BVXS and Secretary, Department of Social Services (Social security second review)

[2025] ARTA 125

BVXS and Secretary, Department of Social Services (Social security second review) [2025] ARTA 125 (25 February 2025)

Applicant:BVXS

Respondent:  Secretary, Department of Social Services

Tribunal Number:                2024/0553

Tribunal:General Member, P Ranson (second review)

Place:Brisbane

Date:25 February 2025

Decision:The Tribunal sets aside the decision under review and in substitution decides:

(a)  the Applicant has a recoverable Austudy debt of $8,601.79 to the Commonwealth in respect of the period 1 August 2022 to 27 February 2023,

(b)  The Applicant has a recoverable Student Start-Up Loan debt of $1,132 on the basis he was not entitled to Austudy in respect of that period, and

(c)   The Applicant’s interest charges applicable to the Austudy and Student Start-Up Loan debts are to be recalculated and the correct amount recovered.

…………… [SGD] ………….
General Member P Ranson

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been removed from this decision and replaced with generic information so as not to identify involved individuals as required by subsections 201(1A) - 201(1B) of the Social Security (Administration) Act 1999

Catchwords

SOCIAL SECURITY – where Applicant in receipt of Austudy on basis of full-time study – where applicant did not notify department that he was not studying full-time – where Applicant received SSL despite being disentitled to it – where debt owed to commonwealth – whether special circumstances – where medical conditions would not have precluded Applicant notifying department of change in circumstances – Decision under review set aside and substituted.

Legislation

Social Security Act 1991

Social Security (Administration) Act 1999

Secondary Materials

Social Security Guide

Statement of Reasons

Background

1. BVXS has many illnesses and suffers from severe pain. He says he has done so since he was 12 years old and can no longer work because of chronic pain, chronic nerve pain, and persistent ear infections.

2. In January 2022, BVXS made a claim for Austudy as he had started a Bachelor of Theology with [redacted] University and he was studying full-time. The course was due to end in December 2023. He was granted Austudy on the basis he was studying full-time. In July 2022, BVXS was also paid a Student Start-Up loan (SSL) of $1,132.

3. All social security benefits come with the obligation to regularly report changes in the circumstances of the recipient. One of those obligations for BVXS was to notify the Department of Social Services (Agency or Centrelink) within 14 days if he stopped studying full-time. Several such notices were sent to him throughout 2022 and into 2023.

4. By September 2022, BVXS was not enrolled full-time in the Bachelor of Theology with [redacted] University as he had withdrawn from all study for Semester 2, 2022 which he did on 1 September 2022. BVXS says he was not able to notify Centrelink he had stopped studying full-time, even though he advised [redacted] University of it, because of his health issues at the time.

5. BVXS applied to the former Administrative Appeals Tribunal (AAT) for a first review of the decision to raise and recover debts for overpaid Austudy and an SSL loan. He was unsuccessful on first review, so he applied for a second review. The matter was transferred to the Administrative Review Tribunal (Tribunal) on 14 October 2024.

6. It is common ground that BVXS was not studying full-time in Semester 2, 2022 and so was not entitled to be paid Austudy or the SSL. The issue in this case is whether there are any grounds to write off or waive the debts due to the Commonwealth arising from the over payment of Austudy and the student loan.

7. For the following reasons the Tribunal sets aside the decision under review and in substitution decides the overpayments of Austudy and SSL are recoverable debts due to the Commonwealth and as no payment arrangement is in place for them, the correct amount of interest is to be calculated and charged to him.

What happened?

1. BVXS applied for and was granted Austudy payable from 20 January 2022 on the basis he was studying a Bachelor degree full-time at [redacted] University.[1] Importantly, that letter says:

   Your Austudy is based on you studying full time at [REDACTED] UNIVERSITY, Tertiary Group B Course with the course ending on the 1 December 2023. If your study load changes or if you cease study you should let us know within 14 days.

   [1] ST14, page 85.

2. Many such notices were sent by Centrelink to BVXS during the time he was being paid Austudy reminding him of his obligation to advise them if he was no longer studying full-time. These are included at ST14 in the Supplementary T Documents.

3. Later that year on 7 July 2022, BVXS was paid an SSL of $1,132.[2] He withdrew from the course on 1 September 2022 as recorded on the Agency mainframe,[3] and in his statement to Centrelink on 3 April 2023.[4] BVXS had advised [redacted] University however he did not inform Centrelink. Centrelink found out from data matching. That meant BVXS was not enrolled in full-time study for Semester 2, 2022 and so not entitled to Austudy or the SSL for that Semester.

   [2] ST1, page 12.

   [3] T18, page 102.

   [4] T12.

4. The Secretary notes BVXS was able to contact Centrelink with six fortnightly income reports, two address changes, and one myGov update. All these contacts with Centrelink occurred on and after December 2022.

1. Centrelink issued a notice to BVXS on 21 March 2023 about the overpaid Austudy and on 12 April 2023 about the SSL he was not entitled to.[5] BVXS sought internal review of the debts on the basis of his medical conditions and on 26 May 2023 an Authorised Review Officer (ARO) of Centrelink affirmed the decisions to raise and recover the Austudy debt of $8,601.79 and an SSL debt of $1,132.[6] BVXS then applied to the AAT for a review of that decision which was affirmed on 11 January 2024 (AAT1).[7]

   [5] T10, T11 and T12.

   [6] T15.

   [7] T2.

2. On 30 November 2023 and 28 December 2023, interest charges were applied to the debts because BVXS had not made any arrangements to repay the debts.[8]

   [8] Attachment A to the SFIC.

3. On 25 January 2024, BVXS applied to the AAT for a review of AAT1. The matter came before the Tribunal on 20 November 2024.

4. In the meantime, BVXS had employment with [employer] from December 2022 to July 2023, which appears to be a tour operator in north Queensland. His income from that employment was irregular and ranged from $390 to $2,730 per fortnight.[9] In his statement included above, it appears BVXS lost that employment in January 2024. He began receiving Jobseeker Payment (JSP) from 11 March 2024.[10]

   [9] ST1, pages 6 to 8.

   [10] ST1, page 13.

The Law

1. The SFIC at paragraph 25 sets out the law which is relevant to this case being:

   (a)Social Security Act 1991 (Act); and

   (b)Social Security (Administration) Act 1999 (Administration Act).

2. The relevant policy is contained in the Social Security Guide – Guides to Social Policy Law (Guide).

3. The SFIC sets out in detail from paragraph 26 the basis on which a person qualifies for Austudy and an SSL and what happens if there is an overpayment of either. It discusses whether they are debts due to the Commonwealth and whether they can be recovered, and if so, the basis on which they can be written-off or waived.

4. As the Tribunal understands BVXS’ case, he does not dispute the creation and calculation of the debts, rather he claims special circumstances prevented him from notifying Centrelink he had stopped studying full-time in September 2022. He says he is broke, and the Tribunal infers from his statements he seeks the debts be waived in full.

5. On that basis, this decision will not revisit the detail of the creation and calculation of the debts and will focus on whether there is any basis to write-off or waive the debts in whole or in part.

What does BVXS say?

1. By way of background, in his review application dated 25 January 2024 BVXS says:

   Please allow me some time to appeal. As a result of medical symptoms I have complained about since I was 12 years old. The medical health care professional institutions ignored my complaints of symptoms consistently mistreating me. And now as a consequence of trusting professional heath care treatment I have received, I am now in a condition of chronic pain Inc chronic nerve pain. I have had all the test however never received the examinations I require until now.

   My condition is declining rapidly, I have not been able to work constantly since I was 12. I can no longer work as a result of chronic pain, chronic nerve pain, and persistent ear infections.

   Attachment is my doctor referral to the ENT specialists @healthcare. I will send my doctor referral to the persistence pain management clinic seperate.

2. To explain this further, on 22 June 2024 BVXS wrote the AAT and said:

   I BVXS hereby submit this email to the court as evidence of my circumstantial changes.

   I was convicted of [redacted] and lost my licence. I therefore lost the ability to continue work as a tour bus driver in January 2024. Having 15 years experience this is an upsetting period in my life, to say the least.

   During semesters 1 and 2, 2023 I began experiencing what I believe is discrimination towards myself from a lecturer at [redacted] University, [redacted], as I appealed to her units for failing me consecutively after asking me personal questions regarding my life.

   This experience combined with, having to leave my residential address in Cairns due to cyclone Jasper 13 Dec 2023, and, in fear for my life from two [redacted] residents who chased me from [place A] to [place B]. All while trying to medicate a chronic neck injury, after suffering from a divorce finalised in 2022.

   I now have extreme mental health issues including depression, and anxiety that is so strong I have not even been able to check my university status, even my student email. Due to panic attacks that I have developed from my circumstance I am incapable of performing even the most basic tasks such as buying food for myself.

   I have no desire to complete my course or to try and achieve anything at all ever again, my anxiety and depression are also increased from a credit card debt of $10000.00. As I am unable to perform work duties, I have no way of repaying any debts I have.

   I am a broke and broken man without hope in humanity or any of the governing bodies.

   To Add, I have not completed my tax return forms since 2021 in fear of how much debt I am into with the ATO.

   I am also currently applying for the disability pension because of my rapid decline with mental health issues including depression and anxiety which prevent me from completing essential basic tasks in social settings, even from home.

3. BVXS provided a Statement of Financial Circumstances with his application for this review. At that time, he was living in [north Queensland] and describes himself as employed on $1,170 per week. He doesn’t list his living expenses in detail and instead says:

   I don’t own anything other than my car since my divorce in 2020. I am also currently in debt to my bank $3000.00, and what the outcome of this debt [Austudy and SAL] will be.

4. On 3 April 2023 BVXS wrote to Centrelink and said:

   Hello, I am writing concerning my overpayment during Semester 2, 2022. I had a severe neck and shoulder injury towards the end of semester 1, 2022. I had to discontinue semester 2 2022, 01/09/22. Due to the extreme nature of my injury and the medications I was prescribed I was unable to communicate this with the correct department of Centrelink. My neck injury had a significant impact on my ability to study. I was experiencing limitations to movement. Discomfort made it difficult for me to sit or stand for long periods of time and affected my ability to concentrate on my studies.

   In addition to the physical limitations of my neck injuries, the medication prescribed to me to manage the pain caused drowsiness, nausea, and reduced cognitive function, impacting study time and academic performance. The medical treatment I required for the severe neck injuries disrupted my study schedules and forced me to take a leave of absence, delaying the completion of my degree.

   I would like to make an appeal of the overpayment based on the serious medical circumstances I was in semester 2, 2022. I have uploaded doctors reports of the injuries and I have the doctors certificate required in order to reschedule my exams semester 1 2022. However, I did not require a medical certificate to discontinue the units semester 2, 2022. I was only required to fill and sign a withdrawal from units form. Please consider my circumstances as I was not thinking clearly and unable to communicate my condition.

5. Attached to the decision of the ARO are review notes. They include a record of discussion with BVXS as follows:

   Called customer at 13:57 11/05/2023 and discussed study load. I advised customer that medical condition alone was not sufficient reason to waive a debt unless his condition was so severe he was not able to advise us that he could no longer study. I said that if he was able to contact the University then he was also able to contact us.

   Customer said he did contact us around about the same as he contacted the University. I advised there were no records of any contact from him during the debt period. I said I would run a special program that recorded all contacts from him whether it be online or through our call centre. However, based on the information provided to date the debts were correct. Customer said he was confused due to the medication he was on at the time but said he was sure he had called us.

6. BVXS provided many certificates and reports from medical practitioners in support of his claim to have been unable to notify Centrelink he had ceased full-time study.

1. Leanda H is a registered psychologist. She reported to Dr G of [redacted] Medical Centre on 16 October 2021 and says:

   BVXS has attended six sessions on his own to discuss the ending of his marriage and his depression related to the same. BVXS has stated that the antidepressants have been of assistance in reducing his depressed mood.

   I have continued in my discussion with BVXS regarding his cannabis and alcohol use. BVXS does not seem to be at a stage where he would consider a change in his patterned behaviour. He has reported a drop in alcohol use since a flat mate recently left, with whom he would drink of an evening. I have suggested that BVXS recognise the emotions he is avoiding by drinking to excess however, he states that he enjoys the feeling of "being smashed". This does not appear to be an area that he is willing to work upon at present whilst he navigates his divorce.

   Above all, BVXS continues in his working life and has been completing his study at university until this semester, where he has taken the term off. BVXS Is now looking forward to a close relative moving in with him and moving forward with his life. He will resume his study next year. BVXS completed the DASS21 where he recorded mild anxiety, severe stress and normal levels of depression. I have informed BVXS that the sessions have ended and if he requires further assistance, that he would need to apply for a BOMH referral as I am no longer bulk billing under the BAMH scheme. I believe BVXS qualifies due to his student status.

2. Dr G writes on 25 January 2022 about his cervical spine issues[11]. She says he has bilateral radiculopathy with previous disc bulge and nerve entrapment, which is normal at C2-3, minor at C3-4 and C4-5, and moderate at C5-6 and C6-7. The Tribunal understands the C3, C4, and C5 vertebrae form the midsection of the cervical spine, near the base of the neck. She comments:

   Multilevel disc bulge but greatest at C5-6 with [where] there is quite prominent left far lateral extension and moderate to prominent foraminal narrowing with potential exiting left C6 nerve impingement. There may been slight deterioration [since February 2018].

   [11] T5.

3. Dr W from Medical Imaging [redacted] comments on a musculoskeletal ultrasound of BVXS’ right shoulder.[12] His report dated 27 April 2022 says:

   The biceps, supraspinatus and infraspinatus tendons are intact. Subscapularis calcific tendinosis is seen. There is no tear. The AC joint is unremarkable.

   The subacromial bursa is thickened with bunching at 45 degrees. This is consistent with subacromial bursitis.

   [12] T6.

4. Dr H provided a Professional Practitioner Certificate about BVXS for [redacted] University College[13]. It is dated 18 May 2022 and he says:

   Multiple cervical disc bulging. Chronic neck and back pain. Currently on medication to control symptoms both cause drowsiness. (Lyrica and Amitriptyline]. Waiting for neurosurgical review. Unable to sit for long time to study, unable to concentrate on his studies.

   [13] T7.

5. Dr Gardner writes again on 12 April 2023 and says:

   BVXS has longstanding neck. pains and anxiety and was unfit for study in semester 2 from 1/08/2022 to 27/02/2023 inclusive.

   He has been taking lyrica and mobic as well as managing his pains with CBD oil.[14] He continue to take escitalopram for anxiety. This medication is likely to have affected his ability to study.

   [14] The Tribunal understands this is Cannabidiol oil derived from cannabis.

6. Dr U of the [redacted] 24 Hour Medical Centre referred BVXS to the ENT Clinic at [redacted] Hospital on 23 January 2024. He reports BVXS presents with a history of persistent severe ear pain, which does not respond to antibiotics and topical applications.

7. As set out above, there is abundant evidence that BVXS has health issues. According to his psychologist his depression was caused by his divorce in late 2021 and he was in no frame of mind to deal with his drug and alcohol problem. At that time, he says he enjoyed the feeling of being severely intoxicated.

8. The Tribunal accepts that during the relevant period, there was some degree of functional impact arising from bilateral radiculopathy with previous disc bulge and nerve entrapment in the cervical spine at C5-6. The Tribunal also accepts that because of such medical conditions, during the relevant period, BVXS was taking medication which caused drowsiness and precluded him from being able to sit and study of long periods of time.

9. However, he was nonetheless undertaking remunerative employment, albeit whilst suffering from mild anxiety, severe stress, and normal levels of depression. BVXS had employment from December 2022 to July 2023 as a bus driver before he lost his job because he lost his licence.

10. The Secretary relies on the nine contacts BVXS made to Centrelink during the time he was in receipt of Austudy as evidence he could make contact and yet he failed to notify that he had ceased full-time study. Whilst those nine contacts were made during that period, they were four months or more after BVXS notified [redacted] University he was withdrawing. The Tribunal considers those contacts have little relevance to this decision because even if he had notified his withdrawal during one of those contacts that he had withdrawn on 1 September 2022, by December 2022 he had already received the majority of the Austudy, and the SSL, to which he was not entitled.

11. The Tribunal notes that whilst this decision is concerned with the circumstances of BVXS in September 2022, his contacts with Centrelink later tend to indicate his ability to satisfy reporting obligations after he had ceased full-time study.

Can these debts be written-off or waived?

1. There are two ways in which a debt can be written-off or waived under the Act. Write-off, despite its name, means delaying the recovery of some or all of a debt until a later time. Waiver means the Secretary waives the right to recover some or all of a debt including debt arising from sole administrative error by the Commonwealth.

2. For a sole administrative error to apply, the debt must be attributable solely to administrative error by the Commonwealth and by no other person and the person must have received the payments in good faith.

3. A debt can be written-off if the debt is irrecoverable at law, or the debtor has no capacity to repay the debt, or the debtor’s whereabouts are unknown after all reasonable efforts have been made to locate the debtor, or it is not cost effective for the Commonwealth to take action to recover the debt.

1. A debt is taken to be irrecoverable at law only if it cannot be recovered by means of deductions or legal proceedings because the relevant 6-year period has lapsed or the debt itself is not capable of being proven at law or the debtor is discharged from bankruptcy and the debt was incurred before the debtor became bankrupt or the debtor has died leaving no estate or insufficient funds to repay the debt. If a debt is recoverable by deduction from the debtors Social Security payments the debtor is taken to have capacity to repay the debt unless recovery would result in the debtor being in severe financial hardship.

2. As severe financial hardship is not defined in the Act, the Tribunal turns to case law for guidance. For it to apply, a person's entire financial position would need to be materially less than the current rate of pension. That is, the person's financial situation must be of such a severe or extreme nature as to warrant waiver of the debt.

3. The Austudy and SSL debts accrued by BVXS cannot be written-off as they are not irrecoverable at law, BVXS has capacity to repay the debt from future income or social security benefits and his whereabouts are known. Deduction from social security benefits make recovery cost effective for the Commonwealth.

4. There has been no error by the Commonwealth because Centrelink issued many notices to BVXS for him to notify them if he ceased studying full-time. The error was by BVXS in not notifying Centrelink at the relevant time. If he had he would not have incurred much of these debts and possibly could have applied for other benefits to see him through his health issues at the time.

5. Whilst BVXS may well consider his circumstances to be financial hardship, he is receiving Jobseeker, and as the Tribunal understands his situation he lives with relatives. That indicates to the Tribunal he is not in severe financial hardship despite the bank debt and potential tax debts he says he has. Payment arrangements can usually be made for such debts.

1. The Secretary can waive some or all of a debt if satisfied the debt did not result wholly or partly from the debtor knowingly making a false statement or false representation or failing or omitting to comply with the provisions of the relevant legislation. For that to apply there must also be special circumstances, other than financial hardship alone, that make it desirable to waive and it is more appropriate to waive the debt rather than to write it off.[15]

   [15] Section 1237AAD.

2. BVXS says he was in no position due to his health circumstances to notify Centrelink he had ceased studying full time on 1 September 2022. There is abundant evidence that Centrelink sent many notices to BVXS reminding him of his obligation to notify them within 14 days if he ceased studying full time. He didn't do that. This is despite his notification to [redacted] University he was withdrawing from the course on that date.

3. The secretary relies on the nine notifications BVXS made to Centrelink from December 2022 as evidence of his capability of notifying them of changes. As already discussed above, the Tribunal considers the appropriate time frame to consider in this case is September 2022 not three months later in December 2022.

4. Whilst the failure by BVXS to notify Centrelink on 1 September 2022 he had ceased full-time study is not in and of itself a false statement or false representation, it is an omission by him to comply with the provisions of the relevant legislation, being to notify Centrelink within 14 days of relevant changes to his circumstances.

5. As the first part of the special circumstance’s waiver is not made out, there is no utility in considering special circumstances given that both must exist for this waiver to apply. However, as the sole basis of this application by BVXS is a special circumstances waiver, then for the sake of completeness the Tribunal will consider whether his circumstances in September 2022 make it desirable to waive the debts.

6. The Tribunal has already acknowledged the specific health issues suffered by BVXS at the time. The difficulty for BVXS is he had the presence of mind to notify [redacted] University on 1 September 2022 he was withdrawing from the units of study that semester. In summary, the evidence is clear BVXS lacked the ability to continue with full-time study. It does not indicate he lacked capacity to also notify Centrelink on or about the same time as he notified [redacted] University.

7. Accordingly, the Tribunal finds there are no grounds to write off or waive the debts for overpaid Austudy and the SSL. The Secretary notes in the SFIC their inability to correctly calculate the interest payable on the debts and requests this decision direct the interest be recalculated.

Decision

1. The Tribunal sets aside the decision under review and in substitution decides:

(a)the Applicant has a recoverable Austudy debt of $8,601.79 to the Commonwealth in respect of the period 1 August 2022 to 27 February 2023,

(b)The Applicant has a recoverable Student Start-Up Loan debt of $1,132 on the basis he was not entitled to Austudy in respect of that period, and

(c)The Applicant’s interest charges applicable to the Austudy and Student Start-Up Loan debts are to be recalculated and the correct amount recovered.

Date of hearing:	20 November 2024
Date final submissions received:	None.
Solicitors for the Applicant:	Self-represented
Solicitors for the Respondent:	Alicia Henderson, Senior Government Lawyer, Litigation Branch, Services Australia