Taylor; Secretary, Department of Social Services and (Social services second review)

[2022] AATA 2146

Taylor; Secretary, Department of Social Services and (Social services second review) [2022] AATA 2146 (6 July 2022)

Division:GENERAL DIVISION

File Number(s):      2020/6378, 2020/6454

Re:Secretary, Department of Social Services

APPLICANT

AndJanina Taylor

RESPONDENT

DECISION

Tribunal:Mrs J C Kelly, Senior Member

Date:6 July 2022

Place:Sydney

1.In proceedings 2020/6454, the reviewable decision is set aside, and in substitution it is decided that the Respondent’s start date for her jobseeker payment is 8 October 2020.

2.In proceedings 2020/6378, the reviewable decision is set aside, and in substitution it is decided that the Respondent’s claim for parenting payment of 15 July 2019 was correctly rejected because she was not residentially qualified for payment.

...............................................[sgd]...................

Mrs J C Kelly, Senior Member

CATCHWORDS

SOCIAL SECURITY – jobseeker payment – where Respondent received termination payment – whether income maintenance period was correctly calculated – decision set aside – parenting payment – whether Respondent is residentially qualified to receive payment – whether Respondent is a protected Special Category Visa holder – decision under review set aside 

LEGISLATION

Social Security Act 1991 (Cth) ss 7, 8, 14A, 19C, 643, 1068, 1072

Sydney Airport Curfew Act 1995 (Cth)

CASES

Drake and Minister for Immigration and Ethnic Affairs (No. 2) (1979) 2 ALD 634

Secretary, Department of Education Employment and Workplace Relations v Ergin [2010] FCA 1438

SECONDARY MATERIALS

Social Security Guide

REASONS FOR DECISION

Mrs J C Kelly, Senior Member

6 July 2022

The reviewable decisions

1. The Applicant, the Secretary of the Department of Social Service (the Secretary), seeks review of two decisions made by the Social Services and Child Support Division of this Tribunal (AAT1) on 14 September 2020.

2. AAT1 decided to:

   (a)set aside the decision made by Services Australia (the Agency) that the Respondent’s start date for jobseeker payment was 8 October 2020 and remitted the matter for reconsideration in accordance with the direction that the Respondent’s termination payment was $102,638.95 (proceedings 2020/6454); and

   (b)set aside the decision made by the Agency to reject the Respondent’s parenting payment claim of 15 July 2019 and remitted the matter for reconsideration in accordance with the direction that the Respondent is a protected Special Category Visa (SCV) holder (proceedings 2020/6378).

   Issues

3. Two questions arise for consideration:

   ·How should her termination payment be treated for the purposes of determining the start date of her jobseeker payment for which she applied on 31 July 2019?

   ·Was the Respondent a protected SCV holder?

   Legislation

4. The relevant legislation is the Social Security Act 1991 (Cth) (the Act).

5. Government policy is also relevant and should be applied in the absence of cogent reasons not to follow it: Drake and Minister for Immigration and Ethnic Affairs (No. 2) (1979) 2 ALD 634 at 645. The relevant policy is set out in the Social Security Guide (the Guide).

   How should the termination payment be treated in respect of jobseeker payment?

6. The Employment Separation Certificate dated 15 July 2019 advised that:

   ·the Respondent ceased employment on 12 July 2019; and

   ·her final gross payment, including leave and redundancy payments, was $120,341.68.

7. As the Secretary pointed out, the individual payments listed add up to $119,341.  On 11 July 2019, the Respondent’s employer deposited $113,166.88 into one of the Respondent’s bank accounts.  

8. On 31 July 2019, the Respondent lodged a claim for newstart allowance.  On 26 August 2019, she was granted newstart allowance with a start dated of 8 October 2020.  From 20 March 2020, newstart allowance was replaced by jobseeker payment.  On 30 June 2020, an Authorised Review Officer (ARO) affirmed the decision to start the Respondent’s jobseeker payment on 8 October 2020, and not an earlier date. 

9. On 30 September 2020, AAT1’s decision made on 14 September 2020 to reconsider the Respondent’s jobseeker payment start date according to the direction, resulted in the start date of jobseeker payment changing to 1 August 2020.  Thereafter, the Respondent received arrears of jobseeker payment in respect of periods from 1 August 2020 to 6 October 2020.

10. On 14 October 2020, the Secretary lodged an application for review of the AAT1 decision in this Tribunal.

11. Jobseeker payment rate is worked out using Benefit Rate Calculator B at the end of section 1068 of the Act.[1] Sections 1068-G7AG to 1068-G7AR of the Act set out how to treat lump sum payments arising from termination of employment. Where a person receives a termination payment:

    the person is taken to have received ordinary income for a period (the income maintenance period) equal to the period to which the payment relates.[2]

    [1] Section 643 of the Act.

    [2] Section  1068-G7AH.

12. For certainty, I find that the components of payment listed on the Employment Separation Certificate constituted a termination payment as defined in section 1068-G7AQ of the Act.  The start date for the Income Maintenance Period (IMP) is 11 July 2019 pursuant to section 1068-G7AKA of the Act.

13. Instruction 4.3.4.10 of the Guide,  Application of the income maintenance period, sets out how to calculate the IMP.

14. Section 1068-G7AM confers a discretion on a decision-maker to determine that the whole, or any part, of the IMP does not apply to the person, if satisfied that a person is in severe financial hardship because the person has incurred unavoidable or reasonable expenditure while an IMP applies.[3]

    [3] Relevantly, severe financial hardship is defined in subsection 19C(2) and unavoidable or reasonable expenditure is defined in subsection 19C(4). 

15. Instruction 4.3.4.40 Hardship Provisions for the IMP in the Guide sets out how to determine if a person is in severe financial hardship due to unavoidable or reasonable expenditure.  The definition of reasonable costs of living in sections 19(C)(5) and 19C(6) are also relevant.

16. Instruction 4.3.4.40 sets out the following:

    Determining whether a person is in severe financial hardship due to unavoidable or reasonable expenditure

    To decide whether a person is in severe financial hardship due to unavoidable or reasonable expenditure incurred during the IMP the following assessment is made.

Step

Procedure

1

Establish whether the person is single or a member of a couple and whether the person is in severe financial hardship.

2

Assess the value of the person's total liquid assets at the date of commencement of their IMP. The person's total liquid assets will be calculated differently if they are a member of a couple - as outlined in 'Assessing severe financial hardship'.

3

Assess the unavoidable or reasonable expenditure of the person by adding together:

·           the level of reasonable cost of living expenditure (cannot exceed the upper limit) applicable to the person's circumstances, incurred since the commencement of the IMP, and

·           any other unavoidable or reasonable expenditure incurred while serving the IMP. This may include any other costs that are determined as unavoidable or reasonable expenditure in the individual circumstances of the person.

4

Deduct the total amount at step 3 (unavoidable and reasonable expenditure) from the amount at step 2 (total liquid assets).

5

If the amount at step 4 still meets the severe financial hardship test, then the person is in severe financial hardship due to reasonable or unavoidable expenditure and they may have the remainder of their IMP waived.

However, if the amount at step 4 does not meet the severe financial hardship test, then NO part of the IMP can be waived. This is because the person's severe financial hardship must be due to unavoidable and reasonable expenditure to allow the IMP waiver provisions.

Exception: If the delegate is satisfied, based on the evidence provided, that the person is in severe financial hardship due to the portion of the person's expenditure that was unavoidable or reasonable, the delegate may waive the remainder of the person's IMP.

1. The Respondent’s IMP was calculated to be from 11 July 2019 to 8 October 2020.  I accept that calculation is correct based on the 325 working days (which equates to 65 weeks) set out in the Employment Separation Certificate.

2. AAT1 reduced the respondent’s termination payment to $102,638.95 because she received an early termination charge of $17,702.73 for a novated finance lease vehicle which was a necessary consequence of her employer’s decision to terminate her employment and outside her control.  Following recalculation in accordance with AAT1’s decision, the Respondent’s start date for jobseeker payment was changed to 1 August 2020.

3. The legislative purpose of the IMP was upheld by the Federal Court in Secretary, Department of Education Employment and Workplace Relations v Ergin [2010] FCA 1438 (Ergin) where it was held that:

   The legislative purpose served by the “income maintenance period” regime is clear. A person who, upon becoming unemployed, receives a termination payment is expected to use that payment to cover his or her reasonable living expenses and is not entitled, immediately, to receive income support from the public purse. [The Act] provides a formula pursuant to which the length of any “income maintenance period” is to be calculated. Once the period has expired the person is entitled to the benefit claimed provided that he or she remains otherwise eligible.[4]

   [4] At [21].

4. In order to exercise the discretion to treat all or any part of the IMP as not applying to the Respondent, I must be satisfied of the matters formulated by Tracey J in Ergin:

   (a)  The Respondent is in severe financial hardship;

   (b)  She is suffering such hardship because she has incurred unavoidable or reasonable expenditure; and

   (c)   Such expenditure has been incurred while the income maintenance period has been applied.[5]

   [5] Ergin at [23].

5. Section 19C(2) of the Act stated that a person who is not a member of a couple is relevantly in severe financial hardship  if the value of the person’s liquid assets (defined in subsection 14A(1)) is less than the fortnightly amount at the maximum payment rate of, relevantly, newstart allowance/jobseeker payment.

6. The relevant fortnightly newstart allowance/jobseeker payments during the IMP were $555.70 until 19 September 2019, then $559 until 19 March 2020 and $565.70 thereafter.

7. The Respondent’s bank statements show that her liquid assets varied greatly during the IMP.  The Secretary conceded that the Applicant was in severe financial hardship at 16 July 2019, but noted that she was not in financial hardship on subsequent dates. However, I must be satisfied that the Respondent was in severe financial hardship because she had incurred unavoidable or reasonable expenditure. 

8. Following the steps in the Guide, and accepting that the Respondent was suffering severe financial hardship as the Secretary conceded, it is necessary to work out her liquid assets at the commencement of the IMP, 11 July 2019.

9. On that day, the Respondent’s employer deposited $113,166.88 into one of her bank accounts.  That home loan account had an outstanding balance of $14,085.82.  The Respondent’s liquid assets were $99,081.06.

10. The next day, the Respondent transferred:

    ·$20,000 to another home loan account, and

    ·$79,081.06 to an account belonging to her mother for repayment of a loan.

11. The reasonable costs of living cannot exceed the amount of newstart allowance/jobseeker payment that would have been payable.  For the IMP, the amount was $18,276.43 which is the maximum allowable for the reasonable costs of living in that period.

12. I accept the Secretary’s submission that the Respondent’s spending of her termination payment was not due to reasonable or unavoidable expenditure in two respects.  There was no evidence that there was an immediate or necessary reason for the home loan or the loan to her mother to be repaid.  There was no evidence, for example, that her home would be repossessed if the payment was not made.  The repayment was made to the Respondent’s mother after her mother had separated from her husband in mid-2018 and in January 2019 had requested the Respondent to start paying back the money. The evidence does not demonstrate that a payment of almost $80,000 was required.  

13. The Secretary cited a number of authorities to the effect that voluntary repayments of a loan are not unavoidable or reasonable expenditure.  The loan repayments were voluntary. 

14. Other unavoidable or reasonable expenditure the Respondent claimed included the early termination charge for the novated finance leased car, school fees, car registration, driver’s licence, various insurance payments, medical expenses and classes at a recreation club, amounting to $26,406.41.  Therefore, the total of the Respondent’s reasonable costs of living and her claimed unavoidable or reasonable expenditure was $44,682.84.

15. The difference between that amount and the Respondent’s liquid assets at the beginning of the IMP is $54,398.22, which does not meet the severe hardship test, that is, it is not less than the maximum rate of jobseeker payment per fortnight during the IMP.  It follows that no part of the IMP can be waived.

16. Finally, I make the following observations about AAT1’s decision.  There was no legislative basis for AAT1 to reduce the termination payment amount by the amount of the early termination charge for the novated finance lease for her car.  Further, AAT1 found that the expenditure was unavoidable because it was outside the Respondent’s control but had failed to ask if the Respondent was suffering severe financial hardship.

    Was the Respondent a protected SCV holder?

17. The provisions addressing parenting payment are in Part 2.10 of the Act.  There is a residential requirement to qualify for parenting payment which may be satisfied in various ways.[6]  Relevantly, the Respondent’s case depends on her satisfying the protected SCV holder criteria.  There was no dispute that she is neither an Australian citizen nor a permanent visa holder.  She is a SCV holder.

    [6] Section 500(1)(b) and subsections 7(2) to (2G) of the Act, instruction 9.1.2.40 of the Guide.

18. In the Respondent’s circumstances, there are two ways of satisfying the protected SCV holder criteria.[7]

    [7] Subsections 7(2A)(a) and (b) of the Act and Instruction 9.1.2.40 New Zealand Citizens of the Guide.  It is not in dispute that she does not satisfy the other criteria to be a protected SCV holder, set out in subsections 7(2B) to (2G) of the Act, for the reasons set out in the Secretary’s Statement of Facts Issues and Contentions dated 25 February 2021 (the Secretary’s SFIC).

19. The first, set out in s 7(2A)(a) of the Act, is to have been present in Australia on 26 February 2001 and be a SCV holder on that day (when the law changed). The Secretary referred to the website of the Department of Home Affairs that provides that a special category visa (subclass 444) ends on the date a person departs Australia.[8]  

    [8] Subclass 444: Special Category visa (SCV). Found at: (accessed 4 July 2022).

20. The second way, set out in s 7(2A)(b) of the Act, is to have been in Australia for a period of, or for periods totalling, 12 months during the period of two years immediately before 26 February 2001, that is during the period 25 February 1999 to 25 February 2001 inclusive and returned to Australia after that day.

21. The Respondent claimed parenting payment on 15 July 2019.  On 5 August 2019, the Agency rejected the claim because the Respondent was not residentially qualified.  On 1 July 2020 an ARO affirmed the decision to reject the claim for parenting payment.

22. Following AAT1’s decision, the Secretary lodged an application for review of that decision on 14 October 2020.  On 3 December 2020, the Tribunal granted a stay of AAT1’s decision with respect to parenting payment.

23. The Secretary relies on the Respondent’s movement records to support its case.  The Respondent claims that those records are inaccurate. 

24. A significant point of difference between the Secretary and Respondent was in relation to the evidence that show that the Respondent left Australia on a flight at 9:27 am on 25 February 2001.[9]The movement records show that she returned to Australia on 2 March 2001.[10]

    [9] Email from the Department of Home Affairs to Services Australia dated 3 December 2022 - Attachment B to the Secretary’s SFIC.

    [10] Section 37 T Documents, T32, pages 316, 320.

25. AAT1 referred to the record showing that the Respondent left Australia on 25 February 2001 and returned on 2 March 2001 and concluded:

    Because she was not in Australia on 26 February 2001, Ms Taylor does not satisfy the provisions of paragraph 7(2A)(a).

26. There was no suggestion in the AAT1 decision that the Respondent argued that she was in Australian air space on 26 February 2001 or that her departure was delayed on 25 August 2001.

27. At the hearing before me, the movement records were discussed in relation to the 12 month criterion and then the Respondent focussed on the legislative change on 26 February 2001.  She was indignant that she had not been informed of that change.  She said that there was no way she would have left the country for a three-day trip to Johannesburg if she had known and spoke about the effect it had on her children who were not eligible for access to the National Disability Insurance Scheme because of this one day.  She said that she was most probably in Australian airspace on 26 February 2001.  She said that she was in no other country or was in Australian airspace or was on the ground in Australia if the flight was delayed.  She then said that her former husband was working on the flight and clearly remembered that it was late.

28. The Respondent did not point to any legal obligation that the Agency had to notify the Respondent of the change to the law, and I am not aware of such an obligation.

29. After the hearing, the Applicant provided a statement dated 13 August 2021 from her former husband who worked as a flight attendant on the flight.  He wrote that the flight was delayed due to mechanical issues for 16 hours and did not depart Sydney airport until “well after midnight at approx 0200 on Feb 26”.  He wrote that, consequently, he had to change hotel bookings and notify a jeweller.  He was planning to propose to the Respondent during that trip.

30. In response to his evidence, the Secretary provided an email from Australian Border Force (ABF) dated 29 September 2021 that advised that they were unable to provide evidence that the plane was on the tarmac for 16 hours as the Respondent claimed.  ABF records showed that she departed on 25 February 2001 at 09:27:28.  The email also stated that “it would be worth looking in the Sydney Airport Curfew Act 1995 (Cth) as this outlines that from 11 pm until 6 am an aircraft must not take off or land at Sydney airport, which according to this it would be unlikely that the flight left in the early hours of the morning”.

31. The ABF concluded:

    Based on the above we are unable to change the travellers movement records without evidence that the flight left in the early hours of the morning.

32. Another internal Department of Home Affairs email states that  09:27:28 was the time the Respondent went through customs and suggested the Respondent be referred to a support line if she wished to “work with them to seek appropriate evidence to establish the circumstances around the movement from 20 years ago”.[11]

    [11] Email from the Department of Home Affairs to Services Australia dated 7 September 2021 and filed by the Secretary in these proceedings on 14 September 2021.

33. The best evidence of the time of the flight’s departure on 25 February 2001 is the movement record.  It is not apparent that the Respondent claimed that there was a flight delay before AAT1.  Her evidence at the hearing before me was not consistent in terms of detail with that of her husband and was speculative – she could have been on the ground in Australia or in Australian airspace.  She and her former husband were giving evidence about an event that occurred more than 20 years ago which has become important to the Respondent very recently because of these proceedings.  Given the curfew rules, it is unlikely that the flight departed at the time the Respondent’s former husband claimed.  I do not accept that the evidence of the Respondent or her former husband about the delayed departure is reliable.  

1. The Respondent does not satisfy s 7(2A)(a) of the Act because I am not satisfied that she was in Australia on 26 February 2001 and she therefore was not a protected SCV holder on that day. The records show that she was granted a subclass 444 visa on her return to Australia on 2 March 2001.[12]

   [12][12] Section 37 T documents page 308.

2. In support of her argument that she had been in Australia for a period of 12 months during the two year period immediately before 26 February 2001, the Respondent challenged the movement records in various respects and claimed that “there was lots of defective administration”.  She provided evidence including from various individuals.  Her employer from 1999 to 2000 wrote in an email dated 11 August 2021, that due to the time that had passed, they did not have access to employee history.  She provided a copy of what appears to be a customer comment about her in relation to that employment in Cairns dated 12 February 2001 and a personal reference dated 9 January 2001 from a pilot who stated that she had attended upon him as a concierge in her employment “for just over 12 months”.  She provided a letter from the owner of a unit in Cairns who certified that the Respondent had rented a room from him from February 1999 to February 2002 and paid weekly during that period.  A person who claimed to be her neighbour in Cairns from February 1999 to February 2002 wrote a letter dated 18 August 2021.  

3. The Respondent completed a TAFE Queensland Certificate IV in Business (Small Business Management) dated 20 December 2002.

4. Medicare recorded a Cairns address for the Respondent from 28 July 2000 to 15 November 2002 and that she received medical attention on 28 June 2000, 3, 6, 11 and 25 July 2000, 15 September 2000 and then on 13 March 2001.

5. The Respondent claimed that she had worked in Australia during 1999.  However, relevantly, the movement records show that she left Australia on 21 February 1999, returned by air on 16 December 1999 but departed by air the same day.  She returned by air on 15 February 2000 and departed the same day by ship.  She returned by air on 24 February 2000.  She disputed the accuracy of those records, for example she claimed that she had returned to Australia by ship and not air. 

6. I prefer the contemporaneous movement records to the recollection of the Respondent and other individuals some 20 years later and which are unsupported by reliable contemporaneous records.

7. Unfortunately, the immigration records before AAT1 were incomplete for the reasons the Secretary set out in the SFIC. I am satisfied that the movement records before me are accurate. The Respondent was present in Australia for 255 days during the period 25 February 1999 to 25 February 2001. She had not been in Australia for a cumulative period of more than 12 months (365 days) during the two year period immediately prior to 26 February 2001. She does not satisfy s 7(2A)(b) of the Act. Her claim for parenting payment of 15 July 2019 was correctly rejected because she was not residentially qualified for payment.

   Decisions

8. In proceedings 2020/6454, the reviewable decision is set aside and in substitution it is decided that the Respondent’s start date for her jobseeker payment is 8 October 2020.

9. In proceedings 2020/6378, the reviewable decision is set aside, and in substitution it is decided that the Respondent’s claim for parenting payment of 15 July 2019 was correctly rejected because she was not residentially qualified for payment.

I certify that the preceding 58 (fifty-eight) paragraphs are a true copy of the reasons for the decision herein of Mrs J C Kelly, Senior Member

..................................[sgd]......................................

Associate

Dated: 6 July 2022

Date(s) of hearing:	13 August 2021
Date final submissions received:	11 October 2021
Solicitors for the Applicant:	E Ulrick, Services Australia
Respondent:	By telephone