Bugden and Secretary, Department of Employment, Education, Training and Youth Affairs
[2000] AATA 135
•8 February 2000
DECISION AND REASONS FOR DECISION [2000] AATA 135
ADMINISTRATIVE APPEALS TRIBUNAL )
) No Q1999/916
GENERAL ADMINISTRATIVE DIVISION )
Re ELIZABETH BUGDEN
Applicant
And SECRETARY, DEPARTMENT OF EMPLOYMENT, EDUCATION, TRAINING AND YOUTH AFFAIRS
Respondent
DECISION
Tribunal Dr E K Christie, Member
Date8 February 2000
PlaceCoolangatta
Decision The Tribunal sets aside the decision under review and in substitution therefor decides: (a) to waive that part of the total overpayments of $3450.79 of Austudy received over the period 24 February 1997 to 24 July 1997; and (b) that the s.43A(2) provisions of the Act apply with respect to the effective period for waiver of the debt, 24 February 1997 to 24 July 1997; and (c) that the part of the total overpayment of $3,450.79 received over the period 25 July 1997 to 3 July 1998 remain a debt due to the Commonwealth to be recovered at an appropriate rate set through close consultation between Centrelink and Ms. Bugden.
............(Signed)..................................
Dr E K Christie
Member
CATCHWORDS
AUSTUDY – overpayments – whether appropriate to waive right to recover debt by reason of administrative error or special circumstances – whether overpayments received in good faith
Student Assistance Act1973: ss.43A, 43B, 43F
Secretary, Department of Education, Training and Youth Affairs and Prince (1998) 152 ALR 127
ORAL REASONS FOR DECISION
8 February 2000 Dr. E.K. Christie, Member
This is an application to review a decision of the Social Security Appeals Tribunal made on 24 June 1999 which affirmed a decision of the Department of Education, Training and Youth Affairs ("the Department") to raise and recover a student assistance overpayment in the amount of $3,450.79 for the period 24 February 1997 to 3 July 1998.
The general facts were not in dispute and may be stated briefly:
Ms. Bugden was in receipt of Austudy during the period 24 February 1997 to 3 July 1998.
She was employed on a casual basis as a sales assistant during that period.
She had a taxable income of $21,628.00 during the 1997/98 financial year.
Details of her earnings were faxed to Centrelink on at least three occasions during that period.
Recovery of overpayments is in progress. As at 7 February 2000, the residual balance was $1,646.33.
It was common ground that:
The overpayment of $3,540.89 was a debt due to the Commonwealth; and
That the overpayment was solely caused by an administrative error on the part of the Commonwealth.
The issues to be decided by the Tribunal were whether whole or part of the debt would be waived under the "Administrative Error" (ss 43A, B) or "special circumstances" (s.43F) provisions of the Student Assistance Act 1973 ("the Act"). Waiver provisions are contained in the Act.
Sections 43A, 43B and 43F of the Act provide, insofar as is relevant:
"43A(1)The Secretary may, on behalf of the Commonwealth, waive the Commonwealth's right to recover the whole or a part of a debt only in the circumstances described in section 43B, 43C, 43D, 43E or 43F.
43B(1)Subject to subsection (2), the Secretary must waive the right to recover the proportion of a debt that is attributable solely to an administrative error made by the Commonwealth if the debtor received in good faith the payment or payments that gave rise to that proportion of the debt.
43B(2)Subsection (1) only applies if:
(a)the debt is not raised within a period of 6 weeks from the first payment that caused the debt; or
(b)if the debt arose because a person has complied with an obligation to provide information or documents to the Department under this Act, the debt is not raised within a period of 6 weeks from the end of the period within which the person was required to comply with that obligation;
whichever is the later.
43FThe Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:
(a)the debt did not result wholly or partly from the debtor or another person knowingly:
(i)making a false statement or a false representation; or
(ii)failing or omitting to comply with a provision of this Act; and
(b)there are special circumstances (other than financial hardship alone) that make it desirable to waive; and
(c)it is more appropriate to waive than to write off the debt or
part of the debt."
Ms. Bugden said that she had advised Centrelink of changes to her income by sending a computer print-out of her earnings to the Centrelink office at Lismore. Each fax had Ms. Bugden's name, address and student number for identification. She did not keep a record of these faxes. However, she rang the Department's office to confirm receipt of the document. A statutory declaration (T1) by the Office Administrator, where the applicant was employed, confirmed that a printout of Ms. Bugden's weekly wages, for quarterly periods for the 1997/98 financial year were faxed to the Lismore office of Austudy or at least three occasions (T1 folio p.2). The SSAT findings of fact included a finding that details of Ms. Bugden's earnings were faxed to Centrelink on at least three occasions during the period 24 February 1997 to 3 July 1998 (T2 Folio 9). However, submissions by the Departmental advocate, indicate the Department is unable to say whether these documents were ever received.
Ms. Bugden said that her Austudy payments were paid to a different bank account to the bank account to which her wages were paid. She said that she would only have become aware as to the Austudy entitlements she received on being issued with a bank statement for the former account. Such statements were received at three monthly intervals.
During cross-examination, Ms. Bugden acknowledged that she knew how Austudy worked – that an increase in her income would lead to a decrease in Austudy entitlements. However, she said that because of the large variations in her weekly earnings – from $80.00 to $300.00 per week, she found it confusing whether she, in fact, received the correct entitlement. She referred to the Austudy Notice of Assessment (T10) as an example, as this Notice only specified the amount of Austudy entitlement she received; it did not indicate the amount of her earnings upon which her entitlement was based.
In addition to her notifying Centrelink of wages in her part-time earnings, by faxing details, Ms. Bugden said that she had also completed an Austudy Eligibility Check Form (T14, 21 July 1997).
Ms. Bugden said that she continually received misinformation from Centrelink over the period she received Austudy, referring to:
The Austudy Continuing Application 1998 Form (T22, Folio 90) in which the estimated change in earnings was not recorded; and
Enquiries she made to the Centrelink office of Lismore which gave incorrect advice eg. advice to continue to receive Austudy over the Christmas vacation period, a time when Ms. Bugden earned large amounts in her part-time job.
Ms. Bugden concluded by saying that because she had done everything she considered necessary to inform Centrelink of the changes in her earnings, she contended that she had received the overpayments in "good faith".
Ms. Rout, from the Australian Government Solicitor's office, contended that Ms. Bugden had acted on constructive knowledge of the requirements of the Austudy scheme and considered that she had not received the overpayments of Austudy in "good faith" because:
Ms. Bugden had acknowledged that she understood how the Austudy system worked. That is, the amount of her earnings would affect the amount of her entitlement. For example, she had her entitlements reassessed on 24 July 1997 on the basis of new estimates provided for income received over the period 1 July 1997 to 31 December 1997;
Ms. Bugden had experience in the assessment of her entitlements, based on her part-time earnings, on a number of occasions. As a consequence, Ms. Rout contended that it would have been reasonable for Ms. Bugden to expect her eligibility to be reassessed each time she faxed an income statement to Centrelink;
The income Ms. Bugden actually earned in 1997/98 ie. $16,624, was above the Austudy threshold. It would have been reasonable to expect Ms. Bugden to have made some query in relation to her eligibility for Austudy.
Ms. Bugden further contended that (a) the presence of the elements of "carelessness" in Ms. Bugden examining her eligibility statements and (b) of naivety in relation to her obligations to Centrelink, did not amount to "good faith". Reference was made to this Tribunal's decision in re DEETYA and Fulton (AAT V97/204, 25 July 1997), where the Tribunal concluded that the overpayment had not been received in good faith because:
"…. while [the applicant] was "generally a person of honesty…..she acted carelessly and/or recklessly and probably was naive".
Ms. Rout concluded that there were no 'special circumstances' in this application which warranted the description of 'unusual', 'uncommon' or 'exceptional'. Moreover, that there was no evidence of 'unusual' circumstances other than the debt was solely attributable to administrative error by the Commonwealth and that this consequence was specifically provided for in s.43A of the Act.
CONSIDERATION OF THE ISSUES
The objective of the Tribunal is to review administrative decisions on their merits and in accordance with the law at all times. The relevant statute is the Social Security Act 1991.
The first issue relates to the credibility of the applicant and the veracity of her account as to her dealings with the Department. I find Ms. Bugden to have acted honestly in her dealings with the Department.
The first issue for the Tribunal to decide is whether the overpayment can be waived under the "administrative error" provisions (s43B) of the Act.
The Tribunal concludes that a proportion of the total overpayment made over the period 24 February 1997 to 3 July 1998 should be waived because the administrative error was solely caused by the Commonwealth and the overpayment was received in good faith by Ms. Bugden. That the period for which the overpayments should be waived is from 24 February 1997 to 24 July 1997.
In reaching this finding the Tribunal has considered the meaning of "good faith" in Secretary, Department of Education, Employment, Training and Youth Affairs and Prince (1998) 152 ALR127 wherein Finn J stated:
[Good faith is concerned] "with the state of mind of a person concerning his or her receipt of the payment: if that person knows or has reason to know that he or she is not entitled to a payment received – ie is not entitled to use the moneys received as his or her own – that person does not receive the payment in good faith. Absent such knowledge or reason to know, the receipt would be in good faith"
The Tribunal finds that over the period 24 February to 24 July 1997, Ms. Bugden did not know or had reason to know that she was not entitled to the amount of the payment she received because:
She and her employer's financial administrator had taken steps to refer Centrelink to her quarterly earnings. This fact is also a finding by the SSAT. Accordingly, the applicant had taken appropriate steps to meet her obligations to Centrelink as an Austudy recipient. The failure of Centrelink to effectively respond to this information over this part of the period Ms. Bugden received her Austudy entitlements could only have led to the situation where Ms. Bugden "did not have or had reason to know" that she was not entitled to the amount of entitlement she received. Accordingly, the Tribunal concludes that the payments were received in good faith over the period 24 February to 24 July 1997. The Tribunal finds that Ms. Bugden has not been "careless" or "reckless" in her dealings with Centrelink over this period.
The Tribunal concludes that 24 July 1997 is the relevant date for waiving the overpayments received, because, at this time, Ms. Bugden received a Notice of Assessment (T15) following the completion of the Austudy Eligibility Check Form (T14). Beyond this date, these materials should have served to act as a "trigger" for Ms. Bugden as to the linkage between her part-time earnings and the correct rate of Austudy entitlement and so justify further query. Moreover, based on her knowledge of the actual income she received each week, together with her evidence that she was aware that increases in income led to decreases in entitlement, some query to the Department and cross-check on her bank statement, to see whether the income changes were reflected in her Austudy payment seems warranted.
However, the Tribunal concludes that the overpayments received over the period 25 July 1997 to 3 July 1998 remain a debt to be recovered by the Commonwealth. The Tribunal finds that the overpayments were not received in good faith because Ms. Bugden had reason to know she was not entitled to receive them as she had prior knowledge through an understanding of the effects of earning on entitlements, directly, through the Austudy Eligibility Check Form process (see paragraph 21).
Given the above finding, the Tribunal does not have to consider whether the overpayment should be waived because of "special circumstances".
For all of the above reasons, the Tribunal sets aside the decision under review and in substitution therefor decides:
(a)to waive that part of the total overpayments of $3450.79 of Austudy received over the period 24 February 1997 to 24 July 1997; and
(b)that the s.43A(2) provisions of the Act apply with respect to the effective period for waiver of the debt, 24 February 1997 to 24 July 1997.
(c)that the part of the total overpayment of $3,450.79 received over the period 25 July 1997 to 3 July 1998 remain a debt due to the Commonwealth to be recovered at an appropriate rate set through close consultation between Centrelink and Ms. Bugden.
I certify that the 24 preceding paragraphs are a true copy of the reasons for the decision herein of Dr. E.K. Christie, Member
Signed: .....................................................................................
B. Hitchcock, SecretaryDate/s of Hearing 8 February 2000
Date of Decision 8 February 2000
Applicant Ms. Bugden, herself
Solicitor for the Respondent Ms. B. Rout, Australian Government Solicitor
Australian Government Solicitor's Office
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