HASSAN and SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS
[2011] AATA 487
•15 July 2011
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2011] AATA 487
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2011/0696
GENERAL ADMINISTRATIVE DIVISION ) Re GHALI HASSAN Applicant
And
SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS
Respondent
DECISION
Tribunal Mr R G Kenny, Senior Member Date15 July 2011
PlaceBrisbane
Decision The Tribunal affirms the decision under review. ................[Sgd]..............................
Senior Member
CATCHWORDS
SOCIAL SECURITY – Pensions, benefits and allowances – Newstart allowance –Scholarship monies as income – Failure to notify correct fortnightly income – Rate calculations based on incorrect income levels – Overpayment of newstart allowance – Debt due to the Commonwealth – No basis for write-off – Debt not attributable solely to Commonwealth error – No special circumstances to enable debt to be waived – Decision under review affirmed
Social Security Act 1991 (Cth) ss 643, 1068B, 1223, 1236, 1237, 1237A, 1237AAD
Social Security (Administration) Act 1999 (Cth) s 68, 100, 188(2)Groth v Secretary, Department of Social Security (1995) 40 ALD 541
REASONS FOR DECISION
15 July 2011 Mr R G Kenny, Senior Member APPLICATION
1. The applicant, Mr Ghali Hassan, received income support payments in the form of newstart allowance under the Social Security Act1991 (Cth) (the Act) from 2007. On 15 October 2010, a Centrelink officer determined that Mr Hassan had been overpaid in respect of that allowance in the period from 30 January 2010 until 8 October 2010 (the overpayment period) and a debt of $4,440.98 was raised. Following a reconsideration of the decision on 29 October 2010, the amount of the debt was varied by the original decision-maker to $6,909.56. This decision was affirmed by an authorised review officer on 25 November 2010. On 27 January 2011, the Social Security Appeals Tribunal (the SSAT) set aside that decision and remitted the matter to Centrelink to recalculate the debt in accordance with its reasons for decision. On 16 February 2011, Centrelink published its recalculation decision, based on that SSAT direction, determining that Mr Hassan owed a debt of $7,250.38 for the overpayment period. It is that decision which is under review by the Tribunal.[1]
[1] See s 188(2)(d)(i) of the Social Security (Administration) Act 1999 (Cth).
CONTENTIONS AND ISSUES FOR DETERMINATION
2. Newstart allowance is calculated in accordance with the fortnightly income of a recipient.[2] Mr Hassan was not employed during the overpayment period. He was undertaking a course of Doctoral study at the University of Southern Queensland (USQ) for which he received a scholarship in the amount of $25,000. This was paid to him on a fortnightly basis. Mr Hassan’s newstart allowance was calculated without regard being had to the scholarship monies.
[2] See ss 643 and 1068 of the Act.
3. Ms J Forsyth, for the respondent, submitted that Centrelink became aware that Mr Hassan was in receipt of a USQ scholarship through a tax file number data match with the Australian Taxation Office (ATO). She submitted that Mr Hassan received $10,349.93 in newstart allowance in the overpayment period and that his entitlement, when scholarship monies were taken into account, was $3,099.55. She submitted that the full amount of $25,000 met the definition of “income” in s 8 of the Act. Ms Forsyth also submitted that Mr Hassan had not complied with a notice under s 68(2) of the Social Security (Administration) Act 1999 (Cth) (the Administration Act). This was sent to him on 29 January 2010 and required him to advise Centrelink of moneys received by him in the fortnight ending 12 February 2010. She submitted that Mr Hassan did not provide information about his scholarship and that, therefore, under s 100 of the Administration Act, his rate of newstart allowance was to be reduced. The specific amount of overpayment was $7250.38, which was a debt owed to him by the Commonwealth.
4. Alternatively, Ms Forsyth submitted that, when Mr Hassan’s proper entitlement to newstart allowance was calculated taking into account his scholarship payments, he was overpaid by $7,250.38. This was a debt due to the Commonwealth under s 1223(1) of the Act.
5. Ms Forsyth submitted that it was Mr Hassan’s failure to provide accurate records of his income to Centrelink which led to the incorrect payments and that, accordingly, the resultant overpayment was not due solely to error on the part of the Commonwealth. She also submitted that there were no special circumstances which would justify waiving the debt. As Mr Hassan had entered into an arrangement to repay his debt through deductions from his current newstart allowance payments, Ms Forsythe submitted that it was also not appropriate to write off the debt.
6. Mr Hassan does not dispute that he was paid $10,349.93 in newstart allowance in the overpayment period or that, if his scholarship monies were taken into account, his entitlement to newstart allowance was as submitted by Ms Forsyth. However, he contended that the scholarship monies do not constitute “income” under s 8 of the Act and that, in any event, he had made Centrelink aware of his receipt of the scholarship throughout the overpayment period when he provided Centrelink with his fortnightly newstart activity documentation. He was critical of Centrelink in that, after his newstart allowance was cancelled, he had to withdraw from his course of study and was left with no income support for several weeks.
7. The central issues for determination are whether Mr Hassan was overpaid an amount of newstart allowance, whether any overpayment is a debt due to the Commonwealth and whether any such debt should be waived or written off. One component of that is whether Mr Hassan’s scholarship satisfies the definition of “income” in s 8 of the Act. Another component is whether Mr Hassan failed to notify Centrelink of the receipt of his scholarship monies in accordance with a notice under s 68(2) of the Administration Act, such that an overpayment arises under s 100 of the Administration Act. A further component is whether a debt arises under s 1223(1) of the Act.
EVIDENCE
Mr Hassan
8. Mr Hassan’s evidence was that, before receiving newstart allowance in 2007, he was employed as a teacher at a university in New South Wales. In late 2009 and early 2010, he discussed study options with Centrelink and indicated a willingness to undertake an online postgraduate course. He was told that such courses by correspondence were not recognised by Centrelink but that it was open to him to enrol in such a course. Mr Hassan was also told that he would have to continue to look for work while receiving newstart allowance and continue to complete fortnightly forms advising Centrelink of his efforts to obtain work. In January 2010, he was accepted into a Doctorate level course at USQ and was also successful in obtaining a scholarship to undertake the course. The scholarship assisted him in paying for textbooks, study materials and other study-related matters.
9. Mr Hassan believed that the scholarship payments were not “income” to be taken into account for the purposes of calculating his newstart allowance. He also said that he spoke with his job service provider on a regular basis and, on occasions, showed her his fortnightly job-seeker forms. He also lodged these on a fortnightly basis, as required, with Centrelink. He said that he advised the Centrelink officers on those occasions that he was receiving scholarship monies.
10. Mr Hassan was dissatisfied that Centrelink had obtained information about him from the ATO. He believed that the information held by the ATO about his income was incorrect. In that regard, he referred to USQ documentation which confirmed that USQ had inadvertently provided the ATO with Mr Hassan’s tax file number and that this was what led to Centrelink raising the overpayment against him.
11. Mr Hassan said that, after his newstart allowance was cancelled, he spoke with Centrelink about its resumption and was advised that he would need to wait until the review procedures about his overpayment were finalised.
12. Mr Hassan is currently receiving newstart allowance and lives in rental accommodation for which he pays $130 per week. He has no dependents. He is in good health except that he has a dental problem for which he has to take prescription painkillers. He has a Health Care Card which reduces the cost of the medication. He said that the rate of his newstart allowance is not sufficient to enable him to have appropriate treatment for his teeth. Apart from this, Mr Hassan was not aware of any other circumstances which were special such that his debt could be waived.
Other evidence
13. In evidence were documents from Centrelink and from USQ. On 9 April 2010, Centrelink wrote to Mr Hassan advising that the data match with the ATO revealed that he had completed a tax file number declaration form. In that letter, Centrelink requested an update of his employment details. On 22 April 2010, Centrelink wrote to USQ requesting information about Mr Hassan’s employment and earnings.
14. On 22 April 2010, Ms C Hammond, Senior HR Officer (Remuneration & Systems) at USQ, advised Centrelink that Mr Hassan was not employed by USQ but that he was in receipt of a scholarship. Ms Hammond attached a document advising that this comprised an annual stipend of $25,000 payable to him in fortnightly instalments, commencing on 10 February 2010, of $961.54. On 4 October 2010, Ms Hammond wrote to Centrelink confirming that Mr Hassan was not employed by USQ. On 25 October 2010, Ms Hammond again wrote to Centrelink advising that Mr Hassan was in receipt of a tax-free tuition scholarship from USQ and had not received a Commonwealth scholarship while at USQ. She advised that Mr Hassan’s details had been sent to the ATO as a result of a system error and should not have been forwarded to the ATO as he was not employed by USQ.
15. Centrelink documents in evidence included a copy of a letter sent to Mr Hassan on 29 January 2010. The letter declared itself to be “an information notice under the social security law”. Therein, Centrelink advised that the fortnightly rate of newstart allowance was based on a fortnightly income of $0.19. It also requested that Mr Hassan advise Centrelink of a range of matters if they occurred during the period from 30 January 2010 to 12 February 2010. One of these was if he “got any other money from any other source”. However, that letter did not nominate a period by which Mr Hassan had to provide that information.
16. Centrelink documents also show that Mr Hassan completed a fortnightly form for the period 30 January 2010 to 12 February 2010 in which he did not advise that he was undertaking a USQ course or that he was in receipt of a scholarship with the first payment on 10 February 2010. Centrelink files do not contain any records of notification by Mr Hassan of his scholarship payments.
CONSIDERATION
Does the scholarship constitute income?
17. Under s 643 of the Act, the rate of newstart allowance is calculated in accordance with s 1068 of the Act. It is not disputed that, in making those calculations, reference must be made to Mr Hassan’s income. The definition of “income” in s 8(1) of the Act reads:
income, in relation to a person, means:
(a)an income amount earned, derived or received by the person for the person’s own use or benefit; or
(b) a periodical payment by way of gift or allowance; or
(c) a periodical benefit by way of gift or allowance;
but does not include an amount that is excluded under subsection (4), (5) or (8).
18. Neither ss 8(4) or 8(5) are relevant in this matter. Subsection 8(8) of the Act lists amounts which are not income for the purposes of the Act, including:
(zia)the amount or value of a scholarship known as a Commonwealth Trade Learning Scholarship;
(zj)a payment of an approved scholarship awarded on or after 1 September 1990;
(zja) the amount or value of:
(i)a scholarship known as a Commonwealth Education Costs Scholarship; or
(ii)a scholarship known as a Commonwealth Accommodation Scholarship;
…
(zjc)a payment covered by subsection (8C) (about payments that are made to an educational institution or the Commonwealth to reduce a person’s liability to the educational institution or Commonwealth and that are made by someone other than the person);
(zjd)a payment of a scholarship to a person during a calendar year (other than an excluded payment):
(i)for the person to study, or to undertake research, at an educational institution; or
(ii)for the person’s achievement in studying, or in undertaking research, at an educational institution;
to the extent that the payment does not exceed the person’s threshold amount for that year;
…
(8AA)For the purposes of paragraph (8)(zjd), each of the following is an excluded payment:
(a)a payment of a scholarship referred to in paragraph (8)(zia), (zj) or (zja);
(b) a scholarship payment under Part 2.11B;
(c) a scholarship payment under the ABSTUDY Scheme;
(d)a payment known as a student start‑up scholarship payment, or a relocation scholarship payment, under the scheme referred to in section 117 of the Veterans’ Entitlements Act;
(e)a payment known as a student start‑up scholarship payment, or a relocation scholarship payment, under the scheme referred to in section 258 of the Military Rehabilitation and Compensation Act.
(8AB)For the purposes of paragraph (8)(zjd), a person’s threshold amount, for a calendar year, means $6,762 less the amount of any payment made to that person during that year that is not income for the purposes of this Act because of that paragraph.
(8B)This subsection covers the amount of a reduction (by discount, remission or waiver) of an amount that would otherwise be payable by a person:
(a)to an educational institution for enrolment or tuition of the person by the institution in a course that:
(i)is determined, under section 5D of the Student Assistance Act 1973, to be a secondary course or a tertiary course for the purposes of that Act; or
(ii)is a Masters or Doctoral degree course accredited as a higher education course by the authority responsible for accrediting higher education courses in the State or Territory in which the course is conducted or by the institution, if it is permitted by a law of the Commonwealth, a State or a Territory to accredit higher education courses that it conducts; or
(iii) is a course of vocational training; or
(b)to the Commonwealth as a result of the person’s enrolment in, or undertaking of, such a course at an educational institution.
(8C) This subsection covers a payment:
(a) that is made to discharge, or to prevent from arising, to any extent:
(i)a person’s actual or anticipated liability to an educational institution for enrolment or tuition of the person by the institution in a course described in paragraph (8B)(a); or
(ii)a person’s actual or anticipated liability to the Commonwealth resulting from the person’s enrolment in, or undertaking of, such a course at an educational institution; and
(b) that is made by someone other than the person; and
(c) that is made to the institution or the Commonwealth; and
(d) that is not made at the direction of the person.
19. For the meaning of the term “approved scholarship”, s 8(1) of the Act refers to the definition in s 24A(1) of the Act which reads:
24A Approved scholarship
(1)The Minister may determine in writing that a scholarship, or a class of scholarships:
(a) awarded outside Australia; and
(b)not intended to be used wholly or partly to assist recipients to meet living expenses;
is an approved scholarship, or a class of approved scholarships, as the case may be, for the purposes of this Act.
20. It is not disputed that Mr Hassan’s scholarship is not an ‘approved scholarship’ within the definition of s 24A and s8(1)(zj), or that it meets any of the other forms of scholarship listed in s 8(1)(zia),(zja) or (zjc). This means that, from the start of 2010, the full amount of Mr Hassan’s scholarship comprised ‘income’ for the purposes of the Act. However, paragraph 8(8)(zjd) of the Act took effect on 1 April 2010.[3] It extends the benefit of a reduction of a threshold amount, as referred to in s 8(8AB) of the Act. This means that, from 1 April 2010, Mr Hassan’s income is reduced by $6,762 when calculating his newstart allowance. It was on that basis that the overpayment to Mr Hassan of $7,250.38 was calculated and I am reasonably satisfied that this was correct.
[3] See the Social Security and Other Legislation Amendment (Income Support for Students) Act 2010 (Cth) Schedule 2 Part 2.
Is there a debt?
21. Under s 68(2) of the Administration Act, a person may be given a notice that requires the person to do a range of specified things, including the giving of information to Centrelink about any amounts of money received from any source. The Administration Act makes provision for a reduction in a social security payment, which includes newstart allowance, where there is a failure to comply with such a notice. To that effect, s 100 of the Administration Act reads:
100Automatic rate reduction—recipient not complying with subsection 68(2) notice
(1) Subject to subsection (2)[4], if:
[4] This provision is not relevant in this matter.
(a)a person who is receiving a social security payment is given a notice under subsection 68(2); and
(b)the notice requires the person to inform the Department of the occurrence of an event or change of circumstances within a specified period (the notification period); and
(c) the event or change of circumstances occurs; and
(d)the person does not inform the Department of the occurrence of the event or change of circumstances within the notification period in accordance with the notice; and
(e)because of the occurrence of the event or change of circumstances, the rate of the social security payment is to be reduced;
the social security payment becomes payable to the person at the reduced rate on the day on which the event or change of circumstances occurs.
22. The letter sent to Mr Hassan on 29 January 2010 required him to advise Centrelink if he received, in the period from 30 January 2010 to 12 February 2010, any money other than the $0.19 per fortnight on which his newstart allowance calculation was based. However, the letter did not include a “notification period” ie a requirement for him to inform the Department within a specified period of the receipt of any such additional money. I note that, elsewhere in the letter, a time frame of 7 days was nominated for notification of the receipt of any compensation payments. Inclusion of a notification period is a precondition to the operation of s 100 of the Administration Act and I am satisfied that the provision is inapplicable in this matter.
23. Nevertheless, Mr Hassan was not entitled to receive the level of newstart allowance that was paid to him. His fortnightly income, which included his scholarship payments, precluded that. It is not disputed that, after scholarship payments were included as income, Mr Hassan was paid $7,250.38 in excess of what was payable to him. In that regard, s 1223 of the Act, insofar as relevant, reads:
1223 Debts arising from lack of qualification, overpayment etc.
(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.
…
(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;
(1AC)If a social security payment was made by mistake as a result of a computer error or an administrative error, subsection (1) applies:
(a)whether or not the payment was made under a determination that had effect at the time when the payment was made; and
(b)whether or not a determination in relation to the payment could be made after that time with effect from and including that time.
(1AD)Subsection (1AC) does not apply if the social security payment was made when it should not have been made because of the occurrence of an event or a change in circumstances where the event or change had not been notified to the Secretary but no valid requirement for notification had been made under the social security law.
…
(9)In this section, unless the contrary intention appears, a reference to a social security payment includes a reference to a part of a social security payment.
24. I am satisfied that part[5] of Mr Hassan’s newstart allowance, amounting to $7,250.38, was an overpayment and this is a debt due to the Commonwealth by him in accordance with s 1223 of the Act.
[5] For part of a payment constituting a debt, see s 8(9) of the Act.
Write-off
25. Under s 1236 of the Act, a debt may be written off if it is irrecoverable at law; or the debtor has no capacity to repay the debt; or the debtor's whereabouts are unknown after all reasonable efforts have been made to locate the debtor; or it is not cost effective for the Commonwealth to take action to recover the debt. The only component of that provision of potential relevance in this matter is that relating to lack of capacity to repay the debt. Mr Hassan is now repaying the debt to the respondent through deductions of $20 per fortnight from his current income support payments. Initially, the recovery amount was $70 per fortnight but, after Mr Hassan discussed that repayment rate with Centrelink, it was reduced to the lower amount. I am reasonably satisfied that there is no lack of capacity for the debt to be repaid on that continuing basis. In this situation, there is no basis for the debt to be written off.
Waiver
26. Section 1237 of the Act lists the circumstances in which a debt may be waived. This includes the waiver of a debt arising from error in accordance with s 1237A of the Act. In so far as relevant, s 1237A reads:
… 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.
27. Although the letter sent to Mr Hassan on 29 January 2010 did not include a notification period, it required him to advise Centrelink if he received any money during the fortnight ending 12 February 2010. The first of the fortnightly scholarship payments to Mr Hassan was made on 10 February 2010. I do not accept that Mr Hassan advised Centrelink of his scholarship or of any fortnightly amount of the scholarship, including that paid on 10 February 2010. I am satisfied that this failure to advise contributed to the overpayment and, accordingly, the debt. In that situation, the debt did not arise solely due to error on the part of the Commonwealth and the debt cannot be waived under s 1237A of the Act.
28. I am also satisfied that the debt can not be waived under s 1237AAD of the Act, which applies only where there are special circumstances, other than financial hardship alone, that make it desirable to waive the debt. In Groth v Secretary, Department of Social Security[6], Kiefel J observed that special circumstances:
… would require something to distinguish ... [the] … case from others, to take it out of the usual or ordinary case. ... It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary.
[6] (1995) 40 ALD 541 at 545.
29. I accept that Mr Hassan experiences a degree of difficulty in meeting his financial obligations with Centrelink payments as his sole income source. He has a problem with his teeth but is able to gain access to medication at reduced cost because of his Health Care Card. Although Mr Hassan experiences a level of financial hardship, s 1237AAD does not permit waiver of a debt on that basis alone. No other matters were raised by Mr Hassan to satisfy the provision and I am satisfied that there are no factors which would distinguish Mr Hassan’s situation from the usual or ordinary case such as to constitute special circumstances. I am satisfied that the debt cannot be waived under s 1237AAD of the Act.
DECISION
30. The Tribunal affirms the decision under review.
I certify that the 30 preceding paragraphs are a true copy of the reasons for the decision herein of Mr R G Kenny, Senior Member
Signed:........................[Sgd]......................................................
Danielle Armstrong, Research AssociateDate/s of Hearing 7 June 2011
Date of Decision 15 July 2011
The Applicant was self-represented
For the Respondent Ms Jasmine Forsyth, Departmental Advocate
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