Editors --- "Newstart allowance: start date for payment; special circumstance" [2005] SocSecRpr 21; (2005) 7 Social Security Reporter, Article 21

• SECRETARY TO THE DEWR and TRAJCEVSKI
• The issue
• Evidence and submissions
• Formal decision

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Newstart Allowance: non-payment period: move to area with reduced employment prospect

SECRETARY TO THE DEWR and TRAJCEVSKI

(2005/415)

Decided: 10th May 2005 by L. Hastwell

On 4 January 2005 Centrelink made a decision to impose a 26week non-payment period on Trajcevski’s newstart allowance (NSA) because it was considered that he had moved to an area that lowered his employment prospects without sufficient reason.

The SSAT considered the matter on review, and on 8 February 2005 decided to set aside the decision under review, and substituted its decision that by moving from Melbourne to Port Augusta, Trajcevski did not lower his employment prospects. The Department of Employment and Workplace Relations applied to the AAT for review of that decision.

The issue

The AAT considered whether Trajcevski reduced his employment prospects when he moved from St Albans in Victoria to Port Augusta in South Australia in December 2004. The relevant legislation is contained in s.634 of the Social Security Act 1991 (the Act):

(1) Subject to subsections (1B) and (2), if, in the opinion of the Secretary, a person has reduced his or her employment prospects by moving to a new place of residence without sufficient reason, a newstart allowance is not payable to the person for 26 weeks.

Evidence and submissions

Centrelink’s case was based largely on statistical data available that indicated that the unemployment rate and labour force in metropolitan Melbourne were 5.5 percent and 1,854,500 respectively, while the corresponding unemployment rate and labour force for the Port Augusta locality were 9.6percent and 6,451 respectively. The Department also argued the policy behind the legislation which is to discourage job seekers from moving from areas where there are job prospects to areas where there are lesser job prospects. The Department argued that the intention of the policy is not to prevent people moving, but to ensure that people on NSA have their actions focused towards finding work.

In 1990 Trajcevski had moved to Whyalla, Port Augusta and lived there for nine years. He was unsuccessful in obtaining employment apart from one short term job with a builder. In 1999 he returned to Melbourne to continue looking for work.

He spent the next five years looking for work and during that time he was moved through five different Job Network Providers but was unable to obtain work.

An opportunity arose which enabled Trajcevski to return to Port Augusta and so he took advantage of that opportunity to return in November 2004 in the hope he could find work and settle there. He argued that he had no understanding that it might affect his social security payments.

Assessing whether there has been a reduction in employment prospects

The AAT considered Re Secretary, Department of Social Security and Prince (AAT 6575, 24December 1990) where the Tribunal rejected taking a purely statistical approach which looks only at the relative employment statistics in the two locations to determine whether a person has reduced his or her employment prospects. An analysis of the individual situation is important in each case. This approach has been affirmed in a number of subsequent cases.

The AAT considered that in this case Trajcevski had significant barriers to employment wherever he was situated. He had significant language difficulties, understood and spoke very little English, and did not read or write English. He was also semi-literate in his own language of Macedonian, had been unemployed for 14 years, and was unskilled. He was 53 years of age, and single with no family in Australia and few close friends. He had one long-term friendship in Port Augusta, and historically a sense of connection with Port Augusta.

The AAT also considered the matter of Re Borowiecki and Secretary to the Department of Social Security (AAT 6914, 8 May 1991) where the applicant had been unemployed for10 years, and moved from Mackay to Brunswick Heads. In that case the Tribunal commented:

... In these circumstances where a removal from a place which has failed to provide the applicant with any employment over a long period to another place where the prospects of obtaining relevant employment are, objectively, no worse than the prospects ... it cannot be said as a matter of fact that the employment prospects have been reduced....

The AAT did not accept the Department’s approach whereby it relied on broad statistics to argue that “objectively” the respondent’s prospects of work had reduced by moving to Port Augusta. Rather, Trajcevski belonged to a specific group, of long-term unemployed men who are over 50, unskilled, and in addition had language barriers to employment. These were people with very significant barriers to employment wherever they resided, and the statistics quoted did not look at specific groups. The Tribunal considered that the data was more applicable to the average job seeker without barriers to employment and that Trajcevski was not in this category.

The AAT also considered that Trajcevski had exhausted his prospects of employment in Victoria as he had sought employment for five years without success.

The AAT found that Trajcevski’s move from Victoria to Port Augusta did not narrow his prospects of employment. The Tribunal was satisfied that his prospects of employment remained negligible and probably unaltered, but possibly slightly improved because of the energy and optimism that the fresh start and the new community may give to him.

Formal decision

The Tribunal affirmed the decision under review.

[S.P.]