DeLuca and Secretary, Department of Education, Science and Training
[2007] AATA 1925
•5 November 2007
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2007] AATA 1925
ADMINISTRATIVE APPEALS TRIBUNAL )
) No Q2007/41
GENERAL ADMINISTRATIVE DIVISION ) Re ADAM DELUCA Applicant
And
SECRETARY, DEPARTMENT OF EDUCATION, SCIENCE AND TRAINING
Respondent
DECISION
Tribunal Dr EK Christie, member Date5 November 2007
Place Brisbane
Decision The decision under review is set aside. The Tribunal substitutes the following decision: The overpayment over the period 1 August 2005 to 31 January 2006 is waived for “special circumstances”. This means Mr DeLuca’s application is successful.
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DR EK CHRISTIE
CATCHWORDS
SOCIAL SECURITY – Austudy – external study - overpayment -– special circumstances – waiver - whole or part of the debt – write-off.
Social Security Act 1991 s 1236, 1237A, 1237AAD
Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60
Australian Tea Tree Oil Research Institute v Industry Research and Development Board (2002) 124 FCR 316
Prince v Secretary, Department of Education, Employment and Youth Affairs [1997-98] 50 ALD 186
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Re Dean and Secretary, Department of Education, Employment and Youth Affairs [2005] AATA 586
Woodward and Department of Family and Community Services [2001] AATA 818
Secretary, Department of Family and Community Services and Temesgea [2002] AATA1290
Hill and Secretary, Department of Family and Community Services [1999] AATA 909WRITTEN REASONS FOR DECISION
5 November 2007 Dr EK Christie, Member 1. This is an application by Adam DeLuca for a review of the decision made by the Social Security Appeals Tribunal (the “SSAT”) on 6 December 2006 to raise and recover an Austudy debt in the sum of $4731.64 for the period 1 August 2005 to 31 January 2006.
2. The evidence before the Tribunal comprised the documents filed pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (the “T” documents) [Exhibit 1] and the various exhibits lodged by the parties.
3. The applicant represented himself at the hearing. The respondent was represented by Mr B Avery, a Departmental Advocate.
Issues before the Tribunal
4. The only issues to decide were whether the debt due to the Commonwealth could be waived, in part or in full, for “special circumstances”.
5. The debt due to the Commonwealth is being currently recovered by instalments of $15 per fortnight.
6. At the end of the hearing and with the consent of both parties, I exerted the Tribunal’s inquisitorial powers in order to clarify specific issues on enrolment and external course (or “distance education”) teaching and assessment procedures that operate at the Australian Institute of Applied Sciences. The Institute (ie its staff) were not called to give evidence at the hearing. Dr James Anderson, the Institute Director, provided a detailed response that was filed on 20 July 2007.
FACTUAL EVIDENCE
7.Based on the evidence before it, the SSAT made the following findings of fact:
“(i)From June 2004 to at least June 2006, Mr DeLuca was enrolled in and undertaking courses at the AIAS: initially the Advanced Diploma of Naturopathy course and, from sometime in 2006, the Diploma of Remedial Massage course.
(ii)A full-time student in the Advanced Diploma of Naturopathy course typically completes a subject per month on average.
(iii)During the period under review Mr DeLuca partly undertook one subject.”
The Tribunal’s Decision-Making Powers
8. There are a range of decisions possible in this application for review and so the question to determine is whether the decision under review was the preferable one on the material before the Tribunal: see Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60 at 68..”
9. In this application for review, I consider all the evidence and information before me at the date of the hearing, including the supplementary submissions in relation to the Tribunal Direction seeking information on administrative procedures on enrolment as provided by the Australian Institute of Applied Sciences: see Australian Tea Tree Oil Research Institute v Industry Research and Development Board (2002) 124 FCR 316 at 324-326.
Statutory Requirements And Case Law
10. The qualifications of Austudy are set out in s 568 of the Social Security Act 1991 (“the Act”):
“568 Qualification for austudy payment--general rule
Subject to this Subdivision, a person is qualified for an austudy payment in respect of a period if, throughout the period:
(a) the person satisfies the activity test (see Subdivision B); and
(b) the person is of austudy age (see Subdivision C); and
(c) the person is an Australian resident. “
11. Mr DeLuca may satisfy the activity test by “undertaking qualifying study”. This term is defined in s 569A as follows:
“569A Undertaking qualifying study
For the purposes of this Part, a person is undertaking qualifying study if:
(a) …
(c) the person is a full-time student or a concessional study-load student in respect of that course (see sections 569C and 569D); and …”
12. At issue in this case is whether Mr DeLuca satisfied paragraph (c). The respondent’s case is that Mr DeLuca did not satisfy paragraph (c) because his enrolment in one of the three semesters he received Austudy was less than that required of a “full-time student”.
13. Section 569C states relevantly:
“569C Full-time students
For the purposes of this Subdivision, a person is a full-time student in respect of a course if:
(a) in the case of a person who is enrolled in the course for a particular study period (such as, for example, a semester)—the person is undertaking at least three quarters of the normal amount of full-time study in respect of the course for that period; …”
14. Section 569E(1)(a) defines the “normal amount of full-time study” in respect of the course as the “standard student load determined in respect of the course by the institution” under subsection 39(2) of the Higher Education Funding Act 1988. That subsection provides for the institution to determine a standard student load representing “an equivalent full-time student unit” (EFTSU). Subjects undertaken by a student are then accorded a proportion of the EFTSU in accordance with the number of subjects required to be undertaken by the student for that student to be maintaining a standard student load.
15. The following details on enrolment, teaching and Austudy requirements relating to courses offered by the Australian Institute of Applied Science have been summarised from the report filed by Dr Anderson:
(a)The academic year for external students is a 12 month period. There are two six month semesters in the academic year. Within this timeframe there are semester breaks, so that each semester averages 17 weeks of study/coursework for external students;
(b)An external student can commence study at any time throughout the year. Once a student commences study, this is also the start date for the 12 month academic year. For external students, the start date for the academic year is the date the Institute despatches the course materials purchased by the student;
(c)The Institute does not provide any notification to the student on course duration status as they progress through their external studies. Course duration information is discussed with the student on enrolment and is set out in the student handbook. The timeframe for each course is also listed on the prospectus; and
(d)Students can change their course of study within the Institute.
16. In terms of full-time study requirements and equivalent full-time student units (EFTSU):
(a)The Advanced Diploma of Naturopathy is registered as a three year course of 36 subjects (or “units”). For external students to be classed as full-time they would have to complete 12 subjects, or six subjects per semester. The arrangement with Centrelink, is that this equates to nine subjects per academic year to be classified as a full-time student breaking down to a minimum of four subjects a semester.
(b)The Diploma of Remedial Massage is registered as a two year course of 20 subjects. For external students to be classed as a full-time student, they would have to complete ten subjects per year. The arrangements with Centrelink is that this equates to eight subjects per year, breaking down to a minimum of four subjects per semester. [Attachment to the report of Dr Anderson]
17. The above provisions are relevant in determining whether Mr DeLuca received an overpayment of Austudy during the period he was studying at the Australian Institute of Applied Sciences. Such an overpayment would constitute a debt due to the Commonwealth under the Social Security Act. However, provision is also made for the recovery of the whole or part of a debt to be waived in certain limited circumstances.
18. The relevant provision in Mr DeLuca’s case is s.1237AAD of the Act which provides that a debt due to the Commonwealth may be waived, either in part or in full, because of “special circumstances”:
“1237AAD – WAIVER 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 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 [Tribunal emphasis].”
19. For this section of the Social Security Act to apply to Mr DeLuca’s factual situation, there must be “special circumstances” that led to the overpayment of social security entitlements. In addition, Mr DeLuca must not have “knowingly” made a false statement or false representation or failed to have complied with a provision of the Social Security Act. Both these requirements must be satisfied for Mr DeLuca to succeed under the “special circumstances” provisions of the Social Security Act.
20. The Tribunal has had to consider the meaning and application of the expression “special circumstances” on many occasions. The decision of the Tribunal in Re Beadle and Director-General of Social Security (1984) 6 ALD 1 has been an oft-quoted benchmark as to the interpretation of “special circumstances”. In that case the Tribunal said (at 3):
“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 circumstances answer any of these descriptions must depend upon the context in which they occur. For it is 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.”
21. In Groth v Secretary, Department of Social Security (1995) 40 ALD 541 (a case on “special circumstances” and section 1184 of the Act) at 545, Kiefel J, after referring to the Federal Court’s decision in Beadle, observed that special circumstances:
“…would require something to distinguish Mr Groth’s case from others, to take it out of the usual or ordinary case…It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary.”
22. The principles in Re Callaghan and Secretary, Department of Social Security (1996-1997) 45 ALD 435 are relevant with respect to the meaning of "knowingly" at Paragraph 48:
“There is nothing in s 1237AAD which suggests that the word 'knowingly' should be given any meaning other than that a person has actual knowledge, rather than constructive knowledge, that he or she is making a false statement or representation of that he or she is failing or omitting to comply with a provision of the Act. That actual knowledge is to be ascertained by reference to the statements of the person as to his or her actual state of knowledge at the time and to events surrounding the false statement or the act or omission debt”; and
Later at paragraph 50,
“Knowingly omitting them is something different from fraudulently omitting them and I draw the distinction in this case” [Tribunal emphasis].
Consideration of the Issues
23. Based on the Institute’s records, the start date for the Associate Diploma of Naturopathy was 3 June 2004. This means that the first semester of external study would end on 3 December 2004.
24.Mr DeLuca claimed Austudy on 9 August 2004 (T1, Folio 7).
25. On 21 September 2004, Centrelink wrote to Mr DeLuca advising that he would be paid Austudy from 9 August 2004 based on his full-time enrolment at the Institute. The commencement date for Austudy was later varied to 26 July 2004 (T1, Folio 7).
26. Based on an examination of Centrelink records, the SSAT concluded (at T1, Folio 8):
·“After conducting an enrolment check with the AIAS, Ms Beacham [of Centrelink] raised a debt against Mr DeLuca on 13 April 2005 in the amount of $1873.93 for the period 9 August 2004 to 31 October 2004. According to the debt notice, the AIAS had advised that Mr DeLuca had completed examinations in four subjects by the end of March 2005, and ‘this means that you met the 75% rate of work in your Advanced Diploma from 1 Nov to 31 March 2005 but not before”.”
·“On 29 April 2005 Mr DeLuca sent a fax to Centrelink explaining how a number of family traumas had impeded his initial attempts at study. He commented ‘it was the end of November before I was able to return to a normal study routine.”
·“On 4 August 2005 Ms Beacham waived the $1873.93 debt under the special circumstances waiver power.”
27. Mr DeLuca’s evidence on the traumatic events in his life in 2004 (Exhibit 3) can be summarised as follows:
· Mr DeLuca, unexpectedly, became unemployed in June 2004. He and his wife decided to move from their residence at Coolum to Rockhampton as they could rely on parental support, as both their families lived in Rockhampton.
· All their furniture and belongings were stored at the home of Mr DeLuca’s parents.
· Their daughter was born at Rockhampton on 28 July 2004. For three weeks after birth, the baby was placed in a special care unit with breathing difficulties. This period was very stressful for him.
· In September 2004, his family’s home was burnt to the ground. All of Mr DeLuca’s furniture and belongings stored at his parent’s home was lost. He had no insurance to cover the stored furniture.
· Mr DeLuca’s mother suffered burns and smoke inhalation from the fire. She was later hospitalised suffering from depression and post-traumatic stress disorder;
· Mr DeLuca’s father is wheel chair bound with muscular dystrophy and so Mr DeLuca was needed to help around the family home destroyed in the fire “searching for stuff, erecting fences and cleaning up the mess”.
· As his parents had nowhere to live, he spent a great deal of time converting a barn into a temporary dwelling until such time as they could be re-established in a permanent home;
· This period was a devastating one for himself and his entire family. Following the fire at his parent’s home at Rockhampton a great deal of time was spent travelling from his residence at Peachester (6½ hours away) to assist his parents. This assistance continued for a number of months.
· During this time Mr DeLuca described himself as “running on empty with the shock of it all”. The worry and stress about his family, together with the constant travel, made study impossible. It was not until the end of November 2004, that he returned to a normal study routine.
28. In his oral evidence, Mr DeLuca stated that the stressful and traumatic events in 2004 continued to affect him in 2005. His judgement was impaired and he was confused. He lost perspective of time frames. His capability to undertake assessment work in his studies was affected. All his studies in remedial massage involved practical work. However, because of his depression, his confidence deteriorated, so that progress in his studies was hindered.
29. The impacts of trauma and stress on Mr DeLuca, from August 2005 to January 2006, were corroborated by an allied health professional Cresta Clark, a practising Iridologist in Rockhampton. She had seen Mr DeLuca three times as a patient, over this period. She said that he was emotionally distressed, unhappy in life and the direction he was in. She said that he spoke of his feelings of depression, that he was physiologically very sad and had broken down. She stated that during this period Mr DeLuca was not coping emotionally.
30. Mr DeLuca telephoned the Institute on 7 October 2005 to discuss the course and that he “wants to complete a diploma of [remedial] massage and then go on to the [Advanced Diploma] of nat [naturopathy]:the report of Dr Anderson.
31. Mr DeLuca had no idea that he had to formally apply in writing to change his course structure at the Institute from naturopathy to remedial massage. Moreover, it is relevant that an Institute File Note titled, “Student Action”, on 7 October 2005 (actioned by Chyrel), surprisingly, did not advise Mr DeLuca that he had to apply formally in writing to change his course structure – notwithstanding that he rang to discuss this issue with this Institute staff member.
FINDINGS
32. I find Mr DeLuca to be a credible witness who, at all times, has acted honestly in his dealings with Centrelink and the Australian Institute of Applied Sciences
33. I find, at no time over the period June 2004 to January 2006, that Mr DeLuca knowingly made a false statement or false representation to Centrelink or had knowingly failed to comply with a provision of the Act. For the relevant overpayment period 1 August 2005 to 31 January 2006, I cannot conclude that Mr DeLuca had actual knowledge of any such events because of the impacts of emotional distress and depression arising from the traumas in his life. Moreover, it is significant fact that he continued to raise queries, over time, with Centrelink and the Institute on his Austudy eligibility. However, he received conflicting information on some occasions - information upon which he relied.
34. I agree with the following summary on Mr DeLuca’s course progress in external studies at the Institute as described by the SSAT (T1, Folios 11,12):
· “A ‘Study Period’…. for an external student is 6 months or other such period as is more appropriate for the student, depending on their pattern of study – purchase and completion of Subjects”;…
· In the period June/August 2004 to 31 October 2004, Mr DeLuca was enrolled in four subjects but did not complete any. He was not a full-time student but the austudy overpayment was waived.
· In the period 1 November 2004 to 31 March 2005, Mr DeLuca completed the four subjects. This is four subjects over a 22 week period, and so Mr DeLuca was a full-time student for austudy purposes.
· In the period 1 April to 31 July 2005, Mr DeLuca completed three subjects by 15 July 2005. Allowing two weeks after 15 July 2005 for a break, Mr DeLuca completed enough subjects in the 17 week period to be a full-time student for austudy purposes.
· In the period 1 August 2005 to 31 January 2006, …..his workload during this six month period was too low to be classed as full-time.
· In the period 1 February to 4 July 2006 (after which austudy was cancelled at Mr DeLuca’s request) Mr DeLuca under took seven subjects. Over the 22 week period, this was ample to make him a full-time student for austudy purposes.”
35. Mr DeLuca’s evidence that he contacted the Institute in March 2005 and changed his enrolment from naturopathy to remedial massage is supported by the following conclusion of the SSAT:
“… support for his contention can be found in Ms Beacham’s computer document dated 26 May 2006, as annotated on 19 July 2006, where she reports an AIAS staff member saying that Mr DeLuca ‘had started in Diploma of Remedial Massage subjects 16.3.05’.” (T1, Folio 10)
36. It is also relevant that an Action Statement, prepared by a staff member of the Institute, on the change in course structure (see paragraph 31) makes no mention of Mr DeLuca being advised to make such a request in writing.
37. Accordingly, I find that Mr DeLuca’s programme of study at the Institute changed from naturopathy to remedial massage from semester two on.
38. Nevertheless, over the relevant debt period 1 August 2005 to 31 January 2006, Mr DeLuca’s academic progress was too low for him to be classed as a full-time student. Only one subject was completed, Remedial Massage 1 (T29, Folio 113); he had also purchased one other subject.
39. I find that there are “special circumstances” for the debt to be waived over the relevant debt period for the following reasons.
40. The following facts are “unusual” or “uncommon” – even “exceptional” to take Mr DeLuca’s case “out of the usual or ordinary case”, to justify the description as “special circumstances”:
(a)Mr DeLuca’s emotional and psychological distress – commencing with the problems following the birth of his daughter in July 2004, followed by the fire at his parent’s home in September 2004, continued through 2005 and up to the end of the overpayment period, 31 January 2006. The trauma impacts left him distraught, confused and depressed and impaired his capacity in terms of the extent he could manage his affairs and to make rational decisions whilst suffering emotional distress and depression. Evidence of the confused state of mind of Mr DeLuca arising from his depressive condition and emotional distress is that he interpreted the Centrelink decision of Ms Beacham (paragraph 26) as giving him a four month reprieve in extending the start date of his external studies at the Institute.
(b)In its analysis of AAT case law on mental and emotional distress and depression and their impacts on a social security recipient’s capability to manage their affairs - including limitations on rational thought, the Tribunal in Re Dean and Secretary, Department of Education, Employment and Youth Affairs [2005] AATA 586, concluded that these circumstances were “special circumstances” because of the impacts of the emotional distress and depression.
(c)I accept Cresta Clark’s evidence as an allied health professional that the depressive, emotional condition of Mr DeLuca persisted throughout the relevant debt period such that the symptoms she observed were of a person not coping mentally or emotionally.
(d)I accept Mr DeLuca’s evidence that he sought to remediate his depressive condition via natural medicine rather than conventional medicine. Treatment with anti-depressants would be the antithesis for a student of naturopathy. His failure to pursue conventional medicine was reflected in his evidence that he did not support such an approach and relied, instead on natural medicine to deal with his condition.
41. A further relevant consideration for the exercise of discretion under the “special circumstances” provision is whether a query had been raised by a social security recipient and the reliability of the advice given. This, in fact, is the situation for Mr DeLuca (T7, Folios 71, 72): 18 January 2005; 25 January 2005). However, Mr DeLuca’s response and interpretation of the advice received from Centrelink needs to be considered in terms of his ongoing depressive condition and emotional distress on his ability to think rationally and to manage his day to day affairs.
42. It is also a relevant consideration that Centrelink considered the trauma experienced by Mr DeLuca, in very broad terms, as representing “special circumstances” to justify waiver of overpayments for the period 9 August 2004 to 31 October 2004 as he did not meet the eligibility requirements for Austudy during this period.
43. However, the impacts of the trauma have persisted, beyond 31 October 2004 as is clear from the oral evidence provided at the Tribunal hearing by Mr DeLuca and corroborated by Cresta Clark.
44. The Tribunal in Re Dean and Secretary, Department of Education, Employment and Youths Affairs [2005] AATA 586 reviewed the following cases as coming within the meaning of “special circumstances” because of the impacts of the medical condition on the social security recipient. The Tribunal in Dean’s case concluded that the application of “special circumstances” involved a consideration of the impacts of the medical condition on the Social Security recipient’s capacity to make rational decisions in managing their day to day affairs:
vWoodward and Department of Family and Community Services [2001] AATA 818
The applicant suffered from emotional and psychological trauma was distraught, disorganised and severely depressed and distressed at the time of overpayments of social security benefits and impaired to the extent she was unable to manage her affairs.
vSecretary, Department of Family and Community Services and Temesgea [2002] AATA 1290
The “respondent’s prevailing state of mental and emotional distress at the time the debt was incurred” reduced the respondent’s ability to understand his obligations and responsibilities under the Act.
vHill and Secretary, Department of Family and Community Services [1999] AATA 909
The applicant was being treated for severe depression. The applicant had trouble thinking rationally” and exhibited confusion and difficulty with decision-making. The Tribunal accepted that the applicant was not capable of great feats of rational thought and had impaired cognitive functions.
45. Applying the legal principles from Dean’s case and associated Tribunal case law, I conclude that over the relevant debt period, 1 August 2005 to 31 January 2006, Mr DeLuca’s ongoing depressive condition and emotional distress are such as to warrant the description of “special circumstances” because of the sources of the trauma he had experienced, and their impacts (i.e. a depressive condition and emotional distress), are “unusual”, even “exceptional”. The impacts of his depressive condition and emotional distress in affecting his ability to think rationally and to manage his day to day affairs, together with his impaired judgement, confused and lost perspective of time frames, have produced a situation which takes Mr DeLuca’s case out of the usual or ordinary case. The outcome, in such circumstances, would be unintended or unjust.
DECISION
46. The decision under review is set aside. The following decision is substituted: The overpayment over the period, 1 August 2005, to 31 January 2006, is waived for “special circumstances”.
I certify that the 46 preceding paragraphs are a true copy of the reasons for the decision herein of Dr EK Christie, Member
Signed:
V Limu, Personal AssistantDate/s of Hearing 11 July 2007
Date of Decision 5 November 2007
Applicant Mr P DeLuca himself
Respondent Mr B Avery, Departmental Advocate
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