eed CATCHWORDS ADMINISTRATIVE LAW - Administrative Appeals Tribunal ~- Appeal to Federal Court - Social services - Reduction in rate of unemployment benefit by reference to "training allowance" paid pursuant to a Labour Force Program - Definition of "income" in Social Security Act 1947 ~ Meaning of "allowance" ~ Whether in the provision of the definition in s.106 (see now s.6) "and includes any periodical payment or benefit by way of gift or allowance", the words "by way of gift or allowance" qualify "periodical payment" as well as "benefit" - Whether "periodical" qualifies "benefit" as well as "payment" - Effect of the word "includes" when introducing a definition clause ~ Effect of exemptions as an aid to the construction of a main provision - Whether to achieve a net amount of "income" to calculate a deduction from unemployment benefit it is appropriate to deduct expenditure associated with the relevant Labour Force Program undertaken. Administrative Appeals Tribunal Act 1975, s.44 Social Security Act 1947 (Cwlth), s.106 (see now s.6), s.114 Mutual Acceptance Company Limited v. The Federal Commissioner of Taxation (1944) 69 C.L.R. 389 Canadian Pacific Tobacco Company Limited v. Stapleton (1952) 86 C.L.R. 1 Richardson v. Austin (1911) 12 C.L.R. 463 The Secretary to the Department of Social Security v. Burman (Neaves J., unreported, 18/4/86) Robinson v. The Local Board for the District of Barton-Eccles, Winton and Monton [1883] 8 App. Cas. 798 Favelle Mort Limited v. Murray (1976) 133 C.L.R. 580 Buckle v. Josephs 1983) 47 A.L.R. 787 Reynolds v. Commissioner of Income Tax [1967] 1 A.C. 1 Corporate Affairs Commission (S.A.) v. Australian Central Credit Union (1985) 61 A.L.R. 236 Ashfield Municipal Council v. Joyce [1978] A.C. 122 Haldane~Stevenson v. Director-General of Social Security (1985) 60 A.L.R. 621 MARSH -V- SECRETARY TO THE DEPARTMENT OF SOCIAL SECURITY NSW G. 114 of 1985 Burchett J. evi Sydney ee a 25 July 1986 eyfe RECEIVED rl 28 JUL 1986 FSOE?4, SounT as Rte ° Be Teak Mm eee ae ey pe eee ee ae oe ee ie wove ae ae IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY No. 114 of 1985 re eee GENERAL DIVISION BETWEEN: KEVIN WILLIAM MARSH Applicant E a iw] SECRETARY TO THE DEPARTMENT OF SOCIAL SECURITY ~ Respondent MINUTE OF ORDER OF THE COURT JUDGE MAKING ORDER: Burchett J. DATE OF ORDER: 25 July 1986 WHERE MADE: Sydney THE COURT ORDERS THAT: (1) The appeal be dismissed. (2) The decision of the Administrative Appeals Tribunal the subject of the appeal be affirmed. (3) There be no order as to costs. NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. a vat aeeee aoe Band ene ae eee IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY No. 114 of 1985 eee we GENERAL DIVISION BETWEEN: KEVIN WILLIAM MARSH . Applicant a =] SECRETARY TO THE DEPARTMENT OF SOCIAL SECURITY Respondent REASONS FOR JUDGMENT BURCHETT J. The sole question in this matter is whether, under the provisions of the Social Security Act 1947 ("the Act"), which were applicable ir July 1984, the Department of Social Security was correct in deducting, from payments of unemployment benefit, an amount in respect of a training allowance paid to the applicant pursuant to a Labour Force Program. The deduction was made under s.114 of the Act on the basis that, by reason of the training allowance, the applicant, who was in receipt of an unemployment benefit, was a person whose income exceeded $20-00 per week. So the question is whether the training allowance was "income" for the purposes of this section. - ile eee ae oe ee rome we ka ee ee re 2. As the Act stood at the time, the word "income" was defined in s.106(1) for the purposes of Part VII which deals with unemployment and sickness benefits. The Act, in its present form, contains a similar definition, but transposed to s.6 of the Act. The then s.106 read relevantly as follows: "(1) In this Part, unless the contrary intention appears - "income", in relation to a = person, means any personal earnings, moneys, valuable consideration or profits earned, derived or received by that person for his own use or benefit by any means from any source whatsoever, within or outside Australia, and includes any periodical payment or benefit by way of gift or allowance, but does not include - (a) a payment made to a person for or in respect of a child of whom that person has the custody, care and control; eee (b) a payment under this Act; (bb) a payment received by a trainee in full-time training under a =e program included in the programs known as the Labour Force Programs, being - (i) a payment known as the training component; or (ii) a payment of a living away from home allowance; (c) a benefit under a law of the Commonwealth relating to the provision of pharmaceutical, sickness or hospital benefits, or of medical or dental services; _ 7 (ca) the value of emergency relief or like assistance; --, (cc) a payment under the Handicapped Persons Assistance Act 1974; (ea) in the case of a member of the Reserve Forces, the pay and allowances paid to him as such a member (other than pay and allowances in respect of continuous full-time service) and ... (fa) an amount payable to a member of the Forces as an allowance by reason of the fact that he has been awarded a decoration; (i) an amount payable by the Repatriation Commission as a clothing allowance to a member of the Forces." The matter comes before the Court pursuant to an appeal from a decision of the Administrative Appeals Tribunal constituted by Dr. A.P. Renouf, Member (now Senior Member). The applicant is a retrenched steel worker who, in 1983, commenced a part-time three year course at the Wollongong Technical College under the Labour Force Programs, also known as the Labour Adjustment Training Arrangements. The course leads to the issue of a welfare worker's certificate. The applicant had sought to do a full-time course, but was unable to find a place. In respect of the course he undertook, he was at the relevant time being paid a training allowance of $46-00 per week. It is not in dispute that this payment was a payment of the kind - ee ep eee ee ee pe ee ees = - wee ween ee ty oe ser? 4. described in s.106(1)(bb)(i) of the Act. What was disputed was whether it amounted to "income" within the meaning of the section. The contention of the Department, which succeeded before the Administrative Appeals Tribunal, 1s a simple one. The Department says the Training Allowance is a "periodical payment... by way of ... allowance", and therefore falls squarely within the definition. It further says that if there could be any doubt about the matter, the express exclusion of such a payment when received "by a trainee in full-time training" demonstrates that it was not the intention of Parliament to bestow a similar benefit upon the recipient of such a payment who is in part-time training only: expressio unius est exclusio alterius. The applicant argues that the training allowance is not "income" within the meaning of the section, and in particular should not be regarded as falling within the word "allowance"; alternatively, it is submitted that certain expenses, connected with the training the applicant was undergoing, should have been deducted from any amount treated as income. The evidence suggested that perhaps one-fifth to one-quarter of the allowance was spent on books, meals away from home, and other items said to have been related to the part-time course. ee ee re ames et ne a 5. Whether or not the training allowance would fall within the language of the first part of the definition of "income", which seems to me to have been framed to cast a very wide net, it does in my opinion plainly fall within the second part of the definition: "and includes any periodical payment or benefit by way of gift or allowance". It is a periodical payment. If it is necessary that it should also be classifiable as an allowance, the word "allowance" is a wide word which, in the definition, gains some colour from the context, both the immediate context of the phrase in which it is used, and also the context of associated paragraphs such as paragraphs (bb(ii)), (ea), (f), (fa) and (i). It is clear, from a consideration of the use of the word in the paragraphs mentioned, that Parliament has employed it to refer to a range of periodical payments including both payments in the nature of a special pension (an allowance to a decorated member of the Forces), and also payments to meet particular needs (living away from home allowance, clothing allowance). A payment referred to as a training allowance fits easily into the pattern of this usage, which is in accordance with the normal meaning of the word. (See Mutual Acceptance Company Limited v. The Federal Commissioner of Taxation (1944) 69 C.L.R. 389 at 396, 402.) But I think the better view is that the expression "any periodical payment" is without express qualification. It is followed by the alternative "or benefit", to which is attached the qualifying phrase "by way of gift or allowance". Admittedly, " Uren Cdk ae. 6. the syntax yields only a weak indication of the meaning of a provision of this sort; the context is a more reliable guide. (cf. the remarks of Dixon C.J. in Canadian Pacific Tobacco Company Limited v. Stapleton (1952) 86 C.L.R. 1 at 6). However, if the phrase "by way of gift or allowance" modifies both "benefit" and "payment", it is difficult to see any purpose served by the use of the word "payment", since any payment by way of gift or allowance would have to be regarded as a benefit by way of gift or allowance. On the other hand, a periodical payment is something which may be distinguished from a benefit by way of gift or allowance, despite some overlapping of the two concepts; and a periodical payment fits naturally into the provision, as a precise and limited extension of a wide definition which might be thought at risk of being read down to receipts having a flavour of employment, business or contract. It fits naturally because the periodicity of a payment is one of the indicia that the payment may have the character of income. This view would see the final reference to a benefit as a further extension wisch, because so imprecise, required a modifying phrase to exclude benefits totally divorced from any concept of income. (I have left to one side the question whether, to fall within the provision, a benefit by way of gift or allowance must also be a periodical benefit. The fact 1s the definition is replete with ambiguity, and it cannot be said to be clear whether the adjective "periodical" applies both to "payment" and to -_— ~~ wee SO ee te wisn : 7. "benefit", or only to "payment". (See Richardson v. Austin (1911) 12 C.L.R. 463, especially at 473, for a discussion of a very similar problem of construction.) But it is not necessary in the present case to resolve this further difficulty.) The structure of the definition seems to me to require a wide meaning to be given to the second part of it. It breaks naturally into three sections, the first introduced by the word "means", the second by the words "and includes", and the third by the words "but does not include". Having given in the first section a broad definition, the legislature goes on in the second to ensure that, even if some "periodical payment or benefit by way of gift or allowance" escapes the net of the first section, it will, unless falling into one or other of the specific categories nominated in the third section, be caught by the second. The diversity of the items referred to in the third section further confirms the width of the first and second, or at least of the second (cf. the doubt raised by Neaves J. in The Secretary to the Department of Social Security v. Burman, unreported, 18 April 1986, as to the effect of the exclusory words added on to the inclusory portion of the definition in s.18 of the Act). In Robinson v. The Local Board for the District of Barton-Eccles, Winton and Monton [1883] 8 App. Cas. 798 at 801 Lord Selborne said, of an interpretation clause which was introduced by the use of the word "includes": "An interpretation clause of this kind is not -- meant to prevent the word receiving its ~ ordinary, popular, and natural sense whenever ace cr a a id SPE e aoe v are. ' 8. that would be properly applicable; but to enable the word as used in the Act, when there is nothing in the context or the subject-matter to the contrary, to be applied to some things to which it would = not ordinarily be applicable." (C£. Favelle Mort Limited v. Murray (1976) 133 C.L.R. 580 at 588-9; Buckle v. Josephs (1983) 47 A.L.R. 787 at 792; Reynolds v. Commissioner of Income Tax (1967) 1 A.C. 1 at 10-11; Corporate Affairs Commission (S.A.) v. Australian Central Credit Union (1985) 61 A.L.R. 236 at 239). In my opinion, the second section of the definition in question is a provision of the kind of which Lord Selborne was speaking - with one qualification, that here the inclusive provision is meant to enable the word to be applied to some things to which, in its earlier defined meaning, it might not otherwise be applicable. So far as concerns the impact upon the construction of the definition of the exclusions contained in the third section of it, I do not overlook the force of the comment which Lord Wilberforce made in Ashfield Municipal Council v. Joyce [1978] A.C. 122 at 137 (see also the warning in the joint judgment of Mason A.C.J., Wilson, Deane and Dawson JJ. in Corporate Affairs Commission (S.A.) v. Australian Central Credit Union (supra, at 242)) to the effect that particular words may be inserted in a provision conferring exemptions ex majore cautela. But his Lordship also made it clear that legitimate use can be made of the terms of associated exemptions in the process of construction; in the case of the definition under consideration, --r- ern a 2 taae eat 9. some light 1s cast on its width by the nature of the subventions and payments which the legislature thought it necessary or desirable to make the subject of express exclusions. I think the weekly training allowance was properly included in the income of the applicant for the purposes of Part VII of the Act. It was not excluded by paragraph (bb), since the applicant was not "a trainee in full-time training", but a trainee in part-time training only. There remains the question whether the amount of the allowance taken into account should have been reduced by the sum of approximately $10-00 per week said to have been expended in ways related to the training undergone. On this point also I think the appeal fails. In Haldane-Stevenson v. Director-General of Social Security (1985) 60 A.L.R. 621 at 622 it was said of the similar definition in s.18 by McGregor and Pincus JJ., in their joint judgment: "It will be noted that the definition of 'income' makes no reference to expenses or deductions. It leaves uncertain the answer to the question whether gross income or nett income is meant. Having regard to the purpose of reducing the pension by reference to income earned, we are of the view that, at least in general, nett income is meant. That does not, however, bring in its train the conclusion that the process of ascertainment of income is to be approached in the same way as, for example, "taxable income' is determined under the provisions of the Income Tax Assessment Act 1936. More particularly, we are of the view that, whatever might happen for the purposes of the Income Tax Assessment Act, deductions of the kind here w= Aha - - ie aed ~ 4s mee ee ae or a ee ie 10. sought to be taken into account are not to be considered unless there is income with which they are associated." The Court rejected an argument that certain expenditure, incurred in research and writing in relation to a book to be published, should be allowed as a deduction from a retired clergyman's "retiring allowance". It was accepted that, if royalties were derived from publication of the book, the expenditure incurred in producing it might have to be taken into account against those royalties. But the joint judgment, at p.623 states: "We are not persuaded that by any process of reasoning or evidence the expenditure referred to could be said to have been incurred in earning the income he received by way of a pension from the Church of England. The amount of the pension, as we understand it, is payable whether or not the appellant writes or writes a book or otherwise derives income from writing." In the present case it cannot of course be said that the allowance is payable whether or not the applicant undertakes part-time training, but it can be said that it is payable whether or not he chooses to expend any of it in the particular ways mentioned in evidence before the Administrative Appeals Tribunal, On the applicant's own case, by far the largest proportion of it was spent in other ways. The whole of it was paid, so far as appears, not on condition that he expended any part of it upon a purpose associated with his part-time training, but to assist in his support whilst he was undergoing that training. How he _chose to organise his life and expenditure during the period of the mote ae fae " -.~ we wae oe © PSE ER Pier ~ |r Eee a - scare = Bee = cosets 5 il. part-time course was entirely a matter for him. The books in question were described as "beyond those prescribed". One can readily imagine a case of an allowance entitlement to receive which was dependent upon its expenditure for specified purposes, unrelated to the ordinary incidents of life, so as to entail the conclusion that either the whole of it, or some proportion of it, could not fairly be regarded as a net receipt "for his own use or benefit", within the meaning which the Pull Court in Haldane-Stevenson's Case ascribed to the definition. But the Tribunal did not, in the present case, make findings extending so far. Nor was any submission made to me that the applicant's expenditure of his allowance could be regarded in that light. What was put was that, in fact, a small proportion of the allowance had been expended for purposes related to the training in question. In my view, it cannot be said that the Tribunal erred in law in declining to allow any deduction in the circumstances of this case. The situation may be compared with that ia Mutual Acceptance Company Limited v. The Federal Commissioner of Taxation (1944) 69 C.L.R. 389, where the majority of the High Court regarded a car expenses allowance as part of the remuneration of employees on the basis that "the moneys when paid are at the complete disposition of the employees" (per Latham C.J., 398; and see per Starke J., 401, per Williams J., 405). I should add that, before the Tribunal, an argument was advanced under s.135TJ(3) of the Act; but this arguinent was expressly abandoned before me, and I say nothing about it. oe t= aed Par te The appeal must be dismissed, was agreed that in the event that I should reach this conclusion the Department would not seek an order for its costs. I certify that this and the preceding eleven (11) pages are a true copy of the Reasons for Judgment herein of his Honour Mr. Justice Burchett. ¢.k. Adnelart —_..,. Associate Dated: 25th Faly , (786 . 12. but without costs, as it us