Steele and Secretary, Department of Education, Employment and Workplace Relations

[2011] AATA 864

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2011] AATA 864

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2011/2589

GENERAL ADMINISTRATIVE DIVISION		)
Re		JUSTIN STEELE

Applicant

And SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal Mr P Wulf, Member

Date7 December 2011

PlaceBrisbane

Decision The Tribunal affirms the decision under review.

............[Sgd].......................

Member

CATCHWORDS

SOCIAL SECURITY – Youth Allowance – Independent rate – Applicant must have been supporting himself through paid work consisting of a period or periods of employment over an 18 month period – Applicant must have earned at least 75% of the maximum Commonwealth training award payment – Payment of wages from family trust – Meaning of “paid work” – Receipt of scholarship funds not “paid work” – No entitlement to independent rate – Decision under review affirmed

Administrative Appeals Tribunal Act 1975 (Cth) s 37

Social Security Act 1991 (Cth) ss 24A, 556, 1067A, 1067G

Bonnefin and Secretary, Department of Education, Science and Training [2006] AATA 471

Pearson and Secretary, Department of Education, Employment and Workplace Relations [2010] AATA 634

REASONS FOR DECISION

7 December 2011 Mr P Wulf, Member

1.      The applicant[1], Justin Steele, seeks the review of a decision made by Centrelink dated 28 June 2010 and the subsequent Authorised Review Officer’s (ARO) decision of 24 February 2011, that he did not have sufficient earnings to qualify for an independent rate for youth allowance.[2] That decision was affirmed by the Social Security Appeals Tribunal (“SSAT”) on 2 June 2011.[3]

[1] Exhibit 1, T-Document 1/1 - 6.

[2] Exhibit 1, T-Document 24/97 - 100.

[3] Exhibit 1, T-Document 2/7 - 11.

ISSUES

2.      The issue for the Tribunal to determine is whether monies paid to Mr Steele by the family trust and under a University scholarship were “paid work” for the purposes of youth allowance.

LEGISLATIVE SCHEME

3. Section 24A of the Social Security Act 1991 (Cth) (“the Act”) allows the Minister to approve a scholarship or a class of scholarships awarded outside Australia that are not intended to be used wholly or partly to assist recipients to meet living expenses. It would appear that the scholarship Mr Steele received was not approved by the Minister.

4. Section 556 of the Act determines how a person’s youth allowance rate is worked out. Section 556 states that the Youth Allowance Rate Calculator enacted under s 1067G should be used; however in making that determination, Centrelink must have regard to s 1067A as to whether the person is independent.

5. The relevant provision of the Act is s 1067A. Firstly, s 1067A(9) refers to a person where it would be unreasonable for them to reside at home in circumstances of some personal danger (physical or sexual etc) “or similar unreasonable circumstance” or where the parents cannot provide a stable home. That is not the case here as Mr Steele comes from a normal family and has decided of his own volition to study away from home.

6. Section 1067A(10) is the relevant subsection as it relates to people who are self-supporting. It provides:

A person is independent if the person has supported himself or herself through paid work consisting of:

(a)full‑time employment of on average 30 hours per week for at least 18 months during any period of 2 years; or

(b)part‑time employment of at least 15 hours per week for at least 2 years since the person last left secondary school; or

(c)a period or periods of employment over an 18 month period since the person last left secondary school, earning the person at least the equivalent of 75% of:

(i)the maximum rate of pay under Wage Level A of a transitional Australian Pay and Classification Scale or modern award generally applicable to trainees; or

(ii)that maximum rate as varied or replaced from time to time by Fair Work Australia;

that applied at the start of the period of employment.

EVIDENCE

7.      The evidence before the Tribunal was comprised of:

(a)The “T-Documents” lodged by the respondent in accordance with s 37 of the Administrative Appeals Tribunal Act 1975 (Cth) (“AAT Act”);[4]

(b)The applicant’s submissions;[5]

(c)The respondent’s Statement of Facts and Contentions;[6]

(d)Immigration movements of the applicant supplied by the Department of Immigration and Citizenship;[7] and

(e)Academic calendar for Australian National University (“ANU”) for 2009;[8] and

(f)Oral evidence from Mr Steele.

[4] Exhibit 1, T-Document 1 – 118.

[5] Exhibit 2

[6] Exhibit 3

[7] Exhibit 4

[8] Exhibit 5

8.      Subsequent to the hearing, the parties provided to the Tribunal:

(a)A Statutory Declaration deposed to by Mr John Andrew Steele dated 13 November 2011; and

(b)The respondent’s additional submission dated 28 October 2011.

ANALYSIS

9.      Mr Steele is a full time student undertaking a Bachelor of Arts majoring in Asian Studies and a Bachelor of Laws at the ANU. During 2009, Mr Steele was employed by ANU, Espresso Garage, Capital Executive Hotel and Andy Steele and Associates as trustee for the Steele Family Trust.[9] In July 2009, he was awarded a scholarship from the Taiwan Ministry of Education for an amount of NT$75,000 (approximately AUD$3,300) to undertake studies in Taiwan in late 2009 and early 2010.

[9] Exhibit 1, T-Document 6/36 – 40.

10.     On 31 May 2010, Mt Steele submitted a claim for youth allowance. On the lodgement of his claim, Mr Steele was required to have earned 75% of the relevant National Training Wage Rate from “paid work” for an 18 month period between 1 October 2008 and 2 September 2010. This amount totalled $19,532.00. The amount of income submitted by Mr Steele at the time was $18,856.00 which fell short of the amount required.

11. There is also a presumption in the Act that a young person under 25 years of age will be a dependant and that the income of the parents of the young person then will be taken into account when assessing youth allowance.[10] However, such a person can establish they are “independent” of their parents. In this case, the applicant states that as he resides in Canberra and, as he submits, he has earned the appropriate income, he is independent from his parents.

[10] See s 1067(4)

12.     On 28 June 2010, Centrelink rejected Mr Steele’s claim for youth allowance as he had not earned enough income during the relevant period.[11] He subsequently submitted that the scholarship he had received while undertaking studies in Taiwan was also “paid work” and, therefore, his income should have been $22,156.00. If that was the case, Mr Steele would have been eligible for youth allowance at the independent rate.

[11] Exhibit 1, T-Document 10/78.

13.     On 28 October 2010, Centrelink reassessed the claim and determined that the original decision to reject his youth allowance claim was correct.[12] The matter was then reviewed again by an ARO, who rejected the claim on 24 February 2011.[13] Mr Steele subsequently provided additional information as to the scholarship he was granted and requested a further review.

[12] Exhibit 1, T-Document 18/90

[13] Exhibit 1, T-Document 24/97-100.

14.     There is agreement between the parties as to the monies the applicant earned from the ANU, the Espresso Garage and Capital Executive Apartment Hotel. However the respondent contended that one period of income from the family trust is an issue, as was the monies provided under the scholarship and these should not be included in the assessment of income as “paid work”. A discussion as to the family trust payment and scholarship are provided below.

Income from the Family Trust

15.     It is relevant to consider all the monies supposedly paid to Mr Steele from the family trust. There were three payments made to Mr Steele from the family trust for the periods 25 September 2009 to 2 October 2009; 3 October 2009 to 7 October 2009 and 17 November 2009 to 23 November 2009.[14] The evidence was that the dates on the payment notices were incorrect, but neither Mr Steele nor his parents, who appeared in person, were able to provide specific dates as to when the work was supposed to have occurred as an alternative to the dates provided.

[14] Exhibit 1, T-Document 8/42-44.

16.     The respondent accepted that the first two payment periods may be valid; however, the Tribunal has significant concerns with all three payments from the family trust. The Tribunal notes that at the times when the work was supposedly undertaken for the family trust during the first two periods, Mr Steele was also working for Capital Executive Apartments Hotel in Canberra.[15] It would appear if the family trust payments were accepted by the Tribunal that Mr Steele was working both in Brisbane for the family trust at the same time that he was working in Canberra during the first two payment periods. The Tribunal notes the locational difficulties in undertaking both positions, particularly in that the evidence from Mr John Andrew Steele was that the applicant was undertaking work sorting files in the business’ office in Holland Park in Brisbane. Clearly, unless Mr Steele was flying consistently between Brisbane and Canberra, doing both would be a physical impossibility. Therefore, the Tribunal does not include this income in the assessment.

[15] See for example, Exhibit 1, T-Document 8/42, 43, 49 and 50.

17.     The respondent contested that the final payment should not be included as it fell within a period when the applicant was out of the country. The applicant clearly left Australia on 17 November 2009 and did not return until 16 February 2010.[16] These dates are consistent with when the applicant was overseas undertaking university studies.

[16] Exhibit 4.

18.     The applicant’s parents suggested that the dates when the work was actually undertaken was from 17 October to 23 October 2009. However, an investigation of Exhibit 5 indicates that this period was when the fourth teaching period had commenced at ANU. This would also coincide with work again being undertaken by Mr Steele at the Capital Executive Apartments Hotel.[17]

[17] See for example, Exhibit 1, T-Document 8/52.

19.     At the end of the hearing the parties were asked to provide additional submissions. Unfortunately, the material provided by the applicant as to the family trust wages in contention was of little assistance as it did not state when the applicant actually worked for the family trust; all it said was that this was something that the SSAT had made a finding of fact on. This, however, is irrelevant as the applicant was required to provide evidence to this Tribunal as to the specifics of the payment. As Mr Steele has not done so, the income with respect to that payment by the family trust cannot be included in the income for the year as it is clearly for a period when the applicant was outside Australia.

20.     Accordingly, the Tribunal finds that none of the $2,520.00 supposedly paid by the family trust should be included in the assessment of “paid work”.

Scholarship – is it “paid work”?

21.     Mr Steele also contends that the money paid under the university scholarship, this being approximately $3,300.00, should be considered as income for the purposes of his claim for youth allowance.

22.     In his evidence, the applicant advised the Tribunal that:

(a)The scholarship required him to undertake a minimum 15 hours a week of study;

(b)The visa he was granted did not allow him to work while studying overseas; and

(c)He received credit for the study overseas towards his degree in Australia.

23.     The scholarship was awarded to Mr Steele on 20 July 2009 for studies to be undertaken between 1 December 2009 and 28 February 2010.[18] The eligibility and selection criteria indicate, among other things, that the scholarship would be paid in monthly instalments of NT$25,000, which is approximately AUD$1,100, over three months.[19]

[18] Exhibit 1, T-Document 26/108.

[19] Exhibit 1, T-Document 26/109-110 and T-Document 27/115-118.

24.     The Macquarie Dictionary defines a scholarship as “2. the position of a student who, because of merit, etc., is granted money or other aid to pursue his or her studies. 3. the sum of money or other aid granted to a scholar.”

25.     There is a very important word that can be drawn from this definition, this being “granted”. The word “granted”, in the opinion of the Tribunal, suggests that a scholarship is conveyed to a student but does not include any requirement to undertake what would normally be considered as “paid work” when giving the money. It is also clear that the scholarship is based on merit.

26.     The Tribunal finds that there are a number of reasons as to why the scholarship cannot be considered as “paid work”. Firstly, it is clear from his own evidence that his Taiwanese visa did not allow him to work. Therefore, on this basis alone, the scholarship cannot be considered as “paid work” because if it was, the Tribunal would find that Mr Steele undertook illegal activities against the conditions of his visa.

27.     As far as the university scholarships were concerned, Mr Steele was obliged to attend classes and there was an expectation that he was to achieve a pass mark of 80%. Mr Steele said the scholarships were offered as an incentive to entice top students to study at overseas universities. It is also the case that employment income is “paid work” where money is received where there is an employer-employee relationship. No such relationship existed or exists between a university and an undergraduate student. It does not, in my view, follow that his attendance at this university qualifies as “paid work”.

28.     Mrs Steele suggested that the facts in Bonnefin and Secretary, Department of Education, Science and Training[20] and Pearson and Secretary, Department of Education, Employment and Workplace Relations[21] should be expanded and/or distinguished because an increasing number of students were being granted scholarships. The Tribunal does not agree. Scholarships have been an aspect of university life for many years. The constituted Tribunal, based on its academic experience as a lecturer at universities and a recipient of scholarships, is aware that the true purpose of scholarships is to provide financial support to gifted students to allow them to undertake specialist studies (normally PhD and Masters) but in this case, studies overseas. Therefore, attendance at the university does not amount to “paid work”. In fact, there is no evidence to suggest that Mr Steele was required to provide the University with specific services in order to receive the scholarships.

[20] [2006] AATA 471.

[21] [2010] AATA 634.

Other Potential Payments

29.     The respondent was requested to provide submissions as to traineeships and Austudy provisions. From the submissions, the Tribunal’s view is that the applicant was not undertaking a traineeship in the normal definition, in that he was not undertaking an apprenticeship. Further, and unfortunately for the applicant, as from July 1998, Austudy was only available to students over the age of 25. At the time of the claim for youth allowance, the applicant was only 21.

30. I am satisfied that the evidence demonstrates that Mr Steele’s university scholarship was not “paid work” for the University and that the income from the family trust should not be included as income for the purposes of being “paid work”. I accept that Mr Steele has supported himself for at least 18 months through not only paid work, but also utilising his scholarship monies. However, without the inclusion of the income from the family trust and scholarship monies he does not meet the requirements of s 1067A(10) of the Act.

DETERMINATION

31.     The Tribunal affirms the decision under review.

I certify that the 31 preceding paragraphs are a true copy of the reasons for the decision herein of Mr Wulf, Member

Signed: ............[Sgd].......................................................
              Associate

Date of Hearing	25 October 2011
Date of Decision	7 December 2011
Applicant	Self-represented (by phone); Mr John Andrew and Mrs Christine Cuthbert-Steele in person (father and mother respectively)
Solicitor for the Respondent	Michelle Brazier, departmental advocate