Shuar and Secretary, Department of Education, Employment and Workplace Relations [2011] AATA 239 (8 April 2011)

Last Updated: 11 April 2011

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2011] AATA 239

ADMINISTRATIVE APPEALS TRIBUNAL )

) No 2010/5003

GENERAL ADMINISTRATIVE DIVISION		)
	Re		Sompis Shuar

Applicant

And

Secretary, Department of Education, Employment and Workplace Relations

Respondent

DECISION

Tribunal

Senior Member A K Britton

Date 8 April 2011

Place Sydney

Decision

The decision under review is set aside and in substitution it is decided that the applicant be paid arrears of Newstart Allowance to include a component for rent assistance, from 19 April 2010.

........................[sgd]......................
Senior Member A K Britton

CATCHWORDS

SOCIAL SECURITY – Newstart Allowance –whether applicant entitled to back payment of Rent Assistance to date of decision to calculate Newstart Allowance without Rent Assistance component – requirement for valid notice under s 109 of Social Security (Administration) Act 1999 – decision under review affirmed

Social Security Act 1991 (Cth)

Social Security (Administration) Act 1999 (Cth) – ss 79, 109

Administrative Appeals Tribunal Act 1975 (Cth) – s 37

Secretary, Department of Family & Community Services v Laurent [2003] FCA 1017; [2003] 132 FCR 211

Re Secretary, Department of Families, Community Services and Indigenous Affairs and Walshe [2007] AATA 1861

REASONS FOR DECISION

Senior Member A K Britton

1. Mrs Shuar was paid Newstart Allowance from 28 December 2006. Initially, the allowance was calculated to include a component for Rent Assistance. However on 7 February 2007, the respondent Secretary decided to discontinue Rent Assistance and reduced Mrs Shuar’s Newstart Allowance rate by about $60 per fortnight.
2. In July 2010, following an enquiry made by Mrs Shuar, the Secretary reinstated Rent Assistance and increased the rate of Newstart Allowance. The Secretary decided, however, that Rent Assistance could not be back paid to February 2007, as requested by Mrs Shuar. On review that decision was affirmed by the Social Security Appeals Tribunal (SSAT). Mrs Shuar now seeks review of that decision.
3. Whether Rent Assistance can be back paid to February 2007 turns on a preliminary question; namely, whether the letter sent by Centrelink to Mrs Shuar on 7 February 2007 (the subject letter), constitutes a valid notice for the purpose of s 109 of the Social Security (Administration) Act 1999 (Cth). Section 109 imposes time limits on when a favourable decision made following review of an original decision, can “take effect”. Critical to its operation is whether the person was given notice of the original decision.

CHARACTERISATION OF ORIGINAL DECISION

4. Cooper J, in Secretary, Department of Family & Community Services v Laurent [2003] FCA 1017; [2003] 132 FCR 211, considered whether “Rent Assistance” constituted a “social security payment” within the meaning of the Social Security Act 1991 (Cth) (the Act). After reviewing the statutory provisions relating to the calculation of Newstart Allowance, His Honour said, at [30]:

[Rent assistance] is a notional amount to be added to a person's maximum basic rate of pension, benefit or allowance to help cover the cost of rent. What is in fact payable and paid is the Newstart Allowance in a sum calculated in accordance with Benefit Rate Calculator B (s 1068) and that is the payment to which s 109(1)(a) of the Administration Act applies.

5. His Honour considered that for the purpose of s 109 of the Administration Act, the “original decision” was not the purported decision to terminate Rent Assistance but rather the decision to calculate the pensioner’s rate of pension without including a component for Rent Assistance.

Statutory requirements of notice

6. Section 109 of the Administration Act provides that if notice of an original decision is given and an application for review is made within 13 weeks of the notice, a favourable decision takes effect from the date of the original decision. If notice of the original decision is given and an application for review is made more than 13 weeks after the notice is given, a favourable decision takes effect on the day on which the application for review was made. If notice of the original decision is not given, a favourable decision will take effect from the date of the original decision.
7. In Re Secretary, Department of Families, Community Services and Indigenous Affairs and Walshe [2007] AATA 1861 (Walshe), the Tribunal considered whether several notices issued to the respondent claimants constituted “adequate notice” for the purpose of s 109 of the Administration Act. Some of the notices related to decisions to reduce the rate of the respondents’ social security payments. Section 79 of the Administration Act deals with decisions of that type and provides:

Rate reduction determination
(1) If the Secretary is satisfied that the rate at which a social security payment is being, or has been, paid is more than the rate provided for by the social security law, the Secretary is to:
(a) determine that the rate is to be reduced to the rate provided for by the social security law; and
(b) specify the last-mentioned rate in the determination.

8. The Tribunal noted that to meet the requirements of s 109 a notice must be given “informing the person of the original decision”. The Tribunal identified the two elements of a decision made under s 79:

(a) that there be an increase or reduction (depending on which section is applicable) in the rate of pension; and
(b) the amount of the newly determined rate of pension.

9. The Tribunal concluded that s 109 requires that the person be notified of the fact and content of the decision, not the reason for it. The Tribunal also concluded that in determining whether the notice constituted “adequate notice”, the test to be applied is whether an ordinary reasonable person would understand the decision the Secretary sought to convey. The Tribunal stated that in deciding whether a particular letter effectively conveys the requisite information it is appropriate to consider how the letter would be read by ordinary or reasonable persons within the group of persons to whom the information is directed.

WAS MRS SHUAR GIVEN NOTICE OF THE “ORIGINAL DECISION”?

10. The “original decision” was the decision apparently made on 7 February 2007, to reduce Mrs Shuar’s rate of Newstart Allowance and purportedly set out in the subject letter. While there is no issue that Mrs Shuar received the subject letter it is necessary to decide whether it constituted adequate notice for the purpose of s 109 of the Administration Act, that is, a notice, “informing the person of the original decision”.
11. Neither party provided the Tribunal with a copy of the subject letter. The information contained in the letter was provided but not in the form it appeared in the letter (see T 15 of the documents provided to the Tribunal under s 37 of the Administrative Appeals Tribunal Act 1975 (Cth)). The subject letter states that Mrs Shuar will receive Newstart Allowance in the sum of $137.50 per week “from payday 21 March 2007”. It makes no mention of the rate of Newstart Allowance paid to Mrs Shuar immediately prior to 7 February 2007; that that rate had been reduced; or, that Rent Assistance had been discontinued.
12. A notice sent to Mrs Shuar the day before the subject letter stated that she would be paid Newstart allowance of $137.50 and Rent Assistance of $68.80, totalling $206.30. Notices in identical terms were sent to Mrs Shuar on 11 January 2007, 23 January 2007 and 29 January 2007.
13. There can be no argument that the subject letter disclosed the revised rate of Newstart Allowance — the first element of a rate reduction determination made under s 79 of the Administration Act. However it made no mention of a reduction having been made to Mrs Shuar’s previous rate of Newstart Allowance or refer to that rate.
14. The subject letter is similar to one of the notices considered by the Tribunal in Walshe, i.e. Letter 5. Like the subject letter, Letter 5 did not expressly state that there had been a change in the pension rate, refer to the previous rate or give reasons for the revised rate. The Tribunal concluded (at [35]) that while it was the least specific of the letters, it nonetheless provided adequate notice:

... in the hands of a pensioner who is regularly receiving a pension, the purport of the letter would be clear. The pensioner would know that these letters are not received every fortnight. He or she would know from that fact and the note on the reverse that the letter was giving notice of a decision. To be told that the payment “from” 23 November 2001 is to be $193.35 is to be told that prior to that it was something else. It is to be noticed that, in terms, ss 78 and 79 require only the specification of the new rate. This letter provides adequate notice.

15. If in this case the question posed is — would the ordinary reasonable person understand from the subject letter that a decision had been made to reduce the rate of Newstart Allowance — the answer must be “no”. However, if the approach taken in Walshe is adopted and imputed to the ordinary reasonable person is the information known to Mrs Shuar, that immediately prior to 7 February 2007 she had been paid a significantly higher rate of Newstart Allowance, the answer is “yes”. Adopting that approach I must conclude that the subject letter constitutes adequate notice for the purpose of s 109 of the Administration Act. It follows that s 109(3) does not apply and a “favourable decision” cannot take effect on the date of the original rate reduction decision, that is, 7 February 2007.

START DATE OF REVISED DECISION

16. I agree with the submissions made for the Secretary that the decision under review should have been made under s 109(1) of the Administration Act, not as decided by the SSAT and the Authorised Review Officer, under s 109(2). Adopting that approach the “original decision” the subject of Mrs Shuar’s application for review can be taken to be the decision made on 19 April 2010 — 13 weeks before the application was made, not the decision made on the day the application for review was made. This means that the increased rate of Newstart Allowance, payable to Mrs Shuar which includes a component for Rent Assistance, must be reinstated to 19 April 2010, not, as the SSAT decided, from 19 July 2010.

RECOMMENDATIONS FOR REFORM

17. The Tribunal in Walshe, while finding that the letters the subject of its review constituted “adequate notice”, recommended (at [41]) that the Secretary take immediate steps to have the letters redrafted for clarity and consistency and that the new form of letter should at least inform the recipient that:

a decision has been made changing the recipient’s pension entitlement;
the nature of the change, be it increase, decrease, suspension or cancellation;
the date the change takes effect;
the amount of the old entitlement; and
the amount of the new entitlement.

The subject letter suggests that these recommendations have not been adopted. It is disappointing that a recommendation made by the President of the AAT over three years ago designed to improve the quality of decision making has not been adopted. It is in the interests of open and transparent decision making that a person directly effected by a decision made by the Secretary is advised in clear and unambiguous terms that a decision has been made, and the contents of that decision. That is consistent with Centrelink’s customer service charter, which states that Centrelink customers can expect Centrelink to give them: “information that is accurate, consistent and easy to understand”. [1]

18. In the interest of completeness it should be noted that I do not agree with the submission made for the Secretary that “the Tribunal in Walshe found that Centrleink notices are adequate notices”. Whether a particular letter constitutes adequate notice for the purpose of s 109, turns on the form and content of that notice and the nature of the decision it seeks to communicate. I can find nothing in the reasons for decision given in Walshe to suggest that the tribunal was of a different opinion.

I certify that the 18 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member A K Britton

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

Associate to Senior Member Britton

Date/s of Hearing: 31 March 2011

Date of Decision: 8 April 2011

Applicant Self-Represented:

Solicitor for the Respondent: Ms R Prasad

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[1] ‘Centrelink’s Customer Service Charter’, cl 3 ‘You can expect us to explain your options to you’.