Chatterton and Secretary, Department of Education, Employment and Workplace Relations

[2010] AATA 964

Administrative Appeals Tribunal

ADMINISTRATIVE APPEALS TRIBUNAL GENERAL ADMINISTRATIVE DIVISION	No 2010/0170
Re	KRISTY CHATTERTON Applicant
And	SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS Respondent

DECISION

8 December 2010

Tribunal	Ms Regina Perton, Member
Date
Place	Melbourne CORRIGENDUM TO DECISION [2010] AATA 964 Pursuant to s 43AA of the Administrative Appeals Tribunal Act 1975 the Tribunal directs the Registrar to amend the decision dated 1 December 2010 as follows: (a)      paragraph 30, sixth line, delete not

.................[signed]...................

Member

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2010] AATA 964

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2010/0170

GENERAL ADMINISTRATIVE DIVISION		)
Re		KRISTY CHATTERTON

Applicant

And SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal Regina Perton, Member

Date1 December 2010

PlaceMelbourne

Decision The Tribunal sets aside the decision under review and substitutes a decision to waive Ms Chatterton’s youth allowance debt due to special circumstances.

(sgd) Regina Perton

Member

SOCIAL SECURITY – youth allowance – failure to inform Centrelink in a timely fashion of change of circumstances – overpayment – waiver of debt – whether administrative error – whether special circumstances exist – decision under review set aside.

Social Security Act 1991 ss 540, 541(1), 541B, 542A, 543B, 1223(1), 1237A, 1237AAD

Ryde v Secretary, Department of Family and Community Services [2005] FCA 866

REASONS FOR DECISION

1 December 2010 Regina Perton, Member    

1. Youth allowance (YAL) is a payment available to young people who are undertaking full-time education, training or seeking work within a prescribed framework.  YAL is administered by Centrelink on behalf of the Department of Education, Employment and Workplace Relations (DEEWR).

2. Kristy Chatterton received YAL from 26 February 2008 to 26 June 2009 (the relevant period) while ostensibly undertaking full-time studies at Victoria University (VU).   In July 2009 Centrelink determined that Ms Chatterton was not eligible for YAL during the relevant period, as she was not studying the requisite number of subjects to be considered as a full-time student.  Centrelink further determined that Ms Chatterton had been overpaid $13,739.50. On 12 October 2009 Centrelink raised a debt of $13,739.50.   

3. Ms Chatterton sought a review of the decision by an authorised review officer (ARO) from Centrelink. On 11 November 2009 the ARO affirmed the decision to raise the debt.  Ms Chatterton then sought a review of the ARO decision by the Social Security Appeals Tribunal (SSAT). On 11 December 2009 the SSAT affirmed the decision.  On 13 January 2010 Ms Chatterton lodged an application with the Tribunal seeking review of the SSAT decision.

4. The issues to be considered by the Tribunal are:

   ·Does Ms Chatterton owe a debt to the Commonwealth?

   ·Should the debt be waived due to administrative error?

   ·Should the debt be waived due to special circumstances?

   Does MS CHATTERTON have a debt to the Commonwealth?

5. Section 540 of the Social Security Act 1991 (the Act) sets out the circumstances in which a person can qualify for payment of YAL. 

   (2) ….. a person is qualified for a youth allowance in respect of a period if:

   (a)either of the following applies:

   (i) throughout the period the person satisfies the activity test…or is not required to satisfy the activity test…

   ….

   (b)       throughout the period the person is of youth allowance age…

6. Section 541(1)(a) of the Act sets out the relevant part of the activity test in this matter:

   (1)…..a person satisfies the activity test in respect of a period if:

   (a) the person satisfies the Secretary that, throughout the period, the person is undertaking full‑time study…

7. Sections 541B of the Act sets out the definition of full-time study:

   541B  Undertaking full‑time study

   General

   (1)For the purposes of this Act, a person is undertaking full‑time study if:

   (a)the person:

   (i)     is enrolled in a course of education at an educational institution; or

   …..

   (b)the person:

   (i)     is undertaking in the particular study period (such as, for example, a semester) for which he or she is enrolled for the course; or

   (ii)     intends to undertake in the next study period for which he or she intends to enrol for the course;

   either:

   (iii)     in a case to which subsection (1A) does not apply—at least three‑quarters of the normal amount of full‑time study in respect of the course for that period (see subsections (2) to (4)); or

   (iv)    in a case to which subsection (1A) applies—at least two‑thirds of the normal amount of full‑time study in respect of the course for that period (see subsections (2) to (4)); and

   (c)the course in question is an approved course of education or study (see subsection (5)); and

   (d)in the Secretary’s opinion, the person is making satisfactory progress towards completing the course.

   When two‑thirds study load applies

   (1A)This subsection applies for the purposes of subparagraph (1)(b)(iv) if the person cannot undertake the normal amount of full‑time study in respect of the course for that period:

   (a)because of the usual requirements of the institution in question in respect of the course; or

   (b)because of a specific direction in writing to the student from the academic registrar, or an equivalent officer, of the institution in question; or

   (c)because the academic registrar, or an equivalent officer, of the institution in question recommends in writing that the person undertake the amount of study mentioned in subparagraph (1)(b)(iv) in respect of the course for specified academic or vocational reasons.

   Paragraph (c) applies for no longer than half of the academic year.

   Meaning of normal amount of full‑time study

   (2)For the purposes of paragraph (1)(b), the normal amount of full‑time study in respect of a course is:

   (a) if:

   (i)     the course is a course of study within the meaning of the Higher Education Support Act 2003; and

   (ii)     there are Commonwealth supported students (within the meaning of that Act) enrolled in the course;

   the full‑time student load for the course; or

   (b)if the course is not such a course and the institution defines an amount of full‑time study that a full‑time student should typically undertake in respect of the course—the amount so defined; or

   (c)otherwise—an amount of full‑time study equivalent to the average amount of full‑time study that a person would have to undertake for the duration of the course in order to complete the course in the minimum amount of time needed to complete it.

   Alternative meaning of normal amount of full‑time study

   (3)For the purposes of paragraph (1)(b), and without limiting subsection (2), the normal amount of full‑time study in respect of a course is an average, taken over the duration of the period for which the person in question is enrolled in the course, of 20 contact hours per week.

   ….

8. VU’s records indicate that Ms Chatterton did not undertake full-time study during the relevant period. Ms Chatterton’s studies in 2008 were rated as half of a normal workload. Her Semester 1 studies also failed to reach the requisite threshold. Ms Chatterton is now aware that her studies did not meet the required full-time load. The Tribunal accepts her evidence that she did not realise that she failed to meet the study requirements for YAL during the relevant period. The Tribunal also accepts that Ms Chatterton had personal and health difficulties during the relevant period. However, the evidence does not establish that she met the exception to full-time workload set out in s 541B(1A) of the Act.

9. Section 542A of the Act allows an exemption from full‑time study for a temporary incapacity. However, the available evidence does not establish that Ms Chatterton meets the legislative requirements for that exemption.

10. Section 543B(1)(a) sets out the maximum age for youth allowance for those not studying full-time:

    543B  Maximum age for youth allowance

    General

    (1)Subject to subsection (2), the person has attained the maximum age for youth allowance if:

    (a)the person is not undertaking full‑time study and is at least 21 years old;….

11. Ms Chatterton was 22 years of age at the start of the relevant period.  As she was not undertaking full-time study, she exceeded the maximum age for YAL.

12. Section 1223(1) of the Act allows the Commonwealth to raise a debt if a person is paid a social security payment to which she is not entitled.

13. On the basis of its records, Centrelink determined that Ms Chatterton was not eligible for YAL during the relevant period and therefore had been paid benefits to which she was not entitled.  Centrelink raised a debt of $13,739.50 for that period.  The Tribunal has no reason to doubt the accuracy of the calculations.

14. The Tribunal is satisfied that Ms Chatterton was paid YAL to which she was not entitled and that she owes a debt of $13,739.50 to the Commonwealth as a result.

    Should the debt be waived due to administrative error?

15. Section 1237A(1) of the Act provides for waiver of a debt arising solely from administrative error:

    Subject to subsection (1A), 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.

    Note: Subsection (1) does not allow waiver of a part of a debt that was caused partly by administrative error and partly by one or more other factors (such as error by the debtor).

16. Ms Chatterton gave evidence that she was unaware that she was not classified as a full-time student until she received a letter from Centrelink to that effect.  She stated that she maintained regular contact with Centrelink and provided it with details of her enrolment at the start of each academic year.  No one from Centrelink queried her when she presented her enrolment details or suggested that she did not meet the minimum study requirement for YAL.   The Tribunal accepts that Ms Chatterton was genuine in her belief that she met the study requirements for YAL.

17. Section 1237A(1) states that if the debtor contributed to the error, waiver under the section is not allowed. Centrelink wrote to Ms Chatterton on approximately 20 occasions during the relevant period. Each letter noted that she was a full-time student and included notice of the requirement to tell Centrelink within 14 days if she stopped being a full-time student. Ms Chatterton worked part-time in the hospitality industry and regularly informed Centrelink of her income. That resulted in the generation of a fresh letter each time, to indicate her rate of payment as a result of her declaration of income. The letters included the standard warning concerning reporting obligations in relation to her studies and a wide range of other matters.

18. The apparent failure of Centrelink’s staff to proactively check whether Ms Chatterton’s enrolment amounted to full-time was one of the factors leading to Ms Chatterton being paid YAL when she was not entitled to it.  However, Ms Chatterton’s error in not realising that she was not a full-time student, and consequently her failure to advise Centrelink of that, was also a factor that led to the debt. 

19. As a result, the Tribunal finds that the debt was not attributable solely to administrative error by the Commonwealth. Therefore, the debt cannot be waived on this ground. 

    Should the debt be waived due to special circumstances?

20. Section 1237AAD of the Act provides for waiver of the debt in special circumstances:

    The 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 false representation; or

    (ii)failing or omitting to comply with a provision of this Act, the Administration Act or the 1947 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.

21. The term special circumstances is not defined in the legislation.  For the Tribunal to use its discretion to determine that Ms Chatterton’s situation constitutes special circumstances, it must be satisfied that there is something that makes Ms Chatterton’s case different from others in similar circumstances.  The term has been considered in many Federal Court and Tribunal cases. In Ryde v Secretary, Department of Family and Community Services [2005] FCA 866, Branson J held that the use of the term special circumstances in the legislation demonstrated an intention to proscribe waiver in ordinary cases.  Branson J stated that the hardship or unfairness should be sufficient to justify departure from the general rule in the particular case.

22. The Tribunal is satisfied that Ms Chatterton did not knowingly make a false statement or representation; and that she did not knowingly fail to comply with relevant legislative requirements. Her choice of subjects was guided by university advisors. She believed she was a full-time student. She regularly reported her income from part-time work and changes of address to Centrelink. Hence, the Tribunal is satisfied that Ms Chatterton meets the requirements of s 1237AAD(a) of the Act.

23. Ms Chatterton’s childhood was a troubled one.  Her mother was unable to care for her satisfactorily and from the age of fourteen, she lived at various times in a hostel, with foster parents, with friends of her family and later with her grandmother.  She dropped out of school but later came back to study.  She is now studying towards a degree in social work, hoping that her experiences during her childhood and teens will be of benefit to the people she will assist. 

24. Ms Chatterton’s problems during her late teens and early twenties were exacerbated by illicit drug use.  During 2007 she lived with an abusive boyfriend who encouraged her use of the drug known colloquially as ice.   Her use of drugs affected her immune system and her moods.  She often expressed her anger inappropriately.  She continued to use drugs until she fell pregnant with her daughter who was born in April 2010.  She credits the pregnancy and her daughter’s birth as saving her life.  She does not live with the father of her child.  She said that she now lives a healthy life eschewing junk food and drugs.   

25. Asked how she could reconcile her drug use with working part-time in hospitality, Ms Chatterton said that she slowed down her use when she had to work.  She was a casual employee.  Ms Chatterton said that she was sacked by a number of the employers she worked for because of her poor attitude.  She attributed part of that to her general behavioural issues as well as her drug use.  

26. Ms Chatterton’s general practitioner, Dr Charles Lisner, provided a report to the Tribunal dated 19 March 2010, in which he stated:

    I have been looking after Kristy for a number of years now and know her medical history well.  She is 37 weeks pregnant now.  She has a past history of drug abuse and there was a time over the last few years when she was doing a lot of speed, ice and ecstacy.  At that time her thought process and decision making would have been adversely affected.  This period of time would have been approximately from November 2007 to June 2009.  During this period she was not fully aware of or concentrating on the responsibilities she had in her life and was therefore ignoring things such as reading her mail.  This will explain why she did not respond to your correspondence.  

27. The Tribunal also received a letter from Katherine Hubbard, youth counsellor of Anglicare Victoria’s Werribee office, who confirmed that Ms Chatterton had attended its youth counselling service from August 2007 to February 2008.  She did not reveal the nature of the counselling due to confidentiality provisions. 

28. The Tribunal is aware that the difficulties Ms Chatterton experienced as a child, teenager and young adult are not without parallel in the community.  However, despite her troubled teenage and young adult years she has demonstrated a commitment to her obligations to provide Centrelink with relevant information throughout that time.  She has personally been in regular contact with Centrelink since she was fourteen years old.  She has been conscientious in reporting changes of address and of income.  She provided Centrelink with details of her studies as required.  Her debt has arisen partly due to her lack of awareness of her student status.  Had Centrelink or VU made her aware that her studies were not considered to be full-time, she may well have been able to invoke alternative income strategies and avoid the debt. 

29. Ms Chatterton said that she cannot recall much about what happened in 2008.  Her doctor suggested that she may not have read relevant correspondence during the relevant period due to her drug use.  However, Ms Chatterton’s failure to respond to the correspondence is not a factor that the Tribunal believes is pertinent to a finding of special circumstances in this matter.  In the Tribunal’s experience, it is a common situation for debts to arise due to the failure of a social security recipient to read mail and, as a result, fail to inform Centrelink of relevant changes.  

30. Taking into account the combination of factors that led to Ms Chatterton’s unwitting failure to inform Centrelink that she did not meet the requirements to receive YAL, and hence accrue a debt to the Commonwealth , the Tribunal finds that Ms Chatterton’s circumstances constitute special circumstances (other than financial hardship alone). The Tribunal is satisfied that the waiver provisions of s 1237AAD of the Act do not apply and that it is appropriate to waive the debt in full.

    DECISION

31. The Tribunal sets aside the decision under review and substitutes a decision to waive Ms Chatterton’s youth allowance debt due to special circumstances.

    I certify that the thirty-one [31] preceding paragraphs are a true copy of the reasons for the decision of:

    Regina Perton, Member

    (sgd)                Dianne Eva

    Clerk

    Date of hearing:  18 October 2010

    Date of decision:  1 December 2010
    Advocate for applicant:                Self represented

    Solicitor for respondent:              Mr T Noonan, Centrelink Legal Services