WETERING and SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS
[2011] AATA 591
•26 August 2011
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2011] AATA 591
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2011/1397
GENERAL ADMINISTRATIVE DIVISION ) Re ASHLEY WETERING Applicant
And
SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS
Respondent
DECISION
Tribunal Mr R G Kenny, Senior Member Date26 August 2011
PlaceBrisbane
Decision The Tribunal sets aside the decision under review and substitutes its decision that the applicant is an independent person for the purposes of calculating her rate of youth allowance. ................[Sgd]..................
Senior Member
CATCHWORDS
SOCIAL SECURITY – Youth allowance – Family Court Order granting guardianship and custody to applicant’s grandmother – Applicant not wholly or substantially dependent on her grandmother – Grandmother not a “parent” under the Act – Applicant an independent person for the purposes of calculating the rate of youth allowance - Decision under review set aside
Social Security Act 1991 (Cth) ss 566, 1067A, 1067G
Family Law Act 1975 (Cth) s 65H
Superannuation Act 1976 (Cth) s 3Aafjes v Kearney (1976) 50 ALJR 454
Minister for Immigration & Multicultural Affairs v Graovac [1999] FCA 1690
Re Commissioner of Superannuation v Fay Olive Scott (1987) 13 FCR 404
Re Semmens and Department of Family and Community Services [2004] AATA 187REASONS FOR DECISION
26 August 2011 Mr R G Kenny, Senior Member Background
1. On 4 October 2010, Centrelink granted Ashley Wetering the youth allowance with effect from 23 August 2010 in accordance with the Social Security Act 1991 (Cth) (“the Act”). On 15 October 2010, Centrelink wrote to Ms Wetering and requested information to assist it in making the correct assessment of the amount of youth allowance that was payable to her. The information was to be provided by 12 November 2010. On 17 December 2010, Centrelink cancelled Ms Wetering’s youth allowance because it did not have details of her parents’ income and assets. The decision to cancel youth allowance was reviewed and affirmed by another Centrelink officer on 31 December 2010. This was on the basis that Ms Wetering was living with her grandmother, Stella Blackwell, whom Centrelink considered to be Ms Wetering’s “parent” for the purposes of assessing the amount of youth allowance payable to Ms Wetering. Centrelink determined that Mrs Blackwell’s income exceeded the level which enabled youth allowance to be paid. That decision was affirmed on 31 January 2011 by an authorised review officer who advised Ms Wetering that she was not considered to be independent and that the income of her “parent” had to be taken into account in calculating her youth allowance. That decision was affirmed by the Social Security Appeals Tribunal (SSAT) on 25 March 2011.
Issues, legislation and Submissions
2. Under s 556 of the Act, the rate of youth allowance is calculated in accordance with the Youth Allowance Rate Calculator in s 1067G of the Act. Where the person in receipt of youth allowance meets the requirements in the Act of being independent, youth allowance is calculated without regard to the income and assets of the person’s parents. A person is regarded as being independent if, and only if, the terms of one of the categories in s 1067A is met. That is made clear by s 1067A(1) of the Act. A person is independent:
·if the person is a member of a YA couple[1];
[1] See s 1067A(2). For the meaning of a YA couple, see s 1067C of the Act.
·if the person has a dependent child[2];
[2] See s 1067A(3) of the Act.
·if, in 2010, the person has reached age 24 years[3];
·if the person’s parents are dead[4];
·if the person’s parents cannot exercise parental responsibility[5];
·if the person is a refugee[6];
·if the person is in State care, which requires that the person not be living with a parent[7];
·if it is unreasonable for the person to live at home[8];
·if the person is self-supporting which requires full or part-time employment of a minimum specified number of hours per week and for a specified period[9];
·if the person is disadvantaged which requires fulltime employment for a specified number of hours per week for a specified period [10]; or
·if the person has a partial capacity to work and is not undertaking full-time study[11].
[3] See s 1067A(4) of the Act.
[4] See s 1067A(5) of the Act.
[5] See s 1067A(6) of the Act.
[6] See s 1067A(7) of the Act.
[7] See s 1067A(8) of the Act.
[8] See s 1067A(9) of the Act.
[9] See s 1067A(10) of the Act.
[10] See s 1067A(11) of the Act.
[11] See s 1067A(12) of the Act.
3. In that provision, various references are made to the “parent” of the person. That term is defined in s 5(1) of the Act :
“parent” means:
(a) (except in Part 2.11 and in the Youth Allowance Rate Calculator in section 1067G):
(i) in relation to a person (the relevant person), other than an adopted child—a natural parent or relationship parent of the relevant person; or
(ii) in relation to an adopted child—an adoptive parent of the child; or
(b) in Part 2.11 and in the Youth Allowance Rate Calculator in section 1067G, in relation to a person (relevant person):
(i) a natural parent, adoptive parent or relationship parent of the relevant person with whom the relevant person normally lives; or
(ii) if a parent referred to in subparagraph (b)(i) is a member of a couple and normally lives with the other member of the couple—the other member of the couple; or
(iii) any other person (other than the relevant person’s partner) on whom the relevant person is wholly or substantially dependent; or
(iv) if none of the preceding paragraphs applies—the natural parent, adoptive parent or relationship parent of the relevant person with whom the relevant person last lived.”
4. For Ms Wetering, Mrs Blackwell submitted that, because of Ms Wetering’s earnings and capacity to care for herself, Ms Wetering was not wholly or substantially dependent on her and that, therefore, she was not Ms Wetering’s “parent” under s 5 of the Act. Mrs Blackwell also submitted that Ms Wetering was independent at all material times on the following bases:
·Mrs Blackwell submitted that Ms Wetering’s situation was within the terms of s 1067A(8) of the Act in that she was in State care because of a Consent Order, dated 21 May 1993, under the Family Law Act 1975 which determined that Mrs Blackwell was to have sole custody and guardianship of Ms Wetering and that Ms Wetering was not living with a “parent”;
·Mrs Blackwell referred to the fortnightly rate of payment which the independent rate of youth allowance comprised and submitted that, if a person earned that amount or more, the person was meeting Centrelink’s description of independence and should be entitled to be paid at the independent rate without regard being had to a parent’s income.
·Mrs Blackwell submitted that, if a person was earning an amount equivalent to the independent rate or, in Ms Wetering’s case some 88% of that rate, it was inappropriate to classify her as being “wholly or substantially dependent” on her for the purposes of applying the definition of “parent” in s 5(1) of the Act.
·Mrs Blackwell submitted that proper regard had not been had to the definition of “dependent child” in s 5(4) of the act which reads:
“(4) Subject to subsections (5) to (8), a young person is a dependent child of another person at a particular time if:
(a) at that time, the young person:
(i) has reached 16, but is under 22, years of age; and
(ii) is wholly or substantially dependent on the other person; and
(b) the young person’s income in the financial year in which that time occurs will not be more than $6,403.”
·Mrs Blackwell submitted that, while Ms Wetering met the age requirement in that provision, she earned more than the stated threshold of $6,403 and that, accordingly, she was not a dependent child under the Act and should be treated as being independent.
5. For the respondent, Jasmine Forsyth submitted that, through the operation of s 5(1)(b)(iii) of the Act, Mrs Blackwell is the parent of Ms Wetering. She submitted that none of the various bases for establishing that Ms Wetering was independent was met. Accordingly, she submitted, it was necessary to have regard to Mrs Blackwell’s assets and income in assessing the rate of payment of Ms Wetering’s youth allowance.
6. The issue for determination is whether Ms Wetering meets the requirements of being independent for the purposes of calculating the rate of her youth allowance.
Evidence
7. Ms Wetering was born in January 1992. Her father is unknown to her and his name is not recorded on her birth certificate. Mrs Blackwell is her mother’s mother. On 21 May 1993, the Family Court of Australia ordered that Mrs Blackwell[12] have sole custody and guardianship of Ms Wetering and Ms Wetering has resided with Mrs Blackwell since that time and has little contact with her mother. Mrs Blackwell received income support payments under the Act in relation to Ms Wetering in the form of Family Allowance and, subsequently, Family Tax Benefit.
[12] At the time, Mrs Blackwell was known as Stella Valentine Wetering. A Marriage Certificate in evidence, dated 29 March 1996, confirms her marriage to David Donald Blackwell on that date.
8. Ms Wetering completed school years 11 and 12 in 2008 and 2009, respectively, and completed the first year of a University course in 2010 as a full-time student. In 2011, she continues in that course of study as a full-time student. From 2008 onwards, she has been in part-time work, initially at a bakery and now in a pizza shop. In the 13 week period from 7 October to 30 December 2010, she earned $2,135.27, an average of $164.25 per week or almost 90% of the independent rate of youth allowance. In the 11 week period from 5 January 2011 to 17 March 2011, she earned $2,203.07, an average of $200.25 per week which was in excess of the independent rate of youth allowance. Her weekly income from part‑time work was paid to her in cash and she used this to cover many of her living costs.
9. Ms Wetering received youth allowance for some months after Centrelink’s decision was made in October 2010 and this was paid into a bank account opened for that purpose. The account is in the name of Mrs Blackwell as trustee for Ms Wetering who required Mrs Blackwell’s signature to make withdrawals. Her evidence was that withdrawals were rare so the account remains in credit with most of the payments made by Centrelink before her youth allowance was cancelled. This is because Ms Wetering was concerned that Centrelink may raise a debt against her because of the payments and she wanted it to be available for that purpose.
10. Ms Wetering has declared Mrs Blackwell to be her emergency contact where this has been required of her. Their evidence was that, since working part‑time, Ms Wetering has been able to cover her living costs by engaging in a frugal lifestyle. She has a vehicle which was gifted to her by Mrs Blackwell on her 18th birthday and, while she is responsible for the vehicle’s maintenance and running costs, she gets contribution from friends when she drives them to places, for example, to and from University or on social occasions. Ms Wetering takes Mrs Blackwell’s mother shopping on a regular basis and, in return, receives contribution from her to petrol costs or a meal.
11. Mrs Blackwell’s evidence was that she has given no financial assistance to Ms Wetering after she commenced part-time work. Mrs Blackwell supplies her with two meals per week on average but, otherwise, Ms Wetering assumes responsibility for her own meals and grocery items. Ms Wetering pays board which, initially, was $20 per week but increased to $50 per week from January 2011. Ms Wetering’s evidence was that, in weeks that she does not have enough money to engage in social activities, she limits these to reduce expenditure. She said that she buys most of her own food and has been assisted in that regard because she has been able to purchase items from the bakery and the pizza shop at 50% discount and has been able to take any unsold food without payment. She buys her own clothes and personal items. Ms Wetering completed a statement of financial circumstances on 23 March 2011. The following expenses, expressed in weekly terms, are noted:
item $ per week rent 20 tax 6 telephone 10 car registration 12 car insurance 6 fuel 30 public transport 10 dental 8 clothing 5 entertainment 10
12. The reference to rent in that table is for 2010. For 2011, it is $50 per week. Ms Wetering nominated her income at that time at $228.45 per wk. In evidence was Ms Wetering’s group certificate from the bakery for the period 1 July 2010 to 29 May 2011. It records her earnings at $9,351. In a further statement from the bakery for Ms Wetering’s employment from 7 October 2010 to 17 March 2011, she is noted to have earned $4,337.15.
Consideration
13. Mrs Blackwell has relied on four separate bases for establishing Ms Wetering’s independent status. Only one of those relates to the criteria in s 1067A of the Act. This is that Ms Wetering was in State care as provided for in s 1067A(8) of the Act. Apart from that provision, Mrs Blackwell placed no reliance on any other component of s 1067A and I am satisfied that none of those other components is met. The other grounds raised by Mrs Blackwell are not within s 1067A of the Act. That section declares, exclusively, the criteria for being independent. Accordingly, those other grounds relied on by Mrs Blackwell do not establish Ms Wetering as being independent. These were based on the level of Ms Wetering’s earnings and whether or not Ms Wetering satisfied the definition of a dependent child. That leaves for consideration s 1067A(8) of the Act. It reads
“Person in State care
(8) A person is independent if the person is not living with a parent, and:
(a) the person is in the guardianship, care or custody of a court, a Minister, or a Department, of the Commonwealth, a State or a Territory; or
(b) there is a current direction from such a court, Minister or Department placing the person in the guardianship, care or custody of someone who is not the person’s parent; or
(c) the person stopped being in a situation described in paragraph (a) or (b) only because of his or her age.
A person to whom this subsection applies is taken, for the purposes of this Part to be in State care”
14. A threshold requirement in that provision is that Ms Wetering was not living with a parent. While I recognise that Ms Blackwell is Ms Wetering’s grandmother, the first issue is whether she is, nonetheless, her “parent” for the purposes of the Act. That term is defined in s 5(1) of the Act as set out above. The only component of that definition of potential relevance to Mrs Blackwell is s 5(1)(b)(iii) of the Act. Mrs Blackwell will be a “parent” as defined if Ms Wetering was wholly or substantially dependent on her during the relevant period which commenced with her claim for youth allowance on 23 August 2010.
15. The Act provides no guidance in interpreting the term “wholly or substantially dependent”. In Re Commissioner of Superannuation v Fay Olive Scott[13], at issue was whether a person was wholly of substantially dependent on another in the context of s 3 of the Superannuation Act 1976 (Cth) ("the Act"). The Full Federal Court concluded[14]:
[13] (1987) 13 FCR 404 at 407-8.
[14] At [408].
“In our opinion the Tribunal erred in law in directing itself that the word "substantially" meant something more than trivial, minimal or nominal. It is necessary to construe it alongside the word "wholly" and not by reference to what it does not mean. It has in our opinion the meaning, in relation to a person in the expression "wholly or substantially dependent", that that person is primarily, essentially or in the main dependent upon another person.”
In Minister for Immigration & Multicultural Affairs v Graovac[15], the Full Federal Court again considered the term, stating[16]:
“…Scott's case, and cases which have followed it, treat "substantially" in the phrase "wholly or substantially dependent" as involving the notion of predominance. When the Full Court in Scott adopted the paraphrase of a person who is "primarily, essentially or in the main" dependent upon another person, in our opinion the Court was describing, in slightly different ways, the same idea, rather than expressing three slightly different ideas. That colours or confines the signification of "essentially".”
[15] [1999] FCA 1690
[16] Per Branson & Hely JJ
16. In that case, reference was made to this example given by the judge at first instance: in a situation where A needs $20 per week for bare survival and gets $2 from B as well as $18 from C, then A is substantially dependent on B as well as on C. The Full Court disagreed with that conclusion, stating[17]:
“A is dependent upon both, but is not wholly or substantially dependent on B because it is upon C that A is mainly dependent. Whilst B's contribution may be essential to A's support, the notion of predominance which is implicit in the phrase "wholly or substantially" dependent, is lacking.”
[17] [1999] FCA 1690 at [12].
17. The Court continued[18]:
“However, in Scott, Fisher and Spender JJ said that a person may be dependent upon another so long as he or she has a need for support, notwithstanding the fact that the need is, for one reason or another, not being satisfied by that other. Thus there may be cases in which a purely quantitative approach will not necessarily determine the issue of dependence. And, in Minister for Immigration & Multicultural Affairs v Pires (1998) 160 ALR 97 Mansfield J held that the expression "wholly or substantially dependent" was intended to convey that the visa applicant had a need to rely upon another person for financial support, rather than simply describing the fact that another person was providing that financial support.
The issue of substantial dependency is to be determined at the time of decision, but the enquiry is as to the state of affairs subsisting at that point in time which may involve consideration of earlier events, and of future probabilities. In Aafjes v Kearney [1976] HCA 5; (1976) 50 ALJR 454, 458 Gibbs J said that the question of whether there is dependence at a particular date is not to be answered by looking only to the circumstances as they existed at that date; past events and future probabilities have to be considered.”
[18] At [13] – [14].
18. It is not in dispute that Ms Wetering was not wholly dependent on Mrs Blackwell when she claimed youth allowance on 23 August 2010 or at any subsequent time. The evidence is that Ms Wetering was dependent on her to some degree. In its statement of facts and contentions, the respondent contended that she was substantially dependent on Mrs Blackwell because Mrs Blackwell provided her with accommodation at $20 per week; because Mrs Blackwell purchased a vehicle for her 18th birthday; and because Mrs Blackwell continued to provide Ms Wetering with meals. Ms Forsythe also referred to the authorities noted above and to Re Semmens and Department of Family and Community Services[19] to support the respondent’s decision.
[19] [2004] AATA 187.
19. In Re Semmens, the issue was whether a 16 year old person was independent in accordance with s 1067A(9) of the Act. He had a full-time job which afforded him a degree of independence but he continued to rely on his uncle with whom he lived and wished to continue living. The enquiry under s 1067A(9) of the Act related to whether Mr Semmens’ uncle was a person from whom he was receiving continuous support, whether directly or indirectly and whether financial or otherwise, from a person who was acting as his guardian on a long-term basis. The Tribunal determined that Mr Semmens was receiving such support and that he was, accordingly, not independent. The Tribunal in that case was not concerned with the definition of “parent” in s 5 of the Act with its reference to whether a person is wholly or substantially dependent on another. I am satisfied that the question of “receiving continuous support, whether directly or indirectly and whether financial or otherwise from another on a long-term basis” raises concepts different from whether a person is wholly or substantially dependent on another.
20. I have noted the reference in Graovac to the question of dependence at a particular date as being answered by considering not only the circumstances as they existed at that particular date but also to past events and future probabilities[20]. Clearly, there were many years when Ms Wetering was completely dependent on Mrs Blackwell. However, in the period leading up to her claim for youth allowance on 23 August 2010 that position had changed substantially because of Ms Wetering taking up part-time employment. Looking forward from the date of claim, those changed arrangements have continued to the date of hearing in July 2011.
[20] Referring to Gibbs J in Aafjes v Kearney[1976] HCA 5; (1976) 50 ALJR 454, 461.
21. The evidence of Mrs Blackwell and Ms Wetering was not challenged by the respondent and I am satisfied they were witnesses of truth. Their evidence before me is that Mrs Blackwell supplies Ms Wetering with meals, on average, twice per week. Mrs Blackwell does not provide her with direct financial support and Ms Wetering is able to manage with income she earns in part-time employment as well as with the food she is able to obtain at a reduced rate or free of charge. Ms Wetering’s transportation needs are met with the vehicle that Mrs Blackwell purchased for her. This was a significant outlay by Mrs Blackwell on Ms Wetering’s behalf but, at and from the date of claim, the day to day running costs of the vehicle have been met by Ms Wetering with assistance from those who share the vehicle’s use. Ms Wetering was living and continues to live in Mrs Blackwell’s house. Initially, she paid a moderate board of $20 per week before this increased to $50 per week in 2011. The group certificate from the bakery where Ms Wetering was employed reflects earnings from 1 July 2010 to 29 May 2011 of $9,351. That is an average for that period of approximately $190 per week. The further statement from the bakery for Ms Wetering’s employment from 7 October 2010 to 17 March 2011 reveals an average of approximately $180 per week. It also reveals that, for 10 weeks in 2011, the weekly average was approximately $220. A lower average weekly payment of approximately $164 is demonstrated for the last 13 weeks of 2010. Ms Wetering’s statement of expenditure reflects an average fortnightly income of $228. However, that was dated 23 March 2011 and is consistent with her 2011 earnings statement from the bakery.
22. Ms Wetering’s statement of expenditure reflects an average outlay in the order of $117 per week. No reference is made to food in that statement and, in her evidence, she nominated $20 per week as her typical outlay which is subsidised through the arrangements she has had at her places of employment and the meals provided by Mrs Blackwell twice per week. This increases the expenses listed in her statement to approximately $137 per week. Those estimates by Ms Wetering of her expenditure may appear to be on the low side. However, as noted above, they were not challenged by the respondent. The estimated expense total is less than the amount described in the earnings statement from the bakery for 2010 and in the group certificate for the 2010/11 financial year.
23. I am satisfied that the degree of financial independence that Ms Wetering has established for herself through her part-time employment means that she is not dependent on Mrs Blackwell "primarily, essentially or in the main", as set out in Scott, or “predominantly” as set out in Graovac. In that sense, she is not wholly or substantially dependent on Mrs Blackwell and it follows that Mrs Blackwell is not her parent as that term is defined in s 5 of the Act. It also means that the threshold requirement in s 1067A(8) of the Act is met.
24. The order of the Family Court referred to above declared that Mrs Blackwell had guardianship and custody of Ms Wetering from 1993. I am satisfied that this continued until Ms Wetering reached 18 years of age[21]. That means that s 1067A(8)(b) and (c) of the Act are met. Having met the requirements of s 1067A(8) of the Act, Ms Wetering is a person in State care and an independent person for the purposes of calculating the level of youth allowance payable to her.
[21] See s 65H(2) of the Family Law Act 1975 (Cth).
Decision
25. The Tribunal sets aside the decision under review and substitutes its decision that the applicant is an independent person for the purposes of calculating her rate of youth allowance.
I certify that the 25 preceding paragraphs are a true copy of the reasons for the decision herein of Mr R G Kenny, Senior Member
Signed: .................[Sgd]............................................
Research AssociateDate/s of Hearing 20 July 2011
Date of Decision 26 August 2011
For the Applicant Mrs S Blackwell
For the Respondent Ms J Forsyth, Departmental Advocate
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