is a "designated parent" and Mrs Mann would, in the view of the Tribunal be included in the definition of a "self-employed person" in regulation 12L (2). It follows that regulation 12J will apply the AMT in this case.
Conclusion
For these reasons the Tribunal finds that the AMT does apply to Mrs Mann because she is a "designated parent". In the circumstances the Tribunal must affirm the decision under review.
I certify that the twenty-two [22] preceding paragraphs are a true copy of the reasons for the decision herein of
Mr J.T.C. Brassil, am, Member
(sgd)       Catherine Thomas
              Personal Assistant
Date of Hearing:  Decided on Papers
Date of Decision:  28.05.01
Solicitor for the Applicant:           NIL
Solicitor for the Respondent:       Ms M. Stratos, Australian Government Solicitor