Editors --- "Cancellation of youth allowance: failure to comply with notice requiring reporting; special circumstances" [2008] SocSecRpr 5; (2008) 10(1) Social Security Reporter, Article 5

• ARCHER - MORRIS and SECRETARY TO THE DEWR
• Background
• Legislation
• The issue
• The evidence
• The Department’s submissions
• Consideration of the issues
• Formal decision

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Cancellation of youth allowance: failure to comply with notice requiring reporting; special circumstances

ARCHER - MORRIS and SECRETARY TO THE DEWR

(2008/0004)

Decided: 3rd January 2008 by L.R. Tovey

Background

Archer-Morris was born in September 1988. On 1 November 2004 she made a claim for youth allowance(YA). The application was granted, and she began receiving payments from 15 November 2004. Centrelink gave Archer-Morris three notices requiring that she report certain information to Centrelink by 23 June 2006. She did not report her earnings for the period 10June 2006 to 23 June 2006. On 10 July 2006 Centrelink decided to cancel Archer-Morris’ YA because of a failure to report earnings by the due date.

The decision was affirmed by an ARO and then by the SSAT on 5 December 2006.

Legislation

Section 68(2) of the Social Security (Administration) Act 1999 (Cth) (the Administration Act) empowers the Department to give to a person being paid a social security payment a notice requiring them to give the Department a statement about a matter that might affect their payment.

Section 95 of the Administration Act provides:

‘(1) If:

(a) a person who is receiving a social security payment is given a notice under subsection 68(2)requiring the person to give the Department a statement or a number of statements; and

(b) the notice relates to the payment of the social security payment in respect of a period or a number of periods specified in the notice; and

(c) the person does not comply with the notice so far as it relates to a particular period;

then, subject to subsection (2), the social security payment is cancelled, by force of this section, on the first day in that period.

(2) If the Secretary is satisfied that, in the special circumstances of the case, it is appropriate to do so, the Secretary may determine in writing that subsection (1) does not apply to the person on and from a day specified in the determination.

(3) The day specified under subsection (2) may be before or after the making of the determination.’

The issue

The Tribunal found that the notices complied with the Administration Act and that Archer-Morris did not comply with the requirement to report contained in the notices. Section 95(1) of the Administration Act effected an automatic cancellation of her YA by reason of that non-compliance, subject to s. 95(2).

The issue was whether pursuant to s.95(2) of the Administration Act the Tribunal was satisfied that, in the special circumstances of the case, it was appropriate to determine in writing that s. 95(1) did not apply to Archer-Morris on and from a particular date.

The evidence

The Tribunal noted that there was no conflicting evidence as to the primary facts and based its findings of fact on the oral evidence of Archer-Morris’ mother as well as documentary evidence. The evidence was as follows:

· On 1 November 2004 Archer-Morris made a claim for YA. The application was completed by her mother and disclosed that she was residing with her parents, undertaking year 11 of High School and was not earning any income. The claim was granted and she began to receive payments from 15 November 2004.

· Archer-Morris suffered from a moderately severe form of Asperger’s Syndrome and the Tribunal was provided with a report prepared by a consultant psychologist which indicated that one aspect of Asperger’s Syndrome is marked social impairment with various communication problems. The psychologist stated that because of her disorder Archer-Morris had a great deal of difficulty completing documentation required by Centrelink and at times it was impossible for her to do this. The contents of the report were not challenged.

· In April 2006 Archer-Morris was receiving YA at the rate of approximately $183 per fortnight, paid into her parent’s joint bank account. A notice from the Department advising her of her payment indicated that:

‘You can earn up to $236 a fortnight before your income affects your payments because you are now studying or training full-time. If you earn less, you can accumulate up to $6,000 in an Income Bank’.

· In 2006 she began a course at a technical college and also began part-time work stocktaking for a supermarket. Both study and part-time work required a great deal of support from her parents.

· By letter dated 2 June 2006 the Department gave notice to Archer-Morris in the following material terms:

‘This Reporting Statement is an information notice given under social security law by a Commonwealth entity. ... You must report every two weeks on the dates below. You will not be paid your Youth Allowance until you report. Report your expected gross earnings even if you haven’t been paid yet. You must report even if you haven’t worked. For this Reporting Period Report on this day:

27 May 2006 to 9 June 2006: Friday9 June 2006

10 June 2006 to 23 June 2006: Friday23 June 2006

24 June 2006 to 7 July 2006: Friday7 July 2006 ...

What you must report for each Centrelink Reporting Period:

...

If you were employed: The business where you worked

The gross amount you earned (BEFORE tax or other deductions)...’

· There was a large volume of text on the notice sent to Archer-Morris and further notices in substantially the same terms were sent to her on 14 and 16 June 2006.

· Archer-Morris provided details of her earnings for the period 27May to 9 June 2006, but did not report her earnings for the period 10 June 2006to 23 June 2006.

· On 10 July 2006 a Centrelink officer decided to cancel her YA with effect from 10 June 2006 due to her failure to report. A notice advising her of the cancellation was sent to her.

Archer-Morris’ mother gave evidence as follows:

· She was aware that Archer-Morris did not report for a period during which she did not work. She understood Archer-Morris was not required to report as she had earned less than the $6,000 referred to in the April 2006notice. She had earned only a few hundred dollars prior to the cancellation of her YA. The Tribunal considered her mother’s failure to comprehend that part of the notice to be readily understandable given the length of the notice.

· She could not recall seeing the notice of cancellation.

· On 29 September 2006 she contacted Centrelink to inquire about a health care card for her daughter. At this time a male Centrelink officer informed her that Archer-Morris’ YA had been cancelled. She then spoke to another Centrelink officer who advised her of the right of review and told her that if she wanted to claim back payments she should not put in a new claim but wait for the decision of the Department. As a result, she did not take steps to make anew claim for her daughter until December 2006, following the decision of the SSAT.

· Archer-Morris’ new claim for YA was notified to Centrelink on 15December 2006 and was granted with effect from that date.

· Her family was in straightened financial circumstances during 2006.The combined annual income available to support a family of four was less than$25,000.

The Department’s submissions

The Department advised the Tribunal that Archer-Morris’ parents were permitted to enquire as to her social security affairs, and that this permission was still in force in June2006. It was submitted by the Department that her parents were each a ‘payment nominee’ within the meaning of s.123A(b)of the Administration Act and the following submissions were made: (a) they were under a duty, imposed by s. 123O of the Administration Act, to ‘at all times act in the best interests of’ their daughter; (b) this included the duty to ensure that all social security payments that should have been made to her were made to her; (c) they did not act in her best interests in that they failed to ensure that she reported; and (d) it was their failure which was the principal cause of the cancellation of her YA. The Department submitted that this precluded a finding of special circumstances.

Consideration of the issues

The Tribunal set out the factors which combined to lead it to the conclusion that the special circumstances of Archer-Morris’ case made it appropriate to determine in writing that s. 95(1) of the Administration Act did not apply to her.

These were:

· her difficulty in complying with the instruction to report which was in a significant respect a product of the moderate to severe Asperger’s syndrome from which she suffered. This took her case out of the ordinary as it explained why she did not comply with the reporting requirement and made it unfair for her YA to be cancelled by reason of the failure to report. It also impaired her capacity to realise that cancellation had been effected, and that she needed to reapply for YA to restore payments.

· her mother was given incorrect information by a Centrelink officer on 29 September 2006, when she first realised that Archer-Morris’ YA had been cancelled to the effect that she should not lodge a new application for YA until the application for review was determined. As a result of the incorrect advice, an application was not made until 15 December 2006. If the cancellation was upheld Archer-Morris would be deprived of the YA to which she would have been entitled if she had made a new application on 29 September2006. The wrong advice and the consequence of reliance on it by her mother took the case out of the ordinary or usual case of a cancellation for failure to report. It was a factor which would produce injustice in the circumstances of the case if the cancellation was effective.

· the level of Archer-Morris’ earnings were not such as to be likely to affect her entitlement to YA and she did not earn any income during the period in which she failed to report prior to the cancellation. Although the requirement to report was validly imposed the Tribunal considered that it was able to have regard to the fact that the failure to report was not capable of leading to an overpayment of YA. To cancel Archer-Morris’ YA in those circumstances would seem to enforce a bureaucratic requirement for its own sake, without regard to the merits of the individual case. The Tribunal considered that this factor counted in favour of the exercise of the discretion if it found there were other special circumstances.

· the straightened financial circumstances of Archer-Morris’ family meant that the cancellation of her YA would have a significant effect on her welfare. This counted in favour of the exercise of the Tribunal’s discretion if it found there were other special circumstances.

The Tribunal did not accept the Department’s submission that the failure of a payment nominee to act in the best interests of the principal would necessarily preclude the application of s. 95(2) of the Administration Act. It noted that there may be cases where the failure of a payment nominee to act may itself constitute special circumstances.

In this case the Tribunal found that Archer-Morris’ parents had at all times acted reasonably and in her best interests.

The Tribunal was satisfied, in the special circumstances of this case, that it was appropriate to determine in writing that s. 95(1) of the Administration Act did not apply to Archer-Morris from 10 June 2006. It set aside the decision to cancel her YA so she was entitled to arrears of payments due to her between 10 June 2006 and 15 December 2006.

Formal decision

The AAT:

(a) Determined that s. 95(1) of the Administration Act did not apply to Archer-Morris on and from 10 June 2006; and

(b) set aside the decision of the SSAT made on 5 December 2006 and the decisions of the Department dated 19 October2006 and 10 July 2006 and substituted a decision that Archer-Morris’ YA was not cancelled.

[C.E.]