Editors --- "Newstart allowance: payability; move to area of lower employment prospects" [2007] SocSecRpr 1; (2007) 9(1) Social Security Reporter, Article 1

• SECRETARY TO THE DEWR and FERGUSON
• Background
• The issues
• The legislation
• Discussion
• Formal decision

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Newstart allowance: payability; move to area of lower employment prospects

SECRETARY TO THE DEWR and FERGUSON

Decided: 12th January 2007 by N. Isenberg

Background

Ferguson had worked for many years in the hospitality industry in the Woy Woy area on a casual basis. She had ceased work in August 2005, when the takeaway outlet in which she worked was sold and she was not offered employment by the new owners.

In November 2005, Ferguson and her husband then decided to move to Port Macquarie, where Ferguson’s sisters, parents and other relatives resided.

Ferguson’s husband had a severe back condition, required care and was in receipt of a disability support pension. Because of Ferguson’s caring responsibilities, she could not undertake employment that would require her to travel long distances or leave home very early. She was, and remained, limited in the hours she could work.

Centrelink determined that Ferguson had reduced her employment prospects by moving to Port Macquarie and that she did not have ‘sufficient reason’ for the move.

Ferguson sought review of this decision and was ultimately successful before the SSAT. The SSAT found that, although Ferguson had reduced her employment prospects by moving to Port Macquarie, she had ‘sufficient reason’ for the move and therefore was entitled to payment.

The DEWR sought a review of the SSAT’s decision by the AAT.

The issues

The issues for determination by the AAT were:

(a) whether Ferguson had reduced her employment prospects by the move; and

(b) if so, whether she had ‘sufficient reason’ for the move.

The legislation

The relevant legislation is contained in s.634 of the Social Security Act 1991 which states:

‘..., 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....’

Discussion

The AAT considered the process adopted by Centrelink to determine whether a person has reduced their employment prospects as a result of moving to another location.

The AAT noted that Centrelink uses a program called ‘REMOVE’ to calculate the relative unemployment rate for the locations in question. The Tribunal observed that, if there is a difference greater than 2% in the relevant unemployment rates, then Centrelink invites the newstart allowance applicant to complete a ‘customer declaration’ indicating the reasons for moving.

The AAT noted that the difference of 2% in unemployment rates is taken by Centrelink to be prima facie evidence of reduced employability in the new location. The AAT considered that this approach suggested some rigidity, which could only be overcome if the person had ‘sufficient reason’ for the move.

The AAT concluded that the focus on the percentage difference in general unemployment statistics did not adequately address the question of whether Ferguson’s employment prospects were in fact reduced by the move to Port Macquarie.

The AAT had regard to the decision of Secretary, Department of Family and Community Services and Pitkin [2005] AATA 532; (2005) 87 ALD 119 (at 123) as support for the proposition that general unemployment statistics do not provide a reasonable measure of the employment prospects of a person and are likely to conceal a wide range of demographic and labour market factors.

The AAT found that, in order to determine as a question of fact whether Ferguson had reduced her employment prospects, it was necessary to consider Ferguson’s individual attributes together with the suitable job vacancies in each respective area and the number of job-seekers competing for those particular jobs. In respect of Ferguson the AAT said:

The material relied upon by the DEWR is generic information that puts Mrs Ferguson in the same position as all job-seekers of all ages, responsibilities and experience: Mrs Ferguson is a 58 year old woman who only had part-time employment in the peninsula area until August 2005, has no trade or professional qualifications and who is restricted in the jobs she can accept because of her caring responsibilities for her husband.

Another serious deficiency in the comparison of employment prospects is in Centrelink’s inclusion of the peninsula area in the greater Sydney metropolitan area on the basis of an internal rule that a job in that wider area may be accessible with 90 minutes travel. To suggest that Mrs Ferguson, who has no familiarity with metropolitan Sydney other than the peninsula area, should travel 90 minutes each way in order to undertake possibly only 3 hours work per day, is clearly unreasonable. Even more ridiculous is the suggestion she should travel for so long, each way, to work a split shift. (Reasons, paras. 18-19)

The AAT concluded that there was no evidence before it to establish, to the requisite standard, that Ferguson had lowered her employment prospects by moving to Port Macquarie.

Formal decision

The AAT affirmed the decision under review.

[S.O.]