MARK PHILP and and SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS

[2013] AATA 52

[2013] AATA 52  

Division	GENERAL ADMINISTRATIVE DIVISION
File Number	2012/1322
Re	MARK PHILP
APPLICANT
And	SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS
RESPONDENT
File Number	2012/1324
Re	DONNA PHILP
APPLICANT
And	SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS
RESPONDENT

DECISION

Tribunal	Senior Member Dr K S Levy, RFD
Date	1 February 2013
Place	Brisbane

The Tribunal affirms the decisions under review.

........................................................................

Senior Member Dr K S Levy, RFD

CATCHWORDS

SOCIAL SECURITY – Pensions, benefits and allowances – Calculation of Newstart allowance – Calculation of Parenting Payment – Working credit balances – Calculation of income reduction – Calculations of working credit balanced based on average daily rate – Decision under review affirmed.

LEGISLATION

Administrative Appeals Tribunal Act 1975 (Cth) s 42D

Social Security Act 1991 (Cth) ss 503, 643, 1068, 1068B, 1073B, 1073C, 1073F, 1073G

CASES

Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355

SECONDARY MATERIALS

Guide to Social Security Law, 3.1.11

REASONS FOR DECISION

Senior Member Dr K S Levy, RFD

1 February 2013

INTRODUCTION

1. The decisions under review in this matter are decisions of the Social Security Appeals Tribunal (“the SSAT”) as follows:

   (1)A decision in respect of Mrs Donna Philp of 8 March 2012, which determined that she was paid the correct amount of parenting payment for the period 16 August 2011 to 29 August 2011; and

   (2)A decision in respect of Mr Mark Philp, also of 8 March 2012, which determined that he was paid the correct amounts of newstart allowance for the period 2 August 2011 to 15 August 2011.

2. As the parties are partnered, the decisions are interlinked. The amounts in dispute for the relevant periods are contended by Mr Philp, who appeared for both applicants, to be underpayments of $4.44 and $9.40 respectively.

3. Mr Philp told the Tribunal presided over by Deputy President Hack SC on 27 April 2012 that there was “illogicality” in the application of the relevant legal provisions, in a mathematical sense, not in the apparent interpretation and process of the legislation per se.

4. At the hearing, Deputy President Hack SC determined that there was no illogicality apparent to the Tribunal and remitted it back to the Secretary under s 42D of the Administrative Appeals Tribunal Act 1975 (Cth), for consideration. He also held it was important that the applicants be able to understand the reasoning for the calculation of the payments they receive. Deputy President Hack SC specified a period of 28 days for the reconsideration.

5. The applicant has re-applied to this Tribunal. He asserted the same “mathematical illogicality” before this Tribunal.

   THE LEGAL ISSUES FOR DETERMINATION

6. The question for determination by this Tribunal is whether the legislation has been correctly applied, with particular reference to provisions concerning working credit balances and the calculation of income reduction.

7. It is noted that Mr Philp has submitted a basis of calculation that would result in Mrs Philp being entitled to an additional $4.44 for the fortnight under review and Mr Philp being entitled to an additional $9.40 for the fortnight period relevant to his application.

   EVIDENCE

8. Documents lodged with the Tribunal show Mr Philp has contested the calculations of the amounts paid to himself and Mrs Philp in five appeals to Centrelink – three in respect of himself and two in respect of his wife. The Authorised Review Officer (“the ARO”) notes set out the contentions of the applicant and the Department’s response.

9. The applicant Mark Philp, appearing for both applicants at the SSAT and at this Tribunal, argued that the actual income figure earned each day should be used in the calculations. His approach to the calculation would result in a different rate of depletion of a working credit balance. Consequently, this would affect the timing of when the 50% and 60% reductions (set out in the statutory formula), would cut into the social security payments the applicants could receive.

10. The respondent called Mr David Evans, an ARO at Centrelink. Mr Evans gave sworn evidence that he holds a Bachelor of Science degree with a major in pure Mathematics. He had been a High School Teacher for six years and had, since that time, been employed by the Department of Human Services for 23 years. He told the Tribunal that the example prepared by the applicant on page 9 (Exhibit 2) was correct up to the point where he dealt with an “Issue” but that his calculation of “total income of $807.62” and the basis of those calculations was not a correct application of the legislation. Also, he did not believe the applicant’s calculation of working credits was correct.

11. Mr Evans was cross-examined by Mr Philp. The applicant referred Mr Evans to a telephone conversation he had previously had with him, where he said he had once asked Mr Evans if he was a “mathematics expert” and he did not respond “yes”. The applicant later said he was disappointed that Mr Evans did not declare he was an expert.

12. Mr Evans stated he had given his responses to Mr Philp in a telephone conversation and to this Tribunal, based on his own analysis. He was not reliant on the opinion of the original ARO, Mr S Smith.

13. While Mr Evans agreed that the first half of page 9 of Mr Philp’s statement (Exhibit 2) was correct, he did not agree with Mr Philp’s suggestion that someone such as the applicant could fall into a small range where they might not receive $4.44 as shown by Mr Philp’s calculation; or that someone “should receive an entitlement” but was “missing out”.

    CONSIDERATION

14. In considering the legal issues submitted for determination, I have taken account of all of the legislative material and the factual presentations by Mr Philp (on behalf of Mr and Mrs Philp) and those by Ms Slack (for the respondent).

15. The relevant law with respect to Mr and Mrs Philp’s claims are extracted from the Social Security Act 1991 (“the Act”) as follows:

    Mr Philp’s Claim – Newstart Allowance

    643How to work out a person’s newstart allowance rate

    A person’s newstart allowance rate is to be worked out using Benefit Rate Calculator B at the end of section 1068.

    Benefit Rate Calculator B

    Module A—Overall rate calculation process

    Method of calculating rate

    1068‑A1 The rate of benefit is a daily rate. That rate is worked out by dividing the fortnightly rate calculated according to this Rate Calculator by 14.

    Method statement

    Step 1.Work out the person’s maximum basic rate using MODULE B below.

    Step 1A.Work out the pension supplement amount (if any) using Module BA below.

    Step 2.Work out the amount per year (if any) of pharmaceutical allowance using MODULE D below.

    Step 3.Work out the applicable amount per fortnight (if any) for rent assistance in accordance with paragraph 1070A(a).

    Step 4.Add up the amounts obtained in Steps 1 to 4: the result is called the maximum payment rate.

    Step 5.Apply the income test using MODULE G below to work out the income reduction.

    Step 6.Take the income reduction away from the maximum payment rate: the result is called the provisional fortnightly payment rate.

    Step 7.The rate of benefit is the amount obtained by:

    (a)subtracting from the provisional fortnightly payment rate any special employment advance deduction (see Part 3.16B); and

    (b)if there is any amount remaining, subtracting from that amount any advance payment deduction (see Part 3.16A); and

    (c)except where the person is a CDEP Scheme participant in respect of the whole or a part of the period for which the rate of benefit is being worked out, adding any amount payable by way of remote area allowance (see Module J).

    Note 1:if a person’s rate is reduced under step 6, the order in which the reduction is to be made against the components of the maximum payment rate is laid down by section 1210 (maximum basic rate first, then rent assistance).

    …

    Module B—Maximum basic rate
    [see Appendix for CPI adjusted figures]

    Maximum basic rate

    1068‑B1 The maximum basic rate of a person other than a person who is a CDEP Scheme participant in respect of the whole or a part of the period for which the maximum basic rate is being worked out is worked out using Table B. Work out the person’s family situation and whether the person has a dependent child or not. The maximum basic rate is the corresponding amount in the rate column. The maximum basic rate of a person who is a CDEP Scheme participant in respect of the whole or a part of the period for which the maximum basic rate is being worked out is nil (see sections 408CG, 614A, 660YCH and 771HK).

Table B—Maximum basic rates
Column 1	Column 2	Column 3 Rate
Item	Person’s family situation	Column 3A Person with dependent child	Column 3B Person without dependent child
7.	Partnered	$272.00	$272.00

…

Module G—Income test

Effect of ordinary income on maximum payment rate

1068‑G1 This is how to work out the effect of a person’s ordinary income, and the ordinary income of a partner of the person, on the person’s maximum payment rate:

Method statement

Step 1.Work out the amount of the person’s ordinary income on a fortnightly basis.

Note 2:for the treatment of amounts received from friendly societies see point 1068‑G4.

Step 2.If the person is a member of a couple, work out the partner income free area using point 1068‑G9.

Note:The partner income free area is the maximum amount of ordinary income the person’s partner may have without affecting the person’s benefit.

Step 3.Use paragraphs 1068‑G10(a), (b) and (c) to work out whether the person has a partner income excess.

Step 4.If the requirements of paragraphs 1068‑G10(a), (b) and (c) are not satisfied then the person’s partner income excess is nil.

Step 5.If the requirements of paragraphs 1068‑G10(a), (b) and (c) are satisfied, the person’s partner income excess is the partner’s ordinary income less the partner income free area.

Step 6.Use the person’s partner income excess to work
out the person’s partner income reduction using point 1068‑G11.

Step 7.Work out whether the person’s ordinary income exceeds the person’s ordinary income free area under point 1068‑G12.

Note:A person’s ordinary income free area is the maximum amount of ordinary income the person may have without affecting the person’s benefit rate.

Step 8.If the person’s ordinary income does not exceed the person’s ordinary income free area, the person’s ordinary income excess is nil.

Step 9.If the person’s ordinary income exceeds the person’s ordinary income free area, the person’s ordinary income excess is the person’s ordinary income less the person’s ordinary income free area.

Step 10.Use the person’s ordinary income excess to work
out the person’s ordinary income reduction using points 1068‑G14, 1068‑G15 and 1068‑G16.

Step 11.Add the person’s partner income reduction and ordinary income reduction: the result is the person’s income reduction referred to in Step 5 of point 1068‑A1.

Note 1:for ordinary income see section 8.

Note 2:see point 1068‑A1 (Steps 6 to 9) for the significance of the person’s income reduction.

Note 3:the application of the ordinary income test is affected by provisions concerning:

·     the general concept of ordinary income (sections 1072 and 1073);

·     business income (sections 1074 and 1075);

·     deemed income from financial assets (sections 1076 to 1084);

·     income from income streams (sections 1095 to 1099DAA);

·     disposal of income (sections 1106 to 1112).

…

Ordinary income free area

1068‑G12 A person’s ordinary income free area is $62.

Note:The income free area is used in the ordinary income test in relation to fortnightly income.

Ordinary income excess

1068‑G13 If a person’s ordinary income exceeds the person’s ordinary income free area:

(a) the person has an ordinary income excess; and

(b) the person’s ordinary income excess is the amount by which the person’s ordinary income exceeds the person’s ordinary income free area.

Ordinary income reduction

1068‑G14 If a person has an ordinary income excess, the person’s ordinary income reduction is the sum of:

(a) the person’s lower range reduction (see point 1068‑G15); and

(b) the person’s upper range reduction (if any) (see point 1068‑G16).

Lower range reduction

1068‑G15 The person’s lower range reduction is an amount equal to 50% of the part of the person’s ordinary income excess that does not exceed $188.

Upper range reduction

1068‑G16 The person’s upper range reduction is an amount equal to 60% of the part (if any) of the person’s ordinary income excess that exceeds $188.

Mrs Philp’s Claim – Parenting Payment (Partnered)

503How to work out a person’s parenting payment rate

A person’s parenting payment rate is worked out using:

(a) if the person is not a member of a couple—the Pension PP (Single) Rate Calculator at the end of section 1068A (see Part 3.6A); or

(b) if the person is a member of a couple—the Benefit PP (Partnered) Rate Calculator at the end of section 1068B (see Part 3.6A).

1068B Rate of parenting payment—PP (partnered)

(1) If a person is a member of a couple, the person’s rate of parenting payment is the benefit PP (partnered) rate.

(2) The benefit PP (partnered) rate is worked out in accordance with the rate calculator at the end of this section.

Note: For member of a couple see section 4.

Benefit PP (Partnered) Rate Calculator

Module A – General Rate Calculation Process

Method of calculating rate—general

1068B‑A1 The rate of benefit PP (partnered) is a daily rate. That rate is worked out by dividing the fortnightly rate calculated according to this Rate Calculator by 14. There are 2 ways of working out the fortnightly rate:

(a)   one for a person who is not a partner of a non‑independent YA recipient (see point 1068B‑A2); and

(b)   one for a person who is a partner of a non‑independent YA recipient (see point 1068B‑A3).

Note: For partner of a non‑independent YA recipient see subsection 23(1).

Method of calculating rate for person who is not a partner of a non‑independent YA recipient

1068B‑A2 If a person is not the partner of a non‑independent YA recipient, the fortnightly rate of benefit PP (partnered) for the person is worked out as follows:

Method statement

Step 1.Work out the person’s maximum basic rate using Module C below.

Step 2.Work out the amount per fortnight (if any) of rent assistance in accordance with paragraph 1070A(a).

Step 2A.Work out the pension supplement amount (if any) using Module DA below.

Step 3.Work out the amount per fortnight (if any) of pharmaceutical allowance using Module E below.

Step 4.Add up the amounts obtained in steps 1 to 3: the result is called the maximum payment rate.

Step 5.Apply the income test using Module D below to work out the person’s income reduction.

Step 6.Take the income reduction away from the maximum payment rate: the result is called the provisional payment rate.

Step 7.The rate of benefit PP (partnered) is the difference between:

(a)the provisional payment rate; and

(b)any advance payment deduction (see Part 3.16A);

plus, except where the person is a CDEP Scheme participant in respect of the whole or part of the period for which the rate of payment is being worked out, any amount by way of remote area allowance that, under Module G, is to be added to the person’s rate of benefit PP (partnered).

Note 1:For partner of a non‑independent YA recipient see subsection 23(1).

Note 2:If a person’s rate is reduced under step 6, the order in which the reduction is to be made against the components of the maximum payment rate is laid down by section 1207 (maximum basic rate first, then rent assistance).

…

Module D—Income test

Effect of income on maximum payment rate

1068B‑D1 This is how to work out the effect of a person’s ordinary income, and the ordinary income of the person’s partner, on the person’s maximum payment rate:

Method statement

Step 1.Work out the amount of the person’s ordinary income on a fortnightly basis.

Note:The amount of the person’s ordinary income is affected by points 1068B‑D2 to 1068B‑D21.

Step 2.Work out the partner income free area using point 1068B‑D22.

Note:The partner income free area is the maximum amount of ordinary income the person’s partner can have without affecting the person’s rate.

Step 3.Use point 1068B‑D23 to work out the person’s partner income excess.

Step 4.Use the person’s partner income excess to work out the person’s partner income reduction using point 1068B‑D24.

Step 5.Work out whether the person’s ordinary income exceeds the person’s ordinary income free area (see point 1068B‑D27).

Note:A person’s ordinary income free area is the maximum amount of ordinary income the person can have without affecting the person’s rate.

Step 6.If the person’s ordinary income does not exceed the person’s ordinary income free area, the person’s ordinary income excess is nil.

Step 7.If the person’s ordinary income exceeds the person’s ordinary income free area, the person’s ordinary income excess is the person’s ordinary income less the person’s ordinary income free area.

Step 8.Use the person’s ordinary income excess to work out the person’s ordinary income reduction using points 1068B‑D29 to 1068B‑D31.

Step 9.Add the person’s ordinary income reduction and partner income reduction: the result is the person’s income reduction referred to in step 5 of the method statement in point 1068B‑A2.

Note 1:For ordinary income see section 8.

Note 2:See point 1068B‑A2 (step 6) for the significance of the person’s income reduction.

Note 3:The application of the ordinary income test is affected by provisions concerning the following:

(a)    the general concept of ordinary income (sections 1072 and 1073);

(b)    business income (sections 1074 and 1075);

(c)    deemed income from financial assets (sections 1076 to 1084);

(d)    income from income streams (sections 1095 to 1099DAA);

(e)    disposal of income (sections 1106 to 1112).

…

Ordinary income free area

1068B‑D27 A person’s ordinary income free area is $62.

Ordinary income excess

1068B‑D28 If a person’s ordinary income exceeds the person’s ordinary income free area:

(a) the person has an ordinary income excess; and

(b) the person’s ordinary income excess is the amount by which the person’s ordinary income exceeds the person’s ordinary income free area.

Ordinary income reduction

1068B‑D29 If a person has an ordinary income excess, the person’s ordinary income reduction is the sum of:

(a) the person’s lower range reduction (see point 1068B‑D30); and

(b) the person’s upper range reduction (if any) (see point 1068B‑D31).

Lower range reduction

1068B‑D30 The person’s lower range reduction is an amount equal to 50% of the part of the person’s ordinary income excess that does not exceed $188.

Upper range reduction

1068B‑D31 The person’s upper range reduction is an amount equal to 60% of the part (if any) of the person’s ordinary income excess that exceeds $188.

Provisions of Common Application – Mr and Mrs Philp

1073B  Daily attribution of employment income

(1) If:

(a) a person is receiving a social security pension or a social security benefit; and

(b) the person’s rate of payment of the pension or benefit is worked out with regard to the income test module of a rate calculator in this Chapter; and

(d) the person earns, derives or receives, or is taken, either by virtue of the operation of section 1073A or any other provision of this Act, to earn, derive or receive, employment income during the whole or a part of a particular instalment period of the person;

the person is taken to earn, derive or receive, on each day in that instalment period, an amount of employment income worked out by dividing the total amount of the employment income referred to in paragraph (d) by the number of days in the period.

(2) If a person has reached pension age and is receiving a social security benefit, subsection (1) does not apply to the person, to the extent that it relates to that benefit.

Note 1: Subsection (1) applies to a person who has not reached pension age and is receiving a social security benefit.

Note 2: For pension age see subsections 23(5A), (5B), (5C) and (5D).

1073C  Fortnightly or yearly expression of attributed employment income

If, in accordance with the operation of section 1073B, a person is taken to earn, derive or receive a particular amount of employment income on each day in an instalment period:

(a) the rate of the person’s employment income on a fortnightly basis for that day may be worked out by multiplying that amount by 14; and

(b) the rate of the person’s employment income on a yearly basis for that day may be worked out by multiplying that amount by 364.

…

1073F  Working out accruals and depletions of working credit for social security beneficiaries

This section determines, in respect of each working credit participant who is receiving a social security benefit, whether, for each day in an instalment period:

(a) there is an accrual to the participant’s working credit balance; or

(b) the participant’s working credit balance is unaffected; or

(c) the participant’s working credit balance is depleted;

and, if there is an accrual to, or a depletion from, the participant’s working credit balance, the amount of that accrual or depletion.

Method statement

Step 1.Work out the amount of the participant’s employment income earned, derived or received on the day. This could be a nil amount or it could be an amount that is taken, under section 1073B, to have been earned, derived or received on the day.

Step 2.Multiply the amount determined under step 1 by 14. This is the participant’s rate of employment income on a fortnightly basis for the day.

Step 3.Add to the participant’s rate of employment income on a fortnightly basis for the day the participant’s rate of any other ordinary income on a fortnightly basis for the day. This is the participant’s rate of total ordinary income on a fortnightly basis for the day.

Step 4.If the participant’s rate of total ordinary income on a fortnightly basis for the day is less than $48, there is an accrual to the participant’s working credit balance for the day of an amount equal to one fourteenth of the amount by which $48 exceeds that rate. The maximum working credit balance is:

(a)if the participant became a working credit participant on a day under subsection 1073E(2), (3), (4), (5), (5A) or (6) and on that day the participant was receiving youth allowance, the participant was not undertaking full‑time study and the participant was not a new apprentice—$3,500; or

(b)in any other case—$1,000.

Step 5.If the participant’s rate of total ordinary income on a fortnightly basis for the day is at least $48 but does not exceed the ordinary income free area applicable to the participant for the day under the income test module of the appropriate rate calculator, the participant’s working credit balance for the day is neither increased nor reduced.

Step 6.If the participant’s rate of total ordinary income on a fortnightly basis for the day is at least $48 and exceeds the participant’s applicable ordinary income free area for the day, the participant’s working credit balance, if it is greater than nil on the day, is depleted on that day by the least of:

(a)the amount of employment income determined under step 1; or

(b)one fourteenth of the amount by which the participant’s rate of total ordinary income on a fortnightly basis exceeds the participant’s applicable ordinary income free area; or

(c)the participant’s available working credit balance.

1073G  Working out the effect of a working credit depletion on the fortnightly rate of ordinary income for a social security beneficiary

If, under section 1073F, the working credit balance of a working credit participant is depleted on a particular day, the participant’s rate of ordinary income on a fortnightly basis for that day is reduced by the working credit depletion amount applicable to that day, determined under step 6 of the method statement, multiplied by 14.

1. It is to be noted that the provisions dealing with the ordinary income free area, ordinary income excess, and ordinary income reduction (by use of a lower range reduction and upper range reduction) for newstart allowance (s 1068-G12 to s 1068-G16) are mirror images of the corresponding provision for Parenting Payment calculation (s 1068B-D27 to s 1068B-D31).

2. The majority of the hearing was concerned with the evidence of the respondent’s witness, Mr Evans. I regarded Mr Evans qualifications and experience qualify him as an expert witness, capable of giving evidence to the Tribunal about details of the mathematical basis of calculations of the formulas in the Guide. Mr Philp spent a considerable time questioning Mr Evans and seemed to take issue with the fact that Mr Evans did not declare to him in a previous telephone conversation that he had a science degree with a major in mathematics. I found Mr Evans to be a witness of truth and competent in his subject area. He was reserved and quite humble, rather than as Mr Philp suggested, that Mr Evans was concealing something from him.

3. The main evidence concentrated on spreadsheets prepared by an ARO and the calculations prepared by Mr Philp, where Mr Philp suggested the calculations used by Centrelink could result in a client of Centrelink being underpaid paid $2.30 or 4.00 where there was an entitlement.

4. In addition, for purposes of calculation, s 1073B prescribes how employment income will be attributed to a particular day. In s 1073B(1), a relevant person will be deemed “to earn, derive or receive”, employment income “… on each day in that instalment period, an amount of employment income worked out by dividing the total amount of the employment income … by the number of days in the period.”

5. In a similar way, s 1073C provides the amount of employment income deemed to be earned, derived or received “on each day in an instalment period”, may be calculated on a fortnightly basis by multiplying the daily rate by 14 (s 1073C(a)); or it may be calculated on an annual basis by multiplying the daily rate by 364 (s 1073C(b)).

6. The attribution of employment income, based on a daily rate, may also be modified by taking account of accruals and depletions of working credits. Section 1073F of the Act provides three possible options – where a person’s working credit balance receives an accrual; where the working credit balance is unaffected; or where the working credit balance is depleted. This section is designed to allow a person to accumulate credits when they are not earning income and for these to reduce the impact of statutory income reductions where the person later earns income in excess of the ordinary income free area.

7. This is further explained by way of example in section 3.1.11.30 (Working Credit Depletion) and section 3.1.11.40 (Working Credit Daily Calculation Examples) of the Guide to Social Security Law (“the Guide”). While the latter does not have any statutory effect, it is informative and in a practical sense, it is of considerable influence. Particularly in the application of working credits, the Guide elucidates the need to apply credits on a daily basis. It shows the most generous application is made for the taxpayer in Step 4; where there is a change in investment income, the incremental change in the daily rate of allowance; and it makes clear, legally and mathematically, the treatment of days in an instalment period on the day where working credits are fully depleted, and for the treatment of the remaining days in that period.

8. In relation to the applicants’ contentions, what the statutory law requires is of primary importance, and the convenience of any mathematical approach which may have some merit in logic, but does not conform to the prescriptions of the statute, cannot be entertained. The approach in the legislation in question is intended by Parliament to fulfil some objective and takes account of what Parliament regards as necessary and justified.

9. Parliament has enacted this legislation and in my view, there is no illogicality from a mathematical point of view. Broadly speaking, calculation of entitlement of both newstart allowance and parenting payment are consistent in approach:

   (a)The payment of newstart allowance or parenting payment is based on the daily rate (see ss 643 and 503).

   (b)Employment income is deemed to accrue on each day by using the formula:

   Total Amount of Employment Income
          Number of days in the period

   (see s 1073 B)

   Therefore, this formula shows that the value of each day’s employment income is an average daily rate for the period.

   (c)Employment income is to be considered on a “fortnightly basis” (s 1073C). Therefore, the fortnightly basis is the daily rate calculated multiplied by 14.

   (d)Ordinary income is calculated on a “fortnightly basis”.

   (e)The total Ordinary and Employment income is to be reduced by working credits (i.e. depletion of working credits). Therefore, on some days there may be no income to be taken into account while working credits are in existence.

   (f)Where ordinary income excess remains after depletion of all working credits, reductions are made to the daily rate of allowance.

10. The interpretation of statutes has to occur in accordance with the purposive approach set out by the High Court of Australia (see for example Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355 at 382). The purpose of these provisions of the Act is clearly to use a daily average rate, as stated in the legislation. All of the legislative objectives behind adopting this approach are not detailed in the Act although some at least are manifested in the detailed approach set out with respect to the calculations of income and working credits to ascertain the resultant entitlement of an individual. It is clear that a beneficial interpretation is to be applied where there are differing possible results (see Step 6 of the rate calculator in s 1073F). That is extended to situations where the applicant altered the amount of earnings after submitting earlier figures. No debt recovery was pursued against Mr or Mrs Philp where that occurred. I have reconsidered the figures used by the SSAT in respect of both applicants, although my algorithm essentially followed the steps of the Tables in the Act. In addition, as the actual income period in this case was on a fortnightly basis, I found it possible to use the fortnightly rates in many steps instead of using daily rates (although I found it necessary to calculate these to be able to finalise income reduction figures).

11. In respect of the statutory formulae relevant to Mr and Mrs Philp’s claims, I am in agreement with all the calculations of the SSAT.

12. The statutory provisions are clear and unambiguous. The depletion of working credits by simply deducting those from the income amount for a fortnight and then applying the relevant rate calculator as set out in the Act (as argued by Mr Philp), is not correct. The steps in the relevant sections of the Act require using “average” daily basis to calculate the quantum of working credit depletion. The evidence of Mr Evans, a mathematics expert, also makes that clear and I accept his evidence unequivocally.

13. Therefore, the decision of the SSAT is correct.

    DECISION

14. I affirm the decisions under review in relation to both applications.

I certify that the preceding 29 (twenty-nine) paragraphs are a true copy of the reasons for the decision herein of Senior Member Dr K S Levy RFD.

........................................................................

Associate

Dated 1 February 2013

Date of hearing	11 December 2012
Applicants	Mr Philp in person on behalf of himself and Mrs Philp
Solicitors for the Respondent	Kate Slack, Sparke Helmore