Iammarrone and Secretary, Department of Education, Employment and Workplace Relations [2009] AATA 8 (8 January 2009)

Last Updated: 8 January 2009

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2009] AATA 8

ADMINISTRATIVE APPEALS TRIBUNAL )

) No 2008/0896

GENERAL ADMINISTRATIVE DIVISION		)
	Re		JESSICA IAMMARRONE

Applicant

And

SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal

Mr J G Short (Member)

Date 8 January 2009

Place Adelaide

Decision

The Tribunal affirms the decision under review.

J G Short
(Signed)
(Member)

CATCHWORDS

SOCIAL SECURITY – pensions, benefits and allowances – Youth Allowance – failure to comply with notice requiring fortnightly reporting of earnings – special circumstances – decision affirmed

Social Security (Administration) Act 1999 (Cth) ss 68, 72, 95

Re Archer-Morris and Secretary, Department of Education, Employment and Workplace Relations [2008] AATA 4

REASONS FOR DECISION

8 January 2009

Mr J G Short (Member)

1. On 14 May 2007, Centrelink made a decision to cancel Ms Iammarrone’s (the applicant) Youth Allowance with effect from 14 April 2007. Her fresh claim for Youth Allowance was granted with effect from 22 October 2007.
2. Ms Iammarrone has sought review of the decision to cancel Youth Allowance and to not re-commence payments from any date prior to 22 October 2007.

APPLICANT’S CASE

3. Ms Iammarrone agreed the summary of information she had provided at the Social Security Appeals Tribunal (the SSAT) hearing on 30 January 2008. That information was recorded by the SSAT in its reasons for decision as follows:

“10. Mr [sic] Iammarrone spoke to the Tribunal and the following is a summary of the information provided.

11. Ms Iammarrone said that she was in year 12 at school last year and found it difficult to report her earnings to Centrelink at the fortnightly frequency required. Ms Iammarrone said that her usual reporting day was a Friday and she found that when she got home Friday night she was often too tired to report. In late April 2007 she stayed home from school on a Monday and rang Centrelink about her difficulty with reporting. She told the Centrelink officer that she was working one day a week and her earnings were always the same. She was aware that a person could be relieved of the requirement to report earnings on a fortnightly basis if there [sic] earnings were regularly the same amount.
12. It was the understanding of Ms Iammarrone that the Centrelink officer to whom she spoke was going to fix her reporting requirements so that she no longer had to report each fortnight. As a result Ms Iammarrone stopped reporting her earnings to Centrelink.
13. Ms Iammarrone’s youth allowance payments were always paid directly into her parent’s bank account. She was unaware that the payments had been stopped. She only became aware when her father queried why he did not have as much money in his account as he thought he should have. Ms Iammarrone told the Tribunal that her father has limited understanding of written English and asked his son to look at his bank statement. It was then that the family became aware that the youth allowance payments were no longer being made.
14. Ms Iammarrone went in to Centrelink on 22 October 2007 and asked why she was no longer receiving youth allowance payments. Centrelink told her that they had sent her a letter dated 14 May 2007 advising that her youth allowance had been cancelled. Ms Iammarrone told the Tribunal that she did not receive that letter. She said that it was possible that her father had opened the letter and not realised its importance.
15. Ms Iammarrone advised the tribunal that he[r] father is on a low income and the family has suffered some hardship as a result of not receiving the youth allowance payments.”
    
4. Ms Iammarrone confirmed that she had been in receipt of Youth Allowance since 27 February 2006 and that her payments had been cancelled on two occasions prior to the cancellation described in Centrelink’s letter of 14 May 2007. She confirmed that her payments had been cancelled on 28 October 2006 and on 4 April 2007, on both occasions for a failure to report earnings.
5. In relation to the most recent cancellation, Ms Iammarrone said that she had been studying year 12 in 2007. She said that she had experienced difficulties in returning home from school in time to provide telephone advice of her earnings. Although her bus trip home took between 30 minutes and one hour and would have seen her home at approximately 4.30pm at the latest, she said that on Fridays she would frequently stay behind in order to seek further instructions from teachers and consequently she struggled to return home by 5.00pm on Fridays (her day for reporting).
6. Ms Iammarrone said that when she called Centrelink on 10 April 2007 to advise previous earnings in order to have her penultimate cancellation of Youth Allowance restored, she recalled the Centrelink officer asking her if she was finding it difficult to report. She said that nothing further was said. Ms Iammarrone said that she understood that if she did not report, her Youth Allowance could be cancelled.
7. Ms Iammarrone said that on or about 23 April 2007, she had again spoken to a Centrelink officer and advised that although her fortnightly income fluctuated, it was always below the threshold from which any reduction in Youth Allowance may be warranted. She said that she was advised that she could qualify for automatic reporting. Ms Iammarrone understood at the end of this conversation that she had been placed on automatic reporting and consequently no longer had to report her income fortnightly. No record of the conversation alleged to have occurred on 23 April 2007 was presented to the Tribunal. However, having noted that Ms Iammarrone had previously reported her income and ceased to do so from mid April 2007 until October 2007, I accept that Ms Iammarrone genuinely believed that she no longer had an obligation to report her income.
8. Ms Iammarrone advised, and I accept, that her income prior to cancellation, had never been sufficient to warrant a reduction in her Youth Allowance payments. I have no record of income achieved during the cancellation period.
9. Ms Iammarrone explained that both of her parents had been born in Italy and that her father’s spoken English skills were poor and that his written English skills were non-existent.
10. When applying for Youth Allowance, Ms Iammarrone’s father had recorded his own bank account as that into which Youth Allowance payments should be made. It appears that a customer can ask that Youth Allowance payments be made directly to the customer. This did not occur in this case.
11. Ms Iammarrone said that the letter of cancellation dated 14 May 2007 was probably opened by her father and the significance not appreciated and that he did not advise her at any time of the existence of the letter.
12. Ms Iammarrone confirmed that a letter dated 16 October 2007 advising the necessity to report income on a fortnightly basis had been received and read by herself. She said that she thought it was just one of a number of letters sent by Centrelink and that perhaps she had considered that as the content of the letter seemed to conflict with her understanding of the need to continue reporting income, the letter may have been subsumed by a subsequent agreement to the contrary. Ms Iammarrone said that she did not consider contacting Centrelink in order to clarify her obligation to report income.
13. Ms Iammarrone said that it was not until October 2007 that her brother (now an accountant), had noted that Youth Allowance payments had not been made. Ms Iammarrone and her brother, Tony Iammarrone, both told the Tribunal that their family had been upset by the revelation that payments had not been made and that her parents had been angry.
14. Ms Iammarrone said that her father was dependent upon a Disability Support Pension and her mother had worked part-time in a hospital. Subsequently, her mother underwent an operation which has prevented her working and although she has been in receipt of sick pay, and from mid December perhaps will rely on recreation leave for a time, she may not resume work until early in 2009. Consequently the family’s resources will be stretched.
15. Ms Iammarrone lodged a fresh application for payment of Youth Allowance on 23 October 2007 and Youth Allowance was paid with effect from 22 October 2007, that is the first date Ms Iammarrone contacted Centrelink in order to foreshadow a fresh claim or perhaps to seek review of the cancellation decision. In any event, it was not argued that a fresh claim could be paid from any time prior to the date of lodging an informal claim and it was not argued that any subsequent favourable decision in respect of the original cancellation, could take effect from the date of the original cancellation, the application for review (if it was one) of 23 October 2007 having been lodged more than 13 weeks after the notice of cancellation in May 2007.
16. Ms Iammarrone explained that she was now studying full-time and working part-time. She receives income at an average rate approximating $175 a week. She also receives Youth Allowance of between $100 and $130 a fortnight.
17. Ms Iammarrone said that her parents used her Youth Allowance to pay her school fees and that if there was any money left over, then she would use those small amounts for her personal needs. She did not and does not pay board.
18. Ms Iammarrone said that her monthly income from employment approximated $700 and that she has been repaying school fees, originally outstanding in a sum approximating $2,500, at a rate of $260 a month. She said that she had about $1,000 left to pay. She said that she is consequently left with about $440 a month on which to live, but in addition receives between $100-130 in Youth Allowance. She said that she was managing, but unable to save. Ms Iammarrone said that if she were able to recover arrears of Centrelink payments, approximating $2,500, then she would pay off the remainder of her school fees and perhaps save towards driving lessons and eventually a car. She did not mention paying her parents any money, although her brother later told the Tribunal that the family would expect some moneys to be paid to the family from any arrears in Youth Allowance directed as a result of this hearing.
19. Ms Iammarrone, through her representative, suggested that I was vested with a discretion under s 95(2) of the Social Security (Administration) Act 1999 (the Administration Act) to treat the cancellation as if it had not occurred if, standing in the shoes of the Secretary, I am satisfied in the special circumstances of the case that it is appropriate to do so. Sub-sections 95(1), (2) and (3) of the Administration Act reads as follows:

“95 Automatic cancellation—failure to provide statement under subsection 68(2)
(1) If:
(a) a person who is receiving a social security payment is given a notice under subsection 68(2) requiring the person to give the Department a statement or a number of statements; and
(b) the notice relates to the payment of the social security payment in respect of a period or a number of periods specified in the notice; and
(c) the person does not comply with the notice so far as it relates to a particular period;
then, subject to subsection (2), the social security payment is cancelled, by force of this section, on the first day in that period.
(2) If the Secretary is satisfied that, in the special circumstances of the case, it is appropriate to do so, the Secretary may determine in writing that subsection (1) does not apply to the person on and from a day specified in the determination.
(3) The day specified under subsection (2) may be before or after the making of the determination.”

CONSIDERATION

20. I have been referred to Re Archer-Morris and Secretary, Department of Education, Employment and Workplace Relations [2008] AATA 4. In that case, Member L R Tovey made a decision pursuant to s 95(2) of the Administration Act, to treat a cancellation for want of reporting, as not having occurred. Both the respondent (the Department) and the applicant suggested that I had a discretion to do so and I am prepared to consider the application on the basis that s 95(2) of the Administration Act provides me with such a discretion.
21. It was suggested by the applicant’s representative that special circumstances existed in this case such as to warrant the favourable exercise of the above-mentioned discretion. The applicant pointed out that moneys were paid to her father’s account on her behalf rather than her own account and consequently she was not aware that payments were not being made, until October 2007. The Department pointed out that the Youth Allowance claim form indicates that a Youth Allowance recipient can ask for payments to be made directly to that recipient rather than a parent.
22. The applicant also referred to the strained relationship within the family which is said to have arisen out of the non-payment of Youth Allowance. Initially anger was expressed by both of Ms Iammarrone’s parents towards her. It was also suggested, and I accept, that Ms Iammarrone genuinely believed that she no longer needed to report her income and I also accept that at least until the time of cancellation, and perhaps during the period of cancellation, Ms Iammarrone did not receive income from employment at a sufficient level to have affected her Youth Allowance payments.
23. It was suggested that as Ms Iammarrone’s parents were dependent upon a modest family income, Mr Iammarrone on his Disability Support Pension, and Mrs Iammarrone on her modest earnings and now sick leave payments, the family could well do with the contribution from Ms Iammarrone from any moneys which could now be paid in arrears relating to the period of cancellation. I am told that Ms Iammarrone’s entitlement, during the cancellation period, would have approximated $2,500 or perhaps a little less.
24. The Department suggested that Ms Iammarrone’s circumstances did not amount to special circumstances as that phrase was intended to be understood by the legislators. The Department pointed out that Ms Iammarrone had, on two occasions prior to the current cancellation, had her Youth Allowance cancelled for want of reporting. In these circumstances it was suggested that Ms Iammarrone should have, if she did not, clearly understand the need to report earnings and the effect of failing to do so. The Department also suggested that Ms Iammarrone’s household income (she lives with her parents and currently two siblings) although modest, is adequate and further that Ms Iammarrone has been paying the private school fees herself from her current earnings, having arranged periodic payments with the school. The Department said that in these circumstances, it is difficult to see how Ms Iammarrone’s parents have been financially disadvantaged. Had the moneys been paid, they would have been used for school fees. Ms Iammarrone is paying the school fees herself. I accept this submission, however, I also accept that some other support provided to Ms Iammarrone by her parents may have been offset by other income received from Centrelink.
25. I accept that Ms Iammarrone genuinely believed that she no longer had to report her income from April 2007. I further accept that her income from employment was likely to have been received at a rate at which it would not have affected her Youth Allowance payments. Nevertheless, Ms Iammarrone’s Youth Allowance payments had been cancelled on two previous occasions due to a failure to report income. Ms Iammarrone appreciated the importance of reporting income.
26. Although the letter of cancellation appears to have been opened, but discarded, by Ms Iammarrone’s father, it was nevertheless posted to the correct address and is, under the Administration Act, deemed to have been received by Ms Iammarrone.
27. While Ms Iammarrone’s parents may have been angry that payments had not been made, I do not regard this as a circumstance which, either in isolation or in combination with other circumstances, should be regarded as special.
28. I do not consider that Ms Iammarrone’s parents are experiencing financial hardship as a result of the non-payment period, or that Ms Iammarrone is currently experiencing financial hardship as a result of that period of non-payment. The arrangement with the school to pay outstanding school fees by periodic payments has alleviated any significant hardship.
29. The legislators could have, if they had wished, substituted for s 95(2) of the Administration Act, a provision simply indicating that if at a time subsequent to a cancellation, it is determined that a recipient would have been entitled to continue to receive Youth Allowance had the cancellation not occurred, then the cancellation should be treated as not having occurred. Parliament chose not to enact such a clause. Rather, Parliament provided a discretion to disregard a cancellation if special circumstances exist. I do not regard the circumstances of this case as special circumstances. Neither Ms Iammarrone nor her parents are experiencing financial hardship and the fact that Ms Iammarrone’s father did not understand or convey to her, the significance of the cancellation letter and the fact that Ms Iammarrone genuinely believed that she need not report her income are in my view insufficient to warrant the favourable exercise of the discretion prescribed in s 95(2) of the Administration Act.

DECISION

30. The decision under review is affirmed.
    

I certify that the 30 preceding paragraphs are a true copy of the reasons for the decision herein of Mr J G Short (Member)

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

B Bills Admin Assistant

Date/s of Hearing 3 December 2008

Date of Decision 8 January 2009

Advocate for the Applicant Ms M Riley

Welfare Rights

Advocate for the Respondent Mr C Goldsworthy

Centrelink Legal Services Branch