STEVEN WILLMOTT and SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS
[2012] AATA 349
•13 June 2012
[2012] AATA 349
Division GENERAL ADMINISTRATIVE DIVISION File Number(s)
2012/0017
Re
STEVEN WILLMOTT
APPLICANT
And
SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS
RESPONDENT
DECISION
Tribunal Mr R G Kenny, Senior Member
Date 13 June 2012 Place Brisbane The Tribunal sets aside the decisions under review and substitutes its decisions that the rate of Mr Willmott’s Newstart allowance in the fortnight ending 22 February 2011 was nil; that his Newstart allowance is cancelled with effect from 23 February 2011; and that arrears of Newstart allowance are payable to him from 31 July 2011.
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Mr R G Kenny, Senior Member
CATCHWORDS
SOCIAL SECURITY – Pensions, benefits and allowances – Newstart allowance – Inappropriate cancellation due to applicant’s receipt of lump sum payment for unfair dismissal – Cancellation at applicant’s request – Application of the Guide to Social Security Law – Favourable determination on review of decision – Arrears payable from date of application for review – Decisions set aside.
LEGISLATION
Acts Interpretation Act 1901 (Cth) ss 28A, 29
Social Security Act 1991 (Cth) s 593
Social Security (Administration) Act 1999 (Cth) ss 68, 80, 85, 108, 109, 608, 643, 1068, 1073Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634
SECONDARY MATERIALS
Guide to Social Security Law
REASONS FOR DECISION
Mr R G Kenny, Senior Member
13 June 2012
THE APPLICATION
Steven Willmott received income support payments in the form of Newstart allowance under the Social Security Act 1991 (Cth) (the Act). On 18 February 2011, Mr Willmott received a lump sum payment in settlement of an unfair dismissal claim against his employer. On 2 March 2011, his Newstart allowance was cancelled by Centrelink with effect from 18 February 2011 because it determined that Mr Willmott’s income exceeded the limit at which it was payable. A further cancellation decision was made by the respondent on 31 March 2011, with effect from 9 February 2011, on the basis that Mr Willmott had requested that his Newstart allowance be cancelled.
On 9 September 2011, an authorised review officer confirmed that Newstart allowance was not payable to Mr Willmott for the fortnight 9 February 2011 to 22 February 2011 because of the level of his income in that period. The authorised review officer also determined that Newstart allowance was not payable to Mr Willmott from 23 February 2011 because he did not lodge, until 25 August 2011, a fortnightly “Application for Payment of Newstart Allowance” form which was due to be lodged by him on 22 February 2011. The authorised review officer also affirmed the decision of 31 March 2011 on the basis that Mr Willmott had requested that his Centrelink dealings be terminated and Newstart allowance cancelled.
As I read the authorised review officer’s determination, it served to vary the decision of 2 March 2011 by determining that the rate of Newstart allowance in the fortnight 9 to 22 February 2011 was nil because of the receipt of the lump sum payment in that period.[1] Also, as I read the authorised review officer’s decision, it served to vary the decision of 31 March 2011 by determining the date of effect to be 23 February 2011.
[1] See s 608 of the Act.
On 8 December 2011, the Social Security Appeals Tribunal (“the SSAT”) affirmed the initial decision of 2 March 2011, thereby rejecting the variation of the decision by the authorised review officer of 9 September 2011. It set aside the decision of 31 March 2011 on the basis that Mr Willmott’s request for cancellation was of no force or effect.
BACKGROUND
On 18 February 2011, Mr Willmott advised a Centrelink officer of the lump sum payment. In response, a “Compensation and damages” form was sent to him. The form was not relevant to the type of lump sum payment he had received and he explained this to the Centrelink officer on 22 February 2011. On 1 March 2011, a Centrelink officer completed a memorandum in which it was stated that that the lump sum should be treated as Mr Willmott’s income for the fortnight in which it was received. Despite that, on 2 March 2011, Mr Willmott was advised by a Centrelink letter that his Newstart allowance was cancelled.
In his evidence, Mr Willmott said that he became frustrated and annoyed at the confusing information he was given by Centrelink officers about his Newstart allowance and, on 28 March 2011, he sent an e-mail to Centrelink in the following terms:
I don’t know if I’m cancelled, as in having to apply for benefits all over again or suspended from payments for a period of time? Just to be absolutely clear, I want to be cancelled off Centrelink and have no further contact at ALL with Centrelink!
On 31 March 2011, a Centrelink officer sent a letter to Mr Willmott advising that his Newstart allowance was cancelled from 9 February 2011 at his request.
The letters of 2 and 31 March 2011 each included a notice about Mr Willmott’s appeal rights and also gave notice that, if Mr Willmott disagreed with the decision, he should seek review within 13 weeks in order to receive his full entitlements in the event that the decision was changed or else any back payment may only be made from the date on which he sought review. Mr Willmott acknowledged receipt of the letter of 2 March 2011, but denied receipt of the letter of 31 March 2011.
Mr Willmott has sent detailed e-mail messages to Centrelink in which he identified errors in its documentation as it relates to him and in the manner of his dealings with Centrelink officers. He also queried why his Newstart allowance had been cancelled. The first of these was on 31 July 2011. The concerns he expressed led to the determinations of the authorised review officer. Subsequently, Mr Willmott reapplied for Newstart allowance and this was granted to him with effect from 21 November 2011.
DECISION OF 2 MARCH 2011
The rate of a person’s Newstart allowance is assessed under the rate calculator in s 1068 of the Act.[2] Module G of that rate calculator sets out the provisions for applying the ordinary income test.[3] “Income” is broadly defined and the definition of “ordinary income” excludes income that is an exempt lump sum. Under s 1073 of the Act, certain lump sum payments are to be treated as if they are received over 12 months in that the recipient is taken to have received one fifty-second of the lump sum each week. Where the lump sum is sufficiently large, this may lead to a fortnightly calculation which reduces Newstart allowance payments, even to nil.[4]
[2] See s 643 of the Act.
[3] Income definitions are set out is s 8 of the Act.
[4] See s 608 of the Act.
It is common ground that the type of lump sum received by Mr Willmott is not, in specific terms, referred to in s 1073 of the Act. This means that, in the ordinary course of events, Mr Willmott’s lump sum payment should be treated as being received over 12 months. This was the basis on which the Centrelink officer reached the decision on 2 March 2011. It was also the basis of the SSAT decision in relation to that decision.
Mr McQuinlan, for the respondent, submitted that, in considering Mr Willmott’s lump sum payment, regard should be had to instruction 4.13.1.20 in the Guide to Social Security Law (the Guide). Therein, the Guide provides that the kind of lump sum payment received by Mr Willmott is not to be treated as having been received over 12 months but, rather, as income in the fortnight in which it was received. Applying the Guide in that way, Mr McQuinlan submitted that Mr Willmott’s Newstart allowance should not have been cancelled on 2 March 2011 but that, rather, it should have been reduced only in the fortnight from 9 to 22 February 2011 when the lump sum was treated as income for that fortnight.
The Guide is published by the respondent to provide assistance to those who administer the Act. The Tribunal is not bound to apply policy instructions of the kind referred to in the Guide but may do so and, indeed, will usually apply the guidelines unless there are cogent reasons in a particular case for not doing so.[5] I am satisfied that no such reasons arise in this case. Accordingly, I am satisfied that the lump sum received by Mr Willmott should be treated as part of his income for the fortnight 9 to 22 February 2011. It is not disputed that this reduced Mr Willmott’s Newstart allowance in that period to nil. That was the basis of the decision of the authorised review officer.
[5] See Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 at 639-645.
I am satisfied that the decision of the SSAT in relation to the Centrelink decision of 2 March 2011 should be set aside. This means that the rate of Newstart allowance payable to Mr Willmott in the fortnight 9 to 22 February 2011 was nil but that his Newstart allowance was not cancelled.
DECISION OF 31 MARCH 2011
Mr Willmott said that he did not receive the letter dated 31 March 2011. He acknowledged receipt of the letter dated 2 March 2011. Copies in evidence show that they were sent to the same address. In his evidence, Mr Willmott did not dispute the correctness of the address at that time although I note that, later in the year, Centrelink mail was sent to Mr Willmott at a different address. I am satisfied that the letter of 31 March 2011 was sent to the address last known by Centrelink at that time to be that of Mr Willmott and that it was served on him in the ordinary course of post at that address.[6]
[6] In accordance with the requirements of ss 28A and 29 of the Acts Interpretation Act 1901 (Cth).
The authorised review officer’s determination concerning the decision of 31 March 2011 was that Mr Willmott’s Newstart allowance was cancelled with effect from 23 February 2011. Mr Willmott conceded that, on 28 March 2011, he requested Centrelink to cancel his Newstart allowance and that this was done by Centrelink on 31 March 2011. This appears to have been done on the basis of Mr Willmott’s request for his payments to be cancelled and also on the basis that Mr Willmott failed to provide his fortnightly payment forms after 22 February 2011. These forms were required to enable Newstart allowance to continue to be paid to him. The second of those bases appears not to have been dealt with in the SSAT decision and no submissions were made at the hearing before me in relation to it, although I note that, in his e-mail of 31 July 2011 to Centrelink, Mr Willmott stated that he was exempt from notification requirements until the end of February 2011.
Despite the terms of the letter of 2 March 2011, the view I have taken of the decision of 2 March 2011, as varied by the authorised review officer, is that the rate of Newstart allowance payable in the fortnight 9 to 22 February 2011 was nil. Newstart allowance was not cancelled thereafter and was payable to Mr Willmott dependent on his complying with the relevant notification requirements and the level of his income. However, the decision of 31 March 2011, as varied by the authorised review officer, changed that by cancelling Newstart allowance from 23 March 2011. I have noted Mr Willmott’s references to his sense of frustration at his dealings with Centrelink but it remains the case that he requested his payments to be cancelled. The decision of 31 March 2011 was an effective decision and I am satisfied that it was made in accordance with s 80 of the Social Security (Administration) Act 1999 (Cth) (“the Administration Act”). Accordingly, the SSAT decision in relation to that decision should be set aside and, in substitution, is the decision that Mr Willmott’s Newstart allowance is cancelled from 23 February 2011.
PAYMENT OF ARREARS
Newstart allowance payments to Mr Willmott recommenced on 21 November 2011. An issue for determination is whether arrears are payable from an earlier date. Under s 109 of the Administration Act, where a favourable determination is made as a result of an application for review, the favourable determination takes effect on the same date as the original decision, provided review is sought with 13 weeks of the decision.[7] Where the application for review is made more than 13 weeks after the notification of the decision, the favourable determination takes effect from the date that the application for review was made.[8]
[7] See s 109(1) of the Administration Act.
[8] See s 109(3) of the Administration Act.
The two Centrelink decisions were adverse to Mr Willmott but, in each case, the letters of 2 and 31 March 2011 advised him that, if he disagreed with the decision, he should seek review within 13 weeks in order to receive his full entitlements in the event that the decision was changed. These were formal notices as provided for in s 68 of the Administration Act. Even if Mr Willmott did not receive the letter of 31 March 2011, the previous letter gave clear notice of the time-frame in which he needed to seek review to obtain maximum back-dating of his entitlements. Although I have determined that the effect of that letter was limited to a particular fortnight, it purported, on its face, to assert cancellation of Mr Willmott’s Newstart allowance. That was also the effect of the letter dated 31 March 2011. Mr Willmott’s contact with Centrelink on 31 July 2011 was the first time he sought to query the decisions made. Clearly, that is more than 13 weeks after either adverse decision.
The decision by Centrelink to re-grant Newstart allowance to Mr Willmott was made on 21 November 2011. As I understand it, that was a “favourable decision”[9] made under s 85 of the Administration Act. In accordance with s 109(2) of the Administration Act that favourable determination is to take effect from the date that Mr Willmott sought to have his cancellation decision reviewed. It is not in dispute that the e-mail to Centrelink on 31 July 2011 constituted an application for review and I am satisfied that arrears of Mr Willmott’s Newstart allowance are payable to him from 31 July 2011. The date that I have determined for payment of his arrears is the earliest date that can be set in this matter.
[9] See s 108 of the Administration Act.
DECISION
The Tribunal sets aside the decisions under review and substitutes its decisions that the rate of Mr Willmott’s Newstart allowance in the fortnight ending 22 February 2011 was nil; that his Newstart allowance is cancelled with effect from 23 February 2011; and that arrears of Newstart allowance are payable to him from 31 July 2011.
I certify that the preceding 20 (twenty) paragraphs are a true copy of the reasons for the decision herein of Mr R G Kenny, Senior Member.
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Associate
Dated 13 June 2012
Date(s) of hearing 18 April 2012 Applicant In person Advocate for the Respondent Mr Rick McQuinlan
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