Editors --- "Newstart allowance participation failures: did the applicant have reasonable excuses for the failures?" [2009] SocSecRpr 28; (2009) 11(3) Social Security Reporter, Article 6

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Newstart allowance participation failures: did the applicant have reasonable excuses for the failures?

LOBENDAHN and SECRETARY TO THE DEEWR

(2009/492)

Decided: 2nd July 2009 by I. Alexander

Background

On 2 April 2008 Lobendahn attended a CRS Australia office and was asked to enter into a new Activity Agreement. He had last signed a similar agreement, in a different format, on 28 February 2006 and in the intervening period had a medical exemption in respect of such an agreement which had expired on 13 March 2008.

Lobendahn refused to sign the standard Activity Agreement because of concerns about privacy issues. He did not wish information about his medical history to be shared with unspecified third parties and expressed particular concerns about a paragraph on page four of the agreement under the heading of ‘Privacy’ which stated that

Your personal information is protected by law and can only be disclosed and used for purposes where Commonwealth legislation authorises,in special circumstances or where you give permission.

He indicated that he wanted the material about privacy removed from the Activity Agreement but was informed that this was not possible. Despite being informed of the potential consequences of failing to enter into an Activity Agreement Lobendahn refused to sign the agreement on 2 April 2008 and in the few days which he was granted to make his own inquiries.

A letter dated 23 April 2008 was sent to Lobendahn informing him of his rights and the consequences of not entering into an Activity Agreement.

On 28 April 2008 a Centrelink Officer spoke to Lobendahn and he continued to express concerns about privacy.

On 29 April 2008 Lobendahn was informed by letter that his failure to enter into an Activity Agreement was recorded as a newstart participation failure.

On 7 May 2008 Lobendahn attended an appointment at CRS Australia and again refused to sign an Activity Agreement. He continued to express concerns about privacy, in particular the words ‘specialcircumstances’, and wanted the Activity Agreement to be changed before he would agree to sign it. The CRS Australia officer discussed the relevant issues with him and provided him with additional information as well as suggesting other resources that would assist him in addressing his concerns. Despite this, Lobendahn maintained his position and refused to sign the agreement.

On 12 May 2008 Lobendahn was informed by letter that a second newstart participation failure had been recorded, and in the letter he was informed of the consequences of committing three failures in a 12 month period.

On 2 June 2008 Lobendahn attended an appointment at CRS Australia and again refused to sign an Activity Agreement.

On 13 June 2008 Lobendahn was informed by letter that as a result of his failure to enter into an Activity Agreement a third newstart participation failure had been recorded. He was advised that an eight week non-payment period commencing 14 June 2008 would be applied in respect of his newstart allowance.

On 24 June 2008 CRS Australia wrote to Lobendahn advising him of an appointment on 1 July 2008 for the purpose of reviewing his Activity Agreement. The letter clearly stated that a failure to attend the appointment without a valid reason may be considered a participation failure and may lead to his Centrelink benefit being stopped.

Lobendahn did not attend this appointment and subsequently contacted CRS Australia on 7 July 2008 and indicated that he had got his dates mixed up and thought that his appointment was on 8 July 2008.

On 18 July 2008 Centrelink informed Lobendahn that they had decided to record his failure to attend the appointment as a newstart participation failure and that newstart allowance was not payable for a period of eight weeks commencing 12 July 2008.

The law

Section 605 of the Social Security Act 1991 (the Act) provides that the Secretary may require a person receiving news-tart allowance to enter into a Newstart Activity Agreement. Subsection 624(1)(c) of the Act provides that a person commits a newstart participation failure if they fail to comply with a requirement to enter into an Activity Agreement.

Subsection 64(2) of the Social Security (Administration) Act 1999 (the Administration Act) provides that a person receiving newstart allowance may be notified by the Secretary that they are required to attend a particular place for a particular purpose. Subsection 624(1)(a) of the Act provides that a person commits a newstart participation failure if that person fails to comply with a reasonable requirement that was notified to the person under subsection 64(2) of the Administration Act and the notification included a statement to the effect that a failure to comply with the requirement could constitute a newstart participation failure.

Considerations

The Tribunal considered whether Lobendahn had a reasonable excuse to refuse to sign an Activity Agreement on any or all of the three occasions on 2 April 2008, 7 May 2008 and 2 June 2008 and whether he had a reasonable excuse for his failure to attend an appointment on 1 July 2008.

The Tribunal noted the Social Security (Reasonable Excuse) (DEWR) Determination 2006 (the Reasonable Excuse Determination) which was the legislative instrument required by subsection 624(2A) of the Act setting out matters which the Secretary must take into account for the purposes of determining whether a person had a reasonable excuse for committing a newstart participation failure. The Tribunal noted however that the instrument was not exhaustive as subsection 624(2B) of the Act provides that a determination under subsection (2A) does not limit the matters that the Secretary may take into account.

The Tribunal noted there was no evidence to indicate that any of the matters listed in the Reasonable Excuse Determinationapplied to Lobendahn’s factual situation and in particular there was no evidence that at the relevant times Lobendahn’s medical problems prevented him from complying with the statutory requirements. The Tribunal then considered whether there were any other relevant matters that must be taken into account in determining whether Lobendahn had a reasonable excuse for any or all of his newstart participation failures.

The Department submitted that the information sheet attached to the Activity Agreement was not part of the agreement and that newstart recipients are not asked to consent to it but are being asked in the substantive part of the agreement to commit to undertake preparing for work activities or job search activities. Also, regardless of whether a newstart recipient signs an Activity Agreement Centrelink’s obligations and responsibilities in relation to the handling of their clients’ personal information is governed by legislation. On that basis the Department contended that Lobendahn’s concerns about privacy and, in particular, the wording of the information sheet attached to the Activity Agreement could not be considered a reasonable excuse for not entering into that agreement.

The Tribunal decided that in respect of Lobendahn’s failure to enter into an Activity Agreement on 2 April 2008 he had a reasonable excuse and that this failure was therefore not a newstart participation failure. In doing so the Tribunal was mindful of the decision of the Federal Court in Secretary, Department of Employment and Workplace Relations v Real [2007] FCA 988,where in considering the question as to whether a person had a reasonable excuse Kiefel J observed at [6] that:

... It is not whether the Tribunal considers that, in all the circumstances, the respondent should be excused. It is whether the Tribunal is satisfied about the reason proffered by him which justifies his non-compliance with the notice...

It follows, in my view, that the Tribunal was obliged to consider what the respondent said was the reason for his non-attendance. It may be expected that this would involve his state of mind, but I do not think it is correct to frame the statutory enquiry by reference to it. It simply requires a consideration of the excuse put forward...

The Tribunal accepted that on 2 April 2008 Lobendahn was asked to sign a document which raised significant concerns in his mind. The fact that these concerns may have been unfounded in reality does not mean that he was not entitled to be given an opportunity to have these concerns addressed. The Tribunal was sat-isfied that Lobendahn had a reasonable excuse not to sign the Activity Agreement on this occasion so that he had time to seek appropriate advice and consider his options. This meant that pursuant to subsection 624(2) his failure to enter into an Activity Agreement on 2 April 2008 was not a newstart participation failure.

However after considering all the evidence, the Tribunal was of the view that by 7 May 2008 Lobendahn had sufficient time to address his concerns and his failure to do so was significantly contributed to by an apparent unwillingness to accept reasonable advice. The Tribunal concluded that on 7 May 2008 and 2 June 2008 he did not have a reasonable excuse for his failures to enter into an Activity Agreement and that pursuant to subsection 624(1)(c) these failures were newstart participation failures.

In respect of Lobendahn’s failure to attend an appointment with CRS Australia on 1 July 2008 the Tribunal found his reasons confused and unconvincing and was not satisfied that he had a reasonable excuse for his failure. In reaching this conclusion, the Tribunal noted that Lobendahn had several years experience with newstart allowance and was well aware of the requirements and the consequences of failing to meet those requirements. He was also well aware of already having three newstart participation failures recorded in 2008 and should have been more attentive to any correspondence from Centrelink. The Tribunal concluded that as Lobendahn did not have a reasonable excuse, his failure to attend the appointment was a newstart participation failure pursuant to subsection 624(1)(a) of the Act.

In respect of subsection 629(3) the Tribunal was satisfied that after having considered the evidence there was no other reason for subsection 629(1) not to apply.

Formal decision

The Tribunal varied the decision under review as follows:

1. Lobendahn had a reasonable excuse for failing to enter into a Newstart Activity Agreement on 2 April 2008 so that pursuant to subsection 624(2) of the Social Security Act 1991 he did not commit a newstart participation failure on 2 April 2008;

2. Lobendahn committed three newstart participation failures on 7 May 2008,

2 June 2008 and 1 July 2008; and

3. As a consequence of the three newstart participation failures committed on

7 May 2008, 2 June 2008 and 1 July 2008 pursuant to subsection 629(1)

(a) of the Social Security Act 1991 newstart allowance was not payable to Lobendahn for a period of eight weeks.

[S.P.]