Steger and Department of Agriculture Fisheries and Forestry
[2007] AATA 1814
•28 September 2007
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2007] AATA 1814
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2007/1082
GENERAL ADMINISTRATIVE DIVISION ) Re MURRAY STEGER Applicant
And
DEPARTMENT OF AGRICULTURE FISHERIES AND FORESTRY
Respondent
DECISION
Tribunal Mr P McDermott RFD Senior Member Date28 September 2007
PlaceBrisbane
Decision The Tribunal sets aside the decision under review and substitutes a decision that Mr Murray Steger qualifies for exceptional circumstances relief under the Family Household Support Act 1999.
[Sgd]
SENIOR MEMBER
CATCHWORDS
SOCIAL SECURITY – exceptional circumstances relief payment – drought – whether the applicant derives a significant part of his income from a farm enterprise – decision set aside
Family Household Support Act 1992 s 8A
Farrett v Secretary, Department of Family & Community Services (2002) 69 ALD 359
Secretary, Department of Family and Community Services v Wallace (2002) 69 ALD 337Re Department of Agriculture, Fisheries and Forestry [2002] AATA 1230
Re Drinkwater and Secretary, Department of Family & Community Services (1999) 58 ALD 243REASONS FOR DECISION
28 September 2007 Senior Member McDermott Introduction
1. Mr Murray Steger is in partnership with his parents in a farming property at Koorlagin. For some time the property has been in an area which has been subject to the prolonged drought. I have to decide whether Mr Steger is qualified for exceptional circumstances relief payment under the Family Household Support Act 1999 (“the Act”).
PRIOR DECISIONS
2. On 22 November 2006 Mr Steger lodged a claim for drought assistance. This benefit is now referred to in s 8A of the Act as exceptional circumstances relief payment. On 14 December 2006 his claim was rejected by Centrelink. The officer who rejected the claim considered that Mr Steger did not qualify as a farmer under the Act.
3. On 14 December 2006 the original decision of Centrelink was reviewed by authorised review officer. Whilst the authorised review officer conceded that Mr Steger was a farmer under the Act, that officer affirmed the original decision to reject the claim. The authorised review officer considered that that Mr Steger did not derive a significant part of his income from the farm enterprise.
4. On 28 February 2007 the Social Security Appeals Tribunal affirmed the decision of the authorised review officer. That Tribunal also ruled that Mr Steger did not derive a significant part of his income from the farm enterprise.
5. On 3 April 2007 Mr Steger made an application to this Tribunal to review the decision of the Social Security Appeals Tribunal.
ELIGIBITY CRITERIA
6. The entitlement to an exceptional circumstances relief payment is conferred by s 8A of the Act.
7. The Secretary has conceded that Mr Steger is a “farmer” within the meaning of s 8A(1)(b)(i)(A) of the Act. I am satisfied that this concession was properly made and I find that he is indeed a “farmer”. I give my reasons for that conclusion.
8. The Act defines a “farmer” as “a person who has a right or interest in the land used for the purposes of a farm enterprise”: see s 3. The evidence before me is that Mr Steger has such an interest. Mr Murray Steger is in partnership with his parents in the farming property at Koorlagin. He has a one third interest in that partnership. There was evidence before me that he is also a joint owner of the farming property.
9. I also find that the property is used for the purposes of a “farm enterprise” within the meaning of s 3. Mr Steger gave evidence that the property comprises some 344 acres. 80 acres of the property is devoted to crops. Eight acres is devoted to lucerne and 24 acres is devoted to barley. There are four grazing paddocks on the property. Since the deregulation of the dairying industry the farm enterprise has a herd of more than 50 breeders being Herefords and Murray Grays. Mr Steger stated that the farm enterprise derived income form the sale of “weaners”. The accounts of the farm enterprise also disclose that income is received from the sale of pigs.
10. I find that Mr Steger has contributed a significant part of his labour and capital to the farm enterprise as required by s 8A(1)(b)(i)(B) of the Act. The Secretary has conceded that Mr Steger has contributed a significant part of his labour and capital to the farm enterprise. I am satisfied that this contention has been properly made. Mr Steger has given uncontradicted evidence of the considerable labour that he contributes to the farm business as well as borrowing funds for the farm business.
11. There are other provisions in s 8A that Mr Steger clearly satisfies. He is an Australian resident (s 8A(1)(b)(i)(E)) and he is in Australia (s 8A(1)(b)(i)(C)).
12. The central issue in these proceedings that I must decide is whether Mr Steger “derives a significant part of his or her income from the farm enterprise” as required by s 8A(1)(b)(i)(C) of the Act.
13. If I find that Mr Steger derives a significant part of his income from the farm enterprise, he cannot be granted exceptional circumstances relief payment without the issue of an exceptional circumstances certificate to Mr Steger (s 8A(1)(b)(ii)). No such certificate has issued by the Secretary and it is common ground that if Mr Steger is successful in his application before me I can issue such a certificate.
CONSIDERATION
14. The evidence before me is that the locality where the farming enterprise is situated has been in drought for some time. This was the evidence that was given by Mr R Saal. Mr Saal has experience in agricultural consultancy and climate change. Mr Saal has stated that since the mid-1990’s there has been a deterioration in the distribution of rainfall to the locality. Mr Saal stated that this drought has continued well into the 21st century. Mr Saal mentioned that the last 20 years had been the “worse ten years”. The drought condition of the locality has also been confirmed by the rainfall data evidence that was placed before me [ex. A4].
15. At the hearing I stated that I accepted that the locality of the farm has been in a severe drought for some time, and that the drought has been in place before and since Mr Steger made his claim for drought assistance. At the hearing I did not consider it necessary for Mr Steger to tender photographs which showed the parched landscape of the farm.
16. The deleterious state of the locality where the farm is located has been confirmed not only by the evidence of Mr Saal but also by the official documentation before me that the farm is located in an area of the then Rosalie Shire which is a drought declared area [ex. R1].
17. I have already mentioned that in determining this application I must decide the central issue of whether Mr Steger “derives a significant part of his or her income from the farm enterprise” as required by s 8A (1)(b)(i)(C) of the Act.
18. The individual tax return of Mr Steger and the partnership tax return for the income year ending 30 June 2006 were placed in evidence before me [T4, T5, T6,T7]. It is clear that the predominant source of income of Mr Steger is from his off-farm income. In the income year ending 30 June 2006 he earned $38,197. In the income year ending 30 June 2006 the partnership derived income of $13,609. In that year the partnership made a loss.
19. It is clear that the main source of income of Mr Steger is his employment in Toowoomba. There is evidence before me that in this present drought many framers are compelled to seek employment away from the farm. I also mention that in Secretary, Department of Family and Community Services v Wallace (2002) 69 ALD 337 at 342 Dowsell J warned against the undesirability of introducing the notion of “principal source of income” in administering the Act
20. In determining whether Mr Steger “derives a significant part of his or her income from the farm enterprise” under s 8A (1)(b)(i)(C) of the Act, I consider that I am not required to adopt a mechanical approach of comparing the monetary amounts that are received by Mr Steger from the farming enterprise and his employment in Toowoomba. I believe that this is in fact recognised by the policy document that is used by Centrelink in administering the Act.
21. The policy document states: “Gross income figures should be used. In some instances net farm income is nil (or a loss) and to use this figure when determining eligibility would disadvantage genuine farmers in this situation”: see Exceptional Circumstances Relief Payment [ex. R2]. The policy document recognises that a claimant who makes a loss can nevertheless receive relief under the Act. It is entirely appropriate that gross income figures of a farming enterprise be used in administering this beneficial legislation.
22. In discussing the income derived by the partnership in the income year ended 30 June 2006, the Social Security Appeals Tribunal referred to as Mr Steger’s “1/3 share” in the partnership income of $13,609. I do not consider that the Tribunal was adverting to an “interest” in the income of the partnership as the partnership did not make a profit. However, it is appropriate to notionally attribute a share of the partnership income to Mr Steger to give effect to the policy of the Act.
23. The preamble of the Act states that it relates to “the provision of relief payments to farmers who are in exceptional circumstances”. In Farrett v Secretary, Department of Family & Community Services (2002) 69 ALD 359, Madgwick J remarked (at 371): “The legislation in question is beneficially intended for needy farmers and, in cases of doubt, should be liberally interpreted”.
24. I consider that Mr Steger’s notional “share” in the partnership income of $13,609 is “significant” within the meaning of s 8A of the Act. There are a range of meanings of the adjective “significant”. The Compact Oxford English Dictionary (2nd rev ed., 2003) has the following meanings: “1. extensive or important enough to warrant attention. 2. having an unstated meaning; indicative of something” (p. 1069).
25. Having regard to the remarks of Madgwick J that the Act should be “liberally interpreted”, I am prepared to rule that one third of the gross income of the partnership (an amount in excess of $4500) is “significant” within the meaning of s 8A of the Act. In terms of the definition of “significant” it is certainly “important enough to warrant attention” or “indicative of something”. If I am in error in this conclusion, I consider that my decision in determining this application is fortified by a purposive interpretation of the Act.
26. In Farrett v Secretary, Department of Family & Community Services (2002) 69 ALD 359 Madgwick J considered the qualifying requirement that a person “derives a significant part of his or her income from the farm enterprise”. That qualifying requirement was then in paragraph (c) of the definition of “farmer” in s 3(2) of the Act. Since that decision the Act has been amended. The requirement that a farmer “derives a significant part of his or her income from the farm enterprise” now appear in s 8A (1)(b)(i)(C) of the Act.
27. In Farrett, at 373-4 [50], Madgwick J placed a purposive interpretation on the provision by remarking:
“As I analyse the matter, therefore, it can be said “with certainty” that parliament would have provided that para (c) of the definition of “farmer” should have had added to it the italicised words which follow:
(c) derives or attempts to derive a significant part of his or her income from the farm enterprise but is prevented from so doing by the vicissitudes of ill-health, seasonal factors or lack of means to continue farming.”
28. In Farrett, Magwick J, at 374 [52], also remarked: “Parliament may, had its members adverted to the problem, have wished to so more than I have suggested, but it seems quite clear that parliament would have expressed a wish to have done at least that much”.
29. I might add that Madgwick derived support for his purposive interpretation by having regard to the second reading speech of the responsible Minister (Hon J Anderson MP) who remarked that the Act “provides income support for those farm families who find themselves suffering exceptional circumstances which are beyond their capacity to manage” :see (2002) 69 ALD 359 at 366 [19].
30. The construction of the qualifying requirement of the Act is binding upon me. The fact that this qualifying requirement has been “transplanted” into s 8A of the Act is not, in my view, a relevant distinguishing factor which changes the construction which was placed on the qualifying requirement by Madgwick J.
31. The amendments to the Act which were made after the decision in Farrett v Secretary, Department of Family & Community Services (2002) 69 ALD 359 was handed down, do not, in my opinion, detract from the construction that was placed on the qualifying provision by His Honour. I also add that this beneficial construction ensures that a claimant for relief who genuinely embarks on a farming enterprise during a drought will qualify for relief. I consider that Mr Steger is indeed in such a position.
32. What is important is that a claimant for exceptional circumstances relief payment must have a genuine intention to gain income from a farming enterprise. This was emphasised by Senior Member R P Handley in Re Drinkwater and Secretary, Department of Family & Community Services (1999) 58 ALD 243 at 249 where he remarked (in considering the then restart scheme): “In the tribunal’s view, in the light of the purpose or object of the restart scheme, it is the person’s intention as to their principal source of income which is crucial, evidenced by their labour contribution or effort in the farm business”. In my view these remarks are equally applicable to the scheme for exceptional circumstances relief payment.
33. In my opinion what is crucial is that a claimant must intend that the farming enterprise be the principal source of income of the claimant. This is in fact the case of Mr Steger who, in his evidence, confirmed that he ultimately intends to work the farm if conditions improve. Mr Steger also stated that if it was necessary to supplement his farming income, he would get a part-time job in a locality that was closer to the farm than Toowoomba. I accept the testimony of Mr Steger.
34. I make the observation that Mr Steger has both emotional and financial ties to the property which has been farmed by his family for some time.
35. I find that Mr Steger “derives a significant part of his income from the farm enterprise” both within the meaning and spirit of s 8A (1)(b)(i)(C) of the Act. Having regard to the construction placed on the Act by Madgwick J and the evidence before me, I consider that Mr Steger has attempted to derive a significant part of his income from the farm enterprise but has been prevented from so doing by “seasonal factors” being the current drought.
36. For the sake of completeness it is necessary for me to turn to whether I should issue an exceptional circumstances certificate to Mr Steger under s 8A (1)(b)(ii) of the Act. It was accepted at the hearing that I had jurisdiction to issue an exceptional circumstances certificate to Mr Steger if he was successful in his application.
37. At the hearing I mentioned that a requirement of s 8A (2) (b) of the Act is that an exceptional circumstances certificate is issued for a “specified period”. Having regard to this statutory requirement I will issue an exceptional circumstances certificate for the period which commences on 22 November 2006, which is the date of the claim of Mr Steger, and which concludes on 28 August 2007, which is the date of the hearing. The certificate will then operate for that period specified in it: see s 8A (3). At the hearing I foreshadowed the issue of such a certificate if Mr Steger was successful in his application and no objection was made to this course of action.
38. I do not think that it would be appropriate for the exceptional circumstances certificate to issue past the date of the hearing as I would have no evidence before me of events which were subsequent to the hearing. The issue of a certificate to operate past the date of the hearing can be attended to by the delegate of the Secretary.
39. I am mindful of the contention of the Secretary that protocols requiring that before an exceptional circumstances issue, an applicant must have income predominantly derived from primary production. While such policy documents provide for the equal treatment of applicants, in this case the application of the protocols would detract from the purposive interpretation of the Act as enunciated by Madgwick J in Farrett v Secretary, Department of Family & Community Services (2002) 69 ALD 359.
40. I wish to acknowledge the assistance provided to the Tribunal by the advocate for the Secretary who properly made concessions to enable this application to be determined on the central issue.
DECISION
41. I set aside the decision under review and substitute a decision that Mr Murray Steger qualifies for exceptional circumstances relief under the Family Household Support Act 1999. I issue Mr Murray Steger with an exceptional circumstances certificate under s 8A(2) (b) of the Family Household Support Act 1999 for the period which commences on 22 November 2006 and which concludes on 28 August 2007.
I certify that the 41 preceding paragraphs are a true copy of the reasons for the decision herein of Mr P McDermott, Senior Member
Signed: .....................................................................................
Personal AssistantDate/s of Hearing 28 August 2007
Date of Decision 28 September 2007
Submissions received by 17 September 2007
Applicant Mr Steger, unrepresented
Respondent Mr T Ffrench, departmental advocate
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