Kherani and Secretary, Department of Social Services (Social services second review)
[2021] AATA 2849
•13 August 2021
Kherani and Secretary, Department of Social Services (Social services second review) [2021] AATA 2849 (13 August 2021)
Division:GENERAL DIVISION
File Number(s): 2019/4186; 2020/4748
Re:Anila Kherani
APPLICANT
AndSecretary, Department of Social Services
RESPONDENT
DECISION
Tribunal:Chris Puplick AM, Senior Member
Date:13 August 2021
Place:Sydney
The decisions of the AAT1 on 4 June 2019 and 16 July 2020 are set aside and remitted to the Secretary with the direction that:
(a)the Applicant’s Austudy is to be cancelled from 16 May 2016;
(b)the Applicant’s Austudy is to be reinstated from 4 July 2016, then cancelled again from 2 May 2017;
(c)the Applicant was overpaid Austudy for the period from 16 May 2016 to 3 July 2016 and from 2 May 2017 to 16 October 2018 in the sum of $25,854.79;
(d)the Secretary is to calculate the debt arising from the overpayment of Austudy between 16 May 2016 to 3 July 2016; and
(e)the total overpayment arising from (c) and (d) above is to be recovered from the Applicant.
..................................[sgd]......................................
Chris Puplick AM, Senior Member
CATCHWORDS
SOCIAL SECURITY – Austudy payment cancellation – for what period was the Applicant eligible for Austudy payment – when was Austudy payment cancelled – whether Applicant owes a debt to the Commonwealth – no sole administrative error or special circumstances – decision set aside and remitted
LEGISLATION
Social Security Act 1991 (Cth) ss 568, 569, 569A, 569AA, 569C, 569E, 1223, 1236, 1237A and 1237AAD
Social Security (Administration) Act 1999 (Cth) ss 80, 94 and 118
CASES
Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25
Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114
Dranichnikov v Centrelink [2003] FCAFC 133
GGGD and Secretary, Department of Social Services (Social services second review) [2020] AATA 802
Hogan v Secretary, Department of Employment, Education and Workplace Relations and Anor [2011] AATA 162
In the Marriage of Phillippe [1997] 4 Fam LR 153
Jess v Scott and Ors (1986) 70 ALR 185
Re Beadle and Director General of Social Security (1984) 6 ALD 1
Secretary, Department of Social Security v Hales (1998) 82 FCR 154
Skinner and Secretary, Department of Social Services (Social services second review) [2015] AATA 569
Stafford and Secretary, Department of Social Services (Social services second review) [2018] AATA 2746
Stubbs and Secretary, Department of Family and Community Services [2003] AATA 729
SECONDARY MATERIALS
Social Security Guide ss 3.3.4.60 and 3.3.4.70
REASONS FOR DECISION
Chris Puplick AM, Senior Member
13 August 2021
THE ISSUES
This matter concerns two decisions by the Social Services and Child Support Division of this Tribunal (AAT1) against which Ms Anila Kherani (the Applicant) has appealed.
The central issue in question is whether or not the Applicant was overpaid the Austudy Allowance. If she was, then questions arise as to the date from which such overpayments may have been made and whether or not they should be recovered by the Secretary, Department of Social Services (the Respondent).
The original decision that the Applicant had been overpaid was made by the Respondent on 22 October 2018.
The first decision by the AAT1 was made on 4 June 2019. It affirmed that the Applicant had an Austudy debt, but it varied the details of that debt by determining that overpayments had commenced on 2 May 2017 rather than on 16 May 2017.[1]
[1] This decision was made by an Authorised Review Officer (ARO) of the Department on 17 December 2018 in response to the Applicant’s request for the decision of 22 October 2018 to be reviewed.
The second decision by the AAT1 was made on 16 July 2020. It went to considerations of the quantum of the debt which had been calculated by the Respondent (via Centrelink) on 3 July 2019. In doing so, it varied a decision by an ARO[2] and determined that the debt in question amounted to $25,854.79.
[2] This decision was made by an ARO on 27 April 2020 in response to a request by the Applicant to review an original calculation made by the Respondent on 3 July 2019.
The application for review of the first decision was made on 14 July 2019, with the second decision subsequently joined to the first as a linked matter.[3] These matters did not come before this Tribunal until 30 June 2021. Most of this delay was occasioned by the Tribunal according the Applicant additional time to obtain and file material which needed to be sourced from various institutions. In the event, there are some 1,000 pages of documents[4] before the Tribunal some of which were lodged only a few days before the hearing. The hearing itself took place using the Microsoft Teams platform in accordance with the Tribunal’s COVID-19 protocols.
[3] Tribunal documents (T-documents) (2019/4186) at 1; T-documents (2020/4748) at 2.
[4] Including at least 35 separate submissions from the Applicant.
THE AUSTUDY SCHEME
In order to understand the complexities of the claims and counter-claims in this application it is necessary to set out in some detail the operations of the Austudy scheme.
Austudy is a scheme to provide financial support to eligible students who are undertaking approved courses of study. From its inception in 1987 until June 1998 it was paid under the Student Assistance Act 1973 (Cth). In 1998 the administration of the scheme was brought within the provisions of the Social Security Act 1991 (Cth) (the Act). At the same time payments were separated into Youth Allowance for students aged 16 to 24 years and Austudy Payment for students aged 25 to 64 years.
Section 568 of the Act sets out the general rules for Austudy eligibility.
568 Qualification for austudy payment—general rule
Subject to this Subdivision, a person is qualified for an austudy payment in respect of a period if, throughout the period:
(a) the person satisfies the activity test (see Subdivision B); and
(b) the person is of austudy age (see Subdivision C); and
(c) the person is an Australian resident.
Section 569 goes on the define what constitutes the “activity test”.
569 Activity test
General
(1) Subject to subsection (2), a person satisfies the activity test in respect of a period if the person satisfies the Secretary that, throughout the period, the person is undertaking qualifying study (see section 569A).
Persons who do not satisfy the activity test
(2) A person cannot be taken to satisfy the activity test if the person:
(a) is a new apprentice; or
(b) has completed a course for:
(i) a degree of Doctor at an educational institution; or
(ii) a qualification at a foreign institution that is, in the Secretary’s opinion, of the same standing as a degree of Doctor at an educational institution.
Section 569A then establishes what a person must do to be taken as undertaking qualifying studies
569A Undertaking qualifying study
For the purposes of this Part, a person is undertaking qualifying study if:
(a) the person:
(i) is enrolled in a course of education at an educational institution; or
(ii) was enrolled in the course and satisfies the Secretary that he or she intends, and has (since no longer being enrolled) always intended, to re‑enrol in the course when re‑enrolments in the course are next accepted; or
(iii) was enrolled in the course and satisfies the Secretary that he or she intends, and has (since no longer being enrolled) always intended, to enrol in another course of education (at the same or a different educational institution) when enrolments in the other course are next accepted; and
(b) the course in which the person is enrolled, or intends to enrol, is an approved course of education or study (see section 569B); and
(c) the person is a full‑time student or a concessional study‑load student in respect of that course (see sections 569C and 569D); and
(d) the person satisfies the progress rules (see sections 569G and 569H).
Note: Only one course of education can be considered in deciding if a person satisfies the undertaking qualifying study requirement: see section 569AA.
Section 569AA provides that the requirements in the previous section are to be determined in relation to only one course of education.
569AA One course of education
(1) Whether subparagraph 569A(a)(i) or (ii) and paragraphs 569A(b), (c) and (d) are satisfied in relation to a person is to be determined in relation to only one course of education.
(2) Whether a person satisfies the Secretary of the person’s intention mentioned in subparagraph 569A(a)(iii) and whether paragraphs 569A(b), (c) and (d) are satisfied in relation to the person is to be determined in relation to only one course of education.
Note 1: The effect of this section is that 2 or more courses of education for a person cannot be aggregated to satisfy the undertaking qualifying study requirement.
Note 2: The one course of education may be a combined course: see the legislative instrument made under section 5D of the Student Assistance Act 1973.
Section 569C provides a definition of what constitutes a full-time student.
569C Full‑time students
For the purposes of this Subdivision, a person is a full‑time student in respect of a course if:
(a) in the case of a person who is enrolled in the course for a particular study period (such as, for example, a semester)—the person is undertaking at least three quarters of the normal amount of full‑time study in respect of the course for that period; or
(b) in the case of a person who intends to enrol in the course for a particular study period—the person intends to undertake at least three quarters of the normal amount of full‑time study in respect of the course for that period.
Note: For normal amount of full‑time study see section 569E.
The normal amount of study referenced in section 569C is defined in section 569E.
569E Normal amount of full‑time study
(1) For the purposes of this Subdivision, the normal amount of full‑time study in respect of a course is:
(a) if:
(i) the course is a course of study within the meaning of the Higher Education Support Act 2003; and
(ii) there are Commonwealth supported students (within the meaning of that Act) enrolled in the course;
the full‑time student load for the course; or
(b) if the course is not such a course and the institution defines an amount of full‑time study that a full‑time student should typically undertake in respect of the course—the amount so defined; or
(c) otherwise—an amount of full‑time study equivalent to the average amount of full‑time study that a person would have to undertake for the duration of the course in order to complete the course in the minimum amount of time needed to complete it.
(2) Without limiting subsection (1), the normal amount of full‑time study in respect of a course is an average, taken over the duration of the period for which the person in question is enrolled in the course, of 20 contact hours per week.
The legislative provisions of the Act are supplemented by Instructions contained in the Social Security Guide (the Guide) which sets out the aspects of the interpretation and implementation of the Act’s provisions. Section 3.3.3 of the Guide deals with qualification and liability for payment of Austudy and section 3.3.4.60 is a guide to “Assessing tertiary study-load for Austudy – full-time students”.
It provides, inter alia:
Full-time study-load
For tertiary students to be in full-time study they must be enrolled in and undertaking, or intending to enrol in at least 75% of the normal amount of full-time study.
The normal amount of full-time study for a course is:
·if the course is a course of study within the meaning of the Higher Education Support Act 2003 and there are Commonwealth supported students (within the meaning of that Act) enrolled in the course, the amount of full-time study for the course, or
·if the course is not such a course and the institution defines an amount of full-time study that a full-time student should typically undertake in respect of the course in the period - the amount so defined, or
·if neither of the above applies, an amount equivalent to the average amount of full-time study that a person would have to undertake in the period for the duration of the course in order to complete the course in the minimum amount of time needed to complete it.
In some cases it may also be appropriate to regard the normal amount of full-time study as an average of 20 hours per week taken over the duration of the period for which the person is enrolled in the course.
The Guide recognises the need for flexible arrangements related to study-load and in relation to Open Training and Education Network (OTEN)[5] courses it states:
To receive Austudy while studying through OTEN, students must be enrolled in an approved course and be undertaking an equivalent full-time study load (EFTSL). OTEN will generally only enrol students in 1 or 2 units at a time and the units are measured in hours.
OTEN considers students to be full-time if they are doing 16 hours of coursework a week.
Example: If students are enrolled in 1 unit that normally takes 48 hours of course work to complete, they are expected to finish the unit within 3 weeks of starting it:
48 hours ÷ 16 hours = 3 weeks.
OTEN provides a flexible course model which encourages students to complete courses at their own pace with no penalty for not completing work. However, if they are receiving Austudy, they should complete their study in the normal time it takes to complete the course. In the example above, students would be expected to have finished their unit within 3 weeks and have started the next unit.
[5] OTEN is now known as TAFE Digital.
Section 3.3.4.60 needs to be read in conjunction with section 3.3.4.70 which sets out details of how study progress is to be measured, the allowable times for completion of courses and the allowable times when students are studying a second course.
THE APPLICANT’S QUALIFICATIONS FOR AUSTUDY
The Applicant was born in June 1972, hence she is of “Austudy age” and is an Australian resident. She thus meets the requirements of subsections 568(b) and (c).
The question before the Tribunal thus revolves around the issue of whether or not she satisfied the “activity test” as required by subsection 568(a).
The Applicant’s study record
During the relevant period (2 May 2016 to 19 October 2018) the Applicant was enrolled in three different courses. Certificates issued by TAFE Digital (previously OTEN) show these as follows:[6]
(a)Certificate IV Accounting from 4 July 2016 to 5 April 2018.
(b)Certificate IV Business Administration from 10 May 2018 to 26 November 2018.
(c)Certificate IV Accounting and Bookkeeping from 17 October 2018 to 8 April 2020.
Exchange of correspondence and advice[7]
[6] T-documents (2020/4748) at 84-86.
[7] Numbers in parentheses refer to pages in T-documents (2020/4748).
The following is a schedule of the correspondence exchanged between the parties in an attempt by the Respondent to ensure that Austudy payments were made in accordance with the Applicant’s actual course of study being undertaken.
Date
Actions undertaken by the Applicant
Actions undertaken by the Respondent
10 May 2016
Lodged online claim (77-81) stating that Applicant was enrolled in course of study commencing 16 May 2016 and ending 3 February 2020.
18 May 2016
Notification of Austudy payment and that Applicant was to advise any change of study arrangements (339).
Similar letters sent 29/11/16; 09/01/17 and 24/10/17 (368, 374 and 392).[8]
25 July 2016
Letter sent to Applicant requesting confirmation of study details (348).
2 August 2016
Advised Respondent that had commenced study in Diploma of Accounting in May 2016 (185)
29 November 2016
Confirmed to Respondent regarding enrolment in course ending 5 January 2018.
Notification of Austudy payment and that Applicant was to advise any change of study arrangements (368).
18 December 2017
Advised Respondent of enrolment in Certificate IV Accounting for period 4 July 2016 to 5 April 2018 (82).
Notification of Austudy payment and that Applicant was to advise any change of study arrangements (401).
11 May 2018
Advised Respondent of enrolment in Certificate IV Business Administration with course dates from 2 May 2018 to 1 November 2019.[9]
15 May 2018
Notification of Austudy payment and that Applicant was to advise any change of study arrangements (417).
14 September 2018
Notice to Applicant requesting proof of evidence of her studies (420).
1 October 2018
Applicant confirmed to Respondent enrolment in Certificate IV Business Administration for period 10 May 2018 to 1 November 2019 (83).
18 October 2018
Applicant confirmed to Respondent enrolment in Certificate IV Accounting and Bookkeeping for period 17 October 2018 to 8 April 2020 (49).[10]
[8] Notifications given under section 68(2) of the Social Security (Administration) Act 1999 (Cth), see below.
[9] Annexure B to Respondent’s Statement of Facts, Issues and Contentions.
[10] This refers to page 49 of the T-documents (2019/4186).
Review and cancellation of Austudy payments
Following the receipt of information from the Applicant in October 2018, the Respondent proceeded as follows:
Date
Respondent
AAT 1
Applicant
22 October 2018
Decision to cancel Austudy payments to Applicant as from 16 May 2016 (247).
6 November 2018
Notification to Applicant of cancellation (84).
17 December 2018
ARO confirms cancellation decision (89).
13 March 2019
Application made for AAT1 review. Matter heard on 29 May 2019.
16 April 2019
Determined level of overpayment to be $42,848.03 (252).
4 June 2019
Varied cancellation so as to take effect from 2 May 2017 (93).
3 July 2019
Debt recalculated to $25,953.42 and implemented 10 July 2019.
14 July 2019
Application made for review of ARO decision.
27 April 2020
Debt recalculated to $26,001.43 for period 2 May 2017 to 19 October 2018 (285).
16 July 2020
Varied overpayment decision to period 2 May 2017 to 16 October 2018 in total sum of $25,854.79 (6).
6 August 2020
Application to this Tribunal for review of AAT1 decision dated 16 July 2020 linked to review of AAT1 decision dated 4 June 2019 .
Completion of Studies
It is now necessary to establish, from the TAFE Digital and other records, exactly when the Applicant was studying and the level of study which she was undertaking. This is because sections 569C and 569E, taken with the provisions of the Guide establish that a course of study may be considered undertaken on a full-time basis even if it has not been for the full length of the course, provided that at least 75% of the normal amount of study has been undertaken full-time.
This turns out to be a Herculean task as the Augean stables of conflicting evidence from the Applicant, TAFE Digital and the variation of calculations made by the several AROs and each of the previous AAT1 assessments are not all in accordance. The Tribunal is faced with trying to establish the correct version of study arrangements undertaken from the following principal sources:
(a)the detailed tables of study arrangements as calculated by the AAT1 in its decision of 16 July 2020;[11]
(b)calculations made by TAFE Digital on 1 April 2019;[12]
(c)detailed notes and calculations made by the ARO on 17 December 2018;[13]
(d)calculations made in relation to the study for Certificate IV in Accounting made by the AAT1 on 4 June 2019;[14]
(e)submissions made in the Respondent’s Statement of Facts, Issues and Contentions (at 5.14) dated 25 February 2021; and
(f)numerous submissions from the Applicant, particularly those of 25 July 2019,[15] 18 March 2020,[16] 5 May 2020[17] and 7 May 2020.[18]
[11] T-documents (2020/4748) at 9-12.
[12] T-documents (2019/4186) at 95-96.
[13] Ibid at 53-57.
[14] Ibid at 33-34.
[15] Applicant’s material submitted 28 April 2021.
[16] Ibid.
[17] Ibid.
[18] T-documents (2019/4186) at 155-161
There are however a number of periods within the larger period of 2 May 2017 to 16 October 2018 which can be carved out and dealt with in a straightforward fashion..
All the evidence suggests that the Applicant did not actually commence any course of study until 4 July 2016 (Certificate IV in Accounting). In her original application for Austudy the Applicant made clear that this was her commencing date and she confirmed this in subsequent correspondence.
Any Austudy payments made for the period 2 May 2016 to 3 July 2016 were incorrectly made.
The Applicant began her studies on 4 July 2016 in Certificate IV Accounting. This course required completion of 13 units of study (10 core and 3 elective). The numbers of curriculum hours assigned to each unit varied but in total the nominal hours required for course completion was 610. Evidence from OTEN shows that by 1 May 2017 the Applicant completed the equivalent of seven complete units (380 hours) and was part-way through four others (86 hours). This gave her a total of 466 nominal hours out of the required 610 which is 76.4% and hence meets the 75% threshold required under section 569C of the Act.
The degree of the difficulty encountered in making these calculations may be seen from the fact that the AAT1 calculated the hours of study to be 466[19] whereas the Respondent’s SFIC, relying on the same OTEN data calculates 468.5 hours.[20]
[19] T-documents (2020/4748) at 95-96.
[20] Respondent’s SFIC at [5.14]; T-documents (2019/4186) at 82.
Any Austudy payments made for the period 4 July 2016 to 1 May 2017 were correctly made.
At the other end of the timeframe there is evidence that from 17 October 2018 to 20 February 2019 the Applicant was undertaking study in both Certificate IV Business Administration and in Certificate IV Accounting and Bookkeeping.[21] OTEN information suggests that over the period from 17 October 2018 to 14 December 2018 the Applicant had completed some 92.5% of the normal full-time study required.[22]
[21] T-documents (2020/4748) at 10-12.
[22] Ibid at 86.
Any Austudy payments made for the period 17 October 2018 to 19 October 2019 were correctly made.
This leaves the intervening period of 2 May 2017 to 16 October 2018 for consideration.
The AAT1 decision of 16 July 2020 meticulously considered the evidence from OTEN to calculate the number of hours of study were being undertaken by the Applicant in the courses in which she was then enrolled (Certificate IV Accounting and Certificate IV Business Administration). This Tribunal has reviewed those figures provided by TAFE Digital[23] and agrees with the calculation made by the AAT1 as follows:
[23] T-documents (2019/4186) at 82-83; T-documents (2020/4748) at 112-114.
Study period
Total nominal hours per week
% full-time study load
2 May 2017 – 22 January 2018
3.02
18.9
23 January 2018 – 23 March 2018
2.76
17.3
24 March 2918 to 28 March 2018
2.40
15.0
29 March 2018 to 11 April 2018
1.77
11.1
10 May 2018 to 4 July 2018
9.48
59.3
5 July 2018 to30 July 2018
6.96
43.6
31 July 2018 to 16 October 2018
5.27
32.9
The Tribunal draws the following conclusions from the data:
(a)in the initial period (2 May 2017 to 11 April 2018) the Applicant undertook less than 19% of the full-time study load;
(b)in the second period (10 May 2018 to 16 October 2018) the Applicant undertook less than 60% of the full-time study load; and
(c)at no point in this period did the Applicant meet a study-load requirement of 75%.
This means that the Applicant cannot be taken as having been qualified to be regarded as a full-time student during this period because she did not meet the activity test of section 569 of the Act.
Any Austudy payments made for the period 2 May 2017 to 16 October 2018 were incorrectly made.
Conclusion regarding Austudy entitlements
The Tribunal’s analysis of the study record of the Applicant leads to the following conclusions:
(a)the Applicant was eligible for Austudy payments from
(i)4 July 2016 to 1 May 2017; and
(ii)17 October 2018 to 19 October 2019.
(b)the Applicant was ineligible for Austudy payment from
(i)16 May 2016 to 3 July 2016; and
(ii)2 May 2017 to 16 October 2018.
CANCELLATION OF AUSTUDY PAYMENTS
Cancellation of Austudy payments is effected under the provisions of the Social Security (Administration) Act 1999 (Cth). There are various relevant provisions of that Act:
(a)section 80 provides that “a social security payment” (in this instance Austudy) may be cancelled or suspended where a person is “not qualified for the payment”;
(b)section 94 further provides that where a person is sent a Notice (under section 68(2)) seeking information from them in order to verify their entitlement to social security payment and they fail to provide that information, this constitutes a further ground for such payments to be cancelled; and
(c)section 118 provides that the date of any such cancellation is to be specified in the determination and may be a date earlier than that on which the decision is made.
The Respondent contends that the cancellation arises not only because the Applicant was not qualified for payment at various times (did not meet the activity test) but that some of her correspondence was misleading in that it claimed she was studying when she was not[24] and furthermore her failure to respond to section 68(2) Notices advising of changes in her study arrangements were intentionally misleading.[25]
[24] T-documents (2020/4748) at 79 and 185.
[25] Respondent’s SFIC at [5.26]-[5.27].
The calculations made by the Respondent are that the overpayment from 2 May 2017 to 16 October amount to $25,854.79. The Tribunal has no reason to doubt that this calculation has been made correctly[26] although it has not itself made any such calculation. There are no figures before the Tribunal which allow it to independently calculate what the amount of overpayment from 16 May 2016 to 3 July 2016 might be.
[26] Based on figures provided in Annexure C to the Respondent’s SFIC.
The Tribunal finds that the Applicant has a debt to the Commonwealth[27] but must remit the matter for calculation as to the exact quantum of that debt.
[27] Social Security Act 1991 (Cth) s 1223.
SHOULD THE DEBT BE RECOVERED?
Part 5.4 of Chapter 5 of the Act contains provisions which allow for the Secretary to write-off or waive debts to the Commonwealth. If a debt is written-off (subject to section 1236) it is taken to be irrecoverable at the time that decision is made but still exists and may be revived at some stage.
1236 Secretary may write off debt
(1) Subject to subsection (1A), the Secretary may, on behalf of the Commonwealth, decide to write off a debt, for a stated period or otherwise.
(1A) 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
(c) the debtor’s whereabouts are unknown after all reasonable efforts have been made to locate the debtor; or
(d) it is not cost effective for the Commonwealth to take action to recover the debt.
(1B) For the purposes of paragraph (1A)(a), a debt is taken to be irrecoverable at law if, and only if:
(b) there is no proof of the debt capable of sustaining legal proceedings for its recovery; or
(c) the debtor is discharged from bankruptcy and the debt was incurred before the debtor became bankrupt and was not incurred by fraud; or
(d) the debtor has died leaving no estate or insufficient funds in the debtor’s estate to repay the debt.
(1C) For the purposes of paragraph (1A)(b), if a debt is recoverable by means of:
(a) deductions from the debtor’s social security payment; or
(b) deductions under section 84 of the A New Tax System (Family Assistance) (Administration) Act 1999; or
(c) setting off under section 84A of that Act;
the debtor is taken to have a capacity to repay the debt unless recovery by those means would result in the debtor being in severe financial hardship.
There is no evidence before the Tribunal which would appear to enliven any of the provisions of this section. Although the term “severe financial hardship” is not defined in the Act, judicial authority makes it clear that it means more than just financial embarrassment or straitened financial circumstances.[28] The Applicant was, at least at the time of the Tribunal hearing, in receipt of Jobseeker Allowance[29] and although the Tribunal has no evidence of her current financial circumstances, nor is it in a position to determine that she does not have the capacity to make repayments which would be determined by the Respondent in relation to her capacity to repay.
[28] Stubbs and Secretary, Department of Family and Community Services [2003] AATA 729.
[29] Respondent’s SFIC at [5.41].
1237A Waiver of debt arising from error
Administrative error
(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.
Underestimating value of property
(2) If:
(a) a debt arose because the debtor or the debtor’s partner underestimated the value of particular property of the debtor or partner; and
(b) the estimate was made in good faith; and
(c) the value of the property was not able to be easily determined when the estimate was made;
the Secretary must waive the right to recover the proportion of the debt attributable to the underestimate.
Proportion of a debt
(3) For the purposes of this section, a proportion of a debt may be 100% of the debt.
The critical element in this section is that it establishes that even in cases where there has been “administrative error”, that error must be the “sole” cause of the potentially incorrect outcome for debt to be waived.
Despite the protestations of the Applicant, there is no evidence of any error on the part of the Respondent. Even if some error might have been shown, the failure of the Applicant to provide the required information to the Respondent when put on notice to do so would mean that such error was not “solely” the cause of the outcome.
This was made clear in Stafford where the Tribunal said:
This Tribunal agrees with these findings. It is at least arguable that, had the Applicant fully complied with the reporting requirements imposed on him, the debt for which he now finds himself liable might not have accrued. Without further evidence it is ultimately impossible to determine if this would have been the case. However, it is certainly not the case that, given his failure to comply with the reporting requirements made clear in the notices sent to them, the debt in question can be blamed solely on an administrative error on the part of the Commonwealth.
In the circumstances, section 1237A of the Act has no application to the facts of this case and the debt in question cannot be waived under section 1237A of the Act.[30]
[30] Stafford and Secretary, Department of Social Services (Social services second review) [2018] AATA 2746 at [78]-[79].
Similarly, in GGGD the Tribunal said:
In the present case the applicants received multiple letters from the respondent over a number of years requiring updated information about their changing circumstances. For example, on 24 November 1992, MXXR was advised:
Under sections 172 and 173 of the Social Security Act 1991 you must tell us within 14 days...if any of these things happen or are likely to happen...If your combined assets go above $160,500.
The respondent outlined many other occasions where the applicant had been notified of their reporting requirements.
There are many cases where the reach of s 1237A has been curtailed by the applicant’s subsequent failure to inform Centrelink of a change of circumstances.[31]
[31] GGGD and Secretary, Department of Social Services (Social services second review) [2020] AATA 802.
Debts may also be waived if there are ‘special circumstances” to justify such a course of action.[32] This is provided in section 1237AAD of the Social Security Act 1991 (Cth) as follows:
[32] Social Security Act 1991 (Cth) s 1237AAD.
1237AAD Waiver in special circumstances
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.
Note 1: Section 1236 allows the Secretary to write off a debt on behalf of the Commonwealth.
Note 2: This section has effect subject to section 1237AAE in relation to an assurance of support debt.
As with so many key concepts in the Act, the term “special circumstances” is not given any precise definition. Without going into extensive detail, it can be said that the courts have identified a number of factors which go to establishing whether or not “special circumstance” exist. They must be:
·something more than ordinary or usual;[33]
·markedly different from the usual run of cases – not necessarily unique but having a particular quality of unusualness;[34]
·somehow distinguishing from usual cases of an analogous nature;[35]
·attuned to the individual circumstances of each case;[36]
·not so rigidly applied as to risk harsh or unreasonable outcomes;[37]
·involving “facts peculiar to the particular case which set it apart from other cases”;[38] and
·supportive of the overall integrity of the social security system and recognising the public interest in ensuring that public moneys are recovered where they can and should be.[39]
[33] Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25; Jess v Scott and Others (1986) 70 ALR 185.
[34] Re Beadle and Director General of Social Security (1984) 6 ALD 3 at 3.
[35] Dranichnikov v Centrelink [2003] FCAFC 133.
[36] Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114.
[37] Secretary, Department of Social Security v Hales (1998) 82 FCR 154.
[38] In the Marriage of Phillippe [1997] 4 Fam LR 153 per Kay J.
[39] Skinner and Secretary, Department of Social Services (Social services second review) [2015] AATA 569; Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114; Secretary, Department of Social Security v Hales (1998) 82 FCR 154.
Additionally, the Tribunal is invested with “a broad discretion to respond to a variety of circumstances”[40] but should note that special circumstances are not merely directed to the person's own circumstances. Rather, they are directed to those that are “special circumstances... that make it desirable to waive”.[41]
[40] Hogan v Secretary, Department of Employment, Education and Workplace Relations and Anor [2011] AATA 162 at [82].
[41] Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114 at [80].
Again, the Tribunal has not had any evidence put before it to establish that special circumstances arise in this case. It is clearly a case where, because the Applicant failed to provide proper advice to the Respondent of her actual study arrangements, she was overpaid.
The gravamen of the Applicant’s position, put repeatedly to the Tribunal both in written and oral submissions was that the Respondent failed to make her aware of her reporting responsibilities or of the basis upon which calculation of her study load would be made. For example, in a submission dated 11 March 2021 the Applicant claims, inter alia:
“Austudy letters with notify study load changes within 14 days I mentioned austudy officials never ask about my courses units studied record or ask study load details when I contact and spoke with the officials for my austudy claims and austudy extend claims, officials just asked for my course enrolled papers on my claims and extended claims. “2017 (and 2018) year administrative error is didn’t advise or writes Department of Social Services (DSS) 3.3.4.6 0/ 3.3.4.70.”
“Social Security Act 1991 written on austudy letters does not have 3.3.4.60 / 3.3.4.70
Legislation.gov.au website does not have 3.3.4.60 / 3.3.4.70
OTEN-TAFE Digital advised we do not have or pay Austudy
OTEN-TAFE Digital never advised guides.dss.gov with 3.3.4.60 on my confirmation of enrolments and letters
OTEN-TAFE Digital never advised Department of Social Services with 3.3.4.60 on my confirmation of enrolments / letters”
“Administrative error is Austudy department didn’t write guides.dss.gov.au with 3.3.4.60 or write Department of Social Services (DSS) guides.dss.gov.au with 3.3.4.60 on my austudy decisions and letters 10 May 2016 - 14 Mar 2019.”
In the same submission the Applicant suggests that she was mis-advised by teachers as to study or assessment requirements:
“CIV in Accounting I had difficulties in understanding an assessment that required extensive reading, teachers advised not to submit assessment until it’s okay because two chances given to pass assessment and course. Teachers check many times assessment submitted by me to the teaching department May 2017 - Jan 2018 I didn’t do well in this assessment I received fail mark because teachers mark differ than persons that final mark assessments then I didn’t need to retake assessment because this course was altered.”
The Applicant also states:
“CIV in Business Administration OTEN-TAFE Digital had computer errors while studying units, my user log in that OTEN had provided had ten units when I start business course studies then while studying unit in May 2018 two units deleted that delayed my full time studied time into part time studied then while studying units four units deleted in Sep 2018 that delayed my full time studied into part time studied time”.
There is no evidence in any of the OTEN-TAFE Digital records before the Tribunal to substantiate any of these claims and examination of earlier versions of them by two previous panels of this Tribunal have found no justification for them.
The Applicant also draws the attention of the Tribunal to her compromised state of health. In her submission of 11 March 2021, she writes:
“Doctors letters say my bad health start in 2017 because of unsatisfactory / fail result then Austudy debt matter arise in 2018 worsen my health. I didn’t visit doctors within time because I didn’t think I had bad health because of the matters, after many visits to the doctors then doctors decided I do have bad health because of the matters happened please revise this information.”
Letters from Dr Veda Safi (22 May 2020), Dr Yajuvendra Bisht (20 November 2019) and Registered Psychologist Ms Lydia Ghaly (19 September 2019) submitted as part of the Applicant’s evidence all attest to her suffering from varying degrees of anxiety and depression during her period of study and a letter from her father (29 October 2020) speaks of her distress and declining health condition over the last few years.
The Tribunal understands and accepts that the Applicant has suffered some compromise in her health status as a result of the pressures arising from both the difficulties encountered with her studies and the additional pressure of facing claims for repayment of a substantial debt.
However, neither this consideration of her health issues, nor the claims made in relation to “administrative error” on the part of the Respondent, in any way sufficiently establish that there are special circumstances which would warrant any waiver of the debt in question.
Conclusions
The evidence before the Tribunal establishes that, during the time when the Applicant was enrolled as a student, she was correctly paid Austudy for part of that time and incorrectly paid for other parts.
The incorrect payments resulted from the failure of the Applicant to respond to repeated Notices from the Respondent requiring her to confirm her study arrangements and hence Austudy entitlements.
This failure on the part of the Applicant has led to an overpayment from the public purse and that overpayment should be recovered. There are no grounds under any of the provisions of the legislation for the debt not to be recovered.
DECISION
The decisions of the AAT1 on 4 June 2019 and 16 July 2020 are set aside and remitted to the Secretary with the direction that:
(a)the Applicant’s Austudy is to be cancelled from 16 May 2016;
(b)the Applicant’s Austudy is to be reinstated from 4 July 2016, then cancelled again from 2 May 2017;
(c)the Applicant was overpaid Austudy for the period from 16 May 2016 to 3 July 2016 and from 2 May 2017 to 16 October 2018 in the sum of $25,854.79;
(d)the Secretary is to calculate the debt arising from the overpayment of Austudy between 16 May 2016 to 3 July 2016; and
(e)the total overpayment arising from (c) and (d) above is to be recovered from the Applicant.
I certify that the preceding 65 (sixty -five) paragraphs are a true copy of the reasons for the decision herein of Chris Puplick AM, Senior Member
......................................[sgd]..................................
Associate
Dated: 13 August 2021
Date(s) of hearing: 30 June 2021 Applicant: In person Solicitors for the Respondent: Dr S Thompson, Services Australia
Key Legal Topics
Areas of Law
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Administrative Law
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Statutory Interpretation
Legal Concepts
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Appeal
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Judicial Review
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Procedural Fairness
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Remedies
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Statutory Construction
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