Case: Kear v Secretary, Department of Social Security [1998] 1087 FCA
Outcome: distinguished
In summary, the applicant submits that the AAT misapplied the term "own use or benefit" within the context of s 8(1). In particular: &#8226; The phrase does not call for an assessment as to whether a person can in fact use the earnings as they wish or benefit from the earnings in an absolute sense. &#8226; The fact that the money may be earmarked to meet a particular obligation does not detract from the fact that the money is for the person's own use or benefit: Kear v Secretary, Department of Social Security [1998] 1087 FCA. &#8226; The fact that the repayments were made in respect of tasks performed by the respondent and made to the same entity who paid her wages seems to have clouded the issue. The situation is analogous to an employee who is found liable to the employer for damages for negligence arising out of the employee's actions in the workplace: even if the damages awarded were deducted from wages of the employee it could not be said that the employee's earnings were the lesser sum after the deduction of the damages award. &#8226; The circumstances surrounding the payment by the respondent and later reimbursement of $1,300 highlights the error in the AAT's approach. &#8226; The AAT appears to have been influenced by the fact that the applicant was unable to identify a benefit to the respondent from the amounts of the shortfalls. This is clearly an irrelevant consideration as the Act provides for the alternative of "use or benefit". The respondent in this case clearly used the amounts to meet her obligations. In any event the respondent did benefit from such amounts in that her superannuation entitlements were calculated on the basis of her gross earnings without deduction for the shortfalls as was apparent from the Employee Payment Summary provided by her employer. 14 In summary, the respondent submitted: 1. So-called questions of law 1, 5 and 6 specified in the notice of appeal are not, in fact, questions of law. 2. The AAT correctly recognised that the key question is whether the whole of the respondent's nominal gross wages can be said to be "income" as that term is defined for the purposes of s 8 of the Act . Expressed alternatively, could the amount of the withheld shortfall be said to be earned, derived or received by her for her own use or benefit? 3. The phrase "for the person's own use or benefit" entails the notion of a person being able to use property or income as the person wishes or sees fit, as opposed to being obliged to apply the property or income in a particular way. The respondent was never able, at the time of earning, derivation or (constructive) receipt to use the whole of her nominal gross wage as she wished or saw fit. Rather, to the extent of any shortfall, her employer was contractually entitled to withhold the amount of that shortfall from that gross wage and the respondent was obliged to accept that such an amount could be so withheld. 4. The words "without any reduction" which appear in s 1072 of the Act qualify only "income" as defined, namely the income earned, derived or received for the person's own use or benefit . 5. Reference by the applicant to the sum of $1,300 later received by the respondent by way of refund from her employer is a distraction as the appeal is unconcerned with that sum, although it will be relevant in any recalculation by the applicant of the amount, if any, of any overpayment of benefit. In any event, the AAT correctly regarded that sum as "ordinary income" for the purposes of the Act . 15 Appeals from the AAT are not appeals in the strict sense as they lie within the original jurisdiction of the Court. A party to a proceeding before the AAT may appeal to the Court from any decision of the AAT in that proceeding, but only on questions of law: s 44(1) Administrative Appeals Tribunal Act 1975 (Cth). 47 It is for the same reason that I find distinguishable from these facts the decision in Kear [1998] 1087 FCA where Heerey J held that the relevant money received by the applicant in that case was "his own money to deal with as he saw fit" notwithstanding that the applicant had other commitments or arrangements for which that money was earmarked.