Re Secker and Secretary, Department of Family and Community Services
[2000] AATA 290
•11 April 2000
DECISION AND REASONS FOR DECISION [2000] AATA 290
ADMINISTRATIVE APPEALS TRIBUNAL )
) No V99/446
GENERAL ADMINISTRATIVE DIVISION )
Re Steven SECKER AND Zara SECKER
Applicants
And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
Respondent
DECISION
Tribunal Mrs Joan Dwyer, Senior Member
Date11 April 2000
PlaceMelbourne
Decision 1. The Tribunal orders pursuant to s 30(1A) of the Administrative Appeals Tribunal Act 1975 that Zara Secker be added as an applicant to this proceeding. 2. The decision under review is set aside. 3. In substitution the Tribunal decides in exercise of the discretion in s 1068B-D15 of the Social Security Act 1991, that the income maintenance period that would otherwise apply to Mr and Mrs Secker does not apply to them. 4. Liberty is reserved to the parties to apply if clarification is required for implementation of this decision.
(Sgnd) Joan Dwyer
Senior Member
SOCIAL SECURITY - newstart allowance - income maintenance period – identification of reviewable decision - absence of formal notification of decision to impose a income maintenance period - impact of income maintenance period in respect of wife's termination leave payment on applicant's newstart allowance - whether Tribunal had jurisdiction to review the entitlements of both Mr and Mrs Secker - whether severe financial hardship – whether the circumstances that would cause the severe financial hardship were not reasonably foreseeable by the person - decision set aside
PRACTICE AND PROCEDURE – difficulty in identifying reviewable decision in absence of written notification of decision – inadequacy of Centrelink documentation – lack of advice to Mr Secker as to "income maintenance periods" - reduction in Mr Secker's entitlements due to income maintenance period imposed in respect of wife's termination leave payment – requirement that wife also be joined as a party as her interests were affected by the decision to impose the income maintenance period
Social Security Act 1991 s 1283(1)
Social Security Legislation Amendment (Budget and Other Measures) Act 1996, s 1068-G7AH and 1068-G7AKA
Cases
Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd (1978) 2 ALD 1
REASONS FOR DECISION
11 April 2000 Mrs Joan Dwyer, Senior Member
is there a reviewable decision?
This is an application pursuant to s 1283(1) of the Social Security Act 1991 ("the Act") for review of a decision of the Social Security Appeals Tribunal ("SSAT") made 23 March 1999. The SSAT stated that it was affirming a decision made 7 April 1998 to impose an income maintenance period on Mr Secker's newstart allowance payments from 17 April 1998 to 19 May 1998. Under s 1283(2)(a) of the Act, if there were any such decision, that would be taken to be the decision made by the SSAT. and would thus be the reviewable decision. However, the Tribunal has not been able to locate any such decision either in the documents ("the T documents") lodged
pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 ("the AAT Act") or in the exhibits tendered during the hearing.Not only is there no original decision in the T documents, there is also no copy of any letter advising Mr Secker of the making of a decision to impose an income maintenance period in respect of his entitlement to newstart allowance. Ms McInnes, who is an employee of Centrelink and appeared for the Secretary, informed the Tribunal that in fact the decision was to impose an income maintenance period in respect of Mrs Secker's entitlement to parenting allowance, rather than in respect of Mr Secker's newstart allowance. She said that Mr Secker's payments were affected indirectly, because his wife was taken to have received income during the income maintenance period. The lack of any document comprising the original decision makes it impossible to check that point.
The SSAT reasons for decision contain the following:
HISTORY OF THE APPLICATION
1.Mr Secker was in receipt of newstart allowance when, on 7 April 1998, a Centrelink delegate made a decision that his newstart allowance payments would be subject to an income maintenance period from 17 April 1998 to 19 May 1998.
2.Mr Secker asked that this decision was reviewed, and after the original decision maker, decided on 26 October 1998 not to change the decision, the matter was referred to an authorised review officer.
3.On 26 November 1998, the authorised review officer wrote to Mr Secker, advising him that the decision to impose a income maintenance period on his newstart allowance payments was affirmed. Mr Secker lodged an appeal against this decision on 9 September 1998 to the Social Security Appeals Tribunal.
The date 7 April 1996 seems to have come from a document (T13 p73) which purports to be a reconsideration of decision to impose an income maintenance period, made 7 April 1998. However there is no copy of any decision of 7 April 1998, no identification of the decision-maker and no reasons for the decision.
It seems very unlikely that the history set out by the SSAT could be correct. First, there is no decision dated 7 April 1998. Secondly, the circumstances which give rise to the possible imposition of an income maintenance period, namely the receipt of a payment on termination of employment, did not occur until 17 April 1998, when Mrs Secker left her employment as a pharmacy assistant (T15 p106). Thirdly, Mr Secker was advised by letter dated 16 April 1998 (T8 pp62-63) that he would be paid newstart allowance from 27 March 1998 at a maximum fortnight rate of $290.10. Fourthly it appears from a letter dated 21 April 1998 (T9 p64) that Centrelink was still seeking information from Mr Secker in order to make a decision as to any income maintenance period as at 21 April 1998.
The letter of 21 April 1998 (T9 p64) reads as follows:
Dear Mr Secker
The purpose of this letter is to gather information to help us make the right decision about your Newstart Allowance.
You have advised Centrelink thru [sic] your Newstart Benefit claim form that your wife has received termination pay of $1576
Would you please provide the following:
Employer Seperation [sic] Certificate showing details of the above termination pay.
Please mail it or make an appointment to bring it in. Documents can be returned by registered mail at your request.
This request is made under the Social Security Act 1991.
It is hard to see how a decision to impose an income maintenance period could have been made two weeks before that letter was sent.
The letter of 21 April 1998 (T9 p64) raises further puzzles in the search for relevant material. Mr Secker's Newstart Benefit [sic] claim form (T6 pp41-60) does not advise that his wife had received termination pay of $1576. Mrs Secker had provided details of her termination pay in a lengthy claim for parenting allowance (T15 pp82-106 at p97). That claim is stamped as having been received by Centrelink on 21 April 1998 although at p104 it appears to have only been signed by Mrs Secker on 28 April 1998. It was lodged as an additional T document by Centrelink two days before the hearing of this matter.
It appears that Mr Secker was never notified in writing of any decision to impose a income maintenance period which would affect his and his wife's social security entitlements. The history of events cannot be traced through the T documents, but Mr Secker gave evidence as to his recollection.
Mr Secker said that when he received a fortnightly payment of only $42.00, instead of the $290.10 which was the amount mentioned in his letter of grant of 16 April 1998 (T8 p62), he contacted Centrelink. He said (at trans. pp47–49):
I was in contact with Centrelink at Fountain Gate or tried to be in contact with Centrelink at Fountain Gate, there is a limit to just how long you can stay on a 13 number when you are on hold.
. . .
And I queried the payment, why had I only received $46.00 [sic] instead of substantially more, I was expecting the $290 and the person that I was speaking to couldn't give me an explanation at the time and we were trying to work out what the story was as to why I got that. There was a comment made, if I remember rightly, that it might be something to do with the processing of the paperwork because of my wife's parenting payment and other allowances being stopped and effects like that.
. . .
We have had experiences a number of times when we have lodged paperwork and it has taken some time for that to be processed and payments have eventually come through some days or weeks afterwards. So that is what we – what it was attributed to initially and then when the second fortnight came through and the payment wasn't there I was basically jumping up and down saying, hang on a moment, why? And by the middle of May I was getting rather furious, and then we got the letter, 21 May, saying that the parenting payment had been approved but at that stage I had been informed about IMP but it was a bit too late for us.
. . .
I actually found out about IMP when I was in Fourtain Gate Centrelink office querying why we hadn't got the payments in there and while I was waiting in the queue I decided to rummage through the stack of leaflets that were around and I actually found a photocopied leaflet on IMP, and that is the first that I knew about it.
MRS DWYER: So what happened then?
MR SECKER: Well, when the issue of IMP was mentioned I wanted to know why we hadn't been told about it and how much of an effect ---
. . .
MRS DWYER: Right. So was it you who suggest maybe IMP is the explanation or did the officer?
MR SECKER: No, IMP came up from the officer.
That was mentioned from the officer. All your allowances have been affected by IMP.
Thank you for telling me.Mr Secker said that his conversation with the officer at Fountain Gate Centrelink Office would have taken place about 14 May 1998. He said it was definitely before his wife received the letter of 21 May (A2) advising her that her parenting payments of $290.10 per fortnight would commence on 4 June 1998.
I accept Mr Secker's evidence and find that Mr and Mrs Secker were never formally informed of the decision to impose an income maintenance period, because of Mrs Secker's employment termination payment. I find further that they only learnt of the decision by querying the inadequacy of the two fortnightly payments received during the relevant period. That shows poor administration and poor customer service. It also makes it very difficult to locate any reviewable decision.
On 8 June 1998 Mr Secker wrote to Centrelink (T11 p66) pointing out that he and his wife had missed out on five weeks of parenting allowance before his newstart allowance commenced. He asked to have his allowance back paid to 18 April. Mr Secker in that letter referred to "the concept of IMP". He wrote in part:
It would appear from the flimsy information provided on the fortnightly reporting form, which is the only written information I have ever received regarding how much allowance I have been paid and what has been deducted for what reason, that we were deprived of both Basic and Additional Parenting Allowance for some weeks following the application, and that my Newstart Allowance was also penalised because of my wife's termination pay, which was fully committed months before she received it. In fact I received less being on Newstart Allowance than I would have received with Parenting Allowance. I do not accept that the Parenting Allowances payable for the period from 18th April should be reduced because of my wife's termination pay, even with IMP applied, because my Newstart Allowance was already being reduced as a result of it. You cannot apply the reduction to ALL payments independently. The department's letter of 16th April clearly implied that all possible reductions to allowances had been considered. It is reasonable for the Basic Parenting Allowance to have been suspended for the period of my Newstart Allowance up to and including 17th April (you were advised in advance that my wife would be finishing work that day) but it should have been restored, and the arrangement for repayment re-initiated, immediately afterwards. I therefore request that Basic and Additional Parenting Allowances be back-paid to 18th April not to a date in the second half of May.
So far as the T documents show, it appears that the reconsideration of 20 October 1998 (T13 pp73-74) was the only response to that letter. That "reconsideration" was then reconsidered by an authorised review officer on 26 November 1998 (T14 pp75-81) in response to a letter of 27 October (T12 p67) sent by Mr Secker wrote to Centrelink. He asked for a review of "the decision not to adjust or waive the IMP which affected allowances payable to my wife and me in April and May of this year."
One question I raised at the hearing was whether the Tribunal had jurisdiction to review the entitlements of both Mr and Mrs Secker. That is what Mr Secker asked for in his letter of 27 October 1998 (T12). It appeared to me clear that Mrs Secker was a person whose interests are affected by the decision to impose an income maintenance period in this matter. Ms McInnes, in a submission to the Tribunal dated 15 December 1999, conceded that the SSAT had "implicitly reviewed the decision to impose the IMP on [Mrs Secker's] Parenting Payment and therefore her entitlement." I arranged for the District Registrar to invite Mrs Secker to apply to be joined as a party to the proceeding. She did so and I propose to order that Mrs Secker be added as an applicant in this proceeding.
I have been troubled by the issue of whether or not there is a reviewable decision. Under s 1283(2) of the Act the reviewable decision is the decision as affirmed by the SSAT. I doubt if the original decision was made on 7 April 1998 for the reasons I have given. Nor can the decision of 20 October 1998 be the original decision. It is clearly a reconsideration decision. It was made many months after the original decision and after the imposition of the income maintenance period from 17 April to 19 May 1998.
I have decided, applying the decision of the Full Court of the Federal Court in Collector of Customs (New South Wales) v Brian Lawlor Automotive Pty Ltd (1978) 2 ALD 1, that it is appropriate to take a generous view of the Tribunal's jurisdiction in the matter. Bowen CJ said at pp4-5:
In the Administrative Appeals Tribunal Act a wide meaning is given to the word "decision" by s 3 (3). In s 25 it appears to me that the word simply refers to a decision in fact made, regardless of whether or not it is a legally effective decision. The difficulty lies in interpreting the words "made in the exercise of powers conferred by that enactment". This may mean that it must be shown there was a decision made:—
(a) in pursuance of a legally effective exercise of powers conferred by the enactment; or
(b) in the honest belief that it was in the exercise of powers conferred by the enactment; or,
(c) in purported exercise of powers conferred by the enactment.The words "purported exercise" in (c) are used as including the notion that the official may be making his decision on the basis that he is exercising powers conferred by the enactment, whether or not on a proper interpretation of the enactment such powers are conferred.
The context of the Act appears to me to point against the adoption of interpretation (a). The Act is clearly intended to give a person whose interests are affected by an administrative decision an effective appeal, free of technicalities, against that decision on questions of fact and of law: see ss 25, 27, 28, 31, 33, 42 and 44. The adoption of interpretation (a) would remove the most significant area involving questions of law from the jurisdiction of the Tribunal. It would render the appeal in many cases useless. Whenever it appeared in proceedings before the Tribunal that there was an error of law by reason of which the decision was legally ineffective and that the applicant certainly needed relief, the Tribunal would at that point be obliged to refuse relief on the ground that it had no jurisdiction to entertain the application. It is a feature of administrative decisions that once made, even if unlawful, they have consequences which may adversely affect citizens, until such time as they are withdrawn due to a change of mind on the part of the administrative official himself or are set aside by the determination of a court or tribunal. It appears to me that the Act is designed to give a simple remedy in all such cases.
. . .
Interpretation (c) appears to me to be consistent with the context in the Administrative Appeals Tribunal Act. . . . The adoption of this view would mean that the Administrative Appeals Tribunal would have jurisdiction to entertain an appeal from a decision in fact made, which purported to be made in the exercise of powers under an enactment. It could then proceed to determine whether the decision was properly made in fact and in law. (emphasis added)
Bowen CJ summed up his view as to the meaning of s 25 of the Administrative Appeals Tribunal Act 1975 as follows at p7:
In the view which I take as to the meaning of s 25 of the Administrative Appeals Tribunal Act, these questions do not need to be decided. As I have said, in my opinion an applicant to the Tribunal has standing and the Tribunal has jurisdiction provided there is a decision in fact and provided further that the decision purports to have been made in exercise of powers conferred by an enactment whether or not as a matter of law it was validly made and whether or not action on the basis there was power to make the decision was right or wrong.
Smithers J expressed similar views. He said at p23:
If administrative decisions are to be subjected to review in the course of good government exclusion from review of decisions made without power would remove from review those decisions most in need of review. The very absence of guidelines as to the exercise by the Tribunal of its powers of review is a most significant feature supporting a conclusion that review is to proceed by reference to the standard of good government. It is a short step to infer that the overriding purpose of the Act is to promote good government by those carrying out the actual practical task of administering Acts of Parliament and making decisions incidental to that task.
Bowen CJ and Smithers J emphasised that the Tribunal has an important role to play in reviewing decisions which affect the interests of citizens, and that where there is such a decision the Tribunal should not be too ready to avoid performing that task because of legal technicalities. In this matter Mr and Mrs Secker's entitlements were reduced by imposing an income maintenance period. Thus although the decision cannot be identified, its effect was felt by Mr and Mrs Secker. They seek review of that decision to allow them to avoid its effect. The fact that due to some administrative deficiencies there is no original decision able to be identified, should not deprive Mr and Mrs Secker of the opportunity to seek review of the decision to impose an income maintenance period in respect of Mrs Secker's termination payment of $1576.00.
the relevant legislationThe concept of an income maintenance period was introduced into the Act by the Social Security Legislation Amendment (Budget and Other Measures) Act 1996, (No 84 of 1996, assented to 23 December 1996). The relevant provisions came into effect on 20 September 1997. The SSAT and the authorised review officer relied on the sections providing for a termination payment to give rise to an income maintenance period in respect of payment of newstart allowance. They provided:
Certain leave payments taken to be ordinary income - employment terminated
1068-G7AH If:(a)a person's employment has been terminated; and
(b)the person receives a leave payment (whether as a lump sum payment, as a payment that is one of a series of regular payments or otherwise);
the person is taken to have received ordinary income for a period (the income maintenance period) equal to the leave period to which the payment relates.
Leave payments in respect of periods longer than a fortnight
. . .Start of income maintenance period—employment terminated
1068-G7AKA. If the person is covered by point 1068-G7AH, the income maintenance period starts, subject to point 1068-G7AKB, on the day the person is paid the leave payment.
Ms McInnes correctly pointed out that that provision was not applicable as Mr Secker's employment was not terminated and he did not receive a leave payment. It was the leave payment received by Mrs Secker on termination of her employment due to the expected birth of her second child, which gave rise to the imposition of an income maintenance period. Thus Ms McInnes, in the respondent's statement of facts and contentions, relied on the provisions relating to the imposition of an income maintenance period in respect of a recipient of parenting payment, namely s 1068B-D10 and 1068B-D13. Those sections were in almost identical terms to s 1068-G7AH and 1068-G7AKA set out in paragraph 19 of these reasons.
I accept that the relevant provisions were those applying to Mrs Secker's parenting payment and that the effect on Mr Secker's payment was a "flow-on" as a result of his wife "being taken to have received ordinary income for 23 days."
Thus the relevant waiver provision was that in s 1068B-D15 which provided:[read in via e-media]
1068B-D15 The Secretary may determine that the whole or any part of an income maintenance period that would, apart from this point, apply to the person, does not apply to the person if the Secretary is satisfied that:
(a)the application of the income maintenance period to the person would cause the person severe financial hardship; and
(b)the circumstances that would cause the severe financial hardship were not reasonably foreseeable by the person.
The SSAT said on this issue:
21. The Tribunal is satisfied that the income maintenance period caused Mr and Mrs Secker some financial hardship in that it was imposed on Mr Secker's newstart allowance payments and reduced income available to the family. However the Tribunal is not satisfied that this represents severe financial hardship. Mr Secker argues that the fact he and his wife were not made aware of the income maintenance period at an earlier date, meant that the financial hardship that he did suffer was not reasonably foreseeable by he and his wife. While as noted above, the definition of "income" on the back of the letter sent to Mr Secker from Centrelink on 16 April 1998 does not refer directly to a partner's income, it is clear that "income" includes leave payments from an employer. Moreover pursuant to subsection 1068-G7AM(b), the unforeseen circumstances must relate to the severe financial hardship. On Mr Secker's own evidence he and his wife were experiencing financial difficulties before she ceased employment and received the termination payment. The Tribunal appreciates that they did not make advance mortgage payments and that Mr and Mrs Secker may have restructured their financial affairs in a different way had they anticipated the imposition of the income maintenance period. However, they were able to take steps to extend their mortgage and during the income maintenance period were able to make ends meet without borrowing additional funds. In the circumstances, the discretion in section 1068-G7AM cannot be exercised in Mr Secker's favour.
Ms McInnes adopted those arguments at the hearing. However after the conclusion of the hearing on 20 October 1999 the Tribunal requested Mr Secker to forward detailed financial information to the Tribunal. The Tribunal at the hearing and in a letter sent by the District Registrar on 26 November 1999 requested Mr Secker to provide:
(i)precise details of all payments made out of the $1576.00 termination payment received by Mrs Secker;
(ii)amounts by which any accounts were in arrears before and after those payments were made (eg mortgage, gas, electricity, credit cards);
(iii)any other debts outstanding during the relevant period;
(iv)details as to letters of demand received or other action taken in respect of money owed.
On 7 February the Tribunal received a final submission from Mr Secker and on 18 February 2000 the Tribunal received from him copies of documentation supporting his claim that he and his wife were suffering "severe financial hardship" during the relevant period. That documentation consisted of:
(a)statement of claim in County Court Action ANZ Banking Group v Secker dated 13 September 1999, and letter as to arrears, 14 January 1998.
(b)ANZ Bank statements of Mr Secker's access account, 24 March 1998 to 22 May 1998.
(c)ANZ Bank statements of Mr and Mrs Secker's joint access account, 19 March 1998 to 19 May 1998.
(d)ANZ Bank statement for Mr and Mrs Secker's Home Loan account, 19 February 1998 to 19 August 1998.
(e)letter of demand Esanda to Mr Secker, 26 May 1998
(f)Esanda statement of account dated 13 August 1999 covering period 30 April 1996 to 6 August 1999.
(g)National Australia Bank Bankcard statements covering period 19 March 1998 to 18 May 1998.
(h)Colonial State Bank of New South Wales Visa statement, 12 May 1998.
(i)Bankwest Bankcard statement, 26 March 1998 to 27 April 1998.
(j)AGC monthly statement 9 April 1998.
(k)Target Card statement, 15 May 1998.
(l)Myer account statement, 3 May 1998.
(m)Master Card statement, 24 March 1998 to 23 April 1998.
(n)Optus account issue date 14 May 1998 (Bromsgrove Pty Ltd).
(o)Optus account issue date 18 March 1998.
(p)Optus account (different account number also Bromsgrove Pty Ltd)
(q)Optus account mobile phone issue date 18 March 1998 Mr and Mrs Secker.
(r)Telstra account (Bromsgrove Pty Ltd), 4 March 1998.
(s)Statements from Lifeshaper Counselling, 14 October 1997 and 7 October 1998.
(t)Analysis of accounts for Housing Loan, Esanda and Lifeshaper.
Those documents have been taken into evidence by the Tribunal and marked as exhibit A5 (a) to (t).
Ms McInnes, in a submission in reply faxed to the Tribunal on 7 March 2000 conceded "that Mr and Mrs Secker were in severe financial hardship for almost all the IMP". Ms McInnes provided calculations showing the small amount of money available to Mr and Mrs Secker each week during the period 17 April 1998 to 19 May 1998.
Ms McInnes made the concession as to severe financial hardship in accordance with Policy Instructions attached to her submission of 15 December 1999. The Tribunal regards the concession as correct. In view of the nature of Mr and Mrs Secker's liabilities and the small amount of income they had available during the relevant period, I am satisfied that they suffered severe financial hardship from 17 April 1998 to 19 May 1998.
Ms McInnes however raised two arguments as to why s 1068B-D15 did not apply to Mr and Mrs Secker. She wrote:
However, it cannot be said that IMP caused Mrs Secker to experience severe financial hardship which is an essential connection to satisfy sub-section (a). Mr Secker's recent submission shows that the termination payment was exhausted to service existing debts and that these payments were voluntarily made prior to and during the IMP itself. By their own admission, the couple were also in difficult financial circumstances long before the IMP was imposed. To find in favour of the applicants would be allow persons in their circumstances to use their termination payments on existing debts, rather than self-sufficiency, as is the legislative intent.
It is also our submission that Mrs Secker does not satisfy s.1068-D15(b). That provision is intended to allow a person to use their termination payment in the event of unforeseen and emergency type expenses, not foreseeable and known expenses such as those voluntarily undertaken by the respondent.Each of those submissions must be considered. The first relates to s 1068B-D15(a). Ms McInnes submitted that the material lodged by Mr Secker showed that he and Mrs Secker were "in difficult financial circumstances long before the IMP was imposed." That is clearly so however Mr Secker submitted that if the income maintenance period had not been imposed and they had therefore received fortnightly social security payments of approximately $290.18 each for newstart allowance (T8) and parenting allowance (A2), they would have been able to manage their debts and expenses and would not have suffered "severe financial hardship". I accept that submission and find on the evidence of Mr Secker and the documents that he forwarded to the Tribunal (Ex A5(a) to (t)) that it was the vastly reduced income for five weeks which changed their position from a fragile financial situation to one of severe financial hardship. I find that Mr and Mrs Secker were committed to paying off part of the arrears on their housing loan and to making payments in respect of amounts due on Mr Secker's bankcard account, an AGC account and their car loan. The only money available for this purpose was the termination payment. The total amount paid in respect of those debts out of the termination payment by 28 April 1998 was $1574.50. I find that there was nothing left from the termination payment to cover daily living expenses. They had expected that such expenses would be covered by their social security payments. The reduction in social security payments as a result of the imposition of the income maintenance period therefore caused severe financial hardship.
The second submission made by Ms McInnes addressed s 1068B-D15 (b). That paragraph requires that the circumstances that would cause the severe financial hardship be "not reasonably foreseeable by the person." Ms McInnes focussed on the fact that Mr and Mrs Secker's commitments under their house mortgage, their car loan and their bankcard and AGC liabilities were ongoing expenses voluntarily undertaken and were known to them and not "unforeseen and emergency-type expenses". That is true, however it is not conclusive.
Section 1068B-D15 gives the Secretary, or this Tribunal standing in the Secretary's shoes, a discretion to determine that the whole or any part of an income maintenance period not apply to the person if the Secretary is satisfied that the application of the income maintenance period would cause severe financial hardship and the circumstances that would cause the severe financial hardship were not reasonably foreseeable by the person. Those circumstances consist of both the imposition of the income maintenance period and the person's debts and liabilities. In this matter the debts and liabilities were not the sort of debts and liabilities which can be characterised as "not reasonably foreseeable". But Mr Secker's evidence was that the imposition of the income maintenance period came as a complete surprise to him. He said that in fact it was not even mentioned to him when he went to ask why he and his wife had received such reduced payments. He said at trans. p50:
We knew about the bills, we knew about the mortgage, we knew about the credit card situation but we didn't know that we weren't going to get the unemployment benefit and the parenting allowance.
and at trans. p51:
We had actually worked out two or three months in advance of when she was leaving work, what we were going to do with the money that she would get at the end of that. We knew that we couldn't get hold of it till she finished work, we knew – we had some idea as to how much she was going to get, so we planned on putting that money onto the mortgage and bringing down the credit card debt.
MRS DWYER: Right, so the 700 that you paid straight to ANZ to pay off part of the arrears of the mortgage?
Correct.
Mr Secker's evidence on this issue has been partly set out in paragraph 9 above. He also explained that he had told the counter officer when lodging his claim for newstart allowance on 7 April 1998 that his wife would be leaving work (trans p8). He said income maintenance was not mentioned to him then. Mr Secker said that he had expected that his wife's termination leave payment would be treated as income in the fortnight of receipt. He said (trans. p15) that from his previous experience dealing with Centrelink he knew that the payment received by his wife would affect their entitlement but he thought it would only be for one week or one fortnight. They had no notice or expectation that it would affect payments for five weeks from 17 April to 19 May 1998. The SSAT referred to the fact that the definition of "income" on the back of the letter sent to Mr Secker on 16 April 1998 (T8) covered leave payments. That was not in issue. The problem is that there was no information given to Mr Secker either on the back of that letter or in any other letter or in conversation, about income maintenance periods having the effect that income received in one week is maintained for a longer period.
I note paragraph 76 of the applicable policy guidelines attached to Ms McInnes' submission of 15 December. It reads as follows:
76. In this example the customer placed themselves in financial hardship by spending their available funds on the mortgage and this was a foreseeable circumstance. It will be important for the CSO to fully explain the implications of the IMP to the customer. This would include background information why the IMP was introduced. Also, that customers are required to live off those funds until the IMP finishes. (emphasis added)
I find that in this matter no CSO or other officer explained the implications of the IMP to Mr Secker until all the termination leave payment had been expended. Thus it was not possible for Mr and Mrs Secker "to live off those funds until the IMP finishes." By the time Mr Secker learnt about the income maintenance period it had almost expired and had caused Mr and Mrs Secker to suffer severe financial hardship.
I accept Mr Secker's evidence. I find that he was not told about the imposition of the income maintenance period until about 14 May when he queried his second reduced fortnightly payment. I find that the information came as a complete surprise to him. By that date the termination leave payment was fully expended except for $2.00. The concept of an income maintenance period had only been introduced into the Act with effect from 20 September 1997. There was no reason why Mr and Mrs Secker should have foreseen that a payment received on 17 April 1998 would continue to affect their entitlements until 19 May 1998. I find that the circumstances of the imposition of an income maintenance period when Mr and Mrs Secker had committed the termination payment to paying off some debts and had relied on their social security payments for daily living expenses caused them to suffer severe financial hardship. I find further that those circumstances were not reasonably foreseeable although a reduction in entitlements for one fortnight, due to receipt of income of $1576.00 in one fortnight would have been reasonably foreseeable, and in fact was foreseen by Mr and Mrs Secker.
I will decide that the decision to impose an income maintenance period should be set aside. In exercise of the discretion in s 1068B-D15 I will decide that the income maintenance period that would otherwise apply to Mr and Mrs Secker does not apply to them. That means that the $1576.00 termination leave payment received by Mrs Secker will be treated as income in the fortnight of receipt only. It will affect payments to her and Mr Secker but only in respect of one fortnight.
I certify that the 36 preceding paragraphs are a true copy of the reasons for the decision herein of Mrs Joan Dwyer, Senior Member
Signed: Anne O'Rourke
AssociateDate/s of Hearing 20 October 1999
Date of Decision 11 April 2000
Counsel for the Applicant Nil
Solicitor for the Applicant Nil - Self Represented
Counsel for the Respondent Nil
Solicitor for the Respondent Nil
Departmental Advocate Ms C McInnes
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