Cvetkovski; Secretary, Department of Education, Training and Youth Affairs

[2000] AATA 147

DECISION AND REASONS FOR DECISION [2000] AATA 147

ADMINISTRATIVE APPEALS TRIBUNAL      )

)     NoV1999/211

GENERAL ADMINISTRATIVE DIVISION          )          

Re      SECRETARY, DEPARTMENT OF EDUCATION, TRAINING AND YOUTH AFFAIRS           

Applicant

And    OLIVER CVETKOVSKI    

Respondent

DECISION

Tribunal       Mr J Handley, Senior Member      

Date25 February 2000

PlaceMelbourne

Decision      The decision under review shall- a)         be affirmed insofar as it applies to the first semester in 1997; and b)    be set aside insofar as it applies to the second semester and in substitution it is decided that the respondent was overpaid $2,018.78 and this sum is a debt repayable to the applicant.

........  Sgd. Mr J. Handley  ......
  Senior Member
CATCHWORDS
AUSTUDY – incorrect parental income stated in AUSTUDY forms – overpayment occurred – whether debt can be waived due to special circumstances – special circumstances claimed by Social Security Appeals Tribunal to be the absence of a document required to be considered – whether that circumstance is 'special' – decision set aside.
Social Security Legislation Amendment (Youth Allowance Consequential & Related Measures) Act 1998
Student Assistance Act 1973 ss.43B and 43F
Re Beadle & Director General of Social Security (1984) 6 ALD 1

REASONS FOR DECISION

25 February 2000    Mr J Handley, Senior Member                  

1. The applicant applied to review a decision of the Social Security Appeals Tribunal ("SSAT") made on 25 January 1999.  An Authorised Review Officer had affirmed a decision of a delegate of the applicant to raise and recover a debt of $4100.56, being AUSTUDY payments in the 1997 academic year.  The SSAT decided to set aside that decision and substitute a new decision that there was no debt for the first semester of 1997, from 1 January 1997 to 25 July 1997.  It also decided there was a debt incurred in the second semester of 1997, from 26 July 1997 to 31 December 1997, but it should be waived.

2. The facts in this matter are as follows.  On 16 December 1996 the respondent lodged an AUSTUDY Continuing Application form.  On that claim form, the respondent stated that for the 1995-96 financial year, his father's income was $31,676 and his mother's income was $32,980.  It was also stated that both his mother and father would receive or expected to receive Newstart Allowance during 1997.  AUSTUDY was granted to the respondent from 1 January 1997 to 30 July 1997 at the rate of $145 per fortnight. 

3. On 28 October 1997 the respondent lodged an AUSTUDY Application for Current Income Assessment or Special Assessment form.  On that form it was stated that the estimated income of his father for the 1996-97 financial year would be $1,920 and that the estimated income of his mother for the same period would be nil.

4. The respondent provided the applicant with his father's 1996-97 financial year Notice of Assessment, which stated that his father's taxable income for that period was $18,633.  As this amount was below the income threshold permitted, an AUSTUDY payment of $2018.78 was made to the respondent on 31 December 1997.

5. On 7 July 1998 the applicant corresponded with the respondent advising that a data match with the Australian Taxation Office discovered that his parent's combined income for the 1996-97 financial year was $38,351 and not $18,633 as claimed.  This information was also provided to the respondent's parents.

6. Below is a table outlining the taxable incomes of the respondent's parents for the relevant periods-
              1995-96 Financial Year     1996-97 Financial Year     
   Mr K Cvetkovski      $31,676         $18,633         
   Mrs V Cvetkovski     $32,980         $19,718         
   Total              $38,351         

1. On 25 July 1998, a delegate of the applicant decided that the respondent had been overpaid $4,100.56 during 1997 due to the incorrect estimate of the respondent's parent's income.  Based on the actual incomes of the respondent's parents, the delegate decided that AUSTUDY was not payable to the respondent at all during 1997.  The respondent requested a review of this decision on 14 August 1998 and on 8 September 1998 that decision was affirmed by an Authorised Review Officer. 

2. On 11 November 1998 the respondent applied to the SSAT for a review of this decision. On 25 January 1999, the SSAT set aside the decision. In substitution the SSAT found that during the period 1 January 1997 to 25 July 1997 when the respondent's parents were in receipt of Newstart Allowance, the parental income test (in accordance with AUSTUDY Regulation 91) did not apply to the respondent and he was therefore entitled to the AUSTUDY paid in that period. The SSAT further found that the respondent was not entitled to the payment made to him on 31 December 1997 of $2018.78, as the respondent's parent's actual income at that time exceeded the parents income threshold of $37,521. However, it was found that there were special circumstances to justify the waiver of this overpayment, those circumstances being the absence before the SSAT of the AUSTUDY Application for Current Income Assessment or Special Assessment form lodged on 28 October 1997 (found at T7 of the documents lodged pursuant to s.37 of the Administrative Appeals Tribunal Act 1975 ("T documents")). The SSAT stated in their decision that the absence of this document meant it was unable to decide whether or not the overpayment was due solely to administrative error, which it then deemed to be a special circumstance.

3. The applicant applied for review of this decision to the Administrative Appeals Tribunal on 1 March 1999.  Upon hearing on 14 October 1999 the applicant was represented by Mr Frazzetto of counsel.  The respondent appeared unrepresented.  The only issue before the Tribunal was whether the overpayment made to the respondent on 31 December 1997 of $2018.78 should be waived due to special circumstances.  Entitlement to AUSTUDY for the period 1 January 1997 to 25 July 1997 was not contested, in effect, permitting that part of the SSAT decision to be affirmed.
   Legislation

4. The Student Assistance Act 1973 ("the Act") provides for waiver of debts in several circumstances. For the purposes of the current application, the relevant provisions are 43B and 43F of the Act, which relevantly provide-

   "43B    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.
   …
   43F     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 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."

Submissions

1. Mr Frazzetto, on behalf of the applicant, submitted that the SSAT erroneously applied s.43F of the Act. He submitted that the respondent has not demonstrated any circumstances that could be found to be special that would make it 'desirable' to waive the debt. It was also submitted that as the respondent omitted to provide correct details of income on the AUSTUDY Application for Current Income Assessment form he had therefore made a false statement.

2. The respondent submitted that at the time that he lodged the AUSTUDY Application for Current Income Assessment form, he was not aware of the correct amounts that his mother and father had earned in the previous financial year and that he may have misunderstood the form when completing it.  He stated that he is currently permanently employed as a machine operator earning approximately $800 per fortnight and expects to return to study in 2000.  He has a $600 debt (that he repays at $50 per month) and also pays his father small and irregular amounts for his car, which his father helped him purchase. 
   Conclusion & Reasons for Decision

3. In Re Beadle & Director General of Social Security (1984) 6 ALD 1 at 3 the Administrative Appeals Tribunal decided-

   "An expression such as 'special circumstances' is by its very nature incapable of precise or exhaustive definition.  The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional.  Whether the circumstances answer any of these descriptions must depend upon the context in which they occur.  For it is in the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases.  This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special."

4. The SSAT misconceived the provisions of s.43F of the Act and the decision insofar as it applies to the second semester debt must be set aside. At paragraph 30 of its reasons, the SSAT concluded-

   "…that the absence of the key document, that may enable it to make a decision under section 289, had such an effect on this decision so as to render it unjust and unfair for Oliver to be required to repay the debt.  The Tribunal was therefore satisfied that this constituted special circumstances as required by paragraph 290C(b)".

5. The SSAT was in error because the concept of special circumstances as it is found within s.43F demands inquiry of the circumstances of the debtor. The debtor is Mr Cvetkovski. The applicant should have made available all relevant documents to the SSAT and to Mr Cvetkovski. It did not, yet the responsibility of the SSAT would have been to stand down or adjourn the hearing until all relevant documentary evidence was made available to it.

6. The reliance by the SSAT also upon "s.290C(b)" was also misconceived. That section was repealed and replaced by s.43F, which was introduced by Act No. 45 of 1998, the Social Security Legislation Amendment (Youth Allowance Consequential & Related Measures) Act 1998, with effect from 1 July 1998. Whilst the language of ss.43F and 290C is identical, it was an error to rely on repealed legislation.

7. The conjunctive construction of s.43F of the Act initially requires consideration of whether the debtor made a false statement or failed to comply with the Act. Clearly this occurred. The information given by Mr Cvetkovski may be characterised as 'incorrect' or a 'mistake' but it is nonetheless false.

8. I am therefore satisfied-

   I)there was no sole administrative error by the applicant in accordance with s.43B of the Act;

   II)there was a debt of $2,018.78 for the second semester in 1997;

   III)the debt occurred by reason of a false statement made by Mr Cvetkovski; and

   IV)(whilst unnecessary to make this finding) there are no special circumstances which make it desirable to waive the debt.

The decision under review shall- 19.       The decision under review shall- a)         be affirmed insofar as it applies to the first semester in 1997; and b)         be set aside insofar as it applies to the second semester and in substitution it is decided that the respondent was overpaid $2,018.78 and this sum is a debt repayable to the applicant.   

I certify that the 19 preceding paragraphs are a true copy of the reasons for the decision herein of Mr J Handley, Senior Member.

Signed:         .....Carolyn Irons ........................................
  Secretary

Date/s of Hearing  14 October 1999
Date of Decision  25 February 2000
Counsel for the Applicant        Mr Frazzetto
Solicitor for the Applicant         
Counsel for the Respondent    unrepresented
Solicitor for the Respondent