Kuoronny and Secretary, Department of Social Services (Social services second review)

[2017] AATA 889

Kuoronny and Secretary, Department of Social Services (Social services second review) [2017] AATA 889 (9 May 2017)

Division:GENERAL DIVISION

File Number:           2016/3770

Re:Thomas Kuoronny

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

DECISION

Tribunal:Senior Member T. Tavoularis

Date:9 May 2017

Corrigendum:  11 May 2017

Date of written reasons:        13 June 2017

Place:Brisbane

The decision under review is set aside and substituted with a decision such that the correct amount of debt that the Respondent should raise and recover from the Applicant is the sum of $42,454.13 for the period from 2 April 2011 to 19 June 2015. The debt is comprised of the following:

·Austudy and Clean Energy Supplement debts totalling $39,957.03;

·Income Support Bonus debt from 20 March 2013 to 20 March 2015 of $447.10;

·Student Start-Up Scholarship debt of $1,025.00 paid on 1 August 2014; and

·Student Start-Up Scholarship debt of $1,025.00 paid on 27 February 2015

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

Senior Member T. Tavoularis

SOCIAL SECURITY – AUSTUDY DEBT – where Applicant failed to report income of partner – whether Applicant received notice of obligations – whether debt appropriately raised – correct amount of debt to be raised – whether debt should be waived – whether special circumstances exist – whether financial hardship – decision under review set aside and amount of debt substituted / varied.

Legislation

Social Security Act 1991 (Cth), ss 581, 592F, 915, 915A, 919, 1067L, 1061VA, 1223, 1236, 1237AAD,

Social Security Administration Act 1999 (Cth), ss 68, 72, 94, 100, 123, 126,

Cases

Beadle and Director General of Social Security (1984) 6 ALD 1
Director of Social Services v Hales (1998) 47 ALR 281
L and Department of Social Security [1995] AATA 159
Lumsden and Secretary, Department of Social Security [1986] AATA 228
Secretary, Department of Family and Community Services and Birgden [2003] AATA 67
Stubbs and Secretary, Department of Family and Community Services [2003] AATA 729

Ward and Secretary, Department of Families and Community Services [2000] AATA 212

Secondary Materials

The Guide to Social Security Law

REASONS FOR DECISION

Senior Member T. Tavoularis

13 June 2017

BACKGROUND

1. The Applicant before me is known by the name of Mr Yeong-Ting Kuo , also known as Thomas Kuoronny in matter number 2016/3770 (“the Applicant”).

2. My Kuoronny appears before the Tribunal for the purposes of seeking a review of the Administrative Appeals Tribunal – Social Services and Child Support Division (“AAT1”) decision that was made on 1 July 2016. Specifically, that decision affirmed the Department of Human Services’ (“the Department”) decision to raise and recover a total amount of $44,134.60 (“the total debt”).

3. The figure of $44,134.60, as I will mention later in these reasons, was the subject of amendment during the evolution of this matter. The total debt is made up of five components.

   1)The predominant amount is Austudy and that is in the order of $41,350.95. That applies to overpayment of Austudy between 2 April 2011 and 19 June 2015.

   2)The second component is income support bonus and that involves an alleged overpayment of $447.10 for the period between 20 March 2013 and 20 March 2015.

   3)The third component is an amount known as energy supplement that applies to a period between 1 January 2014 and 19 June 2015. The alleged amount overpaid is for $286.55.

   4)The fourth component of the alleged overpayment is for a student start-up scholarship in the amount of $1,025.00 that was paid on 1 August 2014.

   5)The final component is for another student start-up scholarship, in the amount of $1,025.00 that was paid to the Applicant on 27 February 2015.

   ISSUES

4. As a result of the alleged total debt or total overpayment, two issues present before the Tribunal for determination in this Application:

   1)Whether there are debts in the sums that are calculated by the Department (in other words, do the debts exist which give rise to the total debt); and if so

   2)Whether those debts, as a total debt, should be recovered.

   FACTS

5. The facts in this matter as I understand it are not in dispute. They are accurately summarised in paragraphs 3 until 16 of the Secretary’s Statement of Facts, and Contentions (the “Respondent’s SFIC”).[1]  However, I will summarise the facts and make specific findings in relation to the provision of notices to the Applicant by the Department for the record.

   [1] See Exhibit 2.

6. This all started on 24 February 2011. On that day the Applicant contacted the Department and said that he wanted to lodge a claim for Austudy. On 28 February 2011 the Applicant, as was required of him, lodged the usual and necessary income questionnaire with the Department. He also attached relevant salary packaging statements from Remuneration Services (Qld) Pty Ltd and a pay advice slip in relation to his wife’s income, as she works as a nurse with Queensland Health. (The wife’s name is Mrs Shin-Yi Lai.)

7. The next relevant date is 11 April 2011. The Applicant on that day lodged an online claim form for Austudy, which as mentioned, was granted to him on 28 February 2011. He was also granted the student start-up scholarship that I mentioned as part of the total debt. What then happened was that the Department issued its usual notice, which stated as follows:

   “… you must tell us within 14 days about events or changes in circumstances affecting your payment. You can tell us by writing, calling or coming into any of our customer service centres. The rate of your Austudy payment may need to be adjusted if there are changes in your circumstances. …

   You must tell us… if you or your partner: … start to receive or stop receiving income or income changes...”[2] [Emphasis added]

   I find, as a matter of fact, that the Applicant did receive that notice.

   [2] See Exhibit 7: T documents: T6, p 85.

8. The Respondent says that further notices were sent to the Applicant relating to his Austudy payments and that those notices specified obligations upon him in relation to those payments and that those notices were respectively provided to him on:

   ·8 July 2011;

   ·30 September 2011;

   ·3, 19 and 24 October 2011;

   ·4 November 2011;

   ·23 December 2011;

   ·11 January 2012;

   ·2, 20 and 23 February 2012;

   ·2 and 30 March 2012;

   ·21 February 2013;

   ·26 June 2013;

   ·9 July 2013;

   ·21 July 2014;

   ·3 November 2014;

   ·5 December 2014; and

   ·3 June 2015.

   Each of those notices appear in the relevant portion of the T documents, which is the final document in the list of exhibits in this Application. [3]

   [3] See Exhibit 7, T7 to T27.

9. During the hearing it was put to the Applicant to confirm or deny whether or not he did receive those notices. His evidence was at best unclear and more likely not compelling in this regard. For the purposes of this decision and for the record, I find that those notices were sent to the Applicant and they contained words to the effect of the quoted portion mentioned earlier. I find that for all intents and purposes those notices were sent to the Applicant.

10. The next relevant date is the 22 June 2015, the Department on that day, issued a notice to the Applicant requiring that it be provided with certain information. That information related his partner’s payslips from Queensland Health for the period 28 February 2011 to 22 June 2015, which is the date of the notice itself.[4]  On that day, 22 June 2015, the Department moved to cancel the Applicant’s Austudy, effective from 29 September 2012. The basis upon which that had done was that he would not have been paid Austudy for a period of 12 weeks.

    [4] See Exhibit 7, T28, p 139.

11. The next relevant date arises very shortly after the notice was sent on 22 June 2015. On 27 June 2015 the Department raised a debt against the Applicant in the amount of $46,538.77.

12. On 2 July 2015, the Department issued the Applicant with an account statement identifying that for the four year period from 25 June 2011 to 19 June 2015 he had been overpaid in an amount of $46,538.77.

13. The next relevant date is 13 July 2015. On that day, the Department received certain material or documents from the Applicant. Those documents comprised:

    (i)A certain loan agreement dated 20 February 2015, the agreement being between the applicant and his partner (as borrowers) and Su Pi (as lender). The amount of the loan was for $405,000; and

    (ii)Certain payslips for the Applicant’s partner (Shin-Yi Lai) for the period running from 22 February 2011 to 5 July 2015.

14. What then followed was that the Department started assessing its position in relation to the debt. On 6 August 2015, an Authorised Review Officer (“ARO”) set aside the original decision and reset the amount of the total debt in the sum of $44,134.60 for the period from 2 April 2011 until 19 June 2015.

15. On 11 August 2015, the Department issued its usual Direct Debit Confirmation letter to the Applicant, confirming that a repayment agreement had been reached and under that agreement the Applicant would repay the debt (that is the $44,134.60 assessed by the ARO), and that such repayment would happen at the rate of $100 per fortnight by way of deductions from a Suncorp Operations Services bank account.

16. The next relevant date is the Applicant’s date because on 7 March 2016, he lodged, as is his right, an application for review of the ARO’s decision with the first level of review of this Tribunal (the “AAT1”). On 1 July 2016, my colleague at the AAT1 reviewed and affirmed the ARO’s decision to raise and recover the total debt of $44,134.60, for the period 2 April 2011 until 19 June 2015.

    17.In terms of the factual sequence the final relevant date is 20 July 2016 because on that day, the Applicant lodged this Application with the Tribunal and it is, as I said, an application for review of the decision made by the AAT1. It is that particular application, dated 20 July 2016, which is presently before the Tribunal.

    LAW AND POLICY

17. The law and policy that relates to this review, is in my respectful view, adequately summarised in the Respondent’s SFIC. Three relevant pieces of legislation and/or policy apply:

    1.The Social Security Act 1991 (“the Act”);

    2.The Social Security (Administration) Act 1999 (“the Administration Act”); and

    3.The Guide to Social Security Law (“the Guide”).

18. In terms of the matters being contended for in this application, it is necessary first to define the Department’s capacity to, as it were, create or give rise to debts and then seek to recover them. The legislation may be described as follows.

19. Section 581 of the Act provides that a person’s Austudy payment can be reviewed in accordance with a certain Austudy Payment Rate Calculator appearing in section 1067L (the “Rate Calculator”). Very importantly a person’s, that is, the recipient and their partner’s income from employment, is to be taken into account when the rate is being determined by using the Rate Calculator in section 1067L.

20. Pursuant to section 919 of the Act, a person who is qualified for and in receipt of Austudy payments can qualify for an income support bonus on an “income support bonus test day”. An “income support bonus test day” for the purposes of this Application, means any one of the following days that occurred on: 20 March 2013, 20 September 2013, and 20 March and 20 September 2014.

21. The next relevant section relates to the energy supplement. Section 915 of the Act provides that such supplement is payable to a person for each day on which an election by the person under subsection 915A(1) or 1061VA(1) is in force in relation to a social security payment the person is receiving.

22. The next relevant section relates to student start-up scholarship payments. Section 592F of the Act says that a person is qualified for a student start-up scholarship payment if, at the qualification time, they are qualified for and in receipt of Austudy payments.

23. Three additional subsections which are relevant are subsections 123(1) and 123(3) of the Administration Act and also subsection 100(1) of the Administration Act, which state as follows:

    Section 123 - Continuing effect of determinations

    (1)  A determination that:

    (a)  a person's claim for a social security payment is granted; or

    (b)  a social security payment is payable to a person;

    continues in effect until:

    (ba)  the payment is cancelled by section 38M of the 1991 Act; or

    (c)  a further determination in relation to the payment under section 80, 81 or 82, subsection 95C(1) or section 124H, 124M or 124NF takes effect; or

    (d)  the payment ceases to be payable under section 90, 91, 93, 94 or 95; or

    (e)  the end of the day immediately before the day on which the person dies.

    …..

    (3)  A determination of the rate of a social security payment continues in effect until:

    (a)  a further determination in relation to the payment under section 78, 79, 81A or 85A takes effect; or

    (b)  the payment becomes payable at a lower rate under section 98, 99 or 100.

    Section 100 - Automatic rate reduction - recipient not complying with subsection 68(2) notice

    (1)  Subject to subsection (2), if:

    (a)  a person who is receiving a social security payment is given a notice under subsection 68(2); and

    (b)  the notice requires the person to inform the Department of the occurrence of an event or change of circumstances within a specified period (the notification period ); and

    (c)  the event or change of circumstances occurs; and

    (d)  the person does not inform the Department of the occurrence of the event or change of circumstances within the notification period in accordance with the notice; and

    (e)  because of the occurrence of the event or change of circumstances, the rate of the social security payment is to be reduced;

    the social security payment becomes payable to the person at the reduced rate on the day on which the event or change of circumstances occurs.

24. Some additional sections that are worth mentioning arise as follows. What power does the Secretary have to issue a notice requiring a person to inform the Department of any change in circumstances? Section 68 of the Administration Act gives the Secretary or the Department the power to issue a notice requesting an explanation for a change in an Austudy or other social security benefit recipient’s circumstances. The requirement on the recipient is to give the Department one or more statements about a matter that may possibly affect the payment of a social security benefit that has been paid to them. There is a time limit for this. Under section 72 of the Administration Act a person must advise the Department of any changes in their circumstances within 14 days.

25. Additionally, section 94 of the Administration Act deals with the situation where a person does not meet these notice and timing requirements. Section 94 provides that where that happens, subsection 68(2) has application and a person can cease to be qualified to receive a social security payment, or that it be effectively cut off, or the payment otherwise ceases to be payable to them, or the person’s working credit balance or student income bank balance is reduced to nil in an instalment period and the social security payment thus ceases to be payable to them. In those circumstances, a person’s social security payment can lawfully be cancelled by the Secretary of the Department.

26. In the present case, this Applicant first received a notice with the abovementioned notification obligations on 11 April 2011. That notice told him that you must tell us within 14 days about events or changes in circumstances affecting your payment. The difficulty for this Applicant is that he did not report those changes in his partner’s income within the requisite 14 day period. Because of that failure to comply with those Centrelink notices that were issued to him, his Austudy payment was retrospectively reduced from 11 April 2011. That is effectively how in a reverse (or retrospective) way the debt arises. When I say “reverse” I mean it goes back in time to 11 April 2011.

27. Section 94(2) of the Administration Act has application and the contention is that the Applicant’s Austudy payment is cancelled from 29 September 2012, as the balance of his income bank had by then been reduced to nil. I accept that contention.

28. Section 1223(1) of the Act says that where a social security payment is made to a person who is not entitled to receive it, the amount of the payment is a debt due to the Commonwealth.

29. There is legal precedent that clearly and without doubt establishes that there is indeed an obligation on the Department to recover debts that are thus crystallised pursuant to section 1223(1) of the Act. A variety of authorities have been quoted to me. Suffice it to say that in the matter of Director-General of Social Services v Hales (1983) 47 ALR 281 the court made it clear that money paid to individuals in excess of their entitlement ought be recovered. The findings from that case are particularly relevant for present purposes. The court in that case said that the taxpayer is entitled to expect that in the ordinary course money paid to people which they are not entitled to receive will be recovered, albeit in a way appropriate to the circumstances which lead to the overpayment and the circumstances of the persons concerned.

30. I find that the Secretary is entitled to rely on the debt calculations as at 31 July 2015 subject to my following comments in relation to a further slight reduction to the amount of the total debt. I accept the Secretary’s submission that the Department has correctly calculated the Applicant owes a debt totalling $43,211 for the period 2 April 2011 to 1 August 2015. I accept for the purposes of this decision that this amount constitutes a legally recoverable debt pursuant to subsection 1223(1) of the Act.

    Debt write off

31. The next possible area of relief for this Applicant relates to whether this debt can be reduced or written off. The legal answer is “yes”, there is power under section 1236(1A) of the Act for the Secretary to write off a debt for a stated period if it is irrecoverable at law, or if the debtor has no capacity to repay it, or if it is otherwise not cost effective for the Commonwealth to take action to recover it.

32. Section 1236(1C) goes on to say that where a debt is recoverable by way of social security payment deductions, a debtor is taken to have capacity to repay the debt unless recovery by those means would result in the debtor being in “severe financial hardship”. So to try and achieve a writing off of the debt, it is necessary for this Applicant to demonstrate that he is in severe financial hardship. The evidence before the Tribunal today was not that the Applicant is a very wealthy man, he is an ambitious man and a hardworking man, which is to his credit, but I do not recall hearing any evidence which put the Applicant and/or his family unit into any kind of proved or describable position of demonstrated financial hardship.

33. For the purposes of these reasons I will refer to several of the authorities to which I have been referred so that we can try and arrive at an understanding of what severe financial hardship means and whether this Applicant can be placed within that position so that the debt can be written off.

34. In the case of Lumsden and Secretary, Department of Social Security [1986] AATA 228 the Tribunal thought about the term ‘severe financial hardship’ and said that it related to a person’s entire financial position and that it would need to be materially less than the current rate of pension. Clearly the Applicant’s circumstances in this case do not put him in that category.

35. In the case of Stubbs and Secretary, Department of Family and Community Services [2003] AATA 729 at [20], the Tribunal said:

    “Severe financial hardship, while not implying destitution, goes beyond straitened financial circumstances and imports a need for the particular case of a person to include financial suffering of a severe or extreme nature.”

1. Again, I find as a matter of fact that when I have regard to the totality of this Applicant’s circumstances, given that his wife works as a nurse with Queensland Health and that they have two properties and that either or both of them appear on the respective titles, and although there has not been any detailed financial evidence to this effect, it seemed readily apparent to me there was equity, and indeed a respectable amount of equity, in both of those properties were they to be liquidated. I note for the record that indeed one of those properties, the townhouse at Wishart, is shortly to be liquidated.

2. In L and Department of Social Security [1995] AATA 159 at [66], the Tribunal said:

   “…matters relating to the personal financial hardship of the individual are always relevant in any decision as to write off under subsection 1236(1). Retrospective considerations may occasionally be relevant. The essential inquiry will always be whether recovery is a feasible proposition, bearing in mind the financial means and obligations of the individual concerned...”

3. The final authority, to which I was referred, was Secretary, Department of Family and Community Services and Birgden [2003] AATA 67. Once again the Tribunal applied an amalgam of the tests in the earlier three decisions and found that severe financial hardship was not established in that case.

4. When I have regard to the totality of the Applicant’s circumstances, that is, his capacity to earn an income, the, as I understand it, full-time employment of his wife as a nurse with Queensland Health, the generously provided resources of their family and friends as is evidenced by the significant loans that have been offered to them (the Applicant and his wife), the totality of the equity available in both of the properties in the two real properties that are owned jointly or in either of their names, I have great difficulty in applying section 1236 of the Act and, on that basis, agreeing that any aspect of this debt should be written off. My finding in this regard is that the write off provisions in section 1236 of the Act do not apply to this matter.

5. As a consequence of that, the debt is recoverable at law and there cannot be any question that it is not cost efficient for the government or the Commonwealth to take legal action to recover that debt if the Applicant does not agree to a repayment plan. I also understand from the evidence that the Applicant has demonstrated a capacity to repay the debt on the basis of a fortnightly repayment schedule of $100. That repayment plan is apparently acceptable to the Department and it was agreed to on 11 August 2015. As I understand the evidence, that repayment plan is being honoured by this Applicant. I therefore agree with the contention that having regard to all of those circumstances it is not appropriate for this Tribunal to now write off the debt for any period of time.

   Debt Waiver

6. The next question is whether this Applicant can convince the Tribunal that this debt should somehow be waived. Debt waiver can happen in one of several circumstances. The first of those circumstances relates to whether there has been sole administrative error. Pursuant to section 1237A of the Act, the Secretary must waive the right to recover the proportion of a debt that is attributable solely to administrative error made by the Commonwealth if the debtor received the payments in good faith. So the question is whether these overpayments are a result of a mistake or an administrative error by Centrelink, in other words, the Commonwealth. An initial point to note is the existence of an administrative error of itself is not sufficient to meet this particular requirement and the debt must arise from administrative error to the exclusion of everything else. In the circumstances of this case, I cannot reasonably find that everything else that could have resulted in an error has been excluded. For reasons I will mention shortly, given the evidence of Mr Bradley Colquhoun, I have serious misgivings about the Applicant being able to assert administrative error on the part of the Department at all.

7. Two relevant authorities apply. The first of those is Ward and Secretary, Department of Families and Community Services [2000] AATA 212. In that decision, the Tribunal said that sole administrative error means that the Department’s duty to waive the debt 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.[5]

   [5] See Ward and Secretary, Department of Families and Community Services [2000] AATA 212 at [47] (Deputy President Forgie).

8. In this matter, much was sought to be made by the Applicant along the lines of an argument that in his various dealings with Centrelink officers, he was given one story or another or one calculation or another. There was evidence about his case officer, a lady called “Susan”, who apparently gave him a version of events leading to a calculation that, according to this Applicant, leads to a different financial outcome now. Be that as it may, I note for the record that both the Applicant and the Respondent have been frank and honest with this Tribunal through the course of this matter.

9. In his letter of 25 June 2015, and I note he was forthright enough to put in writing that he did not know he was required to tell Centrelink about his family’s fortnightly income. He said “…I take responsibility and I accept any debt caused by me”.[6] That is a very honourable and impressive thing for the Applicant to say. To the Respondent’s credit, and this appears throughout their conduct of this case and indeed in their SFIC, (being as it is, a model litigant), those submissions were duly endorsed by the Respondent’s representative that appeared before me today. The Respondent also acknowledged that its conduct of this matter, throughout its history, has been less than perfect.

   [6] See Exhibit 7, T29, p 144.

10. That concession caused me some problems in this hearing because I became concerned that I was not in a position to make an accurate decision in terms of not so much whether a debt was owed, but more about the quantum of that debt. I was concerned that the Applicant might have been under a misapprehension about how the relevant debt was calculated and I was also concerned that the Respondent also had an apprehension that perhaps one expert witness from their side was “missing”, that is, an expert person who is expert in calculating these sorts of debts and providing evidence about them. I make that comment in no way to cast any criticism or negative assertion about the case presented to me by the Respondent. It was, as per all the cases that come before me from this Respondent, presented to me in an exemplary way.

11. Nevertheless, I think that each of the Applicant, the Respondent and indeed myself, reached the view that it would be ideal to have that kind of expert witness for our hearing today. To her credit, the Respondent’s representative, during the luncheon adjournment, diligently made contact with the appropriate person at the Department, namely a Mr Bradley Colquhoun, who at very short notice and in a selfless way made himself available to give evidence as to the calculation and the accuracy of the calculation which is the subject of the dispute in the matter before me. Mr Colquhoun is an appropriately qualified and titled officer with the Department. The critical point about him and his qualifications is that he has been doing this calculations-based work and analysis for exactly these kinds of debts and presenting evidence about them at hearings like this since 2006. This amounts to almost 11 years of experience in matters of this type.

    
    

    Mr Colquhoun spent well over an hour explaining how a figure of $43,211 is arrived at and how this Tribunal can safely rely on the accuracy of that figure for the purposes of these reasons.

12. In those circumstances I note the Respondent’s contention that the Applicant’s failure to read and comply with written notices and report changes in his partner’s income for the purposes of ensuring he was paid the correct amount of Austudy, materially contributed to him being overpaid. I make that finding as a matter of fact. I also accept that the main purpose of these written notices was (and is) to advise recipients of their notification obligations. If there is a failure to closely read them and respond to them, then, in my view, there is a preclusion of any finding that the resulting debt is attributable solely to administrative error. I endorse and accept that contention. In those circumstances I am not of a mind to waive this debt on the basis of sole administrative error on the part of the Department. However, there is further possible relief for this Applicant to have the debt waived if he can demonstrate to this Tribunal that certain special circumstances apply such that they warrant the waiver of the debt.

    Special circumstances

13. Special circumstances arise in section 1237AAD of the Act. That section gives the Secretary power to waive recovery of all or part of a debt where there are special circumstances making waiver desirable and where the debt did not result from a person knowingly making a false statement or representation or failing or omitting to comply with a relevant administrative provision. An initial problem is that the term ‘special circumstances’ is not defined anywhere in the legislation. To obtain an understanding of what ‘special circumstances’ means, a decision maker has to go to the relevant authorities. I have been assisted and referred to a number of authorities by the Respondent, each of which warrant mention here.

14. The first of those is Beadle and Director-General of Social Security (1984) 6 ALD 1, where this Tribunal said:

    “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.”[7]

    [7] Beadle and Director-General of Social Security (1984) 6 ALD 1 at 3 (Justice Toohey, Member Wilkins and Member Billings).

15. Additional authorities cited to me comprise the matters of Groth and Secretary, Department of Social Security [1995] FCA 1708, Ivovic and Director-General of Social Services [1981] AATA 57, Angelakos and Secretary, Department of Employment and Workplace Relations [2007] FCA 25, and Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114. Each of those support this definition of “special” consistently with the definition I have just recited from the matter of Beadle.

16. Having regard to the concept of special circumstances, I am now compelled to try and find special circumstances in the circumstances of this case. The first place I can go to is the Applicant’s written submissions to the AAT1 review, where he referred to financial hardship.  In those submissions he said:

    “I told Centrelink that my family was in financial hardship in August 2015 and that’s true as we started to spend our savings since July 2015. We definitely would face severe financial difficulties if there were no my income and homestay income”. [8]

    [8] See Exhibit 7, T1, p 5.

17. The Respondent has noticed that in his evidence to the AAT1 review, the Applicant said that he was working as a property manager. That was confirmed to this Tribunal in evidence. He also said at AAT1 review that his partner continued to work full-time as a registered nurse. That too was confirmed in this hearing. Indeed, Ms Lai (the Applicant’s partner) had to leave the proceedings at approximately lunch time to ensure she got to her nursing duties on time. Between the two of them, the Applicant and his partner, collectively receive gross earnings in excess of $6,000 per month, plus $6,500 per annum for homestay services, plus a net rental income of $378 per week in respect of an investment property held by the Applicant’s partner. As I mentioned earlier, this investment property had a value of some $415,000 and is encumbered by way of a registered mortgage to a financier in the amount of $265,000. That mortgage is currently serviced on an interest only basis. We heard further evidence about this investment property. It is the subject of a contract of sale, which is due to settle Friday, 12 May 2016 or as soon as mutually agreed between the contracting parties. As I understand the evidence of the Applicant in relation to this property, it will sell. So there will surely be equity available after the payout of the first registered mortgagee in the sum of $265,000, and of course after payment of an additional loan that the Applicant and his partner have from family and friends in the amount of $85,000. So to put matters simply, if the property sells at approximately $415,000 and the first registered mortgage is discharged at $265,000 and the family and friends’ loan is discharged at $85,000 there will be an amount of equity that must be taken into account for present purposes.

18. The ARO noted that this Applicant was not working but that his partner continued to work and that they were in receipt of family tax benefit. The evidence today was that the Applicant, in his own name or with his wife, owns the townhouse at Wishart that is the subject of the sale and which is rented to a tenant. A further house at Mansfield had been purchased with the assistance of a third party. The third party lent the Applicant this money in exchange for looking after the lender’s daughter for a period of five years. Apparently, the loan must be paid back after that period of five years. The loan agreement of 20 February 2015 that was entered into by the Applicant and his partner was also referred to in evidence today. That is the loan of $405,000 by an individual lender known as Pi I Su. The Applicant and his wife are required to pay the sum of $1 per annum in interest in relation to that loan. That loan of $405,000 is not to be repaid any earlier than 1 August 2020. To repeat, the house at Mansfield that the Applicant apparently owns jointly with his partner, has an approximate market value of $650,000 and is encumbered by way of first registered mortgage in the sum of $260,000. That loan is serviced on an interest only basis. I therefore consider that the Applicant’s evidence is consistent with a finding that he cannot, in any way, be regarded as being in some kind of special circumstances or other circumstances of severe financial hardship. On the contrary, the totality of this Applicant’s financial position is, as contended by the Respondent, consistent with a finding that he is indeed in an advantageous financial position in comparison to most social security recipients. It is a fair assumption to say that the Applicant and his partner have positive income flow and their assets do exceed their liabilities. They have significant loans but those loans do not attract interest payments. In those circumstances I cannot find that special circumstances exist sufficient to warrant waiver of this debt.

19. In all other respects there is no other contention put to me by this Applicant that his circumstances are out of the ordinary, unusual or uncommon. The Respondent’s submission is that the Applicant’s circumstances are not sufficiently special to warrant the exercise of the discretion to waive all or part of the debt, pursuant to section 1237AAD of the Act.

    CONCLUSION

20. At the conclusion of the hearing, I set aside the decision under review and substitute it with a decision that the appropriate amount of debt that the Respondent should raise and recover from the Applicant is in the sum of $43,211.92, which is the correct amount that he was overpaid Austudy and related entitlements for the period from 2 April 2011 to 19 June 2015.

21. After the conclusion of the hearing it was identified that the dates cited by the Department for the period of the debt were inconsistent with the AAT1 decision and previous decisions.

22. The Respondent’s representative clarified that the debt period for the purpose of this decision should have been between 2 April 2011 and 19 June 2015, which is referable back to the first notice given to the Applicant. I had expressly accepted that submission during the hearing. That being the case, $757.79 of the total debt amount calculated by the Department as $43,211.92 concerned the period 28 February 2011 to 1 April 2011.[9] 

    [9] See the Debt Report dated 13 March 2017, attached to Exhibit 3.

23. Consequently, I issued a Direction on 11 May 2017, pursuant to subsection 43AA(1) of the Administrative Appeals Tribunal Act 1975 (Cth), requesting that the text of the decision in this application be altered. For the purposes of clarity, in that Direction I corrected the total amount of the debt to be paid and also cited the breakdown of the components of the debt that were owed.

24. The Direction of 11 May 2017 provided that:

    “The decision under review is set aside and substituted with a decision such that the correct amount of debt that the Respondent should raise and recover from the Applicant is the sum of $42,454.13 for the period from 2 April 2011 to 19 June 2015. The debt is comprised of the following:

    -     Austudy and Clean Energy Supplement debts totalling $39,957.03;
    -     Income Support Bonus debt from 20 March 2013 to 20 March 2015 of $447.10;
    -     Student Start-Up Scholarship debt of $1,025.00 paid on 1 August 2014; and
    -     Student Start-Up Scholarship debt of $1,025.00 paid on 27 February 2015.”

I certify that the preceding 60 (sixty) paragraphs are a true copy of the reasons for the decision herein of Senior Member T. Tavoularis

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

Associate

Dated: 13 June 2017

Date of hearing:	Tuesday, 9 May 2017
Applicant:	In person
Solicitors for the Respondent:	M. Underhill, DHS - FOI and Litigation Team