Cho and Secretary, Department of Family and Community Services

[2006] AATA 38

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2006] AATA 38

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q2005/125

GENERAL ADMINISTRATIVE DIVISION		)
Re		PYONE CHO

Applicant

And SECRETARY, DEPARTMENT
OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Ms M J Carstairs, Member

Date19 January 2006

PlaceBrisbane

Decision The Tribunal varies the decision under review to provide that Mr Cho’s Austudy debt for the period 5 April 2003 to 19 March 2004 which totals $7,799.90, should be written off for six months from the date of the Tribunal’s decision.

.................[Sgd]...........................

M J Carstairs
  Member

CATCHWORDS

SOCIAL SECURITY- Austudy Debt – overpayment due to partner’s income – partner overseas – section 24 of Social Security Act does not apply – decision varied and debt written off for a period of 6 months.

Social Security Act1991 ss 24, 1223, 1236, 1237

Ryde v Secretary Department of Family and Community Services [2005] FCA 866
Secretary Department of Social Security v Hales (1998) 82 FCR 154
Perry and Department of Family and Community Services [2001] AATA 282

SRL and Secretary Department of Social Security [1998] AATA 326

REASONS FOR DECISION

19 January 2006         Ms M J Carstairs, Member

1.      Pyone Cho has a notice of debt for Austudy payments he received from 8 April 2003 to 19 March 2004.  His wife, Katrina Crilly, was living in Japan and her employment there generated a level of income that disentitled Mr Cho to any Austudy payments in Australia, because he was assessed by Centrelink as a married person and her income had to be taken into account.  Mr Cho had not told Centrelink that Ms Crilly was living and earning income overseas.

2.      For the period after 30 November 2003 when Mr Cho joined his wife in Japan he agrees that he should pay back the Austudy – some $900 of the overall debt.  He says however that he should not incur an overpayment before this.  Mr Cho says in that earlier period he should have been assessed as a single person, and therefore his wife’s income should not be taken into account, because by her living overseas they incurred double expenses and did not have the opportunities that married persons have to pool resources.

THE ISSUES

3.      The issues in this matter are whether there is a debt of Austudy and if so whether this should be repaid by Mr Cho.

IS THE OVERPAYMENT A DEBT?

4.      There are general obligations that arise under the legislation, requiring that persons receiving payments provide information to Centrelink so their entitlements can be assessed correctly.  A person is notified of their obligations while receiving social security payments, most usually when they first receive a particular payment and then in later letters about ongoing payments.  Mr Cho was sent one such letter on 10 March 2003 (T6), telling him, amongst other things, that he must notify Centrelink about any changed circumstances and giving examples of these.  Itemised amongst the cited examples of possible changed circumstances were:

§  ceasing to live with a partner;

§  a partner’s receipt of wages;

§  proposed departure from Australia; and

§  change to  course enrolments, including ceasing study. 

5.      Mr Cho has limited spoken English skills and required the assistance of an interpreter in the Burmese language for the hearing.   He does not read English fluently.  Mr Cho said that when he received Centrelink letters while Ms Crilly was overseas, he merely put them away, did not read them properly, and was unaware that he needed to tell Centrelink that Ms Crilly was in Japan.  When he ceased undertaking studies in November 2003 and travelled to Japan to holiday with Ms Crilly he believed that his Austudy payments would stop automatically without the need to tell Centrelink.  He said that when he and Ms Crilly realised Austudy payments were still being deposited into their bank account, Ms Crilly phoned Centrelink to cancel the payment (T9).

6.      The debt provisions in the Social Security Act 1991 (the Act) are cast in wide language. Section 1223(1) of the Act provides that a debt will arise if social security payments (such as Austudy) are made when the person was not entitled for any reason to obtain that payment. Section 1223(1AB) further provides that a person is not entitled if the payment was not payable, or the payment was made as a result of a false statement.   It is clear in this case that Mr Cho (assessed as a married person) was not entitled to Austudy because of Ms Crilly’s income, which meant that Austudy was not payable to him.  I was satisfied that Mr Cho has a debt under s1223(1) of the Act as a result of Ms Crilly’s level of income in Japan disentitling him to Austudy between April 2003 and March 2004.

7.      There were a number of points when Mr Cho’s Austudy potentially was affected by his changed circumstances because a number of the cited examples of changed circumstances took place:  Ms Crilly left for Japan; Ms Crilly commenced paid employment; Mr Cho departed Australia in November 2003; at some stage he made a decision to defer his studies in 2004; he stayed on in Japan, obtaining employment there in February 2004.  Crucially, however, from April 2003 Ms Crilly was earning income in Japan beyond the level that allowed for any Austudy payments.  

8.      After the first day of hearing, the respondent recalculated the total of the overpayment, using as the starting date when Ms Crilly first obtained employment in Japan (in April 2003), and applying the fluctuating fortnightly exchange rates for converting Japanese yen to Australian dollars.  This reduced the overpayment by $620.20 to a new total of $7,799.90.   I am satisfied that the overpayment has been correctly calculated under the Act.

9. Mr Cho’s and Ms Crilly’s main contention was that her income should not be taken into account and that s24 of the Act should be applied in their favour. Section 24(1) of the Act allows legally married persons, whose relationship has not broken down, to be treated as not being members of a couple if there is a special reason in the particular case to do so.   Mr Cho and Ms Crilly have claimed that there are a number of special reasons in their case (see T1, T13, T15, T24 and exhibit A2).   Their reasons include that Ms Crilly considered she had no choice but to work in Japan as her employment prospects were better there, and she had not obtained employment in Australia.  Once there, however, she pointed out that she was on a low wage that covered her living costs but did not extend to supporting her husband in Australia.

10. Attractive as this argument to now invoke s24(1) of the Act might seem, I do not accept that s24(1) can be applied in this way, that is, after the event. I am mindful that other Tribunal decisions have indicated that the section may be given retrospective operation: Perry and Department of Family and Community Services [2001] AATA 282. However it seems to me that s24 applies to ongoing payments and circumstances. It is a discretionary provision that should not be applied retrospectively except to the extent allowed under the Social Security (Administration) Act1999 (Administration Act). To use s24 in the way now suggested would run counter to the date of effect provisions that apply under the Administration Act. Generally speaking, these date of effect provisions for favourable determinations (as the exercise of the discretion under s24 would be as its effect would be to increase Mr Cho’s rate of payment of Austudy) take effect from when the person informed the respondent of the change of circumstances. This did not occur until the end of the debt period in this case.

11.     This does not mean that the issues raised by Mr Cho and Ms Crilly, referring to their circumstances while living apart in different countries and unable to have the benefits of pooling resources, cannot be taken into account at all.  They may be considered as issues arising for possible waiver of the debt.

WAIVER

12. There was only one provision of the Act raised on the facts here, namely s1237AAD of the Act which allows waiver in special circumstances.  Special circumstances are those that take the case out of the ordinary, and allow a flexible response to the range of situations that could give rise to hardship or unfairness if the requirements for recovery of debts was rigidly applied: Ryde v Secretary Department of Family and Community Services [2005] FCA 866; Secretary Department of Social Security v Hales (1998) 82 FCR 154.

13.     Mr Cho and Ms Crilly returned to Australia in January 2005.  Mr Cho then resumed his studies at the Southbank Institute of TAFE.  At the time of the hearing Ms Crilly was employed, earning approximately $30,000 per year.  However it is important to bear in mind that this is not her Austudy debt.  The financial circumstances that are primarily relevant are those of Mr Cho, taken in the context of the couple’s overall financial commitments and their combined household outgoings.

14.     Their circumstances are rather different now from those that pertained when Ms Crilly lived in Japan.  They now share rented premises and Ms Crilly pays 100% of the rent.  In 2003 Mr Cho was living rent free with Ms Crilly’s brother in a house jointly owned by Ms Crilly, her father, and brother.  Because Mr Cho was studying full-time in 2005 and was ineligible for Austudy because of Ms Crilly’s income, Ms Crilly pays all outgoings on rent and most household expenditures.  Mr Cho uses his credit card for his educational expenses.  He owes over $4,000 on the credit card.  Ms Crilly pays for a weekly tutor ($40 per week) to assist Mr Cho who would have otherwise experienced difficulty pursuing his studies.  

15.     Focussing on Mr Cho’s circumstances while Ms Crilly was in Japan, do these justify waiver of the debt that he has incurred? 

16. It has generally been stated in decisions dealing with the operation of s24 of the Act that the discretion should be considered, taking into account the purpose of the enactment and the facts and overall justice of the case: SRL and Secretary Department of Social Security [1998] AATA 326.

17.     I was not satisfied that the factor of Ms Crilly’s absence overseas and her own additional cost there should be considered as a special circumstance that would justify waiving the debt in whole or in part.  The facts here showed that Mr Cho continued to have the advantage of pooled resources as a married person as he was able to live rent free in the property of which she was a joint owner, which in all likelihood he would not have been able to do except that he was married to her.   Ms Crilly throughout this period paid her share of the mortgage payments that enabled this situation to continue to Mr Cho’s benefit. 

18.     I do not accept that this is an appropriate case, taking into account the purposes of the Act, to give great weight to Ms Crilly’s absence overseas.  It seems to me that this was a matter of personal choice.  She and Mr Cho had only recently returned to Australia and there was no evidence that she was at risk of being unemployed for the long term.  I also was not convinced by her statements from time to time that her financial circumstances while in Japan were dire.  There were discrepancies between her unsigned statement (T25) where she stated that her expenditure in Japan was 220,000 yen per month and her salary 221,392 yen after tax and the information she provided in exhibit A2 that she regularly paid $AUS240 to an account to cover her monthly mortgage payments and her credit card debt.   If her level of expenditure was that stated in T25 it is difficult to see what moneys remained to cover the outgoings on the mortgage and credit card debts.

19. Section 1237AAD(c) is of particular relevance in Mr Cho’s case. That sub-section requires that the decision maker be satisfied, before exercising the discretion in s1237AAD, that it is more appropriate to waive than to write-off the debt. I was satisfied that write-off of the debt under s1236 of the Act is the preferable course because Mr Cho is a relatively young person who is improving his prosects for employment through education. It is likely that in the future he will be able to repay Centrelink on a basis suitable to both parties.

20. I was satisfied that Mr Cho’s financial circumstances as presented at the hearing were extremely difficult. He has no capacity on his own to repay this debt while he is not employed. He could not have carried on his studies during 2005 in his final year of the Advanced Diploma of Computer Systems Engineering at Southbank TAFE without Ms Crilly’s support. Completing his studies is likely to increase his prospects of employment. He has incurred substantial credit card debt to fund his studies. Ms Crilly has borne all their household outgoings in the meantime. Some leeway should be allowed for Mr Cho to get on his feet again before continuing the recovery of this debt. It seems to me that the justice of the case suggests that the debt should be written off under s1236 of the Act for six months from the date of this decision.

DECISION

21.     The Tribunal varies the decision under review to provide that Mr Cho’s Austudy debt for the period 5 April 2003 to 19 March 2004, which totals $7,799.90, should be written off for six months from the date of the Tribunal’s decision.

I certify that the 21 preceding paragraphs are a true copy of the reasons for the decision herein of Ms M J Carstairs, Member

Signed:         Jeff Mills
  Legal Research Officer

Date/s of Hearing  6 July 2005, 28 October 2005.
Date of Decision  19 January 2006
The Applicant was unrepresented
Solicitor for the Respondent     Ms S Dole, Departmental Advocate