Hosie; Secretary, Department of Family and Community Services [2003] AATA 47 (17 January 2003)

Last Updated: 21 January 2003

DECISION AND REASONS FOR DECISION [2003] AATA 47

ADMINISTRATIVE APPEALS TRIBUNAL )

) No Q2001/980

GENERAL ADMINISTRATIVE DIVISION )

Re SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Applicant

And STEVEN HOSIE

Respondent

DECISION

Tribunal Ms J Cowdroy, Member

Date 17 January 2003

Place Brisbane

Decision The Tribunal sets aside the decision under review and in substitution therefor determines that an activity test breach and an 18% rate reduction should be imposed on the respondent's newstart allowance for the period 21 March 2001 to 18 September 2001.

.....(Sgd) Ms J Cowdroy.....

Member

CATCHWORDS

SOCIAL SECURITY - newstart allowance - imposition of activity breach reduction period - whether applicant has failed to give Centrelink accurate information about his income as required under the social security legislation - application of section 630AA of the Social Security Act 1991- whether section 630AA applies to notices issued under section 68 of the Social Security (Administration) Act 1999

Social Security Act 1991

Social Security (Administration) Act 1999

Re Secretary, Department of Family and Community Services and Quinn [2002] AATA 81

REASONS FOR DECISION

17 January 2003 Ms J Cowdroy, Member

1. By decision dated 26 September 2001, the Social Security Appeals Tribunal ("the SSAT") set aside a decision made by a Centrelink delegate to impose an activity test breach and an 18% rate reduction to Mr Hosie's newstart allowance for the period 21 March 2001 to 18 September 2001. The respondent department has sought review of that decision, claiming that the SSAT erred in its interpretation of section 630AA of the Social Security Act 1991 ("the Act").

2. With the consent of both parties, the application was decided on the basis of the written material, which comprised the T documents and the applicant's written submissions.

Background

3. The factual basis leading to the application for review is not in dispute. The respondent was in receipt of newstart allowance whilst he was employed on a casual basis from 11 November 2000 to 24 November 2000. For the period 18 October 2000 to 28 November 2000, the respondent earned a gross amount of $225.30. On an "Application for Payment of Newstart Allowance" form (T4) he declared gross earnings of $60.

4. Consequently, Centrelink determined that the respondent had knowingly provided false information in relation to his earnings from employment and applied an activity test rate reduction period of 18% reduction for 26 weeks. The SSAT's decision records Mr Hosie as stating that he failed to declare some of his earnings because had not had worked for a long time due to injuries, he had travelled a long way to work and after paying the costs of accommodation, food and petrol, the amount he earned did not cover his outgoings. The SSAT noted those matters, however, irrespective of the reasons for under-declaring income, it was of the view that Mr Hosie's action amounted to knowingly providing false information.

5. In the decision under review, the SSAT considered that the legislative basis for the imposition of the breach and non payment period of newstart allowance was "fundamentally legally flawed", noting that it appeared to be the result of a drafting error. The applicant takes issue with the SSAT's interpretation of that legislation.

Consideration

6. The applicant contends that the document headed "Application for Payment of Newstart Allowance" (T4), constitutes an information notice pursuant to section 68 of the Social Security (Administration) Act 1999 ("the SSA Act"). It states as follows:

"(1) Subsection (2) applies to a person to whom a social security payment is being paid.

(2) The Secretary may give a person to whom this subsection applies a notice that requires the person to do either or both of the following:

(a) inform the Department if:

(i) a specified event or change of circumstances occurs; or

(ii) the person becomes aware that a specified event or change of circumstances is likely to occur;

(b) give the Department a statement about a matter that might affect the payment to the person of the social security payment."

7. Prior to the introduction of the SSA Act on 20 March 2000, the requirement to provide information was contained in section 658 of the Act which stated:

"(1) The Secretary may give a person to whom a newstart allowance is being paid a notice that requires the person to give the Department a statement about a matter that might affect the payment of the allowance to the person."

8. The consequences of failing to comply with the notification provisions in relation to the payment of newstart allowance is contained in section 630AA of the Act. It states as follows:

"(1) If a person:

(a) refuses or fails, without reasonable excuse, to provide information in relation to a person's income from remunerative work (the failure); or

(b) knowingly or recklessly provides false or misleading information in relation to the person's income from remunerative work (the provision of information);

when required to do so under a provision of this Act, a newstart allowance is not payable to the person.

(2) 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 or the provision of information is the person's first or second activity test breach in the 2 years immediately before the day after the failure or the provision of information--an activity test breach rate reduction period applies to the person; or

(b) if the failure or the provision of information is the person's third or subsequent activity test breach in the 2 years immediately before the day after the failure or the provision of information--an activity test non-payment period applies to the person."

9. The issue for the Tribunal to determine is whether the words "when required to do so under a provision of this Act" in section 630AA of the Act encompasses a notice issued pursuant to section 68 of the SSA Act. The respondent submits that the words "a provision of this Act" relate to those provisions which were formerly contained in the 1991 Act and which empowered the Secretary to issue a notice to a recipient of social security allowance to provide certain information.

10. This submission is reliant on the application of sections 244 of the SSA Act, which provides:

"A reference in:

(a) a provision of a law of the Commonwealth or a Territory enacted before 20 March 2000 (whether or not the provision has come into operation); or

(b) an instrument or a document;

to a provision of the 1991 Act that has been repealed by the Social Security (Administration and International Agreements) (Consequential Amendments) Act 1999 is, on and after 20 March 2000, to be construed as a reference to the corresponding provision of this Act."

11. The identification of what is a corresponding section is referred to in section 245 of the SSA Act, which provides:

"If one provision of the 1991 Act and one provision of this Act have the same legal effect, the 2 provisions correspond to each other."

12. It was contended that as the repealed section 658 of the Act was a section under which a person could be required to give information, regard could now be had to section 68 of the SSA Act, as it is the section to which section 658 of the Act corresponds.

13. The applicant posed an alternative proposition concerning the definition of "social security law" in both Acts. It was argued that the notices issued under section 68 of the SSA Act are notices issued under the "social security law" as defined in sections 3(3) and (72) of the SSA Act and sections 23(15) and (16) of the Act.

14. The respondent seeks to rely on the SSAT's interpretation of the relevant sections of both Acts. The thrust of that argument was that the words "under a provision of this Act" in section 630AA(1) of the Act are to be interpreted by reference to section 23(1) of the Act which defines "this Act" as being "the Social Security Act 1991 as originally enacted or as amended and in force at any time". The SSAT considered that if it were accepted that section 244 of the SSA Act applies to section 630AA of the Act, it would effectively be ignoring the restrictive definition contained in section 23(1) of the Act.

15. Additionally, the SSAT considered it significant that other sections of the Act specifically referred to the Administration Act. It particular, it noted the definition of "social security law" found in subsections 23(15) and (16) of the Act, which are mirrored in sections 3(3) and 3(4) of the SSA Act:

"23(15) A reference in this Act to the social security law is a reference to this Act, the Administration Act and any other Act that is expressed to form part of the social security law.

23(16) A reference in this Act to a provision of the social security law is a reference to a provision of this Act, the Administration Act or any other Act that is expressed to form part of the social security law."

16. The SSAT considered that if section 630AA of the Act contained the words "when required to do so under social security law" rather than "this Act", then it "would have no difficulty in finding that the notices issued under section 68 of the SSA Act would be valid for the purposes of applying the penalty provision under section 630AA of the Act". However, because section 244 of the SSA Act lacked specificity, it found that it had no application to section 630AA of the Act. This would mean that the Act does not contain any provisions that would empower the Secretary to require a person in Mr Hosie's position to provide information about his earnings, as a consequence of which there is no basis upon which a breach could be imposed.

17. The issue of whether the words to "a provision of this Act" in section 630AA of the Act should be interpreted as a reference to the Social Security Act 1991 alone or include a reference to the Social Security (Administration) Act 1999 was the subject of decision in Re Secretary, Department of Family and Community Services and Mark Quinn [2002] AATA 81, a decision by Deputy President Forgie, who stated relevantly (at par 31):

"Adopting an interpretation that confines s 630AA(1) to provisions found in the Act itself means that it would have no application in any circumstances (and not just in Mr Quinn's) for there are no provisions in the Act which require a person to provide the relevant information."

18. Deputy President referred to principles of statutory interpretation, having regard to the general rules that "a court will adopt that construction of a statute which will give some effect to all of the words which it contains", the desirability of adopting "an interpretation that will ensure the validity of the legislation". Applying those principles, Deputy President Forgie considered that "it is difficult to conclude that it would have intended that s 630AA(1) should be of no effect". She concluded:

"The effect of s 244 is that those provisions then be read as referring to corresponding provisions in the Administration Act. That interpretation accords with the purposes revealed by the social security law even though, in its application in a particular case, it may be thought to lead to the imposition of unbearable hardship."

19. I agree with the reasoning in Quinn. It follows that section 630AA(1) should be read as applying to the situation where the respondent has knowingly provided false information in relation to his income as required by a notice given under section 68 of the SSA Act.

20. As there is no dispute that a notice was given and I find that the respondent knowingly failed to give such information, it follows that he has committed an activity test breach. The consequence of that action is that he is subject to a newstart allowance activity test rate reduction of 18% for a 26-week period. This would seem a harsh result given the monetary amount involved in the breach, however the Tribunal has no means of ameliorating the financial hardship that no doubt will flow from this decision.

21. Accordingly, the decision under review is set aside and in its place is substituted the decision to impose an activity test breach and an 18% rate reduction to the respondent's newstart allowance.

I certify that the 21 preceding paragraphs are a true copy of the reasons for the decision herein of Ms J Cowdroy, Member

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

Associate

The Matter was Heard on the Papers

Date of Decision 17 January 2003

Solicitor for the Applicant Ms J Dwyer, Departmental Advocate

The Respondent Represented Himself