Tevaga v Ministry of Social Development
[2019] NZHC 1409
•19 June 2019
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV 2019-485-3
[2019] NZHC 1409
BETWEEN ELENA TEVAGA
Appellant
AND
THE MINISTRY OF SOCIAL DEVELOPMENT
Respondent
Hearing:
Further submissions:
21 March 2019
10 May 2019
Counsel:
S J Fraser and S M Wadham for Appellant R J Warren for Respondent
Judgment:
19 June 2019
JUDGMENT OF SIMON FRANCE J
Introduction
[1] The Employment and Work Readiness Assistance Programme is a programme established and approved by the Minister for Social Development under s 124(1)(d) of the Social Security Act 1964 (the Programme). Its purpose is to assist those at risk of long term benefit receipt to become ready for work and to facilitate their transition into and retention of sustainable employment. There are 13 categories of assistance, one of which – education and employment-related training – is the focus of this proceeding.
TEVAGA v THE MINISTRY OF SOCIAL DEVELOPMENT [2019] NZHC 1409 [19 June 2019]
[2] Ms Tevaga was in receipt of assistance with her participation in a full-time study course. Throughout 2015 she received assistance with fees, course-related costs, replacing a laptop and with transport. In February 2016 Ms Tevaga sought further assistance but the application was declined. This was because the course in which she was enrolled had been reclassified from Level 3 to Level 4 on the New Zealand Qualifications Framework. Additional guidelines promulgated pursuant to cl 6(2A) of the Programme, to aid in the Chief Executive’s discretion to grant assistance, restrict assistance to Level 3 courses and below (the Guidelines). The Ministry took the view, which it maintains, that these Guidelines allow no discretion in relation to the level of course.
[3] This absence of discretion was the initial focus of the challenge which is by way of Case Stated Appeal from the Social Security Appeal Authority, but during the course of the hearing more fundamental issues concerning the Guidelines have emerged and require resolution.
Issues
[4]There are two levels of inquiry.
[5] The first is whether the Chief Executive is authorised to restrict the Programme in the manner it has been restricted. The Programme sets out eligibility criteria, and authorises the Chief Executive, in his or her absolute discretion, to grant assistance of the kinds specified in the Schedule.1 One of the kinds of assistance specified in the Schedule is education and employment-related training. This area is in turn divided into short term training courses and longer education courses. It is this latter category that in issue here and concerning that the Schedule specifies assistance cannot be given for a post-graduate level course.2
[6] Shortly after it was established, the Programme was amended to take under its wing some already existing schemes that overlapped with the Programme. One of these schemes was the Training Incentive Assistance programme (the TIA). The
1 Employment and Work Readiness Assistance Programme, cl 6(1).
2 Schedule 1, cl 3(b).
amendment to the Programme cancelled that scheme and amended some of the Programme’s own provisions to accommodate it. What the Ministry has in effect done is implement the TIA under the Programme. A feature of the TIA is that it limits education assistance to Level 3 and below. This is the rule that Ms Tevaga had come up against. Level 3 is obviously a long way below the post-graduate limit (Level 8) contained in the Programme Schedule. The more fundamental issue that has arisen is whether the Chief Executive is authorised to restrict the core Programme in this way, recognising that the more restrictive limit applies not to a targeted group but to all persons eligible under the Programme.3
[7] The second issue is that identified earlier – can the Chief Executive issue prescriptive guidelines that allow no discretion concerning this issue of the course level. The implications of that are well illustrated by the present case – Ms Tevaga had been enrolled in her course, with Ministry assistance, for some time. The level of the course was altered by external agencies and the Ministry considers the Guideline’s leave it powerless to even consider whether an exception to the Level limit should be made.
Scheme
The Programme
[8] The Social Security Act 1964 (the Act) authorises money to be paid for welfare programmes established by the Minister and to be administered by the Chief Executive. On 6 March 2014 the Minister for Social Development established the Programme.
[9]The purpose of the Programme is set out in cl 3:
3.Purpose – The purpose of this programme is to assist to operate the benefit system and associated interventions in such a way as to improve client outcomes (employment and social) to move them closer to independence, with a focus on those at risk of long term benefit receipt, by making provision for the granting of special assistance to or in respect of people who are or may be at risk of long-term benefit receipt, –
3 See cl 6(2A)(a).
(a)to help them become ready for work by reducing barriers to their employment:
(b)if they are ready for work, to help facilitate their transition into, and retention of, sustainable employment.
Clause 6 is central to the Programme and this case:
6.Employment or work readiness assistance: eligibility – (1) For the purposes of this programme, the chief executive may, in his or her absolute discretion and subject to such conditions as the chief executive thinks fit, grant to a person to whom this clause applies employment or work-readiness assistance of any 1 or more of the kinds specified in the Schedule.
(2)Subclause (1) is subject to subclauses (4) and (5) and clause 7, the principles set out in clause 8, and clause 9.
This clause applies to any person who–
(a)is a young person or of working-age; and
(b)is either–
(i)a New Zealand citizen or is a person who holds or is deemed to hold a residence class visa under the Immigration Act 2009 that permits the holder to work in New Zealand; or
(ii)a person recognised as a refugee or protected person under that Act; or
(iii)a person holding a temporary class visa under that Act that permits the person to work in New Zealand and who is–
(A)awaiting the outcome of his or her claim for recognition as a refugee or a protected person (within the meaning of that Act); or
(B)a person applying for a residence class visa under that Act who is compelled to remain in New Zealand because of unforeseen circumstances; and
(c)is any of the following:
(i)a beneficiary (A) receiving a main benefit under the Act or the spouse or partner of A:
(ii)a person formerly receiving a main benefit under the Act whose benefit was terminated because that person entered employment;
(iii)a person granted a supported living payment under the Act on the ground of sickness, injury, or disability who is not for the time being receiving that benefit because he or she is undertaking open employment for a period agreed with the chief executive under section 40K of the Act;
(iv)a person to whom section 11E of the Act (pre-benefit activities) applies at any time before a main benefit under the Act becomes payable to that person or his or her spouse or partner;
(v)a person who has contacted the department or a contracted service provider seeking assistance to obtain or retain employment;
(vi)an applicant for a supported living payment under section 40B of the Act on the ground of sickness, injury, disability, or total blindness.
(4)However, employment or work readiness assistance of a particular kind specified in the Schedule must not be granted under subclause (1) unless the person meets any other eligibility criteria specified in the Schedule relating to that kind of assistance.
(5)Employment or work readiness assistance must not be granted in respect of any employment, self-employment, educational or employment-related training course, work readiness activity, or services located or provided outside New Zealand.
[11] It can be seen that cl 6(3) sets out eligibility criteria. Clause 6(1) says the Chief Executive may in his or her absolute discretion and subject to such conditions as he or she thinks fit, grant employment or work assistance of the kinds listed in the Schedule to any person coming within cl 6(3). This broad discretion is subject to cl 6(4), 6(5), 7, 9 and the principles set out in cl 8. It is also subject to the Schedule in that the Schedule sets out the kinds of assistance that can be given. Indeed, the Schedule is the focus on the cl 6(4) limit which provides that the assistance must meet any further eligibility criteria that are included in the Schedule.
[12]The other limits on the discretion are:
(a)the course or other employment must be located in New Zealand (cl 6(5));
(b)there must be a proper application for the assistance (cl 7); and
(c)the assistance is limited to the amounts specified in the Schedule.
[13] Clause 8 contains the principles (now called matters) that are to be applied in the exercise of the Chief Executive’s discretion, these being:
(a)the principles in s 1B of the Act;
(b)performance targets set by the Minister; and
(c)the principles that this type of assistance will be allocated where it can be of the greatest benefit to all New Zealanders of working age and at risk of long-term benefit receipt. Any assistance is to be monitored and evaluated and should not involve displacement of people already within the workforce and should minimise any adverse impact on the labour market.
[14] At the time the Programme was established there were two provisions in the Schedule particularly applicable to Ms Tavaga’s position. Clause 3 of the Schedule allowed the purchase of a place in an educational course (not being post graduate courses), and cl 5 allowed assistance with associated costs such as transport. In both cases the monetary cap was actual and reasonable.
[15] The Programme was amended on 26 June 2014. The Explanatory Note, on which the respondent places considerable reliance, provides a helpful summary of the purpose of the instrument. Before setting it out I observe that it is not of course itself part of the text of the amendment (emphasis added):
Explanatory Note
This note is not part of this instrument, but is intended to indicate its general effect.
This instrument, most of which comes into force on 1 July 2014, amends the Employment and Work Readiness Assistance Programme (“the principal programme”) as a result of funding for certain programmes of assistance being brought within the coverage of the multi-category appropriation Improved Employment and Social Outcomes Support in Vote: Social Development on that date. It adjusts eligibility criteria and specifications for the kinds of assistance available under the principle programme accordingly, including providing for the revocation of the following welfare programmes and bringing (with amendment) certain criteria and specifications from them under the discretionary provisions of the principal programme:
· the Course Participation Assistance Programme:
· the Training Incentive Allowance Programme:
· the Transition to Work Grant Programme.
Also revoked are the remainder of the Ministerial Guidelines for Employment and Training Assistance. The revocations are subject to transitional and savings provisions. The Ministerial Direction in relation to sections 124(1)(d) and (1A) 2012 relating to the Transition to Work Grant Programme is consequentially revoked.
This instrument also inserts two new kinds of employment or work readiness assistance in the Schedule of the principal programme, clarifies the chief executive’s powers when exercising discretion under the principal programme, inserts additional matters to which the chief executive must (or, in one case, may) have regard when exercising discretion, and makes drafting improvements.
[16] The existing cl 6 was amended. The relevant change is the insertion of cl 2A and 2B:
(2A) In the exercise of the discretion under subclause (1), the chief executive may from time to time–
(a)promulgate guidelines not inconsistent with this programme for staff of the department exercising delegated authority for the purpose of targeting assistance or assistance of a specified kind towards eligible people or specified cohorts of eligible people the chief executive considers most at risk of long-term benefit receipt, including the specification of eligibility criteria for that purpose; and
(b)establish and conduct pilot schemes to provide specified kinds of assistance to specified cohorts of eligible people for the purpose of evaluating their effectiveness in achieving the purpose of this programme, including the specification of eligibility criteria for the schemes; and
(c)not provide or discontinue the provision of any specified kind of assistance that, after evaluation, the chief executive considers is not effective to achieve the purpose of this programme.
(2B) A condition imposed under subclause (1) may include a condition that the assistance granted is recoverable in one or more specified circumstances, and in any of those circumstances the assistance is recoverable accordingly and is a debt due to the Crown for the purposes of section 85A9D)(ii) of the Act.
[17] Changes were made to the Schedule. The existing cl 3 which dealt with education and employment-related training was made more detailed by creating a division between short-term courses (now defined as no more than 12 weeks) and longer education or training courses:
3 Education and employment-related training
(a)Short-term training courses
The purchase for an eligible person with specific employment skills deficits of a place in short-term employment-related training course.
(b)Longer education or training courses
The purchase for an eligible person at risk of long-term benefit dependency and who has specific employment skills deficits of a place in an educational course (not being a post-graduate degree course) or a course of employment-related training.
[18] Specific maximum spends were also introduced, and the TIA scheme was abolished.
The Guidelines
[19] Finding the Guidelines containing the Level 3 limitation is not straight-forward. They have never been promulgated by the Chief Executive as a self-contained document. The respondent’s submissions set the position out this way (footnotes omitted):
32.The TIA Programme provided that eligibility for the TIA was restricted to courses of level 3 and below.
33.Information about the TIA, including that it is provided under the EWRAP [the Programme], can be found on the Work and Income external website. A link on the website allows the reader to obtain further information on the TIA, including the Guidelines which are contained on the Work and Income intranet.
[20] Following the identified internet path, there is a page dedicated to education and employment-related training. Under longer education or training courses, it is stated that clients at risk of long-term benefit dependency may be able to have fees paid. The TIA is identified as the currently approved programme for longer education or training courses. Under a question “Who can get it”, it is stated that under the TIA one cannot be doing a course that is Level 4 or above on the New Zealand Qualifications Framework. A final section invites the reader who wants more information to click on a link which then itself contains a series of links on various topics. The relevant one here reads:
Longer education and training courses Training Incentive Allowance [no link find out why].4
Issue one – the Chief Executive’s guideline making power
[21] The respondent’s argument draws heavily on two features of cl 6(2A) of the Programme:
(a)first, that it was inserted at the time the TIA was abolished; and
(b)second, it provides that guidelines made under it can include eligibility criteria.
[22] The respondent emphasises features of a Departmental report to the Minister that preceded the amendments to the Programme. It is submitted there was a conscious decision to move the rigid criteria of existing programmes such as the TIA to operation guidelines that allow more responsiveness to changing needs. This is reflected in the broad discretion given to the Chief Executive, and the fact that any such guidelines
4 The lack of any link to the Guidelines appears to reflect the fact that they do not exist in a self-contained format.
can include eligibility criteria. These are submitted to mean what they say; they are criteria that a person must meet before any question of assistance and therefore any discretion arises. It is for this reason that the absence of discretion is also defended.
[23] There are several aspects of cl 6(2A) that merit further analysis but the answer to this case does not necessitate me to undertake that exercise. It is clear, as the appellant contends, that the Level 3 guideline is inconsistent with the Programme and therefore not authorised by cl 6(2A). An analysis of the legislative sequence involved in the June 2014 amendment makes this plain.
[24] In June 2014 a provision was added to the Schedule expressly dealing with long-term courses. That provision said that courses up to Level 8 were permissible. At the same time, and by the same amendment, a programme (the TIA) operating in relation to the same kind of assistance, namely long-term study, was revoked. That revoked programme, inconsistent with the terms of the new Schedule provision, had restricted this kind of assistance to Level 3 courses. The logical inference from this legislative history is that the TIA’s standard of Level 3 was being rejected in favour of a higher standard set out in the Schedule. Notwithstanding this, it seems the Chief Executive immediately reinstated the TIA’s operational guidelines, unchanged, with the effect that the new standard in the Schedule was immediately overridden. I have no doubt that was not permissible, and the resulting Guideline is invalid for inconsistency with the Programme.
[25] This conclusion is reinforced by the general scheme of the Programme. Clause 6(4) reinforces the importance of the Programme criteria by expressly confirming that the Chief Executive’s “absolute” discretion in cl 6(1) is subject to the criteria in the Schedule. It is therefore unlikely that cl 6(2A) was intended to give the Chief Executive a general discretion to change those criteria by guidelines, the basic purpose of which is to assist staff to exercise a delegated authority.
[26] This finding is enough to dispose of the appeal, but I observe it is doubtful that the power to set eligibility criteria in guidelines is as wide as the respondent contends. A reading of that power which is consistent with the general scheme is that it is limited to those situations where the Chief Executive is targeting cohorts of eligible persons
who are most at risk. It is logical that such groups, once identified, need to be defined, and the ability to impose eligibility criteria is consistent with this. It is instructive that the same criteria power also appears in cl 6(2A)(b) which deals only with specified cohorts of eligible people.
[27] Because of the conclusion on the first issue, it is not necessary to deal with the second issue.
Conclusion
[28]The Case Stated question is:
Do the Guidelines unlawfully or unreasonably fetter the Chief Executive’s absolute discretion to grant financial assistance under the Employment and Work Readiness Programme by limiting eligibility for employment or work readiness to courses below Level 4?
[29]The answer is Yes.
[30] The fuller answer is they unlawfully fetter the Chief Executive’s discretion because the Guidelines are an invalid exercise of the power contained in cl 6(2A) of the Programme.
[31] If there are cost issues, the parties may file costs memoranda if agreement cannot be reached.
Simon France J
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