Bassett and Secretary, Department of Employment and Workplace Relations

[2007] AATA 1097

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2007] AATA 1097

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No V 200600860

GENERAL   ADMINISTRATIVE  DIVISION		)
Re		SUSAN BASSETT

Applicant

And SECRETARY, DEPARTMENT OF EMPLOYMENT AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal Mr Egon Fice, Member

Date5 March 2007

PlaceMelbourne

Decision The Tribunal affirms the decision under review.

(sgd)  Egon Fice

Member

SOCIAL SECURITY ‑ Disability Support Pension – income – Australian Postgraduate Award scholarship – waiver of tuition fees – nature of scholarship – exempt income

Higher Education Support(Transitional Provisions and Consequential Amendments) Act 2003 s 22A

Higher Education Support Act 2003  s 46-10, 169-20, 238-10

Social Security Act 1991 s 8(1), 8(8), 8(8)(zjb), 8(8B)

Guidelines for Commonwealth Scholarships

REASONS FOR DECISION

5 March 2007 Mr Egon Fice, Member

1.      Ms S. Bassett has been receiving the Disability Support Pension (DSP).  On 6 March 2006 Ms Bassett advised Centrelink that she was about to commence full time study at Central Queensland University (the University) as she had been granted a scholarship.  Centrelink, which is the service delivery agency for the Secretary to the Department of Employment and Workplace Relations (the Secretary), assessed Ms Bassett’s scholarship as income and reduced her rate of the DSP.

2.      Ms Bassett sought an internal review and on 4 May 2006 an Authorised Review Officer from Centrelink decided that the decision to regard her scholarship as income for the purposes of calculating her DSP was correct.  Ms Bassett then sought review by the Social Security Appeals Tribunal (SSAT) which affirmed the decision under review.

3.The only issues before me are:

(a)whether the scholarship, which was in the form of a $24,000 stipend, is income for the purposes of the Social Security Act 1991 (the Act); and

(b)if the stipend is income for the purposes of the Act, whether it is an excluded amount and therefore not to be treated as income for the purposes of the Act.

RELEVANT FACTS

4.There is no dispute about the facts in this matter. 

5.      Ms Bassett applied for and was successful in obtaining an Australian Postgraduate Award (the APA) sponsored by the Department of Science, Education and Training for three years at the University.  Her candidature was for a Doctor of Philosophy in the Faculty of Arts, Health and Sciences commencing on 9 January 2006.

6.      The University provided a letter to Ms Bassett which she gave to Centrelink confirming her Award.  The letter stated:

Ms Bassett has been awarded an Australian Postgraduate Award (APA) which commenced on 20 February 2006 and will expire on the 19 February 2009 and entitles Ms Bassett to a tax-free stipend of $24,000.00 per annum.  In addition to the stipend, Ms Bassett has been offered a funded place which will cover the tuition fees associated with her enrolment in the program.

7.      Centrelink only included the value of her stipend as income when calculating her rate of DSP and not the value of her funded place at the University. 

8.      By notice dated 28 April 2006, Centrelink informed Ms Bassett that her rate of DSP had been reduced on the basis that she had income in the amount of $24,032.01.

9.      On 13 September 2006 Ms Bassett informed Centrelink that from 1 September 2006 she was no longer in receipt of income from the APA scholarship (due to a deferral of studies) and her DSP was increased.

ACCOUNT OF INCOME

10.     There is no dispute between the parties that the Act requires income received by the recipient of the DSP to be taken into account when calculating the rate of pension to be paid.  In fact Module E of s 1064A of the Act explains the effect that a person’s annual income has on the maximum basic rate of DSP.

11.     There appears to be no dispute that the stipend paid to Ms Bassett fell within the description of income as it is defined in s 8(1) of the Act.

12. Section 8(8) of the Act deals comprehensively with amounts which are not to be treated as income for the purposes of the Act. Although Ms Bassett did not rely on any of the exemptions set out in s 8(8) of the Act, it is clear that unless her stipend falls within one of the exemptions set out in s 8(8), it must be treated as income for the purposes of the Act.

13. Ms Bassett’s principal contention was that the scholarship she was awarded is in the form of a waiver of all tuition fees despite the fact that it also provided for a stipend. According to her, it should be treated as the one scholarship rather than, as the Secretary contended, two discrete awards. Ms Bassett sought to rely on s 22A of the Higher Education Support (Transitional Provisions and Consequential Amendments) Act 2003 (Transitional Provisions) which she said applied to her scholarship. Section 22A falls in Schedule 1 of the Transitional Provisions and it provides as follows:

(1)The amount or value of a scholarship in respect of the year 2004 is taken not to be income for the purposes of the Social Security Act 1991 if:

(a)the scholarship is provided by an institution (within the meaning of the old Act) or by an institution or body referred to in Schedule 1 to the old Act; and

(b)the scholarship is in the form of a waiver of all of the fees (within the meaning of the old Act) that the person would be liable to pay to the institution or body in connection with a course of study (within the meaning of the old Act); and

(c)the course of study is not a designated course of study (within the meaning of Chapter 4 of the old Act).

(2)Subitem (1) does not affect whether the amount or value of a scholarship in relation to which that subitem does not apply is income for the purposes of the Social Security Act 1991.

14. Although arguments were put about whether s 22A applied to Ms Bassett’s stipend, there is no need to address those. As the Secretary submitted, s 22A is merely a transitional provision and it applies only to the amount or value of a scholarship in respect of the year 2004. Because Ms Bassett’s scholarship was granted on 6 December 2005, and became effective for the 2006 study year, it cannot apply to any component of the scholarship awarded to her.

15. The Transitional Provisions dealing with a fee waiver for the year 2004 are in any event picked up by s 8(8)(zjb) of the Act which provides:

The following amounts are not income for the purposes of this Act… an amount covered by subsection (8B) (about reductions of amounts payable for enrolment or tuition in certain courses).

Section 8(8B) explains that the subsection covers the amount of a reduction (by discount, remission or waiver) that would otherwise be payable by a person (the student) to an educational institution for enrolment or tuition by the institution in a course that is a Doctoral degree course accredited as a higher education course by the authority responsible for accrediting higher educational courses in the State or Territory in which the course is conducted.

16.     According to Ms Bassett, the APA scholarship is an exemption scholarship in accordance with s 169-20 of the Higher Education Support Act 2003 (the HES Act).  Section 169-20 merely defines those students that may be exempted from payment of tuition fees for a specified course of study.  Such students are said to be in receipt of an exemption scholarship.  There is no reference to a stipend in that section.  Therefore, although the value of tuition fees waived is not to be regarded as income for the purposes of the Act, s 169-20 does not extend to Ms Bassett’s stipend.

NATURE OF THE SCHOLARSHIP

17.     Ms Bassett claimed that the stipend should be exempt from being treated as income for the purposes of the Act because she, in effect, received only one scholarship and that it was in a form of a waiver of all fees.  I cannot accept that contention.  The APA is provided for under s 46-10 of the HES Act.  It provides:

There are 2 classes of *Commonwealth scholarships:

(a)       standard scholarships; and

(b)       postgraduate research scholarships.

Note:The Commonwealth Scholarships Guidelines set out the kinds of scholarships in each class.

18.     The Guidelines for Commonwealth Scholarships (the Guidelines) are made under s 238-10 of the HES Act.  Chapter 3 deals with Australian Postgraduate Awards and paragraph 3.1.1 provides:

3.1.1.   Description of Scholarship

Australian Postgraduate Award (APA) scholarships are awarded to students of exceptional research potential undertaking a Higher Degree by Research (HDR).  APAs are provided to assist with general living costs.

19.     Quite clearly, the stipend of $24,000 per annum, to which Ms Bassett became entitled upon the award of her scholarship, was provided to assist her with her living expenses. 

20.     On the other hand, a waiver of tuition fees is provided for under the Research Training Scheme (RTS) under which block grants are provided by the Commonwealth Government on a calendar year basis to eligible Higher Education Providers to support research training for students undertaking Doctorate and Masters Degrees by research.  The RTS guidelines are made under s 238-10 of the HES Act.  Paragraph 8.10 of the guidelines provides:

8.10RTS Description

8.10.1The RTS provides block grants, on a calendar year basis, to eligible HEPs to support research training for students undertaking HDRs – Doctorate and Masters degrees by research – including coursework components of these degrees, provided that the coursework components do not exceed one third of the degree.

8.10.5These students, referred to as ‘RTS students’, are exempt from payment of student contribution amounts and tuition fees for units undertaken as part of an HDR course of study.

21.     In a Department of Education, Science and Training update provided on the Internet, the RTS grants are described as exemption scholarships.  The update also states that from 2005, exemption scholarships will not be treated as income for Social Security and Veterans’ Affairs pensions.  The same document also describes the APA scheme as offering a stipend and allowances for relocation expenses and for thesis production.  Nothing is said about its treatment for Social Security purposes.  These two forms of assistance available to students appear under separate headings suggesting they are discrete.

22.     Overall, the material in evidence is consistent and makes it abundantly clear that the so called exemption scholarships provided under the RTS are quite distinct and separate from the APA scholarship.  There is nothing in the relevant statutes or guidelines which suggests that where an APA is granted, an exemption scholarship must also be offered.  In fact they stand as two independent schemes.  Ms Bassett is therefore incorrect in submitting that the APA is an exemption scholarship.  It is quite clearly a scholarship in its own right.

CONCLUSION

23.     Although Ms Bassett was awarded an APA scholarship and also a funded place which covered tuition fees associated with her enrolment in a Doctoral research course at the University, it cannot be said that this was merely a single scholarship fitting within the description of an exemption scholarship.  They are two discrete scholarships.  The value of an exemption scholarship is not treated as income from 2005 and that is reflected in the exemption provisions of the Act.  However, the stipend which she received under the APA is not exempt or excluded from the definition of income for the purposes of the Act. It does not fall under any of the exemption provisions set out in s 8(8) of the Act. That being the case, Ms Bassett’s stipend of $24,000 per annum must be treated as income for the purposes of the Act and, accordingly, the rate of payment to her of the DSP must be reduced during the period she was receiving the stipend. Therefore, in my view, the decision of the SSAT made on 2 August 2006 was correct and should be affirmed.

I certify that the twenty‑three [23] preceding paragraphs are a true copy of the reasons for the decision herein of

Mr Egon Fice, Member

Signed:      Dianne Eva

Clerk

Date of Hearing  14 February 2007
Date of Decision  5 March 2007
Advocate for the Applicant          Self‑represented
Advocate for the Respondent       Mr A. Carson, Centrelink Legal Services Branch