KATE READ and SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS

[2009] AATA 932

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2009] AATA 932

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2009/3632

GENERAL ADMINISTRATIVE DIVISION		)
Re		KATE READ

Applicant

And SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal Mr S Karas, AO, Senior Member

Date3 December 2009

PlaceBrisbane

Decision The Tribunal affirms the decisions under review. 

...................[Sgd]...............

Senior Member

CATCHWORDS

SOCIAL SECURITY – Pensioner education supplement – Education entry payment – Applicant not studying full-time – Applicant not entitled to those benefits – Debt owed to Commonwealth – Debt not solely attributable to error by Commonwealth – No special circumstances exist – Write off or waiver of debt not appropriate – Decisions under review affirmed.

Social Security Act 1991 (Cth), ss 662A, 665A, 1061PD, 1061PE, 1061PF, 1223, 1236, 1237A, 1237AAD

Social Security (Administration) Act 1999 (Cth), s 68

Groth v Secretary Department of Social Security (1995) 40 ALD 541

Jazazievska v Secretary, Department of Family and Community Services (2000) 65 ALD 424

Re Beadle and Director-General of Social Security (1984) 6 ALD 1

Re Cochrane and Secretary, Department of Employment and Workplace Relations [2006] AATA 394

Re Gehardt and Secretary, Department of Employment, Education and Training (AAT 10941, 17 May 1996)

REASONS FOR DECISION

3 December 2009 Mr S Karas, AO, Senior Member

INTRODUCTION

1.      Kate Read (“the applicant”) was enrolled as a full-time student with the Australian Institute of Applied Sciences (“the Institute”) in an Advanced Diploma of Naturopathy (“the course”) as at 18 July 2005.  She had enrolled in four subjects, on a correspondence basis.

2.      The applicant has been in receipt of parenting payment single at all times relevant to this matter.  On 3 August 2005, she lodged a claim for pensioner education supplement in respect of the course.  She commenced receiving pensioner education supplement of $62.40 per fortnight from August 2005 for the period 18 July 2005 to 18 July 2007 (the period under review).  Also, the applicant was paid an education entry payment of $208 on 6 January 2006 and again on 3 January 2007.

3.      The applicant was found not to be studying full-time since July 2005 and so, on 2 February 2009, Centrelink raised a pensioner education supplement debt of $3,258.14 for the period under review.  Centrelink also raised an education entry payment debt of $416 on 2 February 2009.  Waiver of the debts was considered in both of the original decisions, but was regarded as “not appropriate”.[1]  The reasons for the decisions were recorded by Centrelink as follows:

cust did not notify Centrelink that she was not studying and continued to receive the payments when she was not a student over a period of almost two years, and two Education Entry Payments … she [the applicant] advised me on 110209, by phone, that she did not hand in any work in this debt period but states that Centrelink advised her that she had heaps of allowable time and it was not a problem.[2]

[1] T5, folio 48; T6, folio 49.

[2] T7, folio 50.

4.      The applicant now applies for review of the original decisions to the Administrative Appeals Tribunal (“the Tribunal”).  Earlier reviews which the relevant legislation prescribes as a prerequisite for such an application have been completed; the original decisions were affirmed on each occasion.

ISSUES AND LEGISLATION

5.      The issues for the Tribunal to determine are:

·    Whether the applicant was studying during the period under review;

·   Whether she was entitled to receive pensioner education supplement and education entry payments;

·   If she was not so entitled, whether she has pensioner education supplement and education entry payment debts; and

·   If those debts exist, whether they should be recovered.

6. The legislative regime covering qualification for pensioner education supplement is set out in ss 1061PA and 1061PB of the Social Security Act 1991 (“the Act”). The Act provides for a person like the applicant who was in receipt of parenting payment single to be paid the supplement on the basis of studying full-time (s 1061PD) or less than full-time (s 1061PE). The normal amount of full-time study is set out in s 1061PF of the Act.

7. Furthermore, s 662A of the Act allows for a single pensioner who is qualified for pensioner education supplement to also receive an education entry payment of $208 per year of study.

8. Section 1223 of the Act defines an overpayment as a debt. Section 1236 of the Act provides for the possibility of writing off (delaying recovery) of a debt for a period. As well, s 1237A of the Act requires the debt to be waived where the debt arises solely from a Centrelink administrative error and the debtor received the payments in good faith. Section 1237AAD of the Act allows for waiver of debts to occur where a person has not knowingly either made false representations or failed to comply with the Act and there are special circumstances (other than financial hardship alone) that make it appropriate to do so.

EVIDENCE

9.      When the applicant applied for pensioner education supplement, she noted on the claim form (Exhibit B, Attachment C) that she was studying full-time and that the “full course period” was from 18 July 2005 to 17 July 2008.  The applicant received a notice from Centrelink dated 3 August 2005 that noted in part:

Your Pensioner Education Supplement is based on you studying Full-time at Australian Institute of Applied Sciences.  If your study load changes or if you cease study you must let you know within 14 days.  To remain eligible for Pensioner Education Supplement you must be enrolled in and undertaking a sufficient workload.  Unless a concession applies, you must take subjects amounting to at least three-quarters (75%) of the normal full-time workload in each period of your course.[3]

[3] T16, folio 102.

10.     On 26 September 2006 another notice[4] was sent by Centrelink to the applicant regarding her pensioner education supplement.  It informed her that “your Pensioner Education Supplement is based on your studying full-time at Australian Institute of Applied Sciences.  If your study load changes or if you cease study you must let us know within 14 days”. 

[4] T16, folio 108.

11.     The applicant was sent an account statement by Centrelink on 6 June 2007 that confirmed her course details, her participation status as full-time, her start date of 18 July 2005 and her expected course completion date in July 2008.  The notice also advised the applicant that she must inform Centrelink within 14 days if she stopped studying full-time.

12.     Centrelink undertook an enrolment check of the applicant with the Institute in June 2007.  The document is annotated “no subjects completed since 7/05.  Never full time”.[5]  On 13 July 2007, a notice was sent by Centrelink to the applicant requesting documents from her, including a transcript, to enable Centrelink to check her entitlements to pensioner education supplement.  An interim transcript of January 2009 indicated that the applicant had been enrolled in four subjects at the beginning of her course but that she did not complete any subjects.  The annotations on the transcript read: “Not finished.  No assignments handed in, No study”.  When asked the period in which the applicant would have been enrolled as at least 50% of a full-time study workload in 2007 and 2008 the Institute indicated “none”.  When asked when the applicant ceased undertaking full-time study the Institute advised “18/12/2005.  No subjects finished”.

[5] T4, folio 47.

The applicant

13.     The applicant was self-represented.  She gave evidence to the Tribunal that she started the course in July 2005, at which time she was enrolled in four subjects.  These subjects were to be assessed by a combination of assignments and examinations.  The applicant did not sit any exams nor submit any assignments.  

14.     The reason why the applicant found study difficult, she submitted, was because she had “a lot of health problems”. She had a long history of migraines as well as hormonal and gynaecological problems.  She was hospitalised twice and took medications.  She feels that her health “is better now than then”.

15.     Reference was made by the applicant to medical evidence.  She had day surgeries in June 2006 and 2007. She states she contacted the Institute in early 2006 about her medical problems and was told the course was “self-paced”.  The applicant described that she had intentions to complete her course at the Institute and would work hard to make up for lost time. The Institute did not send her any exams; nor did she make a request to receive any exams.

16.     The applicant accepts she received the monies that Centrelink claims as outstanding debts.  The applicant states she believed she was still studying full-time during the period under review, even though she did not sit any exams nor complete any assessments.  She further believed she would be paid for the full three years of the course’s duration and that the payments would cease only if she did not complete the course within that time frame.  She held this belief on the basis of her experiences when completing an earlier short course. 

17.     The applicant stated that she informed the Institute of the fact she was receiving payments from Centrelink.   The Institute has stated (see T2, folio 8) that if a student was in receipt of Centrelink benefits, they were always advised of the need to complete five subjects per six months to retain their full-time status. 

18.     The applicant recalls receiving notices from Centrelink and reading about the requirement to notify Centrelink within fourteen days of any changes in her circumstances.  She did not contact Centrelink within fourteen days as the notices required but some six months later, when she rang Centrelink on 20 January 2006. 

19.     According to the applicant, she rang Centrelink on 20 January 2006 to seek an advance payment of parenting payment single and to confirm payment amounts and dates. An advance payment of $500 was subsequently made to her.  However, there is no Centrelink record of the applicant contacting it that day to discuss her studies.  She insists such a conversation took place on the basis of diary notes she kept (Exhibit E). She concedes that Centrelink’s record keeping is usually “meticulous”.

20.     The evidence of the applicant is that she rang Centrelink wanting to make sure she would not acquire a debt.  The conversation with a Centrelink officer lasted some 10 to 15 minutes. She told the officer that she had not yet completed any assessment in relation to the course.  The officer gave assurances, the applicant says, that she could compete the course in more than three years if necessary, without acquiring a debt. 

21.     The applicant told the Tribunal that she relied on the 20 January 2006 conversation with Centrelink and so was horrified when she received a “bill” in February 2009.  The applicant thought that the conversation had resolved the issue of her payments and so she continued receiving them in good faith.  She said she had always thought that it was easy to be “caught” by Centrelink if one did “the wrong thing”.

22.     Apart from the 20 January 2006 telephone conversation, the applicant says she had another, briefer, telephone discussion with a Centrelink officer in August 2006.  She only produced diary entries in relation to the 20 January conversation.

23. The applicant submitted that in giving her the “wrong information”, Centrelink had committed an administrative error under the Act. She also submitted that any debts should be waived on the basis of her “special circumstances”, i.e. medical conditions.

24.     The applicant submitted medical reports from her treating doctors, Drs Carey and Mills.  In his report, Dr Carey referred to an operation the applicant underwent at the Pindara Day Procedure Centre in June 2006.  Other, earlier reports, from Dr Carey to Dr Tucker in May and June 2007 were also included.  In his report of October 2007, Dr Mills indicated that the applicant had suffered endometriosis since April 1999 and migraines since October 1992.  The applicant stated that Dr Mills largely relied on her clinical notes.  He noted that she was able to study and could work for more than eight hours per week. 

25.     The applicant referred to the waiver by Centrelink of one of her education entry payment debts and said that, therefore, the debts from 2006 and 2007 should also be waived.

The respondent

26.     Ms Crittenden is a Centrelink Customer Services Adviser who started working with Centrelink in April 2005 and has regularly dealt with pensioner education supplement inquiries.  She gave evidence over the telephone.  She described her work habits and duties, including how she sought advice from others for complicated matters.  She could not recall speaking to the applicant but had a “tele note” of a conversation with the applicant on 20 January 2006.  It was indicated therein that Ms Crittenden was contacted by the applicant by telephone and that they spoke for some two and half minutes.  She did not access the applicant’s medical records or history during that time.  Ms Crittenden has read the applicant’s statement in this matter and stated that she would not have given the applicant the advice as recorded by the applicant.  She would deal with inquiries efficiently and “straight down the line”.

27.     The applicant stated she did not think Ms Crittenden was the Centrelink person she spoke to on 20 January 2006 as that person had “sounded older”.  However the applicant was sure the contact had occurred on 20 January 2006 as recorded in her diary.

28.     Michelle Brazier, for the respondent, submitted that the applicant should continue to repay the debts by regular fortnightly deductions from her payments, as arranged with Centrelink. 

29.     Ms Brazier referred to the legislation and decided cases to indicate that the debts were correctly raised and payable by the applicant.  Counsel also submitted that a waiver of the debts was not possible, as “special circumstances” were not present in this case.  Also, “sole administrative error” on Centrelink’s part was not present in this matter.

CONSIDERATION AND FINDINGS

30.     The Tribunal notes that in July 2005, the applicant was enrolled as a full-time student with the Institute and was a recipient of parenting payment single.  It is accepted by both parties that she did not complete or submit any assessment for the course.  It is also agreed that the applicant did not respond in relation to her payments and study position within fourteen days as required by the notices she received from Centrelink.

31.     On the basis of Ms Crittendon’s written statement and stated practice, the Tribunal accepts that the Centrelink “tele notes” are an accurate reflection of the 20 January 2006 conversation.  These notes do not record the applicant seeking or requiring a detailed explanation of her circumstances. The Tribunal does not accept the applicant’s version of that conversation.  Ms Crittendon would have referred an inquiry of the kind the applicant alleges to another Centrelink officer, as procedures required. The Tribunal is not prepared to find that she was given incorrect information by Centrelink.   

32. The Tribunal notes that during the period under review, the applicant was paid pensioner education supplement on the basis that she was studying full-time. Under s 1061PE of the Act, a student who is a sole parent may qualify for pensioner educational supplement while studying a concessional study load of at least 25% of the normal full-time load. However, the applicant did not submit any work for her course. Thus, she was not qualified to receive that supplement. As well, the applicant received her education entry payments pursuant to s 665A of the Act. She was not eligible for those payments, pursuant to the requirements of that section.

33. Given the Tribunal’s findings that the applicant received payments in excess of her correct entitlement, the amounts overpaid to her constitute legally recoverable debts under s 1223 of the Act.

34. Section 1236 of the Act allows for the probability of writing off or delaying recovery of a debt for a period, if the stated requirements are met. The applicant works part-time as a clairvoyant, receiving income from that source as well as her Centrelink payments. She lives with her mother, two brothers and her eight year old daughter. She does have the capacity to repay her Centrelink debts by instalments at a fortnightly rate. Indeed, that capacity is further shown by the fact that she has been doing so for some time now. Furthermore, her repayments were decreased by Centrelink from $30 a fortnight to $15 a fortnight. Consequently, it is not appropriate in the circumstances to write off the debt for a period pursuant to s 1236 of the Act.

35. The applicant stated that she received misleading advice from Centrelink regarding her study course completion and welfare payments. She also stated that she received the payments in good faith as referred to in s 1237A of the Act. She submitted that, therefore, any debt should be waived on the grounds that the debt is solely attributable to administrative error.

36.     In Re Gehardt and Secretary, Department of Employment, Education and Training (AAT 10941, 17 May 1996) the Tribunal discussed the meaning of “solely attributable to an error by the Commonwealth” in relation to the equivalent provisions in the Student and Youth Assistance Act 1973.  The Tribunal noted in part at [40]:

There is nothing in sub-section 289(1) [s 1237A(1)] which indicates that any meaning should be given to “solely” other than its ordinary meaning.  Applying those ordinary meanings to the sub-section mean that the Secretary must waive the right to recover the proportion of the debt that is attributable only to the Commonwealth’s administrative error.  The Secretary’s duty to waive does not extend to those debts which are attributable to errors or other factors which are independent of the Commonwealth’s administrative error.  It makes no difference that those other errors or factors are minor.  If those other errors or factors follow as a result of the Commonwealth’s administrative error (i.e. they are incidental to the Commonwealth’s error), then it may be that the debt is attributable solely to the Commonwealth’s administrative error.  Whether it is or is not attributable in that situation to the Commonwealth’s administrative error will be a question of fact.

37. The Tribunal does not accept that the debt incurred by the applicant is “attributable solely to an administrative error made by the Commonwealth”. Contrary to the applicant’s submissions and evidence, Centrelink records for 20 January 2006 do not record a lengthy conversation with the applicant. Indeed, there is no Centrelink record to indicate the applicant was told she could continue to study at her own pace without concern for her full-time student status. The Tribunal notes that the applicant acknowledges receipt of a number of notices pursuant to s 68 of the Social Security (Administration) Act 1999 notifying of her obligations to advise Centrelink within 14 days of her ceasing full-time study.  Centrelink has no record of contact by the applicant in this regard. 

38. The requirement in s 1237A of the Act that a person receive payment in “good faith” means that the applicant must have had a reasonable belief that she was entitled to received the payments. The Federal Court in Jazazievska v Secretary, Department of Family and Community Services (2000) 65 ALD 424 at 435-6 [40] noted:

The issue of good faith is … 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…

39.     As well, the Tribunal in Re Cochrane and Secretary, Department of Employment and Workplace Relations [2006] AATA 394 noted that reliance upon oral evidence given by Centrelink in the face of valid notifications is not sufficient to amount to sole administrative error. Consequently, the Tribunal finds that Centrelink is obliged to recover the debts it is owed: the applicant does not satisfy s 1237A(1) of the Act in that she did not receive the payments in good faith.

40. Section 1237AAD of the Act allows the Commonwealth to waive all or part of the debt on the grounds that “special circumstances” exist (other than financial hardship alone). That section provides as follows:

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.

41. “Knowingly” in s 1237AAD means that the person had actual knowledge of events or circumstances. It does not necessarily mean that the person acted fraudulently. The expression “special circumstance” is not defined in the Act but has been considered in a number of cases. For example, in Re Beadle and Director-General of Social Security (1984) 6 ALD 1 at 3 it was noted that:

An expression such as “special circumstances” is by its very nature incapable of precise or exhaustive definition.  The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional.  Whether circumstances answer any of these descriptions must depend upon the context in which they occur.  For it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases.  This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special.

42.     In Groth v Secretary Department of Social Security (1995) 40 ALD 541 at 545 the Federal Court noted:

The phrase “special circumstances”, it has been said, although imprecise is sufficiently understood not to require judicial gloss … it is sufficient to observe that it would require something to distinguish Mr Groth's case from others, to take it out of the usual or ordinary case. That was, I consider, the only enquiry to be undertaken in this 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. The enquiry I have referred to would involve considering what would be the effect, if the provision in question or the principle of liability it creates, is applied.

43.     The applicant submitted that her health problems in the period under review constitute “special circumstances”.  She noted she experienced migraines and other difficulties that caused her to undergo two hospitalisations in day surgery.  She also noted that there was no Centrelink record of the 20 January 2006 conversation that agreed with her contemporaneous diary entry.

44.     The Tribunal notes that the effect of the applicant’s medical conditions on her ability to study and to undertake her course requirements from July 2005 to July 2007 is not well documented. The Tribunal accepts that she was incapacitated for short times due to her medical conditions.  However, she was unable to provide sufficient corroborative evidence that her medical conditions affected her capacity to study during the period under review.  The Tribunal believes that if her regular treating doctor had doubts about her ability to work or study it would have been recorded in her file notes.  Indeed, none of her medical reports reflect that she was not able to undertake study or work during the period under review.

45. The Tribunal notes the applicant’s evidence that she works part-time and is currently repaying the debt at the rate of $15 a fortnight. In all the circumstances and based on the evidence and material, the Tribunal finds that the applicant’s circumstances are not sufficiently special to warrant the exercise of the discretion to waive all or part of the recovery of the debts under ss 1237A and 1237AAD of the Act.

46.     The overpayment of pensioner education supplement ($3,258.14) and education entry payments ($416) are debts due to the Commonwealth. The debts are to be recovered by Centrelink.

DECISION

47.The Tribunal affirms the decisions under review.

I certify that the 47 preceding paragraphs are a true copy of the reasons for the decision herein of Mr S Karas, AO, Senior Member.

Signed: ...............................[Sgd].........................................
  Mátyás Kochárdy, Research Associate

Date of Hearing  18 November 2009 
Date of Decision  3 December 2009
The Applicant was self-represented.         
For the Respondent                  Michelle Brazier, Departmental Advocate