Webber and Secretary, Department of Family and Community Services [2002] AATA 929 (16 October 2002)

Last Updated: 24 October 2002

DECISION AND REASONS FOR DECISION [2002] AATA 929

ADMINISTRATIVE APPEALS TRIBUNAL )

) No N2001/1341

GENERAL ADMINISTRATIVE DIVISION )

Re ANDREW ROBERT WEBBER

Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Mr M J Sassella. Senior Member

Date 16 October 2002

Place Sydney

Decision The tribunal affirms the decision under review.

[SGD] M J SASSELLA

Senior Member

CATCHWORDS

SOCIAL SECURITY - Newstart Allowance - activity test - Newstart Activity Agreement - Preparing for Work Agreement was a Newstart Activity Agreement - allowee required to complete Jobseeker Diary as term of Newstart Activity Agreement - allowee lost Jobseeker Diary - allowee not able to submit completed Jobseeker Diary on due date - whether allowee had taken reasonable steps to comply with Newstart Activity Agreement - whether main reason for failing to comply with Newstart Activity Agreement involved a matter within allowee's control - whether circumstances that prevented allowee from complying with Newstart Activity Agreement were reasonably foreseeable by allowee - whether allowee was incapacitated and was not required to satisfy activity test - whether decision to apply penalties could have been delayed pending outcome of review and appeals process - decision affirmed

Social Security Act 1991 ss 593, 601(4), (5), (6), 603C(1), 606, 624(1), (1A), (2), 626(1), 644AA, 644AB(1), (2), 644AE(1)-(3)

Social Security (Administration) Act 1999 s 131

Secretary, Department of Employment, Education and Youth Affairs (1997) 48 ALD 593

REASONS FOR DECISION

16 October 2002 Mr M J Sassella. Senior Member

THE APPLICATION

1. This is an application to the Administrative Appeals Tribunal ("the tribunal") by Andrew Robert Webber, born 17 April 1967 (T1), for review of a decision of the Social Security Appeals Tribunal ("the SSAT") dated 31 July 2001 (T2) which affirmed the decision of a Centrelink authorised review officer ("ARO") (T18), made as a sub-delegate of the Secretary, Department of Family and Community Services ("the respondent"). The decision was to impose an activity test breach - rate reduction period of 26 weeks at 18%. This had the effect that Mr Webber would lose 18% of his Newstart Allowance ("NSA") for a period of 26 weeks.

THE HEARING

2. The tribunal convened a hearing in this matter in Wollongong on 5 July 2002. Mr Webber represented himself. Ms A Garcia from the Centrelink Advocacy and Administrative Law Team represented the respondent. The tribunal heard oral evidence from Mr Webber. The tribunal received into evidence the following documents:

Exhibit TD1 - Section 37 Statement and associated documents (exhibits T1 - T21) provided by the respondent.

Exhibit R1 - Respondent's statement of facts and contentions, 28 June 2002.

FINDINGS ON MATERIAL QUESTIONS OF FACT WITH REFERENCE TO THE EVIDENCE AND OTHER MATERIAL IN SUPPORT OF THOSE FINDINGS

3. The tribunal finds that Mr Webber is a qualified fitter and turner (T8).

4. The tribunal finds that on or about 4 June 2000 Mr Webber injured his left shoulder when he fell downstairs. The tribunal notes that Mr Webber's orthopaedic surgeon Dr Deshpande, certified on 4 June 2001 (T19) that Mr Webber was unable to work from July 2000. The tribunal finds, however, that Mr Webber worked as a storeman doing crane work until October 2000. The tribunal notes Mr Webber's evidence that he tailored that work to permit him to do it using only his "good" hand and arm. The tribunal notes also Mr Webber's evidence that he had a number of health-related absences from work during those months. The tribunal further notes Mr Webber's evidence that he worked some 38 hours a week but that this was worked over a four-day week. The tribunal finds that Mr Webber left that work in October 2000 primarily because he was redundant to the employer's needs at the time.

5. The tribunal finds that Mr Webber claimed NSA on 13 November 2000 (T3). The tribunal finds that Mr Webber provided no medical certificate stating that he was unfit for work and that he presented himself as fit to work. On the same day he signed a "Preparing for Work Agreement" ("PWA") (T4). This included a commitment by Mr Webber that he would complete a Jobseeker Diary ("JSD") from 13 November 2000 to 2 February 2001. He agreed to return the JSD to Centrelink on 2 February 2001. He was to enter details of 10 job search contacts each fortnight. He undertook to engage with four job search contacts a fortnight from 3 February 2001. It was foreshadowed that breach penalties might be imposed if Mr Webber failed to return the JSD when asked. There was much else in the agreement of no concern in these proceedings.

6. The JSD provided a telephone number to call if the JSD was lost (T7/32).

7. The tribunal finds that Mr Webber did not present in a way that would have resulted in him being granted "NSA (incapacitated)" and so not required to satisfy the activity test under s 603C(1) of the Social Security Act 1991 ("the Act") for several reasons. He told the SSAT that the cost of obtaining a medical certificate was prohibitive. He told the tribunal that he wanted to get back into work because the NSA payment rate was too low. The tribunal, largely for the reasons advanced by the SSAT (see paragraph 24 below), finds that Mr Webber was actually fit for work during the period covered by the JSD.

8. Mr Webber's continuation form, due for lodgement on 8 February 2001 (T8), was annotated to require the return of the JSD with that form at risk of payments being stopped. The tribunal notes that this was inconsistent with the obligation in the PWA to return the JSD on 2 February 2001. The tribunal takes this to mean that Mr Webber could, with impunity, return the JSD on 8 February 2001, although it was strictly due for return six days earlier. On the continuation form Mr Webber described his normal work as fitter and turner and other work he had done was work as a storeman. He said he was not currently unfit for work but that he had an ongoing illness, injury or condition stopping him from doing certain types of work. In forms lodged between 16 November 2000 and 25 January 2001 (T8) Mr Webber regularly stated that he had not been unfit for work during any of the relevant two-week periods. An exception was the form lodged on 14 December 2000 (T8/58) in which the question about unfitness for work between 1 and 14 December 2000 was not answered.

9. The tribunal finds that Mr Webber lost his JSD on or about 26 January 2001. The tribunal finds that Mr Webber did not report that loss to Centrelink until 8 February 2001.

10. On Thursday 8 February 2001 (T9) a Centrelink computer file note recorded that Mr Webber reported at reception that he did not have his JSD complete. It had been stolen "coming home Australia Day". "Employment Services advised to complete diary and hand in with [continuation form] and payment would be made on Monday". If Mr Webber did not want to complete the diary a breach would be recorded.

11. Mr Webber said he had a medical condition. He rang his doctor but could not speak to the doctor until the close of business on 8 February 2001. He was offered the chance to see a social worker for food and so on. Mr Webber "decided he would have breach so he could have payment tomorrow", ie on 9 February 2001.

12. There was other evidence from Mr Webber to the effect that he had applied for a great many jobs, more than the 10 per fortnight required. However, he did not have details of those contacts with him at the office such that he could complete another JSD on the spot. Indeed, he anticipated that he may need to phone certain of those job contacts to check details.

13. There was other evidence from Mr Webber in which he stressed that he needed money urgently in the day or so after he saw Centrelink and that was why he chose to be breached but to appeal. For a reason discussed in paragraph 28 below there was a better way for Mr Webber to have dealt with this.

14. It is unclear whether Mr Webber took a blank JSD to fill in. He says that he did not. He told the SSAT that he did not because, had he done so, he would have had to wait four days for pay and he could not afford the wait. Rather, he accepted a breach, appealed it, and received a reduced payment on the next day, a Friday (T2). There is, however, a blank JSD on Mr Webber's file (T7). It is possible that this was filed when he declined to take it away. Mr Webber told the SSAT he noticed the loss of the JSD on 27 January 2001. He went in to Centrelink on 29 January 2001 but did not discuss the loss of the diary. He could not say why he did not raise the issue.

15. On 9 February 2001 Mr Webber visited Centrelink and was booked for an interview on 23 February 2001 (T9/67).

16. On 19 February 2001 a Centrelink computer file note recorded that Mr Webber handed in a blank JSD annotated "18% breach to be imposed" (T10). In the Section 37 documents a blank JSD appeared as T7. T8/52 was the continuation form to be submitted with the JSD. That document contained the annotation referred to in T10.

17. On 19 February 2001 the breach effects were determined and applied (T11). There was to be an 18% reduction as of that date and ending on 19 August 2001.

18. On 23 February 2001 a Centrelink computer file note recorded Mr Webber's job search intentions (T12). It was recorded that he had a shoulder and upper arm disorder but that he was able to work at least 20 hours a week. The applicant signified his intention to appeal the breach decision (T12/75). The applicant appealed on the basis that he should never have been required to complete a JSD initially (T12/76). He was awaiting surgery. He provided a medical certificate but that was not backdated. It covered the period 21 February 2001 to 21 March 2001 (T18/88). It was noted that Mr Webber had himself asked the manager to impose a breach. It was said that he chose not to complete a diary and to accept a breach. The decision was left unchanged (T12/77). The outcome was passed on to Mr Webber on 1 March 2001 (T12/78).

19. On 1 March 2001 Mr Webber asked that the matter be referred on to an ARO (T12/79). He said he believed he should not have had to complete the diary because of a disability. Mr Webber completed an ARO review form (T13) on an uncertain date. He said that he could have had a medical certificate from 5 May 2000 but he had decided to work instead. He said he was awaiting an operation for repair of his rotator cuff. He had a doctor's certificate by this time. He said he lost his JSD and that he should not even have had one.

20. On 15 March 2001 the ARO wrote to Mr Webber to state that his appeal had not been successful (T18). The ARO repeated most of the above facts. In addition, the ARO clarified that Mr Webber said that he did not complete his JSD because he was not fit for work but he had indicated on each completion form that he was fit for work during the period covered by the JSD. It was also clarified that Mr Webber did not report the loss of the JSD until 8 February 2001, 13 days after it appeared to have been lost.

21. On 29 March 2001 Dr S R Deshpande, an orthopaedic surgeon, operated on Mr Webber (T19). He repaired the cuff tear in the left shoulder. He was certified fit for work on 11 June 2001. He wrote that Mr Webber "was unable to do any work since July 2000".

22. On 4 June 2001 Mr Webber lodged an appeal with the SSAT (T2).

23. On 5 July 2001 Dr B Whalan, a dental surgeon, certified (T20) that Mr Webber attended his practice on 14 December 2000 for 30 minutes because of toothache, on 24 January 2001 to view an x-ray, on 29 January 2001 for 105 minutes for a tooth extraction and on 26 April 2001 for an hour for a filling.

24. On 31 July 2001 the SSAT heard Mr Webber's appeal (T2). It affirmed the ARO's decision. The SSAT noted that Mr Webber's damaged shoulder was the left shoulder. He is right-handed and so his dominant upper limb was unaffected. Despite Dr Deshpande's certificate stating that Mr Webber had been unable to work since July 2000, Mr Webber had been able to work until October 2000 and stated a readiness and fitness to work on Centrelink forms. The tribunal held that Mr Webber failed to comply with the term of his PWA requiring him to hand in a completed JSD. The main reason for that failure was within his control. He could have obtained and completed a new diary after losing the first one. The tribunal found also that Mr Webber was not prevented from complying by circumstances that were not reasonably foreseeable. Mr Webber was within s 601(6) of the Act:

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.

25. Applying the approach endorsed by Mansfield J in Secretary, Department of Employment, Education and Youth Affairs v Ferguson (1997) 48 ALD 593, the decision-maker, having found that Mr Webber failed to comply with his PWA in accordance with s 601(6) of the Act, had to decide whether, as a matter of fact, Mr Webber failed to take reasonable steps to comply with the terms of the agreement. The SSAT held that Mr Webber had failed to take such reasonable steps. He could have, but did not, obtain and complet another diary and it was reasonable to expect that he would do this after he lost the first diary. The breach penalties were then established in the Act. There was no alternative but to apply them.

26. The tribunal comments at this stage that there were several unfortunate aspects of Mr Webber's case that could have been avoided to Mr Webber's ultimate benefit. To a large degree these appear to reflect Mr Webber's difficulties dealing with the bureaucracy. First, it was clear at the tribunal hearing that Mr Webber was trying to present an internally inconsistent case to the tribunal, much as he had attempted to do with Centrelink, the ARO and the SSAT. On one hand he wanted to be seen as incapacitated for work from June or July 2000 to June 2001. He queried how he could be regarded as anything other than incapacitated when he had a medical report stating that he was. Yet, during that period he had actually worked full time for some months in manual labouring work and he had lost that work only because the work dried up, not because he could not do it. During that period he also looked for work and presented to Centrelink as fit to work, albeit with certain restrictions. It was only when Mr Webber became a "victim" of the JSD rules that he saw a need to present himself as incapacitated. That, with all due respect to Mr Webber, was somewhat too late.

27. Second, Mr Webber handled the aftermath of the loss of the JSD in a manner that was at the least unfortunate. Had he reported the loss immediately to Centrelink, either by visiting or by telephone, he would have had ample time to complete a replacement JSD. Had he been really prepared for any potential problem with Centrelink, he would have retained a copy record of his job search contacts in case he lost his JSD. Instead, he appeared to do nothing about the loss and he awaited, presumably with some trepidation, what would eventuate on 8 February 2002.

28. Third, Mr Webber has consistently made clear that he required payment on 9 February 2001 and he accepted the breach penalty in order to obtain the money quickly. In fact the breach penalty was not exacted until 19 February 2001. Mr Webber was extremely concerned that the penalty period operated harshly for him in the first half of 2001 when, partly because of his rotator cuff operation, he was in desperate financial straits. Mr Webber was unaware, and no one appears to have advised him, that by seeking a review of the decision to impose the breach penalty, Mr Webber could have had the imposition of the penalty delayed pending the outcome of the review and appeals processes. Section 131 of the Social Security (Administration) Act 1999 provides:

Secretary may continue payment pending outcome of application for review

131 (1) Subject to subsection (2), if:

(a) an adverse decision is made in relation to a social security payment; and

(b) the adverse decision:

(i) depends on the exercise of a discretion, or the holding of an opinion, by a person; or

(ii) would result in the application of an activity test non-payment period; and

(c) a person applies to the Secretary under section 129 for review of the adverse decision;

the Secretary may declare that the payment of the social security payment is to continue pending the determination of the review as if the adverse decision had not been made.

(2) Subsection (1) does not apply in the case of a decision to which section 133 or 134 applies.

(3) A declaration under subsection (1) must be by notice in writing.

(4) While a declaration under subsection (1) is in force in relation to an adverse decision, the social security law (other than this Part) applies as if the adverse decision had not been made.

(5) A declaration under subsection (1) in relation to an adverse decision:

(a) takes effect on the day on which it is made or on such earlier day (if any) as is specified in the declaration; and

(b) ceases to have effect if:

(i) the application for review is withdrawn; or

(ii) a decision is made by the Secretary on the review of the adverse decision; or

(iii) the declaration is revoked by the Secretary.

(6) A reference in subsection (1) to a person's holding of an opinion is a reference to the person's holding that opinion, whether or not the social security law expressly requires the opinion to be held before the decision concerned is made.

(7) In this section:

adverse decision, in relation to a social security payment, means:

(a) a decision to cancel or suspend the social security payment; or

(b) a decision to reduce the rate of the social security payment.

29. It is most unfortunate that this provision was not invoked in February 2001.

30. In view of the above findings, however, the tribunal will be affirming the decision under review.

31. The tribunal finds that Mr Webber qualified for payment of NSA in accordance with s 593 of the Act when he claimed that payment on 13 November 2000. The tribunal finds that Mr Webber's PWA was a Newstart Activity Agreement in accordance with s 606 of the Act. The tribunal finds that, for Mr Webber to satisfy the activity test, a requirement for qualification for NSA, he had, in accordance with s 601(4) and (5) of the Act, to take reasonable steps to comply with his PWA.

32. The SSAT correctly applied s 601(6) of the Act to determine whether Mr Webber took reasonable steps to comply with the terms of his PWA (see paragraphs 24 and 25 above).

33. The consequences of a failure such as Mr Webber's are set out in ss 624 and 626 of the Act:

Activity test penalties for failure to satisfy activity test

624 (1) Subject to subsection (2), if a person fails to satisfy the activity test (the failure), a newstart allowance is not payable to the person.

624 (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.

624 (2) A person is not subject to the activity test penalty period under subsection (1) at any time during which the person:

(a) is undertaking:

(i) formal vocational training in a labour market program approved by the Employment Secretary; or

(ia) an activity approved by the Employment Secretary under the CSP; or

(ii) a rehabilitation program approved by the Employment Secretary; and

(b) has been exempted from the application of that subsection by the Secretary.

...

Removal from allowance for failure to comply with Newstart Activity Agreement

626 (1) Subject to subsection (2), a newstart allowance is not payable to a person for the activity test deferment period if:

(a) the 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.

34. The actual breach penalties are established in the following provisions of the Act:

Activity test breach rate reduction periods

644AA If an activity test breach rate reduction period applies to a person under this Part, the period applicable to the person is 26 weeks.

...

Commencement of activity test breach rate reduction periods

644AB (1) Subject to section 644AC, if an activity test breach rate reduction period applies to a person under this Part, the Secretary must give to the person a written notice informing the person of the commencement of the activity test breach rate reduction period applicable to the person.

644AB (2) Subject to section 644AC, the activity test breach rate reduction period commences on the day on which the notice is given to the person.

...

Rate of newstart allowance where activity test breach rate reduction period applies

644AE (1) If:

(a) an activity test breach rate reduction period applies to a person under this Part; and

(b) the person qualifies for a newstart allowance; and

(c) a newstart allowance is payable to the person;

the person's rate of newstart allowance for the activity test breach rate reduction period is worked out as follows:

Newstart allowance rate calculator for activity test breach rate reduction period

This is how to work out a person's rate of newstart allowance for an activity test breach rate reduction period that applies to the person.

Method statement

Step 1. Work out the person's maximum basic rate of newstart allowance specified in:

(a) Table B of Module B of Part 3.5 (Benefit Rate Calculator A); or

(b) Table B of Module B of Part 3.6 (Benefit Rate Calculator B):

the result is called the maximum payment rate.

Step 2. Work out the rate reduction amount in accordance with subsection (2).

Step 3. Take the rate reduction amount away from the rate of benefit worked out in accordance with Benefit Rate Calculator A in section 1067 or Benefit Rate Calculator B in section 1068, as the case requires:

the result is called the activity test breach reduced rate.

644AE (2) A person's rate reduction amount is worked out as follows:

(a) if the activity test breach is the person's first breach in the 2 year period:

Maximum payment rate x 0.18

(b) if the activity test breach is the person's second breach in the 2 year period:

Maximum payment rate x 0.24

644AE (3) In this section:

2 year period means the 2 years immediately before the day after the activity test breach.

35. The tribunal finds that the breach penalty set at 18% and running for 26 weeks was established in accordance with these provisions of the Act.

CONCLUSION

36. The tribunal has upheld the SSAT's decision. This means that Mr Webber will not receive a refund of the NSA withheld from him between February and August 2001. The tribunal wishes to express a certain amount of sympathy for Mr Webber and, as discussed earlier, considers it unfortunate that Mr Webber did not contact Centrelink immediately he became aware of the loss of his diary. The result that ensued could have been averted had he done that.

DECISION

37. The tribunal affirms the decision under review.

I certify that the 37 preceding paragraphs are a true copy of the reasons for the decision herein of Mr M J Sassella. Senior Member

Signed: .....................................................................................

Associate

Date of hearing 5 July 2002

Date of decision 16 October 2002

Advocate for the applicant Self-represented

Advocate for the respondent Ms Andrea Garcia, Centrelink Advocacy and Administrative Law Team