Poyton and Secretary, Department of Social Services (Social services second review)
[2021] AATA 67
•29 January 2021
Poyton and Secretary, Department of Social Services (Social services second review) [2021] AATA 67 (29 January 2021)
Division:GENERAL DIVISION
File Number: 2020/1981
Re:Curtis Poyton
APPLICANT
AndSecretary, Department of Social Services
RESPONDENT
DECISION
Tribunal:Senior Member P J Clauson AM
Date:29 January 2021
Place:Brisbane
the reviewable decision is affirmed.
........................................................................
Senior Member P J Clauson AM
Catchwords
SOCIAL SECURITY – Newstart Payment – cancellation resulting from protracted ineligibility – whether Secretary correctly exercised discretion to cancel the Applicant’s payment – whether cancellation discretion was exercised reasonably – whether decision accounted for relevant considerations – whether statutory pre-requisites were enlivened at time of making decision – whether it is correct and preferable to exercise the discretion - decision affirmed
Legislation
Administrative Appeals Tribunal Act 1975 (Cth)
Administrative Decisions (Judicial Review) Act1977 (Cth)
Social Security Act 1991 (Cth)
Social Security Administration Act 1999 (Cth)
Cases
Alali and Secretary, Department of Social Services [2014] AATA 551
Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223
Boucaut Bay Co (In Liq) v The Commonwealth (1927) 40 CLR 98
British Oxygen Company Limited v Board of Trade [1971] AC 610
Drake and Minister for Immigration and Ethnic Affairs (No. 2) [1979] AATA 179
FAI Insurances Limited v Winnike (1982) 151 CLR 342
Fahmy and Secretary, Department of Social Services [2014] AATA 164
Gidaro v Secretary, Department of Social Services [1998] FCA 400
Green v Daniels (1977) ALJR 463, [1977] HCA 18
Minister for Aboriginal Affairs v Peko-Walsend Ltd (1986) 162 CLR 24
Minister for Immigration and Citizenship v Li (2013) 249 CLR 332, [2013] HCA 18
NADH of 2001 v Minister for Immigration and Multicultural Affairs [2004] FCAFC 328
O’Connell v Secretary, Department of Social Security [1991] AATA 523
Prasad v Minister for Immigration, Local Government and Ethnic Affairs [1985] FCA 47
R v Anderson; Ex Parte Ipec Air Pty Ltd (1965) 113 CLR 117
Re Mouroufas v Secretary, Department of Social Services [2017] AATA 3012
Re O’Connell and Secretary, Department of Social Services [2014] AATA 164
Sean Investments Pty Ltd v MacKellar (1981) 38 ALR 363
Secretary, Department of Social Services v Anwar [2015] AATA 413
Sevel and Secretary, Department of Social Services [1991] AATA 135
The Estate of Maria Kozak and Secretary, Department of Social Services [2015] AATA 480
Secondary Materials
Commonwealth of Australia, Parliamentary Debates Hansard, House of Representatives, 3 July 1999, 5936, The Right Honourable Warren Truss
Department of Social Services, Social Security Guide – Newstart and Jobseeker
Macquarie English Dictionary
REASONS FOR DECISION
Senior Member P J Clauson AM
29 January 2021
Dr Curtis Poyton (“the Applicant”) was at all material times for the purposes of this Application, partnered and in receipt of Newstart Allowance (“NSA”) and held a Pension Health Card (“PHC”).
The rate of payment of the NSA was regulated by the level of income of both the Applicant and his partner (“the combined income”).
At the time of the reviewable decision, the Applicant had not been paid NSA for a period of 12 weeks as his partner’s earnings had placed the combined income above the eligibility threshold. The Applicant was notified that his NSA had, as a consequence of being ineligible for this period, been cancelled. A letter dated 17 October 2019 advised the Applicant of this action effective from 8 October 2019.[1] This letter also advised the Applicant that, inter alia, of his rights to reapply and that his pensioner concession card had been invalidated from 7 October 2019. He was also informed of the ability, if he so qualified, to apply for a low-income healthcare card.
[1] Exhibit 1, T14, page 73.
The Applicant wrote to the Department of Human Services (“DHS”) (formerly the Department of Social Services) on 30 August 2019 requesting a written statement from the decision-maker regarding the factual and/or other evidence upon which the decision had been formed.[2]
[2] Exhibit 1, T9, pages 65 and 66.
There were a number of correspondences between the Applicant and the Respondent which ensued during the period following the notification of cancellation. These correspondences related to the internal review processes of DHS pertaining to the Applicant’s NSA and leading ultimately to the reviews by this Tribunal. These documents are contained in the materials before the Tribunal and set out in Exhibit 1. Suffice to say that the Tribunal has considered these correspondences in formulating its decision, however, is not going to enunciate each item of individual correspondence herein.
The correspondence alluded to above included the Applicant’s letter to DHS dated 29 January 2020 wherein he requested an Authorised Review Officer (“ARO”) review the decisions regarding his NSA entitlement.[3] The ARO affirmed the decision to cancel the Applicant’s NSA on 20 February 2020.[4]
[3] Exhibit 1, T17, page 78.
[4] Exhibit 1, T20, pages 81 to 85.
The Applicant, on 28 February 2020, lodged an Application with the Social Security and Child Support Division of this Tribunal (“AAT1”) for review of the decision[5] and the AAT1 confirmed the ARO’s decision on 20 March 2020.[6]
[5] Exhibit 1, T21, page 86.
[6] Exhibit 1, T2, pages 7 to 9.
From the decision of the AAT1, the Applicant sought a review by the General Division of the Tribunal on 28 February 2020.[7]
[7] Exhibit 2, Annex 2.
The Applicant applied for JobSeeker (“JSP”) on 27 March 2020 and was granted JSP from that date and was still receiving JSP as at the hearing date.
LEGISLATIVE FRAMEWORK
The relevant provisions of the Act, as they then applied, are found in the definition sections of the Social Security Act 1991 (Cth) (“the Act”) as well as the sections pertaining to the Applicant’s specific social security support; and also sections of the Social Security (Administration) Act 1999 (Cth) (“the Administration Act”).
The general provisions relevant to this matter are found in section 23 of the Act, relevantly stating:
4For the purposes of this Act, a person is taken to be receiving a social security payment until the latest day on which the payment is payable to the person even if the last instalment of the payment is not paid until a later day.
4A Despite subsection (4), if:
(a)a person is receiving a social security pension or 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 Chapter 3; and
(d)the person or the person’s partner earns, derives or receives, or is taken to earn, derive or receive, employment income; and
(e)the person would, but for this subsection, cease to be receiving the pension or benefit on and from a day (the cessation day):
(i) if paragraph (d) applies to the person—because of the employment income of the person (either alone or in combination with any other ordinary income earned, derived or received, or taken to have been earned, derived or received, by the person); or
(ii) if paragraph (d) applies to the partner—because of the employment income of the partner (either alone or in combination with any other ordinary income earned, derived or received, or taken to have been earned, derived or received, by the partner); and
(f)but for the employment income, or the combined income, referred to in paragraph (e), the pension or benefit would continue to be payable to the person on and from the cessation day; and
(g) the person continues to be qualified for the pension or benefit on and from the cessation day;
then, for the purposes only of the provisions of this Act that are specified in subsection (4AA), the person is taken to be receiving the pension or benefit until:
(h)12 weeks after the end of the instalment period in which the cessation day occurs; or
(i)the day the pension or benefit would cease to be payable to the person for a reason other than the employment income, or the combined income, referred to in paragraph (e); or
(j) the day the person ceases to be qualified as mentioned in paragraph (g);
whichever happens first.
The provisions that are specific to the Applicant’s entitlement commence at section 593 of the Act, outlining all the rules relevant to Jobseeker (which at the time of the Applicant’s original cancellation and subsequent review, was the Newstart payment).
593Qualification for jobseeker payment
1Subject to sections 596, 596A, 597 and 598, a person is qualified for a jobseeker payment in respect of a period if:
(a)the person satisfies the Secretary that:
(i) throughout the period the person is unemployed; or
(ii) the person is a CDEP Scheme participant in respect of the period; or
(iii) subsection (1A) applies in relation to the person for the period; and
Note: For CDEP Scheme participant see section 1188B.
(b)in the case of a person to whom subparagraph (a)(i) or (iii) applies—throughout the period, or for each period within the period, the person:
(i) satisfies the activity test; or
(ii) is not required to satisfy the activity test; and
(c)if subsection 605(1) applies to the person, at all times (if any) during the period when a Jobseeker Employment Pathway Plan is not in force in relation to the person, the person is prepared to enter into such a plan; and
(d)if subsection 605(1) or (2) applies to the person, at all times during the period when a Jobseeker Employment Pathway Plan is in force in relation to the person, the person is prepared to enter into another such plan instead of the existing plan; and
(e)if the person is required by the Secretary to enter into a Jobseeker Employment Pathway Plan in relation to the period, the person enters into that plan; and
(f)while the plan is in force, the person satisfies the Secretary that the person is complying with the requirements in the plan; and
(g)throughout the period the person:
(i) is at least 22 years of age and has not reached the pension age; and
(ii) is an Australian resident or is exempt from the residence requirement within the meaning of subsection 7(7); and
(i)the person was not in receipt of a youth allowance during the period.
595 Persons may be treated as unemployed
1The Secretary may treat a person as being unemployed throughout a period if:
(a)during the period, the person undertakes:
(i) paid work that, in the Secretary’s opinion, is suitable for the person to undertake; or
(ii) any other activity;
as a result of which he or she would, but for this subsection, not be taken to be unemployed; and
(b)the Secretary is of the opinion that, taking into account:
(i) the nature of the work or other activity; and
(ii) the duration of the work or other activity; and
(iii) any remuneration received for the work or other activity; and
(iv) any other matters relating to the work or other activity, or to the person’s circumstances, that the Secretary considers relevant;
the activity should be disregarded.
Note: The person may, under subsection 603(3), also be treated as satisfying the activity test.
1AHowever, the work or other activity must not be or include any work or other activity of a kind that the Secretary determines under subsection (1B).
1BThe Secretary may determine, by legislative instrument, kinds of work or other activity that are not to be taken into account for the purposes of subsection (1).
2A person complying with a Jobseeker Employment Pathway Plan, or with a requirement under subsection 601(1A), may be treated by the Secretary as being unemployed.
3In deciding whether to treat a person as being unemployed, the Secretary is to take into account:
(a)the nature of the activity undertaken by the person so as to comply with a requirement under subsection 601(1A) (activity test) or a requirement in a Jobseeker Employment Pathway Plan; and
(b)the duration of the activity; and
(c)any other matters relating to the activity that the Secretary considers relevant
608 Jobseeker payment not payable if payment rate nil
1Subject to subsection (2), a jobseeker payment is not payable to a person if the person’s jobseeker payment rate would be nil.
2Subsection (1) does not apply to a person if the person’s rate would be nil merely because:
(a)an election by the person under subsection 915A(1) (about quarterly energy supplement) or 1061VA(1) (about quarterly pension supplement) is in force; or
(b)the person has been paid an advance pharmaceutical allowance under the social security law.
[please note: References to Jobseeker apply to NSA as the name change implemented by the Corona Virus Response Package Omnibus Act 2020 (Cth) has since been implemented. The rules concerning this matter have not materially changed.]
Section 634 of the Act provides that a person’s entitlement is calculated using the rate calculator in section 1068 of the Act. This section then in turn provides at Modules G10 and G11 that a person’s entitlement can be reduced where their combined partnered income exceeds the income free area. The Act provides several formulae by which this is calculated and how the regime functions. For the purposes of the present matter however, it is not a point of contention that the Applicant’s partnered income was such that he was not entitled to any Newstart income for several successive weeks.
Section 80 of the Administration Act provides:
1If the Secretary is satisfied that a social security payment is being, or has been, paid to a person:
(a)who is not, or was not, qualified for the payment; or
(b)to whom the payment is not, or was not, payable (other than because of the operation of Division 3AA);
the Secretary is to determine that the payment is to be cancelled or suspended.
ISSUES FOR THE TRIBUNAL
The issues for the Tribunal are:
(a)whether, in all the circumstances, the Applicant’s NSA should have been suspended or cancelled.
CONSIDERATION
Evidence
Both parties appeared by telephone. The Applicant was affirmed and provided oral evidence to the Tribunal. The Applicant provided extensive and detailed written submissions which were of great assistance to the Tribunal. Each of the contentions propounded by the Applicant therein will be addressed in turn.
Applicant’s Submissions
The Tribunal, at the conclusion of the hearing, allowed the Applicant fourteen (14) days to produce evidence of his and his partner’s income to the Tribunal and a further fourteen (14) days for the DHS to receive the material from the Applicant and to prepare a response, if any, to the Applicant’s further material.
The Applicant’s contentions are based around his argument that the process in which the decision was made was unlawful, was without merit and thus the decision made by the Delegate of the Secretary was also unlawful. The facts of the matter were, it was agreed by the Applicant, correct, however, his contention was based on his fundamental assertion that to cancel his NSA was unreasonable on the facts and suspension should have been the appropriate action for the Respondent to have taken.[8]
[8] Transcript of Proceedings, page 4.
The Applicant’s contentions can be summarised as:
(a)the Applicant suffered detriment as a result of the decision and it therefore ought to be changed;
(b)the Respondent either did suffer detriment as a result of the decision or would alternatively have not suffered detriment if his NSA had not been cancelled therefore justifying a decision to keep him on suspension;
(c)the Respondent could not have been satisfied of the legislative preconditions of section 80 therefore precluding exercise of the discretion;
(d)the Respondent failed to consider relevant considerations;
(e)the Respondent failed to consider the merits of the decision before them; and
(f)the Respondent failed to act reasonably in exercising the discretion.
First, the Applicant agitated his claim on the basis that it would have been reasonable for the Secretary to suspend his NSA and allow him to continue to report his income as he went along because he would not have created any detriment to Services Australia or created any expense for them. He contended that cancellation had created detriment to him insofar as that when his NSA was cancelled and when he was able to reapply, there is a delay of time between those events where he is not in receipt of income even if a back payment is allowed.
Second, the Applicant also claimed detriment in that upon cancellation of his NSA, his low-income healthcare card or pensioner concession card were also consequentially cancelled. He contended that in the circumstances of his situation both cards were cancelled and it was necessary for him to reapply for both the NSA and the low-income healthcare card again and this incurred administrative expense for DHS and detriment to himself by having to expend his time in so doing.[9] Thus, shortly put, the Applicant puts the argument that suspension would have been the appropriate decision to take as it would have avoided the costs of applying the cancellation protocol and invoking the further costs of processing any reapplication he may have made. Additionally, it would have avoided the “detriment” to him caused by these processes as outlined in his Statement of Submissions.[10]
[9] Transcript of Proceedings, page 4.
[10] Exhibit 2, pages 1 to 182.
Third, the Applicant contends that the decision was without merit. The Applicant contends further that the decision was based on an erroneous interpretation of the law relating to his circumstances because the Minister’s Delegate erred insofar as the Social Security Act 1991 (Cth), section 23(4A) does not prescribe whether a person may recommend receiving Newstart allowance without being required to reclaim. Thus, the Applicant contended that the Secretary was in error because the decision was not authorised by the legislation under which it was purported to be made within the meaning of the Administrative Decisions (Judicial Review) Act1977 (Cth) (“ADJRA”) section 5(1)(d).
Fourth, the Applicant contended that the Secretary could not have been reasonably satisfied that prior to the cancellation of his payment pursuant to section 80 of the Administration Act, the Applicant was being paid a Social Security payment that the Applicant was:
(a)not qualified for; or
(b)was not payable to the Applicant because;
the Secretary was unaware of the income of the Applicant and his partner during the payment period in which the decision was made and that as the Applicant had not yet informed Services Australia of either his and/or his partner’s income, the Secretary could not have therefore been so satisfied.
Fifth, the Applicant contends also that the Respondent, in making the decision, failed to consider the relevant consideration that both the Applicant and his partner were casually employed and that their casual income differed from payment period to payment period, therefore failing to account that he may become qualified again.
Sixth, it is also contended by the Applicant that the Respondent did not consider whether to suspend or cancel in the appropriate manner in as much as that the decision made to cancel his NSA was based on a rule or policy which decreed that as the Applicant had not been paid Newstart NSA for a period of 12 weeks, it should be cancelled and that a failure to consider the matter on “the merits” before deciding to cancel NSA had been made. The Applicant contends that the Secretary thus fettered themselves and so fell into administrative error by an improper use of the discretionary power in following a rule or policy without regards to the merits of the case within the meaning of the ADJRA.
Seventh, the Applicant finally contended that in light of the foregoing contentions, the Secretary’s decision to cancel his NSA was therefore arbitrary and thus unreasonable given that it was reasonably possible that the eligibility of the Applicant to receive NSA would change from one payment period to the next. The Applicant thus contended that it would have been reasonable to suspend his NSA until he became eligible again for NSA rather than cancel it.[11]
[11] Exhibit 2, [30]; Transcript of Proceedings, page 14, lines 24-26.
Respondent’s Submissions
The Respondent’s contention is that the Act and the Administration Act govern the situation relating to the Applicant. The policy relevant to the application of the legislation is enunciated in the Guide and based on the principle enunciated in Drake and Minister for Immigration and Ethnic Affairs (No. 2)[12] should be applied where there is an absence of cogent reasons not to follow it.[13]
[12] (1979) 2 ALD 634.
[13] Exhibit 1, T3, pages 39 to 42.
It is not in dispute that the Applicant had qualified for NSA and that he had been a recipient of the tolerance bestowed by section 595 of the Act in that the discretion to treat him as unemployed throughout a period during which he was not unemployed had been exercised by the Secretary.
The Guide also provides that a recipient of NSA at 3.1.12 can qualify for an employment nil rate for a period of duration of “up to six to seven fortnights” if they are denied payment because of earnings income. Once this nil rate period is exceeded, then the payment is to be cancelled.
In the Applicant’s particular situation, both his and his partner’s combined income during the relevant six fortnight period commencing 1 July 2019 and ending 10 October 2019 showed that he had a nil entitlement for each fortnight throughout that period.[14]
[14] Exhibit 1, T20, pages82 and 83.
The Respondent has submitted that given the Applicant had enjoyed the benefit of the extended period of more than six fortnights of nil entitlement, the decision to cancel his NSA was made correctly and in conformance with section 23(4A) of the Act and section 80 of the Administration Act.
The Respondent, in response to the Applicant’s contention that the cancellation of his NSA was made unreasonably, submitted that such cancellation was not, in the Applicant’s circumstances, made unreasonably. The Respondent argues that section 80 does indeed grant to the Secretary a discretion to either cancel or suspend a party’s NSA payment depending upon the individual’s circumstances, however, in the case of the Applicant, he had enjoyed an extended period of grace of nil entitlement due to income and that there was nothing unreasonable in deciding to cancel rather than suspend the Applicant’s NSA in such circumstances.
The Respondent further contended that such a decision was consistent with the legislative intent supporting section 23(4) and section 23(4A) of the Act and the policy outlined in the Guide insofar as they provide for a person who is not entitled to a Social Security payment because of income, being taken to receive such a payment but for a limited time.
The Tribunal also notes the Respondent’s reference to the Tribunal’s decision in the matter of Fahmy and Secretary, Department of Social Services[15] where the Tribunal considered the question of reasonableness in a decision relating to the suspension of a payment albeit on differing facts to the Applicants in this matter.
[15] [2014] AATA 164.
The Tribunal observed, whilst noting its decisions in Re O’Connell and Secretary, Department of Social Services[16] and Sevel and Secretary, Department of Social Services[17] that:
The remedy should be a “rational and proportionate response” to the failure to receive certain information. Suspension is “intended to be a genuine lesser thing than cancellation” and the discretion “extends to suspension for an appropriate period”.[18]
[16] [1991] AATA 523.
[17] [1991] AATA 135.
[18] Gidaro v Secretary, Department of Social Services [1998] FCA 400.
It is the Respondent’s contention that as the Applicant’s income meant he was not entitled to be paid the NSA and had not been so entitled for a period of at least six fortnights, the decision by the Respondent to cancel the Applicant’s NSA on 17 October 2019 was not irrational, nor was it disproportionate.
The Respondent’s further submissions dated 6 October 2020 and lodged with the Tribunal following the Tribunal’s directions made on 9, 21 and 22 September 2020, note that Exhibits 6 and 7, which consist of the Applicant’s and his partner’s payslips for the period from October 2019 through to May 2020. The Respondent filed submissions, including a table setting out the Applicant’s and his partner’s incomes as indicated by their employers and the relevant corresponding Centrelink payment periods, indicate that:[19]
(a)the Applicant’s partner’s gross income from her employer, Staffing Solutions, was in excess of $2,000.00 per fortnight up until 22 December 2019, with a varying income through to April 2020;
(b)that the Applicant also continued to earn income through to December 2019 and then earned a varying income until 17 April 2020;
(c)that the Applicant’s income earned, together with that of his partner, remained over the income cut-off point as indicated by the ARO’s decision as being $1,205.00 per fortnight at the relevant time.[20]
[19] Exhibit 8.
[20] Exhibit 1, T20 at page 84.
Further, the Applicant and his partner went overseas for 10 days in February 2020 which may, in the submission of the Respondent, explain a reduction in their incomes for the early part of February and when the Applicant’s review by the AAT1 proved unsuccessful, he lodged another NSA claim on 27 March 2020 which was then granted.[21]
[21] Exhibit 4, Annexure 2.
It is the Respondent’s contention that there was therefore no bar upon the Applicant making a renewed claim for NSA and retesting his eligibility for it if he so desired. Also, the Respondent has made the observation that an examination of the payslip records indicates that NSA would not have been payable to the parties from 9 October 2019 up to 2 February 2020 as his and his partner’s incomes exceeded the cut-off point for NSA.
The Hearing
The Applicant’s evidence to the Tribunal was that he knew that when his income or the income of his partner, either singly or combined with his income for the same period, exceeded the cut-off point of $1,205.00 per fortnight (as it then was)[22] no NSA would be paid.[23]
[22] Exhibit 1, T20, pages 82 and 83.
[23] Transcript of Proceedings, page 8.
Under cross-examination by Mr McQuinlan for the Respondent, the Applicant conceded that his NSA had been cancelled by letter dated 17 October 2019[24] and received that correspondence approximately some 10 days later. The Applicant acknowledged that he could reclaim, if he so desired, as outlined in the terms of the letter. However, when asked why he did not reclaim, he stated that he intended to “appeal the decision, which I did”.[25]
[24] Exhibit 1, T14 at 73.
[25] Transcript of Proceedings, page 9.
Mr McQuinlan put the question to the Applicant regarding his choice to reclaim in the following form:
But you had the choice to reclaim and chose not to?
to which the Applicant responded:
I reclaimed later.
The Tribunal notes that the reclaim to which the Applicant was referring was his later claim for Jobseeker on 27 March 2020 and acknowledged by the Centrelink advice of even date.[26] The Applicant had obviously chosen not to reclaim for NSA after 17 October 2019 and up to 27 March 2020.
[26] Ibid.
Given that the Applicant, as part of his review, agitated the claim that the decision to cancel his NSA on 17 October 2019 caused him detriment, it is somewhat enigmatic that the Applicant failed to lodge a reclaim notwithstanding the imprimatur provided for him so to do. He also claimed that any detriment is never fully mitigated by a fresh claim because of the delay between notification of the cancellation and receiving payment again. His evidence was that detriment was always there and that the decision was unlawful.[27]
[27] Transcript of Proceedings, pages 9 and 10.
The Tribunal finds that the credibility of the Applicant’s assertion as to detriment generally and the decision being unlawful can be assessed from the relevant exchanges between Mr McQuinlan and the Applicant from the Transcript of Proceedings.
The following lengthy extract from the transcript is, in the Tribunal’s view, telling in relation to this contention.
Mr McQuinlan: But what was there to mitigate if your income hadn’t dropped in October or November or December, if the income was - and it seems that throughout - from that period of time that I’ve referred you to, the income was more than two to $3000 a fortnight, and if there was no apparent drop in income until sometime in the beginning of this year, what detriment are you talking about? If you know that the income test is earning more than $1205 a fortnight as a couple, you wouldn’t have had any entitlement at all?
Dr Poyton: So I don’t actually know off the top of my head what the actual income test is.
Mr McQuinlan: Well I’ll get you to look at page 84, for example?
Dr Poyton: I’ll take your word on it.
Mr McQuinlan: Well why don’t you look at page 84 and the review officer describes the income test to you:
Please note fortnightly income between $104 and $254 reduces fortnightly allowance by 50 cents in the dollar.
And then it goes on to explain, and then it goes on to talk about a cut off point. So you had that information before you, so - - -?‑‑‑
Dr Poyton: I have it now before me, yes.
Mr McQuinlan: Well you had that back in February
Dr Poyton: That’s correct, yes, I had it back in February.
Mr McQuinlan: So you know from this information that if your income’s more than $1205 per fortnight you wouldn’t have had any entitlement to a Newstart Allowance. That’s correct?
Dr Poyton: That’s correct, but I - - -
Mr McQuinlan: So what is the detriment you’re talking about when you’re talking - if you’ve acknowledged that there wasn’t a drop in income until January 2020 when I think you indicated your partner had commenced some studies, I think was your evidence. So what detriment are you talking about?
Dr Poyton: Well again, that number that I just gave you, that’s just based upon my recollection. However, it could have dropped earlier than that. It went up and down every week. Maybe the week after that the cancellation had occurred, it would have gone down, I don’t know. That’s why I would have liked to have Services Australia test my income and then if I’m not entitled, I’m not entitled but I believe it should have been assessed, which it wasn’t because there was a cancellation not a suspension and - - -
Mr McQuinlan: Well there’s no evidence that your income was lower than the income cut off point during October, November or December is there?
Dr Poyton: No, there’s no evidence but that doesn’t prevent me from simply being able to report that income and having that assessed.
Mr McQuinlan: It may well be hypothetical but it’s very likely that there was no entitlement to Newstart Allowance in October, November or December. That would be right?
Dr Poyton: That could be the case.
Mr McQuinlan: If you thought you had an entitlement you could have claimed it and tested that out with an application?
Dr Poyton: Or the Secretary could have simply not cancelled the income and suspended it.
Mr McQuinlan: It’d be reasonable to infer that the fact that you didn’t actually make a claim is because you knew your income was such that you weren’t eligible anyway. Isn’t that a reasonable inference to make?
Dr Poyton: Not for me. I didn’t make a claim as I knew that the Secretary had quite clearly erred in making that decision. The matter would be appealed and on appeal it would be back paid.
Mr McQuinlan: In February 2020 you went overseas with your partner. I think that’s your evidence?
Dr Poyton: Yes.
Mr McQuinlan: You wouldn’t be entitled to Newstart Allowance while you were out of the country?
Dr Poyton: No, that’s correct.
Mr McQuinlan: What was the purpose of that trip?
Dr Poyton: She was - she had a medical exam, so it was a business - it was a business trip.
Mr McQuinlan: Your trip was overseas as well? You were there to accompany her?
Dr Poyton: I was there to accompany her, yes.
Mr McQuinlan: During that period you’re not claiming you’d be eligible for a Newstart Allowance?
Dr Poyton: That’s correct.
Mr McQuinlan: How long were you out of the country for?
Dr Poyton: I think it was about 10 days.
Mr McQuinlan: So it’s a relatively short period, and when you get back you finally make a reclaim on 27 March. Is that correct?
Dr Poyton: That sounds correct, yes.
Mr McQuinlan: If I can get you to look at page 105 of exhibit 4, that’s an annexure to your statement in reply?
Dr Poyton: Yes.
Mr McQuinlan: It talks about your claim has been submitted successfully?
Dr Poyton: Yes.
Mr McQuinlan: So you made that claim. What was the reason for that claim?
Dr Poyton: Because the first decision through the AAT had been unsuccessful so I did a reclaim.
Mr McQuinlan: Now it would also be inferred that your and your partner’s income had dropped around about this time significantly?
Dr Poyton: I can’t recall.
Mr McQuinlan: Well you’ve spoken about her income dropping in January and then there was a trip away in February for you said 10 days. March, did you have much income coming in at that point in time?
Dr Poyton: I think it went back up, I think.
Mr McQuinlan: They granted that payment to you?
Dr Poyton: The payment was granted.
[Tribunal’s emphasis in bold]
Mr McQuinlan then continued:
Mr McQuinlan: You’ve spoken about the Secretary had failed to apply reasonableness in its decision, Dr Poyndon (sic), but you’ve also spoken about your right of review. So you knew that any decision made by the Department you’ve had an entitlement to bring an application for a review and you exercised that right?
Dr Poyton: That’s correct, but that doesn’t necessarily mean that the decision was reasonable in the first place. The decision has to be reasonable in the first place. There’s no point having a review if someone can just have an unreasonable decision to start off with.
Mr McQuinlan: In that process you were afforded the opportunity to put your arguments to the review officer, for example?
Dr Poyton: Yes, but then the question is why was I not afforded the opportunity prior to the making of the decision.
Mr McQuinlan: You were also afforded that opportunity at this tribunal at the tier below?
Dr Poyton: Yes, that’s correct.
Mr McQuinlan: You’ve spoken about that there be no cost to the Commonwealth or detriment to the Commonwealth in letting you just remain enrolled or remain on the books, if you like, and report your income every fortnight?
Dr Poyton: Yes.
Mr McQuinlan: But you’ve also spoken about the fact that one of the consequences, and I think you’ve described this as a detriment, is the loss of your pensioner concession card. Wouldn’t that be a cost to the Commonwealth someone holding a pensioner concession card by being enrolled or suspended and on Newstart Allowance?
Dr Poyton: Well you might be able to answer this. I mean if a person was suspended do they still get the concession card?
Mr McQuinlan: Well you’ve described it as a detriment, the loss of your pensioner concession card but that is also a cost to the Commonwealth having somebody who’s not in fact entitled to receive a Newstart Allowance, not entitled to receive pensioner concessions, so why isn’t that considered to be a cost to the Commonwealth? That’s a motive that you put forward as why you should have been treated as suspended so you could retain pensioner concessions. That’s to be inferred from your submissions, isn’t that correct?
Dr Poyton: Is that correct though?
Mr McQuinlan: Well you - - -?
Dr Poyton: Does a person actually if they are suspended keep the pensioner concession card?
Mr McQuinlan: Well you’ve raised it as a detriment that you’ve lost your pensioner concession card, so you’ve articulated that as a detriment to yourself, the loss of the concession card?
Dr Poyton: Well that is a detriment but I don’t, I am unaware and I’m not versed in the law as you would be, as to if someone is actually suspended do they keep their card? It’s a moot point if they don’t keep the card. Do they keep the card if they’re suspended?
Mr McQuinlan: Well your argument is that you should just be indefinitely kept on Newstart Allowance or suspended for as long as you consider that appropriate effectively. You want to be permanently on a Newstart Allowance as long as you only have casual work. Isn’t that the net effect of your submissions to this tribunal?
Dr Poyton: That’s a matter - it may not apply to the concession card though, I’m not sure, I’m not sure on that one. I’m not sure what the law actually says around that with regards to a suspension.
Mr McQuinlan: You’ve also suggested that any time the Department wants to make a decision to cancel a payment it should first raise that with you and give you the opportunity to make submissions and give evidence?
Dr Poyton: Well that would be to afford someone natural justice and procedural fairness. That’s a significant decision to cancel someone’s income. Why not let them be heard on the decision prior to making it?
Mr McQuinlan: So there might be some millions of customers, on that view, Centrelink before it cancels anyone’s payment should first write to them and say look, we’re thinking about cancelling your payment, do you want to give us some submissions on that. We understand that you’ve got a job, for example. How would that be a workable solution, Dr Poyndon (sic)?
Dr Poyton: Are you saying it’s too much effort for the Secretary to afford people natural justice and procedural fairness (indistinct) - - -
Mr McQuinlan: Well I’m asking you the question, are you suggesting that every time the Department decides before it can make a decision, on your submission the Department has to first write to the person and say we’re considering cancelling your payment because you’ve got a job, you’ve left the country or any other multitude of reasons why cancellations should occur?
Dr Poyton: Well the left the country is usually a suspension isn’t it?
Mr McQuinlan: Well in any situation the question I’ve put to you is you seem to be submitting that the Department’s not allowed to cancel payments until they’ve first spoken to the customer about that?
Dr Poyton: Well that would seem to me to be reasonable in the circumstances. That would seem to be what the High Court has said. What the law seems to require, for someone to be afforded natural justice and procedural fairness. It could be an automated email. It doesn’t matter - the Department does lots of things that are automated but surely affording people the opportunity to be heard prior to making a decision is a fundamental aspect of decision making.
Mr McQuinlan: Getting back to your income situation during that period post cancellation, you had your payslips, that’s correct?
Dr Poyton: I had my payslips, yes.
Mr McQuinlan: During that period you would have had access to your partner’s payslips because - or information about her income because there’s a history of you getting that information and telling the Department, that’s correct?
Dr Poyton: That’s correct.
Mr McQuinlan: So your complaint seems to be that you should have the right to just keep reporting to Centrelink your income. Is that right?
Dr Poyton: Yes, and Centrelink can assess the income.
Mr McQuinlan: Well there’s nothing stopping you reporting all that income is there?
Dr Poyton: The system doesn’t let me report my income.
Mr McQuinlan: Well you could have sent an email to the Department or written a letter to the Department saying look, I understand you’ve cancelled my Newstart Allowance but I’d just like to tell you that this fortnight I earned $3300. You could have done that?
Dr Poyton: Would that have been assessed?
Mr McQuinlan: It might not have been assessed but you could have reported it. You could have asked an officer look, my income’s $3000 in this particular fortnight, would I meet the requirements of Newstart Allowance based on the income test. You could have done that?
Dr Poyton: Would that have actually allowed any Newstart to be paid?
Mr McQuinlan: Well you might have made a claim in which case that would have been assessed but you chose not to?
Dr Poyton: The claim however wouldn’t be backdated to that date. It would be from the date that I made the claim.
Mr McQuinlan: Well let’s be a bit more clear about this. Did you know what your income was during that period October through to December through to January?
Dr Poyton: No, I don’t know what - I simply report my income to Services Australia and let them do the assessment. I don’t know what the calculations are that are going on in the background. I presume that they’re correct, they could actually be totally incorrect calculations for all I know which could be to my detriment but I don’t actually know what the calculation that are being done are.
Mr McQuinlan: It’s pretty likely your income was more than $1205 a fortnight during that period, Dr Poyndon (sic), and you knew it?
Dr Poyton: I had no idea what my income actually is from fortnight to fortnight. We’re both casual when we were working. I simply - - -
Mr McQuinlan: Well when you get paid, Dr Poyndon (sic), and you know what your income is because you work a certain number of hours and your employer pays it to you, that’s right?
Dr Poyton: But those - but the payment and the Centrelink payment periods aren’t in sync, so I might - I wouldn’t actually - I might get the payment, you know, have had it like for a week before then I report it to Centrelink and there’s a week that I haven’t been paid because the employer hasn’t paid during that period when the Centrelink reporting period comes up. So there - - -
Mr McQuinlan: But wouldn’t there have been a dramatic drop in income during that period because had there been a dramatic drop in your income you would have come back to Centrelink and said I’ve had a dramatic drop in my income, I need to go back onto the Newstart Allowance. That’s right, isn’t it?
Dr Poyton: No, you can’t impute that I would have done that. I don’t know what my income is from week to week, I simply - at the end of the reporting period of very close to when I have to report, usually I’m a bit over date because - overdue because it takes me a bit of time to do the calculations and get all the payslips. Whatever the number comes out at I just put it in the system and let the system calculate it, so I don’t actually proactively look at what I’m earning or what my partner is earning. I simply just put the numbers into the system.
Mr McQuinlan: Well I’m putting to you that a prompt figure you put in your claim in on 27 February was in essence because there’d been a drop in your income and you needed the welfare payment?
Dr Poyton: No, I put it in because the first review to the AAT was unsuccessful. That’s why I put it in.
Mr McQuinlan: You hadn’t chosen to exercise that right at an earlier point in time because you were relying on your right to review. You were thinking that you’d be successful? Correct.
Dr Poyton: But you’ve got to - mitigated any of your potential detriment and which there’s no actual evidence that you lost or actually suffered any real detriment, because you hadn’t provided any evidence that you had entitlement during that period. That’s correct. There’s no evidence that you’ve suffered any detriment as a result of the cancellation?
Mr McQuinlan: Well it was open to the Secretary in making the decision to make that inquiry, and that would have been a reasonable thing for the Secretary to have done when
Dr Poyton: But the question was there’s no actual evidence that you suffered any detriment at all? Well I don’t know what the detriment that I’ve suffered is because I don’t know what my income is for those periods off the top of my head, I don’t have - - -
Mr McQuinlan: You haven’t submitted your income for that period?
Dr Poyton: Pardon?
Mr McQuinlan: You haven’t submitted any evidence at all about the income for that period?
Dr Poyton: No, I haven’t submitted and I don’t know what.
Mr McQuinlan: So there’d be no evidence for any detriment?
Dr Poyton: If you want I could get the payslips and submit them.
Mr McQuinlan: Well the reason you haven’t provided the payslips is that you understand that those payslips would probably bear out that you weren’t entitled during that period?
Dr Poyton: No, you can’t say that I would have known a thing which I do not know. I do not know what the income actually was for that time period. It’s not something that I know off the top of my head. It’s something that I could provide and in making the decision it would have been - the first decision, if that’s a fact that the Secretary is relying upon in making their decision, it would be reasonable to make inquiries and I can get you the case law reference for that, that the Federal Court has held. If that is a factor that is a relevant consideration the Secretary should have made those inquiries.
At that point the witness was excused and that was the conclusion of the cross-examination of the Applicant by the representative of the Respondent.
The Tribunal considers that given the evidence provided, it is clearly not tenable to support a claim of detriment to the Applicant as a result of the operation of the legislation and the application of the Guide. The Applicant’s claim to detriment in regard to both the effects of his NSA cancellation per se and the alleged “flow-on” effect from this on his low income concession card being cancelled and having to be reapplied for if he wasn’t the holder of a pensioner concession card is, in the view of the Tribunal, an untenable contention.
The Applicant, in relation to the cancellation of his NSA, when asked under cross-examination what form of actual detriment he had suffered as a result of the Secretary’s actions, was not able to quantify his alleged detriment with any degree of confidence or indeed certainty. No quantifiable detriment regarding mitigation was clearly identified by the Applicant as the evidence was that his income exceeded the cut-off point of $1,205.00 per fortnight up until he reapplied in early 2020. The Applicant, in his evidence, told the Tribunal he considered it a detriment because that period of delay between when he was notified of the cancellation of NSA and when he would “actually again receive the payment” could not be fully mitigated. This is a most tenuous contention in the view of the Tribunal as the implied effect seems to be that a detriment would exist to every person who applied for any benefit at all between the date of application for such benefit and the date upon which they receive it. It is a contention which the Tribunal does not accept.
The Applicant gave evidence under cross-examination that he simply put in his income during the relevant period and that he relied upon Services Australia to work out the eligibility for NSA. He told the Tribunal that he knew that he and his partner had mutual obligations to report the combined income, and that the eligibility for a payment depended on whether their incomes exceeded the cut-off figure. He then, in addition, asserted that he did not know what the cut-off figure was, “I simply reported my income to Services Australia and let them sort that out”.[28]
[28] Transcript of Proceedings, page 8.
Upon further cross-examination, the Applicant conceded that he knew that the cut-off figure was $1,205.00 per fortnight as that had been advised to him by the ARO in the letter of rejection of his review dated 20 February 2020.[29] He further conceded that he did have this material in February and that on that basis he knew that if the combined income was more than $1,205.00 a fortnight, he would not have been entitled to NSA. He attempted to justify his contention regarding his detriment on the basis that his income went up and down every week and that maybe it went down the week of the cancellation, but he did not know, and that was his reasoning that his income should have been assessed on an ongoing basis but it was not because of the cancellation as opposed to suspension. However, he conceded that no evidence existed to indicate that his income was lower than the cut-off point during October, November or December. He continued to assert that Centrelink could have allowed him to keep reporting his income and assess it. The Applicant’s assertion was that suspension would have been a simple choice to make as it would have effectively allowed him to report income, have it assessed, and be appraised by Centrelink as to whether he would or would not receive a payment. When it was put to him that a reasonable inference was that he did not make a claim because he knew his income was such that he was ineligible, he responded that he did not make a claim because he knew the Secretary had erred in making that decision and the matter would be appealed and “on appeal it would be paid back”.
[29] Exhibit 1, T20, pages 81 to 85 at 84.
The Applicant and his partner went overseas for a business trip in February 2020 and when asked by Mr McQuinlan whether he would be entitled to NSA whilst overseas, he indicated that he knew he would not.
When it was put to him that the reason for reclaiming NSA upon his return to Australia was that his and his partner’s income had reduced, perhaps significantly, around that time, he replied that he could not recall and that he had made the claim because the first decision for review with the Tribunal had been unsuccessful. He then, however, confirmed that his payment rose in March and thus confirmed the payment.
The Tribunal has considered this evidence of the Applicant and finds that it is inconsistent in the context of the matter. The Applicant has told the Tribunal that he did not know how much he was earning at any fortnight and simply reported his earnings to Centrelink and relied upon them to calculate his entitlement. He further stated that he knew that if his income fell below the cut-off figure, he would be entitled to payment and that when he went overseas, his payment would be suspended. The Tribunal notes the Applicant’s explanation for reclaiming upon his return from overseas as being the rejection of his first review and not the circumstance of his knowledge of his reduction in income at that time.
The Tribunal considers it to be most unlikely that a person possessing the Applicant’s clear intellectual ability to research and prepare not insignificant pleadings would not know, or be interested in, how much he earnt in order to continue to meet the criteria for receipt of a government benefit such as NSA. The Tribunal considers that the evidence presented by the Applicant in this regard is challenging to his credibility.
The Applicant post the hearing was granted the opportunity to produce to the Tribunal copies of his and his former partner’s payslips by way of a Direction of this Tribunal. The Applicant obviously knew that those documents did exist but were not available at the hearing. The fact that these documents were ultimately produced to the Tribunal clearly confirmed that the records were available to him and which he knew detailed his income and that of his partner. It is the Tribunal’s view that this clearly indicates the lack of credibility underpinning the Applicant’s evidence in this regard that he did not know from time to time what his income may have been.
The Applicant agitated the contention that to cancel rather than suspend his NSA caused detriment. The Tribunal finds that there was no quantifiable detriment to the Applicant either by way of cancellation of his NSA or by way of the attendant cancellation of his pensioner concession card. Regarding his contention that the extra work for the Department in processing a new NSA application is somehow a detriment to the public sector, the Tribunal rejects that contention. The Social Security system is set-up in order to service the needs of those who require publicly funded support from time to time. There is need for a uniform and consistent administrative approach. The volume of work processed is immense. The Applicant’s suggestion that suspending rather than cancelling his NSA would in some way mitigate a detriment for the Minister is, in the view of the Tribunal, incorrect. If the Applicant’s NSA had been suspended, there would have been the necessity for a Centrelink employee to check the input each fortnight whether or not a “nil return” or a return showing positive income was lodged whereas, if cancellation had been decided upon, then only a single application would be required with ongoing assessments up to the point where after six fortnights of nil benefit payments, cancellation could be reasonably made. The social contract between the public and the arms of government requires consideration from both participants. If a person is to receive a benefit, their obligation is to support a system which may well be imperfect in many respects but is required by responsibility to the taxpayer to minimise its overheads.
The Parliament has determined, through the Act’s income calculators, that if a combined income is such that it is over $1,205.00, that couple does not require assistance from the government. The tool to implement this determination is the discretion under section 80 of the Administration Act. Any party is at liberty to reapply if they believe that their level of income is such as to allow them to qualify. The Applicant was clearly able to make that assessment when he first made an application for NSA.
The Applicant’s contention that it would be reasonable to suspend rather than cancel an NSA recipient’s benefit after the cut-off figure was reached and maintained for six consecutive fortnight periods as it would cause little disruption to Centrelink’s operations, is flawed. The potential consequences could result in the situation where every recipient who had been receiving NSA who then reached the cut-off point would be suspended indefinitely and reporting on income beyond the cut-off point. This would be an outcome clearly not intended by the legislation or the policy framework and could hardly be described as reasonable in all the circumstances. In support of this position, the Tribunal notes the purpose of the Act and the Administration Act being a more efficient and cheap social security regime.[30]
[30] Commonwealth of Australia, Parliamentary Debates, House of Representatives, 3 July 1999, 5936, The Right Honourable Warren Truss.
The legislation and the policy have their genesis in the concept of reasonableness. It is the purpose of NSA to assist parties who are seeking a position while taking advantage of available part-time work. Thus, section 593 of the Act treats those in part-time work as unemployed and section 595 of the Act facilitates the treatment of such persons as unemployed to the purpose of assessing their qualification for NSA.
The purpose is to allow persons who are capable of working and who are actively seeking work to be encouraged so to do by not capriciously, so-to-speak, cutting-off benefits immediately after an income, albeit a part-time income, is achieved. The Tribunal sees this as a reasonable and appropriate approach to ensuring that a recipient is not left bereft of income during the quest for meaningful employment.
The policy informs that stage of the process where it becomes apparent that a recipient of NSA is able to meet their personal needs from their own efforts. This, combined with the operation of section 80 of the Administration Act, helps to define that point when cancellation of a recipient’s NSA is appropriate namely, after the elapse of six to seven fortnights of non-eligibility accruing. It is true that section 80 of the Administration Act provides to the Secretary the discretion to either cancel or suspend, however, neither course is mandatory, although it would be expected that the course decided upon by the decision-maker should be reflective of the circumstances.
The Applicant in this matter challenged the reasonableness of the Secretary’s decision to cancel his NSA after the cut-off point for his support had been reached for six fortnightly periods. It is appropriate therefore to examine to some extent the broad understanding of reasonableness and the role of policy.
In his statement in reply, the Applicant asserted that:
The Secretary was required to examine the power of the Secretary in relation to the Social Security (Administration) Act 1999 (Cth) reasonably.[31]
[31] Exhibit 4, page 13, paragraph 31.
The question thus arising from this contention therefore is: How is this standard to be defined and what consequence for the application of the law does this standard pose?
The Applicant relies on the case of Minister of Immigration and Citizenship v Li (2013) 249 CLR 332 to propound his contention of reasonableness. This law is uncontroversial and does indeed establish a presumption that the conferral of a statutory discretion imputes an expectation that the discretion will be exercised reasonably in the circumstances.[32]
[32] At [24] per French J.
This particular case dealt with the common law understanding of unreasonableness otherwise known as “Wednesbury unreasonableness”.[33] The Court acknowledged the high threshold established by this at common law.
[33] Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 at 330.
This standard is satisfied where a conclusion is reached, or a decision made, such that no reasonable authority could have arrived at the same outcome.[34]
[34] Ibid.
This definition of unreasonableness presumes that power is being exercised arbitrarily and not according to the law. Failure to establish such a contention will make it difficult to assert that a decision was made “unreasonably”. The Tribunal notes that there is a distinction between what constitutes the ordinary understanding of “unreasonable” which can be synonymous with “disproportionate” or “exorbitant” or “immoderate”.[35] This stands in stark contrast to the restrictive definition of unreasonable that has been identified by the Court within the bounds of administrative law.
[35] Macquarie Dictionary Online, definition of “unreasonable” 5.
It has long been recognised that government has a right to issue directional guidance on how a statute should be implemented[36] and the role of policy is generally acceptable to the extent that a decision-maker considers the merits of the decision to be made before them.[37]
[36] Drake v Minister for Immigration and Ethnic Affairs (No. 2) [1979] AATA at 179.
[37] Green v Daniels (1977) ALJR 463.
Such reasons are to be found on the basis that “consistency [of policy application] is not preferable to justice”.[38]
[38] Drake v Minister for Immigration and Ethnic Affairs (No. 2) [1979] AATA at 179.
There is further jurisprudence determining that policy cannot exclude a class of Applicants from the decision-making process by unfairly prejudicing them relevant to the average Applicant.[39]
[39] British Oxygen Company Limited v Board of Trade [1971] AC 610 at 616.
It should be further noted that the Tribunal must defer to the correct and preferable decision in the circumstances, not necessarily the outcome dictated by policy.[40]
[40] Administrative Appeals Tribunal Act 1975 (Cth), s2A; Secretary, Department of Social Services v Anwar [2015] AATA 413; Drake and Minister for Immigration and Ethnic Affairs (No. 2) [1979] AATA 179.
In this matter, it will be helpful to examine the specific definition of “reasonableness” in relation to section 80 of the Administration Act. Recent authority on the application of reasonableness with respect to section 80 of the Act is directed at the statutory purpose of the Tribunal. And in the case of Re Mouroufas v Secretary, Department of Social Services,[41] the Tribunal found that it was not appropriate to cancel over suspending the Applicant’s DSP when she overstayed her portability period for the following reasons:
The decision to cancel rather than continue suspension can only be a lawful decision if it is made for reason, and with regard to considerations, the Act expressly or implicitly makes relevant to that decision. This raises the question of how the discretionary power to cancel, rather than to continue suspension, might properly be exercised …
[41] [2017] AATA 3012.
The Tribunal found that the Secretary’s policy instituting a 13 week automatic cancellation period where a recipient’s DSP was suspended when they first overstayed their portability period and then cancelled 13 weeks thereafter did not reflect the proper reason for the conferral of the discretion. It was therefore exercised in the alternative and found that the Secretary ought to have continued to suspend the payment as the Applicant was planning on returning to Australia after her period abroad.
That matter involved a benefit relating to a pension payable to a recipient who had been assessed as permanently unfit for employment. She had overstayed her 13 week suspension period and then her pension was cancelled notwithstanding her physical unchanged condition and her intention to return to Australia.
The Tribunal considers that the matter before it here is distinguishable from the above matter on several aspects. The benefits are of a totally different nature as Ms Mouroufas’ condition was permanent and unlikely to change and the benefit payable to her was her only principal form of income upon which she would be totally dependent and was reflective of that. Whereas, in this matter, the Applicant’s employment circumstances could not be classified as permanent and unlikely to change. The legislation and policy reflect the premise that NSA is a benefit designed to assist recipients on their path to a permanent employment situation, and hence, ultimately be independent of the benefits. Thus, these differences present the Tribunal with a different set of circumstances to consider for each matter.
In certain circumstances, the Court has found that suspension of a payment is intended to be “a lesser thing” when compared to cancellation.[42] Consequently, where suspension could mediate the Commonwealth’s losses even after a long period, it may be the preferred option. In a tangential bane, the Tribunal has expressly stated that the section does not create an expectation that the power is further devised into sub-categories of when the suspension/cancel power can be exercised. But rather, if either of the preconditions are met, either of the enlivened powers can be exercised at the Secretary’s discretion.[43]
[42] Gidaro v Secretary, Department of Social Services [1998] FCA at 400.
[43] The Estate of Maria Kozak v Secretary, Department of Social Services [2015] AATA at 480.
The understanding of when it is appropriate to cancel a payment seems to be indefinite timing. The Tribunal based its reasoning in Mouroufas on the fact that the Applicant was returning to Australia and would therefore become eligible for their DSP payment again. The Tribunal has outlined its view that the matter currently before it can be distinguished from Mouroufas on the basis outlined above.
The Tribunal has acknowledged that there is a distinction between a decision being right and preferred.[44] In relation to a similar provision in the previous Social Security Act (1947 Act), the Tribunal found that the Respondent should have suspended the Applicant’s payment until such time as they had collected the Applicant’s financial information to inform their decision. They found that whilst the Respondent’s course of action was reasonable, it was not preferable.
[44] O’Connell v Secretary, Department of Social Security [1991] AATA 523.
The Tribunal considered the distinction between a legally correct decision and a preferable decision in that a legally correct decision can be shown to possess a plausible justification and reasonable application of the law.[45] However, a preferable decision accounts for further information and all the evidence to arrive at the most just outcome.
[45] Prasad v Minister for Immigration, Local Government and Ethnic Affairs [1985] FCA 47.
The Applicant, in support of his contention that the Secretary’s decision to cancel his NSA was unreasonable and should be set aside, placed reliance upon three cases. These cases were:
(a)Minister for Immigration and Citizenship v Li [2013] HCA 18;
(b)NADH of 2001 v Minister for Immigration and Multicultural Affairs [2004] FCAFC 328;
(c)Alali and Secretary, Department of Social Services [2014] AATA 551.
The Tribunal has previously considered the principles adduced from Li and now considers the principles to be extracted from NADH of 2001 and Alali as they apply to the Applicant’s matter.
In the matter of NADH of 2001, the Applicants were a Chinese married couple seeking a Protection Visa on the basis that they were active Roman Catholics with two children who feared government persecution on religious grounds and that they were in breach of the Chinese One Child Policy.
The Migration and Refugee Tribunal originally rejected the claim on the basis that the first ground was not factually true (that the Applicants were in fact not Roman Catholic) and that the second was not a justifiable reason for a Protection Visa. The Applicants sought appeal on the basis that, inter alia, the Tribunal exhibited apprehended bias and it acted unreasonably.
The appeal was granted on the grounds that apprehended bias on the part of the Tribunal Member. In considering the decision in that matter, it is to be noted that the Court dealt with the two relevant grounds of appeal in the audit described above. Of the first ground, the Court said in relation to apprehended bias at paragraph 12:
The existence in any case of arbitrary unreasoned conclusions made without a scintilla of evidence may lay a foundation for an argument that the decision maker mould his or her fact finding to reach a particular result. Such may also lay the foundation for argument that the decision reached was capricious, arbitrary, made according to humour or private opinion rather than reason and justice, or that it was unreasonable.
[Tribunal’s emphasis]
The use of the phrase “unreasonable” in this sense was defined by the earlier decision of Boucaut Bay Co (In Liq) v The Commonwealth (1927) 40 CLR 98 at 101 where Starke J. stated:
If a man is to form a belief and his belief is to govern, he must form it himself on such reasons and grounds as seem good to him. He must not act dishonestly, capriciously or arbitrarily: that would be contrary to the implication of the agreement and so establish a want of the belief stipulated for as a condition of the exercise of the power of determination.
In the matter of NADH of 2001, the Court proceeded to explain how the Tribunal had selectively used oral evidence that supported its conclusion, summarily dismissed documentary evidence as forgeries, and characterised answers as vague and irrelevant when they patently were not and engaged in many courses of conduct that gave rise to a very real apprehension that the Member used the evidence to reach a predetermined conclusion.
When dealing with the unreasonableness ground, the Court engaged in the following discussion at paragraph 136:
It [the Tribunal] was obliged not to act capriciously, that is, it was obliged not to reach an opinion arbitrarily or by whim or, with the exception of proper credit findings, by intuition … a supposed process of reasoning was used to conclude that both these people were not Christians or Catholics. It was a process, in significant part, that was bereft of supporting material and rational or reasoned foundation, and was inexplicably selective of the oral evidence. There is much to be said for the proposition that it betrayed so inadequate a dealing with objective evidence as to amount to an arbitrary or capricious conclusion. This is not a matter of illogicality or harsh fact finding … The foundation of the rejection of the claims was by a supposed process of reasoning which in significant and central aspects, was no process of reasoning at all.
[Tribunal’s emphasis]
The conclusion of the Court was that the Tribunal’s decision was unreasonable because it was unreasoned, that is to say, devoid of rationality.
The Court further went on to discuss the fact that the Tribunal had acted in a such an unreasoned manner so as to misconstrue its own purpose and jurisdiction. The Court found that the Tribunal Member engaged in an overly restricted line of ‘reasoning’ which suggested he was concerned primarily with whether or not the Applicants were Catholics, not if they had a well-founded fear of persecution and were entitled to an Australian Protection Visa. The Court found that mere association with the Catholic Church in China could attract the ire of the authorities, therefore entitling that person to protection from the said authorities. This outcome would not require a Member being satisfied that the Applicants were actually Catholic. They found this was not the inquiry that the Tribunal undertook. Thus, the ultimate conclusion of the Court was that where there is unreasonableness, that is absence of logic; and where such absence of logic is manoeuvred as a means to justify otherwise arbitrary, preconceived or capricious outcome, it gives rise to the apprehension of bias on the part of the decision-maker.
In the present matter, the Applicant has not agitated the issue of apprehended bias in his pleadings, only the contention that the decision to cancel was unreasonable. It is clear to the Tribunal that the high bar set in NADH to define “unreasonableness” has in no way or form been met by the decision-maker. There is no caprice, no evidence of manoeuvred or tortured logic having been applied to the Applicant’s circumstance to justify an arbitrary, preconceived or capricious outcome evidencing the apprehension of bias in the decision-maker. The facts of this matter are accepted that the Applicant was not entitled to the NSA for six consecutive fortnights. This is of itself sound evidence to conclude that the section 80 discretion was enlivened.
The Applicant relied upon the matter of Alali and Secretary, Department of Social Services[46] for his assertion and contention that the decision should be set aside. In that matter, the Applicant was in receipt of the Family Tax Benefit (“FTB”) and a Parenting Allowance. The child for whom he was caring was his niece who, in 2011, travelled to Iraq with her mother, the Applicant’s sister. The Applicant duly notified Centrelink that he was not in care of the child anymore. Whilst the Applicant’s sister and his niece were in Iraq, a bomb exploded, killing the Applicant’s brother and father. The Applicant informed Centrelink that:
(a)he would be travelling to Iraq to visit his family; and
(b)his sister and niece would remain in Iraq for an unknown period of time.
[46] Ibid.
The Applicant continued to financially support his niece whilst she was in Iraq pursuant to Centrelink advice that he would continue to receive his payments if he was supporting a child under his care. Despite the Applicant notifying Centrelink that he was not caring directly for his niece, he continued to receive parenting payments and the FTB.
Several months later, in 2012, Centrelink cancelled his payments and raised debts of $18,474.52 for the period that his niece had not been under his direct care. It was decided by the presiding Member that the decision would be set aside and remitted on the basis that:
(a)the cancellation was correct but not the debts – which had been raised as a result of sole administrative error;
(b)the Applicant had done everything he was supposed to with respect to notifying Centrelink of a change in his circumstances and had received the money in good faith. However, at a certain point, it fell on him to realise that he was receiving the wrong payment and at that point the money was improperly received and therefore, repayable as a debt.
In reaching this decision, the presiding Member highlighted:
(a)the extreme situation that gave rise to this issue (the bomb explosion in Iraq);
(b)that the Applicant did not speak English and that it was understandable that he may have misunderstood instructions given to him by Centrelink; and
(c)that the Applicant was entitled to Newstart, but not in receipt of it, and therefore portions of the debt that could not be waived could be offset through a Newstart payment.
The Tribunal did not engage in a discussion of natural justice or reasonableness, merely a statutory application of the administrative error provisions of the relevant Acts.
The Tribunal will now turn to the Applicant’s remaining submissions, which were not pressed at hearing but explained in his written submissions.
First, regarding the assertion that the Respondent failed to account for the relevant consideration that the combined income was casual and therefore prone to flux.[47] A relevant consideration can be anything that a decision maker turns their mind to in making a decision. However, failing to undertake this exercise only invalidates a decision where the decision-maker fails to consider something they were bound to.[48] Indeed the High Court has stressed that a decision maker cannot be faulted for failing to account for every conceivable factor that might be regarded as relevant.[49] In this matter there was no express requirement that the Respondent consider whether the Applicant was likely to or not retain the same ongoing level of income. Therefore, failing to consider it does not make the Respondent’s decision legally incorrect.
[47] Exhibit 2.
[48] Minister for Aboriginal Affairs v Peko-Walsend Ltd (1986) 162 CLR 24, 39.
[49] Sean Investments Pty Ltd v MacKellar (1981) 38 ALR 363, 375 per Deane J.
Finally, the Tribunal will address the Applicant’s assertion that the statutory pre-requisites of section 80 had not been satisfied by virtue of the Applicant not having reported his income for that week when the Respondent made the decision.[50] The Applicant correctly points out that the section 80(1) discretion is enlivened when the Secretary is satisfied that “a social security payment is being, or has been, paid to a person…who is not, or was not, qualified for the payment or…to whom the payment is not, or was not, payable.”
[50] Exhibit 2 at [21].
This requires the Secretary to make a finding of fact either prospectively or retrospectively. The section specifically empowers the Secretary to look to the future and to the past. Therefore, even if the Secretary could not be satisfied that the Applicant was not qualified in the week they made the decision, it was open to them to refer to the previous weeks where the payment had been paid to him despite his being ineligible.
The Applicant’s contention is that the original decision maker could not have been reasonably satisfied as to the state of the Applicant’s income as he had not advised Services Australia in the fortnight period that the decision was made of his and his partner’s incomes. Also, because both his and his partner’s incomes differed from one reporting period to the next as a result of their casual employment, that aspect should have been taken into account by the decision maker before making the decision to cancel the NSA.
Taking the second point of the Applicant’s contentions first, it is clear that the legislation is structured around a system of taxpayer funded support for people seeking fulltime employment and which recognises the possibility indeed, probability that their incomes will fluctuate subject to the vagaries and vicissitudes of the employment marketplace. It is clear that this is the reason why the Administration Act and the guide both acknowledge the need for a period of “grace” for want of a better term to describe it, that being the period of six to seven fortnights built into the Act and acknowledged in the Guide, to allow people such as the Applicant the concession of not continually coming onto the scheme and then falling off the scheme as their income would fluctuate.
This “grace” period informs the decision maker in the sense that it presents the decision maker with the parameters of “reasonableness” within which the decision maker, when coming to a view as to when and if it is appropriate to decide to cancel a person’s NSA, can operate when contemplating the decision to be made. It is not an unreasonable premise to accept that all NSA recipient’s incomes would fluctuate to a greater or lesser extent and that it would be very difficult if not impossible not to consider the incomes as they occur as they are the lynch pin which decides if a recipient is to receive the benefit and at what level and ultimately whether the benefit has reached the point where a decision to cancel it should be considered.
In this matter the Tribunal finds therefore, that the decision maker at the relevant time, has given mind to the circumstance of the Applicant’s varying income and concluded that it was the preferable decision based on the evidence and the provisions of the Administration Act and supporting Policy when the decision to cancel the Applicant’s NSA was made.
The Tribunal now turns to the Applicant’s first contention that the decision maker could not be satisfied pursuant to the Applicant’s interpretation of the provisions of section 80 of the Administration Act as they applied to him, before cancelling his NSA, because the decision maker was, at the time the decision was made, unaware of the Applicant’s and his partner’s incomes during the fortnight period within which the decision was made. Thus, the Applicant asserts that the decision maker could not be reasonably satisfied that the Applicant was being paid a Social Security benefit that the Applicant was not qualified for or, which was not payable to the Applicant prior to the decision being made.
Once again, the six or seven weeks “grace” period is relevant here. The Administration Act, as has already been discussed, sets this as a reasonable period of time to efflux prior to any action being taken to consider the cancellation of a recipient’s NSA. The reporting period in such a case where the consideration is “triggered” is naturally that period at the conclusion of the nominated six or seven fortnight period at the end of which a decision may be made and a notice of cancellation sent to a recipient following the decision to cancel the person’s NSA. It may well be the case that the Tribunal would not know what the income of the Applicant may be in that fortnight in which cancellation occurred. However, it is not the Tribunal’s role to seek out the details of such income that may exist at that time. It is the Applicant’s obligation to report any such income and then to re-apply to test whether he would be eligible to receive the NSA once more.
If one was to accept the Applicant’s contention the circumstance could well exist where a decision maker would never be able to make a decision to cancel a recipient’s NSA as the decision to do so would, by necessity, have to be made on the exact day that represented the last day of any “grace” period and at no time beyond that. This would clearly be an absurd and impractical approach to the administration and application of the Administration Act and the Guide. The Tribunal has decided that the decision maker has not acted unreasonably in not seeking to ascertain the earnings to be reported if any, during the fortnight within which the decision to cancel the Applicant’s NSA was made.
CONCLUSION
Having considered whether the decision to cancel rather than suspend the Applicant’s NSA was reasonable and legal, the Tribunal will now consider if this was the preferable decision in the circumstance.
The Tribunal notes that the discretion was delegated to remove non-eligible recipients from the public support system and therefore streamline the administration of that system. This matter is a archetypal example of when the discretion to cancel ought to be exercised, there being no way of knowing if Applicant’s combined income would ever again fall within the eligibility threshold and having exceeded the requirements of section 23(4A) of the Act directs the Tribunal’s attention to the following questions.
In order for the Applicant’s position to succeed, two questions must be answered in the affirmative:
(a)Is there a cogent reason on the merits of the matter to depart from the Secretary’s policy of cancellation after six to seven consecutive fortnights of ineligibility? and
(b)Is the statutory conferral of the power to suspend or cancel a Newstart recipient’s payment intended to prefer suspension until such time as the recipient is again in need of the payment?
For the reasons explored above, it is the decision of the Tribunal in this matter that the answers to both of the foregoing questions have to be answered in the negative.
DECISION
The Tribunal finds that there has been no detriment to the Applicant by way of the Secretary’s decision to cancel his NSA and he has not been placed in a worse position than any other recipient of the same benefit in similar circumstances. Further, there is no detriment to Centrelink flowing from the cancellation decision and, in fact, as enunciated in the considerations herein, a benefit in fact accrues to Centrelink by virtue of the decision under review.
The Tribunal finds that the decision was made according to law, that it was made neither capriciously, nor without reasonable consideration of the Applicant’s circumstances, it was not made arbitrarily and followed the principles enunciated in the policy applicable to the administration of the appropriate legislation in this matter. It was proportionate and the Tribunal finds that the Applicant, notwithstanding his contentions to the contrary, was afforded natural justice and procedural fairness through the process. Nor did the decision-maker incur any jurisdictional error in regard to the Applicant’s circumstances in deciding to cancel rather than suspend his NSA. The Tribunal finds that the decision to cancel the Applicant’s NSA was therefore the correct and preferable decision based on the facts of the matter.
The decision under review is affirmed.
I certify that the preceding 116 (one hundred and sixteen) paragraphs are a true copy of the reasons for the decision herein of Senior Member P J Clauson AM
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Associate
Dated: 29 January 2021
Date of hearing: 9 September 2020 Date final submissions received: 6 October 2020 Applicant: By Telephone Solicitors for the Respondent: Mr R McQuinlan, Service Australia
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