Ejueyitsi and Secretary, Department of Social Services (Social services second review)

[2017] AATA 1321

Ejueyitsi and Secretary, Department of Social Services (Social services second review) [2017] AATA 1321 (18 August 2017)

Division:GENERAL DIVISION

File Number:           2016/3029

Re:Vincent Ejueyitsi

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

DECISION

Tribunal:Mr D. J. Morris, Member

Date:18 August 2017

Place:Perth

The decision under review is affirmed.

..........[sgd].............................................................

D. J. Morris, Member

CATCHWORDS

SOCIAL SECURITY – Austudy allowance – overpayment – where Applicant failed to report change of circumstances – whether debt should be waived – no special circumstances – no financial hardship – decision under review affirmed

LEGISLATION

Budget Savings (Omnibus) Act 2016

Social Security Act 1991, ss 568, 569C, 592D, 592F (rep), 1236, 1237A, 1237AAD

Social Security (Administration) Act 1999, ss 66A, 68, 126

CASES

Angelakos v Secretary, Department of Employment and Workplace Relations (2007) 100 ALD 9

Ward v Commissioner of Taxation [2016] FCAFC 132

REASONS FOR DECISION

Mr D. J. Morris, Member

18 August 2017

1. Mr Vincent Ejueyitsi sought a review of a decision by the Social Services and Child Support Division (AAT1) of 27 April 2016 which affirmed a decision by an officer of the Department of Human Services (the Department) to raise and recover a debt in the amount of $9,817.34 (T2).  The Respondent contended that the debt arose as Mr Ejueyitsi was not a full-time student but continued to receive payments of Austudy and associated benefits in the period between 22 June 2014 and 28 January 2015.

2. On 28 February 2012, Mr Ejueyitsi applied for Austudy payment on the basis of his enrolment in a Bachelor of Laws course at Deakin University, commencing on 1 March 2012 and concluding on 14 November 2014.  He then changed courses and the Department wrote to him on 22 March 2013 advising that his Austudy payment was based on full-time study at Griffith University ending on 16 November 2016 (T5).

3. On 21 February 2014, Mr Ejueyitsi was paid a Student Start-up Scholarship to assist with the cost of undertaking study in semester 1 of 2014 (T12).  He was paid a student start-up scholarship to assist with the costs of his study in semester 2 of 2014.

4. On 1 February 2015, the Department notified Mr Ejueyitsi that his Austudy payment was suspended while inquiries regarding his entitlement were made (T15).  On 24 February 2015 the Department raised a debt in the amount of $14,861.94 on the basis that it decided the Applicant had ceased study on 14 March 2014 but received Austudy payment and Student Start-up Scholarship payments during the period 26 February 2014 to 28 January 2015 (T19).

5. On 24 February 2015, Mr Ejueyitsi was notified by the Department that his Austudy payment was cancelled from 14 March 2014 because he was not enrolled at a nominated education institution (T20).

6. On 5 March 2015, Mr Ejueyitsi provided an enrolment statement from the University of Western Australia (UWA) which indicated he was enrolled to complete one subject from 19 February 2015 to 30 June 2015 at an Equivalent Full Time Study Load (EFTSL) of 0.125.

7. In March 2015, an Authorised Review Officer (ARO), an officer of the Department not involved in the original decision, decided to increase the debt to $15,290.50 because Mr Ejueyitsi had not provided evidence of full-time study in the 2014 academic year (T21), but the Applicant in the following month provided a letter dated 28 January 2014 from UWA (T11) indicating that he had been accepted into the Graduate Diploma of Legal Practice course.  He also provided an enrolment statement from the UWA showing that he was enrolled to complete three subjects at an EFTSL of 0.375 (T17).

8. On 1 May 2015, the Department advised Mr Ejueyitsi in writing that his debt was reduced to $9,817.34 for the period 22 June 2014 to 28 January 2015 because he had supplied new evidence of full-time study at UWA in the first semester of 2014 (T25).  On the same date, the Applicant provided enrolment details from Murdoch University indicating he completed one subject in the second semester of 2014 at an EFTSL of 0.166 (T26).  Mr Ejueyitsi also provided a letter from the University of Technology, Sydney, indicating that he had been accepted into a Graduate Certificate in Professional Legal Practice for the summer semester 2015/2016 (T28).

9. Mr Ejueyitsi sought a review of the varied debt decision by the ARO by AAT1. The Department conducted a further review pursuant to section 126 of the Social Security (Administration) Act 1999 (the Administration Act).

10. On 22 February 2016, another ARO affirmed the decision under review.  On 27 April 2016, AAT1 conducted a hearing at which the Applicant gave evidence.  AAT1 affirmed the debt on the basis that Mr Ejueyitsi had failed to advise the Department of his change from full-time to part-time study and the debt could not be waived because of sole administrative error.  AAT1 was not satisfied that there were special circumstances that justified the waiver of the debt (T2).

11. Mr Ejueyitsi sought a review by the General Division of the Tribunal.  The hearing was held on 22 June 2017.  The Applicant represented himself, gave evidence and was cross-examined by the representative of the Respondent, Ms Sharon Sangha.

12. The Tribunal had regard to documents submitted by the Department under section 37 of the Administrative Appeals Tribunal Act 1975 (T-documents), and the written submissions of the Secretary, dated 3 December 2016.

13. The Tribunal also took into evidence:

    ·Additional Outline of Applicant’s Submission dated 4 November 2016 (Exhibit A1); and

    ·Outline of the Applicant’s Submissions, received by the Tribunal on 20 June 2017 (Exhibit A2).

14. The Tribunal outlined the matter before the hearing: whether the Austudy debt has been correctly calculated and raised and, if so, whether the debt is due and payable to the Commonwealth or whether all or part of it should be waived or written off because special circumstances apply in accordance with the relevant provisions of the Social Security Act 1991 (the Act).

    THE LAW

15. The general rule for qualification for Austudy payment is set out in section 568 of the Act.  The general rule requires that a person claiming Austudy payment satisfies the activity test which can include full-time study, which is further defined in section 569C, or concessional study-load as defined in section 569D of the Act.

16. Additionally, section 592F(2) of the Act sets out the required criteria for a claimant to be qualified to receive a student start-up scholarship payment including that the person is receiving Austudy payment at the time the person qualifies.   This particular section has been repealed by the Budget Savings (Omnibus) Act 2016 but was the law at the time the reviewable decision was made and AAT1 heard this matter and made a decision.

17. Section 68 of the Administration Act relevantly states:

    Person receiving social security payment or holding concession card

    (1)Subsection (2) applies to a person to whom a social security payment (other than utilities allowance or energy supplement under Part 2.25B of the 1991 Act) is being paid.

    (2)The Secretary may give a person to whom this subsection applies a notice that requires the person to do any or all 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 one or more statements about a matter that might affect the payment to the person of the social security payment;

    (c)  give the Department one or more statements about a matter that might affect the operation, or prospective operation, of Part 3B in relation to the person.

18. In addition, section 66A of the Administration Act confers a general duty on a person making a claim for a social security benefit to inform the Department of a change of circumstances that may affect the person’s entitlement to the benefit being claimed.

    The Respondent’s argument

19. The Respondent contended that, on the information provided by the Applicant (T29, p. 95), Mr Ejueyitsi was enrolled as a full-time student in semester 1 of 2014 with an EFTSL of 0.375 but in semester 2 of that year his study load changed and Mr Ejueyitsi undertook an EFTSL of 0.166.  He therefore ceased to be a full-time student from 22 June 2014, which is the day after the end of semester 1 at UWA.

20. In the period from 22 June 2014 to 28 January 2015, Mr Ejueyitsi received Austudy payments in the amount of $8,683.44; he received an income support bonus payment of $108.90 and a student start-up scholarship of $1,025.  He was not qualified to receive any of these payments and so, calculated together, the amount of $9,817.34 was a debt to the Commonwealth.

21. Ms Sangha submitted that Mr Ejueyitsi was enrolled in the subject of Evidence at Murdoch University in semester 2 of 2014 and as this was not a full-time study load he therefore was not allowed to receive payment as a full-time student.  She submitted that it was the Secretary’s argument that the Applicant did not receive the funds in good faith so he therefore cannot rely on the sole administrative error provisions in the Act in terms of waiving the debt.

    The Applicant’s evidence

22. Mr Ejueyitsi gave evidence that he was studying the subject of Evidence at Murdoch University in semester 2 of 2014.  He said he was led to believe that he was undertaking a full-time study load at the time because of cross-institutional study.  He did not say who led him to this belief.

23. Mr Ejueyitsi was asked if he knew that, if there were changes in his study load, he had an obligation to inform the Department, and he responded that he knew this was a requirement in section 66A of the Administration Act.

24. The Applicant was asked, given that his evidence was that he knew of his obligations to report changes in his study circumstances to the Department, why he continued to accept Austudy payments at the full rate, when he was not studying a full-time load, as defined in the Act, at that time.  Mr Ejueyitsi said that he “assumed that Centrelink was paying him the correct amount.”

25. When asked if he would expect the Austudy payment to go down if he was not enrolled full-time, Mr Ejueyitsi responded that he “was not in a position to determine that.”

26. Mr Ejueyitsi submitted that, in his view, the Department had an obligation under section 66A of the Administration Act to inform the recipient of a benefit that he or she is not entitled to receive it. He urged the Tribunal to look at the totality of the whole argument; he submitted that he was not in a position to know he was being wrongly paid. He said he was not working at present and that it was not his desire to owe money.

    Consideration

27. There was no disagreement between the parties of the amount of over-payment that Mr Ejueyitsi received in the debt period.  There was also no disagreement between the Applicant and the Respondent about the calculation of the debt.

28. The Tribunal finds that the debt was properly calculated and that Mr Ejueyitsi received payments totalling $9,817.34, from 22 June 2014 to 28 January 2015, to which he was not entitled.

29. The next step is for the Tribunal to consider whether all or part of this debt should be waived or written off.

30. Section 1236 of the Act provides as follows:

    Secretary may write off debt

    1Subject to subsection (1A), the Secretary may, on behalf of the Commonwealth, decide to write off a debt, for a stated period or otherwise.

    (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.

    (1B)For the purposes of paragraph (1A)(a), a debt is taken to be irrecoverable at law if, and only if:

    [there is no subsection (a)]

    (b)there is no proof of the debt capable of sustaining legal proceedings for its recovery; or

    (c)the debtor is discharged from bankruptcy and the debt was incurred before the debtor became bankrupt and was not incurred by fraud; or

    (d)the debtor has died leaving no estate or insufficient funds in the debtor's estate to repay the debt.

    (1C)For the purposes of paragraph (1A)(b), if a debt is recoverable by means of:

    (a)deductions from the debtor's social security payment; or

    (b)deductions under section 84 of the A New Tax System (Family Assistance)(Administration) Act 1999; or

    (c)setting off under section 84A of that Act;

    the debtor is taken to have a capacity to repay the debt unless recovery by those means would result in the debtor being in severe financial hardship.

31. There are provisions in the Act which require the Secretary to waive recovery of a debt where the debt is attributable solely to administrative error.  These are found in section 1237A of the Act:

    Waiver of debt arising from error

    Administrative error

    1Subject 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).

    (1A)Subsection (1) only applies if:

    (a)the debt is not raised within a period of 6 weeks from the first payment that caused the debt; or

    (b)if the debt arose because a person has complied with a notification obligation, the debt is not raised within a period of 6 weeks from the end of the notification period;

    whichever is the later.

32. There are also provisions in the Act, at section 1237AAD, which give the Secretary a discretion to waive the right to recover all or part of a debt in what are called in the heading to the section “special circumstances”:

    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 a false representation; or

    (ii) failing or omitting to comply with a provision of this Act, the Administration 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.

33. It is important to note that what precisely constitute “special circumstances” is not otherwise defined in the Act or the Administration Act. The phrase has been considered judicially and by the Tribunal on previous occasions. In Angelakos v Secretary, Department of Employment and Workplace Relations (2007) 100 ALD 9 at [33], Besanko J warned against a requirement that there needs to be exceptional circumstances before there may be said to be special circumstances:

    “... I also note that the authorities have emphasised time and again the importance of maintaining flexibility in determining what constitutes special circumstances. The danger is that the test will be overstated if the word ‘exceptional’ is emphasised. It was not the intention of Parliament to confine the exercise of the discretion to an exceptional case. There is less risk of overstatement if the words ‘unusual’ or ‘uncommon’ are emphasised. Those words indicate, correctly in my view, the fact that there must be something that distinguishes the case from the ordinary or usual case. It may not be easy to postulate the ordinary or usual case other than in quite general terms and, in doing so, close attention must be given to the particular statutory context.”

34. In addition, the Full Court of the Federal Court has sounded a warning against a decision-maker taking too narrow a view of what may constitute “special circumstances” within the meaning of an Act of Parliament.  In Ward v Commissioner of Taxation [2016] FCAFC 132, considering the reference “special circumstances” in a similar context in section 292-465 of the Income Tax Assessment Act 1997, the Court stated:

    In our opinion, the Tribunal erred in law by taking too narrow a view of what may constitute “special circumstances” within the meaning of the statute.  This may have been caused by unnecessarily considering factors in isolation before focusing on the entirety of the circumstances said by the applicant to be special.

35. In considering the application of these sections of the Act to this matter, the Tribunal concludes that the provisions of section 1236(1A) do not apply to Mr Ejueyitsi.  The Tribunal heard evidence that currently the debt is being recovered by means of a withholding from Mr Ejueyitsi’s Newstart Allowance.  Mr Ejueyitsi agreed in evidence that he was receiving approximately $576.60 per fortnight, after a withholding of $30 per fortnight in repayment of the debt and an amount of $70 per fortnight for an unrelated court fine was deducted. 

36. As outlined above, section 1236(1C)(a) of the Act sets out that a debtor is taken to have the capacity to repay the debt by deductions from his or her social security payments unless recovery by those means would result in the debtor being in “severe financial hardship.”

37. Mr Ejueyitsi submitted (Exhibit A1):

    The Applicant has been in severe financial agony since the deduction of his payment and [this has] completely reduced him to nothing.  The Tribunal must balance fairness in this submission with respect.

38. Mr Ejueyitsi also submitted (Exhibit A2), in regard to his financial situation:

    To bring unplanned debt on a person by error amounted to open injustice and oppression and caused significantly hardship on [the] person, in this case the Applicant.

39. And further (Exhibit A2):

    It is submitted that anybody in social security payment is pushed by circumstances as it is not their wishes in particularly when they are agile.

40. At the hearing, however, Mr Ejueyitsi did not provide any further expansion on his financial situation such as, for instance, a fortnightly household budget detailing his financial obligations.  He stated that he was not currently working, he lives on his own and that he had now completed his law studies and was qualified as a legal practitioner but not yet admitted to practise.

41. The Tribunal accepts that Mr Ejueyitsi may be, as he suggests, in “pushed” financial circumstances, but in that respect he is no different from many, perhaps most, other recipients of social security benefits and he has not provided other material which would allow the Tribunal to consider whether his particular personal fiscal circumstances would place him in severe financial hardship by repaying this debt.  

42. In the dearth of specific information on Mr Ejueyitsi’s personal financial situation other than his confirmation of his income from social security benefits, the Tribunal finds that the provisions of section 1236 of the Act in terms of relief from the debt are not applicable to him.

43. Mr Ejueyitsi said he received the payments in good faith on what he said was the honest belief that he was undertaking cross-institutional study in semester 2 of 2014.  He told AAT1 that the subject of Evidence was not offered by UWA in semester 2 of 2014 and he needed to complete that subject to finish his diploma. 

44. The Tribunal had before it (T27, p. 90) a Murdoch University document dated 19 May 2015 which recorded that Mr Ejueyitsi was enrolled in the subject of ‘Evidence’ in semester 2 of 2014 and that the EFTSL for that subject was 0.166.  There is a handwritten annotation by the Murdoch University officer which says “This unit was studied cross-institutional enrolment [sic] with UWA.”

1. Mr Ejueyitsi told AAT1 and this hearing that he did not believe Department officers understood what cross-institutional study was.  The Tribunal is not persuaded that this is particularly germane, because the fact is that the study load that Mr Ejueyitsi was undertaking in semester 2 of 2014 was plainly 0.166 which is not the total full-time load for which he was receiving Austudy payment and associated benefits.

2. The Applicant received regular notices from the Department reminding him of his obligations to inform them if his circumstances change.  He was not a full-time student from the end of semester 2 in 2014 until he resumed as a full-time student at the end of January in 2015.  The Tribunal does not accept the Applicant’s submissions about cross-institutional study as relevant because the fact that he was undertaking a subject provided by one institution towards a qualification from another does not change the fact that his EFTSL for semester 2 in 2014 was only one subject.

3. The Applicant had been receiving Austudy payment for some two years before semester 2 of 2014.  The Tribunal considers it is reasonable that he would have realised his payment had not fallen when he ceased to be a full-time student at that time.  He then had an obligation to advise the Department; had he done so, the overpayment would not have occurred and he would not now have this debt.

4. The Tribunal found Mr Ejueyitsi intelligent and articulate, and well able to formulate his arguments, as one would expect from someone who has recently qualified to practise law. However, the Applicant’s submissions about how section 66A of the Administration Act should be interpreted by the Tribunal are misconceived. The obligation, as set out in both section 66A and 68 of the Administration Act, is on the claimant of a social security benefit to reasonably inform the Department of changes in his or her circumstances of which the person is aware that might affect the payment. This includes both an entitlement for a benefit and the amount of the benefit.

5. It is a mistake for the Applicant to suggest that he “assumed Centrelink was paying the right amount”, especially when, in the documents before the Tribunal, he had received several notices reminding him of his reporting obligations, should his circumstances change.  The result of him failing to do so meant that the Department was continuing to pay him an Austudy payment and associated benefits because the Department believed he was studying full-time; he had not told the Department otherwise.

6. The Tribunal is not persuaded that any special circumstances as provided by the Parliament in section 1237AAD of the Act are engaged in this matter.  The debt has come about simply because of the Applicant’s tardiness in advising the Department of changes in his circumstances.  The fact that the debt was earlier adjusted by the second ARO because he provided information to the Department about his enrolment in semester 1 of 2014, but only some thirteen months after he received that letter (T11, p. 55), is an example of that lack of timely attention to his obligations.

7. The Tribunal has examined this matter afresh in this review, but finds no reason to disagree with the conclusions of AAT1.  The debt has been correctly raised and is being paid by allotments from the Applicant’s social security payments and there are no provisions of the Act that would entitle the Applicant to all or part of the debt being waived or written off.

   DECISION

8. The reviewable decision is affirmed.

I certify that the preceding 52 (fifty two) paragraphs are a true copy of the reasons for the decision herein of Mr D. J. Morris, Member

........[sgd]....................................

Administrative Assistant - Legal

Dated: 18 August 2017

Date of hearing:	22 June 2017
Applicant:	In person
Representative for the Respondent:	Ms S Sangha
Solicitors for the Respondent:	Mills Oakley