Editors --- "Newstart allowance: full-time student, whether entitled to newstart allowance during honours year of study" [2006] SocSecRpr 6; (2006) 8(1) Social Security Reporter, Article 6

• SECRETARY TO THE DFaCS and KELLY
• Background
• The issue
• The law
• Discussion
• Formal decision

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Newstart allowance: full-time student, whether entitled to newstart allowance during honours year of study

SECRETARY TO THE DFaCS and KELLY

(2005/1191)

Decided: 5th December 2005 by J. Handley

Background

Kelly was a full-time student. He completed a Bachelor of Environmental Science in July 2004. He then became unemployed and qualified for newstart allowance. He and Centrelink entered into a Newstart Activity Agreement, part of which required him to seek suitable work and maintain a job seeker diary. He had difficulty locating full-time employment in his field, and was advised to complete an Honours year with Deakin University, in order to improve his employment prospects.

In November 2004 Kelly notified Centrelink when he enrolled in the Honours year. A Centrelink officer indicated to him that the Honours year would be regarded as a ‘short course’ (as it was less than 12 months) and as ‘vocational training’, such as to qualify him for newstart allowance. He was not advised that the activity agreement needed to be amended to exempt him from seeking work, so he could undertake full-time studies in 2005.

Notwithstanding the above, Centrelink cancelled Kelly’s newstart allowance from 9 February 2005. Different reasons were given by Centrelink officers for the cancellation.

Kelly provided Centrelink with a number of letters advising that it was likely that he would obtain full-time employment upon completion of the Honours year of study, because people with that qualification have greater appeal to potential employers. By the date of the AAT hearing, Kelly had obtained two jobs with Melbourne University and Deakin University as a research assistant. He said he obtained that employment as a result of completing the Honours studies.

The SSAT held that Kelly was entitled to newstart allowance, and the DFaCS appealed the decision.

The issue

Whether Kelly was entitled to newstart allowance during a period of time when he was a full-time student.

The law

Section 593 of the Social Security Act 1991 (‘the Act’) provides that a person is qualified to receive newstart allowance if throughout the period the person is unemployed and satisfies the activity test. Section 601(1) of the Act provides that a person will satisfy the activity test if the person is actively seeking and willing to undertake paid work. Section 601(2) provides that a person will also satisfy the activity test if the Secretary is of the opinion that the person should either undertake a course of vocational training or participate in another course approved by the Secretary which is likely to improve the person’s prospects of obtaining suitable paid work or to assist the person in seeking paid work.

Section 606(1) of the Act provides that a Newstart Activity Agreement is to require the person to undertake activities approved by the Secretary.

Section 613(1) of the Act provides that newstart allowance is not payable to a person who is enrolled in a full-time course of education or vocational training. However s.613(2) provides that ss.(1) does not prevent newstart allowance being payable during a period where a ‘person is enrolled in a course that the Secretary has required the person to undertake under s.601(2)’ or ‘the person is engaged in a course undertaken under a Newstart Activity Agreement’.

Discussion

The AAT held that the decisions made by the Centrelink officers were in error. The primary decision maker decided that the Honours course was not considered to be ‘a short course as it is an extension of your undergraduate course...’ The primary decision maker meant that the Honours course would entitle Kelly to Youth Allowance, and therefore could not entitle him to newstart allowance. The AAT found that the decision maker failed to have regard to the combined effects of ss.601, 606 and 613.

The Centrelink Authorised Review Officer acknowledged that full-time students can qualify for newstart allowance and that there was less than 12 months of full-time study remaining, but decided ‘it is clearly not going to improve your employment prospects. In any case you are qualified for YAL by being a full-time student’. The AAT determined that this decision was also wrong. Kelly was not entitled to youth allowance due to his parents’ income level. Further, the AAT held that the combined effects of ss.601, 606 and 613 do not proscribe that full-time study must ‘clearly improve employment prospects’. The AAT referred to s.601(2) which uses the words are ‘likely to’.

The AAT determined that:

The use of the word ‘clearly’ imposed a burden upon Mr Kelly, by its ordinary meaning, which is not found within the legislation. The word ‘likely’, by its ordinary meaning, imposes a lesser burden. (Reasons, para. 22)

The AAT referred to the abundance of material before the Authorised Review Officer from Kelly’s potential employers indicating that applicants for positions should have an Honours degree. The AAT noted that Centrelink was entitled to have regard to the expertise of the officials from Deakin University and the content of job descriptions made available to it by Kelly.

The AAT determined that a Newstart Activity Agreement should have been negotiated with Kelly and should have incorporated his Honours course by way of a requirement on the part of the Secretary and by way of an undertaking by Kelly (s.601(2) and s.613(2)). As an addition, or in the alternative, the AAT held that the Secretary should have regarded the Honours study as ‘suitable’ as an activity and should have included it in a Newstart Activity Agreement (s.606(1)(g)). As a result Kelly was entitled to newstart allowance from the date of cancellation.

Formal decision

The AAT affirmed the decision under review.

[J.F.]