HAI PING LIU and SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS

[2010] AATA 953

Administrative Appeals Tribunal

ADMINISTRATIVE APPEALS TRIBUNAL        )

)         No: 2009/3506

General Administrative Division           )

Re: Hai Ping Liu
Applicant

And: Secretary, Department of Education, Employment and Workplace Relations
Respondent

DIRECTION

TRIBUNAL:             Dr T Schafer, Member

DATE:                      10 February 2011

PLACE:                   Sydney

The Tribunal directs the Registrar, pursuant to subsection 43AA(1) of the Administrative Appeals Tribunal Act 1975, to alter the text of the decision in this application as follows:

1. The correct Respondent in this application is Secretary, Department of Education, Employment and Workplace Relations.

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

T Schafer
Member

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2010] AATA 953

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No. 2009/3506

GENERAL ADMINISTRATIVE DIVISION		)
Re		HAI PING LIU

Applicant

And SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal Dr T Schafer, Member

Date29 November 2010

PlaceSydney

Decision The decision under review is affirmed.

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

Dr T Schafer

Member

CATCHWORDS

SOCIAL SECURITY- Austudy- change of circumstances- enrolled in and undertaking full-time studies at an educational institution- debt owed to the Commonwealth- whether debt should be recovered-waived or written off- special circumstances- AFFIRMED.

LEGISLATION

Social Security Act 1991 (Act)

Social Security (Administration) Act 1999

CASES

Beadle v Director-General of Social Security (1985) 60 ALR 225

Re Colaiacolo and Secretary, Department of Social Security (1985) AAT 2109

REASONS FOR DECISION

29 November 2010 Dr T Schafer, Member

1.      Mr Liu lodged a claim for Austudy on 21 February 2007. He was enrolled as a full-time student in a Bachelor of Housing Degree at the Penrith campus of the University of Western Sydney (UWS).

2.      On 11 July 2007, a letter was issued to Mr Liu advising him that Austudy had been granted from 10 July 2007.

3.      On 12 December 2007, a letter was issued to Mr Liu, which provided the Austudy Account Statement from 18 September 2007 to 12 December 2007.  The letter asked Mr Liu to check the information on the statement carefully and to inform Centrelink within 14 days if any of the information was incorrect, missing or needed to be updated.

4.      On 28 May 2008, Mr Liu received another letter in the same terms as the letter received on 12 December 2007.

5.      On 14 August 2008, the Centrelink Academic Review Team (CART) conducted a review in relation to Mr Liu’s University enrolment.  However, this review was withdrawn because Mr Liu stated that he was ill and had therefore enrolled late in the semester.  He said, however, that he was still a full-time student.

6.      On 4 September, Mr Liu received another letter in the same terms as the letters received on 12 December 2007 and 28 May 2008.

7.      On 30 September 2008, CART conducted another review in relation to Mr Liu’s University enrolment.  On the same day, a letter was sent to Mr Liu advising him that his Austudy was suspended following electronic notification from the University regarding changes in his study workload.  The letter stated that Centrelink had tried to contact Mr Liu twice to discuss his Austudy payment.

8.      On 14 October 2008, Centrelink wrote to Mr Liu advising him that his Austudy had been cancelled from 30 September 2008 because Mr Liu had not responded to Centrelink’s letters.

9.      On the same day, Mr Liu contacted Centrelink in relation to claiming Newstart Allowance.  Mr Liu’s intention to claim Newstart Allowance was confirmed in a letter from Centrelink dated 15 October 2008.

10.     On 16 October 2008, Mr Liu contacted Centrelink and asked that his Newstart allowance be paid from 30 September 2008, the date his Austudy was cancelled.  The Centrelink officer requested verification from Mr Liu of the last day that he attended the University.  Mr Liu was not willing to provide this information.

11.     On 17 October 2008, Centrelink wrote to Mr Liu asking him to provide an academic transcript and the official date of study workload change.  Mr Liu did not respond to this letter.

12.     On 17 February 2009, Mr Liu was notified of the overpayment of Austudy to him in the amount of $8,390.50.  This overpayment arose during the period from 25 February 2008 to 29 September 2008 (relevant period).  A debt was raised for this amount.  The notice stated that the debt arose because Mr Liu was not ‘enrolled in and undertaking full-time studies at an educational institution’ during the relevant period, and was therefore not entitled to Austudy.

13.     On 19 February 2009, Centrelink issued a statement to Mr Liu to recover the debt.

14.     On 12 March 2009, Mr Liu requested a review of the decision to raise and recover the Austudy debt.

15.     On the same day, the decision was reviewed by the original decision maker.  The decision remained unchanged.

16.     On 7 May 2009, an authorised review officer (ARO) affirmed the original decision to raise and recover the debt of $8,390.50. 

17.     On 11 May 2009, Mr Liu applied for a review of the ARO’s decision by the Social Security Appeals Tribunal (SSAT).

18.     On 29 June 2009, the SSAT affirmed the decision under review.

19.     On 29 July 2009, Mr Liu applied to the Administrative Appeals Tribunal for a review of the SSAT’s decision.

Issues

20.     The issues that the Tribunal must decide are:

(a)whether Mr Liu owes a debt of $8,390.50 to the Commonwealth due to overpayment of Austudy during the relevant period;

(b)if a debt is owed to the Commonwealth, whether Mr Liu should pay all, or part, of the debt.

Legislation

21.     The relevant legislation is the Social Security Act 1991 (Act) and the Social Security (Administration) Act 1999 (Administration Act).

22.     Section 568 of the Act sets out the qualification criteria for the payment of Austudy, and provides that a person qualifies for Austudy if the person is at least 25 years of age, an Australian resident and satisfies the activity test.

23.     Section 569(1) of the Act provides that a person satisfies the activity test if the person is undertaking qualifying study.

24.     A person is “undertaking qualifying study” if the person is a full-time student (section 569C), is involved in an approved course of education or study at an educational institution (section 569B) in the particular study period, and is undertaking at least three-quarters of the normal amount of full-time study in respect of the course, for that period.

25.     Subsection 68(2) of the Administration Act, requires a person who receives a social security payment to inform the Department of any specified event or change of circumstances that might affect their payment.  Subsection 72(3) obliges a person to fulfil this requirement within 14 days of the event or change of circumstances.

26.     Subsection 1223(1) of the Act provides:

(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.

27.     Thus, if it is found that Mr Liu was given notice of the requirement to advise Centrelink of any changes to his study arrangements, and he failed to advise Centrelink that he was no longer enrolled as a full-time student, any payment he received to which he was not entitled will be a debt due to the Commonwealth by Mr Liu.

Should the debt be written off or waived?

28.     If it is established that a debt is due to the Commonwealth, the Tribunal must also consider whether the debt should be written off or waived.

29.     Pursuant to section 1236 of the Act, a debt may be written off if the debt is irrecoverable at law; when the debtor has no capacity to pay the money or cannot be located; or the person is not receiving a social security payment and it is not cost effective to take recovery action.  If any of these circumstances apply to Mr Liu, the debt may be written off.

30.     In limited circumstances, the Commonwealth can, or must, waive the right to the recovery of the debt.  These are set out in section 1237 of the Act, and the provisions that are relevant to Mr Liu's situation include subsection 1237A and 1237AAD.

31.     Subsection 1237A(1) of the Act mandates the debt to be waived if it was caused solely by administrative error, and provides as follows:

(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.

32.     Subsection 1237AAD of the Act provides for the waiver to be exercised if there are special circumstances to be considered.  It states:

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.     In considering whether there are special circumstances relevant in this case, the Tribunal may take into account the conditions in which the debt arose, the circumstances of Mr Liu and his family, any financial hardship that may be suffered (Re Colaiacolo and Secretary, Department of Social Security (1985) AAT 2109), and any other ‘unusual, uncommon or exceptional’ circumstances (Beadle v Director-General of Social Security (1985) 60 ALR 225).

34.     The Tribunal must consider whether it is appropriate to exercise the discretion contained in sections 1237A and 1237AAD of the Act, in the Applicant's favour.

Consideration

35.     Mr Liu first enrolled in a Bachelor of Housing Degree in March 2007.

36.     On 2 May 2008, the University sent Mr Liu an email notifying him that he was not currently enrolled in any units for the Autumn semester of 2008 and asking him if he wanted to take leave of absence.  According to University records, and the evidence of Ms Keller, a client service officer from UWS, Mr Liu did not attempt to enrol in any units at all in 2008.

37.     Mr Liu gave evidence that in 2007, he was in a "very hard situation", as his daughter was very sick.  He also stated that, in the same year, he had two operations in the space of about five months and couldn't walk.  Mr Liu stated that, because of his daughter's and his own illness, he was unable to attend full-time study and did not enrol in the Autumn and Spring semesters in 2008.

38.     However, whilst the Tribunal accepts Mr Liu's evidence regarding his daughter's and his own illness, pursuant to section 68(2) of the Administration Act, Mr Liu was required to advise Centrelink of any change in his circumstances that might affect his Austudy payment.  He was required to do this within 14 days of any change in circumstances, pursuant to section 72(3) of the Administration Act. 

39.     Mr Liu did not notify Centrelink of the circumstances of his daughter's or his own illness.  He did not inform Centrelink that due to these circumstances, he had not enrolled in the Autumn and Spring semesters in 2008, and had been unable to attend full-time study.

40.     For Mr Liu to have continued to qualify for Austudy during the relevant period in 2008, he was required to satisfy the "activity test" as set out in section 568 of the Act.  In turn, pursuant to section 569(1) of the Act, to satisfy the activity test, Mr Liu was required to be undertaking qualifying study during the relevant period.

41.     Mr Liu would have been “undertaking qualifying study” during the relevant period if he was a full-time student (section 569C of the Act), was enrolled in an approved course of education or study at an educational institution (section 569B of the Act), and was undertaking at least three-quarters of the normal amount of full-time study in respect of the course, for that period.

42.     Based on Mr Liu's evidence, Mr Liu was not a full-time student during the relevant period, was not enrolled in an approved course of education or study at an educational institution, and was not undertaking at least three-quarters of the normal amount of full-time study in respect of the course.  He did not, therefore, satisfy the requirements for the payment of Austudy, as set out in the Act, during the relevant period.

43.     On this basis, the Tribunal decides that Mr Liu was not entitled to the Austudy payments he received during the relevant period, which amounted to $8390.50.  This amount, therefore, is a debt due by Mr Liu to the Commonwealth.

44.     Having established that a debt is due to the Commonwealth, I must now consider whether the debt should be written-off or waived, pursuant to section 1236 or 1237 of the Act, respectively.

45.     Pursuant to section 1236 of the Act, the debt may be written-off if it is irrecoverable at law; if Mr Liu has no capacity to pay the money or cannot be located; or if Mr Liu is not receiving a social security payment and it is not cost effective to take recovery action.

46.     I do not consider that any of the circumstances set out in section 1236 apply to Mr Liu.  Mr Liu stated that after his Austudy was suspended, he applied for Newstart allowance instead.  There do not appear to be any circumstances that would suggest that the debt is not recoverable and should be written-off.

47.     In relation to whether or not the Commonwealth can, or must, waive the right to the recovery of the debt, subsection 1237A(1) of the Act provides that the debt is to be waived if it was caused solely by 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.

48.     I am satisfied that the debt did not arise due to any administrative error on the part of the Commonwealth, but arose because Mr Liu was continuing to receive Austudy payments from Centrelink, which he was not entitled to.  Mr Liu did not inform Centrelink, as he was required to do, that he was not a full-time student during the relevant period, was not enrolled in an approved course of education or study at an educational institution, and was not undertaking at least three-quarters of the normal amount of full-time study.  The debt cannot, therefore, be waived pursuant to section 1237(1) of the Act.

49.     Subsection 1237AAD of the Act provides for the debt to be waived if the following special circumstances apply:

(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.

50.     In considering whether there are special circumstances relevant in this case, I have considered the circumstances of Mr Liu and his family, any financial hardship that may be suffered (Re Colaiacolo and Secretary, Department of Social Security (1985) AAT 2109), and any other ‘unusual, uncommon or exceptional’ circumstances (Beadle v Director-General of Social Security (1985) 60 ALR 225) that would make Mr Liu's circumstances markedly different from others receiving income support payments. Mr Liu's circumstances would need to be particularly unusual, such that they would be considered special.

51.     I accept that Mr Liu was unable to attend full-time study during the relevant period because he needed to care for his daughter, who was ill.  I also accept that Mr Liu himself was ill during the relevant period.  However, Mr Liu failed to notify Centrelink of the change in his circumstances that prevented him from attending lectures and enrolling in the Autumn and September 2008 semesters.  Had he done so, he may have been advised at the time that he could apply for Newstart Allowance instead of Austudy, and the debt may not have arisen.  However, Mr Liu did not make a claim for Newstart Allowance until after his Austudy payment was suspended in September 2008.

52.     I find that Mr Liu's failure to notify Centrelink of the change in his circumstances has been a significant factor that has led to the debt arising, and is also a factor in his failure to claim Newstart Allowance from the time his circumstances changed.  In these surroundings, I do not consider that there are special circumstances, pursuant to section 1237AAD, which make it desirable to waive the debt.

53.     I do note, however, that Mr Liu has incurred a number of debts in relation to his and his daughter's illness, which he is currently repaying.  I also note that Mr Liu has been repaying the debt of $8, 390.50 by fortnightly instalments of $15.  Accordingly, whilst I do not consider that the debt should be waived, in the circumstances, I direct that Centrelink continue to withhold $15 per fortnight from any Centrelink payment Mr Liu receives until the amount owed to the Commonwealth has been fully repaid.

Decision

54.     For the reasons stated above, the Tribunal decides that the decision under review should be affirmed as follows:

(a)The debt of $8,390.50 arising during the period 25 February 2008 to 29 September 2008 is a debt owed by Mr Liu to the Commonwealth;

(b)The debt is recoverable by the Commonwealth and should not be written off or waived; and

(c)The debt should be repaid by Mr Liu by withholdings of $15.00 per fortnight, and an adjusted final payment, from any current Centrelink payment Mr Liu is receiving.  Such amounts are to be withheld until the debt has been fully repaid.

I certify that the 54 preceding paragraphs are a true copy of the reasons for the decision herein of Dr T Schafer, Member.

Signed: ............[sgd].........................................................................
             Associate B. Dhanasar

Date of Hearing            30 July 2010
Date of Decision       29 November 2010
Representative for the Applicant        Mr Hai Pung Liu (Self)   
Solicitor for the Respondent               Ms Phyllis Lee (Centrelink Legal Services)