Fowdh and Secretary, Department of Family and Community Services
[2005] AATA 757
•9 August 2005
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2005] AATA 757
ADMINISTRATIVE APPEALS TRIBUNAL )
) No Q2005/141
GENERAL ADMINISTRATIVE DIVISION )
Re CHLOE FOWDH Applicant
And
SECRETARY, DEPARTMENT
OF FAMILY AND COMMUNITY SERVICESRespondent
DECISION
Tribunal Dr KS Levy, Member Date9 August 2005
PlaceBrisbane
Decision The Tribunal affirms the decision under review.
.....................[Sgd]…...................
KS Levy
Member
CATCHWORDS
SOCIAL SECURITY –Youth allowance – ineligible as not full time student – waiver of debt under s1237 of Social Security Act 1991 – administrative error – decision affirmed
Social Security Act 1991 ss 540, 541, 541B, 542, 542A,542C, 1223, 1236, 1237A, 1237AAD
Re Hales and Secretary, Department of Social Security, AAT 12159, 27 August 1997
Jazazievska v Secretary, Department of Family and Community Services [2000] FCA 1484; (2000) 65 ALD 424Secretary, Department of Education, Employment, Training and Youth Affairs v Prince (1997) 26 AAR 385; (1997) 50 ALD 186
Hooi v Brophy (1984) 52 ALR 710
Taylor’s Central Garages (Exeter) Ltd v Roper [1951] WN 383Beadle v Director-General Social Security (1985) 60 ALR 225
Dranichnikov v Centrelink (2003) 75 ALD 134REASONS FOR DECISION
9 August 2005 Dr KS Levy, Member 1. The applicant, Chloe Fowdh, lodged an application on 9 March 2005 for review of a decision of the Social Security Appeals Tribunal (SSAT) under section 29(1) of the Administrative Appeals Tribunal Act 1975.
2. The application seeks review of the SSAT decision of 2 February 2005 which decided to affirm decisions of Centrelink to raise and recover a debt of $3,516.29. The original decision dated 19 August 2004 was subsequently reviewed by the original decision-maker on 14 September 2004 by an Authorised Review Officer on 7 October 2004 and by the SSAT on 2 February 2005, all of which concern the original decision of Centrelink.
3. The debt raised is attributable to the period 23 February 2004 to 20 June 2004, which was the period of Semester 1 at the Sunshine Coast University where the applicant was a third year student in the degree of Bachelor of Science (Sport and Exercise Science). In Semester 1 of 2004, she enrolled in two subjects, the equivalent of 0.25 HECS study workload. This did not satisfy the requirements of the Social Security Act 1991 (the Act) to be undertaking a minimum of 0.375 HECS study workload in order to qualify for youth allowance.
4. At the hearing the Tribunal admitted the following documentary exhibits:
Exhibit 1“T” Documents under section 37 of the Administrative Appeals Tribunal Act 1975
Exhibit 2Statement by Ms Robyn Symons re Chloe Fowdh dated 12 May 2005
Exhibit 3Certificate by Jodi Powell from Sunshine Coast University (and copy of University Transcript)
Exhibit 4Explanation of terms from Sunshine Coast University website
Exhibit 5Internal Centrelink document relating to receipt numbers
5. The applicant was represented by her parents, Mr Ala Fowdh and Mrs Suzanne Fowdh. The respondent was represented by Ms Sarah Oliver.
Issues
6. The issues for the Tribunal’s determination are:
(i)Can Ms Chloe Fowdh satisfy the legislative provisions to justify maintenance of the youth allowance?
(ii)Has Ms Fowdh been overpaid?
(iii)If she has been overpaid, is there a debt due to the Commonwealth?
(iv)Can any debt due to the Commonwealth be written off or waived, or should it be recovered?
Legislation
7. The following are the relevant legislative provisions in determining this matter:
§ Social Security Act 1991
“540 Qualification for youth allowance—general rule
Subject to this Subdivision, a person is qualified for a youth allowance in respect of a period if:
(a) either of the following applies:
(i)throughout the period the person satisfies the activity test (see Subdivision B) or is not required to satisfy the activity test (see Subdivision C);
(ii)the person is a CDEP Scheme participant (see section 1188B) in respect of the period;
(b)throughout the period the person is of youth allowance age (see Subdivision D); and
(c)throughout the period the person satisfies any requirements relating to Youth Allowance Activity Agreements that apply to the person under Subdivision E; and
(d) throughout the period, the person:
(i) is an Australian resident; or
(ii)is exempt from the residence requirement within the meaning of subsection 7(7).
Note 1: Subdivision G provides for prospective qualification for youth allowance.
Note 2: Division 2 sets out situations in which youth allowance is not payable even if the person qualifies for it.
....
541 Activity test
General
541(1) Subject to section 541A and subsection (3) of this section, a person satisfies the activity test in respect of a period if:
(a)the person satisfies the Secretary that, throughout the period, the person is undertaking full-time study (see section 541B); or
(b)the person satisfies the Secretary that, throughout the period, the person is actively seeking, and willing to undertake, paid work in Australia (other than paid work that is unsuitable for the person); or
(c)the person takes reasonable steps, throughout the period, to comply with the terms of a Youth Allowance Activity Agreement applying to the person; or
(d)the person takes reasonable steps to comply, throughout the period, with a requirement of the Secretary notified to the person under subsection (2).
Note 1: See section 541D on paid work that is unsuitable.
Note 2: See section 541F on taking reasonable steps.
….
Full-time employees etc.
541(3) A person cannot be taken to satisfy the activity test if:
(a)the person is employed on a full-time basis as an apprentice or trainee under an industrial instrument and has a training agreement (however described) with a training authority (by whatever name called) of a State or Territory; or
(b)except in the case of a person who is undertaking full-time study—the person is employed in full-time paid work for at least:
(i) 35 hours per week; or
(ii)such lesser period per week as is, in the Secretary’s opinion, the normal number of hours per week that constitutes full-time work in the industry in which the person is employed; or
(c)except in the case of a person who is undertaking full-time study—the person is, in the Secretary’s opinion, involved to a substantial degree in the operation of a family business and, in the Secretary’s opinion, should not be taken to satisfy the activity test.
….
541B Undertaking full-time study
General
541B(1) For the purposes of this Act, a person is undertaking full-time study if:
(a) the person:
(i) is enrolled in a course of education at an educational institution; or
(ii)was enrolled in the course and satisfies the Secretary that he or she intends, and has (since no longer being enrolled) always intended, to re-enrol in the course when re-enrolments in the course are next accepted; or
(iii)was enrolled in the course and satisfies the Secretary that he or she intends, and has (since no longer being enrolled) always intended, to enrol in another course of education (at the same or a different educational institution) when enrolments in the other course are next accepted; and
(b) the person:
(i)is undertaking in the particular study period (such as, for example, a semester) for which he or she is enrolled for the course; or
(ii)intends to undertake in the next study period for which he or she intends to enrol for the course;
either:
(iii)in a case to which subsection (1A) does not apply—at least three-quarters of the normal amount of full-time study in respect of the course for that period (see subsections (2) to (4)); or
(iv)in a case to which subsection (1A) applies—at least two-thirds of the normal amount of full-time study in respect of the course for that period (see subsections (2) to (4)); and
(c)the course in question is an approved course of education or study (see subsection (5)); and
(d)in the Secretary’s opinion, the person is making satisfactory progress towards completing the course.
….
541B(2) For the purposes of paragraph (1)(b), the normal amount of full-time study in respect of a course is:
(a) if:
(i)the course is a course of study within the meaning of the Higher Education Support Act 2003; and
(ii)there are Commonwealth supported students (within the meaning of that Act) enrolled in the course;
the full-time student load for the course; or
(b)if the course is not such a course and the institution defines an amount of full-time study that a full-time student should typically undertake in respect of the course—the amount so defined; or
(c)otherwise—an amount of full-time study equivalent to the average amount of full-time study that a person would have to undertake for the duration of the course in order to complete the course in the minimum amount of time needed to complete it.
Alternative meaning of normal amount of full-time study
541B(3) For the purposes of paragraph (1)(b), and without limiting subsection (2), the normal amount of full-time study in respect of a course is an average, taken over the duration of the period for which the person in question is enrolled in the course, of 20 contact hours per week.
….
542 Situations in which a person is not required to satisfy the activity test
For the purposes of this Part, a person is not required to satisfy the activity test in respect of a period if, throughout the period:
(a) the person has a temporary incapacity exemption under section 542A; or
(b)the person has a pre-natal exemption or a post-natal exemption under section 542D; or
(c) the person has a remote area exemption under section 542E; or
(d) the person has an unpaid voluntary work exemption under section 542F; or
(e) the person has a training camp exemption under section 542G; or
(f) the person has a special circumstances exemption under section 542H.
542A Temporary incapacity exemption
General
542A(1) Subject to subsection (2) of this section and sections 542B and 542C, a person has a temporary incapacity exemption if:
(a) throughout the period the person:
(i)if the person is undertaking full-time study—does not have the capacity to undertake the course of education in respect of which he or she is undertaking full-time study; or
(ii) in any other case—is incapacitated for work;
because of sickness or an accident; and
(b)the incapacity is caused wholly, or virtually wholly, by a medical condition arising from the sickness or accident; and
(c) the incapacity is, or is likely to be, of a temporary nature; and
(d)the person has, whether before or after the commencement of this section, given the Secretary a certificate of a medical practitioner, in a form approved by the Secretary, stating:
(i) the medical practitioner’s diagnosis; and
(ii) the medical practitioner’s prognosis; and
(iii)that the person is incapacitated for study or work (as the case requires); and
(iv)the period for which the person is incapacitated for study or work (as the case requires); and
(e)the Secretary is satisfied that the incapacity has not been brought about with a view to obtaining an exemption from the activity test.
542C Time limit for temporary incapacity exemptions
General
….
Maximum exemption period
542C(2)Subject to this section, a person’s maximum exemption period is:
(a)if the person has, whether before or after the commencement of this section, given the Secretary a medical certificate for the purpose of enabling the Secretary to decide whether the person was required to satisfy the activity test—the lesser of the following periods:
(i)the period stated in the certificate as the period for which the person would be incapacitated for work or study;
(ii)the period of 13 weeks that started or starts on the first day of the period so stated in the certificate; or
(b)otherwise—the period of 4 weeks that started or starts on the day determined by the Secretary to have been the day on which the person’s incapacity for work or study began.
….
1223 Debts arising from lack of qualification, overpayment etc.
1223(1)Subject to this section, if:
(a)a social security payment is made; and
(b)a person who obtains the benefit of the payment was not entitled for any reason to obtain that benefit;
the amount of the payment is a debt due to the Commonwealth by the person and the debt is taken to arise when the person obtains the benefit of the payment.
….
1223(1AB) Without limiting by implication the circumstances to which paragraph (1)(b) applies apart from this subsection, a person who obtained the benefit of a social security payment is taken not to have been entitled to obtain the benefit if the payment should not have been made for any one or more of the following reasons:
(a)the payment was made to the person by mistake as a result of a computer error or an administrative error;
(b)the person for whose benefit the payment was intended to be made was not qualified to receive the payment;
(c)the payment was not payable;
(d)the payment was made as a result of a contravention of the social security law, a false statement or a misrepresentation;
(e)the payment was made in purported compliance with a direction or authority given by the person who was entitled to obtain the benefit of the payment but the direction or authority had been revoked or withdrawn before the payment was made;
(f)the payment was intended to be made for the benefit of someone else who died before the payment was made.
1236 Secretary may write off debt
1236(1) Subject to subsection (1A), the Secretary may, on behalf of the Commonwealth, decide to write off a debt, for a stated period or otherwise.
1236(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.
1236(1B) For the purposes of paragraph (1A)(a), a debt is taken to be irrecoverable at law if, and only if:
(a)the debt cannot be recovered by means of deductions, or legal proceedings, or garnishee notice, because the relevant 6 year period mentioned in section 1231, 1232 or 1233 has elapsed; or
(aa)the debt cannot be recovered by means of deductions or setting off because the relevant 6 year period mentioned in section 86 of the A New Tax System (Family Assistance) (Administration) Act 1999 has elapsed; or
(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.
1236(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.
….
1237A Waiver of debt arising from error
Administrative error
1237A(1) Subject 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).
….
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 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.
Note 1: Section 1236 allows the Secretary to write off a debt on behalf of the Commonwealth.
Note 2: This section has effect subject to section 1237AAE in relation to an assurance of support debt.”
Background
8. Ms Fowdh completed her secondary schooling in 2000. She enrolled in a Bachelor of Science (Sport and Exercise Science) in 2002 at Sunshine Coast University, and was in her third year in 2004, when in semester 1 of that year, she chose to enrol with a lesser workload due to a reduced state of health at that time.
9. Her enrolment in semester 1 was for two subjects, the workload of which was equivalent to a 0.25 HECS study workload, and not the minimum of 0.375 HECS study workload for a semester as required by the legislation if a person were to qualify for youth allowance.
10. Ms Fowdh contacted Centrelink on 24 February 2004, the day after the start of semester 1, 2004. On that occasion, she advised Centrelink of new employment. There is no record of her advising of a change to her University enrolment status from full-time to part-time.
11. Centrelink undertook a data-matching exercise on 30 July 2004 and it was revealed that the two subjects for which she was enrolled, each had a value of 0.125 HECS study workload. Therefore, the total workload was 0.25 for that semester.
12. On 5 August 2004, Ms A P Roberts wrote to the applicant and indicated that a review of her youth allowance was being conducted and asked her to supply certain information by 26 August 2004. The letter advised:
“We need to make sure you are getting the right amount of Youth Allowance….
Please provide the following:
Transcript of Academic Record, listing each subject/module/unit, specifying the semesters or terms in which each was undertaken and the HECS/hours/units/points for each.
Official date of study workload change, for example, withdrawal from subjects/modules/units in semester 1 this year and if any were backdated due to exceptional circumstances, the dates that these changes were requested.” (see Folios 37-38 of “T” Documents)
13. This information was provided by Ms Fowdh on 11 August 2004 (Folios 39-44 of “T” Documents). On 17 August 2004, Centrelink faxed a request to Sunshine Coast University about providing a certificate of information about Ms Fowdh’s enrolment in semester 1, 2004. This was returned by the university on 18 August 2004 (“T” Documents, Folio 42). This shows she was enrolled in a Bachelor of Science (Sport and Exercise Science) Degree in 2004, but in semester 1, she was not enrolled in subjects with a HECS study workload of at least 0.375 for that semester. That was the position from the start of semester 1 and was unchanged throughout the whole of semester 1. Subsequent information provided by the university shows she enrolled in three courses on 17 May 2004 (or an equivalent study workload of 0.375 EFTSL) for semester 2, 2004 (Exhibit 3). Clearly therefore, the only period under scrutiny by Centrelink was the period of semester 1, 2004.
14. As a consequence of this information, Centrelink raised a debt against Ms Fowdh on 19 August 2004 for an amount of $3,516.29 representing youth allowance for the period of semester 1, 2004 (23 February 2004 to 20 June 2004). The applicant was advised that the debt was recoverable (Folios 43-45 of the “T” Documents).
Evidence
§ Ms Chloe Fowdh
15. Ms Fowdh swore her evidence on the Koran at the hearing. She advised that she contacted Centrelink in February 2004 after she had enrolled at Sunshine Coast University. She indicated that she had enrolled in two subjects that semester as she had been quite run down and wished to recover her health at the same time as continuing her university course. After the enrolment, she telephoned Centrelink and provided advice of her fortnightly income. She also stated that she advised the Centrelink officer to whom she spoke that she was enrolling in two subjects for that semester. She stated that the person in the Call Centre was a female officer and while she cannot recall exactly what she told her, her evidence was that she did not give the subject details or their weighting to the Centrelink officer. However, she intended by the information provided that Centrelink would be put on notice about the change of her enrolment. She expected that Centrelink would then determine any change to entitlements and advise her accordingly.
16. Ms Fowdh stated that she did not know the technical requirements for being a full-time student or a part-time student at the university. She had received youth allowance in the previous years and undertaken four subjects in each semester. She stated that had she known that her youth allowance would be affected, she would have increased her workload and taken three subjects. She maintained that she was not contacted by the university or advised in any manner that her enrolment status might have changed.
17. The applicant stated that the first time she was aware that there might be a problem was when she received a call from a Centrelink officer asking her to provide certain information. She complied with that request. However, when asked for written confirmation she replied that she had already given her first semester enrolment details to Centrelink.
18. Under cross-examination, the applicant was referred to Folios 23-25 of the “T” Documents which indicate that Ms Fowdh called Centrelink at 8.41am on 24 February 2004 and her identification was verified by the officer concerned. Her employment details were updated and her student income bank details were checked. The record of the telephone conversation also indicates that Ms Fowdh was advised to notify Centrelink again on 5 March 2004 for the period 21 February 2004 to 5 March 2004 inclusive. She then requested to be registered for self-service. The enquiry record shows that the self-service system was explained to her and that she was then transferred to the interactive voice recognition system (IVR) for reporting purposes.
19. Ms Oliver, for the respondent, then drew attention to the fact that the applicant had been in receipt of the youth allowance since 30 September 1999 for a period, and then continuously from 25 February 2002. Attention was also drawn to letters from Centrelink dated 27 October 2003 (Folios 20-21 of the “T” Documents) and 19 April 2004 (Folios 28-29 of the “T” Documents) where Centrelink provided written advice to Ms Fowdh about the rate of allowance she was being paid and on both occasions, advised her of her obligations to notify Centrelink within 14 days if she ceased to be a full-time student.
20. The Tribunal noted that amongst the evidence in the “T” Documents, a submission was made on behalf of Ms Fowdh by her parents reiterating Chloe’s explanation of notification to Centrelink in her telephone call in February 2004. They also maintained that if Centrelink were going to conduct checks, then they should have done it much earlier and not paid her the amounts from the beginning of the semester rather than querying it only at the end of the semester. They then argued as a consequence, that the debt claimed by Centrelink was solely due to the Commonwealth’s administrative error. It was also stated that the payments were received by their daughter in good faith. They therefore argued that she should not be required to repay the amount of the overpayment (Folios 77-78 of the “T” Documents).
21. Ms Oliver also informed the Tribunal that Centrelink had already commenced recovering the debt by debiting her subsequent entitlements at $63.90 per fortnight.
22. Also in the evidence, were written references on behalf of the applicant (Folios 80-83 of the “T” Documents). These show her in a good light and she was well-regarded by teachers, work supervisors and others who had contact with her in the community. She is characteristically seen as someone who is efficient, hard-working, has an engaging personality and was enthusiastic. She was noted as being of generous spirit, in particular, where in her final year of school, she spent considerable time with a disabled boy (Folio 82 of the “T” Documents).
23. Ms Oliver submitted that the legal obligations under sections 540 – 542 were clear. It was also submitted that the record was clear that she had not reported the change in her university study workload and that she must have known her workload for semester 1 was that of a part-time student, as such terms were shown on the Sunshine Coast University website under “Explanation of Terms”.
24. Ms Fowdh, on questions put by her father to her, said that when there were changes to circumstances, that she was required to advise the university and the university would ordinarily ask her to bring her card back and get a new student card. This did not occur. Also, she said she received no advice that it would affect Centrelink payments.
25. Mr Fowdh asked her daughter about the phone call she received in August 2004 from the Centrelink officer. Ms Fowdh stated that she asked why she was being requested to provide a printout for semester 1. She did not supply the information requested by Centrelink because of the need to attend lectures and other demands upon her. Centrelink obtained it separately from the university.
26. Mr Fowdh then asked his daughter what she did with the letter from Centrelink about the debt. She indicated she did not do anything about it but she contacted her parents and talked to them about it. She then sent the letter to them. She said that she was happy to let her parents look after that matter for her, although she also indicated that she looks after her financial affairs herself. She did not know any student who went to university part-time. She indicated that if she did two subjects that semester she might work full-time. In the current semester she is undertaking four subjects.
27. Under further cross-examination by Ms Oliver, Ms Fowdh was shown an extract of the University Handbook which defines various terms. She stated that she had never seen those terms before and did not understand them. She did not understand that she was a part-time student as, according to her, “no-one told me”. She also thought that if there was some change, that they would have asked to change her student card, which did not occur. She was referred to Folios 23-25 which deal with the enquiries she made to Centrelink on 24 February 2004. While she initially said she thought it may have been earlier than 24 February, after referring to some of the exhibits and discussing the matter further, she conceded it may have been 24 February.
28. When Ms Fowdh rang Centrelink, she told the officer at the Call Centre about her earnings from Sport and Action, where she presently works. She maintains that she told the officer concerned that she was doing two subjects that semester. However, she cannot remember exactly what was said but maintained that she did tell the officer that she was only doing two subjects. She was then referred to Folio 84 which shows a record of telephone conversations about her record at Centrelink. That record showed that apart from the enquiry on 24 February, the previous contact had not been since 22 December 2003. Ms Fowdh also indicated that she usually enrolled at the end of the previous semester and agreed it may have been 22 December 2003. However, she subsequently gave evidence that it could have been 24 February 2004.
29. Ms Fowdh also mentioned that she had been sick for about six months before the start of semester 1, 2004. She admitted she was not sick throughout 2004 but she had allergies which gave her ear infections and this made it difficult for her, particularly given her part-time employment was that of a swimming instructor. Her father also led evidence that after receiving $360 approximately per fortnight, and paying rent and instalments to repay the debt to Centrelink ($63 per fortnight) she said there was only $20 per fortnight to pay all of her expenses.
30. The applicant was re-examined by her father. Based on the questioning and her responses, she emphasised that she had never seen the document which defines the meaning of full-time and part-time student. She also said nobody had ever given her a copy. On questioning from the Tribunal, she provided evidence that in late 2003 she became sick and was diagnosed with Giardia. On further questioning by the Tribunal, the applicant stated that she was diagnosed with this illness late in 2003 which was before the exams in November and continued on until about February or March 2004.
31. She was also questioned about the number of hours she worked. At present she worked about four hours weekly, which was all day on Saturdays. However, for the previous six weeks she indicated that she had worked 7 – 15 hours per week. Ms Fowdh was also asked whether she had a doctor’s certificate about the state of her illness. She stated that she had a doctor’s certificate so she could undertake deferred exams or supplementary exams, and she also had a doctor’s certificate for days off work. She indicated that each of these certificates were for a couple of days. She was required also to take courses of tablets from late 2003 until early 2004 which she thought went up to February or March 2004.
32. On questioning by the Tribunal, Ms Fowdh stated she will graduate from her course at the end of this semester, that is, at the end of 2005. The Tribunal also sought information about how many contact hours she had in semester 1, 2004. She indicated each subject had two hours of lectures and two hours of tutorials. That is, four hours contact time for each subject is required and therefore for the two subjects undertaken in semester 1, 2004, involved eight hours of contact time for each of the weeks in semester 1, 2004.
§ Evidence of Mr Ala Fowdh
33. Mr Fowdh swore his testimony on the Koran. He stated that the first he knew of this matter was in early September 2004 after his daughter forwarded the letter from Centrelink which was dated 19 August 2004 and demanding payment of $3,516. He provided evidence that he had made contact with Centrelink on 8 September, 15 September and 16 September 2004 and advised that his daughter had contacted Centrelink and reported her earnings and her subject load that semester. He stated it was a mistake and that she had received these payments in good faith. In these conversations it was mentioned that the matter was to be reviewed by an authorised review officer. He also pointed to a document in the “T” Documents (Folio 72) where the authorised review officer tried to contact Chloe and she did not return the call.
34. Mr Fowdh indicated that a letter had been provided to Centrelink signed by Chloe stating that all contact was to be had about this matter through her parents. However, the authorised review officer finalised the review of the decision on 7 October 2004 without evidence from Ms Fowdh, and nor was evidence obtained from Mr or Mrs Fowdh.
Submissions
35. Mr Fowdh reiterated evidence that had been presented and also referred to “Job Search” which he said she would have been entitled to had she applied and the amount would have been the same, but merely called by another name. His submission was that his daughter Chloe had done everything possible to let Centrelink know that she had changed her circumstances as a student. His submission essentially was that the Centrelink Officer, Ms Symons, had failed to distribute information which had been provided by his daughter. When asked about whether there were any “special circumstances” he referred to the financial hardship that his daughter is under, even without having to repay the debt. He referred to various expenses of transport, medical, laundry, food and other expenses.
36. Ms Oliver referred to the review by the authorised review officer and pointed out that the enquiries made by Mr Fowdh and the request for no contact with his daughter, was made during the course of the review by the authorised review officer. She also pointed to the “Job Search” allowance which she said was known as “Job Seek” allowance. In that case the applicant needed to satisfy an activity test which was demonstrating that there was some activity seeking work each week and being willing to undertake paid work. She said it was not merely a matter of submitting a form to Centrelink each week as suggested by Mr Fowdh. In any event, she also pointed out that it required somebody to be seeking work full-time and that that would not have been possible because of the study commitments and other course requirements which Ms Fowdh had during that semester.
37. In relation to waiver, Ms Oliver said this was relevant only if it could not show that the debt arose solely because of an administrative error of Centrelink. She referred to Folio 84 where no access was made to the screen about study details, whereas Ms Symons made access to numerous other screens about the enquiries made on 24 February 2004. She contended that Ms Symons would have made an official note if the matter had been raised. In any event, she submits that even had an official note not been made, then the screens accessed would have appeared on Folio 84 and revealed that the screen relating to the number of subjects undertaken would have been accessed. No such record is shown in Folio 84.
38. Ms Oliver also submitted that the applicant’s claim that she had no knowledge of what amounted to full or part-time status or about various options that were available to her is not a matter which was the responsibility of Centrelink. She submitted that the applicant was obliged to notify if there were a change to her full-time student status. She submitted she was obliged to inform Centrelink of that matter. In relation to the evidence that Ms Fowdh presented, Ms Oliver said that if the Tribunal accepts her evidence, then the Secretary would contend that the notification that she provided did not go as far as to advise Centrelink of her part-time status. Specifically, she did not advise that she was not then undertaking four subjects but only two subjects. In other words, the applicant did not provide sufficient information to alert the officer that she may have been overpaid. Therefore, it was submitted that it was not solely the administrative error of Centrelink and consequently, section 1237A cannot apply.
39. In relation to “special circumstances”, Ms Oliver submitted that section 1237AAD also cannot apply. Her submission was that other than financial hardship alone, there was no other circumstance to be pointed to and financial hardship of itself was not adequate to constitute “special circumstances”. She acknowledged that Ms Fowdh was suffering from financial hardship but the health problem she alluded to had now improved and there was nothing else that was contained in the evidence that could be accepted so as to constitute “special circumstances”.
Consideration And Findings
40. I have carefully considered all of the relevant evidence, both oral and documentary, in arriving at the decision in this matter.
§ Findings Of Fact
41. The following findings of fact are made:
(a)Chloe Fowdh was enrolled in a Bachelor of Science (Sport and Exercise Science) Degree at Sunshine Coast University for 2002 to 2004.
(b)In the first semester 2004, she was enrolled in two subjects, which in aggregate, had a HECS study workload of 0.25.
(c)The applicant contacted Centrelink on 24 February 2005 and provided information as to her fortnightly earnings.
(d)The record of Ms Robyn Symons is accepted as a factual account by the Call Centre officer, who has had adequate experience in dealing with these matters and her notes at Folios 23-25 of the “T” Documents are succinct and cover relevant information about Ms Fowdh’s enquiry. There is no reason to suspect those notes may be deficient.
(e)Ms Fowdh knew that her study workload for semester 1, 2004 was that of a part-time student.
(f)Ms Fowdh did not work for 35 hours per week and therefore was not in full-time work.
(g)Ms Fowdh did not have 15 contact hours per week at Sunshine Coast University as outlined in section 541B(1) and (3).
(h)Ms Fowdh did not provide a medical certificate to the Secretary at the time to claim a “temporary incapacity exemption” under section 542A(1).
§ Findings In Relation To The Issues
§ Issue (i) - Can Ms Chloe Fowdh Satisfy The Legislative Provisions To Justify Maintenance Of The Youth Allowance?
42. In relation to issue (a) which the Tribunal must determine, section 540 sets out the applicant’s obligations. Section 541, subsection (1) prescribes the means by which the applicant must satisfy the “activity test”. On the face of it, the evidence indicates that Ms Fowdh does not satisfy the activity test to qualify for youth allowance.
43. However, the Tribunal sought further information as to what other circumstances there may be and for which the applicant might satisfy an exemption provision. For example, she did not work 35 hours per week, but unfortunately, the other pre-condition that she would need to be a full-time student was not satisfied (section 541(3)). Also, section 541B provides a definition of alternative meaning of “normal amount of full-time study” and defines it as 20 contact hours per week (see section 541B(1) and (3)). Ms Fowdh does not satisfy this provision. Also, section 542A(1) makes provision for the Secretary to grant the status of “temporary incapacity exemption” if a person who has health problems provide a medical certificate. There is a time limit on the applicability of this provision of 13 weeks. While that exemption would have virtually covered the period of semester 1, Ms Fowdh did not provide a medical certificate.
44. Clearly, these statutory provisions have not been satisfied. Equally, there was no dispute that the applicant was not enrolled for the minimum statutory 0.375 EFTSL for semester 1, 2004 at Sunshine Coast University.
45. The evidence raises three issues which also require resolution:
(a)Was Centrelink in some way negligent in following up the data-matching process in raising this matter with Ms Fowdh?
(b)Did the applicant know that she was not undertaking a full-time study workload and therefore, did she receive the payments in good faith?
(c)Did the applicant advise Centrelink of her changed student status when she telephoned in February 2004?
46. In relation to question (a), that is whether Centrelink were in some way responsible for not raising the matter earlier with the applicant, the fact that independent checks and balances are undertaken by government authorities where public monies are involved, is a normal part of operations and expected by the community. This is also subject to audit as part of the accountability process.
47. In large organisations such as Centrelink and Sunshine Coast University, some degree of delay might ordinarily be expected merely because of the size of the organisations concerned. Their computer systems are also undoubtedly quite complex. However, Centrelink can only conduct a data-matching once it has received the information from the university. The fact that this occurred at the end of semester 1 approximately five months after the commencement of the first semester, does not seem to be out of the realm of the normal tolerances that one would expect within and between two large organisations. Therefore, I can find no evidence of negligence on the part of Centrelink and the period following the conduct of the data-matching exercise following the receipt of the relevant information on 30 July 2004 commenced on 5 August 2004. That also seems to be not unreasonable in terms of response time. In fact, the latter action once the data-matching exercise was undertaken seems to be quite efficient. Therefore, there is no evidence of negligence on the part of Centrelink in that regard.
48. In relation to question (b), that is, whether Ms Fowdh knew she was not undertaking a full-time student study workload for that semester the applicant claimed she was not aware of this. The respondent argues that she must be deemed to have known that she was not a full-time student because of the advice that was on the university’s website. The Tribunal prefers to view it in a different way. The applicant must be taken to have known she was not a full-time student, as most students have a working knowledge of the university system as is fundamental in planning their courses. Also, as a third year student, she had completed and lodged enrolment data each semester for the first two years and by planning the workload required to complete the course in a set timeframe, by seeking advice at the start of the course and, by normal interaction with students, it is difficult to imagine that a student in the final year of a full-time course would not be aware of basic notions of full-time and part-time status.
49. Therefore, the only reasonable conclusion is that the applicant knew or had reason to believe that she was not undertaking a full-time workload at the time she enrolled in semester 1, 2004.
50. In relation to question (c), that is, whether the applicant advised Centrelink in February 2004 that she was only undertaking two subjects, there is a record of the discussions and the matters she enquired about on 24 February 2004. However, there is no record of any mention of a change to student subject load status at the university, either in those terms or in terms that describes the number of subjects which she was undertaking that semester. The statement by the Call Centre officer indicates no specific recollection of this matter, which is not surprising, but she is quite specific that even if the matter were raised in general terms with her, she would always make a record of it. Such a record does not exist.
51. What those discussions were, what form of words were used by Ms Fowdh and by the Call Centre officer in relation to that communication is not recorded. However the Centrelink computer system records enquiries and can show screens accessed during such enquiries. On enquiry by the Tribunal, Ms Oliver referred the Tribunal to Folio 84 of the “T” Documents which showed the various screens accessed during the course of the enquiry on 24 February 2004. While there were a number of codes shown about the various screens accessed, Ms Oliver pointed out the screen relating to subjects undertaken and student workload would have a code EDCH. There is no record of that screen having been accessed. But on the balance of probabilities, the Tribunal has to decide this matter. It decides that the change in student status was not communicated in a way that the Call Centre officer may have been put on notice about that status change or so that the Centrelink officer may have been alerted to a possible change in the eligibility for Centrelink payments.
52. Therefore, based on the findings of fact and reasoning as set out above, the legislative provisions are not satisfied.
§ Issue (ii) – Has Ms Fowdh Been Overpaid?
53. As a result of the conclusions above, there was no entitlement to be paid for the period of semester 1, 2004. As she was paid youth allowance over that period, she was therefore overpaid.
§ Issue (iii) – Is It A Debt Due To The Commonwealth?
54. Section 1223(1) prescribes that where a social security payment is made and the recipient was not entitled “for any reason” to that payment, then the amount is a debt due to the Commonwealth.
55. By amplification of section 1223(1)(b), the Act was amended by the insertion of section 1223(1)(AB). Part of this latter section replaces the former section 1224(1). In introducing the Family and Community Services and Veterans’ Affairs Legislation Amendment (Debt Recovery) Bill, (which included the present section 1223(1)(AB), the responsible Minister told the Commonwealth Parliament that:
“[T]he changes introduced by this Bill, will ensure that when a person receives a social security payment….that exceeds the amount that should have been paid, the excess amount is a debt and is recoverable.”
56. The Explanatory Memorandum that amplifies the amendments in this Bill includes “examples” which mirror the provisions of section 1223(1)(AB). This qualifies the explanation of subsection 1223(1) which applies where a person had “….obtained the benefit of a payment and the person was not entitled to obtain that benefit for any reason”.
57. In considering the evidence of the applicant in relation to her representation about the change of subjects, then regardless of any intention or her recollection about mentioning the change of subjects to the Centrelink officer on 24 February 2004, the Tribunal has determined that that explanation was not sufficiently explicit for the officer to be able to identify this as an issue affecting her youth allowance entitlement.
58. Failure to comply with an obligation on the taxpayer (implied or expressed) or a failure to comply with the section was discussed in Re Hales and Secretary, Department of Social Security AAT 12159, 27 August 1997. In that case, there was a failure to comply with the section, notwithstanding advice on more than one occasion of the obligation to inform the Department of any change in the income advised and upon which the income was calculated. Similar circumstances apply in the present case where the applicant had been informed at least twice of her obligation to inform Centrelink where there was a change to her full-time university student status.
59. Consequently there is, as a matter of law, a debt due to the Commonwealth as there was no entitlement to the payments of youth allowance for the period of Semester 1, 2004.
§ Issue (iv) – Can The Debt Be Written-Off, Waived Or Should It Be Recovered?
Can the Debt be Written Off?
60. A debt can be written off under section 1236 only if it is irrecoverable. Section 1236(1A) and 1236(1B) outline the circumstances when the Secretary may write off a debt.
61. These provisions do not reveal any condition which is applicable to the applicant. The applicant’s circumstances are not such that now or in the future, the debt might not be recoverable at law. Therefore write off is not appropriate.
Can the debt be waived?
62. A debt can be waived under section 1237 of the Act. However, the Secretary may only waive a debt in circumstances set out in the provisions specified in section 1237(1). In this case, there appears to be two other provisions which may be relevant. These are sections 1237A and 1237AAD:
“Waiver of debt arising from error
Administrative error
1237A.(1) Subject 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.
1237A.(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.
Waiver in special circumstances
1237AAD. 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.”
63. In applying these provisions to the present case, section 1237A(1) is only relevant where there is an administrative error. Section 1237A(1A) makes section 1237A(1) applicable only where the debt is not raised within a period of 6 weeks from the first payment that caused the debt.
64. I am not satisfied that the circumstances that gave rise to the debt in respect of Ms Fowdh are attributable solely to administrative error by Centrelink. She was advised of her obligation to inform Centrelink of any change in income or circumstances of her student status. While she made contact with Centrelink at an appropriate time, this action was not sufficiently specific to displace entirely the indications that she did not provide all information which was required, or certainly not in a way that a reasonably efficient officer of Centrelink could interpret the relevance of what might have been said. Therefore, the Tribunal determines that there is clearly no sole Departmental error which resulted in the present debts raised against Ms Fowdh.
65. Ms Oliver argued that in any event, the applicant must have been on notice that she had no entitlement to the payments and therefore did not receive them in “good faith”. In particular, she referred the Tribunal to the case of Jazazievska v Secretary, Department of Family and Community Services [2000] FCA 1484; (2000) 65 ALD 424 at 435-36. In that case, Cooper J (as he then was) discussed the interpretation and application of the term “good faith” as follows:
“Prima facie, s 1237A(1) is concerned with actual personal receipt by the debtor of the payment or payments which give rise to the debt. The issue of good faith is, for the purpose of the section, to be determined when the debtor commences to exercise control over the payment by retaining it. It is at this time that the recipient must act with the requisite good faith. A lack of good faith does not mean that the recipient of the payment must be acting fraudulently when the payment is received and retained. It means that for whatever reason, the recipient acts without an honest belief that he or she was entitled to receive and retain the payment when he or she receives the payment and decides to exercise control over it by retaining it.
A person does not act in good faith where the person turns a blind eye to circumstances which raise doubt as to the entitlement of the person to receive and retain the payment or refuses to make reasonable inquiries where doubt exists. Although said in a different context, the observations of Lord Blackburn in Jones v Gordon (1877) 2 App Cas 616 at 629 are apposite. His Lordship said :
‘... If he was (if I may use the phrase) honestly blundering and careless, and so took a bill of exchange or a bank-note when he ought not to have taken it, still he would be entitled to recover. But if the facts and circumstances are such that the jury, or whoever has to try the question, came to the conclusion that he was not honestly blundering and careless, but that he must have had a suspicion that there was something wrong, and that he refrained from asking questions, not because he was an honest blunderer or a stupid man, but because he thought in his own secret mind - I suspect there is something wrong, and if I ask questions and make farther inquiry, it will no longer be my suspecting it, but my knowing it, and then I shall not be able to recover - I think that is dishonesty. I think, my Lords, that that is established, not only by good sense and reason, but by the authority of the cases themselves.’”
66. The Tribunal was also referred to the decision of Secretary, Department of Education, Employment, Training and Youth Affairs v Prince (1997) 26 AAR 385 at 387-88; (1997) 50 ALD 186 at 188-89. Consideration of the term “good faith” in that case is analogous with the provision of section 1237A(1). There, Finn J said:
“The significance of the statutory context in which the formula is used is in the illumination it gives as to what is that required state of affairs. It has correctly been observed that the term ‘good faith’ (or its now less fashionable Latin equivalent ‘bona fide’) is a protean one having longstanding usage in a variety of statutory and, for that matter, common law contexts. I merely instance provisions protective of public officials in respect of illegal acts done in good faith in the purported execution of a statute; for a discussion of which see, for example, Little v Commonwealth (1947) 75 CLR 94 at 108-110; the duty of good faith of a mortgagee exercising a power of sale (for example, Downsview Nominees Ltd v First City Corp Ltd [1993] 1 NZL 513); and ‘good faith’ as an essentially knowledge or notice idea in both statutory and common law contexts involving property dealings; see, for example Bankruptcy Act 1966 (Cth), s 120(6); Queensland Bacon Pty Ltd v Rees (1966) 115 CLR 266.
The burden of the formula can very significantly given the purpose it is intended to serve in a given setting. In one context it can focus inquiry upon a person’s reason for action (eg as with the good faith duty of company directors); in another, to a person’s state of knowledge when a particular event occurs.
For my own part, I consider the burden of the formula in the s 289 setting to be obvious enough. Its concern is with the state of mind of a person concerning his or her receipt of the payment: if that person knows or has reason to know that he or she is not entitled to a payment received – that is, is not entitled to use the moneys received as his or her own – that person does not receive the payment in good faith. Absent such knowledge or reason to know, the receipt would be in good faith.” (Pages 387-388).
67. The Tribunal has found that Ms Fowdh must have known that her university enrolment status had changed and that she was not a full-time student. This is due to the fact that students would have knowledge of fundamental issues such as whether they are full-time or part-time and her enrolment in two subjects would have triggered some suspicion in most students who had been in University for four semesters full-time.
68. The other relevant provision is section 1237AAD, which provides for waiver in “special circumstances”. Section 1237AAD relevantly provides:
“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 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.”
69. All three of the limbs of section 1237AAD must be satisfied before the debt may be waived. In relation to the first limb, the question is whether the false information provided or the continuation of Centrelink acting on inaccurate information upon which the payment was calculated, was done so “knowingly”. This condition is not the same as the concept of mens rea which in the criminal jurisdiction, requires the mental element of intention to be satisfied. However, in considering the degree of knowledge or intention or recklessness that might be relevant to section 1237AAD, it is useful to consider concept of “knowledge” as discussed in case of Hooi v Brophy (1984) 52 ALR 710 at 712-713. There, the term “knowledge” was cross-referenced to the judgment of Devlin J (as he then was) in Taylor’s Central Garages (Exeter) Ltd v Roper [1951] WN 383 at 385.
“There are I think, 3 degrees of knowledge which it may be relevant to consider in cases of this sort. The first is actual knowledge, and, of course, the justices may find it because they infer from it the nature of the act that was done, for no man can prove the state of another man’s mind, and they may find it, of course, even if the defendant gives evidence to the contrary. They may disbelieve him, and think that that was his state of mind. They may feel that the evidence falls short of that, and, if they do, they have then to consider what might be described as knowledge of the second degree: they have to consider then whether what the defendant was doing was, as it had been called, shutting his eyes to an obvious means of knowledge. Various expressions have been used to describe that state of mind. I do not think it necessary to look further, certainly not in cases of this type, than the expression used by Lord Hewart CJ, in a case under this section, Evans v Dell (1937) 53 TLR 310 at 313 ’… the respondent deliberately refrained “from making inquiries” the results of which he might not “care to have”.’
The third sort of knowledge is what is generally known in the law as constructive knowledge. It is what is encompassed in the words ‘ought to have known’ in the phrase ‘know or ought to have known’. It does not mean actual knowledge at all. It means that the defendant had in effect, the means of knowledge. (my emphasis.)”
70. In relation to the second limb of that section, it must be determined whether there are special circumstances (other than financial hardship alone) which make it desirable to waive the debt. Determining whether the circumstances are “special” depends on the purpose of the power in that section. In Beadle v Director-General Social Security (1985) 60 ALR 225 at 228, the Full Court of the Federal Court determined that limits of that term cannot be specified with any real precision.
71. The respondent also referred the Tribunal to Dranichnikov v Centrelink (2003) 75 ALD 134 at 148. In that case it was stated:
“To some extent, the question whether there were special circumstances must depend on how it came about that the error occurred.”
72. In that case also, the Tribunal found “special circumstances” involves something unusual or exceptional, particularly where there are degrees of culpability or intensity for example. These characteristics may relate to personal circumstances, financial circumstances or other matters.
73. While the discretion in determining “special circumstances” is a broad one, after taking account of all of the circumstances, the Tribunal must be satisfied that it is proper to exercise a discretion in the applicant’s favour. To demonstrate “special circumstances” :
(a)an acceptable explanation of the circumstances to justify acceptance of the applicant’s version of the facts would need to be shown;
(b)the applicant should not have taken any action that might be seen to disadvantage the respondent or to avoid compliance with the law;
(c)the merits of the application must be properly weighed; and
(d)the period of time during which the circumstances were in existence will be relevant.
74. There are a number of aspects of the evidence which have become clear but are not such that they would amount to special circumstances. These are:
(a)Ms Fowdh consistently relied on an assertion that nobody told her about the meaning of terms or about her obligations and rights. Unfortunately, this is not the responsibility of Centrelink or the University.
(b)Ms Fowdh does not seem to have taken responsibility for most of the aspects of this matter, except that she said she managed her own financial affairs. She has relegated the conduct of this matter since the letter was received in August 2004 to her parents.
(c)The evidence of Centrelink records do not reveal access to the relevant screens to support the applicant’s claims that she informed Centrelink of the change in her study load.
(d)Ms Fowdh had never enquired about other provisions or options or rights which may have been open to her.
(e)Ms Fowdh appears to have suffered some financial hardship, but that alone is not adequate to constitute special circumstances.
75. In light of all of the circumstances outlined in the evidence which are relevant to section 1237A(1), Ms Fowdh’s circumstances do not have the characteristics of “special circumstances” under the law and which point to an unfairness if the applicant had to repay the debt to the Commonwealth.
76. Consequently, there are no special circumstances in this case.
77. It is determined that the decision under review is affirmed.
I certify that the 77 preceding paragraphs are a true copy of the reasons for the decision herein of Dr KS Levy, Member
Signed: Jeff Mills
Legal Research OfficerDate/s of Hearing 18 July 2005
Date of Decision 9 August 2005
The Applicant was represented by her parents Mr A Fowdh and Mrs S Fowdh
For the Respondent Ms S Oliver
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