Marsh, K.W. v Secretary to the Department of Social Security

CATCHWORDS

ADMINISTRATIVE LAW - Admlnistrative Appeals Tribunal - Appeal to

Federal

Court

- Soclal

services

- Reductlon in rate

unemployment benefit

reference to "trainlng allowance" paid

pursuant to a Labour Force Program

- Definition of "income" in

Social Security Act 1947 - Meaning of "allowance" - Whether in

the provision of the definition in s.106 (see now s.6) "and includes any periodlcal payment or benefit by way of gift or allowance", the words "by way of gift or allowance" qualify

"periodical payment" as well as "benefit" - Whether "periodical"

qualifies "benefit" as well

"payment" -

Effect of the word

"includes" when introducing a definition clause - Effect of exemptions as an aid to the construction of a main provision - Whether to achieve a net amount of "Income" to calculate a deduction from unemployment benefit it is appropriate to deduct expenditure associated wlth the relevant Labour Force Program

undertaken.

Administrative Appeals Tribunal Act

1975, s.44

Social Security Act 1947

(Cwlth), s.106

(see now s . 6 1 ,

s.114

Mutual Acceptance Company Limited v. The Federal Commissioner of

Taxation (1944) 69 C.L.R. 389

Canadlan Paciflc Tobacco Company Limited v. Stapleton (1952) 86

C.L.R. 1

Richardson v. Austin (1911) 12 C.L.R.

463

The Secretary to the Department of Social Security

v. Burman

- - I .

I - r .

(Neaves ~J., unreporcea,

1 t l / 4 / t l b )

Robinson v . The Local Board for the District	of Barton-Eccles,
Wlnton and Monton 118831 8 ADD. Cas. 798
Favelle
Buckle v. Josephs '1983) Reynolds v. Commissioner Corporate Aff:air;

Union (1985) 61 A.L.R.

236

Ashfield Municipal Council

v. Joyce [l9781 A.C. 122

Haldane-Stevenson v. Dlrector-General of Social Security (1985)

60 A.L.R. 621

MARSH -V- SECRETARY TO THE DEPARTMENT OF SOCIAL SECURITY

NSW G. 114 of 1985

Burchett J.

Sydney

25 July 1986

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

)	No. l14 of 1985

)

DIVISION	GENERAL	1
BETWEEN :

KEVIN WILLIAEI MARSH

Applicant

AND :

SECRETARY TO THE

DEPARTMENT OF SOCIAL

SECURITY

Respondent

MINUTE OF ORDER OF THE COURT

JUDGE MAKING ORDER:	Burchett J.
DATE OF ORDER:	25 July 1986
WHERE MADE:	Sydney

THE COURT ORDERS

THAT:

(1)	The appeal be dismissed.

( 2 )

The

decision

the Administrative Appeals Tribunal the

subject of the appeal be affirmed.

( 3 )

There be no order as to

costs.

NOTE :

Settlement and entry of orders is dealt with in Order 36

of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

1 1

NEW SOUTH WALES DISTRICT REGISTRY

)	No. 114 of 1985

DIVISION	GENERAL	)
BETWEEN :

KEVIN NILLIAM MARSH

Applicant

AND :

SECRETARY TO THE

DEPARTMENT OF SOCIAL

SECURITY

Respondent

REASONS FOR JUDGMENT

BURCHETT J.

The sole question in this matter is whether, under the

provisions of the Social Security Act 1947 ("the Act") , which were applicable ir July 1984, the Department of Social Security was correct in deducting, from payments of unemployment benefit, an amount in respect of a training allowance paid to the

applicant pursuant to a Labour Force Program. The deduction was made under s.114 of the Act on the basis that, by reason of the training allowance, the applicant, who was in receipt of an

unemployment benefit, was a person whose income exceeded

$20-00

per week.

So the question is whether the training allowance was

"income" for the purposes of this section.

As the Act stood at the time, the word

“income“ was

defined in s.106(1) for the purposes

of Part VI1 which deals with

unemployment and sickness benefits.

The Act, in its present

form, contains

a similar definition, but transposed to

s . 6

of the

Act.	The then s.106 read relevantly as follows:

“(l) In

this Part, unless the contrary

intention appears -

...

“income”, in relation to a person,

means any personal earnings, moneys,

valuable consideration or profits

earned, derived or received by that

person for his own use or bene€it by

any means from any source whatsoever,

within or outside

Australia,

and

includes

any

periodical

payment

benefit by way of gift or allowance,

.!	but does not include	-
1

(a)

a payment made to a person for or in respect of a child of whom that person

has the custody, care

and control;

...

(b)	a payment under this Act:

(bb) a payment received by a trainee in

full-time

training

under

a program

included in the

programs known as the

Labour Force Programs,

being -

(i)

payment known as the training

component; or

(ii) a payment of a living away from home allowance;

under

a law of the

Commonwealth relating to the provision

of pharmaceutical, sickness or hospltal	I
benefits, or of medical or dental

services:

(ca) the value of emergency relief or like

assistance;

3 .

...

a payment under the Handicapped Persons

Assistance Act 1974;

...

in the case of a member of the Reserve

Forces, the pay and allowances paid to him as such a member (other than pay and allowances in respect of continuous full-time service) and . ..

...

an amount payable to a member of the

Forces as an allowance by reason of the

fact

that

he has

been

awarded

decoration:

...

an amount payable

by the Repatriation

Commission as a clothing allowance to a

member of the

Forces."

The matter comes before the Court pursuant

to an appeal

from a decision of the

Administrative

Appeals

Tribunal

constituted by Dr. A.Q.

Renouf, Member (now Senior Member).

The applicant is a retrenched steel

worker who, in 1983,

commenced

part-time

three

year course at

the

Wollongong

Technical College under the Labour Force Programs, also known as the Labour Adjustment Training Arrangements. The course leads to

the issue of a welfare worker's certificate.

The applicant had

sought to do a full-time course, but was unable to find a place.

In respect of the course he undertook, he was at the relevant

time being paid

a training allowance of

$46-00 per week-.

It is

not in dispute that this payment was

a payment of the kind

I .

4 .

described In s.l06(l)(bb)

(i) of the Act. What

was disputed was

whether it amounted to	"Income" within the meaning of the
section.

The contention of the Department, which succeeded before

the Adminlstrative Appeals Tribunal,

1s a simple one.

The

Department says the

Training

Allowance

is a "periodical

payment... by way of ... allowance", and therefore falls squarely

within the definition.

It further says that if there could be

any doubt about the matter, the express exclusion of such a

payment when received "by

trainee in full-time training"

demonstrates that it was not the intention of Parliament to bestow a similar benefit upon the recipient of such a payment who

is in part-time training only:	express10 unius est exclusio
alterius.

The applicant argues that the training allowance

is not

"income" within the meaning

of the section, and in particular

should not be reydrded as falling within

the word

"allowance";

alternatively,

it is

submitted that certain expenses, connected

with the training the applicant was undergoing, should have been

deducted from any amount treated as income. The evidence

suggested that perhaps one-fifth to one-quarter of the allowance

was spent on books, meals away from home, and other items sald to

have been related to the part-time course.

Whether or nut the training allowance would fall

w i t h 1 1 1

the language of the first part

of the definition of "income",

which seems to

me to have been framed to cast a very wide net,

does in my opinion plainly fall within the second part

of the

definition: "and includes any periodical payment

or benefit by

way of gift or allowance".

It is a periodical payment. If it is

necessary that it should

also be classifiable as an allowance,

the word

"allowance" is a wide word

which, in the definition,

gains some colour from the context, both the immediate context

the phrase

in which it is used, and also the context

associated paragraphs

such as paragraphs

(bb(ii)),

(ea), (f),

(fa) and (i). It

is clear, from a consideration of the use of

the

word in

the paragraphs mentioned, that

Parliament has

employed it to refer to a range of periodical payments including

both payments in the nature

of a special pension (an allowance

a decorated member of the Forces), and also payments to meet

particular needs (living away from home allowance, clothing

allowance).

A payment referred to as a training allowance fits

easily into the pattern

of this usage, which

is in accordance

with the normal meaning of the word. (See Mutual Acceptance

Company Limited v. The Federal Commissioner	of Taxation (1944) 69
C.L.R. 389 at 396, 402.)

But I think the better view is that the expression "any

periodical payment" is without express qualification.

~t is

followed by the alternative

"or benefit" , to which is attached

the qualifying phrase "by way

of gift or allowance". Admittedly,

the syntax yields o n l y d Wedk indicdtlon of the meaning of a provision of this sort; the context is a more reliable guide. (Cf. the remarks of Dixon C.J. in Canadian Pacific Tobacco

Company Limited v. Stapleton ( 1 9 5 2 ) 86 C.L.R.

1 at 6).

However,

if the phrase "by way of gift

or allowance" modifies

both

"benefit" and "payment", it is dif€icult to see any purpose	l
served by the use of the word "payment", since any payment by way

of gift or allowance would have to be regarded as a benefit by way of gift or allowance. On the other hand, a periodical

payment is something which may be distinguished from a benefit

way of gift or allowance, despite some overlapping of the two

concepts; and

periodical payment fits naturally into the

provision, as a

precise

and

limited

extension

of a

wide

definition which might be thought at risk of being read down to receipts having a flavour of employment, business or contract.

It fits naturally because the periodicity of a payment

is one of

the indicia that the payment may have the character

of income.

This view would see the final reference to a benefit as a further extension wilrch, because so imprecise, required a modifying phrase to exclude benefits totally divorced from any concept of income.

( I have left to one side the question whether, to fall within the provision, a benefit by way

of gift or allowance must

also be a periodical benefit. The fact

1s the definition is

replete with ambiguity, and

it cannot be said

to be clear whether

the adjective "periodical" applies both to "payment"

and to

l .

1	"benef	lt", or	only to "payment".	(See	Richardson	V. Austin
i

(1911) 12 C.L.R.

463, especially at 473, for a discussion of a

very similar problem

of construction.) But it is not necessary

in the present case

to resolve this further difficulty.)

The structure of the definition seems to me to require a

wide meaning to be given to the second part of it. It breaks naturally into three sections, the first introduced by the word "means", the second by the words "and includes", and the third by

the words "but does not include". Having

given in the first

section a broad definition, the legislature

goes on in the second

to ensure that, even

if some "periodical payment or benefit by

way of gift or allowance" escapes the net of the first section,

it	will, unless falling into one or other of the specific

categories nominated in the third section, be caught by the second. The diversity of the items referred to in the third

section further confirms the width of the first and

second, or at

least of the second (cf. the doubt raised by Neaves

in The

Secretary to the Department of Social Security v. Burman, unreported, 18 April 1986, as to the effect of the exclusory

words added on to the inclusory portion of the definition

in s.18

of the Act).

In Robinson v. The Local Board for the District

Barton-Eccles, Winton and Monton

[l8831 8

App. Cas.

798 at 801

Lord Selborne said, of an

interpretation

clause

which

was

introduced by the use

of the word "includes":

"An interpretation clause of this kind is not

meant to

prevent

the

word

receiving

its

ordinary, popular, and natural sense whenever

that would be properly applicable; but to enable the word as used in the Act, when there is nothing in the context or the

subject-matter to the contrary, to	be applied
to some things to which it would not ordinarily be applicable."

(Cf. Favelle Mort Limited

v .

Murray (1976) 133 C.L.R.

5 8 0 at

588-9; Buckle v. JoseDhs (1983) 47 A.L.R. 787 at 792; Reynolds v.

Commissioner of Income Tax (1967) 1 A.C. 1 at 10-11: Corporate

Affairs Commission (S.A.)

v. Australian Central Credit Union

(19851 61 A.L.R.

236 at 239).

In my opinion, the second section of the definition in

question is a provlsion of the kind of which Lord Selborne was

speaking

with one qualification, that here the inclusive

provision is meant to enable the word to be applied to some

things to whlch, in its earlier defined

meaning, it might not

otherwise be applicable.

So far as concerns the impact upon the

construction of the definition of the exclusions contained in the third section of it, I do not overlook the force of the comment which Lord Wilberforce made in Ashfield Municipal Council v .

Joyce 119783 A.C.

122 at 137 (see also the warning in the joint

judgment of Mason

A.C.J.,

Wilson, Deane and Dawson JJ. in

Corporate Affairs Commission (S.A.) v.

Australian Central Credit

Union (supra, at 242)) to the effect that particular words

may be

inserted in a provision conferring exemptions ex majore cautela.

But his Lordship also

made it clear that legitimate use can be

made of the terms of assoclated exemptions in the process of construction; in the case of the definition under consideration,

some light 1s cast on its width by the nature of the subventions and payments which the legislature thought it necessary or desirable to make the subject of express exclusions.

I think the weekly training

allowance was properly

included in the income of the applicant for the purposes

of Part

VI1 of the Act. It was not excluded by paragraph (bb), since the applicant was not "a trainee ~n full-time training", but a trainee in part-time training only.

There

remains the question whether the amount

the

allowance taken into account should have been reduced

by the sum

of approximately

$10-00 per week said

to have been expended in

ways related to the training undergone. On this point also I think the appeal fails. In Haldane-Stevenson v. Director-General

of Social Security (1985) 6 0 A.L.R. 6 2 1 at 6 2 2 it was said of the

similar de'finition in s.18 by McGregor and Pincus JJ., in their

~oint

judgment:

"It will be noted that the definition

'income' makes no reference to expenses or

deductions.

It leaves uncertain the answer

to the question whether gross income or nett

income is meant. Having

regard to

the

purpose of reducing the pension by reference

to income earned, we are of the view that, at

least in general, nett income is meant. That

does not, however, bring in its train the

conclusion that the process of ascertainment

of income is to be approached in the same way

as, for examDle, 'taxable income' is

determined under- the provisions of the Income

Tax Assessment Act

1936.

More particularly,

we are of

the vlew that, whatever miaht

happen for the purposes o-f the Income Tax

Assessment Act, deductions of the kind here

10.

sought to bc taken into account are not to be considered unless there 1s lncome with which they are associated."

The Court rejected an argument that certain expenditure, incurred

in	research and writing in relation to a book to be published,

should be allowed as a deduction from a retired clergyman's "retiring allowance". It was accepted that, if royalties were derived from publication of the book, the expenditure incurred in

producing it

might have to

be taken into account against those

royalties.

But the joint judgment, at p.623 states:

"We are not persuaded that by any process of

reasoning or evidence

the

expenditure

referred

could

said

have

been

incurred in earning the income

he received by

way of a pension from the Church of England. The amount of the pension, as we understand it, is payable whether or not the appellant writes or writes a book or otherwise derives

income from writing."

In the present case

it cannot of course

be said that the

allowance is payable whether or not the applicant undertakes part-time training, but it can be said that it is payable whether

or not he chooses to expend any of

it in the particular ways

mentioned in evidence before the Administrative Appeals Tribunal,

On the applicant's own

case, by far the largest proportion

of it

was spent in other ways.

The whole of it was paid, so far as

appears, not on condition that he expended any part

of it upon a

purpose associated with his part-time

training, but to assist in

his support whilst he was undergoing that training. How he-chose

organise his

life

and expenditure during the period of the

. .

1 11.

part-time course was entirely a matter €or him.

The books in

questlon were described

as "beyond those prescribed".

One can

readily imagine a case

of an allowance entitlement

to receive

which was dependent upon Its expenditure for specified purposes,

unrelated to the ordinary incidents

of life, so as to entail the

conclusion that either the whole of it,

or some proportion of it,

could not fairly be regarded

as a net receipt "for his own use

benefit",

within

the

meaning

which

the

Full Court

Haldane-Stevenson's Case ascribed to the definition. But the Tribunal did not, in the present case, make findings extending so far. Nor was any submission made to me that the applicant's

expenditure

h i s

allowance could be regarded in that light.

What was put was that,

in fact, a small proportion of the

allowance had been expended for purposes related to the training

in question.

In my

view, it cannot be said that the Tribunal

erred

in law

declining

allow

any

deduction

the

circumstances of this case.

The situation may be compared with

that

i l l

Mutual

Acceptance

Company

Limited

v. The Federal

Commissioner of Taxation

(1944) 69 C.L.R.

389, where the majority

of the High Court regarded a car expenses allowance as part of the remuneration of employees on the basis that "the moneys when

paid	are at the complete disposition of the employees" (per

Latham C.J., 398; and see per Starke J., 401, per Williams J.,

405).

I should add that, before the Tribunal, an argument was advanced under s.l35TJ(3)

of the Act; but this argument was

1 -

expressly abandoned before

me, and I say nothing about it.

12.

i - ,

The	appea l	m u s t	b e	d i s m i s s e d ,	b u t	w i t h o u t	c o s t s ,	a s	it	I
I

was

a g r e e d

t h a t

i n

t h e

e v e n t

t h a t

s h o u l d

r e a c h

t h i s

c o n c l u s i o n

Department	the	would	n o t	seek	an	order	f o r i t s c o s t s .	i
i
I
! !
I I I

c e r t i f y

t h a t

t h i s

a n d

t h e

preceding

e leven

(11)

pages

are a

t r u e copy

the

Reasons

for

Judgment

h e r e i n

h i s

Honour

M r .

J u s t i c e B u r c h e t t .

Associate

[1986] FCA 293

25 Jul 1986