Moran and Secretary, Department of Family and Community Services

[2003] AATA 1003

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2003] AATA 1003

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q2003/471

GENERAL ADMINISTRATIVE DIVISION		)
Re		TRAVIS MORAN

Applicant

And

SECRETARY, DEPARTMENT

OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Mr RG Kenny, Member

Date7 October 2003 

PlaceBrisbane

Decision The Tribunal affirms the decision under review. 

(Sgd) RG Kenny
  Member

CATCHWORDS

SOCIAL SECURITY – youth allowance – whether applicant was independent – whether applicant was in paid work – period or periods of employment over an 18 month period

Social Security Act 1991 ss 1067, 1067A

REASONS FOR DECISION

7 October 2003  Mr RG Kenny, Member      

Background

1.      Travis Moran (the applicant) was born on 14 September 1982 and completed Year 12 studies at the end of 1999.  During 2000, 2001 and 2002, he undertook periods of employment and, on 13 January 2003, lodged, in accordance with the Social Security Act 1991 (the Act), a claim for youth allowance to assist him with his course of full-time study at the University of Queensland. He sought to be paid at the independent rate which would mean that the calculation of the level of payments would be made without regard being had to the financial circumstances of his parents. Annexed to his application was documentation relating to periods of employment, the amount that he earned and certificates to indicate that there were periods during 2001 and 2002 when he was unable to work because of the debilitating effects of chronic fatigue syndrome.

2.      On 13 January 2003, a delegate of the Secretary, Department of Family and Community Services (the respondent) determined that the applicant was not able to be treated as an independent person in accordance with the provisions of the Act.  That decision was affirmed by an Authorised Review Officer on 14 February 2003 and, in turn, by the Social Security Appeals Tribunal on 16 May 2003.  On 5 June 2003, the applicant sought review of that decision by the Administrative Appeals Tribunal (the Tribunal).

3.      At the hearing, the applicant was not represented and the respondent was represented by Mr T Ffrench. 

4.      The following documents were taken into evidence:

Exhibit 1the documents prepared in accordance with section 37 of the Administrative Appeals Tribunal Act 1975 (the T Documents – T1 to T21);

Exhibit 2the respondent’s Statement of Facts and Contentions with annexures; and

Exhibit 3the applicant’s Statement of Facts and Contentions.

Issues and Legislation

5.      The facts in this matter are not in dispute and the issue is whether or not the applicant meets the requirement of being an independent person as provided for in subsections 1067(1) and 1067A(10) of the Act which, in so far as relevant, read:

“1067(1)  In this Part:

‘independent’ has the meaning given by section 1067A.

…

1067A(10)  A person is independent if the person has supported himself or herself through paid work consisting of:

(a)full-time employment of at least 30 hours per week for at least 18 months during any period of 2 years; or

(b)part-time employment of at least 15 hours per week for at least 2 years since the person last left secondary school; or

(c)a period or periods of employment over an 18 month period since the person last left secondary school, earning the person at least the equivalent of 75% of the maximum Commonwealth training award payment that applied at the start of the period of the employment.”

6.      In particular, the issue for determination is whether or not the applicant’s circumstances are embraced by the terms of paragraph 1067A(10)(c) of the Act.

Applicant’s Case

7.      The applicant told the Tribunal that, from 16 October 2000 until 3 August 2001, he was employed on a part-time basis with Myer Stores Pty Ltd during which time he earned $8,362.  He said that he was then overcome with the effects of his illness and was unable to return to employment until 1 July 2002.  He then continued with Myer Stores Limited until 28 December 2002 during which time he earned $8,465. 

8.      In relation to his period of illness, the applicant said that, in 2003, he received income protection insurance payments from REST Superannuation in the form of two separate payments of $4,031.82 each for the periods 2 October 2001 until 2 April 2002 and from 3 April 2002 until 30 June 2002, respectively. He said that the payments did not relate to the beginning of his period of unemployment because the policy required a qualifying period of two months to pass before payments could be made. He conceded that the monies that he received from REST Superannuation could not be taken into account as money received by him from paid work.

9.      The applicant submitted that, if the insurance monies were not to be taken into account, the period referrable to their payments should also not be taken into account in calculating the period of time over which he earned his income.  He submitted that, if the period of illness were not considered, then his earnings from Myer Stores amounted to $16,827 which exceeded the threshold of 75% of the relevant Commonwealth training award referred to in paragraph 1067A(10)(c) of the Act and were earned in periods which totalled less than 18 months.  He agreed that his earnings were realised over a period which constituted more than 18 months but considered that there was unfairness in the system which did not allow him to take out of consideration the period of illness.

10.     The applicant also said that the insurance payments were calculated on the basis of 75% of his average monthly earnings prior to his becoming ill and that these had been calculated at $895.96 per month.  He submitted that, with that level of earnings and if he had not been ill, he would have been able to earn the threshold level of income required by the provision in well under 18 months.

Respondent’s Case

11.     Mr Ffrench submitted that subsection 1067A(10) of the Act was the only means of determining whether a person was independent on the basis of being self-supporting and that it did not provide for the exercise of discretion by a decision-maker.  He noted that the only income that could be taken into account was that which was earned by a person through paid work and he submitted that this did not include payments received by the applicant from REST Superannuation. 

12.     Nevertheless, he conceded that the amount that the applicant had earned in his two periods of employment with Myer Stores was in excess of the threshold requirement of 75% of the relevant Commonwealth training award.  In that regard he referred to entries in the Guide to Social Security Law where the threshold level was set at $15,444 in the period 17 August 2001 to 2 July 2002 and $15,095 for the period from 17 August 2000 to 16 August 2001.

13.     Mr Ffrench submitted that, despite those earnings, the applicant did not meet the requirements of paragraph 1067A(10)(c) of the Act because the monies that he earned were not referrable to a period or periods of employment over an 18 month period.  He submitted that the 18 month period was a single timeframe and could not be an aggregation of separate periods such as the applicant had in this case.  He submitted that, in any single 18 month period, the applicant did not meet the threshold requirement and only did so if a longer timeframe was considered.

14.     Mr Ffrench referred to the meaning of the word “period” as set out in the Concise Oxford Dictionary and the Macquarie Concise Dictionary.  In relation to the former, he submitted that the term meant a “distinct portion of history, life, etc;  any portion of time”..  In relation to the latter, he submitted that it meant “any specified division or portion of time”.

Consideration

15.     The applicant was employed by Myer Stores Pty Ltd from 16 October 2000 until 3 August 2001 and from 1 July 2002 until 28 December 2002.  In the first of those periods, he earned $8,362 and, in the second period, he earned $8,465.  Thus, in periods aggregating almost 16 months, he earned $16,827.  For a period of some 10 months between those two periods of employment, he was unable to engage in employment because of the effects of illness.

16.     The applicant had a contract of insurance with Colonial Mutual Insurance/Rest pursuant to which he claimed income insurance payments. In evidence was a letter, dated 11 April 2003, to the applicant from REST Superannuation advising the applicant that an amount of $4,031.82 had been electronically transferred to his bank account and that this was compensation for loss of wages for the period from 2 October 2001 until 2 April 2002. The letter also stated that the monies were “fully assessable as normal income under the Income Tax Assessment Act” and that they needed to be declared by him, accordingly. The applicant’s evidence was that he was paid a second amount, also totalling $4,031.82, for the remaining period that he was unable to work which was from 3 April 2002 until 30 June 2002. There was no documentation in evidence in relation to a second payment and it is difficult to understand that a payment of the same amount would be paid for the second period which was much shorter than the first period. However, I make no findings on any second payment to the applicant. 

17.      In the second reading speech in introducing the Social Security Legislation Amendment (Youth Allowance) Bill 1997, the Minister made reference to the means by which a person may be considered to be independent and these included where the person has supported himself for at least 18 months out of the previous two years.  The Minister also said:

“Youth allowance will be subject to parental income and family assets and actual means tests, as currently apply to AUSTUDY.  This parental means test reinforces the Government’s message that families should support their young family members until they have achieved financial independence.”

18.     As I read it, subsection 1067A(10) of the Act is the provision which implements that sentiment expressed by the Minister.  It provides three means by which a person who has been self-supporting will qualify as being independent.  It is not disputed that the applicant does not meet the terms of either paragraph 1067A(10)(a) or (b) of the Act. This is because he was not in full-time employment of at least 30 hours per week for at least 18 months in any 2 year period prior to making his claim and neither was he in part-time employment of at least 15 hours per week for at least 2 years after leaving school and before making his claim. Accordingly, for him to be considered to be independent, he must satisfy the terms of paragraph 1067A(10)(c) of the Act.

19.     The monies earned by the applicant from Myer Stores, taken in conjunction with his REST Superannuation payments, enabled him to achieve a significant level of independence.  However, that, alone, is not sufficient for the purposes of subsection 1067A(10) of the Act which requires that the person have “supported himself or herself through paid work”.  The term “paid work” is not defined in the Act. On one view of the meaning of the phrase, it would require the person to be engaged in remunerative work for the period and would not extend to circumstances when the person was not employed and where he received income protection insurance payments as in this case. Rather, those monies were paid to the applicant because he was not able to engage in paid work and because there was a policy in place to protect him financially in that situation. 

20.     On another view, the focus of the provision may be seen as being whether a person supported himself by means of paid work in the sense of achieving financial independence in the manner referred to above by the Minister. In other words, the provision does not refer to being engaged in paid work but in supporting oneself through paid work. Given that the income insurance arrangement came about because of the engagement in paid work, it might be said that there is a clear nexus between the receipt by the applicant of those payments and his paid work at Myers Stores and this would mean that those monies may be taken onto account to determine whether or not he has supported himself as subsection 1067A(10) of the Act requires.

21.     I am satisfied that this second construction is not open under the provision because it only enables a person to be independent if the person has supported himself or herself through paid work consisting of one of the three forms of employment in paragraphs (a), (b) or (c) of the Act. Therefore, there must be a period of employment and the period when the applicant was in receipt of income insurance payments related to a period when the applicant was not employed. This means that the only periods that can be considered under subsection 1067A(1) of the Act are the two periods that he was employed by Myers Stores when he earned a total of $16,827. The first of those periods was for 9.5 months (approx) and the second was for 6 months (approx). Therefore, the total was 15.5 months but, when the period of illness is considered, the total span of his earning period was 25.5 months (approx).

22.     In evidence were extracts from the Guide to Social Security Law and I accept as correct the submission by Mr Ffrench that the relevant threshold amounts of the Commonwealth training award were $15,095 in the period from 17 August 2000 to 16 August 2001 and $15,444 from 17 August 2001 to 2 July 2002.  Therefore, the applicant earned an amount which exceeded those thresholds but he did so in two separate periods.  If those periods can be aggregated, for the purposes of paragraph 1067A(10)(c) of the Act, the applicant will have earned more than the required threshold level of income and have done so in a period of less than 18 months.

23.     The phrase “an 18 month period” in paragraph 1067A(10)(c) of the Act is expressed in singular form.  That is significant in that, elsewhere in that paragraph, the word “period” is used in both the singular and plural sense.  The reference is to “a period or periods of employment over an 18 month period”.  Clearly, the provision will extend to separate occasions when a person is employed. However, the period or the periods of employment must be “over an 18 month period” and I am satisfied that this is reference to a single unbroken period of 18 months. 

24.     In support of that construction, I note that a different form of words is used in the preceding paragraphs. In particular, in paragraph 1067A(10)(a) of the Act, the reference is to a timeframe of “at least 18 months during any period of 2 years”.  Such a formula enables broken periods to be taken into account even where the time between commencement of a first period and the end of a second period spanned a period greater than 18 months provided they did not span a period greater than 2 years.  That is not the case with the 18 month reference in paragraph 1067A(10)(c) of the Act which allows for separate periods of employment to be considered provided they fall within a single 18 month period.

25.     In this case, the applicant had separate periods of employment between 16 October 2000 and 28 December 2002. He earned the required amount in a period which aggregated to 15.5 months but did this over a period that was longer than 18 months. I am satisfied that this did not comprise a period or periods of employment over an 18 month period.

26.     I have noted the applicant’s contention about the unfairness of the legislation but am satisfied that the provision is not one which admits of the exercise of discretion.  The applicant’s circumstances do not bring him within any of the components of subsection 1067A(10) of the Act and, therefore, he does not meet the requirement of being independent for the purposes of the Act.

Decision

27.     The decision under review is affirmed.

I certify that the 27 preceding paragraphs are a true copy of the reasons for the decision herein of Mr RG Kenny, Member

Signed:         Sarah Oliver
  Associate

Date of Hearing  25 September 2003
Date of Decision  7 October 2003

The Applicant appeared in person
For the Respondent                  Mr T Ffrench, Departmental Advocate