Stemm and Secretary, Department of Social Services (Social services second review) - [2017] AATA 727

Stemm and Secretary, Department of Social Services (Social services second review) [2017] AATA 727 (24 May 2017)
Division:GENERAL DIVISION
File Number(s): 2016/2113
Re:Anthony Stemm
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

DECISION
Tribunal:Mr S. Webb, Member
Date:24 May 2017
Place:Canberra

The decision under review is set aside and in substitution thereof the Tribunal decides that:
1.an Income Maintenance Period (IMP) commencing on 26 May 2015 applies in respect of Mr Stemm’s Newstart Allowance claim; and
2.it is appropriate to exercise discretion to foreshorten the period, such that the IMP does not apply from 28 October 2015.

The matter is remitted to the Secretary to determine Mr Stemm's entitlements, if any.
.......................[sgd].................................................
Mr S. Webb, Member
SOCIAL SECURITY – Newstart Allowance – termination payment – ordinary income - income maintenance period – request for reduction of period on financial hardship grounds – discretion to reduce period – discretion preconditioned by ‘severe financial hardship’ because of ‘unavoidable or reasonable expenditure’ incurred during the income maintenance period - determinants of ‘severe financial hardship’ – comparison of liquid assets to ‘maximum payment rate’ of Allowance - time at which comparison is to be made and financial hardship assessed on review – meaning of unavoidable or reasonable expenditure – crystallization of liability to pay amounts resulting from prior action – tax paid on termination payment unavoidable expenditure – fines resulting from offending conduct not unavoidable or reasonable expenses - assessment of reasonable costs of living during income maintenance period – compulsive and reckless over-spending attributable to mental illness accepted as unavoidable in the circumstances – severe financial hardship because of unavoidable or reasonable expenses – discretion enlivened – appropriate to shorten income maintenance period – decision set aside and remitted
Administrative Appeals Tribunal Act 1975, s 43(1)
Social Security Act 1991, ss 14A, 19C, 593, 608, 1068, 1068-A1, 1068-G1, 1068-G7AH, 1068-G7AKA, 1068-G7AM, 1068-G7AP, 1068-G7AQ, 1072
Social Security (Administration) Act 1999, ss 126, 135, 142, 142(4)(a), 147(5), 147(6), 179, 179(2)(c), 180
Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577
Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40
Re Kelsey and Secretary, Department of Social Services [2014] AATA 596
Secretary, Department of Education, Employment and Workplace Relations v Ergin [2010] FCA 1438
Shi V Migration Agents Registration Authority [2008] HCA 31
A guide to Australian Government payments - 20 March 2015 to 31 December 2015
REASONS FOR DECISION
Mr S. Webb, Member
24 May 2017

2015 was not a good year for Anthony Stemm. His marriage broke down, his long-term employment came to an end and his mental health deteriorated. He was paid a lump sum on termination of his employment. Within several months, he was impecunious and in a parlous position. Unemployed and without any source of income, he claimed Newstart Allowance. His claim was accepted, but Newstart Allowance was not payable as an ‘income maintenance period’ (IMP) was found to apply. He sought relief, but a delegate of the Secretary decided that the IMP could not be shortened in the particular circumstances.
Mr Stemm pressed his right to review by an Authorised Review Officer (ARO) and, subsequently, by the Social Security and Child Support Division of this Tribunal (the Tribunal of first instance). Different decisions have been made, but Mr Stemm has not obtained relief. Now he seeks further review.
In the course of these administrative and review processes, much time has passed and Mr Stemm’s circumstances have changed. He benefitted from psychiatric treatment. He claimed and was paid Special Benefit for a very short period. He obtained employment. He has made a new life in a new place.
But he is aggrieved, and he remains unhappy about his inability to obtain income support when he was most in need. He is not satisfied that his case has been properly addressed. He says that numerous errors have been made – the legislation has not properly been applied to the particular circumstances of his case, and a reasonable, fair, just result has been denied.
At hearing, I explained to Mr Stemm that even if the IMP is dis-applied from 28 October 2015, as he contends it should be, it does not follow that he will be eligible for back payment of Newstart Allowance as the payability criteria for Newstart Allowance would need to be satisfied at the particular time, and doing so may not, presently, be possible. This notwithstanding, Mr Stemm asserts that his case is not without utility – he is entitled to a proper assessment of the merits of his case, on the basis of a proper application of the legislation with regard to all relevant materials and circumstances.
During the hearing, the Secretary’s legal representative sought leave to obtain instructions on several issues relating to construction of the legislation, procedural fairness and new materials Mr Stemm provided. Mr Stemm sought leave to provide further and better particulars of spending he attributes to psychiatric illness. In order to provide fairness to both parties, and to properly address all of the relevant issues raised, I set a timetable for both parties to file additional materials after the hearing, with liberty to apply to be heard.
I have now received those documents and submissions, and I have heard the parties on related issues. Mr Stemm gave further evidence in respect of his expenses during the IMP.
Brief facts
Mr Stemm was previously employed by GM Holden Limited (Holden). In this employment he was provided with a motor vehicle under beneficial lease terms.
In December 2014, he separated from his former wife.[1] There are two children of the marriage. His mental health was affected – previously, from 2005, he had been treated for Bipolar Affective Disorder, Obsessive Compulsive Disorder, chronic anxiety and alcoholism.[2]
[1] T6 folio 81; T15 folios 145-146.
[2] Exhibit A4.
Early in 2015, Mr Stemm agreed to take a redundancy package from Holden. At that time, his intention was to apply the redundancy lump sum to pay out a debt on a caravan, to purchase a franchise business, and to purchase a motor vehicle for the purposes of that business.
On 7 May 2015, he contracted to purchase a motor vehicle for a total amount of $22,332.[3]
[3] Exhibit A3.
Soon thereafter, an incident occurred and his marriage broke down irretrievably. He was charged with a driving offence and a fine of $1,160 was imposed. He was unable to return to the matrimonial home and it was necessary for him to purchase clothes and furnishings.
On 22 May 2015, his employment was terminated and he was paid a lump sum – a gross amount of $135,970.70 from which $14,597 was deducted in tax.
Examination of Mr Stemm’s bank records reveals that on 27 May 2015, he withdrew $92,352.[4] I accept that this covered payment of $70,000 to his then wife and $22,332 for the purchase of the motor vehicle. He paid $723 to Optus in respect of an overdue telephone account that had caused his telephone service to be cut off. He also made periodic repayments on cash advance loans previously obtained from Cash Converters and Nimble.
[4] Exhibit R1.
On 29 May 2015, three days are receipt of his termination payment, he had $21,605 remaining. By 24 July 2015, he had $4,742.22 remaining but this fell to $383.77 on 11 August 2015.[5]
[5] Ibid.
On or about 17 August 2015, consent orders made by the Family Court of Australia accounted for payment of $70,000 by Mr Stemm to his former wife, comprising $60,000 in cash and $10,000 to be applied to the school fees of the children.
On 21 August 2015, he was paid a tax refund of $1,396.33.[6]
[6] T8 folio 94.
In September 2015, Mr Stemm traded the car he purchased in May 2015 for a cheaper one. This transaction resulted in payment of $4,408 into his bank account on 4 September 2015.[7] On 14 September 2015, he received payment of an insurance claim in the amount of $1,410.[8]
[7] Ibid folio 94.
[8] Ibid folio 93.
On 8 October 2015, Mr Stemm had $1,001.50 remaining in his bank account.[9]
[9] Exhibit R1.
On 9 October 2015, he claimed Newstart Allowance.[10]
[10] T15 folio 144.
On 23 October 2015, a delegate of the Secretary decided under s 593 of the Social Security Act 1991 (the SS Act) to grant Newstart Allowance but notified Mr Stemm that –
“A decision has been made that you will be paid Newstart Allowance from 2 June 2017.
We cannot pay you before 2 June 2017 because:
an Income Maintenance Period has been applied because of money you received for redundancy payments and/or leave entitlements such as annual leave, sick leave or long service leave. Your Income Maintenance Period will start on 18 July and will end on 1 June 2017.”
On 28 October 2015, Mr Stemm sought relief and asked for the IMP to be waived.[11]
[11] T15 folio 143.
On 9 November 2015, a Centrelink officer affirmed the IMP determination and noted that “funds received from redundancy from GM Holden have been used”.[12]
[12] T15 folio 142.
On 18 December 2015, an ARO affirmed the IMP determination and “concluded that the income maintenance period cannot be waived at this time”.[13]
[13] T13 folios 125 and 127.
On 7 April 2016, the Tribunal of first instance set aside the IMP determination and decided that the IMP applied from 27 May 2015 to 1 March 2017 and no part of this period could be waived in the circumstances.[14]
[14] T2 folios 9 and 13.
Mr Stemm applied for further review.
On 6 June 2016, Mr Stemm claimed and was subsequently paid Special Benefit for a short period, prior to him obtaining employment.
Issues
The key issue to be decided is whether Mr Stemm’s request for relief from the IMP that resulted from his termination payment can be granted. In order to decide this issue it is necessary to determine –
(a)the start and end dates of the IMP;
(b)whether discretion to shorten the IMP is enlivened by –
(i)‘severe financial hardship’ because of
(ii)‘unavoidable or reasonable expenditure’ incurred during the IMP; and if so
(c)whether it is appropriate to exercise discretion to shorten the IMP; and if so
(d)the date from which the IMP does not apply.
Start and end dates of the IMP
There is no dispute that Mr Stemm was paid a lump sum on cessation of his previous employment by Holden.
Having regard to the Employment Separation Certificate[15] and the Pay Advice dated 26 May 2015[16], I am satisfied that the lump sum payment is comprised of the following amounts –
[15] T7 folio 87.
[16] Exhibit A1.
Redundancy (Term D) (tax free portion) -  $90,400.00
Excluded LB ETP <cap:
Eligible termination payment -           $31,120.97
In lieu of notice -   $5,928.79
Gratuity - $2,500.00
Sick leave - $2,260.98
$41,810.74
Term A AL - $2,004.80
Leave loading LSA -   $360.96
Annual leave and loading  $2,365.76
Term A LSL or Long service leave -            $1,442.20
Rostered day off -  $251.22
Rostered day off recovery term -       -$999.26
Net rostered day off adjustment -   -$748.04
Income protection rebate -                 $700.00
Net income protection adjustment -   $700.00
Total gross lump sum payment amount -   $135,970.66
The amount of tax deducted from the total gross lump sum payment amount is $14,597.00.[17] The net amount paid to Mr Stemm is $121,020.43. This amount was deposited into his Westpac bank account on 26 May 2015.[18]
[17] Exhibit A1.
[18] T8 folio 103.
There is no dispute that the lump sum payment is within the meaning of ‘termination payment’ as defined in s 1068-G7AQ of the SS Act. This is plainly correct.
To the extent that there is uncertainty about whether ‘termination payment’ refers to the gross amount or the net amount actually paid to Mr Stemm, there is little room for doubt that it is the gross amount that must be applied.
Under s 1068-G7AH of the SS Act it can be seen that the ‘termination payment’ is treated as ‘ordinary income’ during the period to which the payment relates. The conception of ‘ordinary income’ may relevantly be understood by reference to s 1072, which provides that –
A reference in this Act to a person’s ordinary income for a period is a reference to the person’s gross ordinary income from all sources for the period calculated without any reduction, other than a reduction under Division 1A.
Previous decisions of this Tribunal have adopted a consistent interpretation of ‘ordinary income’ as the gross income of the person during a period.[19]
[19] See Re Kelsey and Secretary, Department of Social Services [2014] AATA 596, for example.
For the purposes of s 1068-G7QA of the SS Act, I am satisfied that the ‘termination payment’ amount is $135,970.66 and it is this gross amount that must be applied as ordinary income over the period to which the lump sum payment relates when determining the duration of the resulting IMP.
The period to which the termination payment relates can be determined by reference to the Employment Separation Certificate. As can be seen, with the exception of the gratuity amount of $2,500, the period covered by the specified amounts are listed, as follows –
Redundancy -  425 days
In lieu of notice -   20 days
Sick leave - 9 days
Annual leave -  8 days
Long service leave -               5 days
Under s 1068-G7AP, if Mr Stemm’s lump sum payment is comprised of different kinds of termination payments, the periods to which each payment relates must be added together when working out the IMP.
Thus, a total of 467 days would apply in respect of these items. But this does not include any provision in respect of other elements of the termination payment, namely, the gratuity of $2,500, the rostered day off adjustment of -$748.04 and the income protection rebate adjustment of $700.00. Details set out in the Pay Advice in Exhibit A1 in respect of the rostered day off adjustment reveal that Mr Stemm worked 38 hours per week, or 5 days each week working 7.6 hours per day. It can be seen that Mr Stemm’s hourly rate of pay was $33.0553 per hour. This equates to a gross amount of $251.22 per day or $1,256.10 per week, consistent with the amount specified in the Employment Separation Certificate.
Applying these amounts, the following allocation of days can be derived in respect of –
(a)Gratuity - $2,500.00:  9.96 days
(b)Rostered day off - $251.20:               1 day
(c)RDO Recovery Term -   -3.97 days
It follows that 7 days must be added to the 467 days notified in the Employment Separation Certificate when calculating the period to which the lump sum payment relates. As s 1068-G7AQ(b) applies, it follows that the ‘period to which the payment relates’ for the purposes of s 1068-G7AH is the period of 474 days, or 94 weeks and 4 days.
Under s 1068-G7AKA, as s 1068-G7AH applies, the start day of Mr Stemm’s IMP is the day on which he received the termination payment, 26 May 2015, and the IMP ends 474 days later on 18 March 2017.
Discretion
Section 1068-G7AM confers discretion on the Secretary to shorten an IMP in certain circumstances –
If the Secretary is satisfied that a person is in severe financial hardship because the person has incurred unavoidable or reasonable expenditure while an income maintenance period applies to the person, the Secretary may determine that the whole, or any part, of the period does not apply to the person.
Note 1:       For in severe financial hardship see subsection 19C(2) (person who is not a member of a couple) and 19C(3) (person who is a member of a couple).
Note 2:       For unavoidable or reasonable expenditure see subsection 19C(4).
Note 3:       If an income maintenance period applies to a person, then, during that period:
(a)     the allowance claimed may not be payable to the person; or
(b)     the amount of the allowance payable to the person may be reduced.
As can be seen, for the discretion to be enlivened, it must be established that Mr Stemm was in ‘severe financial hardship’ because he incurred ‘unavoidable or reasonable expenditure’ while the IMP applied. Those are matters to which I will return.
First, however, it is necessary to consider whether the Tribunal is confined to assess Mr Stemm’s circumstances on the day he sought relief, 28 October 2015, or on some other later date, or presently. It is also necessary to consider whether a decision to dis-apply part of the IMP in retrospect has any utility.
When is the assessment to be made?
The discretion to grant relief from an IMP is not expressly referable to a point in time, albeit framed by the period worked out under Module G of Benefit Rate Calculator B in Part 3.6.
The assessment of financial hardship in the particular circumstances of a case is directed to the time when the request for relief is made – the discretion turns on a finding that the person ‘is’ in severe financial hardship. As Tracey J said in Secretary, Department of Education, Employment and Workplace Relations v Ergin (Ergin’s case)[20] at [25] –
An applicant must be in severe financial hardship at the time at which the Secretary makes her decision under s 1068-G7AM.
[20] [2010] FCA 1438.
Nonetheless, a request for relief may be made sometime after the commencement of an income maintenance period, or after the onset of financial hardship, or there might be some delay in determining whether a request for relief can be granted. There is no barrier in the legislation, or as a matter of general principle, to the Secretary considering relevant circumstances at any time in respect of an income maintenance period. The discretion conferred permits the whole or any part of an income maintenance period to be dis-applied if the person is in severe financial hardship because of unavoidable or reasonable expenditure incurred during the IMP.
Where the Secretary has made a decision under s 1068-G7AM, granting or refusing relief, a question arises on review whether the assessment of hardship is confined to the date when relief was requested, or to the date of the Secretary’s determination, or whether the it is properly directed to some other date, or to the person’s present circumstances. To answer this question it is necessary to carefully consider the terms of the discretion and the purposes of the legislation.
The subject matter, scope and purpose of the legislation provides for an employment termination payment to be treated as ordinary income during the period to which it relates. The object of so doing is not mysterious - it is clearly intended to prevent a person from obtaining income support under the SS Act during a period in which the person has received income in the form of a ‘termination payment’.[21] A similar policy objective can be seen in the compensation recovery provisions set out in Part 3.14 of the SS Act.
[21] Ibid, at [21].
The discretion conferred by s 1068-G7AM allows for relief from the effect of this policy in certain limited cases.
A decision under this section involves two key elements. Firstly, an assessment whether the person’s circumstances are sufficient to enliven the discretion. And secondly, having regard to those circumstances, whether it is appropriate to exercise the discretion and, if so, to what extent. Each of these elements requires consideration of the person’s relevant circumstances during the IMP. While considerations of this kind are not directed to a fixed point in time by the legislation, as Tracey J made clear in Ergin’s case, the preconditioning criteria must be satisfied at the time a request for relief is made and determined by the Secretary.
On review, however, the assessment is not tied to evidence that was before the original decision-maker – the Tribunal must make the correct or preferable decision on the material placed before it.[22]
[22] Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577 at 589.

That being so, I see no reason why the general principle to which Mason J referred in Minister for Aboriginal Affairs v Peko-Wallsend Ltd[23] at [20] should not apply -
It would be a strange result indeed to hold that the Minister is entitled to ignore material of which he has actual or constructive knowledge and which may have a direct bearing on the justice of making the land grant, and to proceed instead on the basis of material that may be incomplete, inaccurate or misleading. In one sense this conclusion may be seen as an application of the general principle that an administrative decision-maker is required to make his decision on the basis of material available to him at the time the decision is made. But that principle is itself a reflection of the fact that there may be found in the subject matter, scope and purpose of nearly every statute conferring power to make an administrative decision an implication that the decision is to be made on the basis of the most current material available to the decision-maker.
[23] [1986] HCA 40.
Thus, when assessing the materials placed before it, the Tribunal should have regard to changes in relevant circumstances of the person. For example, where the original decision-maker finds the person to be in severe financial hardship but denies the person relief under s 1068-G7AM because the hardship was not because of unavoidable or reasonable expenditures incurred during the IMP to that date, the discretion to provide relief may be enlivened at a later date during the IMP should the person’s circumstances deteriorate. Alternatively, the person’s circumstances might change for the better and the hardship might fall away – the person might obtain income from another source for example. It would be rather odd for changes of this kind to be excluded from consideration on review. To my mind, where the person’s circumstances change after the initial request for relief was made and determined by the Secretary, those changed circumstances may properly be taken into account by the Tribunal when deciding a request for discretionary relief on review. It would be inconsistent with the purposes of the legislation for circumstantial changes of these kinds to be ignored simply because the change occurred after an initial determination had been made.
Furthermore, as a matter of legal principle, subject only to an assessment of the nature and incidents of the decision under review in the context of the applicable legislation, there is no bar, generally, to the Tribunal having regard to any change in relevant circumstances after the reviewable decision was made. In Shi V Migration Agents Registration Authority,[24] Kirby J said –
“44. Sometimes, it may be inherent in the nature of a particular decision that review of that decision is confined to identified past events. If, for example, under federal legislation, a pension is payable at fortnightly rests, by reference to particular qualifications that may themselves alter over time, a "review" of an administrative "decision" to grant or refuse such a pension, by reference to statutory qualifications, may necessarily be limited to the facts at the particular time of the decision.
45. That issue was raised in Jebb v Repatriation Commission, another decision of Davies J, but this time in the Federal Court of Australia, deciding an "appeal" from a decision of the Tribunal on a suggested error of law. In that case, Davies J found that the Tribunal had fallen into error in considering the applicant's entitlement to certain benefits exclusively by reference to the state of the evidence at a particular time in the past. In the relevant statutory context, there was no warrant for doing so. His Honour said:
"[T]he general approach of the [T]ribunal has been to regard the administrative decision making process as a continuum and to look upon the [T]ribunal's function as a part of that continuum so that, within the limits of a reconsideration of the decision under review, the [T]ribunal considers the applicant's entitlement from the date of application, or other proper commencing date, to the date of the [T]ribunal's decision. That function was enunciated in Re Tiknaz and Director-General of Social Services. The approach there taken has since been generally adopted. In the repatriation jurisdiction, it was applied after Banovich in Re Easton and Repatriation Commission, where ... the [T]ribunal ... said:
'The ambit of a review by the [Tribunal] is necessarily influenced by the ambit of the steps and proceedings that have taken place prior to its review, for the function of the [Tribunal] is to review a decision. But provided that the matter is within the ambit of its jurisdiction as a review authority, the general practice of the [T]ribunal is to take account of events that have occurred up to the date of the decision. Indeed, s 43(1) of the [AAT Act so implies].'"
46. There is thus a general approach deriving in particular from the statutory function of substituting one administrative decision for another. Nevertheless, the particular nature of the "decision" in question may sometimes, exceptionally, confine the Tribunal's attention to the state of the evidence as at a particular time.”
[Citations removed]
[24] [2008] HCA 31.
A decision to grant relief under s 1068-G7AM turns on three findings – the person is in severe financial hardship; the hardship is because the person has incurred unavoidable or reasonable expenditure during the IMP; and, should those tests be satisfied, it is appropriate to exercise the discretion in the particular circumstances. In effect, it is a decision to dis-apply all or part of an IMP that has been imposed – the relief provided allows access to income support payments during the IMP from the date of the decision or, where the decision specifies a date, from that date (commonly, the date on which the request for relief was made). Before any payment could be made, however, it would be necessary to assess the person’s eligibility for payment of the particular allowance or benefit sought – in this case Newstart Allowance.
When viewed in this frame, should the person’s case for exercise of the discretion be made out on review, subject only to all applicable eligibility criteria being satisfied, the person is entitled to recover from the date on which relief from the IMP was requested and for such period as the person exercising the discretion considers to be appropriate in the particular circumstances.
In Mr Stemm’s case, his circumstances have changed for the better from those he faced on 28 October 2015. On 6 June 2016, he was granted Special Benefit. He found employment. And now the IMP has come to an end.
These positive changes notwithstanding, as will appear, I am satisfied that there are grounds to dis-apply part of the IMP. Whether any amount of Newstart Allowance might be payable to Mr Stemm is a matter for further consideration under the applicable legislation.
In view of this, there is a question whether a favourable decision to grant relief in retrospect has any utility.
Utility
Much time has elapsed since Mr Stemm’s request for relief was made and first determined. Mr Stemm’s present circumstances are substantially different than those he faced in October 2015 and over subsequent months. He is aggrieved that relief was not provided to him when he needed it most, and he argues that the decision refusing his request for relief from the IMP is wrong.
No submission has been made by the Secretary that Mr Stemm’s application is vexatious or so lacking in utility that it should be dismissed. To my mind, it is not.
At this point it is important to note that the provision of discretionary relief to shorten an IMP under s 1068-G7AM in retrospect does not mean, and it cannot be assumed, that Newstart Allowance will be payable in respect of all or part of an IMP that is no longer applicable. For Newstart Allowance to be payable, Mr Stemm would necessarily have to satisfy the qualifying criteria under s 593 of the SS Act for each fortnight the IMP is not applied, and the rate of the Allowance would necessarily fall for determination under the applicable rate calculator in s 1068.
Where an assessment of this kind has not been made or considered by an ARO or at Internal Review, there is a question of jurisdiction and power for the Tribunal.
Jurisdiction
The Tribunal’s jurisdiction for ‘AAT second review’ of an ‘AAT first review’ decision is conferred by s 179 of the Social Security (Administration) Act 1999 (the Administration Act). Under s 179(2)(c), where, as in Mr Stemm’s case, the AAT first review sets a decision aside and substitutes a new decision, it is the new decision that is subject to the AAT second review.
The Tribunal’s jurisdiction for ‘AAT first review’ of a decision of the Secretary under s 126 of the Administration Act or of an ARO under s 135 of that Act is conferred by s 142. Under s 142(4)(a), where an ARO affirmed a decision, it is that decision as affirmed that is subject to AAT first review.
The effect of these provisions can be understood by reference to the procedural history. The original IMP decision was made on 23 October 2015. That decision determined the start and end dates of an IMP and purported to grant Newstart Allowance from 2 June 2017. On 28 October 2015, a delegate of the Secretary decided to refuse Mr Stemm’s request for relief from the IMP. The matter was referred to an ARO. The ARO reviewed and affirmed the decision made on 23 October 2015 and decided “that the income maintenance period cannot be waived at this time”.[25] On 7 April 2016, the ‘AAT first review’ set aside the ARO decision and substituted a new decision that an IMP applied to Mr Stemm’s Newstart Allowance from 27 May 2015 to 1 March 2017 and no part of the IMP could be waived as the discretion to do so was not enlivened.[26]
[25] T10 folio 119.
[26] T2 folio 13.
As can be seen, the original decision and the decision to refuse waiver of any part of Mr Stemm’s IMP were before the ARO and the AAT first review.
The original decision set out the following (rather surprising) payment information –
Regular Payment from payment date 16/06/2017
Newstart Allowance  $523.40
Plus Energy Supplement  + $8.80
Plus Rent Assistance  + $129.40
Total  __$661.60
This is perplexing. It is not possible to accurately determine the rate of Newstart Allowance that would be payable to Mr Stemm from 2 June 2017, then almost 20 months in the future, without knowing the applicable rates and properly assessing Mr Stemm’s circumstances at that time. Furthermore, the decision assumes no change to the applicable rates of payment specified (which are subject to quarterly adjustment), and it assumes no change in Mr Stemm’s circumstances.
No explanation of these highly improbable assumptions is given even though, as subsequent events amply demonstrate, the likelihood of them being correct was extremely low. Perhaps the best that can be said is that the decision-maker purported to exercise power to determine the rate of Newstart Allowance that would be payable to Mr Stemm at the end of the IMP, should (then) present circumstances continue.
The same power was open to the ARO on review. In other words, should the ARO have decided to waive all or part of the IMP, the officer could then have proceeded on to determine whether Newstart Allowance was then payable and, if so, the rate of the payment.
If that is correct, those powers would have been available to the Tribunal on ‘AAT first review’. Under s 43(1) of the Administrative Appeals Tribunal Act 1975 (the AAT Act) as modified by s 147(5) and (6) of the Administration Act, for the purpose of reviewing a decision, the Tribunal may exercise powers available to the person who made the decision under review. In Mr Stemm’s case, this section applies without modification under s 180 of the Administration Act in respect of the ‘AAT second review’.[27]
[27] It is noted that s 43(2), (2A) and (6) of the AAT Act are modified by s 142 (7) and (8) of the Administration Act.
From this it follows that, in the particular circumstances of this case, the Tribunal has jurisdiction and power to address Mr Stemm’s entitlement to payment of Newstart Allowance from the date relief from the IMP is granted. And his application is not without utility.
Severe financial hardship
Where, as in Mr Stemm’s case, a claim for Newstart Allowance has been made and an IMP applied, the term ‘severe financial hardship’ is given meaning by s 19C(2) of the SS Act –
A person who is not a member of a couple and who makes a claim for …:
(a) newstart allowance;
(b) …;
is in severe financial hardship if the value of the person’s liquid assets (within the meaning of subsection 14A(1)) is less than the fortnightly amount at the maximum payment rate of the payment, benefit, pension or allowance that would be payable to the person:
(f) if the person’s claim were granted; and
(g) in the case of a person to whom an income maintenance period applies, if that period did not apply.
Note: For maximum payment rate see subsection (8).
Liquid assets within the meaning of s 14A(1) means ‘the person’s cash and readily realisable assets’.
The ‘maximum payment rate’ in respect of Newstart Allowance is set out in s 19C(8)(b) –
For the purposes of subsections (2) and (3), maximum payment rate:
(aa) …; or
(b) in relation to newstart allowance and, if the person has turned 22, in relation to special benefit—means the rate worked out at Step 4 of the Method statement in Module A of the applicable rate calculator; or
(c) …
A person’s ‘maximum payment rate’ is a fortnightly amount calculated under Step 4 of Module A in the Benefit Rate Calculator B set out in s 1068-A1. It provides for applicable amounts of pension supplement, energy supplement, pharmaceutical allowance and rent allowance to be added to the person’s ‘maximum basic rate’.
The applicable rates are published quarterly in Centrelink’s “A guide to Australian Government payments” (Payment Guide). Payment Guides covering the period from 20 March 2015 to 31 December 2015 are in Exhibit R4.[28] As Mr Stemm was not qualified for pension supplement and it is not presently established that he was eligible for payment of pharmaceutical allowance, his ‘maximum payment rate’ is –
[28] Payment Guides for subsequent periods are published on the Department of Human Services website -
(d)from 26 May 2015 to 19 September 2015:
maximum basic rate -            $519.20
rent allowance -  $128.40
energy supplement -              $8.80
maximum payment rate -       $656.40
(e)from 20 September 2015 to 19 March 2016:
maximum basic rate -            $523.40
rent allowance -  $129.40
energy supplement -              $14.10
maximum payment rate -       $666.90
(f)from 20 March 2016 to 5 June 2016:
maximum basic rate -            $527.60
rent allowance -  $130.40
energy supplement -              $14.10
maximum payment rate -       $672.10
Mr Stemm’s liquid assets can be assessed on the basis of his bank records. I accept that he did not hold any significant amount of cash and he did not own other financial assets, such as shares in a publicly listed company, when he claimed Newstart Allowance on 8 October 2015, or when he requested relief from the IMP on 28 October 2015.
The Secretary asserts that Mr Stemm was not in ‘severe financial hardship’ when he claimed Newstart Allowance on 9 October 2015, as his liquid assets at that time amounted to $1,150 and this exceed his applicable ‘maximum payment rate’. In the Secretary’s submission, this changed by 28 October 2015 when Mr Stemm requested relief from the IMP as, at that time, his liquid assets had declined to $28.22.
On 28 October 2015, Mr Stemm gave Centrelink a written statement that he had no money.[29]
[29] T11 folio 122.
Examination of the bank records in T8 shows that Mr Stemm had 4 accounts with the Westpac Bank. On 8 October 2015 his Bills Account had a zero balance; his Everyday Account had a zero balance; his Westpac Choice account had a balance of $886.46; and his Low Rate Visa Card account had a balance of -$819.04.[30] On 11 August 2015 the balance of his Westpac Choice account was $383.77.[31] It fell to $62.50 on 17 August 2015. Mr Stemm received a $1,396.33 tax return on 21 August 2015, payment of $4,408 on 4 September 2015, following sale of his car, and an insurance payment of $1,410 on 14 September 2015.[32] Thereafter, the balance of his bank account fell to $514.72 on 12 October 2015 and to $28.22 on 28 October 2015.[33] On 15 December 2015, his bank balance was -$1.95 and his Low Rate Visa Card account balance was -$1.040.64.[34]
[30] T8 folio 89. I note that the records in Exhibit R1 record Mr Stemm’s Westpac Choice account balance to be $1001.50 on 8 October 2015.
[31] Exhibit R1.
[32] Ibid.
[33] Ibid.
[34] Exhibit R4.
As can be seen, Mr Stemm fell within the defined meaning of ‘severe financial hardship’ on 11 August 2015 although he recovered from this position in September 2015, but again fell into severe financial hardship on 12 October 2015. He did not recover from that condition in the period to 15 December 2015 – which is the extent of the available records in evidence. Beyond that date, no bank records have been provided. It can be accepted, however, that Mr Stemm’s impecuniosity continued until 6 June 2016, at least, at which point the Secretary accepted his claim for Special Benefit. I accept his account of enduring financial hardship during this period without capacity to increase his liquid assets.
From this is follows that Mr Stemm was in severe financial hardship on 28 October 2015, when he requested relief from the IMP.
Unavoidable or reasonable expenditure
As I have said, for the discretion conferred by s 1068-G7AM to be enlivened, it must be established that Mr Stemm’s ‘severe financial hardship’ arose ‘because’ he incurred ‘unavoidable or reasonable expenditure’ during the IMP.
The phrase ‘unavoidable or reasonable expenditure’ is given meaning by s 19C(4) –
(4) Unavoidable or reasonable expenditure, in relation to … a person to whom an income maintenance period applies, includes, but is not limited to, the following expenditure:
(a) the reasonable costs of living that the person is taken, under subsection (6) or (7), to have incurred in respect of:
(i)...
(ii)…
(iii) if an income maintenance period applies to the person—that part of the period that has already applied to the person;
(b) the costs of repairs to, or replacement of, essential whitegoods situated in the person’s home;
(c) school expenses;
(d) funeral expenses;
(e) essential expenses arising on the birth of the person’s child or the adoption of a child by the person;
(f) expenditure to buy replacement essential household goods because of loss of those goods through theft or natural disaster when the cost of replacement is not the subject of an insurance policy;
(g) the costs of essential repairs to the person’s car or home;
(h) premiums in respect of vehicle or home insurance;
(i) expenses in respect of vehicle registration;
(j) essential medical expenses;
(k) any other costs that the Secretary determines are unavoidable or reasonable expenditure in the circumstances in relation to a person.
However, unavoidable or reasonable expenditure does not include any reasonable costs of living other than those referred to in paragraph (a).
Meaning of reasonable costs of living
(5) The reasonable costs of living of a person include, but are not limited to, the following costs:
(a) food costs;
(b) rent or mortgage payments;
(c) regular medical expenses;
(d) rates, water and sewerage payments;
(e) gas, electricity and telephone bills;
(f) costs of petrol for the person’s vehicle;
(g) public transport costs;
(h) any other cost that the Secretary determines is a reasonable cost of living in relation to a person.
(6) For the purposes of paragraph (4)(a), the amount of reasonable costs of living that a person who is not a member of a couple is taken to have incurred, may not exceed:
(a) ..; or
(b) …; or
(c) in the case of a person to whom an income maintenance period applies—the amount of allowance or parenting payment (as the case may be) that would have been payable to the person during that part of the income maintenance period that has already applied to the person, if the period did not apply to the person.

Thus, there are two assessment calculations to be made. Firstly, the person’s ‘reasonable costs of living’ amount must be assessed under s 19C(4)(a). This cannot exceed the total amount of allowance that would have been payable during that part of the IMP which has already applied to the date on which the assessment is made. And secondly, the amount of any unavoidable or reasonable expenditure the person incurred during the IMP, if any, must be assessed. Once these assessments have been made, then it is necessary to determine if the discretion is enlivened. It will be if it is found that Mr Stemm was in severe financial hardship ‘because’ of unavoidable or reasonable expenditure he incurred during the IMP.
Reasonable costs of living amount
The ‘reasonable costs of living’ to be assessed ‘include, but are not limited to’ those specified in s 19C(5).
There is scant evidence of Mr Stemm’s costs of living in the period from 26 May 2015 to 28 October 2015 or thereafter during the IMP.
Doing the best with the available evidence, it is probable that Mr Stemm’s reasonable living costs during this 22 week period included amounts he specified for –
Regular medical expenses  $344.93
Food and groceries  $4,084.98
Petrol  $853.39
Rent  $3,300.00
Phone  $382.15
Taxi and public transport  $289.51
Total  $9,254.96
The Secretary contends that, as this amount exceeds the maximum amount of Newstart Allowance that would have been payable to him absent the IMP, under s 19C(6)(c) of the SS Act, the maximum amount of Newstart Allowance should be applied. This amount, the Secretary argues, should be calculated on the applicable ‘maximum basic rate’ for Newstart Allowance, without including any amount for the energy supplement, pharmaceutical allowance and rent assistance that may have been payable to Mr Stemm. In the Secretary’s submission, the ‘maximum basic rate’ of Newstart Allowance is $519.20 per fortnight from the start of the IMP to 19 September 2015, and $523.40 per fortnight from 20 September 2015 to 28 October 2015.
I do not accept the Secretary’s submission that the ‘amount of allowance’ that would have been payable to Mr Stemm should, for the purposes of s 19C(6), exclude any amount for energy supplement, pharmaceutical allowance and rent assistance. There are two reasons for this. Firstly, the components and the amount of Newstart Allowance that was payable is specified in the notice issued on 23 October 2015.[35] Secondly, the meaning given to ‘reasonable costs of living’ in s 19C(5) expressly includes costs relating to regular medical treatment, utilities and rent.
[35] T10 folio 119.
The ‘amount of allowance’ that would have been payable each fortnight to Mr Stemm but for the IMP is –
(a)from 26 May 2015 to 19 September 2015 (8 fortnights): $656.40; and
(b)from 20 September 2015 to 23 October 2015 (3 fortnights): $666.90.
Thus, the total amount of Newstart Allowance that would have been payable to Mr Stemm but for the IMP to 28 October 2015 (11 fortnights) is $7,251.90.
I am satisfied that this is the maximum allowable amount of Mr Stemm’s reasonable costs of living during the IMP to 28 October 2015. As the present evidence is not sufficient to determine Mr Stemm’s actual reasonable living costs during this period with any accuracy, I will proceed in the manner suggested by the Secretary.
Unavoidable or reasonable expenditure amount
The Secretary accepts that Mr Stemm incurred the following unavoidable expenditure during the IMP to 28 October 2015 –
Family Court settlement -   $70,000
child support and mortgage payments -        $8,310
legal fees -   $2,100
car insurance -   $1,885
furniture -   $2,000
net cost of vehicle transactions -                   $17,322
tax paid on termination payment -                  $14,597
Total amount  $116,214
Mr Stemm asserts that the full cost of the motor vehicle he contracted to purchase on 7 May 2015, an amount of $22,332, was ‘unavoidable’. He says that he was contractually bound to complete the purchase on termination of his employment, even though his domestic circumstances had changed and he could no longer afford to do so. In his submission, the fact that he subsequently traded it for a cheaper car does not reduce the unavoidable expenditure he incurred.
I do not agree. It can be accepted that Mr Stemm was obligated to purchase the motor vehicle he had contracted to buy on 7 May 2015. But it does not follow that he was unable to avoid all of the cost incurred in this transaction. By trading the car for a cheaper one he managed to avoid some of the initial cost, albeit that he lost “around $4,000 overall”[36] on the resale transaction. I note in passing that Mr Stemm’s recollection of the amount he lost on the transaction is not consistent with the available evidence, which indicates he lost in excess of $6,000. To my mind, it is the net amount of these transactions that is properly able to be considered as ‘unavoidable’ –
Original motor vehicle purchase price  $22,332[37]
Cash paid to Mr Stemm on original vehicle trade                 $4,408[38]
Second motor vehicle purchase price           $10,990[39]
Stamp duty   $395
Transfer fee  $54
Net cost of motor vehicle transactions  $17,924
[36] T11 folio 122.
[37] Exhibit A3.
[38] T8 folio 94.
[39] Exhibit A3.
Additionally, Mr Stemm asserts that a $1,160 fine he incurred on or about 26 May 2015 should be included as an unavoidable expenditure during the IMP. The Secretary argues that the fine should not be included as it was not an unavoidable expense.
Mr Stemm’s evidence on this point is that on the day his employment was terminated a nasty interpersonal conflict arose between him and his former wife. In the result, he left the house and drove to a local hotel, where he had a few drinks and then drove. Police attended. He was charged with a drink driving offence. On this charge, he was fined $1,160. Ultimately, he paid $160 and called upon his father to pay $1,000.
Plainly enough, Mr Stemm was required to pay the fine imposed or face further penalty. In that sense, the fine he incurred is unavoidable. That is what Mr Stemm asserts. The difficulty with this is that the conduct which resulted in the fine he incurred was not unavoidable. This is at the heart of the Secretary’s submission.
Resolving this issue involves consideration of the discretion conferred by s 19C(4)(k) – any other costs that the Secretary determines are unavoidable or reasonable expenditure in the circumstances in relation to a person. To my mind, the cost of the fine imposed was avoidable. It was incurred in circumstances of unlawful conduct by Mr Stemm, albeit in difficult circumstances. It is not appropriate in the particular circumstances to exercise the discretion.
Finally, Mr Stemm asserts that he suffers from a mental illness which causes him to spend money impulsively and recklessly. This evidence is supported by evidence from his treating psychiatrist, Dr Giardini, who reported that symptoms of Mr Stemm’s mental illness “included reckless over-spending of money”.[40]
[40] Exhibit A4.
Even though the Secretary does not object to admission of Dr Giardini’s report into evidence on grounds of late service or procedural fairness, the Secretary argues that little weight can be given to the report of reckless spending as the doctor does not specify the nature or quantum of expenses Mr Stemm incurred in this way. The only evidence addressing these points is Mr Stemm’s sworn account, in respect of sunglasses he did not require, or alcohol and cigarettes for example.
I am satisfied that Mr Stemm’s reckless over-spending as a result of mental illness is within the meaning of ‘unavoidable’ expenditure. Mr Stemm did not specify specific amounts in his bank records that, he says, were ‘over-spending’ that was attributable to his mental illness.
Instead, he provided further submissions including his asserted “expenditure from 26 May 2015 to 28 October 2015” –
Essential medications  $344.93
Substance abuse  $4,796.53
Food and Groceries  $4,084.98
Monies paid to ex partner.  $79,166.03
Purchase of a car  $22,332.00
Relocation costs  $3,912.29
Maintenance of car  $2,810.72
Petrol$853.39
Debt repayment  $2,101.65
Rent$3,300.00
Legal fees$2,100.00
Phone$382.15
Taxi and public transport  $289.51
Crows tickets  $405.00
Fine$160.00
There are some difficulties with these figures.
Several of these amounts relate to reasonable costs of living. In this category, I would include foods, groceries, fuel, rent, telephone, taxi/public transport and ‘Crows tickets’. The Secretary argues that the amount Mr Stemm included for medical expenses should also be treated as reasonable costs of living as they are ‘regular medical expenses’ for the purposes of s 19C(5)(c) of the SS Act. I think that this is correct.
Mr Stemm gave oral evidence, explaining the expenses he has included in respect of substance abuse, monies paid to his ex-partner and relocation expenses. I accept his unchallenged evidence on these matters.
On the present materials, it is possible that Mr Stemm expended $4,796.53 on alcohol and tobacco, as he asserts. He has given sworn evidence on this point and in respect of impulsive over-spending, which I accept. His account is supported by Dr Giardini’s evidence that –
“At times [Mr Stemm’s] behaviour was impulsive and related to the symptoms of Alcoholism and Bipolar Affective Disorder, and included reckless over-spending of money.”[41]
[41] Exhibit A4.
Considering Mr Stemm’s bank records in evidence, as I have said, he first fell into severe financial hardship on 11 August 2015. The pattern of his spending behaviour prior to and after that time is variable. There are purchases, of sunglasses for example, and unexplained withdrawals from Mr Stemm’s bank account, on 12 and 17 August 2015 and 12 and 15 October 2015 for example, that may well have been reckless in view of his increasingly parlous financial position, with rapidly declining bank balances and no source of income. Thus, even though I am not able to identify specific amounts of expenditure that may be considered unavoidable or reasonable on grounds of impulsive and reckless over-spending as result of the mental illnesses diagnosed by Dr Giardini, I accept the doctor’s evidence and I am satisfied that some of Mr Stemm’s expenses during the IMP to 28 October 2015 may reasonably be attributed to that cause.
Mr Stemm’s account of expending $4,796.53 on ‘substance abuse’ equates to expenditure of roughly $215 per week or $31 per day in the period from 26 May 2015 to 28 October 2015. On his oral evidence, this is a conservative estimate. I am prepared to accept that this amount was an unavoidable or reasonable expense in Mr Stemm’s particular health circumstances at the time.
Mr Stemm says he paid $9,166.03 to his ex-wife in addition to payment of $70,000 under the orders made by the Family Court. Previously, Mr Stemm provided information that he had paid $8,310 in child support and mortgage payments to his ex-wife.[42] I have accepted Mr Stemm’s oral evidence in respect of these expenses. I am satisfied that he paid $9,166.03 to his ex-wife in addition to the $70,000 payment order by the Family Court.
[42] T11 folio 122.
Mr Stemm explained that he added payments for car registration, car insurance and a payment to his ex-wife for extended motor vehicle warranty in the $2,810.72 amount he included for ‘maintenance of car’. The Secretary has accepted that the payment to Mr Stemm’s ex-wife for ‘car insurance’ was an unavoidable or reasonable expense. To my mind, that assessment applies equally to the total amount of these expenses.
Mr Stemm’s evidence is that he expended $3,912.29 on relocation expenses. Previously, he stated that he expended “around $2,000”[43] purchasing clothes and furniture after separating from his ex-wife. This amount is somewhat vague and he explained that it was an estimate made without reference to bank records. On the basis that he has now revised the amount on the basis of bank records of payments made I am prepared to accept Mr Stemm’s evidence about the expenses he has attributed to ‘relocation costs’.
[43] Ibid.
Mr Stemm has given oral evidence in explanation of $2,101.65 in debt repayments he made to Optus, Cash Converters and Nimble after 26 May 2015. His evidence was not challenged and I accept it is correct. It is consistent with the bank records before the Tribunal. I am prepared to accept that these repayments were unavoidable expenses.
In sum on this point, for the purposes of s 19C(4), I am satisfied that the total amount of Mr Stemm’s unavoidable or reasonable expenditure during the IMP to 28 October 2015 is –
Reasonable costs of living -  $7,251.90
Family Court settlement -  $70,000.00
Monies paid to ex-partner -   $9,166.03
Car registration and insurance -  $2,810.72
Debt repayments -  $2,101.65
Substance abuse -  $4,796.53
Relocation costs -                    $3,912.29
Legal fees - $2,100.00
net cost of vehicle transactions -            $17,924.00
tax paid on termination payment -           $14,597.00
Total amount  $134,660.10
‘Because’
As I have said, the next step is to determine if Mr Stemm was in severe financial hardship on 28 October 2015 because of the unavoidable or reasonable expenditure he incurred during the IMP.
Mr Stemm’s termination payment on 26 May 2015 was an amount of $135,970.66. As of 28 October 2015, he had only $28.22 remaining. During the intervening period of the IMP he incurred unavoidable or reasonable expenditures amounting to $134,660.10.
This leaves an amount of $1,310.54 unaccounted for.
The test is not whether the entire termination payment has been exhausted by meeting unavoidable or reasonable expenses. Rather it is whether expenses meeting that description are the cause of Mr Stemm’s severe financial hardship. This is not an easy matter to decide. On the one hand, as Mr Stemm argues, had he not incurred unavoidable or reasonable expenses that consumed the lion’s share of his termination payment, he would not have fallen into severe financial hardship. On the other hand, as the Secretary asserts, the amount of his termination payment remaining after unavoidable or reasonable expenses would have been sufficient to keep him from falling into severe financial hardship as of 28 October 2015, and for some time thereafter. It is for this reason the Secretary argues that no part of Mr Stemm’s IMP can be waived.
I do not agree.
The part of his termination lump sum that is not accounted for as unavoidable or reasonable expenses amounts to $1,310.54. Applying the maximum rate of Newstart Allowance then applicable ($666.90), this would be expected to sustain him above the ‘severe financial hardship’ threshold for approximately 28 days, whereupon he would have liquid assets of less than the threshold amount. Thus, even if this unaccounted amount is applied in the manner for which the Secretary contends, Mr Stemm would have fallen into severe financial hardship by 26 November 2015. In reality, Mr Stemm was in ‘severe financial hardship’ on 12 October 2015, if the unaccounted funds are applied from this date, Mr Stemm would be taken to have exhausted his termination lump sum by 10 November 2015, a matter of days after 28 October 2015 when he requested relief.
I am satisfied that his impecuniosity and the ‘severe financial hardship’ he experienced on and after 28 October 2015 was, in substantial part at least, because of the unavoidable or reasonable expenditures he incurred during the IMP to that date. Making this finding I am mindful of what Tracey J said in Secretary, Department of Education, Employment and Workplace Relations v Ergin[44] -
32 Having regard to the context in which it appears, s 1068-G7AM requires that the Secretary be satisfied that the cause of an applicant’s impecuniosity was the incurring of “unavoidable or reasonable expenditure” during the income maintenance period, before the power to exercise the discretion is enlivened.
33 The judgment which the decision-maker is required to form must be made in a practical manner. The judgment will, normally, fall to be made in the course of an income maintenance period. Just when, during such a period, the issue will arise will usually depend on when an applicant seeks the favourable exercise of the Secretary’s discretion. At whatever point such a request is made, it will be necessary for the Secretary to examine the financial position of the applicant at that time and then to ascertain how the applicant has disposed of the termination payment.
34 Depending on the circumstances, the Secretary may be satisfied that the cause of the applicant’s impecunious state was unavoidable or reasonable expenditure even though some of the termination payment may have been spent on items which do not fall into this category. Such a conclusion may be possible, for example, in a case in which an application for the exercise of discretion is made towards the end of an income maintenance period and it is found that the bulk of the termination payment has been expended on unavoidable and reasonable purchases, notwithstanding that a very small sum has been used for other purposes. I do not, therefore, accept the submission that the discretion, conferred by s 1068-G7AM, can only be exercised where none of the applicant’s termination payment has been expended for such other purposes.
[44] [2010] FCA 1438.
This is such a case.
More than 98 percent of Mr Stemm’s termination payment was applied to unavoidable or reasonable expenditure during the IMP prior to 28 October 2015.
I am satisfied that Mr Stemm fell into severe financial hardship because of unavoidable or reasonable expenditure he incurred during the IMP.
Exercise of discretion
This means that the discretion conferred by s 1068-G7AM is enlivened. The next step is to decide whether it is appropriate to exercise the discretion in all the circumstances.
I am satisfied that it is.
Having regard to the text and purposes of the IMP provisions, it is appropriate to strike a balance between the expectation that Mr Stemm would use his termination payment to support himself during the resulting IMP with the parlous circumstances in which he found himself, having fallen into severe financial hardship because of unavoidable or reasonable expenditures he had incurred during the IMP.
To my mind, the appropriate balance may be struck by dis-applying the IMP from 28 October 2015.
From this date, the bar on payment of Newstart Allowance to Mr Stemm is lifted. Whether or not he qualifies for payment is another matter. The present materials before the Tribunal are not sufficient to make any such determination.
The Secretary asserts that Mr Stemm cannot be taken to be in severe financial hardship from the date he was granted Special Benefit, on 6 June 2016. That may be so. The materials before the Tribunal are not sufficient to make findings in respect of Mr Stemm’s financial circumstances thereafter.
The way in which this should be dealt with is not clear. On the one hand, relief from the IMP could be confined to the period from 28 October 2015 to 6 June 2016. On the other hand, it can be accepted that Mr Stemm’s ‘severe financial hardship’ was a reason for grant of Special Benefit, as he asserts – in effect, the discretionary grant of Special Benefit was a different kind of relief from the IMP. But this came to an end when he obtained employment. What occurred thereafter, and any subsequent changes to Mr Stemm’s financial circumstances, I cannot determine on the present materials.
It is quite clear that Mr Stemm cannot be paid Special Benefit and Newstart Allowance, should he be eligible for payment of that Allowance, for the same period.
In these circumstances, I think the preferable course is to remit the matter to the Secretary to determine Mr Stemm’s entitlement to payment of Newstart Allowance, if any, from 28 October 2015.
Other matters
Mr Stemm has made extensive submissions setting out grievances and criticisms of the Secretary’s Department and Centrelink.

I do not propose to address these matters in any detail.
It is quite clear that errors have been made in the calculation of the IMP that applied upon the termination payment Mr Stemm received. Those are capable of correction on review.
Other grievances and allegations Mr Stemm has attempted to ventilate in these proceedings, relating to conduct of the Department and Centrelink he considers deficient, are not capable of being properly addressed this Tribunal. If Mr Stemm intends to press complaints of this kind, he should do so with the Secretary or other competent authority.
Decision
The decision under review is set aside and in substitution thereof the Tribunal decides that Mr Stemm’s IMP commenced on 26 May 2015 and it is appropriate to exercise discretion to foreshorten the period, such that the IMP does not apply from 28 October 2015.
The matter is remitted to the Secretary to determine Mr Stemm’s entitlements, if any.

I certify that the preceding 144 (one hundred and forty-four) paragraphs are a true copy of the reasons for the decision herein of Mr S. Webb, Member

..........................[sgd]..............................................
Associate
Dated: 24 May 2017

Date(s) of hearing: 28 March 2017; 19 May 2017

Date final submissions received: 9 May 2017

Applicant: In person

Advocate for the Respondent: Nivvy Venkatraman

Solicitors for the Respondent: Mills Oakley Lawyers

Date(s) of hearing:	28 March 2017; 19 May 2017
Date final submissions received:	9 May 2017
Applicant:	In person
Advocate for the Respondent:	Nivvy Venkatraman
Solicitors for the Respondent:	Mills Oakley Lawyers