JUSTIN ARNOLD and SECRETARY, DEPARTMENT OF INDUSTRY, INNOVATION, CLIMATE CHANGE, SCIENCE, RESEARCH AND TERTIARY EDUCATION

[2013] AATA 640

[2013] AATA 640

Division	GENERAL ADMINISTRATIVE DIVISION
File Number	2012/4602
Re	JUSTIN ARNOLD
APPLICANT
And	SECRETARY, DEPARTMENT OF INDUSTRY, INNOVATION, CLIMATE CHANGE, SCIENCE, RESEARCH AND TERTIARY EDUCATION
RESPONDENT

DECISION

Tribunal	PROFESSOR RM CREYKE, SENIOR MEMBER
Date	10 September 2013
Place	Canberra

The decision under review is affirmed.

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

Professor RM Creyke, Senior Member

Catchwords

SOCIAL SECURITY – entitlement to austudy – course not an approved course – whether applicant advised of change of course – whether debt raised was lawful – whether debt raised must be waived – whether debt raised may be written off – whether debt may be waived for special circumstances

Legislation

Social Security Act 1991 (Cth) section 568, 569(2), 569A, 569B, 1223(1), 1230C, 1236(1), 1236(1A), 1237A, 1237AAD

Social Security (Administration Act) 1999 (Cth) section 68

Student Assistance Act 1973 (Cth) section 5D

Cases

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

Re Mallows and Secretary, Department of Social Security (1997) 50 ALD 265

Secretary, Department of Education, Employment, Training and Youth Affairs v Prince (1997) 152 ALR 127

REASONS FOR DECISION

PROFESSOR RM CREYKE, SENIOR MEMBER

10 September 2013

1. On 13 November 2008, the Secretary decided to recover two debts from Mr Justin Arnold: $7,268.18 for the period 26 June 2007 to 17 February 2008; and $7,400.57 for the period 18 February 2008 to 14 October 2008. However, the first debt was waived on 14 November 2008 as it was wholly due to administrative error by Centrelink, namely a coding error which was repeated, that is, listing a wrong end date of his Bachelor of Arts course. This application for review relates only to the second debt.

2. A review by an Authorised Review Officer (ARO) of the second debt on 6 January 2009 affirmed the decision, a decision upheld by the Social Security Review Tribunal (SSAT) on 25 September 2012. On 12 October 2012, Mr Arnold sought further review by the Tribunal.

3. The matter was heard in Canberra on 8 July 2013.

   Background and evidence

4. Mr Arnold was studying at the University of New England and was granted austudy from 2004. Mr Arnold was initially enrolled in an Advanced Diploma course with a start date of 23 February 2004 and an end date of 30 November 2005. Mr Arnold graduated with the Advanced Diploma in April 2006.

5. Mr Arnold subsequently enrolled in a Bachelor of Arts (Political Science) in 2006 and informed the Centrelink office, Armidale by lodging a Course details required form which confirmed his continued study. During his studies, he enrolled in courses on a cross-institutional basis at Murdoch University and in 2005 in part-time study for a University Certificate in Theology at Charles Sturt University, with a course end date of November 2006.

6. In the claim form for austudy, signed by Mr Arnold on 28 May 2004, Mr Arnold nominated the start date of his studies as 1 March 2004 and initially, the end date as 21 November 2008. The form also originally showed 5 years as the intended study time. Mr Arnold said that the end date, and the reference to ‘five years’, were references to his intended study period. However, on advice he changed the form to show ‘2 years’ for the duration of the course and the end date as ‘21 November 2005’.

7. On 18 October 2005 Mr Arnold was sent a letter from Centrelink, Armidale asking for verification of his enrolments during 2005 at the University of New England, and at Charles Sturt University. On 1 December 2005 Mr Arnold was advised his austudy was cancelled from 1 December 2005. However, on 19 December 2005, he was advised he had again been assessed as eligible for austudy, and, on 28 February 2006, that his end date was 30 November 2008.

8. Mr Arnold graduated with a BA (Political Science) in April 2008, having completed the course in 2007. For 2008 he enrolled in a Master of Arts (Political and International Studies) from which he graduated on 9 October 2010.

9. On 22 August 2006, Centrelink commenced a review of Mr Arnold’s austudy payment. Mr Arnold lodged documents at the Armidale office on 7 September 2006 confirming his enrolment at University of New England, and his cross-institutional studies in 2006 at Murdoch University. The review process was finalised on 12 September 2006. The Centrelink officer who conducted the review updated the Education Course Details screen but did not alter the allowable end date for his bachelor’s degree which remained as 30 November 2008.

10. On 5 October 2006 Centrelink Armidale requested a ‘Service Profiling Control Group Interview’ interview with Mr Arnold on 20 October 2006 to check his continued eligibility for austudy. On 15 October 2006 he was also subject to a ‘Student Review’ interview on 5 November 2006. The review was completed when Mr Arnold attended an interview at Centrelink, Armidale and completed a ‘Review of Circumstances’ on 23 November 2006.

11. Records of subsequent contacts by Mr Arnold with Centrelink in the relevant period are as follows:

    ·26 February 2007: phone contact regarding Centrepay;

    ·22 March 2007: attendance at Centrelink Armidale regarding concession card reissue;

    ·21 July 2007: request for advance payment;

    ·24 July 2007: phone contact regarding change of payment destination;

    ·27 August 2007: phone contact  regarding change of payment details for austudy;

    ·4 October 2007: phone contact regarding change of payment details for austudy; and

    ·16 July 2008: request for advance payment.

12. Records of actions by Centrelink concerning Mr Arnold’s file in the relevant period are a contact on 24 July 2008 regarding a general enquiry for Austudy, and on 15 October 2008 regarding a ‘Review of Entitlement for Austudy’. In addition numerous letters were sent by Centrelink to Mr Arnold during 2007 and 2008 relating to his social security payments. On 5 October 2008, Centrelink requested Mr Arnold provide further information to update his details. The review was concluded on 2 December 2008. On 21 October 2008, Mr Arnold provided a copy of tax invoices from the University of New England for semester 1 and 2 of 2008 for a Master of Arts course. The review was finalised on 31 October 2008.

13. On 29 October 2008 Centrelink raised an austudy payment debt of $7,400.57 for the period 18 February 2008 to 14 October 2008. The debt was raised because Mr Arnold was not entitled to austudy payment as he was enrolled in a Masters of Arts degree which is not an approved course of study. The decision was affirmed by an ARO on the basis that there was no evidence Mr Arnold advised Centrelink that he commenced study at a Masters level in 2008. The ARO also found that the debt could not be waived since it was not caused solely by Centrelink administrative error.

14. Centrelink provided evidence to the Tribunal that in accordance with Records Disposal practice, relevant documents relating to reviews about social security entitlement of Mr Arnold would have been sent to batch storage and after three years, destroyed. So the originals of any claim forms completed by Mr Arnold no longer exist. The only evidence Centrelink can provide of documents relating to reviews in 2007 or 2008 is based on electronic records.

    Legislation

15. The relevant legislation is found in the Social Security Act 1991 (Cth) (Act), the Social Security (Administration Act) 1999 (Cth) (Administration Act), and the related Student Assistance Act 1973 (Cth). Relevant provisions are:

    ·Section 568 of the Act which sets out the qualifications for payment of austudy, including satisfaction of the activity test;

    ·Section 569(2) of the Act which provides that a person satisfies the activity test if they are undertaking qualifying study;

    ·Section 569A of the Act which defines ‘qualifying study’ for the purposes of receipt of austudy;

    ·Section 569B of the Act which defines an ‘approved course of education or study’ as a course determined under s 5D of the Student Assistance Act 1973 (Cth);

    ·Section 68 of the Administration Act which obliges those in receipt of a social security payment to notify of a change of circumstances;

    ·Section 1223(1) of the Act concerning the raising of a debt against someone who receives a social security payment to which they are not entitled;

    ·Section 1236(1) of the Act authorising the Secretary to write off of a debt;

    ·Section 1236(1A) of the Act for the circumstances in which the Secretary may write off a debt;

    ·Section 1237A of the Act for the circumstances in which the Secretary must waive a debt;

    ·Section 1237AAD of the Act for special circumstances in which the Secretary may waive a debt.

    Issue

16. The issues are whether:

    ·    Mr Arnold was overpaid austudy payment totalling $7,400.57 for the period 18 February 2008 to 14 October 2008;

    ·    the overpayment constitutes a legally recoverable debt; and

    ·    all or part of the recovery of the debt can be waived or written off.

    Consideration

17. Mr Arnold was in receipt of austudy payments amounting to $7,400.57 between February 2008 and October 2008. The issue is whether Mr Arnold was entitled to those payments. It is contended by the Secretary that the course in which Mr Arnold was enrolled in 2008 was not an approved course for the purpose of austudy, and that Mr Arnold had not advised Centrelink that he was intending to study such a course.

18. Section 568 of the Act sets out the qualifications for payment of austudy. Section 569(2) provides that the person satisfies the ‘activity test’[1] if they are ‘undertaking qualifying study’. A person is undertaking qualifying study if they are enrolled in an ‘education institution’[2] and undertaking an ‘approved course of education or study’.[3] An approved course of education or study is defined as ‘a course determined, under section 5D of the Student Assistance Act 1973’.[4]

    [1] Act section 568(a) and Subdivision B.

    [2] Act section 569A(a).

    [3] Act section 569A(b).

    [4] Act section 569B.

19. There is no dispute that as at February 2008 the University of New England was an ‘education institution’ for the purposes of the Student Assistance Act 1973 (Cth), nor that a master of arts course at the University of New England was not an ‘approved course of education or study’.[5]

    [5] Determination under section 5D(1) of the Student Assistance Act 1973 (Cth), dated 19 December 2007.

20. Accordingly, there is no issue that Mr Arnold was paid $7,400.57 in austudy payments for the period 18 February 2008 to 14 October 2008 while he was undergoing a masters course which was not an approved course of study. Nor is there an issue that this payment is a debt to the Commonwealth since it was a payment to which he was not entitled.[6] That leaves for consideration whether that debt should be waived or written off, or whether there are special circumstances justifying the Secretary waiving part or all of the debt.

    Write off

    [6] Act section 1223(1).

21. Section 1236(1A) states:

    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…

    (d) it is not cost effective for the Commonwealth to take action to recover the debt.

22. There is no suggestion that the debt is not recoverable at law, and it is being recovered under the Act by means of deductions from Mr Arnold’s social security payments.[7] As at 29 April 2013, the date of the Secretary’s statement of facts, issues and contentions, Mr Arnold was continuing to repay the debt. No evidence was provided to indicate that he was in severe financial hardship. So there is no evidence that Mr Arnold is incapable of repaying the debt. The size of the debt remaining ($3,920.26 as at 29 April 2013) indicates that it is not so insignificant as to make it not cost effective for the Commonwealth to recover it. The Tribunal affirms the finding that the discretion not to write off the debt was correct.

    Waiver

    [7] Act section 1230C.

23. Section 1237A provides that the Secretary must waive a debt due solely to administrative error. The provision states as relevant:

    (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).

    (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.

24. There are two considerations: did the debt arise solely due to administrative error; and did Mr Arnold receive the payments in good faith?

    Administrative error

25. The Secretary maintains that it is not appropriate to waive the debt as the debt did not result from administrative error. The Secretary contends that letters sent by Centrelink to Mr Arnold in 2007 and 2008 advised him to notify Centrelink if there were changes in his circumstances affecting his social security payments, including any change in his course, and he did not do so.

26. Mr Arnold maintains that he did advise Centrelink of his change of enrolment details in October 2007 and again in February 2008. He initially claimed that he had filled in another austudy claim form when he transferred to a bachelor’s degree and then also when he transferred to the masters course.

27. There is no record of Mr Arnold being asked to complete a further application for austudy form. At the hearing the representative of the Secretary said she suspected there was no need to complete a further austudy claim form once a person was in receipt of austudy. This assumption was confirmed by the Manager, Centrelink Armidale, who gave evidence by telephone at the hearing. As he said, provided Centrelink were not aware of a change of course, austudy payments would continue based on the original coded end date information, in Mr Arnold’s case, 30 November 2008.

28. Mr Arnold referred to a form ‘they send to you every year at the end of the year for next year’s enrolment details and you attach enrolment details to that form’, as evidence that he had advised Centrelink. Mr Arnold also said that if you did not present this form each year prior to the first day of enrolment your austudy would be cut off. It is unclear whether this is an SY074 form referred to by the representative of the Secretary. The Tribunal only has evidence of one SY074 form having been completed by Mr Arnold in the period 2005 to 2008 and that was in late 2005/early 2006. If the form referred to by Mr Arnold and the SY074 form are the same form, it is surprising that none of the archived records provided to the Tribunal referred to completion of a form each year. That suggests the archived material in evidence is incomplete.

29. However, the Tribunal accepts that there is no obligation to complete a further austudy form by someone already in receipt of the payment. Mr Arnold may have confused the austudy claim form with another Centrelink form or form required by Centrelink as proof of enrolment.

30. Mr Arnold said he had advised Centrelink about his change to a masters degree course in October 2007 when he attended a review by the Newcastle Centrelink team. He said that the person conducting the review simply took his documents and photocopied them. He claims he had specifically asked whether a masters degree would be equivalent to doing an honours course, and provided documentation that a masters course would be equivalent to an honours course for entry to a PhD. The response, he claims, was that he should bring in the details and Centrelink would check his eligibility and get back to him. Mr Arnold said that they did not do so.  Later Mr Arnold said he thought the review may have occurred in September 2007.

31. The Secretary’s extensive records did not disclose any such review had taken place. In particular, no review concerning Mr Arnold had occurred between November 2006 and December 2008. A student review involving Mr Arnold had occurred twelve months earlier in 2006. At that time, Mr Arnold had received a letter requiring him to fax or take into his local Centrelink office certain documents concerning his student status. Accordingly it is the Secretary’s view that Mr Arnold did not attend any such review, nor advise at that time of his change of course in 2007/2008.

32. Despite Mr Arnold’s contention that he advised Centrelink in October 2007 and again in February 2008 of his change of course, Centrelink has not been able to find any evidence of letters to Mr Arnold in late 2007 or early 2008 requesting he provide information about his enrolment, nor of any data matching process, or service profiling reviews initiated during that period.

33. Nor is Mr Arnold able to do so. Mr Arnold said he could not supply any further information to supplement those provided by Centrelink as he had not kept records from 2007.  He had moved three or four times since then, he did not keep a diary, and he had destroyed much of the paperwork, including telephone accounts, to limit moving costs. As a consequence he had no records to substantiate that he told Centrelink about his course change in late 2007/early 2008.

34. The Tribunal is satisfied that no review took place in 2007. Given the significance of reviews, whether for data-matching, or service profiling purposes, the likelihood is that some record of such a review would have been made by Centrelink. Even if documents relating to any review had been destroyed under archival policies, there would be electronic records which can be retrieved of the occurrence of such a review.

35. In addition, the Tribunal is satisfied that the similarity between the requirements of the review described by Mr Arnold in 2007 to the review conducted in August/September 2006, only a year earlier, suggests that Mr Arnold may have confused the supposed 2007 review with the one conducted in 2006. The Tribunal notes that given these events occurred some six or so years ago, the confusion is not surprising.

36. Mr Arnold said he also notified Centrelink of his change of course in February 2008. His evidence was that he went to Centrelink, Armidale, waited in one of two queues set up that day – one for newstart allowance, the other for austudy – and enquired about his entitlement to austudy. He said his doubts about his eligibility followed discussions with fellow masters students. As a consequence, he had asked the Centrelink officer specifically whether he still qualified for austudy.

37. Mr Arnold’s evidence was that there was a lengthy queue that day, common at that time of year, and he had waited some three quarters of an hour in the line. He said that the customer service officer to whom he had spoken had said simply ‘if you’re still getting the payment, then you’ve been approved’. So he accepted that advice.

38. Centrelink has no evidence that such an enquiry was made. The Tribunal accepts, in the situation described, that the enquiry could have occurred. It is no criticism of Centrelink that in circumstances when staff are under pressure, such as at the beginning of the academic year, mistakes or omissions to record information can occur. The Tribunal had no reason to doubt Mr Arnold’s credibility or recollection on this issue, as it was precise, was supported by evidence from a flatmate that Mr Arnold went into the Centerlink office at that time, was consistent with the evidence of the Manager, Armidale Centrelink, as to the volume of enquiries at this time of year, and with Mr Arnold’s concerns about his eligibility.

1. In addition, had the customer service officer looked at the screen for Mr Arnold’s records at that time it would have shown Mr Arnold was in receipt of austudy. This corroborates the advice Mr Arnold said he received, namely, that as he was already receiving austudy he must be entitled to the payment. In addition, the end date of his course at that time still showed 30 November 2008. That end date was not changed until October 2008, as shown in letters from Centrelink to Mr Arnold throughout 2008. It was apparently not until October 2008 that the Education Course History record was amended to show the end date as June 2007. So, in February 2008 there was nothing to alert the customer service officer to check further.

2. This means that although Mr Arnold did not notify Centrelink of his change of course in late 2007, he did do so in early 2008. That finding, however, is not sufficient to enable the Tribunal to find that Mr Arnold had received his austudy payments in good faith.

   Good faith

3. Finn J said in Secretary, Department of Education, employment, Training and Youth Affairs v Prince:

   …the burden of the formula [in ‘good faith’]…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 – ie 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’.[8]

   [8] Secretary, Department of Education, Employment, Training and Youth Affairs v Prince (1997) 152 ALR 127 at 130.

4. Advice of change of enrolment is listed as one of the matters of which an austudy recipient must advise Centrelink. There were regular letters to Mr Arnold from Centrelink throughout 2007 reminding him of this obligation. Whether Mr Arnold had actually read these advices is not known, but any failure to do so is indicative of ‘a degree of wilful blindness’[9] which does not equate to receipt of payments of austudy in ‘good faith’.

   [9] Re Mallows and Secretary, Department of Social Security (1997) 50 ALD 265 at [33].

5. Finally, Mr Arnold said his conversations with other masters students had alerted him to a doubt about his continuing eligibility for austudy. In addition Mr Arnold acknowledged that when he was not notified, as normal, that his enrolment in a masters course had been accepted, he began to doubt that he should still be on austudy, a notification the Tribunal infers takes place in the first semester of enrolment of a course. However, he did not take action to check why no notification had been sent.

6. Mr Arnold said he had taken documents to the Centrelink office showing he was in a masters course, namely, the tax invoice for the year. Mr Arnold provided to the Tribunal copies of his Commonwealth Assistance Notices. If these are what he was referring to as a ‘HECS tax invoice notification’, the Tribunal notes that they are issued either in April or September each year and relate to the preceding semesters. In that event, he could not have brought a copy to the pre-enrolment session at Centrelink in February 2008.

7. Accordingly the Tribunal is not satisfied that Mr Arnold took such a document into the Centrelink office in February 2008, even if he did raise the issue orally with an officer on that occasion. Nor did he check the reason he had not received a notification of approval of his course in the first semester 2008. In those circumstances, the Tribunal is not satisfied that he received the moneys in good faith. As a consequence, he is not entitled to have his debt waived under section 1237A(1).

   Waiver in special circumstances

8. Section 1237AAD 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.

9. The Secretary noted that Mr Arnold had produced no evidence to support a claim of special circumstances. In order to do so he needed to provide evidence of circumstances, other than financial hardship alone, which were ‘special’. There is limited guidance as to what constitutes ‘special circumstances’ and the courts have consistently found that the use of the expression is intended to indicate ‘the importance of maintaining flexibility in determining what constitutes special circumstances’.[10]

   [10] Angelakos v Secretary, Department of Employment and Workplace Relations (2007) 100 ALD 9 at [33].

10. In relation to the criteria in section 1237AAD, there was no evidence that the debt resulted from Mr Arnold knowingly make a false statement to Centrelink. His evidence was that he had advised Centrelink of his change of course, rather than trying to conceal it. Nor is there evidence that the debt arose because a Centrelink officer knowingly made a false statement about Mr Arnold’s eligibility. If the accuracy of all the details of Mr Arnold’s account is accepted, namely, that the officer had simply responded to his enquiry with the statement that if he was receiving austudy he was entitled to the benefit, there is no indication that the officer did not believe or knowingly misrepresented that information. The most that could be inferred is that the officer was inattentive.

11. The Tribunal notes that it has accepted Mr Arnold’s account of the advice he received from the Centrelink officer in February 2008. Mr Arnold could have argued that, following that advice, he was lulled into a belief that his eligibility for austudy continued. In addition, the acceptance of Mr Arnold’s evidence means that he did not omit or fail to comply with a provision of the relevant legislation. The Tribunal has not accepted the submission of the Secretary that Mr Arnold failed to comply with a provision of the Act and therefore he is not entitled to rely on section 1237AAD.

12. At the same time, Mr Arnold has provided no evidence of any special circumstances, other than financial hardship alone, to bring himself within section 1237AAD. Even given the need for flexible application of the test, there is nothing to which it can be applied in this matter. In this evidential void, whatever its findings on other criteria in section 1237AAD, the Tribunal can make no findings in favour of Mr Arnold under that section. In these circumstances, Mr Arnold is not entitled to the benefit of the waiver provisions for special circumstances.

13. In summary, that means Mr Arnold has not been successful in establishing his entitlement to have some or all of the debt he owes waived. That means the decision under review is affirmed.

I certify that the preceding 51 (fifty -one) paragraphs are a true copy of the reasons for the decision herein of Professor RM Creyke, Senior Member

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

Associate

Dated 10 September 2013

Date of hearing	8 July 2013
Date final submissions received	12 July 2013
Applicant	Self-represented
Advocate for the Respondent	Ms Jennifer Maclean
Solicitors for the Respondent	Department of Human Services, Program Litigation and Review Branch