COURT
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Burchett J.

CWDS
  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

HRNG
SYDNEY
#DATE 25:7:1986

ORDER
  (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.

JUDGE1
  The sole question in this matter is whether, under the provisions of the
Social Security Act 1947 ("the Act"), which were applicable in 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.
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;

                ...

          (b)   a payment under this Act;

          (bb)  a payment received by a trainee in
                full-time training under a 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;

          (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."

3.  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).
4.  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 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.
5.  The contention of the Department, which succeeded before the
Administrative Appeals Tribunal, is 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.
6.  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.
7.  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 CLR 389 at 396, 402.)
8.  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, 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 CLR 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 which, because so imprecise, required a modifying phrase to exclude
benefits totally divorced from any concept of income.
9.  (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 is the definition is replete with ambiguity, and it cannot
be said to be clear whether the adjective "periodical" applies both to
"payment" and to "benefit", or only to "payment".  (See Richardson v. Austin
(1911) 12 CLR 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.)
10.  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
          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."

(Cf. Favelle Mort Limited v. Murray (1976) 133 CLR 580 at 588-9; Buckle v.
Josephs (1983) 47 ALR 787 at 792; Reynolds v. Commissioner of Income Tax
(1967) 1 AC 1 at 10-11; Corporate Affairs Commission (S.A.) v. Australian
Central Credit Union (1985) 61 ALR 236 at 239).
11.  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) AC 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, some light is 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.
12.  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.
13.  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 ALR 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
          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 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 Full 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 in Mutual Acceptance Company Limited v.
The Federal Commissioner of Taxation (1944) 69 CLR 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).
14.  I should add that, before the Tribunal, an argument was advanced under
s.135TJ(3) of the Act; but this argument was expressly abandoned before me,
and I say nothing about it.
15.  The appeal must be dismissed, but without costs, as it was agreed that in
the event that I should reach this conclusion the Department would not seek an
order for its costs.