Ehrmann and Secretary, Department of Education Science and Training

[2007] AATA 1441

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2007] AATA 1441

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q 200600417

GENERAL ADMINISTRATIVE DIVISION		)
Re		SUSAN EHRMANN

Applicant

And SECRETARY, DEPARTMENT OF EDUCATION SCIENCE AND TRAINING

Respondent

DECISION

Tribunal Deputy President P E Hack SC

Date7 June 2007

PlaceCairns

Decision

1.      The decision under review be set aside.

2.      The matter to be remitted to the respondent to recalculate the debt on the basis that the applicant was not entitled to Austudy payments from 19 March 2002 to 30 June 2003.

..............................................

Deputy President

CATCHWORDS

SOCIAL SECURITY – overpayment of debt – Austudy payments – whether overpayment should be recovered – whether applicant satisfied activity test – whether applicant was full time student – applicant not a full time student for 2002 and semester one 2003 – applicant not entitled to Austudy payments from 19 March 2002 to 30 June 2003 – waiver and write off provisions not applicable – decision set aside – remit matter to respondent to recalculate debt on basis that applicant was not entitled to Austudy payments from 19 March 2002 to 30 June 2003

Social Security Act 1991 – ss 568, 569(1), 569A, 569C, 569E, 1236, 1237AAD

REASONS FOR DECISION

7 June 2007 Deputy President P E Hack SC    

1.This is an application by Mrs Susan Ehrmann for the review of a decision made on 29 March 2005 to raise and recover an overpayment debt of $13,619.23 in respect of payments of Austudy in the period 19 March 2002 to 1 October 2003.

2.The issues in the case are twofold – whether there was an overpayment and, if so, whether it ought be recovered.

3.By virtue of s 568 of the Social Security Act 1991 a person is qualified to receive Austudy in respect of a particular period if, throughout that period, the person satisfies the activity test, is of Austudy age and is an Australian resident. The second and third of these matters are not in issue. What is in issue is whether, in the period in question, Mrs Ehrmann satisfied the activity test.

4.The activity test is satisfied if, throughout the period the person is undertaking qualifying study: see s 569(1). By virtue of s 569A a person is undertaking qualifying study if the person is enrolled in an approved course of education at an educational institution, is a full-time student and is satisfying the progress rules.

5.In the present case it is necessary only to have regard to the question of full-time study. A person is a full-time student if the person is undertaking at least three quarters of the normal amount of full-time study for that course.

6.The narrow issue here is whether Mrs Ehrmann was a full-time student.

7.Mrs Ehrmann commenced receiving Austudy on the basis of being a full-time student in March 2002. She first enrolled in the Advanced Diploma of Applied Science (Naturopathy) offered by the Australian Institute of Applied Sciences in 2002. The course prospectus indicates that full-time students were expected to complete the course in 3 to 4 years. According to the Institute the full-time study load was 4 subjects per semester. Thus a person undertaking three subjects in a semester would be regarded as being a full-time student for the purposes of the Social Security Act.

8.The material before me establishes that in the first semester of 2002 Mrs Ehrmann completed one subject. She appears not to have completed any subjects in the second semester of that year. In the first semester of 2003 she completed two subjects and in the second semester she completed three subjects. There is no question that after that point she satisfied the requirements of full-time study.

9.The extent of Mrs Ehrmann’s workload was raised by Centrelink in late 2004 and Mrs Ehrmann became aware that she may not have been meeting Centrelink’s requirements. To that point she had not been made aware of the precise requirements. She was told, she says, that the only requirement was that she study for 20 hours per week. That figure appears to come from the definition of the term normal amount of full-time study in s 569E and refers to 20 contact hours per week. As it seems to me it is likely that Mrs Ehrmann could have believed, albeit mistakenly, that 20 hours of study was all that was required even though I regard it as unlikely that she was told that.

10.Once the matter came to the attention of Centrelink in February 2005 following an enrolment check, an overpayment debt of $14,948.32 was raised in March 2005 on the basis that Mrs Ehrmann had not been a full-time student in the period from 19 March 2002 to 30 November 2003. Subsequently on internal review the debt was reduced to $13,619.32 to cover the period from 19 March 2002 to 1 October 2003.

11.The debt, as modified, was affirmed on further internal review and by the Social Security Appeals Tribunal. Hence this application.

12.I have no doubt that in respect of the 2002 year and the first semester of 2003 Mrs Ehrmann was paid Austudy when she was not entitled because she did not then satisfy the statutory definition of full-time study. The second semester of 2003 is not so clear.

13.If, as the Institute says, a full-time study load is 4 subjects, then during this period Mrs Ehrmann was satisfying the requirement of s 569C by undertaking at least three-quarters of that load. There are obvious problems in reconciling the statutory concepts with external courses that advertise the notion of “study at your own pace” but I consider that in this period Mrs Ehrmann was entitled to Austudy allowance.

14.In the absence of evidence of when semesters started and ended I propose to choose 30 June as the end of the first semester and to remit the matter for recalculation on the basis that Mrs Ehrmann was not entitled to Austudy in the period from 19 March 2002 to 30 June 2003.

15.Given that there will remain a debt it becomes necessary to consider the question of its recovery. Two possibilities exist – write off or waiver.

16.There is no question that the overpayment resulted as a consequence of sole administrative error and thus that provision for waiver does not arise. The other provision, s 1237AAD, provides:

“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 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.”

17.Mr McQuinlan, who appears for the Secretary, concedes that paragraph (a) does not arise.

18.Paragraph (b) requires that there be special circumstances, other than financial hardship alone. The cases on special circumstances make it plain that the term is not capable of any precise definition – to do so would be to put a gloss on the legislation. What must be shown are circumstances that make the case different from the usual type of case. What is relied upon here is principally the circumstance where Mrs Ehrmann was not properly informed of the requirements. I am far from satisfied that that is so; rather it seems to me to be more likely that Mrs Ehrmann did not read or properly comprehend the information given to her. But even if that were to be so it does not, in my view, amount to special circumstances. The social welfare system does not operate on the basis that all recipients will have the requirements explained in minute detail; it operates on the basis that recipients will themselves understand the requirements and, where understanding is lacking, make enquiries.

19.I do not regard Mrs Ehrmann’s circumstances as answering the description of “special” and would not waive the remaining debt under s 1237AAD.

20.The matter is one where I consider that the write-off provisions in s 1236 of the Act might have had application had Mrs Ehrmann wished for a period of grace to allow her to establish her new venture however she was not keen to do so and I do not propose to consider the matter further.

21.It will be a matter for Mrs Ehrmann to seek that relief from the Secretary if she wishes.

22.In the result I would set aside the decision under review and remit the matter to the respondent with a direction to recalculate the debt on the basis that Mrs Ehrmann was not entitled to Austudy in the period from 19 March 2002 to 30 June 2003.     

I certify that the 22 preceding paragraphs are a true copy of the reasons for the decision herein of Deputy President P E Hack SC

Signed:         .....................................................................................
  Eleanor O’Gorman, Associate

Date of Hearing  7 June 2007
Date of Decision  7 June 2007
The Applicant appeared in person     

Solicitor for the Respondent  Advocate, Centrelink Legal Services