Watson and Secretary, Department of Family and Community Services [2003] AATA 599; (2003) 74 ALD 523 (27 June 2003)

Last Updated: 30 July 2009

Administrative

Appeals

Tribunal

DECISION AND REASONS FOR DECISION [2003] AATA 599

ADMINISTRATIVE APPEALS TRIBUNAL )

) No Q2002/718

GENERAL ADMINISTRATIVE DIVISION		)
	Re		ERIC WATSON

Applicant

And

SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal

Mr O Rinaudo, Member

Date 27 June 2003

Place Brisbane

Decision

The Tribunal affirms the decision under review.

.................(Sgd).........................
Mr O Rinaudo
Member

ORDER TO AMEND DECISION

Tribunal

Mr O Rinaudo, Member

Date 14 July 2003

Place Brisbane

WHEREAS the Tribunal made a decision in this matter on 27 June 2003, and it has come to the Tribunal’s attention that there were errors in that decision;

AND WHEREAS the Tribunal wishes to amend the decision so as to rectify the errors with the least cost and inconvenience to the parties;

THE TRIBUNAL ORDERS, pursuant to section 43AA of the Administrative Appeals Tribunal Act 1975, that:

1. In paragraphs 34 and 35 of the decision, the words "direct debit" be replaced with the words "direct credit".
   

MEMBER

CATCHWORDS

SOCIAL SECURITY – benefits and entitlements – newstart allowance – method of payment – cash, cheque or direct credit into a bank account

SOCIAL SECURITY – jurisdiction – whether SSAT has power to review decisions relating to the method of payment of a social security benefit – effect of restriction on SSAT exercising powers and discretions of Secretary – powers of AAT on review

Social Security (Administration) Act 1999

Walker v Secretary, Department of Social Security (1997) 147 ALR 263

REASONS FOR DECISION

27 June 2003

Mr O Rinaudo, Member

DECISION UNDER REVIEW

1. The applicant seeks review of a decision made on 12 August 2002 by the Social Security Appeals Tribunal (SSAT). The SSAT, in affirming the decision under review, determined that they did not have the power to vary or set aside a decision of the respondent regarding the manner of payment of the applicant’s newstart allowance.

BACKGROUND

2. The applicant has been in receipt of newstart allowance for some time. On 19 April 1996, the Administrative Appeals Tribunal (AAT) determined that the applicant was to be paid job search allowance by cheque to be posted to his home address on a fortnightly basis (T5, folio 20). This decision was implemented by Centrelink.
3. On 27 March 2000, the applicant advised Centrelink that he was having difficulty cashing non-negotiable duplicate cheques. Centrelink was of the view that it was not required to issue cheques that were not non-negotiable and that cashing the cheques was an issue for the applicant.
4. On 11 April 2002, the applicant advised Centrelink that he could no longer cash his non-negotiable cheques. The applicant was advised that Centrelink had fully implemented the AAT’s decision on method of payment and was provided with a list of financial institutions to contact and inquire about services provided by them.
5. On 17 June 2002, a decision was made by Centrelink not to make regular payments of newstart allowance by electronic benefit transfer card or to continue giving the applicant letters of introduction each fortnight. This decision was affirmed by a review officer on 9 July 2002.
6. On 15 July 2002, the applicant appealed to the SSAT. The SSAT determined that it did have jurisdiction to hear the applicant’s appeal. However, it did not have the power to vary or set aside the decision made by Centrelink and therefore affirmed the decision.
7. The applicant then applied to the AAT for a review of the decision.

EVIDENCE AND APPEARANCES

8. This matter was heard at Bundaberg on 2 April 2003. The applicant was self-unrepresented. Ms H Wallis-Dunn appeared on behalf of the respondent.
9. The Tribunal had before it the documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 as exhibit 1.
10. The applicant made submissions from the Bar table. He stated that he had a distrust of banks and refused to open a bank account. He had been receiving cheques from Centrelink for sometime. He would cash these at the local shops. As the cheques are marked “for order” the local shops would no longer cash the cheques as the bank would not negotiate them on presentation by the shops.
11. For the time being he was receiving a letter form Centrelink which allowed the shops to cash the cheques but Centrelink has told him they are about to stop this.
12. Mr Watson said that all he wants is to have access to his money without the need to bank his money. He stated that it would cost him $45.00 if he is required to come to Bundaberg to cash his cheques at the bank.

ISSUES BEFORE THE TRIBUNAL

13. The issue before the Tribunal is whether the SSAT correctly determined that it did not have the power to set aside or vary the decision made by the respondent.
14. If the determination of the SSAT is correct the AAT’s jurisdiction is not enlivened because a reviewable decision has not been made.

LEGISLATIVE FRAMEWORK

15. The relevant legislation is contained in sections 55, 144 and 151 of the Social Security (Administration) Act 1999 (the Act). Section 55(2) of the Act provides that an amount that is to be paid to a person is to be paid to the credit of a bank account nominated and maintained by the person. However, section 55(4) states that the Secretary may direct that payment may be made in a different manner. Section 55 states:

“(1) An amount (the relevant amount) that is to be paid to a person under section 44, 45, 47, 48 or 50 is to be paid in the manner set out in this section.
(2) Subject to subsections (4) and (4A), the relevant amount is to be paid to the credit of a bank account nominated and maintained by the person.
...
(4) The Secretary may direct that the whole or a part of the relevant amount be paid to the person in a different way from that provided for by subsection (2). If the Secretary gives a direction, the relevant amount is to be paid in accordance with the direction. ...”

16. The applicant is currently being paid by cheque in accordance with section 55(4) of the Act.
17. Section 144 of the Act sets out decisions which are not reviewable by the SSAT. The Tribunal notes that decision under section 55 are not expressly excluded from the jurisdiction of the SSAT under that provision.
18. Section 151(1) of the Act sets out the power of the SSAT. It states:

“(1) Subject to subsection (2), the SSAT may, for the purpose of reviewing a decision under the social security law, exercise all the powers and discretions that are conferred by the social security law on the Secretary.
(2) The reference in subsection (1) to powers and discretions conferred by the social security law does not include a reference to a power or discretion conferred by: ...
(b) a provision dealing with the manner of payment of a social security payment; or...”

19. Thus, for the purposes of reviewing a decision under the social security law, the SSAT may exercise all the powers and discretions that are conferred on the Secretary. However, section 151(1) is subject to subsection (2). Section 151(2)(b) provides that the reference in subsection (1) to powers and discretions conferred by the social security law does not include a reference to a power or discretion conferred by a provision dealing with the manner of payment of a “social security payment”. Section 55 of the Act is a provision dealing with the manner of payment of a social security payment.
20. The term “social security payment” is defined in section 23(1) of the Social Security Act 1991. That section provides:

“social security payment means:
(a) a social security pension; or
(b) a social security benefit; or
(c) an allowance under this Act; or
(e) any other kind of payment under Chapter 2 of this Act; or
(f) a pension, benefit or allowance under the 1947 Act.” [Emphasis added]

21. A “social security benefit” is defined in section 23(1) to include a newstart allowance.
22. The Tribunal is satisfied that the applicant was in receipt of a social security benefit, that is, a newstart allowance and was therefore in receipt of a “social security payment”.
23. The Full Federal Court decision in Walker v Secretary, Department of Social Security (1997) 147 ALR 263 dealt with a similar legal point as the one arising in matter. That case involved a decision under section 1233 (to issue a garnishee notice), where section 1253(4)(f) denied the SSAT, on review of a decision under section 1233, authority to exercise the powers and discretions of the Secretary. The decision provides a useful discussion of the jurisdiction of the SSAT and AAT. Burchett J said:

“It is now possible to see the difficulty which confronted the Social Security Appeals Tribunal. Its charter was merits review, but, in the case of a decision under s 1223, it was denied the powers and discretions without which meaningful merits review was impossible. Indeed, no powers were expressly conferred upon it to deal with such a case. Because s 1253(1) said that it ‘must’ take one of the courses specified in that subsection, while subsec (4) prevented it from dealing with the merits, it simply affirmed the decision without coming to any conclusion upon the questions raised before it – the alleged denial of natural justice, and the alleged failure to take account of the appellant’s financial position. The Administrative Appeals Tribunal, the decision of which is the decision that was called in question in this Court, agreed with that way of looking at the matter.
...
Not surprisingly, [s 1283(1)] gives not right to apply to the Administrative Appeals Tribunal for a review of a decision simply declining jurisdiction. I say ‘not surprisingly’, because such a decision involves a question which is quite plainly appropriate to be decided upon judicial review, by proceedings in the nature of mandamus. Therefore, if the Administrative Appeals Tribunal rightly interpreted the decision of the Social Security Appeals Tribunal as a refusal of jurisdiction, then Administrative Appeals Tribunal had itself no jurisdiction to deal with the matter. ...
Although the Social Security Appeals Tribunal used the formal language of a confirmation of the decision put before it for review, the conclusion stated in its brief reasons was expressed in terms of power, which it considered it did not have. ‘[T]herefore’ it affirmed the decision. An affirmation springing from a denial of any capacity to consider the matter is no affirmation at all. ... Furthermore, it could not be said, in the words of s 1283(1), that the decision in question had ‘been reviewed by the Social Security Appeals Tribunal’. Accordingly, the Administrative Appeals Tribunal was right in finding there had been a refusal of jurisdiction; but, for that very reason, it was wrong to find any jurisdiction in itself. ...
...I now turn to consider whether the Social Security Appeals Tribunal did in reality have some power to review the decision made under s 1233.
The powers conferred on the Social Security Appeals Tribunal, as I have said, are powers of review on the merits. It is because the Secretary’s decision is being reviewed on the merits that the task is to ascertain the correct or preferable decision to be made on the material presented to the Tribunal, not on the material that was before the Department... The drafting of subsecs (1) and (3) of s 1253 envisages decision-making on the merits. The expressions used are plainly taken from s 43(1) of the Administrative Appeals Tribunal Act 1975, where, however, the logical link between actually making the appropriate decision and having the powers necessary to do so more explicitly appears. ...
Since the Tribunal is re-examining the merits in light of the material put before it, a question whether the original decision-maker denied natural justice to a person affected, or failed to take into account some matter that was required to be taken into account, will not generally arise before the Tribunal. It simply makes the correct or preferable decision on the material before it. ...
It would be neatly logical to conclude, as the Social Security Appeals Tribunal and the Administrative Appeals Tribunal have done in the present case, that the withdrawal by s 1253(4) of the powers and discretions of the Secretary effectively negates any power of review by the Social Security Appeals Tribunal of decisions under s 1233. Certainly, it could only be in a very formal sense, and not at all in the sense intended, for instance, by s 43(1) of the Administrative Appeals Tribunal Act, that the Social Security Appeals Tribunal could affirm a decision of the Secretary under s 1233. One may compare administrative powers to affirm or vary decisions, or to make decisions in substitution for them, or to recommend decisions, following a merits review, with the powers of a court ... which may set aside a decision, refer it back subject to directions, or declare the rights of the parties with respect to any matter to which it relates, but would not, using language strictly, affirm or recommend an administrative decision.
Although ... the Social Security Appeals Tribunal has conferred on it for the purposes of its decision making, by the terms of the legislation, only powers and functions of the original decision-maker, and these powers and functions have been withdrawn from the Social Security Appeals Tribunal in a case under s 1233, meaning must be given (if possible) to the contrast between s 1253(4) and the express provision in s 1250 taking certain decisions out of the field of review by the Tribunal. The inference is strong that other decisions, such as those under s 1233, were intended to have some form of review, although its nature and the power to engage in it were unstated, however restricted the review might be. ...
Not without some hesitation, I have come to the conclusion that Parliament’s withholding from the Social Security Appeals Tribunal of the powers and discretions conferred by s 1233 does not leave the Tribunal without any work to do in a case such as the present. It cannot review the ultimate decision to utilize the procedure under s 1233, for a review on the merits of that decision would necessarily involve an exercise of the discretion conferred by the section. But before, in any case, this discretion can be exercised, there must be an amount due to the Commonwealth upon which the discretion can fasten. The ascertainment of that amount is an anterior, though necessary, step to be taken to enable the powers and discretions conferred by s 1233 to be considered. ...
Accordingly, the Social Security Appeals Tribunal did have a function to perform, though a limited one, in relation to the appellant’s application. It should not have declined to consider the matter and, subject to discretionary considerations, could have been compelled to do so by proceedings in the nature of mandamus.”

24. Drummond and Mansfield JJ reached a similar conclusion:

“Decisions under s 1233 are not in the class of decisions declared by s 1250 to be non-reviewable by the SSAT and s 1253(4) does not purport to make decisions under s 1233 non-reviewable: s 1253(4) appears to have a more narrow objective than that. All that s 1253(4)(f) in terms does, is withdraw from the SSAT the right to exercise the powers and discretions conferred by s 1233 on the initial decision-maker, when it is reviewing a decision made under s 1233. The sub-section does not purport to deny the SSAT power to examine whether the original exercise of those powers and discretions miscarried but is confined to limiting only the range of decisions the SSAT itself can make, once it decides that interference with the decision under review is justified.
...
We therefore think that s 1253(4) should be read as permitting the SSAT to review decisions within s 1253(4) for any error of fact or law, but preventing the SSAT, even where it identifies error in such a decision, from making any decision of its own on the merits. That is the sole province of the Secretary. But that the SSAT cannot do more than set aside an erroneous DSS decision within s 1253(4) and remit it to the DSS for reconsideration does not absolve the SSAT from examining the DSS decision for error.”

25. Section 55(4) of the Act gives the Secretary a discretion to direct that whole or part of a payment be made in a manner other than by credit into a bank account nominated by a social security recipient. Pursuant to section 151(1), the SSAT cannot exercise this discretion. However, this does not mean that the SSAT cannot review a decision under section 55. Where, for example, the SSAT considers that there has been a denial of natural justice, the Tribunal could set aside the decision under review and remit it back to the Secretary for reconsideration (see section 149(1)(c)(ii) and Walker). In Walker (at 275), Drummond and Mansfield JJ found that the Tribunal, in setting aside a decision and remitting it to the decision-maker for reconsideration, could make non-binding recommendations without infringing the prohibition upon the Tribunal exercising the powers and discretions of the decision-maker. The Tribunal is not automatically obliged to affirm the decision under review.
26. In its reasons for decision in the present matter, the SSAT stated:

“Section 151(1) of the Administration Act provides that the Tribunal may, for the purposes of reviewing a decision under the social security law, exercise all the powers and discretions that are conferred by the social security law on the Secretary. However section 151(2)(b) of the Administration Act provides that a reference in subsection (1) to powers and discretions conferred by the social security law does not include a reference to a power or discretion conferred by a provision dealing with the manner of payment of a social security payment. This means that the Tribunal cannot exercise any powers or discretions that are conferred on the Secretary under the provisions of section 55 of the Administration Act and that the Tribunal cannot vary or set aside the decision to pay Mr Watson by cheque.”

27. That decision, in so far as it determines that the SSAT did not have power to set aside the decision, is wrong in law. As discussed above, the Tribunal does have the power to set aside the decision where it finds, for example, that there has been a denial of natural justice or an inappropriate exercise of the power. The SSAT did not consider any such issues in its decision and therefore its decision is wrong in law. It would have been open to the applicant therefore to commence proceedings in the nature of mandamus to compel the SSAT to consider the decision.
28. In Walker, Drummond and Mansfield JJ considered the role of the AAT in reviewing decisions such as this. Their Honours said:

“Ordinarily, the AAT, in exercising its review powers under s 43 of the Administrative Appeals Tribunal Act, can conduct a full merits review of its own. But s 1283(1) and (2) of the Social Security Act limit the AAT’s authority to review the relevant DSS decision as dealt with by the SSAT. It follows that, since the SSAT, on review of a decision within s 1253(4), can only determine whether the DSS decision in question is erroneous or not, the AAT cannot conduct a merit review itself of the DSS decision and is confined to determining whether the DSS decision as dealt with by the SSAT is erroneous in law or fact.”

29. And later:

“The learned primary judge erred in law in failing to recognise that s 1253(1) conferred power on the SSAT to review the relevant DSS decision and set it aside if it involved error of any kind, as did the AAT and the SSAT: the limitation imposed by s 1253(4) on the review powers of both the SSAT and the AAT did not absolve those Tribunals from examining the DSS decision for error.”

30. As such, this Tribunal must now consider whether the decision of the respondent involved an “error of any kind” and, if so, may determine that the decision under review should be set aside and the matter remitted to the respondent for reconsideration.

WAS THERE AN ERROR IN THE RESPONDENT’S DECISION?

31. Evidence before the Tribunal in this case is clear. Mr Watson wants to be paid his entitlements in a manner which enables him to obtain cash without the necessity to open a bank account. This could be achieved in only a couple of ways. Either Centrelink paid Mr Watson in cash which he collected from a Centrelink branch or he was issued with a cheque which was paid “or bearer”.. This would enable him to assign the benefit of the cheques to traders in exchange for cash and allow the traders to deposit the cheques to their bank accounts.
32. It is clear that the first of these options is not viable as Mr Watson has to travel some distance to the nearest Centrelink office and this, he said, would involve him in expense of about $45.00 per visit.
33. Clearly enough it is not practical for Centrelink to write out a cheque for Mr Watson every payday and send it to him. This would be time consuming and expensive. It would also not be safe as a cheque marked to “or bearer” could be cashed by someone other than Mr Watson. Centrelink would have less control over issues of lost or stolen cheques, which would ultimately be detrimental to Mr Watson.
34. In the circumstances, the Tribunal accepts that the best and safest way for Mr Watson to be paid is by way of direct debit to a bank account. While the Tribunal has some sympathy for Mr Watson’s view of banks, it is difficult to accept that a problem, which he had with one bank sometime ago, could cause Mr Watson to have such distrust for all banks.
35. Each week millions of social security recipients are paid by direct debit to bank accounts.
36. Accordingly, in the circumstances of this case the Tribunal is satisfied that the respondent has acted reasonably in rejecting Mr Watson’s application, and the Tribunal finds that the respondent has made no error of any kind in the consideration of Mr Watson’s application.
37. Accordingly 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 O Rinaudo, Member

Signed: Sarah Oliver

Associate

Date of Hearing 2 April 2003 (at Bundaberg)

Date of Decision 27 June 2003

The Applicant appeared in person

Solicitor for the Respondent Ms H Wallis-Dunn, Departmental Advocate