Difazio and Secretary, Department of Education, Employment and Workplace Relations [2009] AATA 43 (22 January 2009)

Last Updated: 22 January 2009

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2009] AATA 43

ADMINISTRATIVE APPEALS TRIBUNAL )

) No 2008/2854

GENERAL ADMINISTRATIVE DIVISION		)
	Re		SIGFRID DIFAZIO

Applicant

And

SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal

Rear Admiral A R Horton AO

Date 22 January 2009

Place Sydney

Decision

The Decision under review is set aside and in substitution therefor the Tribunal decides that there had not been three participation failures within a twelve month period pursuant to section 629 of the Social Security Act 1991, and hence an eight week newstart allowance non payment period is not appropriate.

....................[sgd].....................
Rear Admiral A R Horton AO
Member

CATCHWORDS

SOCIAL SECURITY – newstart allowance – conditions of Activity Agreement – requirement to attend and participate in supervised jobsearch – participation failures on 21 November 2007 and 6 February 2008 not contested – further participation failure (in 12 months) would result in 8 week non payment period – reasonable excuse for non attendance on 3 - 5 March 2008 – decision to impose 8 week non payment period set aside

Social Security Act 1991 – Sections 593, 601, 605, 624, 629, 630

Social Security (Administration) Act 1999 – Section 63

Social Security (Reasonable Excuse) (DEWR) Determination 2006

Guide to Social Security Law – Part 3.2.13.30

REASONS FOR DECISION

22 January 2009

Rear Admiral A R Horton AO

1. Mr Sigfrid Difazio (“the Applicant”) has been in receipt of newstart allowance (“NSA”) since 2006. His commitments in order to retain eligibility have been defined in Activity Agreements as appropriate, that relevant to the matters before me being signed on 3 October 2007.
2. On 25 February 2008, Centrelink found that Mr Difazio had committed three participation failures and hence decided that NSA payment be stopped for 8 weeks in accordance with the provisions of s 629(1) of the Social Security Act 1991 (“the Act”). This decision was set aside by the Social Security Appeals Tribunal (“SSAT”) on 7 May 2008, finding for a reasonable excuse pursuant to s 624(2) of the Act in respect of the second claimed participation failure (9 January 2008), as Mr Difazio had been required to attend Campbelltown Local Court on that day.
3. On 6 March 2008, Max Network Employment advised Centrelink that Mr Difazio had failed to attend jobsearch sessions on 3, 4 and 5 March 2008. Centrelink consequently found that Mr Difazio had incurred 3 participation failures within a period of 12 months (that is 21 November 2007, 6 February 2008 and now 5 March 2008) and imposed an 8 week non payment period, the decision to impose this non-payment period being affirmed by an Authorised Review Officer on 23 April 2008 and the SSAT on 3 June 2008. This is the matter before me. (Pending resolution of the appeals process against this decision, no penalty has yet been applied). This latter SSAT decision did not review the findings of the earlier SSAT as regards the failures of 21 November 2007 and 6 February 2008, but accepted them as read.
4. Mr Difazio attended a hearing before me on 19 November 2008. As he was accompanied by his 9 year old son, the hearing was curtailed. A resumed hearing took place on 23 December 2008. Mr Difazio was self represented. Mr James Larcombe appeared for the Secretary, Department of Education, Employment and Workplace Relations (“the Respondent”). At the outset, T documents pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 were taken into evidence, as was the Respondent’s Statement of Facts and Contentions (Exhibit R1).

ISSUES

5. The issues in this matter are:
   • Did Mr Difazio incur 3 newstart participation failures in a period of 12 months, such that he would be liable for an 8 week newstart allowance non payment period pursuant to the relevant sections of the Act, and if so;
   • Did Mr Difazio have reasonable excuse for one or more of those failures.

LEGISLATION

QUALIFYING FOR NEWSTART ALLOWANCE

6. Section 593 of the Act defines the qualifications for NSA. Relevantly, to qualify for the allowance, the person must be unemployed for the period (of the allowance), must satisfy the activity test (unless not required to do so) and must enter into and comply with the terms of a Newstart Activity Agreement. Subsection 601(1) of the Act states that subject to s 601(5), the activity test will be satisfied if throughout the period, the person is actively seeking and prepared to undertake paid work. Subsection 601(5) states:

If a person fails to comply, throughout a period, with the terms of a Newstart Activity Agreement between the Secretary and the person, the person cannot be taken to satisfy the activity test in respect of the period in spite of any compliance of the person with subsection (1).

7. Subsection 605(2) provides for a person who has already entered into a Newstart Activity Agreement to enter into another agreement, and s 605(3) sets out the notification requirements for this to happen.

PARTICIPATION FAILURE

8. Section 624 of the Act refers to newstart participation failures and relevantly states:

(1)  A person commits a newstart participation failure if the person:
                     (a)  fails to comply with a requirement:
                              (i)  that was notified to the person under subsection 63(2) or 64(2) of the Administration Act; and
                             (ii)  that was reasonable; and
                            (iii)  the notification of which included a statement to the effect that a failure to comply with the requirement could constitute a newstart participation failure; or
                     (b)  fails to satisfy the activity test; or
(c)  fails to comply with a requirement to enter into a Newstart Activity Agreement; or
(d)  fails to comply with a term of a Newstart Activity Agreement between the Secretary and the person;
...
(2)  Despite subsection (1), a failure of a kind referred to in that subsection is not a newstart participation failure if the person satisfies the Secretary that the person had a reasonable excuse for the failure.
(2A)  The Secretary must, by legislative instrument, determine matters that the Secretary must take into account in deciding whether, for the purposes of subsection (2), a person had a reasonable excuse for committing a newstart participation failure.
(2B)  To avoid doubt, a determination under subsection (2A) does not limit the matters that the Secretary may take into account in deciding whether, for the purposes of subsection (2), a person had a reasonable excuse for committing the newstart participation failure referred to in subsection (1).

9. Section 629 of the Act refers to repeated or more serious failure, and relevantly states:

(1)  A newstart allowance is not payable to a person, for the period of 8 weeks starting in accordance with section 630, if the person:
                   (a)  commits a newstart participation failure (the repeated failure), having committed newstart participation failures (the earlier failures) on 2 or more other occasions during the period of 12 months preceding that failure;
...

10. Section 630 confirms that non payment starts at the commencement of the next instalment period after the Secretary first becomes aware of the failure. (As noted above, non payment has not yet been implemented in this matter). Section 63 of the Social Security (Administration) Act 1999 is relevant in that the payment implications of failure to comply must have been included in an activity agreement.
11. Section 624(2A) of the Act must be read in conjunction with the Social Security (Reasonable Excuse) (DEWR) Determination 2006 (“the Determination”), which requires that account be taken of the accommodation of the person, the literacy and language skills of the person (or lack thereof), any illness or impairment including neurological and psychiatric illness, drug or alcohol dependency, family circumstances and imprisonment. Departmental policy is further explained in the Guide to Social Security Law (“the Guide”).
12. Part 3.2.13.30 of the Guide provides that:

“The meaning of the term reasonable excuse is discretionary but the excuse must be one that would seem plausible to a member of the public. The refusal or failure must not simply be a deliberate act of non-compliance. It is important to consider whether or not the reason for the failure to meet the requirement was foreseeable or within the person's control. The legislation also requires that the requirement was reasonable and that the job seeker was notified correctly.
...
When determining if a recipient has a reasonable excuse for failing to meet a requirement, the recipient's personal circumstances must also be considered”.

13. Part 3.2.13.30 of the Guide also lists a number of factors that may be taken into account when determining whether there is a reasonable excuse, if that factor has a “significant effect on the job seeker’s capacity to comply with the specific requirement at the time the job seeker failed to comply”. The nature of conflicting commitments that the job seeker faces must also be considered.

EVIDENCE

14. Mr Difazio, aged 38 years, has “always lived in the Campbelltown area”. He has been in receipt of NSA since July 2006. He completed his schooling to year 10 and subsequently commenced pre-apprenticeship training as a mechanic. Whilst he did not complete an apprenticeship, he stated that he had gained practical mechanical skills. He then was primarily employed as a truck driver until losing his licence in August 2007; this will not be reinstated until 2010.

15. Mr Difazio is not married; he has one son aged 9 years, who alternately lives with his father and mother. At the time of the claimed participation failures, that is in late 2007 and early 2008, Mr Difazio lived in a rented property in Chisolm Crescent, Campbelltown. He stated that he could walk to the Campbelltown Centrelink office in about 20 minutes, and to Max Network Employment in about the same time. He referred to difficulties in speaking by telephone with Max Network, in that he was not always sure that his message was received and understood.

16. Mr Difazio did not dispute that he had signed an Activity Agreement with Max Network Employment on 3 October 2007, nor that it required him to attend forenoon supervised jobsearch on Mondays, Tuesdays and Wednesdays. He believed he was “probably” informed of the penalties that might be imposed in the event he did not meet the required commitments, but thought that a telephone call to Max Employment in the event of any difficulty would suffice. He did not dispute the claim that he had not attended, as required, such activities on 21 November 2007 and 6 February 2008.

17. The third date before me in respect of the participation failure original decision is that of 5 March 2008. Whilst that is the date against which Centrelink reached a decision, the SSAT saw it appropriate to also consider both 3 and 4 March, these being dates of non attendance as advised to Centrelink by Max Employment. I agree with this interpretation, and the Respondent endorsed this thinking. Thus I review the circumstances on 3, 4 and 5 March.

18. The SSAT accepted that whilst Mr Difazio had been required to attend Campbelltown Local Court on 5 March (NSW Attorney General letter of 7 May 2008 (T31) refers), his reasons for non attendance at Max Employment on the two previous days - “chasing up Centrelink documents, reference from [his] house mate, decide where [his] belongings might be stored, pay some bills, sort out loan repayments, and generally get [his] affairs in order in case [he] received a custodial sentence” and “discuss care arrangements with [his] son’s mother and take him to school” were insufficient to lead to a finding that he had reasonable excuses.

19. I noted earlier that the Tribunal adjourned the initial hearing on 19 November 2008 because of the domestic circumstances of Mr Difazio. On resumption on 23 December 2008, Mr Difazio tendered a “Notice of Periodic Detention Order“ of 26 March 2008 (Exhibit A1) and further gave evidence as to the circumstances of his court appearances. On 19 March 2008, (vide the above document), Mr Difazio was convicted of contravention of a domestic order and sentenced to imprisonment, such term by way of periodic detention.

20. In evidence, Mr Difazio referred to attendance at court on 9 January 2008 for mention and then 30 January for hearing, which did not proceed, but at which he was advised by the magistrate to seek legal aid. That he did, to be informed that a custodial sentence, in the order of 7 months, was likely. The hearing was then set for 5 March 2008 (albeit that on that day it was stood over until 19 March), and hence in the days leading up to the forecast 5 March hearing, and in anticipation of a custodial sentence, Mr Difazio explained that he focused on the variety of matters that he needed to resolve before being sentenced.

21. Mr Difazio stated that he rang Max Employment on 3 or 4 March to explain his unavailability; there is no record before me of such a conversation. The SSAT decision notes that Mr Difazio believed he rang Max Employment on 29 February and spoke to someone at the front desk. This date was not raised in evidence before me.

22. As explained by Mr Difazio, the matters occupying his attention, thoughts and actions in the two days leading up to the 5 March court appearance were those explained to the SSAT. Mr Difazio variously emphasised particular issues, in particular that he would have no time to make arrangements, such as for the custody of his son, the need to store his effects given he would likely have to give up the rental property, and generally get his affairs in order, as a custodial sentence, as considered most likely by his solicitor, would occur on 5 March. Mr Difazio believed that in the circumstances, and notwithstanding that both Centrelink and Max Employment offices were located relatively close by, his priorities had to be given to preparation for the court decision. In that sense, the pursuit of work became of less importance.

23. Mr Difazio informed me that he met and completed the periodic detention requirements. When asked, he further stated that he had no further participation failures – he has since been transferred to the Commonwealth Rehabilitation Service – since those in March 2008. The Respondent made no submissions in this respect. Mr Difazio also stated that the imposition of an eight week non-payment penalty would probably lead to him vacating his rented property, and being unable to take periodic custody of his son for some time.

CONSIDERATION

24. The Respondent submitted that whilst the evidence supported the claimed court appearances, Mr Difazio was nonetheless obliged to meet his Centrelink obligations. Given that he lived relatively close to Centrelink and Max Employment, to suggest, as Mr Difazio has done, that he could not find the time to directly consult either or both organisations on or before 3 and 4 March, was unrealistic. Further, the Respondent submitted that the court decision, and the expectation thereof as described by Mr Difazio, was not sufficient reason for failing to meet the scheduled jobsearch activities at Max Employment. The Respondent did not consider that Mr Difazio had a reasonable excuse for the participation failure on either day, (3 or 4 March) and hence three participation failures were in evidence and an eight week non payment penalty should be imposed.

25. “Reasonable Excuse” is broadly defined in the Determination. The Guide provides further explanation and guidance as to factors that should be considered. The SSAT was not satisfied that the circumstances of the failure of Mr Difazio to meet his jobsearch commitments on 3 and 4 March 2008 provided the basis for a reasonable excuse.

26. In my opinion, the evidence before me in respect of the custodial sentence handed down by the Campbelltown Local Court provided more insight into the likely pressures on Mr Difazio in the days immediately leading up to the planned hearing (5 March). He emphasised the advice he was receiving from his solicitor, and the need to positively plan prior to the hearing. I also place some weight on the fact that Mr Difazio is not particularly well educated; that he had a number of court appearances and a custodial sentence may well be a reflection of difficulties in his life, and ultimately, his decision to put preparation for his court appearance ahead of his responsibilities to jobsearch employment at that time.

27. Given that there is no evidence before me of any participation failures subsequent to 5 March 2008, the evidence of Mr Difazio that he properly met his periodic determination commitments, and his financial and parental responsibilities in respect of his 9 year old son, I find that Mr Difazio has a reasonable excuse for his failures to attend jobsearch activities on 3 and 4 March 2008. (As I have previously observed, Mr Difazio does not challenge the original decision that he has no reasonable excuse for the participation failures on 21 November 2007 and 6 February 2008).

28. The decision of the SSAT of 3 June 2008 is set aside. Three participation failures in a period of 12 months have not been found pursuant to s 629 of the Act, and hence an 8 week newstart allowance non payment period is not appropriate.

I certify that the 28 preceding paragraphs are a true copy of the reasons for the decision herein of REAR ADMIRAL A R HORTON AO, Member.

Signed: ..............[sgd]..................................................................

Associate

Date/s of Hearing 23 December 2008

Date of Decision 22 January 2009

Applicant self-represented

Solicitor for the Respondent Mr J Larcombe, Centrelink Legal Services