Editors --- "Newstart allowance activity test" [2007] SocSecRpr 23; (2007) 9(2) Social Security Reporter, Article 10

• YAO and SECRETARY TO THE DEWR
• The issue
• Background
• The law
• Discussion
• Formal decision

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Newstart allowance activity test

YAO and SECRETARY TO THE DEWR

(Federal Magistrates Court)

Decided: 20th February 2007 by Smith FM

The issue

The question for consideration in this matter was whether the AAT had erred in law in its consideration of two issues. The first was whether the rate of Yao’s newstart allowance (NSA) should have been reduced by 18% for 26 weeks from 16 August 2005, because his JobSeeker Diary did not show him making 10 job search contacts per fortnight from April to July 2005; and the second involved the decision by Centrelink, implicit or otherwise, to not give approval for Yao to undertake in 2005 a full-time TAFE course as a means of satisfying the NSA activity test. The Department argued that Yao had breached his activity agreement because he continued full-time study in 2005 rather than seeking the required number of jobs each fortnight, despite the absence of explicit approval for continued full-time study.

Background

Yao, a permanent Australian resident, completed a Master of Engineering Science in July 2002. He was granted NSA from August 2002, a condition of which was that he seek work and maintain a JobSeeker Diary. In February 2004 Yao advised Centrelink that he was studying full-time, and in May of 2004 Centrelink advised him in an interview that whilst on NSA he must be looking for work, that approval for a short course of up to 6 months only was possible under NSA, and that he should apply for Au study. He did so apply in June 2004, indicating at that time, that he had been studying full-time for a Diploma of Accounting at TAFE since early 2004, due to be completed in December 2004. His application for Au study was rejected and Yao was advised that Au study could not be paid where a Masters’ level degree had already been completed. No further entries on Yao’s file appear in 2004, and the SSAT concluded (and AAT affirmed) that Centrelink, although it advised Yao in May 2004 of concerns about his continuing studies, nevertheless granted him short course approval (in respect of the Diploma of Accounting course) by default.

In January 2005Yao enrolled in an Advanced Diploma of Accounting course at TAFE, and advised Centrelink of this in February 2005. At that time Centrelink file notes confirmed that short course approval for his prior course had been given for 6 months from June to December 2004, and that he had been advised that he must now comply with activity test requirements, and of breach implications should he not do so. In April 2005Yao entered a fresh Preparing for Work Agreement requiring him to make at least 10 job search contacts per fortnight from April to July 2005. In August 2005Yao was advised that he had incurred an activity test breach, for failure to make the required number of job search contacts, and a NSA rate reduction period was imposed.

Both the SSAT on 6 February 2006 and the AAT on 7 July 2006 affirmed the earlier decisions made by an Authorised Review Officer on 21 September 2005, that the activity test requirements had not been met and that the rate reduction was properly imposed.

The law

The general qualification requirement for NSA is set out in s.593(1) of the Social Security Act 1991 (the Act) which provides that an applicant must demonstrate that he ‘satisfies the activity test’. This test is usually met by seeking work (s.601(1)) but can also be met by undertaking approved vocational or other courses (s.601(2)). A person receiving NSA may be required to enter a Newstart Activity Agreement (s.604(1)), which can incorporate the requirement to seek employment or undertake a vocational course (s.606(1)). Where a person fails to take reasonable steps to comply with the activity test, or to comply with the terms of a Newstart Activity Agreement, NSA is not payable and a rate reduction period may be imposed (s.626).

Discussion

Yao did not dispute the essential facts of the situation: that he had been enrolled in a full-time course in 2004 and again in 2005; that he had not made 10 job contacts per fortnight in the period in question; and that the rate reduction period was appropriately imposed unless his TAFE study in 2005 was accepted as meeting his activity test requirements. He argued that Centrelink should have given short course approval in respect of the advanced accountancy course in which he was enrolled in 2005.

The

Federal Magistrate Court

noted the arguments and issues raised in the decisions of both the SSAT and AAT. It also noted the Guide NSA Activity Testing Policy reference that both full and part-time courses may be approved as meeting activity test requirements, but that an applicant would usually be required to test their employability for 6 months prior to such course approval, that such approval would usually be given only where the completion of the course would improve the person’s employment prospects, and even then only if the applicant required less than 12 months to complete the course. The Court agreed with both the SSAT and the AAT that the 2005 Advanced Accounting course was a separate course from the one in which Yao was enrolled in 2004, and concluded that it was reasonably open to the AAT to determine that, having examined the number of contact hours and duration required for the Advanced Diploma, this course was one of over 12 months duration and so beyond the parameters outlined in the relevant policy. The Court noted the earlier AAT conclusion that Yao had, in early 2005, been put on notice that his previous short course approval had expired, and that he had ignored this warning (that he was expected to be actively seeking work) when continuing with his 2005 studies. The Court accepted that Yao had assumed that, given the absence of a clearly recorded approval for his 2004 studies, his 2005 studies had been approved for activity test purposes, but could find no evidence of any error of law in how the AAT dealt with these matters. The Court noted (as had the AAT) the decision in Drake and Minister for Immigration & Ethnic Affairs (No 2) (1979) 2 ALD 634 that

‘... [when]the Tribunal is reviewing the exercise of a discretionary power reposed in a Minister, and the Minister has adopted a general policy to guide him in the exercise of the power, the Tribunal will ordinarily apply that policy in reviewing the decision, unless the policy is unlawful or unless its application tends to produce an unjust decision in the circumstances of the particular case’.

The Court could find no error affecting the AAT’s conclusion that there was no basis for regarding the application of the policy in Yao’s situation as producing an unjust outcome.

Formal decision

The Court dismissed the appeal.

[P.A.S.]