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

[2024] AATA 2668

Hammouche and Secretary, Department of Social Services (Social services second review) [2024] AATA 2668 (30 July 2024)

Division:GENERAL DIVISION

File Number:          2023/8839

Re:Zenav Hammouche

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

DECISION

Tribunal:Dr Stewart Fenwick, Member

Date:30 July 2024

Place:Melbourne

The decision of the Social Services and Child Support Division dated 2 November 2023 is affirmed.

..................[SGD]...........................................

Dr Stewart Fenwick, Member

Catchwords

SOCIAL SERVICES – qualification for Austudy and COVID-19 supplement – activity test – whether undertaking full-time study – whether all or part of any debts should be written-off or waived – decision affirmed

Legislation

Administrative Appeals Tribunal Act 1975 (Cth)

Social Security Act 1991 (Cth)

Social Security (Administration) Act 1999 (Cth)

Cases

Re Mary Lumsden and the Secretary, Department of Social Security [1986] AATA 228

REASONS FOR DECISION

Dr Stewart Fenwick, Member

30 July 2024

BACKGROUND

1. Ms Hammouche applied for review of a decision of the Social Services and Child Support Division (AAT 1) dated 2 November 2023. This decision required the Respondent to recalculate debts for overpayment of Austudy and the COVID-19 supplement. This amounted to a reduction on debts previously determined in two decisions made by the Respondent.

2. Centrelink originally assessed debts in excess of $42,000 for Austudy and over $9,000 for the COVID-19 supplement. They were ultimately reassessed as $29,790.89 and $1,691.16 respectively, of which some hundreds of dollars has been repaid from the Applicant’s family tax benefits payments. The difference in amounts arises from AAT 1 determining a longer period of qualification.

3. The Applicant had been enrolled for the qualification of Bachelor of Education since 2018 and the debts were raised when Centrelink became aware that Ms Hammouche’s study load had fallen below the minimum threshold of equivalent full-time study load across the years 2020-2022. At issue in this matter therefore is the Applicant’s enrolment status in her studies over a number of years which, as will be seen below, largely turns upon her understanding of the concept of full-time study.

4. Ms Hammouche was formally represented by her husband before the Tribunal and lodged an undated statement prior to the hearing, and a further short statement by email on the day of, and shortly following, the hearing. Both Ms Hammouche and her husband gave evidence at the hearing.

5. The Respondent lodged a Statement of Facts, Issues and Circumstances (RSFIC) and documents pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 (Cth) (T), as well as bundles of Supplementary (ST) and Further Supplementary (FST) documents.

   LEGISLATION

6. Qualification for Austudy is addressed in Division 1 of Part 2.11A of the Social Security Act 1991 (Cth) (the SS Act). Of particular relevance here is the requirement to satisfy the activity test (s 568(a)), which relevantly involves a person undertaking qualifying study (s 569), which – in turn – requires them to be a full-time student (s 569A). A full-time student is defined as a person undertaking at least three-quarters of the normal amount of full-time study (s 596C). The normal amount of full-time study is further defined in several alternative ways, but effectively amounts to the load determined by the educational institution (s 596E).

7. Qualification for the COVID-19 supplement was addressed in legislative amendments in force between 2020-2021. The relevant provision provided that a person’s social security payment was increased by the amount of the supplement.

8. Various requirements of persons claiming or receiving social security payments are set out in Part 3, Division 6 of the Social Security (Administration) Act 1999 (Cth) (the SSA Act). Specifically, a general requirement is established for persons to advise within fourteen days of an event or change of circumstances that might affect the payment, or their qualification for such payment (s 66A).

9. Chapter 5 of the SS Act deals with overpayments and debt recovery. Fundamentally, a person must remain qualified for a payment during the time they obtain the benefit of the payment (s 1223), and amounts that should not have been paid can be recoverable as a debt to the Commonwealth (s 1222A).

10. Two principal measures exist under the SS Act that permit a debt to be determined to not be recoverable. Firstly, a debt may be written off if any one of four conditions are satisfied (s 1236): it is irrecoverable; the debtor has no capacity to pay; the debtor’s whereabouts are unknown; or, recovery is not cost-effective. In the case where a debtor has capacity to repay through deductions from another social security payment or family tax benefit payments, a debt cannot be recovered if it would cause severe financial hardship (s1236(1C)).

11. Secondly, a series of provisions permit the waiver of a debt (s 1237):

    (a)that proportion of a debt attributable to the sole administrative error of the Commonwealth must be waived, but only in circumstances the payment was received in good faith (s 1237A); and

    (b)all or part of a debt may be waived in circumstances where the debt did not arise in whole or in part from a person knowingly making a false statement or false representation, or failing or omitting to comply with a provision of the SS Act or the SSA Act, and there are special circumstances that make this desirable (s 1237AAD).

    ISSUES

12. The issues in this matter are as follows:

    (a)the Applicant’s continuing qualification for Austudy across 2020-2022;

    (b)consequently, her continuing qualification for the COVID-19 supplement;

    (c)whether the Applicant was overpaid during the years 2020-2022; and

    (d)whether all or part of any debts should be written-off or waived.

    EVIDENCE

13. In her statement, Ms Hammouche states, in summary that she:

    (a)is married with three children and completed VCE in 2003;

    (b)was unfamiliar with higher education and is the first person she has known to undertake tertiary education;

    (c)undertook studies between 2018 and 2023 with the intention to study full time;

    (d)was under the belief that she was always studying full time which she understood as being related to her workload, and not to unit codes;

    (e)thought full-time was associated with a unit that was large and with a difficult assignment, or where she spent thirty hours or more a week studying;

    (f)battled mental health issues from 2020 to 2022 due to complications from the birth of a child; and

    (g)is not capable of repaying the massive amount owing as her family relies on one income and everything has become expensive.

14. I note further from a statement lodged with her application (T1, 1) that Ms Hammouche states:

    (a)the debt will take years and years to repay;

    (b)she has a lot of repayments for other things;

    (c)she has experienced a number of car accidents without insurance and also has fines to repay; and

    (d)the situation is extremely overwhelming.

15. In her evidence Ms Hammouche confirmed that she commenced her tertiary studies in March 2018. She was unable to specifically recall reading various notices sent to her by Centrelink, but stated that she did see notification of cancellation of her Austudy (T17, 221) in November 2022. The Applicant stated that she accepts she was under an obligation to advise Centrelink about her circumstances.

16. When taken to transcripts of her enrolment (ST10), Ms Hammouche acknowledged their contents and accepted that her study load reduced from November 2020, but she had not notified Centrelink about this. Consistent with her statement, the Applicant repeated that she understood full-time study to relate to the amount of work she had to undertake, not to the units being undertaken.

17. In response to questions from myself, Ms Hammouche stated that she enrolled in tertiary study in ‘self-service’ mode, that is without receiving guidance from administrative staff at her institution. She also stated that Centrelink had guided her transfer to Austudy, having previously been on Parenting Payment, and that mention was made of full-time study at the time.

18. When Ms Hammouche was asked if it occurred to her to advise Centrelink in 2021 that she was no longer enrolled, she responded that she was enrolled, just not studying. Ms Hammouche appeared to acknowledge that there were records of her contacting Centrelink on a number of occasions during 2021. I put to her specifically that there was a record of the Applicant speaking with the customer team at Centrelink in November 2021 to confirm that she was still a full-time student (T18, 263). Ms Hammouche stated she could not remember this call.

19. Ms Hammouche confirmed that she experienced serious post-natal depression after giving birth in February 2021, and was managing two other young children at the time. She stated that she had no records of contact she had made with a hospital but had undertaken mental health consultations over the phone.

20. The Applicant gave evidence that she is now employed as a kindergarten teacher. She described the family’s income as equating to what was previously obtained from various benefit payments. Ms Hammouche stated that ‘everything’ is on payment plans, by which she meant expenses such as utility bills, a bill from her mechanic, and a set of second-hand tools her husband acquired to start a carpentry business.

    Other evidence

21. A consolidated enrolment statement for Ms Hammouche’s studies sets out her equivalent full-time study load for the years 2018-2023 (ST9). The Applicant’s annual total study load for the relevant years is as follows: March to October 2020 – 0.50; November 2020 to February 2021 – 0.125; 2021 – no other record of enrolment; and, 2022 – 0.375.

22. Among numerous official notices contained in the materials, a typical example concerning Ms Hammouche’s Austudy payments is dated 13 August 2019, and includes the information: ‘If your study load changes or if you cease study you should let us know within 14 days’ (T17, 104). Another example of a routine notice is dated 24 June 2021 and also carries a note that Ms Hammouche must notify Centrelink of changes of circumstances affecting her payment (T17, 181).

23. A further notice dated 29 October 2021 is headed ‘You need to act now’ (T17, 188). It commences: ‘Your payment will stop on 25 November 2021 as this is recorded as your last day of study’. A later notification dated 26 November 2021 that the Applicant’s Austudy payment is being cancelled ‘because you are not studying full-time or you have ceased studying’ (T17, 191). A further notification dated 29 November 2021 indicates the recommencement of Austudy, together with the note that it is ‘based on you studying full time …’ (T17, 193). Ms Hammouche had her Austudy cancelled for the second and final time by notice dated 21 November 2022, following a final payment made on 22 November 2022 (T17, 221).

24. Finally, a customer contact record dated 9 December 2022 (T18, 267) records that the Applicant called Centrelink to advise that she was no longer a full-time student as she ‘is only enrolled in one unit worth 12.5 credits’ in the coming study periods.

25. Among material lodged by Ms Hammouche at AAT 1 is an obstetric discharge report from February 2021 indicating that she experienced pre-eclampsia, and premature breech birth (T5). A medical certificate from March 2023 indicates the birth was ‘traumatic’ and the counselling was required (T9).

    CONSIDERATION

26. Ms Hammouche provided brief submissions at the hearing, contending that the ‘whole thing was a misunderstanding’ and she had always acted in good faith.

27. The Respondent contended at the hearing that the evidence demonstrates Ms Hammouche was no longer a full-time student from 2 November 2020. It was submitted that the debts cannot be waived as the debt did not arise from the sole administrative error of the Commonwealth, given that numerous notices were sent to the Applicant, and she acted to have her payments reinstated. This latter event also meant that she had not received the payments in good faith. It was also contended that Ms Hammouche had the capacity to advise of changes to her circumstances.

28. It was submitted that special circumstances also do not arise to justify a waiver, and that it is open to the Tribunal to find that the Applicant knowingly provided false information to Centrelink. It was contended that Ms Hammouche is in better financial circumstances than other benefit recipients, being in employment, and it is open to her to make suitable arrangements for the repayment of her debt.

29. In the RSFIC it is contended that none of the circumstances identified in s 1236 of the SS Act arise so as to justify write-off of the debt (noting that this document refers to Ms Hammouche’s financial circumstances as they were prior to hearing, at which time she and her husband were receiving other social security payments). A range of authorities are cited in respect of the matters requiring consideration in relation to non-recovery of the debts.

30. I am satisfied from the evidence, including the materials lodged, that Ms Hammouche ceased being a full-time student, in the sense required by the legislation, from 2 November 2020. I am also satisfied that she did not re-engage in study at a full-time level prior to completing her studies.

31. On this basis (and consistent with the decision of AAT 1) I am satisfied that prima facie, the Applicant had accumulated a debt to the Commonwealth in respect of both Austudy and COVID-19 supplement between 2 November 2020 and 22 November 2022.

32. Is there any basis upon which the debt should be considered non-recoverable? Given the evidence of Ms Hammouche that she is in employment and receiving income commensurate with the family’s previous benefit-based income (RSFIC [47 d)]), I find that she has capacity to repay the debt. It appears from the evidence overall, further, that the Applicant is not likely to suffer severe financial hardship. I accept that I have been presented with written and oral evidence concerning the financial circumstances of Ms Hammouche and her family. Payment plans referred to in evidence appear to be reflected in details provided in the materials (T16, 93).

33. The phrase ‘severe financial hardship’ is not defined in the legislation but has been considered by the Tribunal previously (Re Mary Lumsden and the Secretary, Department of Social Security [1986] AATA 228). There it was found that the phrase should be understood as reflecting ‘arduous financial suffering’ and is indicative of facing severe challenges with household finances [19]. It was also noted there that social security payments were intended to avoid severe hardship for persons who would otherwise be without adequate means of support [20].

34. Taking into account the Applicant’s education, participation in the workforce, capacity to manage her various financial commitments, and ongoing receipt of family tax benefit, I do not consider that she would face severe financial hardship justifying waiver of the debt. Further, as discussed with Ms Hammouche at the hearing, there is capacity for the level of any repayment to be negotiated with the Respondent.

35. There is no evidence to indicate that the debts, or any part of them, arose from the sole administrative error of the Commonwealth. This is demonstrated if only by the fact that Ms Hammouche had been legitimately in receipt of payments and was under an obligation to advise the Commonwealth should her circumstances change. She did not do so, despite her study load falling below the threshold at the end of 2020. The evidence the Applicant gave about her state of mind or misunderstanding of the basis of her entitlement to Austudy (the nature of full-time study) does not change this.

36. Under these circumstances, I do not consider the matter of good faith necessarily arises for consideration. My reading of s 1237A(1) is that only when and if a finding of sole administrative error is made does the second element of good faith come to be addressed.

37. In any event, a generous interpretation of Ms Hammouche’s written and oral evidence suggests that she was mistaken in her appreciation of the basis of entitlement, and may – at least at times in 2021 – have been experiencing less than robust health. Against this, I might weigh the fact that the record demonstrates the Applicant was not enrolled at all during 2021, and actively sought reinstatement of her Austudy in direct contact with Centrelink in November 2021. Further, she appears to have volunteered the information in December 2022 that she was no longer studying full-time. This latter evidence also undermines Ms Hammouche’s written and oral evidence that she did not understand how full-time study was determined. However, I do not need to make a finding on good faith.

38. Do special circumstances arise that justify waiver? Given my findings above, this matter also does not arise for consideration. I am satisfied overall that Ms Hammouche failed or omitted to comply with her reporting obligations under the SSA Act. For this reason also, I do not need to make a finding as to whether the Applicant made a false statement or representation. Were the circumstances different, I am not persuaded that special circumstances arise on the basis of the evidence in this matter.

39. In summary, nothing arising in this matter has changed the basis upon which the decision was made in AAT 1, and nor, therefore, upon the recalculation of the debts by the Respondent.

    DECISION

40. For the reasons give above, the decision of the Social Services and Child Support Division dated 2 November 2023 is affirmed.

I certify that the preceding 40 (forty) paragraphs are a true copy of the reasons for the decision herein of Dr Stewart Fenwick, Member

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Associate

Dated: 30 July 2024

Date of hearing:	5 July 2024
Solicitor for the Respondent:	Ms Vincci Chan