Result of my first hearing at the AAT against Centrelink

Yesterday I had my first hearing at the Administrative Appeals Tribunal (AAT), and it went exactly as expected. The AAT rejected the law and affirmed Centrelink’s decision.

This was in relation to a periodic lottery win that I received in October 2022, $5,000 a month for 12 months.

If the win had been a $60,000 lump sum, it wouldn’t affect my disability pension, but because it is paid monthly Centrelink classify it as income from gambling, and declared me a professional gambler.

For this reason, they averaged the $60,000 by 26 to come up with a fortnightly income amount, which meant my wife and I had our combined disability pension and carer’s allowance slashed by $2,000 a month. This leaves us with about $700 a week each, including the money from the lottery win – still below the poverty level.

This income averaging doesn’t just apply to periodic lottery wins. It also applies to inheritances, insurance payments, superannuation, scholarships, gifts, donations, bursaries and many other things that Centrelink assess as income if they are paid in two or more payments rather than as a lump sum.

My main argument was that Centrelink had used income averaging to calculate a fortnightly income amount on my periodic lottery win.

Income averaging was found to be illegal in the Federal Court case of Amato v Commonwealth (2019), the Robodebt test case that resulted in 400,000 people receiving a total of $1.8 billion dollars in compensation.

The AAT yesterday rejected this case and found that income averaging is legal, citing a much earlier 2005 AAT decision that supported s 1064 of the Social Security Act (1991), which allows income averaging.

This is the problem when you have one third of the AAT without any legal qualifications; they don’t understand law. A recent Federal Court case trumps an old AAT decision, as the Federal Court is a higher jurisdiction.

The AAT argued that income averaging only applied to debts raised against Austudy payments, because that was what Ms Amato was receiving when Centrelink illegally calculated her debt using Robodebt. AAT seem to believe it doesn’t apply to disability pensions.

They were wrong; it applies to all Centrelink payments as was confirmed in later Robodebt cases, which the AAT completely ignored in their summation.

The AAT also rejected the argument that income received can only be applied by Centrelink in the fortnight in which it is received, pointing again to s 1064 of the Act which allows income averaging.

The Amato case clearly stated that income can only be applied in the fortnight in which it is actually received. Again, the AAT wrongly argued that it only applies to Austudy payments, and not disability pensions.

The AAT also rejected my submission that, as a contractor, I have been reporting my income quarterly on a profit and loss statement, under s 1075 of the Act, for the past eight years, and that the income from the lottery, if it is income, should continue to be reported in this manner.

Profit and loss reporting allows a contractor or farmer to apply expenses incurred in earning an income to the gross amount, which results in actual income being reported, and not the contractor payment received. Expenses include home office expenses, Internet, phone, computer equipment, petrol, transport costs and depreciation on a motor vehicle, amongst other things.

The AAT ruling was that the lottery win has to be reported separately from any contractor earnings, and that any salary I get that is not contractor payments has to be reported separately as well, as fortnightly earnings. This means that I now have to report my income in three completely different ways.

There is provision in the Act for the Secretary to overrule the decision, but to date the Secretary falsely claims this is not possible. She wants to drag the matter out through multiple tribunal and court hearings, seemingly with the mindset that it will become too much work and I will give up. She is wrong.

The matter now goes to the General Division of the AAT, and, if necessary, to the Federal Court. The fight is not over.

Craig Hill is a Brisbane-based Social Justice Campaigner, Writer, Teacher and Business Consultant. He has campaigned for social justice in Australia, promoted human rights in China and worked with the homeless in Honolulu. He holds a Graduate Certificate in Education and a degree in Management.