Editors --- "Administrative rate reduction: reasonable excuse" [2007] SocSecRpr 40; (2007) 9(3) Social Security Reporter, Article 14

• SECRETARY TO THE DEWR v REAL
• Background
• The issues
• Discussion
• Formal decision

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Administrative rate reduction: reasonable excuse

SECRETARY TO THE DEWR v REAL

(Federal Court of Australia)

Decided: 26th June 2007 by Kiefel J.

Background

At all relevant times, the respondent was in receipt of newstart allowance.

By notice dated 24 August2005, issued by a delegate of the Secretary pursuant to s.63(3) of the Social Security (Administration) Act 1999 (the Act), the respondent was required to attend an interview with Salvation Army Employment Plus on 6 September 2005.The respondent failed to attend that interview and, pursuant to s.63(5) of the Act, a decision was made to apply an administrative rate reduction period from 18 November 2005 to 17 February 2006.

The respondent sought review of this decision before the SSAT and then the AAT. The respondent was successful before the AAT, who found that the respondent had a reasonable excuse for failing to comply with the notice, the excuse being that the respondent was working on 6 September 2005.

The Secretary appealed the AAT’s decision to the Federal Court of Australia.

The issues

The issue for determination by the Court was whether the AAT had erred in law by applying an incorrect test to determine whether the respondent had a reasonable excuse, pursuant to s.63 of the Act, for failing to comply with the notice issued on 24 August 2005.

Discussion

The Court inferred from the AAT’s reasons for decision, and earlier decisions made concerning Real, that his excuse for failing to attend the interview on 6 September 2005was that he had been unaware of the letter of 24 August 2005. His evidence to the AAT was that he had difficulties collecting his mail due to his state of health (he suffered from diabetes and other symptoms).

The Court inferred from the available material that Real had a habit of not reading correspondence from Centrelink and that the view he took of Centrelink strongly suggested that he did not intend to open any correspondence from them. The Court considered that he had something more than disdain for communications from Centrelink.

The Court noted that the excuses put forward by the respondent to the AAT were not specifically directed to the requirement to attend the appointment on 6September 2005 and that the AAT had made no findings about those excuses. The Court observed that what appeared to have occurred was that the AAT found some objective evidence to indicate that the respondent had in fact been working on6 September 2005.

The question the AAT posed itself was: does Mr Real have a reasonable excuse for not attending the relevant interview on 6 September 2005? It found that he did have, because he was working.

The Court agreed with the Department’s submissions that the AAT had posed the incorrect question when considering whethers.63(9) applied. The Court found that the discretion given to the Secretary pursuant to s.63(9)is circumscribed. The Court found that the question to be asked is not whether the AAT considers that, in all the circumstances, Real should be excused; it is whether the AAT is satisfied about the reason proffered by him justifies his non-compliance with the notice.

The Court held that it was necessary, for s.63(9) to operate in favour of a person, that the AAT be given a reason or reasons why the person did not do as they were required. The Court noted that the evident purpose of the provision was to encourage co-operation by a recipient of a social security benefit in connection with employment.

The Court held that the AAT had misunderstood the question posed by the statute and that the decision should be set aside on account of the error of law.

Formal decision

The Court set aside the relevant part of the AAT’s decision and remitted the matter to the AAT for reconsideration (by a differently constituted AAT) according to law.

[S.O.]