Re Holt and Secretary, Department of Education, Employment and Workplace Relations
[2010] AATA 143
•26 February 2010
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2010] AATA 143
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2009/2883
GENERAL ADMINISTRATIVE DIVISION ) Re Peter Holt Applicant
And
Secretary, Department of Education, Employment & Workplace Relations
Respondent
DECISION
Tribunal Professor RM Creyke, Senior Member Date26 February 2010
PlaceCanberra
Decision The decision under review is set aside and substituted. The discretion to provide Mr Holt with the Newstart allowance at the single rate should be exercised in his favour in the special reasons in their particular case.
......................[sgd]...................
Professor RM Creyke, Senior Member
CATCHWORDS
SOCIAL SECURITY – Newstart Allowance at partnered rate – whether ‘special reasons’ to treat Applicant as not being a member of a couple for Newstart Allowance purposes – couple’s circumstances ‘different and unusual’ – inability to pool resources for mutual benefit in a marriage – physical remoteness of home – cost and restrictions on forms of transport – lack of practicable employment opportunities – decision under review set aside and substituted
Acts Interpretation Act 1901 (Cth) s 15AA
Social Security Act 1991 (Cth) ss 4, 24, 542H, 603A, 1184K, 1237AAD
Re Beadle v Director-General of Social Security (1984) 6 ALD 1
Boscolo v Secretary, Department of Social Security (1999) 53 ALD 227
Cocks v Centrelink (2000) FCA 1248
Department of Social Security v Porter (1997) 48 ALD 343
Re Galewski v Secretary, Department of Social Security (1998) 54 ALD 569
Re Hawkins and Secretary, Department of Social Security (1996) 44 ALD 651
K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd (1985) 60 ALR 509
Klein v Domus (1963) 109 CLR
Re Lada v Secretary, Department of Families, Community Services and Indigenous Affairs [2007] AATA 1496
Re Malajew v Secretary, Department of Social Security (1988) 16 ALD 1
Re Petrovic v Secretary, Department of Social Security (1991) 23 ALD 240
Project Blue Sky Inc v Australian Broadcasting Authority (1998) 153 ALR 490
Re Secretary, Department of Social Security v Begum (1998) 51 ALD 157
Re Secretary, Department of Social Security v Tsimpidaros [1995] AATA 554
Re Williams and Director-General of Social Services (1981) 4 ALD 300
Secretary, Department of Families, Housing, Community Services and Indigenous Affairs v Nicolaas [2009] AATA 416
26 February 2010 REASONS FOR DECISION
Professor RM Creyke
Senior Member1. Mr and Mrs Holt are a couple. They were married on 2 April 2006 and reside together in a house in Ravensbourne, Queensland. Mr Holt is 61 years of age; Mrs Holt is considerably younger.
2. When the couple married on 2 April 2006, Mrs Holt had no separate income, nor did she bring any assets to the marriage. She is not currently in receipt of any income, nor is she receiving any income support benefit.
3. Mr Holt has been on Newstart allowance intermittently since 1991 and the allowance has been paid at the partnered rate of $414.50 a fortnight since he has been married. The partnered rate reduces his Newstart allowance by about $45.00 a fortnight. Being on the partnered rate meant he has also foregone an increase of another $45.00 a fortnight when he turned 60. Mrs Holt had applied in June 2009 for Newstart allowance but did not pursue the claim.
4. On 10 February 2009, Mr Holt lodged a written request to Centrelink to review a decision made by an authorised review officer on 3 December 2008, which reduced the rate of payment he received as a Newstart allowance recipient.
5. On 26 February 2009, Centrelink decided to decline Mr Holt’s request.
6. On 25 March 2009, a Centrelink authorised review officer affirmed the decision and provided the following reasons:
(a)Mr Holt is receiving the correct rate of payment for a person living as a member of a married couple;
(b)There are no special circumstances which would justify a change to the rate of the payment of Newstart allowance;
(c)Accordingly, Mr Holt’s request must be declined.
7. Mr Holt appealed to the Social Security Appeals Tribunal in Brisbane on 26 May 2009, which affirmed the decision under review.
8. Mr Holt appealed the Social Security Appeals Tribunal’s decision to this Tribunal on 26 February 2010.
Issue
9. The sole issue is whether Mr Holt, despite being married, is eligible for payment of Newstart allowance at the single rate. In effect, the issue in this case is whether, in terms of the Social Security Guide, the discretion to grant Mr Holt Newstart allowance at the single rate should be exercised in Mr Holt’s favour because the couple’s circumstances mean they cannot ‘reasonably be expected to benefit from the pooling of resources for their mutual benefit.’
Legislation and policy guide
10. The relevant legislation is found in the Social Security Act 1991 (Cth) (Act).
24 Person may be treated as not being a member of a couple (subsection 4(2))
(1) Where:
(a) a person is legally married to another person; and(b) the person is not living separately and apart from the other person on a permanent or indefinite basis; and
(c) the Secretary is satisfied that the person should, for a special reason in the particular case, not be treated as a member of a couple;
the Secretary may determine, in writing, that the person is not to be treated as a member of a couple for the purposes of this Act.
4 Family relationships definitions – couples
(1) In this Act, unless the contrary intention appears: …
member of a couple has the meaning given by subsections (2), (3), (3A), (6) and (6A).
(2) Subject to subsection (3), a person is a member of a couple for the purposes of this Act if:
(a) the person is legally married to another person and is not, in the Secretary's opinion (formed as mentioned in subsection (3)), living separately and apart from the other person on a permanent or indefinite basis;
…
Member of a couple – criteria for forming opinion about relationship
(3)In forming an opinion about the relationship between 2 people for the purposes of paragraph (2)(a) … the Secretary is to have regard to all the circumstances of the relationship . …
[Then follows a list of the matters to be taken into account, matters which are not relevant for the current matter. Section 4(3A) is also not relevant in Mr Holt’s case.]
Member of a couple – special excluding determination
(6) A person is not a member of a couple if a determination under section 24 is in force in relation to the person.
[Section 4(6A) is not relevant in Mr Holt’s case.]
1068Rate of … Newstart allowance (18 or over) … under Part 2.12B
(1)The rate of:
(a) Newstart allowance; …
is to be calculated in accordance with the Rate Calculator at the end of this section.
11. Relevant policy is found in the Social Security Guide, at 2.2.5.50 Discretion to Treat a Person as Not Being a Member of a Couple for a Special Reason. The summary which commences at 2.2.5.0 states:
Members of a couple in ordinary circumstances will pool their resources and share their expenses, making it cheaper for them to live than if they were 2 single people. A significant body of case law has established that the inability to pool resources for their mutual benefit is a special reason to exercise the discretion in section 24.[1]
[1] Social Security Guide 2.2.5.50.
12. Under ‘Examples of circumstances where section 24 may or may not be applied’ in the Social Security Guide, the Explanation provides:
The AAT has indicated that only being ineligible for income support is very unlikely to constitute a special reason for the purposes of the exercise of section 24, but being in hardship as a result of having a partner who is not residentially qualified for an income support payment or who is subject to the NARWP [Newly Arrived Resident’s Waiting Period] may constitute a special reason.[2]
[2] Ibid.
13. If there are no additional special circumstances then it will generally be appropriate to apply section 24 in NAWRP and not residentially qualified cases where the couple are experiencing financial hardship. The following steps should be applied:
·Calculate the amount the partner who is entitled to payment would receive at the partnered rate. In this step, all income and assets of the couple should be considered.
·Add the above amount to any income that the couple is receiving.
·If the total is less than the combined partnered rate which the couple would receive if they were both eligible for payment (taking into account their income and assets), then section 24 should be applied.
14. Any additional circumstances also need to be taken into account. For instance, a couple may not meet the hardship test but there may be a special reason for applying section 24.
Evidence
15. Mr and Mrs Holt live on a pocket of land of some 2.57 hectares in a small weatherboard house of about 7 squares. The house is situated about 20 km from Crows Nest, a small village of about 1,600 people in the Ravensbourne district of Queensland, and about 50 km from Toowoomba, the nearest sizeable city. There are a few shops, a post office, two banks and a small library in Crows Nest. There is an engineering business on the outskirts, but little else. The cost of groceries is higher in Crows Nest than in Toowoomba, but if the couple go to Toowoomba to shop they have to factor in the cost of petrol on a 100 km round trip.
16. The land, which is in a rugged and remote forestry area, was purchased for about $2000 in 1976 and Mr Holt paid it off by 1978. He estimates that the house would now be worth about $20,000, if a buyer could be found for such a remote spot. The Queensland Valuer-General has valued the land at about $99,000. The land and house are in Mr Holt’s name.
17. Mr Holt has a car, a 1981 Honda Accord, of no market value. There is no money for a replacement when the car is no longer driveable. The car boils on occasions and then has to be driven slowly. He has owned a small 125cc scooter since 2006 but it is really only suitable for driving into Crows Nest. The maximum speed of the scooter is 80 km an hour; it is dangerous to ride due to the rough edges to the road and the small ten-inch size of the wheels; and it is not an all-weather vehicle. It is also not suitable for forestry work since it has very little carrying capacity for tools. Mrs Holt does not yet have a scooter licence and hence does not drive the scooter. The scooter’s licence runs out in the month after the hearing. Mrs Holt said she would also be fearful of driving the car for long distances on her own in case it broke down. She is still learning motor mechanic skills. There is no public transport and it would be dangerous to hitchhike.
18. Mr Holt conceded it would theoretically possible for Mrs Holt to drive the car to work and for Mr Holt to take the scooter if they were both employed at the same time but this would be very difficult given he could not take the scooter any distance, it cannot be used in all weathers and is not capable of carrying the tools for forestry work, and Mrs Holt's fear of the car breaking down in a remote location.
19. The couple own a chainsaw. The house is mostly furnished with second-hand furniture. They have two washing machines. Both are partially defective. One can only wash and the other can only spin dry. The couple do not have a mobile phone. There is no reception in the area. The telephone is set up to take inbound calls only. They cannot afford to make outward calls on the landline. If they wish to do so they pay a monthly fee to the post office. Generally, however, they resort to the public phone at Crows Nest in an emergency. Mr Holt estimated that the total value of his assets, including the land and house would be about $160,000.
20. Mr Holt says he has no formal qualifications. He finished secondary school. He mostly works in the forestry business, planting, spraying, pruning and fertilising trees. In the last twelve months he has worked for about seven to eight weeks. His income from this work is about $600-$700 per week but is variable because it is piecemeal and only available sporadically. He has been employed in the Toowoomba Foundry for a three month period and in the 1990s he worked for six month periods. Recently, there has been less work with the financial downturn and the drought. When work is available, employers phone him. He is not prepared to work for some contractors who have short-changed him in the past. Forestry work is variable and an area may not get work for some time. He cannot afford to take work which is too far distant from his home.
21. Mr Holt said as his wife has no transport, if she was to get a job he would be happy to drive her to work and pick her up, provided he was also working in the vicinity. However, he would not be happy just to wait all day close to her workplace so he could drive her home. This would restrict the assistance he could provide to transport her. If he was working in an area a long way from her workplace, driving her to work may be impossible. Mr Holt also said he respects Mrs Holt’s wish to be a career housewife and homemaker and would not put pressure on her to change. That is her choice.
22. Mrs Holt had no assets or other monies to bring to the marriage, except her share of the wedding gifts, worth about $1,000 to $1,500 in total. Prior to her marriage, Mrs Holt had obtained a tertiary qualification in naturopathy but did not practise. Between obtaining her degree in 2001 and marrying Mr Holt in 2006 she lived in her parents’ home and did household chores in return for her keep. On a casual basis she worked in her father’s garden maintenance business for one day a week. She had earned less than $2,500 per annum in the two financial years prior to her marriage. Since she has been married she has earned, she estimated, about $15,000 in four years, or less than $4,000 per annum. This has been either in a mail contract business run by her family which she did for about 3 weeks, and which required use of the couple’s car, or assisting Mr Holt fertilising or spraying in his forestry work. In relation to the parcel delivery business, Mrs Holt said after she accidentally destroyed a letter-box on a delivery run, the owners of the business were angry with her and required her to pay for the damage to the car and she decided she could not afford to work with them again. In addition, the mail sorting office was on the other side of Toowoomba so it is not feasible for her to travel that far, especially given the declining state of the couple's car. She has worked for about 7 weeks over the last year. As the forestry work is piecework, she received about $450-$550 per week. The last time she worked was in June 2009.
23. Mrs Holt says Mr Holt does the outside work at home but she does all the household chores. Mr Holt had offered to help when they married, but she is meticulous and preferred to divide up the work as they currently do. The work is labour intensive. When they are conserving water, she has to carry water from the second tank. The rainwater tank is closer to the house. To conserve electricity, she only heats water in a jug for the washing up. There is no electric heater as they cannot afford one, so in winter she uses the chainsaw to cut wood for a fire. Her husband’s work as a labourer means his clothes get dirty. She washes them; makes the meals; does the cooking; and the housecleaning. As their house is situated in the forest, she has a constant battle to remove cobwebs from under the eaves and on the walls. They cannot afford vegetables and fruit and she has established a vegetable garden but it has been hard work to keep plants alive. She has had to purchase wire netting to keep out the animals and to purchase the seeds, and these were expensive. She has to water the vegetable garden and does so with recycled water. Her working day is between 10-12 hours.
24. On those occasions, when she has undertaken paid work she has to get up at 2:00am in order to manage the travel, and the meals and other chores around the house suffer. She has to prioritise the tasks since she is unable to manage them all. On their return from work, for example, they might not be able to heat the house, or make a decent meal. If she worked, keeping the garden alive would be difficult and they rely on the produce for food. Although Mrs Holt says she is a housewife by choice, and would prefer to be a homemaker indefinitely, she acknowledges that she would be willing to work, but because of their transport difficulties, this could only occur if she could work in the same vicinity as her husband. She also is not averse to receiving income support payments and would apply, for example, for parenting payment if she had a child. She has received Austudy in the past.
25. Unless Mr Holt is able to obtain work, the couple live on Mr Holt’s Newstart allowance of $414.50 per week or $207.25 per week each. The rates are about $260 every six months at a discounted rate. They have to pay for groceries and petrol. After payment of bills, they are lucky to be left with $4-5 a week. As Mrs Holt does not work, there is no pooling of resources. Mr Holt divides what he gets. The couple have no savings. They do not own shares. The couple do not have a joint bank account. Mrs Holt has no account. When she earned money, she deposited it in Mr Holt’s account. They do not have credit cards but also have no debts. They believe they could not afford to move, even if they wanted to do so. When asked how this has affected him, Mr Holt gave as an example the fact that he has lost most of one of his front teeth. The tooth needs capping. He cannot get into Toowoomba Hospital to have it done so is forced to rely on a private dentist at a cost of $1500 approximately. He cannot afford the dentistry work so he has to go without and says he looks unsightly.
26. Mr Holt maintains that it is illogical to grant a person more if they are single than if they are married, as he says two people cost more than one and if the other party has not brought assets or income into the marriage then this makes the reduction to the partnered rate of Newstart allowance particularly illogical. If he was on the single rate, he believes he would be between $95 and $100 per fortnight better off, with the supplementation upon his turning 60.
Consideration
27. Mr and Mrs Holt impressed as honest witnesses who gave their evidence to the best of their ability.
28. Section 24 of the Social Security Act 1991 (Cth) (Act) provides for a discretion to treat a person as not being ‘a member of a couple’. For a couple not to be treated as ‘a member of a couple’ they must meet the criteria in section 24 of the Act. There is no dispute that Mr Holt was legally married to Mrs Holt on 2 April 2006 (section 24(1)(a)). Nor is there any doubt that the couple are not living separately and apart on a permanent basis (section 24(1)(b)). The sole issue is whether they meet the criteria in section 24(1)(c), namely, ‘the Secretary is satisfied that the person should, for a special reason in the particular case, not be treated as a member of a couple’. The critical expression in that provision is ‘special reason in the particular case.’ This formulation provides a broad discretion in the Secretary.
29. There has been a tendency in the cases to treat the expression ‘for a special reason in the particular case’ in section 24(1)(c) as being equivalent to the expression ‘special circumstances’ used elsewhere in the Act.[3] Undoubtedly, both expressions - ‘special circumstances’ and the ‘special reason in the particular case’ – do grant a wide discretion to the decision-maker. Nonetheless, choice of a different expression when it could have been expected that another, well used expression of similar import would suffice, indicates a legislative intention to differentiate between the two. On that basis, some caution should be exercised about relying on the cases which deal with the meaning of ‘special circumstances’. The Tribunal notes that there appears to be a division of opinion in the cases as to whether the two expressions are equivalent, as is indicated in the Guide to Social Security Law at [24.05].[4]
[3] For example, section 542H – exemption from youth allowance activity test; section 603A – relief from the activity test; section 1184K – discretion to disregard compensation payment; and section 1237AAD - the waiver provisions.
[4] Re Beadle and Director-General of Social Security (1984) 6 ALD 1; cf Re Petrovic and Secretary, Department of Social Security (1991) 23 ALD 240.
30. The Tribunal’s concern about eliding the two expressions is that a number of the cases and the Guide import a requirement that whatever the ‘special reason’, it must be ‘outside the couple’s or individual’s control and cannot be changed’. The quotation is taken from the Guide to Social Security Law (Guide) at 2.2.5.50, which relates to the discretion in section 24 to treat a person as not being a member of a couple for a special reason. This additional criterion would appear to have originated from the tests for ‘special circumstances’ which in two of the ‘special circumstances’ provisions in the Act contain a requirement that not only must there be ‘special circumstances’ but they must be ‘beyond the person's control’.[5] No such criterion is written into the ‘special reason in the particular case’ provisions in the Act. For that reason, caution should be exercised about importing any such requirement.
[5] Eg Social Security Act 1991 (Cth) ss 542H, 603A.
31. Other guidance as to how the discretion should be exercised has been provided in the cases. The circumstances need not be exceptional. As French J said in Boscolo v Secretary, Department of Social Security,[6] although the discretion is ‘not lightly to be enlivened’,[7] that ‘does not require that the case be extremely unusual, uncommon or exceptional’.[8]
[6] Boscolo v Secretary, Department of Social Security (1999) 53 ALD 277.
[7] Id at 281.
[8] Id at 282.
32. The expression must, however, be interpreted in context,[9] consistent with the scope and purpose of the Act.[10] That context and purpose was explained in the Explanatory Memorandum to the Social Security Legislation Amendment Bill (No 4) 1991 which stated (at 17):
… there is justification in paying a higher rate to an unpartnered person than to a member of a couple if both members of the couple are living together. This justification is based on the premise that the unpartnered person does not enjoy the same economies of shared living costs as does the member of a couple in those circumstances. If the economies of scale are not available to the member of the couple because he or she is living apart from his or her partner because, for example, of the illness of one or both members of the couple, then each would face similar living costs as an unpartnered person.
[9] Acts Interpretation Act 1901 (Cth) s 15AA. See also K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd (1985) 60 ALR 509, 514 (Mason J); Project Blue Sky Inc v Australian Broadcasting Authority (1998) 153 ALR 490, 509 (McHugh, Gummow, Kirby and Hayne JJ).
[10] Klein v Domus (1963) 109 CLR 467.
33. This justification was elaborated in Re Hawkins and Secretary, Department of Social Security:
The evident policy behind the relevant legislative provisions is that ordinarily couples should be expected to pool their resources and practise economies of scale; that those expectations should not apply to couples who are separated by illness or imprisonment; but that there would have to be some special reason not to apply those expectations to members of other couples. [11]
[11] Re Hawkins and Secretary, Department of Social Security (1996) 44 ALD 651, 652 (Deputy President Blow).
34. These extracts indicate two reasons for the partnered rate: that there are economies of scale in two people living together; and that because there has been a pooling of resources, the two persons are better off financially because they pool their joint income and assets.
35. As regards the first reason, it is clear that Mr and Mrs Holt only require one residence, not two, and that there are economies of scale in their sharing of food, costs of electricity, rates, means of transport, petrol and other outgoings. There are also some increased expenses: more money must be spent on items for two individuals than for one such as clothes, haircuts, dentists and doctors, and individual transport, to cite some obvious examples. Nonetheless, on balance, the economies of scale are likely to favour a couple over a single person.
36. As for the second reason, in Mr and Mrs Holt’s circumstances there is no benefit from pooled finances and assets. Mrs Holt had no assets or income to pool at the commencement of their marriage. All she had were her share of the wedding gifts and her personal clothing and effects. So her circumstances are not like those which ordinarily apply when two people agree to live together. That means the situation of Mr and Mrs Holt do not fall within the second reason for the reduced rate of payment for Newstart allowance at the partnered rate. The issue is whether this difference, and any other special reasons relating to the current circumstances of Mr and Mrs Holt, are sufficient to bring them within the test in section 24(1)(c). That test, as French J said in Boscolo, had at its core ‘the requirement …that there be something unusual or different to take the matter the subject of the discretion out of the ordinary course’. Do their circumstances mean that the discretion should be exercised in Mr Holt’s favour because this couple ‘could not reasonably be expected to enjoy the pooling of resources that usually occurs in a marital relationship’?[12]
[12] Re Secretary, Department of Social Security and Tsimpidaros [1995] AATA 554, para 2 (Senior Member Muller), citing the Social Security Guide.
37. The Tribunal notes that in Boscolo it was pointed out that:
[Section] 24 requires the decision-maker to focus on the position of one person, not the couple, and to assess whether that person should for a special reason not be treated as a member of the couple.[13]
However, French J went on to say:
That does not of course prevent the tribunal from considering all relevant circumstances including the position of [the wife] as it affected B[oscolo]. The matter will be a matter for the tribunal to reconsider in the light of these remarks’.[14]
[13] Boscolo v Secretary, Department of Social Security (1999) 53 ALD 277, 282.
[14] Id at 283.
38. The Tribunal considers that it is necessary to consider the circumstances of both Mr and Mrs Holt when making its findings in this case.
39. A finding that Mrs Holt brought no assets or income into the marriage is not sufficient on its own to justify a finding that Mr Holt should receive the Newstart allowance at the single rate. The Tribunal accepts the correctness of the sentiment in the Explanatory Memorandum that:
There is no clear justification for paying a higher rate of pension/benefit or pharmaceutical allowance to a member of a couple simply because the partner does not also receive income support’.[15]
[15] Explanatory Memorandum to the Social Security Legislation Amendment Bill (No 4) 1991, 17.
40. Nor is financial hardship on its own a sufficient ‘special reason’,[16] although hardship is a consideration.[17] There must be other circumstances, in addition to the fact that there was no pooling of assets or other monies in the case of Mr and Mrs Holt, to justify the favourable exercise of the discretion. In particular, since Mrs Holt is able to work, but chooses to be a full-time housewife and homemaker, those circumstances or special reasons must explain why it would be unreasonable to deny Mr Holt the benefit of the exercise of the discretion in section 24.
Relevant case law
[16] Re Malajew and Secretary, Department of Social Security (1988) 16 ALD 1; Re Colaiacolo and Secretary, Department of Social Security [1985] AATA 91 para 20 (Dr Renouf, Member).
[17] Re Williams and Director-General of Social Services (1981) 4 ALD 300, para 27 (Senior Member Hall).
41. The Guide notes that: ‘A significant body of case law has established that the inability to pool resources for their mutual benefit is a special reason to exercise the discretion in section 24’.[18] What causes the ‘inability’ needs exploring. In relation to the first justification for the partnered rate that the couple pool the joint resources they possess at the time of the marriage, the inability of Mrs Holt to do so was simply because she had no assets and no income.
[18] Guide to Social Security Law 2.2.5.50.
42. In relation to the second reason, that the couple pool their joint resources acquired following their marriage, the reasons in the Holt's case need exploration. The case law illustrates some of those reasons. In some cases the partner was legally prohibited from working;[19] in others, the inability was practical. For example, the couple were not living together for a variety of reasons, including being separated by illness or imprisonment or, as a matter of choice, to support a child from a previous relationship for the period the child was facing legal proceedings.[20]
[19] Re Secretary, Department of Social Security and Tsimpidaros [1995] AATA 554; Re Hawkins and Secretary, Department of Social Security (1996) 44 ALD 651.
[20] Boscolo v Secretary, Department of Social Security (1999) 53 ALD 277 (husband moved to Sydney from Perth for a period to attend Family Court hearings in relation to his son by a previous relationship; Re Lada and Secretary, Department of Families, Community Services and Indigenous Affairs [2007] AATA 1496 (Austrian wife, as a matter of choice, returned to Austria for medical treatment under Austrian private health insurance); Department of Social Security and Porter (1997) 48 ALD 343 (wife in nursing home); Re Secretary, Department of Social Security and Begum (1998) 51 ALD 157.
43. But there does not need to be a physical separation. As the Tribunal noted, obiter, in Re Williams and Director-General of Social Services: ‘I assume without deciding that the exercise of the discretion … on the grounds of hardship is possible even though the person lives with and has full access to the income of his or her spouse’.[21] Such a case was Cocks v Centrelink,[22] in which Mr Cocks was a pensioner who lived in the Philippines with his wife and young daughter for up to six months of the year, but returned to Australia for the balance. O’Loughlin J made the following observation in relation to the issue of an inability to pool the financial benefit of marriage:
The marriage of a man and woman is taken to mean, in ordinary circumstances, that they will pool their resources, share their expenses, and thereby live more cheaply than if they were two single persons who were living separate and apart. In the case of income earners they would pool their respective incomes. In the case of pensioners they would pool their pensions. In the case of Mr and Mrs Cocksit would seem to be the case that she has nothing to pool and he, as a result, has nothing to gain from any supposed pooling. That predicament exists whether or not they are residing together or apart.[23]
[21] Re Williams and Director-General of Social Services (1981) 4 ALD 300, para 27..
[22] Cocks v Centrelink (2000) FCA 1248.
[23] Ibid, para 12.
44. Earlier O'Loughlin J had said:
It is submitted that the absence of Mrs Cocks and the child overseas was a matter which was not beyond Mr Cocks' control but, according to the department, it was a lifestyle choice for which the public purse should not bear responsibility. That submission, in my opinion, cannot be accepted. It is contrary to the facts as found by the Tribunal, and I quote ... the relevant passage: 'He simply cannot afford the $3500 to bring his family to Australia and provide accommodation'.[24]
[24] Ibid, para 11.
45. The barrier was a practical one. Mr Cocks had to live in the Philippines for part of the year because he could not afford to bring his family to Australia, and when in the Philippines, it was inferred that his wife was neither earning an income or on any form of welfare benefit. On remittal to the Tribunal, it was found that Mr Cocks was eligible for Newstart allowance at the single rate in the six months of the year when he resided in the Philippines with his wife and her child.
46. In Re Galewski and Secretary, Department of Social Security[25] the Tribunal said, in favourably applying section 24 of the Act:
The case of the pensioner who has to support a partner who brings to the marriage no assets, no financial resources and no financial prospects, seems to have been overlooked by the people who framed the amending legislation.[26]
[25] Re Galewski and Secretary, Department of Social Security (1998) 54 ALD 569.
[26] Ibid, 571 (Senior Member Muller).
47. In that case, Mr Galewski had married a Tongan (Miss Finau) and was living in Tonga and as the reasons indicate, his wife ‘had no qualifications, no job, no assets and no prospects prior to her marriage…. Her prospects have not improved much since her marriage’.[27] As the Tribunal said, it is ‘most unlikely that Ms Finau will bring any financial resources to the marriage’.[28] Once again, the lack of assets to pool by the wife, and the poor prospects of her subsequent employment were sufficient to attract the exercise of the discretion.
[27] Ibid, 570.
[28] Ibid.
48. The issue in the case of Mr and Mrs Holt is whether for practical reasons they could not reasonably be expected to enjoy the pooling of resources that usually occurs in a marital relationship. In assessing the circumstances, the test does not require that they 'be extremely unusual, uncommon or exceptional’.
Pooling of resources in marriage
49. It is clear that Mrs Holt has contributed some income since marriage. The issue is whether there are practical barriers to her continuing to do so which amount to a special reason in the particular case and justify the exercise of the discretion in section 24 in favour of Mr Holt.
Practicability of Mrs Holt working
50. Mrs Holt does have some qualifications, and has done some labouring and delivery work. However, there are considerable practical difficulties in her working, at least other than intermittently. Her qualification is in naturopathy, but she has not practised as a naturopath. Nor would it be easy for her to do so. It is unlikely that even if she were to practise, people would travel to the Holt’s home in its remote location for treatment. That means she would need to work in a nearby town. Demand for naturopathic services is unlikely to be high in Crows Nest with a population of about 1,600 people. In Toowoomba, she may be able to establish a viable naturopathy business but that would entail a 100 km round trip daily in order to work. In addition, unless she could join an existing naturopathy practice, there are start-up costs to establishing a business, for which the couple have no funds. The costs of petrol to cover journeys of up to 500 km per week, assuming she worked fulltime, would make the economics difficult.
51. Mrs Holt might attempt to work closer to their home in other administrative capacities. Such work is unlikely to be found in Crows Nest and she would again be required to commute to Toowoomba. The couple only have two vehicles. Mrs Holt has no scooter licence and would be reluctant to drive the 29 year old car on her own for any distance in case it broke down in the countryside between her home and Toowoomba and she could not repair it. The car is prone to boiling and at these times has to be driven at a sedate pace.
52. If Mrs Holt were to take the car, Mr Holt would be confined to the 125cc scooter which has a maximum speed of 80 km per hour, and is unsuitable for the forestry roads in the vicinity of his home, for carrying tools for forestry work, and for going lengthy distances. If she were to take the car, this would restrict his applying for and doing work any distance from Ravensbourne when she was working and so jeopardise his Newstart allowance. He is 62 years of age; he completed secondary education but has no training other than in forestry skills and his experience in foundry work or labouring. It would be unreasonable to expect him to retrain at his age. This limits the work he can undertake. There is also a question about how long the car will continue to go. As Mr Holt said, when it finally breaks down they cannot afford to replace it. In that event, the couple would be without transport other than the scooter, adding considerably to their isolation. Mr Holt said that calls for his forestry work can take him long distances from his home at Ravensthorpe. This would not be feasible given the lack of public transport if Mr Holt loses access to the car and the scooter cannot be used for that purpose.
53. Nor would it be feasible for the couple to attempt to move in order that Mrs Holt can obtain work. They can live simply where they are. If they attempted to sell the house and land, it is uncertain that they could find a buyer. If they did sell, the amount likely to be received from the sale would be insufficient to enable the couple to purchase a house in Toowoomba. Renting is a possibility. However, Mr Holt would then be located away from the area in which he has lived for over 30 years. In other words, like the circumstances in Cocks, to relocate would be financially difficult. To require the couple to take such a step would be unreasonable.
54. The only work which is feasible for Mrs Holt to do is to work with Mr Holt in the forestry business. That work is sporadic, and has been in decline with the drought and financial downturn. It can be undertaken by her when it is available. However, If Mrs Holt were to attempt to obtain paid work, the work she does at home would either fall on Mr Holt (if he was not working) or not be done. As she said, when she was working with him in the forestry business, she had to get up at 2:00am to do the chores and at times, when they got home, they either might not be able to heat the house since she had not cut up firewood, or she might not able to provide reasonable meals. The travel time and costs involved if Mrs Holt were to work and the impact on her ability to maintain a lifestyle in the remote region in which the couple live would be significant.
Financial hardship
55. The couple are subsisting on Mr Holt’s Newstart allowance and the limited income one or the other has been able to obtain. Their house is barely furnished and to conserve electricity, is often heated only by firewood, which the couple cut. They do not have access to telephone for outbound calls. They have limited assets and unlike the pensioner in Secretary, Department of Families, House, Community Services and Indigenous Affairs and Nicolaas,[29] the couple have no savings. This distinguishes their case from that in Nicolaas where Mr Nicolaas did have superannuation and savings. In effect, the Holts are existing at a subsistence level. This lifestyle can only be maintained through considerable time and personal effort. The resources Mrs Holt brings to this marital relationship is the homemaker work she does for up to 12 hours a day some days in order to enable them to live as frugally as they do.
Other reasons
[29] Secretary, Department of Families, Housing, Community Services and Indigenous Affairs and Nicolaas [2009] AATA 416.
56. If Mrs Holt applied for Newstart allowance in her own name, she would be required to meet the activity test and actively seek work and accept work when it is offered. As this examination of their lifestyle indicates, in effect, it is impracticable for both of them to work at the same time, except in the sporadic forestry business. Mrs Holt, unlike Mr Cocks’s wife, could be eligible for Newstart allowance. Indeed, she did at one time commence an application for that allowance. However, the impracticability of her obtaining employment, given the location of the couple’s home, their distance from the nearest sizeable town in which to obtain employment, and the restrictions on transport they face, mean their cases are not comparable.
Conclusion
57. The Tribunal finds that the discretion to provide Mr Holt with the Newstart allowance at the single rate should be exercised in his favour in the special reasons in their particular case. The circumstances which make the couple’s case ‘different and unusual’ and mean that they cannot reasonably be expected to benefit from the pooling of resources for their mutual benefit include the inability of Mrs Holt to pool resources at the date of the marriage; the difficulty for her to find work and undertake work since their marriage due to the physical remoteness of their home; the cost and restrictions of their forms of transport; the lack of practicable employment opportunities for both Mr and Mrs Holt; the unlikelihood that the couple could realise the value of their house and land if they were to attempt to sell and the unreasonableness of requiring them to do so; the remoteness of their dwelling; the fact that it is only due to Mrs Holt’s homemaker skills that they can continue at their subsistence level in that remote location; and their straitened financial position. These circumstances are both special and particular and are unlikely to be replicated by many other couples living together. These findings means the couple ‘cannot reasonably be expected to benefit from the pooling of resources that usually occurs in a marital relationship resulting in financial hardship’ and that the discretion in section 24 should be exercised to permit Mr Holt to receive Newstart allowance at the single rate.
I certify that the 57 preceding paragraphs are a true copy of the reasons for the decision herein of Professor RM Creyke
Signed: .........................[sgd]..........................................
Cigdem Kocak, AssociateDate/s of Hearing 18 January 2010
Date of Decision 26 February 2010
Solicitor for the Applicant A B Vincent - Northside
Solicitor for the Respondent Centrelink Legal Services
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