Editors --- "Youth allowance: independent rate; meaning of 'paid work'" [2012] SocSecRpr 5; (2012) 14(1) Social Security Reporter, Article 5

• STEELE AND SECRETARY To THE DEEWR
• Background
• The issue
• The law
• Evidence
• Consideration
• Formal decision

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Youth allowance: independent rate; meaning of ‘paid work’

STEELE AND SECRETARY To THE DEEWR

(2011/864)

Decided: 7th December 2011 by P. Wulf

Background

Steele claimed youth allowance at the independent rate. His claim was rejected by Centrelink on the grounds that he did not have sufficient earnings to qualify for this payment. This decision was affirmed by the Social Security Appeals Tribunal.

The issue

The issue in this appeal was whether money paid to Steele through a family trust and by way of a university scholarship was ‘paid work’ for the purposes of youth allowance.

The law

Section 1067A (10) is the relevant section of the Social Security Act1991 (the Act) relating to people who are self-supporting. It states as follows:

A person is independent if the person has supported himself or herself through paid work consisting of:

(a) full-time employment of on average 30 hours per week for at least 18 months during any period of 2 years; or

(b) part-time employment of at least 15 hours per week for at least 2 years since the person last left secondary school; or

(c) a period or periods of employment over an 18 month period since the person last left secondary school, earning the person at least the equivalent of 75% of:

(i) the maximum rate of pay under Wage Level A of a transitional Australian Pay and Classification Scale or modern award generally applicable to trainees; or

(ii) that maximum rate as varied or replaced from time to time by Fair Work Australia;

that applied at the start of the period of employment.

Evidence

During 2009, Steele was employed in a number of jobs. One of the jobs involved payment from his father in the capacity as trustee for the Steele Family Trust. In July 2009 Steele was also awarded a scholarship from the Taiwan Ministry of Education for an amount of approximately $3300.

Steele’s earnings, not including payments from the trust and the scholarship, for an 18 month period - 1 October 2008 to 2 September 2010 was $18,856. The required amount to qualify for independent youth allowance at that time was $19,532.

During this period Steele was living in Canberra and his parents were residing in Brisbane.

He received funds from the family trust by way of three payments for the period 25 September to 7 October and 17 November to 23 November 2009. The Tribunal noted that during the first period Steele was working in Canberra and was out of the country for the final period.

The scholarship that was awarded to Steele was for study to be undertaken between 1 December 2009 and 28 February 2010. The payments were made in monthly instalments of approximately $1100. Steele gave evidence that the scholarship required him to undertake a minimum 15 hours a week of study, that he was not allowed to work while studying and that he received credit for his study towards his degree in Australia.

Consideration

The Tribunal considered firstly, the income from the family trust. Because of the inconsistencies in relation to the applicant’s whereabouts during the periods where he was paid for allegedly working in Brisbane, the Tribunal found that Steele had not provided evidence such that it could be satisfied that the income paid to him could be included in the assessment of ‘paid work’. The amount of $2520 was therefore not included in this assessment.

The second question related to whether the scholarship constituted paid work. The Tribunal noted the definition of scholarship from the Macquarie Dictionary - ‘2. the position of a student who, because of merit, etc., is granted money or other aid to pursue his or her studies. 3. the sum of money or other aid granted to a scholar.’

Of particular interest to the Tribunal was the word ‘granted’. From this, the Tribunal concluded that the scholarship was given without any requirement for the recipient to undertake ‘paid work’ and that the granting of a scholarship is based on merit. The Tribunal also concluded that Steele’s visa did not allow him to work and that there was no employer– employee relationship between Steele and the university at which he attended.

The Tribunal concluded that the purpose of the scholarship is to provide financial support to gifted students to allow them to undertake specialist studies. The scholarship could therefore not constitute ‘paid work’.

Formal decision

Given the above conclusion, the Tribunal was satisfied that Steele was not eligible for youth allowance as claimed and affirmed the decision of the SSAT.

[R.P.]