Klancic and Secretary to the Department of Family and Community Services

[2002] AATA 1243

DECISION AND REASONS FOR DECISION [2002] AATA 1243

ADMINISTRATIVE APPEALS TRIBUNAL        Nº V2001/1610
GENERAL ADMINISTRATIVE DIVISION
  Re:         FABIAN KLANCIC
  Applicant
  And:       SECRETARY TO THE
  DEPARTMENT OF FAMILY AND
  COMMUNITY SERVICES
  Respondent

DECISION

Tribunal:       G.D. Friedman, Member
Date:             2 December 2002
Place:            Melbourne

Decision:The Tribunal affirms the decision under review.

(sgd) G.D. Friedman
  Member

1. SOCIAL SECURITY - overpayment of Austudy - notional entitlement to other benefit -recovery of debt - write off of debt - waiver - whether special circumstances exist
   Social Security Act 1991 s1223(1), 1224(1), 1236(1), 1236(1A), 1237A(1), 1237A(1A),
        1237AAD
   Re Beadle and Director-General of Social Security (1984) 6 ALD 1

REASONS FOR DECISION

2 December 2002  G.D. Friedman, Member

1. This is an application by Fabian Klancic (the applicant) for review of a decision of the Social Security Appeals Tribunal (SSAT) dated 14 November 2001.  The SSAT affirmed a decision of an authorised review officer of Centrelink dated 19 September 2001 to raise and recover a debt of Austudy allowance of $6131.44 for the period 7 February 2000 to 20 October 2000 (the relevant period). 

2. At the hearing of this matter on 27 November 2002 the applicant represented himself and Mr R. Huttner, a Centrelink advocate, represented the Secretary to the Department of Family and Community Services (the respondent).

3. The Tribunal received into evidence the documents lodged under s37 of the Administrative Appeals Tribunal Act 1975 (T1-T22).
   BACKGROUND

4. On 12 July 1999 the applicant enrolled in a full-time Diploma of Video Production course at Box Hill Institute of TAFE.  On 22 July 1999 he applied for and received Austudy and he advised Centrelink that the course would continue until 29 June 2001.  After completing the first year of the course, the applicant did not return to full-time study in 2000, but did not inform Centrelink of the change. He therefore continued to receive Austudy as a full-time student.  On 31 October 2000 Centrelink decided that the applicant had been overpaid and raised a debt of $6131.44 of Austudy paid to the applicant during the relevant period.  On 19 September 2001 an authorised review officer (ARO) affirmed the decision.  On 23 October 2001 the applicant sought review by the SSAT. The SSAT affirmed the decision of the ARO.  On 13 December 2001 the applicant lodged an application with the Tribunal for review of the SSAT's decision.
   EVIDENCE

5. The applicant gave oral evidence by telephone that, after completing the second semester in 1999, he attended two classes in one subject and work experience on two other days in the first semester of 2000, before ceasing his studies.  He said that, at the time, he was unsure whether he would continue the course.  He agreed that he received a letter from Centrelink dated 12 August 2000 requesting him to notify Centrelink if he ceased to be a full-time student.  He agreed that he had failed to do so, but said that he was having health problems at the time, caused by stress as a result of a fraudulent scheme that promised him employment.  The applicant also stated that he was not happy with the course and preferred to seek full-time employment at the time. 

6. The applicant told the Tribunal that, after several months without work, he was granted Newstart Allowance in about October 2000, which continued until December 2001 when he secured full-time employment as a storeman.  He agreed that he pleaded guilty in the Magistrates' Court to criminal charges arising from the overpayment and received a good behaviour bond, but emphasised that at no time did he intend to receive a benefit to which he was not entitled.  He stated that if he had notified Centrelink when he discontinued his studies, he would have been eligible to receive Newstart Allowance in any event.

7. On the question of repaying the debt, the applicant explained that he takes home about $500.00 per week, but his contract expires in December 2002, and he expects to be unemployed after that date.  He said that he could not afford to repay the entire amount.
   CONSIDERATION OF THE ISSUES

8. The relevant sections of the Social Security Act 1991 (the Act) are (s1223 and 1224 are as they were at the relevant time):  

   1223.(1)     Subject to subsection (1B), if an amount has been paid to a person by way of social security payment or fares allowance on or after 1 October 1997 and:

   (a)the recipient was not qualified for the social security payment or fares allowance when it was granted; or

   (b)the amount was not payable to the recipient;

   the amount so paid is a debt due to the Commonwealth.
   …

   1224.(1)   If:

   (a)an amount has been paid to a recipient by way of social security payment or fares allowance; and

   (b)the amount was paid because the recipient or another person:

   (i)made a false statement or a false representation; or

   (ii)failed or omitted to comply with a provision of the social security law or this Act as in force immediately before 20 March 2000, the 1947 Act or the Social Security (Fares Allowance) Rules 1998;

   the amount so paid is a debt due by the recipient to the Commonwealth.…

   …
   1236.(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.
   1236.(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.

   1237A.(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.
   1237A.(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.

   1237AAD     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 false representation; or

   (ii)failing or omitting to comply with a provision of this 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. Mr Huttner submitted that, as the applicant received a payment to which he was not entitled, there was an overpayment under the Act, and the debt was raised correctly.  He said that there was no provision under the Act for notional payment of Newstart Allowance.  He also stated that there was no administrative error attributable to the Commonwealth, no special circumstances to justify waiver of the debt and no grounds to write off the debt.

10. In reaching its decision, the Tribunal takes into account the written material, the oral evidence and the submissions made at the hearing.

11. On the material presented, the Tribunal finds that, as a result of receipt of Austudy payments during the relevant period, the applicant received a payment to which he was not entitled.  The overpayment is a debt to the Commonwealth in the amount of $6131.44 under s1223 and s1224 of the Act.

12. The Tribunal accepts Mr Huttner's submission that there are no grounds to write off the debt under s1236(1A) of the Act. With respect to waiver of the debt, the Tribunal finds that the debt was not attributable solely to an administrative error made by the Commonwealth, so the debt may not be waived under s1237A of the Act. In relation to s1237AAD of the Act, s1237AAD(b) requires special circumstances (other than financial hardship alone).  In Re Beadle and Director-General of Social Security (1984) 6 ALD 1, the Tribunal held that special circumstances must be unusual, uncommon or exceptional, and there must be something to distinguish the case from others.  On the evidence presented, the Tribunal finds that there is no notional entitlement to Newstart Allowance, and there are no financial or other matters raised by the applicant that constitute special circumstances.  Therefore, the Tribunal finds that the applicant does not satisfy s1237AAD(b) of the Act.  As a result, he is unable to satisfy s1237AAD, and the debt may not be waived. 
    DECISION

13. The Tribunal affirms the decision under review.

    I certify that the thirteen [13] preceding paragraphs are a true copy of the reasons for the decision of:
    G.D.Friedman, Member

    (sgd)       Catherine Thomas
                  Clerk

    Date of hearing:  27 November 2002

    Date of decision:  2 December 2002
    Advocate for applicant:               Self-represented
    Advocate for respondent:            Mr R. Huttner, Advocate with Centrelink