PHAM And SECRETARY, DEPARTMENT OF EMPLOYMENT AND WORKPLACE RELATIONS
[2007] AATA 15
•12 January 2007
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2007] AATA 15
ADMINISTRATIVE APPEALS TRIBUNAL N°V2006/838
GENERAL ADMINISTRATIVE DIVISION Re CHARLES PHAM Applicant
And
SECRETARY, DEPARTMENT OF EMPLOYMENT AND WORKPLACE RELATIONS
Respondent
DECISION
Tribunal:Mr Egon Fice, Member
Date:12 January 2007
Place:Melbourne
Decision:The Tribunal affirms the decision under review.
Mr Egon Fice
Member
SOCIAL SECURITY – newstart allowance – request for information about trust income – failure to provide requested information – suspension of newstart allowance – reasonable request – reasonable excuse for non-compliance
Acts Interpretation Act 1901 s 28A
Commonwealth Services Delivery Agency Act 1997 s 6, 12, 33
Freedom of Information Act 1982
Privacy Act 1988 s 6C, 16A, Schedule 3
Social Security (Administration) Act 1999 s 63, 192, 234
Social Security Act 1991 s 611, 1068
REASONS FOR DECISION
12 January 2007 Mr Egon Fice, Member
1. Mr Charles Pham was receiving Newstart Allowance (NA) from Centrelink, the service delivery agent for the Department of Employment and Workplace Relations. In November 2005, following a data-matching exercise with the Australian Tax Office (ATO), Centrelink received information which indicated that, in the 2003/2004 financial year, Mr Pham had received $5,055 by way of distribution from the Pham Family Trust (the family trust).
2. On 1 March 2006 Centrelink wrote to Mr Pham requesting more information about the family trust and the payment. When there was no response to that letter, Centrelink sent him another letter in April 2006, again requesting information regarding the family trust, and cautioning Mr Pham that if the information was not provided within 14 days of the date of the letter, his NA may be suspended. Mr Pham did not respond within the requisite time and his NA was suspended on 4 May 2006.
3. After discussions with Centrelink, Mr Pham’s NA was reinstated on 12 May 2006 and he was asked to provide the information sought by Centrelink within 14 days. Mr Pham did not provide that information. As a result, Mr Pham’s NA was suspended and on 16 June 2006 he was informed that it had been cancelled.
4. Mr Pham sought an internal review of the decision. On 22 June 2006 an Authorised Review Officer (ARO) from Centrelink affirmed that decision. Mr Pham then sought a review of the decision by the Social Security Appeals Tribunal (SSAT). The SSAT also affirmed the decision. Mr Pham then applied to this Tribunal for review of the decision.
5. The only issues in this matter are whether Centrelink acted in accordance with law in seeking information regarding the family trust and when it subsequently cancelled Mr Pham’s NA following his failure to provide the information sought.
RELEVANT FACTS
6. Mr Pham was receiving NA for some time when, after a data-matching exercise with the ATO, Centrelink learned that Mr Pham had received income by way of distribution from the family trust in the sum of $5,055. Mr W.R. Jarman, a Customer Service Officer (CSO) with Centrelink, wrote to Mr Pham on 1 March 2006 stating that ATO records disclosed that he was a beneficiary of the family trust in the 2003/2004 financial year. Mr Jarman asked Mr Pham confirm that the ATO records were correct. Mr Jarman also enclosed a Module A Asset Details form and a Module 1 Income and Investments form with his letter and asked Mr Pham to complete those forms. Mr Jarman explained that the rate of NA for which Mr Pham may be eligible depended on his income and assets. Mr Jarman requested that the information be provided in the enclosed reply-paid envelope by 22 March 2006. He also said that the request for information was made under s 63 and/or s 192 of the Social Security (Administration) Act 1999 (the Administration Act). He warned Mr Pham that if he did not contact Centrelink before 22 March 2006 his NA may be stopped. Mr Jarman made a file note on Mr Pham’s Centrelink record indicating dispatch of the letter and its enclosures.
7. When Mr Pham did not respond to Centrelink’s letter of 1 March 2006, Mr Jarman sent to him a second request for information in a letter dated 18 April 2006. That letter requested a response within 14 days and it cautioned Mr Pham that if the information was not provided within that time, his NA may be suspended. Mr Pham did not respond to that letter either.
8. Centrelink records indicate that Mr Pham contacted a Centrelink officer on 4 May 2006 and made a general enquiry about NA. The file note indicated that Mr Pham’s NA was suspended with effect from 4 May 2006.
9. On 12 May 2006 Mr Pham again contacted Centrelink regarding the suspension of his NA. On this occasion, Mr Pham attended Centrelink’s office and he was interviewed by a CSO. Mr Pham told this officer that he had not received Centrelink’s letter of 18 April 2004. The CSO downloaded that letter from Mr Pham’s computer record, printed it and handed it to him. The officer advised Mr Pham to contact Mr Jarman regarding that letter. The CSO also noted that Mr Pham said that he recently started a self-employed business and was unable to attend at Centrelink to have his entitlement clarified. His NA payment was reinstated and he was asked to provide the requested information within 14 days.
10. On 16 May 2006 Mr Pham contacted Mr Jarman by telephone. He told Mr Jarman that he had not received Centrelink’s letters of 1 March 2006 and 18 April 2006; but he had been given a copy of the 18 April 2006 letter by a CSO. According to the file note made by Mr Jarman, Mr Pham requested a signed copy of the letter which had been given to him on 12 May 2006. He also requested that Mr Jarman provide him with the relevant section of the Administration Act. Mr Jarman complied with Mr Pham’s request and provided a signed copy of the 18 April 2006 letter together with copies of s 63 and s 192 of the Administration Act. Mr Jarman told Mr Pham that he must provide the requested information by 30 May 2006 but, if he had difficulty in obtaining that information, Mr Pham should contact him prior to 30 May 2006 otherwise his NA would be suspended.
11. Centrelink received no response from Mr Pham by 30 May 2006. On 14 June 2006 Mr Pham telephoned Mr Jarman asking if he had received a fax dated 1 June 2006. Mr Jarman said that he had not. In his evidence, Mr Pham said that he had faxed the letter to Mr Jarman on 25 May 2006, despite the fact that letter is dated 1 June 2006. A copy of Mr Pham’s faxed letter follows.
…
WR Jarman
Delegated Customer Service Officer Centrelink
RE: Regarding requested financial information
1.In conjunction with your letter dated 18 April 2006, and in addition to our telephone conversation at around the same date.
2.You have failed to provide myself with the Legislation you are trying to enforce;
3.The Privacy Act has prevented myself with obtaining any information regarding any Trusts;
4.You have indicated that you have information about the Trust;
5.I would like a copy of the information you have, in order to do further investigation;
6.You need to provide myself with the Legislation in writing;
7.You need your superiors to sign the request for more information;
8.You need to provide me with the information you have so that I can investigate on my own;
9.I have tried to investigate, but a(s) I have said PHAM is a common surname name;
10.The Privacy Act is thrown in my face;
Sincerely
Charles Pham
…
1 June 2006
12. Mr Pham also asked Mr Jarman to contact him on 15 June 2006 and provided him with his mobile telephone number to facilitate that contact. Mr Jarman telephoned Mr Pham at 2.10pm on 15 June 2006 but Mr Pham did not answer the call.
13. Mr Pham contacted Mr Jarman by telephone again on 20 June 2006 asking if his NA had been restored. Mr Jarman told him it had not been restored and, after abusing Mr Jarman, Mr Pham asked to speak to his supervisor. Mr Jarman attempted to transfer Mr Pham to his supervisor but was not able to do so and he told Mr Pham he would have his team leader contact him as soon as he was available. A file note dated 20 June 2006 indicates that the team leader contacted Mr Pham who told him that he needed the (relevant) legislation and, although Centrelink had provided copies of the legislation, that was not sufficient as he required an original version. Mr Pham also asked that a reference to the relevant legislation be noted in letters sent from Centrelink even though it was pointed out to him that the legislation had been referred to in the letters. Mr Pham was offered a review by an ARO. He said he would like the matter referred directly to the ARO. The ARO reviewed Mr Pham’s file and by letter dated 22 June 2006 informed Mr Pham that the decision to suspend his NA was correct. The ARO also explained to Mr Pham that Centrelink was yet to receive from him business details and a profit and loss statement regarding his self employed business which he referred to when he spoke to a CSO on 12 May 2006.
14. Mr Pham then sought review of the ARO decision by the SSAT. On 10 August 2006 the SSAT affirmed the decision.
REQUIREMENT TO INFORM CENTRELINK ABOUT ASSETS AND INCOME
15. NA is not payable to a person if the value of that person’s assets is more than the person’s assets value limit (see s 611(1) Social Security Act 1991)) (the Act). Section 1068(1) of the Act provides that the rate of NA is to be calculated in accordance with the Rate Calculator at the end of that section. Module A of the Rate Calculator requires the income test set out in Module G to be applied in order to work out income reduction. Module G sets out the method by which a person’s ordinary income affects a person’s maximum payment rate. There can therefore be no question that a person’s assets and income are required to be taken into account in determining whether a person is entitled to NA and, if so, the rate of payment.
16. Division 6 of the Administration Act deals with the requirement of a claimant or a person receiving a social security payment to provide certain information to the Secretary, Department of Employment and Workplace Relations (the Secretary). Section 63(1), provides that the section applies to a person who is receiving or has made a claim for social security. Section 63(3) of the Administration Act (as it was prior to amendments which applied to claims made after 1 July 2006) provides:
63.(3) If the Secretary is of the opinion that a person to whom this subjection applies should:
(a)attend an office of the Department; or
(b)contact the Department; or
(c)attend a particular place for a particular purpose; or
(d)give information to the Secretary;
the Secretary may notify the person that he or she is required, within a specified time, to:
(e)attend that office; or
(f)contact the Department; or
(g)attend that place for that purpose; or
(h)give that information;
as the case may be.
17. Section 63(3) applies specifically to a person who is receiving or has made a claim for NA (s 63(3A)).
18. Section 63(5) of the Administration Act provides:
If:
(a) the Secretary notifies a person under subsection (3) of a requirement; and
(b) the requirement is reasonable; and
(c) the person does not comply with the requirement;
then:
(d) newstart allowance or special benefit is not payable to the person; and
(e) an administrative breach rate reduction period applies to the person if:
(i)the person meets the conditions in subsection (5A) at the time of the non-compliance and newstart allowance later becomes payable to the person; or
(ii)special benefit later becomes payable to the person.
19. Section 63(11) provides that a notification under subsection (3) must inform the person to whom it is given of the effect of s 63. In other words, the notification must inform the person that failure to provide the information sought may result in NA being cancelled or suspended.
20. Section 5 of the Administration Act provides that:
if a provision of the social security law requires that a written notice be given to a person, it is sufficient compliance with the provision if the notice is given a manner approved by the Secretary.
It also provides that nothing under subsection (1) prevents a notice being given in accordance s 28A of the Acts Interpretation Act 1901 (the Acts Interpretation Act).
ADEQUATE NOTICE
21. There can be no dispute that s 63 of the Administration Act applies to Mr Pham. At the time notice was given to him to provide information to the Secretary about the family trust, he was receiving NA which is a social security payment for the purposes of the Administration Act (see s 3).
22. The notification requirements set out in s 63(3) of the Administration Act simply state that the Secretary may notify the person. There is no express reference to notice in writing. Further, that section does not require the Secretary to sign the notice if it were given in writing. By way of distinction, s 63(2), which deals with notification requirements regarding payments other than NA, prescribes that written notice must be given.
23. In his submissions Mr Pham suggested that s 63(3) required the Secretary to personally give him notice that he was required to provide information. That would of course be impractical given the number of requests which are made for further information from social security claimants. For that reason, s 234(2) of the Administration Act provides that:
the Secretary may, in writing and in accordance with service arrangements, delegate to the Chief Executive Officer (CEO) or an employee of the Agency all or any of the powers of the Secretary under the social security law.
The Agency is also known as Centrelink (see s 6(3) of the Commonwealth Services Delivery Agency Act 1997 (the CSDA Act). If the power is delegated to the CEO of an Agency, the CEO may, in writing, delegate to an employee of the Agency (Centrelink), all or any of the powers or functions of the CEO (see s 12 of the CSDA Act).
24. Mr Jarman, a CSO with Centrelink, holds a delegation from the Secretary. He has been a Centrelink employee since 26 January 1997 and has been acting at Centrelink level 3 (APS level 5) since 12 January 2001. Mr Jarman is employed by Centrelink under Category 11. Under s 33 of the CSDA Act, the CEO of Centrelink, Mr J. Whalan, by Instrument N° 4 of 2006 which was made on 24 February 2006, delegated his powers under s 63 of the Administration Act to all Category 11 employees of Centrelink. There can therefore be no question about the fact that Mr Jarman had delegated power to issue notices under s 63 of the Administration Act.
25. Mr Pham complained that he had never received either the 1 March 2006 or 18 April 2006 letters. However, following subsequent discussions with a CSO on 12 May 2006 and further telephone conversations with Mr Jarman, it is clear that Mr Pham was notified of the Secretary’s request for further information regarding the family trust. There is no requirement for the notification to be either in writing or signed by the Secretary or an authorised officer of Centrelink. There is also no requirement under the Administration Act for a Centrelink officer to provide copies of the legislation upon which the officer relies when seeking information. The only statutory requirement is that the notification given to the person must inform that person of the effect of s 63 of the Administration Act. The effect of s 63 is that failure to comply with the notice results in NA ceasing to be payable to the person. Mr Pham was warned about the effect of failure to comply with the notice in the letter of 1 March 2006 and in the various telephone conversations he had with Mr Jarman.
26. Although Mr Pham claimed that the letters of 1 March 2006 and 18 April 2006 were never received by him, he did agree that they were correctly addressed to his home address. He could not explain why he had not received those letters and agreed that he had received other correspondence sent by Centrelink. Section 5 of the Administration Act does not apply as the notice was not required to be in writing. The Secretary relied on s 28A of the Acts Interpretation Act submitting that the notices were sent by pre-paid post to Mr Pham’s last known address. However, there was no evidence before me that Centrelink had complied with s 28A other than the file note made by Mr Jarman on 16 May 2005. Nevertheless, there can be no question at all that Mr Pham was notified of the Secretary’s request for further information about the family trust. Even if Mr Pham had not received Mr Jarman’s letter dated 18 April 2004 in the post, he did receive it on 12 May 2006 when the CSO downloaded the letter and handed it to Mr Pham. Mr Pham was also notified orally by Mr Jarman and he received a signed version of that letter from him. Also, there is no statutory requirement for Centrelink to provide to a person receiving a social security payment the information which it has obtained by the data matching process with the ATO. Therefore, there is no merit in the complaints made by Mr Pham in his letter of 1 June 2006, numbered two, four, five, six, seven and eight.
REASONABLE REQUEST
27. In accordance with s 63(5) of the Administration Act, the requirement by the Secretary for information must be reasonable before a person’s social security payments can be stopped.
28. Part 3.18 of the Act deals with the means test treatment of private companies and private trusts. In general, it sets up a system where the assets and income of private companies and private trusts are attributed to individuals. Where the attribution rules apply and a person derives ordinary income from a family trust, then that income in addition to any other ordinary income of the individual is calculated to determine the total income of the individual when assessing the rate of social security payment to be made. Therefore, any income derived from a family trust is clearly relevant information which the Secretary must take into account in determining the rate of social security payment to be made to a claimant. Accordingly, it is my opinion that the request for information about the family trust was reasonable.
REASONABLE EXCUSE
29. Section 63(9) of the Administration Act provides that the Secretary may determine that a social security payment which was not payable because of s 63(5), is payable if the Secretary is satisfied that the person had a reasonable excuse for not complying with the requirement under s 63(3).
30. Mr Pham argued that he did not have the information and that it was not available to him. He was asked whether he could obtain the information regarding the family trust and he said he could not. When further questioned about this, he said his father was recovering from a cancer operation and that he could not discuss that with him. He admitted that he had seen his father on a number of occasions since his operation. Mr Pham said that his father had recovered from the cancer operation but, nevertheless, he did not discuss financial matters with his father. When it was suggested to him that he could at least have ascertained the existence of the family trust, he rejected that and again repeated that his father was too ill be troubled by such matters. He was also asked whether he had discussed the family trust with his brother and he answered that he had. According to Mr Pham, his brother told him that he needed something in writing before he could provide any information at all. His brother admitted that there was a trust but, according to Mr Pham, he refused to provide any further information unless provided with a letter from Centrelink.
31. Mr Pham also submitted that the persons who had information about his involvement in the family trust could not provide that information because of the Privacy Act 1988 (the Privacy Act). This was despite the fact that Mr Pham would merely be obtaining information about himself and not any other persons associated with the trust. An organisation, for the purposes of the Privacy Act, includes a trust (s 6C). If an organisation is not bound by an approved privacy code, it must not act in breach of the National Privacy Code (s 16A). There was no evidence that the family trust was subject to an approved privacy code. The National Privacy Code (set out in Schedule 3 of the Privacy Act) provides, at principle 1.3, that an organisation must take reasonable steps to ensure that an individual is aware that he or she is able to gain access to their personal information. The family trust (through the trustee) is therefore required by law to make Mr Pham aware that he is able to gain access to his information. Furthermore, principle 2.1 provides that an organisation must not use or disclose personal information about an individual unless the individual has consented to the disclosure. Therefore, simply by contacting the trustee (quite possibly his father), Mr Pham could authorise disclosure of his personal information to Centrelink. Clearly, the Privacy Act does not provide a reasonable excuse for Mr Pham’s failure to provide the information sought by Centrelink.
32. In his letter of 1 June 2006, Mr Pham, at point nine, said that he had tried to investigate (presumably the existence of the family trust) but said that Pham is a common surname and presumably he was unable to come up with any information. However, this is strongly at odds with the evidence he gave at the hearing regarding the discussions with his brother. Furthermore, it is not my view that any breach of the Privacy Act would occur were Mr Pham to provide Centrelink information regarding his involvement in the family trust and any distributions he had received as a consequence of being a beneficiary of that trust. Therefore, the Mr Pham’s complaints numbered three, nine and ten set out in the letter of 1 June 2006 have no substance at all. Furthermore, Mr Pham was given adequate time to provide the information sought prior to suspension of his NA. In fact, Mr Jarman offered to extend the time by which Mr Pham should comply provided he notified Centrelink that he needed more time. Mr Pham did not take up that offer.
33. In the course of the hearing Mr Pham said that he had obtained other Centrelink documents under the Freedom of Information Act 1982 (FOI) and that although he did not have those with him at the hearing, he wanted the opportunity to present some of those to the Tribunal. I directed that Mr Pham provide copies of those documents as soon as possible. I also directed Mr Pham to provide copies of any additional documents to Ms J. Hume, who appeared for the Secretary, and that I would allow Ms Hume to make any additional submissions if required. In a letter dated 12 December 2006 which Mr Pham faxed to the Tribunal, he complained that the Tribunal refused to allow him to submit further documents. In order to clear up any misunderstanding that Mr Pham may have had about the direction regarding further documents, the District Registrar of the Tribunal wrote to him on 15 December 2006 explaining the directions which I made and permitting him to provide the FOI documents by 22 December 2006. Mr Pham has not provided any further documents to the Tribunal. Numerous attempts have been made by the Tribunal to contact Mr Pham, however he has not answered his telephone and he has not made any attempt to contact the Tribunal.
CONCLUSION
34. In my view it is clear that Mr Pham was notified of a requirement to provide the Secretary with information regarding his interest in the family trust. I have no doubt this was a reasonable request made in accordance with s 63(3) of the Administration Act. The reasons given by Mr Pham for non-compliance are unsatisfactory and do not provide a reasonable excuse for failure to comply s 63(3) of the Administration Act. Therefore, the decision of the Secretary to suspend Mr Pham’s NA is correct. The decision of the SSAT made on 10 August 2006 should be affirmed.
I certify that the thirty-four [34] preceding paragraphs are a true copy of the reasons for the decision herein of
Signed: Dianne Eva
ClerkDate/s of Hearing 1 December 2006
Date of Decision 12 January 2007
Advocate for the Applicant Self -represented
Advocate for the Respondent Ms J. Hume, Sparke Helmore
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