DSGR and Secretary, Department of Education, Science and Technology
[2007] AATA 1981
•23 November 2007
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2007] AATA 1981
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2007/1189
GENERAL ADMINISTRATIVE DIVISION ) Re DSGR Applicant
And
SECRETARY, DEPARTMENT OF EDUCATION, SCIENCE AND TECHNOLOGY
Respondent
DECISION
Tribunal Mr John Handley, Senior Member Date23 November 2007
PlaceMelbourne
Decision The decision under review made by the Social Security Appeals Tribunal on 21 February 2007 is affirmed.
(Sgd) John Handley
Senior Member
SOCIAL SECURITY – youth allowance – applicant engaged in full time study before 2004 in a double degree course at university – in 2004 she studied one subject only and sat for one examination – applicant not engaged in 2004 for at least three quarters of the amount of full time study – telephone enquiry made to Centrelink of entitlement in 2004 – failure to respond to recipient notices – applicant overpaid – received benefits to which she was not entitled – write off provisions do not apply – debt not to be waived – applicant had no claim to a notional entitlement to another benefit – decision of Social Security Appeal Tribunal affirmed
Social Security Act 1991 (Cth) s 540, s 541, s 541B, s 1223(1), s 1236, s 1237AAC and s 1237AAD
Social Security (Administration) Act 1999 (Cth) s 15, s 68 and s 68(5)
Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25
Beadle and Director-General of Social Security (1984) 6 ALD 1
Groth v Secretary Department of Social Security (1995) 40 ALD 541
Re Huynh and Secretary Department of Social Security (1994) 34 ALD 694
Re Sara and Secretary, Department of Families, Community Services and Indigenous Affairs [2006] AATA 708
Re Schulze and Secretary, Department of Family and Community Services (2004) 81 ALD 636
Re Secretary Department of Family and Community Services and Barhegyi [2005] AATA 635
Ryde v Secretary Department of Family and Community Services [2005] FCA 866
Secretary Department of Family and Community Services v Chamberlain [2002] FCA 67
Secretary Department of Social Security v Hales (1998) 82 FCR 154
Pledger v Department of Famility and community Services [2002] FCA 1576
REASONS FOR DECISION
23 November 2007 Mr John Handley, Senior Member 1. At the commencement of the hearing of the review of this application, the applicant lodged a significant bundle of medical reports and other clinical data relating to a number of illnesses suffered by her. The documents were lodged in support of her application that a debt levied against her, if upheld by these proceedings, should be waived by reason of her special circumstances. Whilst claims arising out of injury are frequently the subject of litigation in this Tribunal, the focus of this review is upon whether the applicant has been overpaid a benefit and whether that overpayment constitutes a debt. That is to say the focus of these proceedings is not upon the applicant's medical history. Additionally, the applicant recently graduated as a lawyer and has joined the Victorian Bar. I agreed with the submission made by her that the private and confidential matters emerging from her illness should not be known beyond those persons who were present during the hearing and her privacy should otherwise be preserved. Accordingly the applicant in these proceedings will be known as DSGR.
2. The applicant appeared at the hearing without representation to seek review of a decision made by the Social Security Appeals Tribunal (SSAT) on 21 February 2007. Mr Carson appeared on behalf of the respondent Secretary.
3. A Centrelink officer decided on 20 September 2006 that the applicant had been overpaid youth allowance within the period 1 March 2004 and 14 September 2004 and raised a debt of $3943.54. An authorised review officer (ARO) varied that decision and found that the overpayment beyond 6 July 2004 should be waived by reason of sole administrative error on the part of the Commonwealth. The SSAT in effect varied the decision made by the ARO and decided that the initial decision made by the Centrelink officer on 20 September 2006 should be affirmed.
the facts
4. Prior to the 2004 academic year the applicant was engaged in full time study undertaking a double degree of law and commerce at Deakin University. By reason of a right arm injury that she suffered some years earlier, she had been unable to complete a number of subjects during the academic year but did attend summer schools where those subjects were undertaken.
5. In the 2004 academic year, the applicant studied in one subject only and was required to attend for an examination in one subject only. It was envisaged that when those subjects were completed she would have completed the degree courses and would be entitled to graduate.
6. In order to determine her continuing entitlement to youth allowance in 2004, the applicant made an enquiry by telephone of Centrelink. She did not identify herself or give her claimant identification number. She said that she explained that she would be undertaking one subject and attending for one examination only. Additionally she explained that she would be required to undertake a short period of practical placement. She said that she was advised by the Centrelink officer that in those circumstances she would continue to have an entitlement to youth allowance.
7. When the applicant's circumstances were reviewed in July 2004 it was ascertained from an officer at Deakin University that she had been engaged in part time study only. Shortly thereafter the applicant's youth allowance payments were suspended.
8. The applicant acknowledged that from time to time she did receive recipient notices compelling her to notify Centrelink of any change in her circumstances. The applicant said however that she relied at all times on the advice that she had received from a Centrelink officer when she made her telephone enquiry. At the hearing, she conceded that she was not a person engaged in full time study in 2004 as defined by the Social Security Act. The applicant said that it was not until August or September 2004 that she understood (for the first time) that she had been in receipt of a benefit in the 2004 year to which she was not entitled. She said that she did not ever mislead Centrelink because by reason of her intention to practice as a lawyer, she was well aware of the risks of prosecution. She said that had she been given correct advice initially she would have attempted to qualify for another benefit.
9. At an interview with a Centrelink officer in August 2004, the applicant said she became aware of a potential entitlement to newstart allowance. She learnt she would be required to attend an information session and claim forms for that benefit would then be allocated to her. She said that she was then distressed, having learnt that she had been overpaid a benefit and that the benefits had been suspended. She said that she did not attend the information session nor did she ever complete claim forms for newstart allowance. She said that she was then scared that she may incur further debt. It was learnt at the hearing that the applicant had previously incurred a debt to Centrelink by reason of an overpayment.
10. In cross‑examination the applicant agreed that she did receive youth allowance in 2004 until August. She also agreed that she studied one subject only and attended for an examination in August 2004. She agreed that she now understood that she could not be regarded as being engaged in full time study but reaffirmed that she had been advised by a Centrelink officer that she would have an entitlement to youth allowance in 2004. She agreed that recipient notices had been sent to her.
reporting obligations
11. The applicant said that she did make an enquiry of Centrelink where she explained the course requirements for 2004. She said that she was advised that she would have a continuing entitlement to youth allowance. However the applicant said that she did not identify herself nor did she disclose her claimant identification number. It would appear from Centrelink practice that telephone calls of that type are not recorded and there is no documented evidence of that telephone call having been made. The applicant said that by reason of the advice that she was given, she continued to receive youth allowance and did not report an alteration in the academic workload in 2004 compared to previous years.
12. The applicant could not recall when she made the telephone call. A recipient notice of 24 December 2003 (T4) compelled her to advise if she ceased being a full time student or if her enrolment at university was varied or if she stopped paying rent or if she started to live with her parents. If the telephone call to Centrelink was made after that notice was received, it is conceivable that the applicant would not have responded to it. Additionally it may well have been that that recipient notice caused the applicant to make the telephone enquiry.
13. However, at T12 there is another recipient notice in almost identical terms dated 20 May 2004. That compelled the applicant to give similar notifications as the recipient notice of 24 December 2003. The applicant did not respond to the notice of 20 May 2004.
qualification for youth allowance
14. Section 540 of the Social Security Act 1991 (the Act) records that a person is qualified for youth allowance if they satisfy the activity test. A person satisfies the activity test pursuant to s 541 of the Act if they are undertaking full time study. Section 541B provides that a person is undertaking full time study if enrolled in a course of education and is engaged for at least three quarters of the normal amount of full time study in respect of the course.
15. It was also learnt at the hearing that the applicant had been paid rent assistance throughout the time that youth allowance had been paid. It was learnt that rent assistance was only payable to the applicant by reason of her being engaged in full time study as defined. Accordingly, the amount raised against the applicant as an overpayment includes a component of youth allowance and a component of rent assistance.
has the applicant been overpaid?
16. I am satisfied that an overpayment has been made. That is to say, the applicant has received a benefit to which she was not entitled. I am also satisfied the applicant is a witness of truth and she did make a telephone enquiry of a Centrelink officer. The applicant said that by reason of her discussion with the Centrelink officer she was advised that youth allowance would be payable. However she had been in receipt of youth allowance as a full time student for some years prior to 2004. In all of those years she was engaged in full time study where she was undertaking a number of subjects each year. She more than satisfied the requirement to be engaged in at least three quarters of the normal amount of full time study in each of those years. Perhaps having the course requirement in 2004 so dramatically reduced caused the telephone enquiry to be made but her obligation to comply with recipient notices should have alerted her, at least to the potential of not having an entitlement to ongoing benefits. The notice of December 2003 – before the start of the 2004 academic year – unambiguously put her on notice that continuing entitlement to benefits was in doubt. The applicant is an intelligent person. If the telephone enquiry was made after the December notice was received, she should have clarified her entitlement, if any. As the recipient of public monies, I think she was careless in failing to ensure, by proper enquiry, whether she did have an entitlement to benefits in 2004. The recipient notice of 20 May 2004 (T12) should have caused the applicant to make further enquiries of Centrelink about her continuing entitlement because she was then (again) directed to notify if she had stopped being a full time student or if her enrolment had varied. Clearly, she was then no longer a full time student, irrespective of the advice that she had received. Obviously, her enrolment had varied because compared to previous years, in 2004 she was undertaking one subject only and undertaking one examination. The applicant should have responded to at least to the recipient notice of 20 May 2004 and had she then made the disclosures to which she was required it is unlikely that a benefit would have been paid beyond the date of notification. Authority for issuing recipient notices is found at s 68 of the Social Security (Administration) Act 1999 (the Administration Act). That section records that the Secretary may issue a notice that requires a recipient to inform the Department if a specified event or change of circumstances occurs. Sub-section (5) provides that an event or change of circumstance shall only be specified in the notice if it might affect a social security payment or qualification.
17. Section 1223(1) of the Act provides that if a social security payment is made to a person who is not entitled to obtain the benefit of that payment, the amount paid is a debt due to the Commonwealth.
should the secretary write off or waive the debt?
18. Section 1236 of the Act provides that the Secretary may write off the debt only if it is not recoverable at law or if the debtor has no capacity to repay it or if the whereabouts of the debtor are not known after reasonable efforts have been made to locate the debtor or it is not cost effective to take action to recover the debt. I am not satisfied that any of those circumstances are applicable and accordingly the debt cannot be written off.
19. The Secretary must waive recovery of the proportion of a debt attributable solely to administrative error made by the Commonwealth if a debtor received the payments giving rise to that proportion of the debt in good faith. I am not satisfied that if any error was made by the Commonwealth, that the debt was solely attributable to it.
20. For reasons expressed earlier, if the applicant had been advised by the telephone enquiry that she was entitled to youth allowance, she should surely have been alerted, by the recipient notices of December 2003 and May 2004 that she was not engaged in full time study and her course had been varied. She should have reported those circumstances to the Commonwealth. She should also have understood that by reason of a comparison between the course requirements of previous years and the course requirement of 2004 that a continuing entitlement to youth allowance was seriously in doubt. Had she responded to the notices, she would not have been overpaid. Even if part of the debt could be attributable to sole error on the part of the Commonwealth I doubt that by acting on the advice given by telephone only, that benefits were subsequently received in good faith (refer Pledger v Department of Famility and community Services [2002] FCA 1576 at paragraph 59).
21. Section 1237AAC of the Act provides that a debt must be waived if the debtor or the debtor's partner had an entitlement to unclaimed family payment or family allowance. That section does not apply to these proceedings.
22. Section 1237AAD provides that the Secretary may waive all or part of a debt if the debt
(i)did not result wholly or partly from the debtor knowingly making a false statement or false representation or failing to comply with the provision of the Act; and
(ii)there are special circumstances other than financial hardship alone making it desirable to waive; and
(iii)it is more appropriate to waive than to write off the debt.
23. I am not satisfied that the applicant made any false statement or any false representation but the debt did result wholly or partly by her having failed or omitted to comply with a provision of the Act namely, either failing to disclose that she was no longer a full time student or failing to declare that her course had varied.
24. All parts of this section of the Act must be satisfied. Whilst it is not therefore necessary – because of the findings in the previous paragraph – to consider the remainder of this section – I will do so for reasons which will become apparent later.
25. The remainder of this section prohibits (when reviewing whether special circumstances exists) consideration of whether there is financial hardship. For the purposes of this analysis, it should be recorded that the applicant has incurred expenses over the last few years. She borrowed heavily from her parents to undertake the Leo Cussen Practical Training Program and incurred considerable expense associated with that program. She has also joined the Victorian Bar where she had incurred considerable expense to date and will incur additional expense when Chambers are allocated to her. She has earned some fees to date but most of the fees paid have been expended on costs associated with commencement of practice.
26. The applicant has also incurred very considerable medical costs with respect to treatment that she has undertaken for a number of illnesses. She does not have private health insurance. The illnesses suffered by the applicant are deserving of consideration.
27. Some years ago the applicant was diagnosed with suffering from insulin resistance which she said is a phenomena where her body will not metabolise insulin naturally occurring. Administration of insulin has caused illness with a probability being expressed to her by her medical practitioners that within five years she will be diagnosed with diabetes. The inability of the applicant to metabolise insulin has also caused considerable weight gain which has affected other illnesses from which she suffers.
28. The applicant also suffers a condition known as hidradenitis suppurativa which causes considerable pain in the applicant's arms and legs. This illness also causes severe pain on movement of limbs and joints. The applicant said that the condition is worse by heat and when she is stressed. She refuses to take pain killers because of her fear of addiction. The cause of the illness is not known but there is a suspicion that it is related to the insulin resistance. The applicant has been told that there is no known cure for it and there is a probability that the condition will become worse.
29. The applicant also suffers from acanthosis nigracans being a condition which causes pigmentation and scarring of her skin. This condition may also be associated with insulin resistance. It is regarded by her medical practitioners as being rare with no known cure.
30. The applicant also suffers from polycystic ovary syndrome which is thought to have a likely association with insulin resistance. It affects her fertility, causes a hormone imbalance and may cause complications with pregnancy.
31. There have been occasions where the applicant has been unable to work as a Barrister because of these illnesses but she has not returned or refused briefs because of illness.
32. In Groth v Secretary Department of Social Security (1995) 40 ALD 541 Kiefel J decided that whilst the expression special circumstances was imprecise, for it to be established it 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. Her Honour reached a similar conclusion in Secretary Department of Family and Community Services v Chamberlain [2002] FCA 67 (refer also Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25).
33. In Ryde v Secretary Department of Family and Community Services [2005] FCA 866 Branson J decided that special circumstances would not be established only if those circumstances were unusual, uncommon or exceptional. It was decided, by reference to the Federal Court decision of Secretary Department of Social Security v Hales (1998) 82 FCR 154 that a flexible response to the wide range of circumstances which could give rise to hardship or unfairness must be sufficient to justify departure from the general rule in the particular case.
34. When financial hardship alone is excluded from the analysis of whether circumstances are special, consideration must also be given to whether it is desirable to waive because of the special circumstances.
35. It may be thought that illness is not a circumstance which is special because it is something which is unfortunately suffered or endured by many people. That is to say, illness is not something which may be regarded as being unusual, uncommon or exceptional (refer Beadle and Director-General of Social Security (1984) 6 ALD 1). Serious illness, as in the case of the applicant, could be regarded as being unfair, unintended or unjust but is it sufficient to justify departure from the general rule? The section does not require consideration of the special circumstances only. The circumstances alleged to be special must make it desirable to waive the debt. I readily acknowledge that the medical circumstances endured by the applicant for many years have caused her considerable distress and discomfort. There is much to indicate that her conditions will deteriorate but to date she has been able to complete a double degree and graduate, she worked as a solicitor and then joined the Victorian Bar. She has not lost any work or had to return any briefs because of illness. Had I been permitted to consider the applicant's financial circumstances I probably would have found special circumstances because she has experienced hardship, largely associated with incurring considerable costs for treatment in the absence of private health insurance.
36. The applicant received a benefit to which she was not entitled. Those benefits were paid from the public purse. On balance I am not satisfied that the circumstances of the applicant make it desirable to waive the debt.
37. In concluding this part I can find no reason to determine that it would be more appropriate to waive than to write off the debt or part of the debt. I would think however that by reason of the applicant's financial circumstances it would be prudent on the part of the Commonwealth to give consideration to defer collection of the debt for a period of time to permit the applicant to become more financially stable or to enter into an arrangement with her that would permit, with some confidence, the ability to repay by instalments.
is there a notional entitlement?
38. The applicant submitted, (by way of expanding her submissions that the debt be waived), that during the time that she was paid youth allowance in 2004 she had a notional entitlement to newstart allowance. That is to say, had she been paid newstart allowance instead of youth allowance, there would not have been an overpayment. In pursuing this submission the applicant relied on a recent decision of the Tribunal in Re Sara and Secretary, Department of Families, Community Services and Indigenous Affairs [2006] AATA 708. In that decision the Presiding Member acknowledged decisions previously made by the Tribunal on the issue of notional entitlement and decided that except for the provisions contained within s 1237AAD, the discretion as to whether a debt should be waived was relatively unfettered.
39. A number of decisions of the Tribunal have considered whether a debt can be offset by a notional entitlement when considering waiver in special circumstances (refer Re Schulze and Secretary, Department of Family and Community Services (2004) 81 ALD 636; Re Huynh and Secretary Department of Social Security (1994) 34 ALD 694; Re Secretary Department of Family and Community Services and Barhegyi [2005] AATA 635).
40. In Huynh the Tribunal decided that the circumstances giving rise to the overpayment (and therefore whether the overpayment should be offset by the notional entitlement) should be carefully considered and if the overpayment was fraudulently obtained it would weigh heavily against any notional entitlement to another benefit.
41. In Schulze the Tribunal noted that the legislation was amended by s 1237AAC to provide for set off by notional entitlement only in the limited circumstances with respect to family allowance or family payment.
42. In Barhegyi it was decided that there is no room to introduce a concept of notional entitlement in that of special circumstances in s 1237AAD(1) of the Act.
43. From my part, whilst I would not exclude the possibility of the circumstances of a person being so special that set off by notional entitlement could never be permitted, I would think that those circumstances would be unusual and set off by notional entitlement would be a relatively uncommon occurrence.
44. But for s 1237AAC and the very limited circumstances of s 15 of the Social Security (Administration) Act 1999 (the Administration Act), I know of no legislative basis permitting set off of a debt by a notional entitlement.
45. In circumstances where a discretion may be exercised, subject to it being fettered by the legislation as is the case under s 1237AAD, consideration would need to be given as to why the notional entitlement was in fact not claimed. In the present application, newstart allowance was not claimed because the applicant was receiving youth allowance. Had she been more alert to whether she had an entitlement to that benefit before 1 March 2004, she may well have then considered applying for the newstart allowance. In all probability, that benefit would have been paid. Unlike Sara, criticism cannot be levelled at Centrelink for failing to advise of an entitlement to newstart allowance because Centrelink, in the absence of responding to recipient notices, was of the belief that the applicant had an entitlement to youth allowance.
46. Section 15 of the Administration Act refers to circumstances where if an incorrect claim is made and a subsequent claim is made for which there is qualification, subject to the remaining provisions of the section, the incorrect claim initially made is deemed to be the claim subsequently made. That section has no application in the present circumstances because the applicant did not ever make a subsequent claim and the claim initially made was the correct claim (because before the first semester of 2004 the applicant in fact did have an entitlement to youth allowance).
47. On balance I am not satisfied that it would be appropriate to consider any notional entitlement in deciding whether it would be appropriate to waive the debt. I am also of the view that having regard to the manner in which s 1237AAD is presently constructed, consideration of notional entitlement would only occur in very limited and unusual circumstances. By way of conclusion I note that s 1237AAD in its present form was inserted by Act No 143 of 2005, replacing s 1237AAD in its previous form and in the form that applied when Barhegyi was decided.
conclusion
48. For all of the forgoing reasons I am satisfied that the decision under review made by the SSAT on 21 February 2007 should be affirmed.
I certify that the 48 preceding paragraphs are a true copy of the reasons for the decision herein of:
Mr John Handley, Senior MemberSigned: Grace Carney, Personal Assistant
Date of Hearing 12 November 2007
Date of Decision 23 November 2007
Solicitor for the Applicant Self Represented
Departmental Advocate Andrew Carson
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