Yao v D.E.W.R.
[2007] FMCA 63
•20 February 2007
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| YAO v D.E.W.R. | [2007] FMCA 63 |
| ADMINISTRATIVE LAW – Social security legislation – reduction of newstart allowance after breach of activity agreement requiring job seeking – beneficiary undertaking full‑time study without approval – effect of administrative policy for “short‑course” approval – consideration of departure from policy – decisions affirmed by Administrative Appeals Tribunal – no error found in Tribunal’s decision. |
Administrative Appeals Tribunal Act 1975 (Cth), s.44
Administrative Decisions (Judicial Review) Act 1977 (Cth)
Social Security Act 1991 (Cth), ss.593, 593(1), 593(1)(b)(i), 593(2A), 601, 601(1), 601(2), 601(2)(a)(ii)(C), 601(4), 601(6), 604, 604(1), 604(1C), 606, 606(1), 606(1)(b), 606(1)(c), 606(5), 606(5A), 606(5B), 606(5C), 613, 624, 626, 626(1), 626(1A), 626(2), 631B(1), 644AA, 644AB(1), 644AE
Social Security (Administration) Act 1999 (Cth), s.149(4)
Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321
Drake v Minister for Immigration & Ethnic Affairs (1979) 46 FLR 409
Re Drake and Minister for Immigration & Ethnic Affairs (No 2) (1979) 2 ALD 634
Secretary, Department of Employment and Workplace Relations v Kelly (2006) 151 FCR 534
| Applicant: | QING QUAN YAO |
| Respondent: | SECRETARY, DEPARTMENT OF EMPLOYMENT & WORKPLACE RELATIONS |
| File Number: | SYG2194 of 2006 |
| Judgment of: | Smith FM |
| Hearing date: | 15 December 2006 |
| Date of Last Submission: | 19 December 2006 |
| Delivered at: | Sydney |
| Delivered on: | 20 February 2007 |
REPRESENTATION
| Counsel for the Applicant: | Mr W J Carney |
| Solicitors for the Applicant: | Austin Dunhill Barwick |
| Counsel for the Respondent: | Ms K Eastman |
| Solicitors for the Respondent: | Australian Government Solicitor |
ORDERS
The application is dismissed.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG2194 of 2006
| QING QUAN YAO |
Applicant
And
| SECRETARY, DEPARTMENT OF EMPLOYMENT & WORKPLACE RELATIONS |
Respondent
REASONS FOR JUDGMENT
This is an application filed on 21 July 2006 in the Federal Court by way of appeal under s.44 of the Administrative Appeals Tribunal Act 1975 (Cth), which has been transferred to this Court by order of Madgwick J on 8 August 2006. It appeals from a decision of a Senior Member of the Administrative Appeals Tribunal (“the AAT”) made on 7 July 2006, which affirmed a decision of the Social Security Appeals Tribunal (“the SSAT”) made on 6 February 2006, which itself affirmed two previous decisions of Authorised Review Officers (“AROs”) affirming first instance decisions of delegates of the respondent Secretary.
The legislative basis for the operative decisions under review by the AAT will need to be identified below. They were identified by the AAT in practical terms as:
a)An ARO decision dated 21 September 2005 to affirm a decision of a delegate in Centrelink dated 2 August 2005, which reduced the rate of payment of the applicant’s newstart allowance by 18% from 16 August 2005 for 26 weeks until 13 February 2006, as a result of a finding that there had been an “activity test breach”. The breach was found because the applicant’s “Jobseeker Diary”, which he was required to keep pursuant to a “Preparing for Work Agreement” (“the activity agreement”) he signed on 20 April 2005, did not show him making 10 “job search contacts” each fortnight from 20 April 2005 to 20 July 2005 as required by the agreement. I shall refer to this decision as “the breach decision”.
b)A decision of an ARO dated 23 November 2005, affirming earlier decisions of delegates made implicitly prior to, or at, the time when the applicant entered his activity agreement. In those decisions, approval was not given for the applicant to undertake a full‑time TAFE course beyond December 2004, as a method of satisfying the activity test for newstart allowance. I shall refer to this decision as “the activity decision”.
Put shortly, the applicant’s breach of his activity agreement arose because he continued full‑time accounting studies during 2005 rather than engaging in the required job searching, notwithstanding the absence of an approval for his undertaking studies in lieu of job searching. The operative activity decision therefore occurred chronologically earlier than the breach decision.
The reverse sequence of the two ARO decisions occurred because the applicant did not seek review of any earlier decision as to the activities he was required to undertake, or was approved to undertake, during 2005 as a condition of receiving newstart allowance, until the need to seek such review was suggested to him by the SSAT in the course of his appeal against the breach decision. It then appeared to the SSAT that the applicant did not dispute the breach of his activity agreement and his consequent liability to an “activity test breach rate reduction period”, but that he wished to challenge earlier discretionary decisions to refuse approval to continue his studies during 2005.
As I shall explain below, both the SSAT and the AAT upheld that refusal, and found that this was in accordance with an appropriately applied policy. They therefore found that the allowance rate reduction period was properly imposed.
In fact, it seems that the adverse decisions did not affect the applicant for the full rate reduction period. According to the SSAT, “the breach and rate reduction ceased to apply from 19 October 2005 in Mr Yao’s case as he entered into a “Work for the Dole” program at that time. This is in accordance with subsection 626(2) of the Act”. The applicant’s case, therefore, concerns in practical terms only his liability to a reduced newstart allowance for nine weeks in 2005. However, he contends that the decision to refuse approval for his continued studies in that year was wrong and unfair, and has chosen to pursue his rights of appeal and judicial review.
The background
The factual background to the decisions reviewed by the AAT was concisely summarised in its statement of reasons, and it is convenient to extract this in full:
5.The facts were essentially not in dispute between the parties, although their interpretation was on several points in contention, as will be noted below.
6.Mr Yao arrived in Australia from China in July 2000. He has permanent residence status. He is presently 35 years of age. He enrolled at the University of New South Wales in the course for the degree of Master of Engineering Science, which he successfully completed in July 2002. Mr Yao then applied to Centrelink for a Newstart allowance, which was granted with effect from 12 August 2002. He has been in continuous receipt of this allowance (subject to the reduction later to be mentioned) since that time.
7.On 14 August 2002 the applicant entered into a Preparing for Work Agreement. He entered into a further Preparing for Work Agreement on 20 December 2002. These agreements obliged the Applicant, inter alia, to actively seek work, keep a jobseeker diary, and report any change in his circumstances. Under the Mutual Obligation Initiative Policy, referred to in the Agreement, and applicable to persons in the age group to which the Applicant belongs, part‑time study (but not full‑time study) is one of the permitted activities satisfying the Mutual Obligation requirements.
8.No evidence was provided by either party as to whether the Applicant was engaged in employment during 2003.
9.On 6 February 2004 the Applicant advised the Centrelink Office at Auburn that he was engaged in full‑time study. As a consequence he was given a form of application for an Austudy grant, since he was advised that Newstart allowance would not cover such an activity.
10.On 31 May 2004 the Centrelink Office at Auburn recorded that the Applicant had not lodged the Austudy claim form issued to him on 6 February 2004, stating that he had lost it. The Applicant informed the Office that he had been studying full‑time at Granville TAFE in the course for the Diploma of Accounting. The Office advised the Applicant that a Newstart allowance could only be paid to persons looking for work and that only short course approvals could be given within Newstart. He was advised to lodge his alternative claim under Austudy as soon as possible. He was advised of the possibility that his Newstart allowance could be cancelled.
11.On 4 June 2004 the Applicant lodged an application for Austudy in respect of the Diploma in Accounting Course No. 9265 at South Western Sydney Institute of TAFE. He had already been enrolled in this course since 9 February 2004. The end date of the course was given as 19 December 2004.
12.By a letter to the Applicant dated 9 June 2004 Centrelink notified him that his claim for Austudy had been rejected. The reason given for refusal was that “Austudy is not payable to customers who have completed a Masters Degree.” (The Applicant had stated on his application form that he possessed the degree of Master of Engineering Science awarded by the UNSW.) He was advised that he had the right to appeal against this decision to an Authorised Review Officer (“ARO”) within 13 weeks of notification. The Applicant did not avail himself of this right.
13.At this point the record of Centrelink falls silent for the remainder of 2004. No action appears to have been taken to follow up the letter of 9 June 2004 rejecting the application for Austudy. The record does not resume until February 2005. The following remarks by the SSAT explain the gap in the record:
“It appears to the tribunal that Mr Yao was granted short course approval during 2004 by default. There is no evidence that any Centrelink officer made a positive decision to permit the full time Diploma of Accounting course to be accepted as an approved activity. This was an administrative lapse on Centrelink’s part but it has caused no injury to Mr Yao except to perhaps lull him into a false sense of security that Centrelink had no problem with his full time study and his Newstart allowance entitlement. However, it is clear to the tribunal that the file note recorded on 31 May 2004 shows that Mr Yao was told face to face (if not in writing) that Centrelink had concerns about his continuing studies as at that date. As the file note states: ‘(customer) was advised (Newstart allowance) payable for customer looking for work and only (short) course approval may be given.’
It seems to the Tribunal that Centrelink have acquiesced and have implicitly granted Mr Yao a short course exemption from the activity test during the period 31 May 2004 to 10 December 2004. They did not put this in writing. However, as Centrelink never cancelled Mr Yao’s Newstart allowance for this period nor raised a debt, his full time study during 2004 was found not to disturb his eligibility for Newstart allowance.”
14.On 27 January 2005 the Applicant enrolled at Granville College in the Advanced Diploma of Accounting, course code 9266.
15.On 1 February 2005 the Applicant contacted the Centrelink Office at Auburn regarding his Newstart allowance. The file note stated that “Customer is still studying full time, same advanced diploma for which Austudy was rejected last July. Short course exemption was given for Newstart allowance for six months but now he has commenced Intensive Support and must test his employability for at least 6 months. Advised via interpreter that his NSA [Newstart allowance] requires that he complies with the activity test, breach implications also advised. This is the second time today he has been advised of this. Austudy claim issued so he can get a formal decision that he can’t be paid as a student.”
16.On 20 April 2005 the Applicant entered into a new Preparing for Work Agreement. This obliged him, inter alia, from 20 April to 20 July 2005, to make 10 job search contacts each fortnight and record these in his Jobseeker Diary.
17.On 2 August the Applicant was advised of the suspension of his Newstart allowance. The letter stated that: “Your Newstart allowance has been suspended because a review of your Jobseeker Diary has indicated that your work efforts and/or availability have been unsatisfactory. This has also resulted in an activity test breach. The breach occurred on 27 July 2005 and as you have had no other activity test breaches in the 2 years immediately prior to this date, your rate will be reduced by 18% from 16 August 2005 until 13 February 2006.” The Applicant was advised of his right to have this decision reviewed.
18.The Applicant attended the Centrelink office at Auburn on 8 August and was told that the reason why a breach of the activity test had occurred was that only 20 jobs were entered in the Jobseeker Diary.
19.The copy of the Applicant’s Jobseeker Diary contained in the T documents showed that these entries covered only two fortnightly periods in July 2005, and no earlier periods.
20.By letter to the Centrelink Authorised Review Officer dated 10 August 2005 the Applicant claimed that he had satisfied the activity test in that:
(a)He had been engaged in full‑time study for the Advanced Diploma in Accounting at Granville TAFE from 17 January 2005;
(b)He had logged 4 job searches per fortnight with his application for payment forms since 20 April 2005; and
(c)He had recorded 10 job search activities each fortnight from 29 June to 27 July 2005 in his Jobseeker Diary, covering the period of the four weeks of the TAFE holidays.
21.The Applicant’s case was reviewed by the Authorised Review Officer (“ARO”), Centreline Area West NSW, whose decision, dated 21 September 2005, confirmed the breach and rate deduction. The decision referred, inter alia, to the Policy Reference: The Guide NSA Activity Testing Full‑time Vocational Short Course. The decision described the policy as follows:
“A full‑time vocational short course is a course of up to 12 months duration with an employment focus. Generally a person on NSA [Newstart Allowance] would be expected to test their employability in the labour market for at least 6 months before being given approval to participate in a full‑time vocational short course. However, a full‑time short course can be approved prior to testing employability in the labour market for NSA if participation in the course would clearly improve the recipient’s short‑term employment prospects. To improve a person’s short‑term employment prospects it would be expected that after completing the course the person would be able to gain employment in the field in which they studied within the following 2 months.”
22.Applying that policy to the circumstances of the Applicant, the ARO stated that:
“I noted that in your case an exemption from the Activity Test under ‘Short course approval’ had been given to you for the period 03 June 2004 to 10 December 2004 to enable you to complete the 12 month Accounting diploma course. Your 2005 TAFE enrolment forms show that you enrolled in the Advanced Diploma of Accounting at Granville College of TAFE on 27 January 2005 for the first semester and again on 18 July 2005 for the second semester. It can be seen that a period of short course approval had been granted to you in the second half of 2004 and that it would not be appropriate to grant another period of short course exemption before six months of testing your employability in the labour market.”
23.The Applicant appealed against this decision of the ARO to the SSAT. On 26 October 2005 the SSAT sent the file back to Centrelink pointing out that the ARO had not expressly reviewed the decision not to grant an extension of short course approval, and requesting that such a review be made.
24.On 23 November 2005 the ARO reviewed and confirmed the decision of 10 December 2004 to refuse to give short course approval after December 2004.
The legislation
The relevant provisions of the Social Security Act 1991 (Cth) (“the Social Security Act”) were not cited by the AAT, which appears to have assumed that these were sufficiently identified in the SSAT’s reasons and in the submissions of the Secretary to the AAT. Unfortunately, the former do not precisely identify the powers of the Secretary which were exercised in the decisions under review, and the latter are not before me.
The representatives of neither party took me to any provisions of the Act, nor did they submit that the AAT’s reasons disclosed any relevant misapprehension as to a relevant provision. Like the AAT, they assumed that the legislative background was uncontroversial, and was sufficiently identified by narrating the course of administrative decision‑making set out above. As I shall indicate, the applicant’s submissions now challenge some of the AAT’s findings of fact and its application of administrative policy, rather than the legal analysis the AAT implicitly performed.
However, I was concerned to understand the legislative background to its decision, and invited the parties after the hearing to submit supplementary submissions which identified the sections of the Act which conferred the powers or discretions to which the policy applied by the AAT related. The respondent made a brief submission, referring me to ss.593, 601, 606, and 613 of the Social Security Act. I shall set out relevant parts of these provisions from a July 2005 consolidation of the Act, together with other provisions which appear to me to be relevant to the present case.
The payment of newstart allowance is governed by Part 2.12 of Chapter 2 of the Social Security Act. The general qualification to receive payment in respect of a period is provided by a series of conditions set out in s.593, including:
593(1)…
(a) the person satisfies the Secretary that:
(i)throughout the period the person is unemployed; or
…
(b) in the case of a person to whom subparagraph (a)(i) applies–throughout the period, or for each period within the period, the person:
(i)satisfies the activity test; or
(ii)is not required to satisfy the activity test; and
(c) if subsection 604(1) applies to the person, at all times (if any) during the period when the person is not a party to a Newstart Activity Agreement, the person is prepared to enter into such an agreement; and
(d) if subsection 604(1) applies to the person, at all times during the period when the person is a party to a Newstart Activity Agreement, the person is prepared to enter into another such agreement instead of the existing agreement; and
(e) if the person is required by the Secretary to enter into a Newstart Activity Agreement in relation to the period, the person enters into that agreement; and
(f) while the agreement is in force, the person satisfies the Secretary that the person is taking reasonable steps to comply with the terms of the agreement; and
…
593(2A)For the purposes of paragraph (1)(f) or (2)(f), a person is taking reasonable steps to comply with the terms of a Newstart Activity Agreement unless the person has failed to comply with the terms of the agreement and:
(a) the main reason for failing to comply involved a matter that was within the person’s control; or
(b) the circumstances that prevented the person from complying were reasonably foreseeable by the person.
The obligation in s.593(1)(b)(i) to satisfy “the activity test” is generally performed by the beneficiary actively seeking work as required by s.601(1), but under s.601(2) it may be performed by undertaking a vocational or other course approved if the Secretary so requires. The activity test can also be satisfied under s.601(4) if the person takes reasonable steps to comply with the terms of a newstart activity agreement. These provisions are:
601(1)Subject to subsections (1A) and (3), a person satisfies the activity test in respect of a period if the person satisfies the Secretary that, throughout the period, the person is:
(a) actively seeking; and
(b) willing to undertake;
paid work in Australia, other than paid work that is unsuitable to be undertaken by the person.
…
601(2)A person also satisfies the activity test in respect of a period if:
(a) the Secretary is of the opinion that, throughout the period, the person:
…
(ii)should:
(A)undertake a course of vocational training; or
(B)participate in a labour market program; or
(BA)participate in a rehabilitation program; or
(C)participate in another course;
approved by the Employment Secretary which is likely to:
(D)improve the person’s prospects of obtaining suitable paid work; or
(E)assist the person in seeking suitable paid work; or
…
(b) the Secretary notifies the person that the person is required to act in accordance with the opinion; and
(c) the person takes reasonable steps to comply, throughout the period, with the Secretary’s requirement.
…
601(4)A person also satisfies the activity test in respect of a period if, throughout the period, the person is taking reasonable steps to comply with the terms of a Newstart Activity Agreement between the Secretary and the person.
…
601(6)For the purposes of this section, a person takes reasonable steps to comply with a notice under subsection (1A), with a requirement of the Secretary under subsection (2), or with the terms of a Newstart Activity Agreement (as the case requires) unless the person has failed so to comply and:
(a) the main reason for failing to comply involved a matter that was within the person’s control; or
(b) the circumstances that prevented the person from complying were reasonably foreseeable by the person.
The entry into, and content of, a newstart activity agreement is governed by a series of provisions in Subdivision C. Section 604(1) provides generally that “if a person is in receipt of a newstart allowance, the Secretary may require the person to enter into a Newstart Activity Agreement”. This is described generally by s.604(1C) as “a written agreement in a form approved by the Secretary and the Employment Secretary. The agreement is between the person and the Secretary”. It is not necessary to examine these requirements further, nor to consider the form of the agreements signed by the applicant, since no issue is taken with these matters.
Under s.606(1) an activity agreement itself can contain provision requiring the applicant to seek employment or to undertake a vocational course of study:
606(1)A Newstart Activity Agreement with a person is to require the person to undertake one or more of the following activities approved by the Secretary:
(a) a job search;
(b) a vocational training course;
(c) training that would help in searching for work;
(d) paid work experience;
(e) measures designed to eliminate or reduce any disadvantage the person has in the labour market;
(ea) subject to section 607A, development of self‑employment;
(eb) subject to section 607B, development of and/or participation in group enterprises or co‑operative enterprises;
(ec) an approved program of work for income support payment;
(f) participation in a labour market program;
(fa) participation in a rehabilitation program;
(fb) participation in the PSP;
(g) another activity that the Secretary regards as suitable for the person and that is agreed to between the person and the Secretary.
An activity agreement is subject to review and renegotiation at any time:
606(5)An agreement with a person:
(a) may be varied (in negotiation with the person) or suspended; and
(b) if another Newstart Activity Agreement is made with the person, may be cancelled; and
(c) may be reviewed from time to time at the request of either party to the agreement; and
(d) may be cancelled by the Secretary after a review under paragraph (c).
606(5A)Within 14 days of the terms of the agreement being approved, those terms may be varied by the person with the approval of the Secretary.
606(5B)The Secretary must advise the person in writing of the effect of subsection (5A).
606(5C)To avoid doubt, subsection (5A) does not prevent the person at any time from requesting a review of an agreement under paragraph (5)(c).
Under Subdivision F, there is provision in s.624 for penal consequences for a failure to satisfy the activity test. There is also in s.626 separate, but duplicate, penalties for failing to comply with obligations under a newstart activity agreement. It provides:
626(1)Subject to subsection (2), if:
(a) a person is required to take reasonable steps to comply with the terms of a Newstart Activity Agreement in order to qualify, or to continue to qualify, for a newstart allowance; and
(b) the person fails to take reasonable steps to comply with the terms of the Newstart Activity Agreement (the failure);
a newstart allowance is not payable to the person because of the failure.
626(1A)If a newstart allowance becomes payable to the person after the time it ceases to be payable under subsection (1), then:
(a) if the failure is the person’s first or second activity test breach in the 2 years immediately before the day after the failure–an activity test breach rate reduction period applies to the person; or
(b) if the failure is the person’s third or subsequent activity test breach in the 2 years immediately before the day after the failure–an activity test non‑payment period applies to the person.
…
The language of the section makes clear that the penalties under s.626(1A) of a period of reduced allowance or a period of “non‑payment” arise upon the existence of the stated factual situation of non‑compliance with the activity agreement, and no discretion is conferred on the Secretary by this section or any other section to waive or vary the penalty incurred. However, the existence of a factual situation of “breach” is necessarily a matter for determination by a delegate of the Secretary, and the proper imposition of a penalty would then become reviewable by the SSAT and AAT, as in the present case. The need for an operative determination is made clear in s.644AB(1), which requires the Secretary to given a written notice of the commencement of the reduction period, which is required to start on the 14th day after the day on which the notice is given.
Under s.644AA, the reduction period is a period of 26 weeks where the breach is constituted by “a failure to take reasonable steps to comply with a job search requirement of a Newstart Allowance Activity Agreement”, such as was admitted by the present applicant. As I have noted above, the provisions of ss.626(2) or 631B(1) subsequently applied to cut short the 26 week reduction period applicable to the applicant. The quantum of the rate reduction was also a matter determined by direct effect of the Act, since s.644AE provided a formula under a special rate calculator.
The issues before the AAT
It is unnecessary for me to take a closer examination of the complex provisions which governed the imposition of an 18% reduction of the applicant’s newstart allowance from 16 August 2005.
The applicant admitted before the SSAT and AAT that he had been required in April 2005 to enter into a newstart activity agreement, which contained the following requirement in relation to a “Jobseeker Diary”:
·I will fully participate in Intensive Support after discussing it with my Job Network member.
·From 20 APR 2005 to 20 JUL 2005 I will make 10 job search contact/s each fortnight and record these in my Jobseeker Diary. I will return my completed Jobseeker Diary on 20 JUL 2005. These job search contact/s will include all types of suitable work, including part‑time, casual and full‑time.
Of the 10 job search contact/s I agree to make and record in my Jobseeker Diary:
oat least 1 job search contact per fortnight will be made through a Job Network member.
oat least 4 job search contact/s each fortnight will also be recorded on my application for payment form(s) from 20 APR 2005 to 20 JUL 2005.
·From 20 APR 2005 I will make 4 job search contact/s each fortnight and record these job search contact/s on my application for payment forms. These job search contact/s will include all types of suitable work, including part‑time, casual and full‑time.
Of the 4 job search contact/s I agree to make and record on my application for payment forms:
oat least 1 job search contact per fortnight will be made through a Job Network member.
(emphasis in original)
He also did not contest that by September 2005 he was in “breach” of this obligation. He told the SSAT:
23.Mr Yao said he could not undertake the 10 employer contacts each fortnight when he was studying full time. He did not have the time. Mr Yao insisted that Centrelink should have sent him a letter in February 2005 if they had decided not to allow a further short course exemption. As he had not received such a letter he assumed that his study in the Advanced Diploma of Accounting had been approved. Mr Yao told the tribunal that this study will help him get a job and Centrelink should not be frustrating him in this regard.
The applicant did not present any argument nor evidence to the AAT suggesting that his non‑compliance could be excused under ss.593(2A) or 601(6) (see above), and no contention was made to me that the AAT erred in law by failing to consider the application of these provisions. In effect, it was conceded by the applicant that the original determination made on 2 August 2005 to give effect to a 26 week rate reduction period under s.626(1A) should be upheld, unless the AAT decided that the Secretary should have given “short course approval” for his advanced accounting diploma in which he enrolled in 2005, rather than requiring in April 2005 that he participate in intensive support by undertaking 10 job search contacts each fortnight.
The live issue for the AAT was, therefore, whether a wrong discretionary decision had been taken by a delegate at or prior to the applicant’s interview in April 2005, by refusing to give “short course approval” in relation to the advanced accountancy course in which the applicant had enrolled in 2005.
The term “short course approval” is not found in the legislation which I have set out above, but is a term adopted for administrative convenience when applying the Secretary’s discretions to require a newstart allowance beneficiary to undertake a course of study rather than jobseeking. The discretions are found either in the Secretary’s power to require participation in a course under s.601(2)(a)(ii)(C), or in the Secretary’s power under s.606(1)(b) or (c) to include the undertaking of the course as a term of a newstart activity agreement.
The SSAT at [55] of its decision identified the latter power as the power under consideration in the applicant’s case, and the AAT may be assumed to have accepted that reasoning. Neither party contended before me that this reasoning was attended by any error of law, nor that the AAT was under any misapprehension as to the existence of a relevant discretionary power in the Secretary to allow the applicant to undertake his 2005 course so as to satisfy the activity test.
The ARO who affirmed the activity decision, identified relevant policy considerations, and applied them to the applicant’s circumstances, when explaining his decision to the applicant:
Summary
Both full‑time and part–time study may be included as an approved activity in a Preparing for Work Agreement for the purpose of fulfilling the activity test for job seekers receiving NSA.
Newstart allowance
NSA provides a safety net for people who are unemployed and looking for suitable work. NSA is not intended as a payment for students and recipients are generally not able to undertake full‑time study, but should claim Youth Allowance or Austudy. However, there are some circumstances under which full‑time study can be approved, as an activity for inclusion in their PFWA for NSA recipients. These are where the customer:
·is undertaking a full‑time vocational short course of less than 12 months duration, or
·has less than 12 months of full‑time study remaining to complete an undergraduate course, and are not eligible for another payment, or
·has claimed ABSTUDY.
Any part‑time study undertaken for less than 20 hours (total) per week does not need approval as long as the job seeker is still able to fully satisfy their job search and other obligations. Study of less than 20 hours a week may also be used to help a person fulfil their NSA activity test requirements.
Policy reference: The Guide NSA Activity Testing Full‑time vocational short course
A full‑time vocational short course is a course of up to 12 months duration with an employment focus. Generally a person on NSA would be expected to test their employability in the labour market for at least 6 months before being given approval to participate in a full‑time vocational short course. However, a full‑time short course can be approved prior to testing employability in the labour market for NSA if participation in the course would clearly improve the recipient’s short‑term employment prospects. To improve a person’s short‑term employment prospects it would be expected that after completing the course the person would be able to gain employment in the field in which they studied within the following 2 months.
I noted that you wrote in your letter received on 26 October 2005; “Diploma of accounting is an 18 months full time study course, the policy guide gives 12 months so why does Centrelink only give me 6 months”. I noted that in your case an exemption from the Activity Test under “Short course approval” had been given to you for the period 03 June 2004 to 19 December 2004 to enable you to complete the 6 months remaining in the Accounting diploma course id no 9265.
This decision was made under policy guidelines contained in Section 3.2.8.110 of the Guide.
Section 3.2.8.110 of the Guide further discusses Approved Activity – Study.
“There are different approval procedures for a NSA short course depending on how long it will take to complete the course.
6 months or less of the course
If a full‑time student requires less than 6 months to complete their course but they have exhausted all options for a study payment, making NSA the only payment option, then they can continue their full‑time studies whilst receiving NSA for a maximum of 6 months. The student does not need to justify that completing the course will increase their employment prospects.
6‑12 months remaining of the course
Not all students with over 6 months but less than 12 months of full‑time study remaining of their course will be able to have this approved as an activity in their PFWA. Approval should only be given if completion of the course would clearly improve the recipients’ employment prospects. Each case will need to be decided individually, taking into account the person’s particular circumstances.
If a decision is made that the remaining study is not to be approved, the person may continue part‑time study in addition to meeting their job search and other obligations. See below ‘Part‑time study of less than 20 hours a week’ for more information.
Over 12 months remaining of the course
Students with more than 12 months of full‑time study remaining of a course are not able to have this full‑time study included as an approved activity in their NSA PFWA. They can continue part‑time study in addition to meeting their job search and other obligations.”
As you provided information regarding the TAFE Accounting diploma course no: 9625 with your claim for Austudy form and you were expected to finish the course within 6 months by December 2004, approval was given for you to complete the course as an approved activity under the 6 months policy guidelines contained in Section 3.2.8.110 of the Guide.
Your 2005 TAFE enrolment forms shows that you enrolled in the Advanced Diploma of Accounting course number 9266 at Granville College of TAFE on 27 January 2005 for the first semester and again on 18 July 2005 for the second semester. It can be seen that this is a new course. Information from TAFE NSW shows that course number 9266 has 1,268 nominal hours. At 22 hours per week it can be seen that the course will take 58 weeks to complete (not allowing for vacation breaks).
This means that the course is over 12 months duration and under the 12 month or more policy contained in Section 3.2.8.110 of the Guide Students with more than 12 months of full‑time study remaining of a course are not able to have this full‑time study included as an approved activity in their NSA PFWA.
At all times, it was common ground that the ARO had identified relevant parts of the Department’s guide to the administration of the legislation, as did the earlier ARO. A full extract of the policy was provided by the SSAT in its decision.
As did the ARO, the SSAT found that the applicant’s 2005 course was a separate course from the course in which he was enrolled in 2004. It also found that, whether treated separately or as a continuation of the 2004 course, it was incapable of coming within the terms of the policy guide. It concluded that “Mr Yao’s period of full time study lasted at least 18 months, for the whole of 2004 and the first semester of 2005. The tribunal considers that such a long period of full time study is inconsistent with newstart allowance’s primary purpose”. It also considered the dealings between the applicant and Centrelink during 2005 broadly, and concluded that “the terms of the activity agreement dated 20 April 2005 were reasonable”, i.e. in their requirement of intensive job seeking and their implicit denial of approval for further full‑time study. It therefore concluded that the correct decision had been taken in September to act upon the applicant’s failure to comply with that agreement.
The SSAT’s reasoning leading to these conclusions contained a reference to a leading authority on the status of government policy in the course of merits review of discretionary decisions: Re Drake and Minister for Immigration & Ethnic Affairs (No 2) (1979) 2 ALD 634 (“Drake’s case”) (on remitter from Drake v Minister for Immigration & Ethnic Affairs (1979) 46 FLR 409). It recognised that “the tribunal is not necessarily bound to apply Government Policy”, and quoted Brennan J at 645:
When the Tribunal is reviewing the exercise of a discretionary power reposed in a Minister, and the Minister has adopted a general policy to guide him in the exercise of the power, the Tribunal will ordinarily apply that policy in reviewing the decision, unless the policy is unlawful or unless its application tends to produce an unjust decision in the circumstances of the particular case. Where the policy would ordinarily be applied, an argument against the policy itself or against its application in the particular case will be considered, but cogent reasons will have to be shown against its application, especially if the policy is shown to have been exposed to parliamentary scrutiny.
I have referred at some length to the reasoning followed by the ARO and the SSAT, since it significantly assists to explain how the AAT addressed the matter before it.
The AAT’s reasoning
The AAT noted that the applicant had raised a series of questions concerning Centrelink’s decision‑making, and that they had been answered in the respondent’s statement of facts and contention. It then identified the arguments presented by the applicant at the hearing, and briefly gave its reasoning which answered them. It is convenient to extract the whole of this concluding part of the Tribunal’s reasons for affirming the decisions under review:
28.At the hearing the Applicant confined himself to challenging three of the contentions made on behalf of the Respondent.
29.The first of these contentions was to the effect that, on 31 May 2004, the Applicant had been informed orally that a Newstart allowance was payable only if he was looking for full‑time work, although short course approval might be given. The Applicant disputed that he was told that Newstart could not be paid while he was engaged in full‑time study. However, having regard to the fact that on this date the Applicant filed an application for Austudy to cover his full-time study, and this was rejected by letter dated 9 June 2004, it is difficult to accept that the Applicant was unaware that his continuing receipt of benefits under Newstart was irregular.
30.The second contention by the Respondent was that the Applicant was given a jobseeker diary on 20 April 2005 as part of his Preparing for Work Agreement. The Applicant stated before the Tribunal that he did not receive the diary until 13 July 2005. However, the Preparing for Work Agreement signed by the Applicant on 20 April 2005 contained the statement that “From 20 APR 2005 to 20 JUL 2005 I will make 10 job search contact/s each fortnight and record these in my Jobseeker Diary….” (Emphasis in original). The jobseeker diary itself, included in the T documents, directs on its cover “Start filling out this Diary on 20/4//05.”
31.The third contention disputed by the Applicant was that the Advanced Diploma in Accounting, in which the Applicant was enrolled throughout 2005, was not a continuation of the course in which the Applicant had been enrolled in 2004, but a new course for which no approval had been given. The Applicant claimed that it was all one course. However, this is belied by the fact that the Advanced Diploma has a separate course code number, and is clearly treated by Granville TAFE as a separate course, albeit that satisfactory completion of the earlier Diploma was a prerequisite for enrolment in the advanced course.
32.Moreover, the Applicant argued that, because he had not been given a specific written decision that his continued full‑time study in 2005 (following the “default” approval of the course in which he was enrolled in 2004) was not rejected as an approved activity under Newstart, he was entitled to assume that it was approved.
33.It is difficult for the Tribunal to accept the Applicant’s arguments. While it is true that there was no written decision communicated to him that he was prohibited from engaging in full‑time study in 2005, such a decision was implicit in the decision to reject his application for Austudy. It was implicit also in his entering into a Preparing for Work Agreement on 20 April 2005, which required him to look for full‑time work. Moreover, the irregularity of his situation, and his options, were explained to him on several occasions orally, at least once in the presence of a Mandarin interpreter.
34.The Tribunal must conclude that the Applicant ignored all the warnings that he had been given. He stated in evidence that “Centrelink’s policies are not part of law,” and that the terms of the Preparing for Work Agreement of 20 April 2005 were “not reasonable”. Such an attitude displays the Applicant’s conscious disregard of the conditions under which he was receiving a Newstart allowance, and a fixed determination that he would prevail in his ambition to complete two diplomas on a full‑time basis in preference to seeking work. It may be that, as the SSAT remarked, he had been lulled into a false sense of security by the failure of Centrelink to take punitive action against him in 2004, but this hardly excuses his attitude in 2005. Nor is there any evidence of misunderstanding on the Applicant’s part. The rules were explained to him on several occasions. He is, moreover, the holder of a Masters degree and two diplomas (the latter was awarded in December 2005 with a Distinction grade) from Australian tertiary institutions. He is an intelligent and educated person.
35.It is clear to the tribunal that Centrelink was administering rules plainly set out in the applicable legislation and policy. Policy directives, contrary to the argument of the Applicant, are to be given effect by the decision maker, unless the policy is unlawful or its application would tend to produce an unjust decision in the circumstances of the particular case: Re Drake and Minister for Immigration and Ethnic Affairs (No.2) (1979) 2 ALD 634, at 645. There is no basis in the circumstances of the present case for regarding the application of the applicable policy as unlawful or unjust.
The questions of law and grounds of appeal
Until shortly before the hearing, the applicant represented himself in this Court, as he had before the SSAT and the AAT. His original application and an amended application contained detailed criticisms of the actions of Centrelink staff at various stages of his history, both as to their factual basis and merits. Many of his points were framed in terms of grounds of judicial review of these decisions under the Administrative Decisions (Judicial Review) Act 1977 (Cth) (“the AD(JR) Act”). However, at an interlocutory stage I refused him leave to amend his s.44 appeal so as to encompass other claims under the AD(JR) Act directed at the decision‑making which occurred at the Centrelink level. I did so because it appeared to me that there were clear discretionary reasons for refusing the applicant the required extensions of time and substantive relief, in particular, since he had elected to pursue his disputes with Centrelink by exercising his rights of merits review. I could see no issue raised by the applicant which had any practical effect on his entitlements to newstart allowance, and which had not been addressed by the decisions of the SSAT and the AAT.
At the hearing, the applicant was represented by counsel, who did not seek to extend the matter beyond an appeal from the AAT’s decision, and did not rely upon the documents previously filed by the applicant. He relied upon an amended notice of appeal which was filed at the hearing. This purported to identify the following as the questions of law raised on the appeal:
2.THE QUESTIONS OF LAW raised on appeal are –
(a)That there was no evidence on which the tribunal could conclude that the Applicant was engaged in a full time course for a period longer than 12 months the evidence in paragraph eleven is that the course was of ten months duration.
(b)In paragraph 13 the tribunal notes that a “short course exemption must have been granted in 2004”. We argue by extension that the same must be said of the Course undertaken in 2005 as no objection or debt was raised in regards this course either.
(c)In paragraph 14 the tribunal noted that in 2005 the Applicant entered into a different course namely an Advanced Diploma of Accounting.
(d)Accordingly there is no evidence that the applicant was doing any thing not allowed by the respondent and no evidence to suggest the Courses he was engaged in were in any way outside the respondent’s guidelines (see paragraph 21 “the Guide NSA Activity Testing Fulltime Vocational Short Course”).
(e)The requirement for Preparing for Work Agreement was obviously entered into in contravention of the respondent’s acceptance of the applicant’s status as a student doing a vocational course of short duration and consequently the policy requiring such an agreement was unfair and contradictory (see Drake v Minister for Immigration and Ethnic Affairs).
As I understood the argument presented in support of paragraphs (a) to (d), it was contended that it was not open to the AAT to conclude as a matter of fact (c.f. Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 356), that the Advanced Diploma of Accounting course which the applicant enrolled in 2005 was a course exceeding 12 months duration, and therefore was outside the policy for giving “short course approval” for the activity test.
I accept that the Tribunal probably did make such a finding, since it implicitly accepted the reasoning of the ARO and the SSAT which was to this effect. Their reasoning included reference to factual investigations by the ARO, which are contained in the passage I have extracted above, and which made calculations supporting an opinion that the course was over 12 months duration. In view of the information referred to by the ARO, I am not satisfied that it was not reasonably open to the AAT to find that the applicant’s 2005 course was not within the terms of the Secretary’s policy. Indeed, I was ultimately left in doubt whether the applicant could seriously contend that it was within the policy.
There was no inconsistency in the AAT’s findings about the 2005 course, as appears to be suggested in the amended notice of appeal. The dates of the course which were referred to by the AAT at paragraph 11 of its reasons (extracted above at [7]) concerned the applicant’s 2004 course, and not his 2005 course. Nor, in my opinion, can the applicant identify inconsistency by reference to paragraph 15 of the AAT’s reasoning. That paragraph referred to a file note in which the applicant was recorded as suggesting to Centrelink in February 2005 that he was continuing the same course into 2005. However, the ARO and SSAT were clearly aware that his 2005 studies involved a new “advanced” accountancy course, and the AAT expressly found to this effect at paragraph 31 (extracted above at [31]).
I can find no error of law identified in the applicant’s arguments against the AAT’s rejection of the applicant’s claim that he was implicitly given approval to continue his studies into 2005. As the AAT pointed out, this factual claim was inconsistent with records showing that in early 2005 the applicant was put on notice that his previous short course approval had expired. The AAT concluded that the applicant ignored warnings when proceeding with his 2005 studies, and I consider that this was a conclusion which was open to it on the evidence.
The final argument presented to me was that the Tribunal erred when considering whether the applicant’s undertaking of the 2005 course should have been approved for the purposes of the activity test, notwithstanding that this would not be within the policy.
I accept that the applicant argued to the Tribunal that the absence of a clearly recorded approval of the 2004 course had led him to assume that the 2005 course had been or would also be approved, and that it would therefore be fair to give this approval. He also argued to the AAT that he was unfairly required in April 2005 to agree to undertake intensive job seeking, in circumstances where it was reasonable for him to be completing his full‑time studies in advanced accountancy.
However, I can identify no error of law in how the AAT has dealt with these contentions. It addressed the arguments which the applicant presented to it. Its reference to Drake’s case indicates that it was correctly aware that the AAT could depart from the Secretary’s policy if it produced an unjust outcome in the particular circumstances. Its ultimate conclusion that “there is no basis in the circumstances of the present case for regarding the application of the applicable policy as unlawful or unjust” confirms that it has independently addressed this discretion upon its own assessment of the circumstances. Its conclusion was rationally and reasonably based upon its earlier findings that, in effect, the applicant was probably aware that he did not have approval to undertake full‑time studies during 2005 and consciously disregarded warnings that he was expected to be actively seeking work. I can see no error affecting the AAT’s exercise of its relevant discretions.
For the above reasons, I am unpersuaded by any of the arguments presented by the applicant or his counsel that the AAT’s decision involved any error of law. The appeal should, therefore, be dismissed.
A concluding observation
Before concluding this judgment, I note that an assumption of both the present tribunals and of both the parties before me, was that it was consistent with the terms of the Social Security Act 1991 (Cth) and the Social Security (Administration) Act 1999 (Cth) for the review tribunals to have power to review the merits of discretionary decisions concerning the contents of the applicant’s newstart allowance activity agreements in early 2005 in the course of reviewing the imposition of the penalty, notwithstanding that the applicant had not been given approval to undertake studies over that past period of time, that he had not appealed against the refusal of approval, and that he had accepted an activity agreement with inconsistent obligations over the same period.
In a recent similar case, Weinberg J said: “it is difficult to see how something that manifestly did not occur can be deemed by a tribunal, with retrospective effect, to have occurred, at least in the context of statutory criteria that are strict, and clearly stated” (see Secretary, Department of Employment and Workplace Relations v Kelly (2006) 151 FCR 534 at [29]). He considered that neither the SSAT nor the AAT had power to set aside a cancellation of newstart allowance upon the ground that the recipient was ineligible for payments, by giving effect to their opinions that the Secretary should have given approval for the recipient to enrol in full‑time study over the period of the ineligibility.
This point was not taken by the respondent before me. It may also be unclear whether Weinberg J’s reasoning in that case is directly applicable to the present matter. His judgment concerned a decision to cancel newstart allowance by reference to s.613, which provided that allowance was not payable to a person enrolled in a full‑time course of study, unless the Secretary “has required the person to undertake [the course] under subsection 601(2)” or under a newstart activity agreement. The present adverse decision was a decision to apply s.626(1A) to ongoing payments of newstart allowance by imposing an activity test breach rate reduction period as a result of a past breach of a newstart activity agreement.
Moreover, Weinberg J appears not to have been referred to s.149(4) of the Social Security (Administration) Act 1999 (Cth) which empowers the Secretary or the SSAT to direct that an event that did not occur, but would have occurred if a decision had not been made, “is to be taken, for the purposes of the social security law, to have occurred”. The tribunals may have had this power to re‑write history in the present case.
Since I have upheld the AAT’s decision by rejecting the applicant’s argued grounds of appeal, I did not feel it necessary to recall the parties to receive submissions on this point.
I certify that the preceding forty-ix (46) paragraphs are a true copy of the reasons for judgment of Smith FM
Associate: Lilian Khaw
Date: 20 February 2007
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