Wheeler and Secretary, Department of Family and Community Service S

[2003] AATA 443

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2003] AATA 443

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q2002/714

GENERAL ADMINISTRATIVE DIVISION		)
Re		FELICITY WHEELER

Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Ms J Cowdroy, Member

Date16 May 2003

PlaceBrisbane

Decision The Tribunal affirms the decision under review, as varied by Centrelink on 11 December 2002. That is, the Tribunal finds that the applicant is not entitled to Youth Allowance from 21 September 2002.

...................(Sgd)......................

Ms J Cowdroy
  Member

CATCHWORDS

SOCIAL SECURITY – benefits and entitlements – youth allowance – eligibility – income - whether applicant is “independent” for the purposes of the Social Security Act 1991 – whether parental income exceeds threshold for eligibility for the allowance – “combined parental income” – whether Tribunal can have regard to parents’ financial commitments when calculating their “combined parental income”

Social Security Act 1991

REASONS FOR DECISION

16 May 2003 Ms J Cowdroy, Member    

Background

1.      By decision dated 7 August 2002, the Social Security Appeals Tribunal (the SSAT) affirmed a decision made by Centrelink on 4 April 2002 not to pay Youth Allowance to the applicant. That decision was varied by Centrelink on 11 December 2002 to the extent that Youth Allowance was granted for the period 19 March 2002 to 20 September 2002. 

Hearing

2.      The matter was determined in the absence of the parties, by consent.  A decision was reached after considering the T documents (marked T1-18), the Supplementary documents (marked S1-S9), as well as the written submissions of the parties.

Evidence

3.      There are a number of matters not in dispute.  The applicant applied for Youth Allowance on 14 March 2002.  On the claim form she indicated she needed to live in Brisbane, away from her permanent home, for the purpose of study.  Her permanent home, which is her parents’ home, is in Mackay.  In 2002 she was enrolled at the Queensland University of Technology as a full-time student undertaking a Bachelor of Justice.  That course is not offered in Mackay.  

4.      On the application form, the applicant’s parents, Dr Anthony Wheeler and Mrs Anne Wheeler, indicated they had a combined taxable income for the year 2000/2001 of $67,329. On 4 April 2002 a decision was made to reject the applicant’s claim on the basis that she was not an independent for Youth Allowance purposes and her parents’ income was above the allowable limit.  On 11 December 2002, Centrelink reassessed her entitlement and granted Youth Allowance from 19 March 2002 to 20 September 2002. From 21 September 2002 the respondent determined the applicant’s entitlement to Youth Allowance as zero. 

Applicant’s Case

5.      In her application for review, Ms Wheeler stated:

“Whilst I understand the rationale for this decision, I believe this decision is wrong as I have no choice but to live away from home to study. My parents combined income is higher than the cut-off parental income level but their expenditures have not been taken into account, neither has the fact that they need to be saving for their future retirement given that they have been unable to invest heavily in superannuation.  They are also supporting my sister who is halfway through a nursing degree.

I have worked throughout my high school years starting work in 1997 in a corner store.  I have never gone for more than three months without work and have saved a lot of this money.  I am trying to support myself whilst at university but can’t afford to continue to do this and will have to consider dropping university at the end of year if no financial aid is obtainable.”

6.      In her application to the SSAT, Ms Wheeler referred to the fact that her parents are unable to support her.  She stated relevantly:

“The criteria used seems close to impossible to be fulfilled by anyone of my age.  I require financial support to continue studying.”

7.      The Tribunal also had regard to the record of a telephone conversation between the applicant and a Centrelink officer (undated) which appears at T16-57.  The notation is made that the applicant had not worked for at least 30 hours per week for 18 months, although she had a part-time job in Brisbane of between 5-16 hours per week. The applicant indicated that she was meeting her living expenses by using her savings and part-time work. 

Respondent’s Case

8.      The applicant’s eligibility for Youth Allowance is calculated on the basis of parental income unless she qualifies as “independent”. It determined that Ms Wheeler did not meet any of the requirements for independent status. As she was required to live away from home for study purposes, the respondent calculated the maximum basic rate at the time of her claim was $301.70, to which was added the maximum rate of rent allowance payable, namely $89.60.

9.      As the applicant is not independent for the purposes of the Social Security Act 1991 (the Act), the respondent then applied the parental income test which is set out in the Act. The parental income free area was calculated at $30,442, which includes an amount for the applicant’s sister who is a student wholly or substantially dependent on her parents.     

10.     The parental income for the 2000/2001 year was $67,329 and for the year 2001/2002, $85,215. The application of the method for calculating eligibility set out in section 1067 of the Act, resulted in the applicant having entitlement to Youth Allowance of $36.65 per fortnight and payment was issued from the lodgment of the claim to 20 September 2002. For the instalment period commencing after 21 September 2002, the parental income was assessed on the income year 2001/2002, as it was more than 125% of the amount in 2000/2001. The application of the calculation resulted in the applicant having no entitlement to Youth Allowance. 

The Legislation and its Application

11.     As the Tribunal understands the applicant’s submissions, she is not contending that she qualifies as an independent person for the purposes of her eligibility for Youth Allowance. Section 1067 of the Act states that “independent” has the meaning given by section 1067A.  A person will be regarded as independent if any of the criteria in subsections (2) to (11) are met.  The only subsection which is of potential relevance to the applicant is (10) which states:

“1067A(10)  A person is independent if the person has supported himself or herself through paid work consisting of:

(a) full-time employment of at least 30 hours per week for at least 18 months during any period of 2 years; or

(b) part-time employment of at least 15 hours per week for at least 2 years since the person last left secondary school; or

(c) a period or periods of employment over an 18 month period since the person last left secondary school, earning the person at least the equivalent of 75% of the maximum Commonwealth training award payment that applied at the start of the period of the employment.”

12.     Whilst there is evidence that the applicant has worked part time for many years, her circumstances do not fall within either (b) or (c) and there is no suggestion that she has been engaged in full time employment of sufficient duration to meet (a). The Tribunal accepts that a person of Ms Wheeler’s age would have great difficulty in meeting any of the above criteria and also notes her contention that it would be difficult to work regularly for 15 hours per week and undertake full time study.  

13.     As the applicant cannot meet the requirements of an “independent”, her entitlement to Youth Allowance must be assessed on the basis of her parents’ income. The parental income is not in dispute. 

14.     The applicant pointed out that her parents’ expenditure has not been taken into account, nor had any regard been paid to the fact that they need to be saving for their retirement.  The definition of “combined parental income” is contained in section 1067G-F10 and it states:

“For the purposes of this Module, a person’s combined parental income for a particular tax year is the sum of the following amounts (income components) in respect of each of the person’s parents:

(a)     the parent’s taxable income for that year;

(b)     the parent’s adjusted fringe benefits total for that year;

(c)     the parent’s target foreign income for that year;

(d)     the parent’s net passive business loss for that year.”

15.     Unfortunately for the applicant, as can be seen, no adjustments are permissible to take into account individual financial circumstances, including expenditure.    

16.     Section 1067GA(1) is the income rate calculation that is used to assess entitlement for Youth Allowance.  There is no challenge to these calculations and I am satisfied they are accurate.  The application of the calculation results in a rate of $36.65 per fortnight up to 20 September 2002. After this payment period the parental income is assessed on the following tax year (2001/2002) of $85,215. The application of the formula results in a nil entitlement to Youth Allowance. 

17.     Whilst having some sympathy to the applicant for the situation in which she finds herself, the Tribunal has no discretion in this matter and the application of the appropriate legislation means that it must affirm the decision under review, as varied by Centrelink on 11 December 2002.

I certify that the 17 preceding paragraphs are a true copy of the reasons for the decision herein of Ms J Cowdroy, Member

Signed:         Sarah Oliver
  Associate

The matter was heard on the papers
Date of Decision  16 May 2003