Cole; Secretary to the Department of Family and Community Services

[2002] AATA 1147

DECISION AND REASONS FOR DECISION [2002] AATA 1147

ADMINISTRATIVE APPEALS TRIBUNAL        Nº V2002/346
GENERAL  ADMINISTRATIVE DIVISION
  Re:         SECRETARY TO THE
  DEPARTMENT OF FAMILY AND
  COMMUNITY SERVICES
  Applicant
  And:       DAVID COLE
  Respondent

DECISION

Tribunal:       Miss E.A. Shanahan, Member
Date:             7 November 2002
Place:            Melbourne

Decision:The Tribunal:

1.sets aside the decision of the Social Security Appeals Tribunal that the respondent did not have a recoverable debt owed to the Commonwealth as the recipient of the payment was the respondent's mother, Mrs Leslie Cole;

2.the primary decision of a Centrelink officer dated 4 January 2002, as affirmed by an authorised review officer on 16 January 2002, is affirmed.  The respondent was not eligible for payment of a youth allowance in the calendar year 2001.  The sum of $3357.48 is a debt owed to the Commonwealth; and

3.in accordance with s.1237A(1) of the Social Security Act 1991, the entire debt is waived, as the debt is attributable solely to an administrative error made by the Commonwealth.

(sgd) E.A. Shanahan
  Member
SOCIAL SECURITY – youth allowance – payment of youth allowance while an ineligible part-time student – debt raised – who received payment and who is the debtor – special circumstances – administrative error
Social Security Act 1991 ss.540, 1223(1), (1AA), 1236, 1237A(1), 1237AAD
Social Security (Administration) Act 1999 ss.45, 68
Re Secretary, Department of Family and Community Services and Lyster (2000) 59 ALD 587
Re Secretary, Department of Family and Community Services and Rowe (2001) 65 ALD 266
Re Secretary, Department of Family and Community Services and Ringin [2002] AATA 281

REASONS FOR DECISION

7 November 2002  Miss E.A. Shanahan, Member

1. This is an application for review of a decision of the Social Security Appeals Tribunal (SSAT) dated 25 February 2002.  The SSAT determined that the recipient of youth allowance payments had been Mrs Leslie Cole and therefore the respondent, David Cole, did not owe a debt to the Commonwealth in the sum of $3357.48.  This debt had been raised on 4 January 2002 by the primary decision-maker (a Centrelink officer) when advised by the respondent's school that he had been a part-time student from 31 January 2001 to 23 November 2001.  As a part-time student, he did not qualify for a youth allowance.  The primary decision was affirmed by an authorised review officer (ARO) on 16 January 2002.

2. At the hearing before this Tribunal the Secretary to the Department of Family and Community Services (the respondent) was represented by Mr T. Baker, an advocate with Centrelink, and the respondent was self-represented. The Tribunal had before it the documents lodged pursuant to s.37 of the Administrative Appeals Tribunal Act1975 (the T documents).  The respondent gave evidence in person and his mother, Mrs Leslie Cole, gave evidence by telephone. 
   BACKGROUND TO THE APPLICATION

3. The respondent was granted a youth allowance from 27 January 2000. The application forms were completed by his mother (her evidence) and in accordance with s.45(1)(a) of the Social Security (Administration) Act 1999 (the SSA Act), the allowance was paid into Mrs Cole's bank account as the respondent was under 18 years and not independent. The respondent was notified by Centrelink on numerous occasions that he must advise Centrelink if he stopped being a full-time student or varied his enrolment at school, college, etc. On 21 November 2001, Lang Warren Secondary College notified Centrelink that the respondent had commenced part-time studies with them on 21 January 2001. Based on this information, a debt of $3357.48 was raised for the period 31 January 2001, to 23 November 2001, as the respondent was not eligible for youth allowance. His study, being part-time, rendered him ineligible.

4. The respondent appealed to the SSAT.  On 25 February 2002, the SSAT determined that Mr David Cole did not have a recoverable debt owed, as the recipient of the payments had been Mrs Leslie Cole.  The Secretary of the Department of Family and Community Services sought review of the SSAT decision on 5 April 2002. 

5. The issues before the Tribunal were three in number:

   (a)who was the recipient of the benefit?

   (b)if the respondent was the recipient of the benefit, are there special circumstances that might attract waiver of the debt? and

   (c)if the respondent is the recipient of the benefit, is the debt subject to waiver on the basis that it arose solely from an administrative error?

EVIDENCE BEFORE THE TRIBUNAL

1. The parties agreed that the facts, as contained in the T documents, were not in dispute.  A search for the respondent's youth allowance claim form (lodged late 2000), in both his Centrelink file and that of his twin brother Evan, had not been successful. 

2. The respondent gave evidence that he had claimed youth allowance (or his mother had on his behalf) in 2000 and 2001 and, as of 31 January 2001, he attended a secondary college on a part-time basis.  He lives at home with his mother, Mrs Cole, and his twin brother Evan.  Evan is disabled, suffering from cerebral palsy and epilepsy.  The family home is rented.  His mother does not work and receives social security payments, as does his brother Evan. 

3. The respondent, who is now aged 18, is about to commence part-time work at McDonalds having been working as a casual in an abattoir throughout the earlier part of 2002.  His earnings varied from $35.90 per week to a maximum of $200 per week.  He pays his mother rent of $50 to $100 per week, depending on his earnings.  The respondent outlined his other expenses with respect to food, petrol and telephone bills. 

4. Mr Baker inquired as to the respondent's state of health.  The respondent stated that he had a back problem and suffered nerve compression of both wrists.  Surgical decompression of the latter had been recommended.  The respondent indicated that he intended to apply in the near future to join the permanent Australian Army.

5. In answer to a question posed by the Tribunal, the respondent indicated that he helped with the care of his disabled twin brother who frequently needed settling down.  The respondent believed his mother's health was good. 

6. Mrs Cole gave evidence by telephone.  She advised that she had filled out claims for youth allowance for both her sons, David and Evan, every November since they had turned 16.  She had been unaware that part-time students were not eligible for youth allowance.  In November 2000, she had completed forms for youth allowance for the respondent and she advised he would be studying part-time in 2001.  Claim forms for her other son Evan were also completed.  Evan receives a disability allowance, education allowance and a mobility allowance.  Mrs Cole recalled that the forms for each son were sent to Centrelink a few days apart.  She had no reason to believe that they had not been received.  Mrs Cole was aware of Centrelink's practice of contacting the recipient or legal guardian when the said forms were not received or were incomplete.  In November 2001, she had received a follow-up letter and a telephone call from Centrelink when she had delayed sending claim forms with respect to Evan, for a period of two weeks.  This delay had resulted on her giving consideration as to whether or not to change Evan's school.  As far as Mrs Evan could tell, Centrelink had received Evan's claim forms of November 2000 and she assumed that they had received the respondent's also, as no contact had been made by Centrelink until April 2002. 

7. In answer to a question posted by Mr Baker, Mrs Cole stated that she did not believe there were any matters in the family that were special or unusual, except for the constant supervision Evan required. 
   THE RELEVANT LEGISLATION

8. The following are the relevant provisions of the Social Security Act 1991 (the Act):

   540.        Subject to this Subdivision, 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 (see Subdivision B) or is not required to satisfy the activity test (see Subdivision C);

   (ii)the person is a CDEP Scheme participant (see section 1188B) in respect of the period;

   (b)throughout the period the person is of youth allowance age (see Subdivision D); and

   (c)throughout the period the person satisfies any requirements relating to Youth Allowance Activity Agreements that apply to the person under Subdivision E; and

   (d)throughout the period, the person:

   (i)is an Australian resident; or

   (ii)is exempt from the residence requirement within the meaning of subsection 7(7).

   Note 1:   Subdivision G provides for prospective qualification for youth allowance.
   Note 2:   Division 2 sets out situations in which youth allowance is not payable even if the person qualifies for it.
   …
   1223.(1)   Subject to this section, if:

   (a)a social security payment is made; and

   (b)a person who obtains the benefit of the payment was not entitled for any reason to obtain that benefit;

   the amount of the payment is a debt due to the Commonwealth by the person and the debt is taken to arise when the person obtains the benefit of the payment.
   …

   1236.(1A)   The Secretary may decide to write off a debt under subsection (1) if, and only if:

   (a)the debt is irrecoverable at law; or

   (b)the debtor has no capacity to repay the debt; or

   (c)the debtor's whereabouts are unknown after all reasonable efforts have been made to locate the debtor; or

   (d)it is not cost effective for the Commonwealth to take action to recover the debt.

   …

   1237A.(1)   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).
   …
   1237AAD.  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 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.

   Note:    Section 1236 allows the Secretary to write off a debt on behalf of the Commonwealth.

9. Relevant provisions of sections 45 and 68 of SSA Act provide:

   45.(1)        Subject to subsection (2), instalments of youth allowance of a person who is under 18 years of age and is not independent are to be paid on behalf of the person:

   (a)if the person has only one living parent—to that parent; or

   (b)if the person has more than one living parent—to the parent nominated in writing by the person to the Secretary.

   45.(2)        The Secretary may direct that the whole or a part of the instalments of youth allowance of a person referred to in subsection (1) is to be paid:

   (a)to the person; or

   (b)to someone other than the person's parent on behalf of the person.

   45.(3)        If the Secretary gives a direction under subsection (2), the instalments are to be paid in accordance with the direction.
   …
   68.(1)        Subsection (2) applies to a person to whom a social security payment is being paid.
   68.(2)        The Secretary may give a person to whom this subsection applies a notice that requires the person to do either or both of the following:

   (a)inform the Department if:

   (i)a specified event or change of circumstances occurs; or

   (ii)the person becomes aware that a specified event or change of circumstances is likely to occur;

   (b)give the Department a statement about a matter that might affect the payment to the person of the social security payment.

   68.(3)        Subsection (4) applies to a person who is the holder of a concession card.
   68.(4)        The Secretary may give a person to whom this subsection applies a notice that requires the person to do either or both of the following:

   (a)inform the Department if:

   (i)a specified event or change of circumstances occurs; or

   (ii)the person becomes aware that a specified event or change of circumstances is likely to occur;

   (b)give the Department a statement about a matter that might affect the person's qualification for the concession card.

   68.(5)        An event or change of circumstances is not to be specified in a notice under this section unless the occurrence of the event or change of circumstances might affect the payment of the social security payment or the person's qualification for the concession card, as the case requires.

APPLICATION OF THE LEGISLATION TO THE FACTS BEFORE THE TRIBUNAL

1. The applicant contends that both the legislation and its interpretation by precedent Administrative Appeals Tribunal decisions determine that the respondent was the recipient of the youth allowance and not his mother.  In Re Secretary, Department of Family and Community Services and Lyster (2000) 59 ALD 587, at paragraph 19, Senior Member Hallowes noted:

   …The word "recipient" is used throughout the Act and should be consistently applied as being the person who is qualified for a social security payment and to whom that payment is payable.  

The decisions in Re Secretary, Department of Family and Community Services and Rowe (2001) 65 ALD 266 and Re Secretary, Department of Family and Community Services and Ringin [2002] AATA 281 confirm this definition of the term recipient.

1. The Tribunal has no doubt that, as a question of law, the respondent was the recipient of the youth allowance and during the period 31 January 2001 to 23 November 2001, was not eligible for this benefit.  In accordance with s.1223 of the Act the amount of payment, to which the respondent was not entitled, is a debt due to the Commonwealth.  The SSAT decision of 25 February 2002 was wrong in law and is set aside.

2. The respondent's family is almost solely dependent on income support benefits.  The respondent has recently obtained regular part-time work and hopes to join the permanent army.  His twin brother is disabled and requires constant supervision, provided, in the main, by Mrs Cole.  Mrs Cole herself is not of the opinion that the family's circumstances are special or unusual, apart from Evan's disability.  Section 1237AAD of the Act is not attracted.

3. The evidence of both the respondent and Mrs Cole is to the effect that the necessary youth allowance claim form was completed in November 2000 and forwarded to Centrelink.  This form indicated that the respondent would be a part-time student.  The form is not present in the respondent's file, nor is it mistakenly contained in Evan Cole's file.  Centrelink did not contact the respondent or his mother in late 2000 to query non-receipt of the claim form (as is normal practice) and continued to pay the respondent a youth allowance in 2001.  Mrs Cole, who completed the forms for her sons, is very experienced in Centrelink procedure and practice, and concluded that the respondent was entitled to a youth allowance on the basis that she and her son were not contacted by Centrelink and payment of the youth allowance continued.  Centrelink was advised by the respondent's school that he had studied part-time from 31 January 2000.  This advice was received on 21 November 2001.  At T6, page 20, of the T documents entry is made regarding a telephone conversation between a Centrelink officer and Mrs Cole.  Mrs Cole stated that she did advise Cranbourne CSC that her son is part time.  Yet no record. 

4. The Tribunal found the respondent and Mrs Cole to be reliable and truthful witnesses.  Given Mrs Cole's experience in dealing with Centrelink over a lengthy period, the Tribunal concludes that she did complete the youth allowance claim form for the respondent in November 2000 and did inform Centrelink that the respondent would be studying part-time in 2001. 

5. The debt raised is due solely to administrative error and in accordance with s.1237A(1) is waived in toto.

   I certify that the twenty [20] preceding paragraphs are a true copy of the reasons for the decision herein of
   Miss E.A. Shanahan, Member

   (sgd)     Catherine Thomas
               Clerk

   Date of Hearing:  18 September 2002
   Date of Decision:  7 November 2002
   Advocate for the applicant:         Mr T. Baker, Centrelink

   Solicitor for the Respondent:        Nil — IN PERSON