Editors --- "Newstart allowance: meaning of income" [2012] SocSecRpr 18; (2012) 14(2) Social Security Reporter, Article 9

• GABOR v SECRETARY TO THE DEEWR
• Background
• Issues
• Decision
• Formal decision

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Newstart allowance: meaning of income

GABOR v SECRETARY TO THE DEEWR

Federal Court of Australia

Decided: 5th September 2011 by Murphy J

Background

At all relevant times, Gabor worked as a casual employee for various market research companies. She was required to travel to various locations in her own vehicle during the course of this employment. Her employers made two types of payments to her in respect of her traveling, being (1) a travel allowance based on kilometres travelled by way of reimbursement for expenses (travel allowance reimbursement), and (2) an hourly rate for the time taken to travel (travel time payment).

Gabor was in receipt of newstart allowance and she regularly reported her income from this casual employment to Centrelink. However, Gabor had formed the honest belief that she was not required to declare to Centrelink the payments made to her by her employers with respect to the travel she had undertaken. Whilst she was not required to declare the travel allowance reimbursements, Centrelink formed the view that she was required to declare the travel time payment and that this payment was income that was to be taken into account in assessing her entitlement to newstart allowance payments.

Centrelink also decided to raise and recover an overpayment of newstart allowance which had arisen as a result of the non-declaration of the travel time payments.

Gabor sought review of Centrelink’s decision, which was reviewed and affirmed by an Authorised Review Officer, the SSAT and the AAT.

Gabor then appealed the decision of the AAT to the Federal Court of Australia.

Issues

The issue for determination by the Federal Court was whether the travel time payments were ‘income’ for the purposes of theSocial Security Act 1991 (the Act).11 Vol. 14. No. 2, June 2012

Decision

The Federal Court agreed with the finding of fact by the AAT that the travel time payments received by Ms Gabor were in the nature of a payment for time taken to travel during her employment. The Federal Court considered that the payments were not in the nature of reimbursement for expenses incurred, as such reimbursement was provided for by the travel allowance reimbursements.

The Federal Court further agreed with a finding made by the AAT that the travel time payment was employment income within the meaning of section 8 of the Act. The Court could find no error in the AAT’s finding or reasons, and the Court affirmed the AAT’s decision on this issue.

As the Federal Court found that the travel time payments were in the nature of income from remunerative work, the Court rejected an assertion by Gabor that the payments were ‘exempt lump sums’ under s.8(11) of the Act. The Federal Court further rejected her assertion that the travel time payments were an exempt expense benefit under s.1157JB of the Act, on the basis that the payments were not in the nature of reimbursement of a private expense.

Formal decision

The Court therefore dismissed the appeal. [S.O.]

Court:

Federal Court of Australia