Editors --- "Newstart allowance: whether there were valid grounds for cancellation" [2009] SocSecRpr 13; (2009) 11(2) Social Security Reporter, Article 2

• MAKSYMIUK and SECRETARY TO THE DEEWR
• Background
• The law
• Issues
• The 2007 cancellation
• The 2008 cancellation
• Consideration
• The 2007 cancellation
• The 2008 cancellation
• Formal decision

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Newstart allowance: whether there were valid grounds for cancellation

MAKSYMIUK and SECRETARY TO THE DEEWR

(2009/175)

Decided: 17th March 2009 by M.J. Carstairs

Background

In 2004 a Centrelink social worker assessed Maksymiuk as having a mental health issue into which he lacked insight. His Centrelink record was flagged so that his jobseeking requirements would be reduced. Taking into account his age, lack of recent work experience and medical issues, Centrelink allowed him to lodge his newstart ‘Application for Payment’ forms every 12 weeks.

In 2006, Centrelink decided that Maksymiuk should be placed on a fortnightly lodgement cycle. Maksymiuk’s newstart allowance was cancelled after he failed to lodge a form one fortnight (the 2006 cancellation).

Maksymiuk sought review of the 2006 cancellation decision. On 23 January 2007, an Authorised Review Officer (ARO) set aside the cancellation decision and made recommendations that Maksymiuk should be eligible to lodge his forms every 12 weeks. The Tribunal noted that the ARO went beyond his scope by making that recommendation but acknowledged that Maksymiuk could reasonably expect that he had been returned to 12weekly reporting.

Centrelink records revealed ensuing discussions within Centrelink to the effect that Maksymiuk was to have more frequent intervention and so he was placed on a ‘contact model’ which required him to go into Centrelink for a ‘participation discussion’ every fortnight. This arrangement also required Maksymiuk to sign a new Activity Agreement.

On 30 January 2007, one week after the ARO’s decision, Maksymiuk was sent a barrage of letters, one of which included the implementation of the ARO decision in relation to arrears, and two notices which were subsequently relied on as grounds for the 2007 cancellation. One was a notice under s.196 of the Social Security (Administration) Act 1999 (the Administration Act), which required him to attend Centrelink on 5 February 2007. The other was an ‘information notice under social security law’which required him to attend ‘participation interviews’ on proposed dates, the first being on 19 February 2007.

On 20 February 2007, Maksymiuk was told of the retrospective cancellation of his newstart allowance ‘from 23 January 2007 because we have not received your application for payment form’ (the 2007 cancellation).

Maksymiuk sought review of the 2007 cancellation on 16 November 2007. On the same day, Maksymiuk discussed a new claim for newstart allowance, but he did not lodge a formal claim until 31 December 2007.

On 8 February 2008, Maksymiuk’s newstart allowance was again cancelled, on the grounds that he failed to enter into a Centrelink approved Activity Agreement (the 2008 cancellation).

Maksymiuk finally agreed to sign an Activity Agreement, in the required form, on 4 April 2008.

The law

A notice under s.196 of the Administration Act may require a person to give information to Centrelink by appearing before a specified officer to answer questions. Importantly, s.196(5) provides that the person must be given at least 14 days notice.

Section 95 of the Administration Act permits an automatic cancellation if a person does not comply with a notice given under s.68(2) of the Administration Act. A notice under s.68(2) may require a person to inform Centrelink of a change of circumstances.

Section 109(2) of the Administration Act provides that if a person applies more than 13 weeks after the original decision, a favourable determination takes effect on the day on which the request for review was made.

Section 13(1) of the Administration Act provides that, in most circumstances, a person can only be back paid on an informal claim where this is followed up within 14 days by a formal claim.

Section 593(1) of the Social Security Act 1991 (the Act) sets out what a person must do in order to maintain qualification for newstart allowance. Section 605 of the Act provides that a person who has an Activity Agreement can be required to enter into a new Activity Agreement, which must be in an approved form.

Issues

The 2007 cancellation

The first notice under s.196 of the Administration Act, which required Maksymiuk to attend Centrelink on 5 February 2007, was held to be invalid as it did not comply with the 14day notification requirement.

The question for the Tribunal was whether the second ‘information notice under social security law’ gave rise to a cancellation power under s.95 of the Administration Act or any other powers.

The Secretary submitted that there are a number of provisions in the Administration Act under which Centrelink can require people to provide information or require them to attend interviews. Instead of suggesting that the letter dated 30 January 2007 complied with the requirements of s.68(2), the Secretary relied on computer records of oral discussions. Under s.63 and s.64 of the Administration Act, oral notifications can be a valid form of notification of ongoing obligations.

The 2008 cancellation

The other issue was whether in refusing to sign a new Activity Agreement in the approved form, Maksymiuk ceased to qualify for the payment and hence the cancellation was valid.

Consideration

The 2007 cancellation

In the absence of any direct evidence concerning the specific content of any oral discussions, the Tribunal was not satisfied that Maksymiuk was told clearly he had to attend Centrelink on a particular date. The Tribunal also noted that in the light of Maksymiuk’s mental health, and in the context of the then very recent review by the ARO, which confirmed that he should be eligible to lodge forms on a 12weekly basis, nothing less than the plainest communication would suffice.

Furthermore, it was stated by the Tribunal that s.63 and s.64 of the Administration Act are not referred to in s.95 and cannot provide the grounds that would permit an automatic cancellation of newstart allowance under that section. Nor does s.81 of the Administration Act permit cancellation as that section does not apply to newstart allowees. That leaves s.80 of theAdministration Act as the general provision available to cancel or suspend where the Secretary is satisfied that newstart allowance is not payable. However, the Tribunal found that s.80(4)(b) of the Administration Act excludes the Secretary’s power to cancel or suspend in cases that involve newstart payability issues which relate to a ‘participation failure’. The Tribunal found that Maksymiuk’s failure to attend his participation interview on 19 February 2007 fell within that description and was thereby excluded. In effect, no grounds gave rise to a valid cancellation in 2007.

The Tribunal stated that the shifting grounds relied on for the 2007 cancellation in itself put doubt on the correctness of the cancellation. Highlighting the Federal Court case of Gidaro v SDSS (1998) ALR 550, it was observed that there is need for careful consideration when a decision is made about cancellation, which ought to be taken only on the strongest of grounds.

The Tribunal set aside the 2007 cancellation decision and substituted the decision that Maksymiuk’s newstart allowance should not have been cancelled. However the Tribunal found Maksymiuk was notified of the 2007 cancellation decision in a letter dated 20 February 2007 and did not seek a review until 16 November 2007, that is, he did not request a review within 13 weeks of being notified of the 2007 cancellation decision. Accordingly, the date of effect of the Tribunal’s decision, in accordance with s.109 of the Administration Act, was the date that Maksymiuk sought review of the 2007 cancellation decision, namely 16 November 2007.

The Tribunal commented that s.179(4) of the Administration Act could be called upon to ensure Mr Maksymiuk had an entitlement to newstart allowance in the period from 16 November 2007 to 31 December 2007, despite not necessarily lodging forms, or demonstrating work efforts during that time.

The 2008 cancellation

The Tribunal found that in refusing to sign an Agreement in the approved form, Maksymiuk ceased to be qualified for newstart allowance under s.593 of the Act and hence the 2008 cancellation was correct.

Formal decision

The 2007 cancellation was set aside as it was not in accordance with the Administration Act. The date of effect of this decision was 16 November 2007, when Maksymiuk sought review of the decision. Therefore, Maksymiuk had anentitlement from 16 November 2007 to 31 December 2007 (being the date when his Newstart payments recommenced based on a new claim), and entitlement from 23 January 2007 to 20 February 2007 (being the period before the 2007 cancellation notice).

The decision not to pay arrears on the new claim of 16 November 2007 was affirmed, as it was not followed by a formal claim within 14 days, pursuant to s.13(1) of the Administration Act. The effect of this decision was in practical terms cancelled out by the Tribunal’s decision above.

The cancellation decision of 8 February 2008 was affirmed, as Maksymiuk ceased to qualify for newstart allowance as he had not signed an approved Activity Agreement, and therefore, could not be paid newstart allowance until he again qualified on 4 April 2008, when he did sign an Agreement.

[C.W.]