Narendra Kaley and Secretary, Department of Social Services

[2014] AATA 39

[2014] AATA 39  

Division	GENERAL ADMINISTRATIVE DIVISION
File Number	2013/3741
Re	Narendra Kaley
APPLICANT
And	Secretary, Department of Social Services
RESPONDENT

DECISION

Tribunal	RM Creyke, Senior Member
Date	29 January 2014
Place	Canberra

The decision under review is affirmed.

.....................[sgd]........................

RM Creyke, Senior Member

Catchwords

SOCIAL SECURITY – Newstart Allowance – eligibility – definition of partner and ‘member of a couple’ – ‘means’ testing – partner’s income exceeding allowable limit

Legislation

Social Security Act 1991 (Cth) sections 4, 8, 593, 608, 643, 1068, 1072

Social Security (Administration) Act 1999 (Cth) sections 11, 16, 37(2)

Acts Interpretation Act 1901 (Cth) section 13

Cases

Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634

Secondary Materials

Guide to the Social Security Law

REASONS FOR DECISION

RM Creyke, Senior Member

1. Mr Narendra Kaley is an architect who was employed by Defence Housing. That employment ceased in 2012.  He has not since been employed. His claim for newstart allowance was rejected on 9 April 2013, a decision upheld on review by an authorised review officer on 30 April 2013, and affirmed by the Social Security Appeals Tribunal on 18 June 2013.

2. On 1 August 2013 Mr Kaley sought further review by the Tribunal.  The Tribunal is satisfied that it has jurisdiction to consider the application.  A hearing was held in Canberra on 16 January 2014.

   Background

3. Mr Kaley was employed as an architect by Defence Housing in September 2011.  On 13 April 2012 he ceased that employment. Mr Kaley had also, from 2006, set up a business in the name of Narendra M Kaley Architect. His evidence about his earnings from his business was equivocal. In a business details form he completed for Centrelink he stated that he works in this architectural services business as a sole trader for about 28 hours per week. However, in the newstart allowance declaration he said ‘I have no business interests’. In his statement of facts, issues and contentions Mr Kaley said that he was a ‘Sole Trader’ and was not employed by the business, and that his ‘ordinary income’[1] was ‘zero’. He conceded he had ‘business income’.  

   [1]Social Security Act 1991 (Cth) ss 8, 1072.

4. Mr Kaley is married and his wife is currently employed. Her gross income at the relevant time was $3,542.30 per fortnight.

5. Mr Kaley first enquired about his eligibility for newstart allowance on 12 March 2013.  He was advised by Centrelink that he needed to lodge an application on or before 26 March 2013. Mr Kaley had several conversations with Centrelink concerning his eligibility, which resulted in the commencement of a new claim assessment. Therefore Mr Kaley was taken to have lodged a claim within the relevant time limits.

6. There were further consultations with Centrelink concerning his wife’s employment and her salary, and Mr Kaley’s earnings as a sole trader. Ultimately his application was rejected. In one letter from Centrelink dated 9 April 2013 the reason given was that ‘your and your partner’s income is above the allowable limit’. In a second letter from Centrelink, also dated 9 April 2013, the rejection was said to be because of his wife’s income.

   Legislation

7. The relevant law is found in the Social Security Act 1991 (Cth) (Act) and in the Social Security (Administration) Act 1999 (Cth) (Administration Act). Part 2.12 of the Act provides for newstart allowance. Section 593 of the Act sets out the criteria for eligibility for newstart allowance. Section 608 of the Act provides that newstart allowance is not payable if the rate of payment would be nil. Section 643 of the Act provides that the rate is worked out using the benefit rate calculators in section 1068 of the Act.

8. Section 37(2) of the Administration Act provides that if a person qualifies for a social security payment which is also payable, an application for the payment must be granted. In order to qualify, the person must make a claim in accordance with the Administration Act and that claim must be in writing.[2] There is no dispute that Mr Kaley made an appropriate claim and that it was in writing.

   [2] Social Security (Administration) Act 1999 (Cth) ss 11, 16.

   Issues

9. The sole issue is whether newstart allowance is payable to Mr Kaley.

   Consideration

10. Mr Kaley is unemployed and has been so since 13 April 2012. He is also a sole trader, and he declared his business income for the purposes of the claim. At the hearing, however, it was agreed that the decision under review was the decision to deny Mr Kaley newstart allowance because of his wife’s income, that is, according to the reasons in the second of the Centrelink letters dated 9 April 2013.  That means any reference to Mr Kaley’s business income or income as a sole trader is irrelevant.

11. Mr Kaley is married and accordingly for the purposes of the Act, payability of newstart allowance to him is at the partnered rate. Mr Kaley contended that the ‘Partner’s ordinary income test and assets test is not applicable … because [he] is a married member of couple’. He relied on section 1068(2) for this reasoning. In so doing, Mr Kaley has failed to take account of those provisions of the Act relating to family relationships definitions and has misunderstood the purpose of section 1068(2).

12. The family relationship provisions are found in section 4 of the Act. That section states in section 4(1) that a “member of a couple” has the meaning given by subsections (2), (3), (3A), (6) and (6A)’. Of those provisions only section 4(2) is relevant. ‘Partner’ is also defined in section 4(1). The definition states: ‘“Partner in relation to a person who is a member of a couple” means the other member of the couple’.

13. ‘Member of a couple’ is defined in section 4(2) which states:

    4(2) Subject to subsection (3),[3] a person is a member of a couple for the purposes of this Act if: (a) the person is legally married to another person and is not, in the Secretary’s opinion … living separately and apart from the other person on a permanent or indefinite basis’.

    [3] Section 4(3) of the Act sets out the criteria for forming an opinion about the nature of the relationship.

14. Mr Kaley confirmed that he was married, and that he was not living separately and apart from his wife as referred to in section 4(2). That means Mr Kaley is a ‘member of a couple’, and he and his wife are both each other’s ‘partner’.  That means that provisions referring to a ‘member of a couple’, or ‘partner’ in the Act apply to his claim.

15. Mr Kaley has submitted that Module G of section 1068 of the Act which contains the rate calculators does not apply to him because of the terms of section 1068(2). In his view, relying on section 1068(2), the ‘ordinary income and assets test is not applicable to married couples’.

16. The Tribunal pointed out to Mr Kaley that the provision deals with a specific situation, namely, the application of the rate calculator to assess payability where an applicant is seeking a social security payment and one member of the couple is under the age of consent according to the law in the place where the couple are living.  The representative for the Secretary provided an extract from the Guide to the Social Security Law clause 5.1.8.20 which explains the need for this provision as follows:

    If a benefit recipient is living in a member of a couple relationship … and one or both partners are under the age of consent in the state in which they live, they are not classified as partnered.  However, the rate payable is not to exceed the rate payable if they were partnered.  This means the rate is the partnered rate.  The income and assets tests apply to all benefit recipients in this situation as they were a couple.

17. Mr Kaley agreed that he was married, and that neither he nor his partner (wife) were under the age of consent. Nonetheless, he maintained that as this was the only specific provision in section 1068 which refers to the income and assets test being applicable to a couple, his view was that the income and assets test would not apply other than in this situation. He did not appear to accept that means testing applies to most social security payments and would apply in his case.

18. The Guide to the Social Security Law is not legislation.  Nonetheless, unless the Guide is shown to be misleading or inaccurate, the Tribunal can rely on the Guide to explain a particular provision.[4] The Tribunal accepts that the explanation for section 1068(2) in the Guide is an accurate reflection of the reason for the provision and its specific nature. That acceptance is supported by the reference to the heading to section 1068 which notes ‘Rate of … Newstart allowance (18 or over)’ indicating that the provision would, apart from section 1068(2), apply only to newstart applicants who were ‘18 or over’, that is, adults in terms of Australian law.[5]

    [4] Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 at 640, 642, 643, 645.

    [5] The heading to a subdivision of an Act is part of the Act: Acts Interpretation Act 1901 (Cth) s 13(2)(d).

19. The Guide is not misleading, nor is it inaccurate. In those circumstances, the Tribunal does not accept that Mr Kaley’s interpretation of the provision and its implications is correct. The Tribunal finds that the Guide provides an explanation for the terms of section 1068(2) and that explanation means the provision does not assist Mr Kaley’s case.

20. In summary, the effect of the family relationship definitions and the terms of the rate calculator in section 1068 where these refer to ‘partnered’, ‘partner’ or ‘member of a couple’  apply to the claim by Mr Kaley. In particular there is a reference to a ‘member of a couple’ and to a ‘partner’ in the Method statement for establishing the effect of a person’s ordinary income in section 1068 – G1. It follows that in calculating the amount of any newstart allowance to which Mr Kaley is entitled, his partner’s income must be taken into account. As the calculation based on the income of Mr Kaley’s wife precluded him being eligible for newstart allowance, there was no need also to consider his business income or any assets of the couple.

21. Mr Kaley had also claimed that his rate of newstart allowance was not nil, but rather it was $444.70.  In his view, the rate of newstart allowance as relevant was Nil ‘only under the application of an income maintenance period’. He cited section 37(2)(b)(v) of the Administration Act in support of this contention.

22. Section 37 provides for the grant of claims. The provision states specifically in relation to newstart allowance:

    37 (2) The Secretary must determine that a claim for a newstart allowance is to be granted if the Secretary is satisfied that:

    (a) the claimant is qualified, or is expected to be qualified, for the allowance; and

    (b) the allowance would be payable apart from: …

    (v) the application of an ‘income maintenance period’ where the rate of newstart allowance payable to the person is nil.

23. Mr Kaley’s contention was that since this provision was, in his view, the only reference to ‘the rate of newstart allowance’ being ‘nil’, his amount of newstart allowance could not be ‘nil’ under the Act as the Secretary had concluded. Mr Kaley confirmed at the hearing that he correctly understood the meaning of the expression ‘income maintenance period’.  However, he said he could not accept that the calculation of the ‘ordinary income’ in his case would be ‘nil’ if the application of the rate of payment to him, based on his wife’s income was a negative amount. In his view that was not ‘nil’.  As he contended “’Nil’ means ‘Zero’. Negative does not mean ‘Zero’ or ‘Nil’”.  As the only relevant provision, in his view, referring to a ‘nil’ amount was section 37(2), and that provision did not refer to a negative amount, the amount to which he was entitled could not preclude newstart allowance being payable to him.

24. The Tribunal finds that Mr Kaley’s interpretation is not correct and whether a negative amount or a zero amount results from the application of the rate calculator, the result is that there is a ‘nil’ payment of newstart allowance to Mr Kaley.

25. Mr Kaley also contended that he met the criteria for newstart allowance since he was unemployed and that the rate calculator only applied once eligibility was established. In other words he did not accept that the criteria include both being unemployed and also that an amount of newstart allowance was payable to him.

26. Section 593 of the Act lists the qualifications for newstart allowance. However, Mr Kaley has failed to take into account that section 593 contains Note 13 which states ‘a newstart allowance is not payable in certain situations even if the person is qualified (see Subdivisions C, D, E and F and Part 4.2’. Subdivision D, which includes, section 608, is relevant. Section 608 provides: ‘(1) Subject to subsection (2), a newstart allowance is not payable to a person if the person's newstart allowance rate would be nil.’  Subsection (2) is not relevant.

27. A note to an Act, unless the Act specifically provides to the contrary, is not part of an Act.[6] Nonetheless, as the reprinted version of the Act provides ‘Notes and examples throughout the Act help explain how certain provisions work’.  As the explanation continues: ‘Notes tell you where to find definitions and alert you to other provisions in this Act and in other legislation that is relevant to the text you are reading’.  The Tribunal (and Mr Kaley) is, therefore, entitled to use Note 13 as an aid to navigating what is complex legislation.

    [6] Acts Interpretation Act 1901 (Cth) s 13.

28. The effect of the Note and the provisions of the Act to which it points is that the criteria for eligibility for newstart allowance include the requirement that an amount of newstart allowance greater than nil be payable to an applicant before that person qualifies for the allowance. In other words, unless Mr Kaley has an amount of newstart allowance payable to him, he does not meet all the criteria for payment since the amount to which he would be entitled is ‘nil’.

29. The application of the rate calculator, the correctness of the calculations of which in accordance with Module B in section 1068-B1 and the method statement in Module G found in section 1068-G1 has not been questioned.  This means Mr Kaley is not eligible to receive the newstart allowance.  The income level of Mr Kaley’s partner (wife) is sufficiently high to preclude such a payment under the Act. Therefore the decision under review must be affirmed. 

I certify that the preceding 29 (twenty nine) paragraphs are a true copy of the reasons for the decision herein of RM Creyke, Senior Member

.....................[sgd]................

Associate

29 January 2014

Date of hearing	16 January 2014
Applicant	In person
Advocate for the Respondent	Julie Zhou
Solicitors for the Respondent	Department of Human Services