Langshaw and Secretary, Department of Family and Community Services

[2005] AATA 357

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2005] AATA 357

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q2004/469

GENERAL ADMINISTRATIVE DIVISION		)
Re		DENNIS LANGSHAW

Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Ms MJ Carstairs, Member

Date22 April 2005

PlaceBrisbane

Decision The Tribunal affirms the decision under review, namely the decision that the applicant has a debt of Austudy totalling $5,116.50.   This debt should be recovered at the rate of $20 per fortnight, with a review of the rate of repayment in 12 months from the date of this decision.     

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

Ms MJ Carstairs
  Member

CATCHWORDS

SOCIAL SECURITY – Austudy – undertaking full-time study – whether undertaking study in a period – failure to notify change of circumstances – recovery of debt – special circumstances

Social Security Act 1991 s 569C, 1223, 1237A, 1237AAD

Moon and Secretary Department of Family and Community Services [2003] AATA 676

REASONS FOR DECISION

22 April 2005 Ms MJ Carstairs, Member          

1.      This is an application by Dennis Langshaw (the applicant) for review of the decision of Centrelink to raise and recover an Austudy overpayment of $5,116.50 for the period 22 July 2002 to 17 June 2003 (the relevant period). 

2.      The applicant represented himself at the hearing.  The respondent was represented by its advocate Ms J Hamilton.

3. The Tribunal had before it the documents lodged pursuant to s37 of the Administrative Appeals Tribunal Act 1975 numbered T1-T37 as well as exhibits marked A1 – A9 for the applicant and R1 – R2 for the respondent.

BACKGROUND

4.      The applicant is aged forty five and is married.  He and his wife have two sons, one at school, and a daughter who attends TAFE and lives at home.  Another daughter, Kelly, was aged thirteen when she died in 1996 from meningococcal meningitis.   

5.      The applicant claimed Austudy payments in February 2002 when he commenced studies at the University of Southern Queensland (USQ).  On his claim form dated 30 January 2002 (T5), the applicant stated he was undertaking full-time study in the period 4 March 2002 until 5 July 2002.  He was enrolled in a tertiary preparation course in Semester 1 of 2002 entitled Access and Equity and was undertaking three study units in that semester(T35).   He failed two of the subjects.  On 25 July 2002, Mr Langshaw lodged a continuation claim for Austudy (T9) stating that for the period from 20 July 2002 to 30 December 2002 (that is in Semester 2 of 2002) he would continue full-time studies.

6.      Centrelink received information from USQ on 20 May 2003 (T21) that resulted in further checks about the applicant‘s enrolment status.  As a result of the information provided by USQ concerning the applicant’s student record, Centrelink raised a debt on 19 June 2003.  The applicant sought review of the decision to raise and recover Austudy paid to him in the relevant period.  The decision was reviewed and affirmed by an authorised review officer and by the Social Security Appeals Tribunal (the SSAT).  The applicant sought further review with this Tribunal on 21 June 2004.

7.      The issues for the Tribunal are whether there is a debt of Austudy for the relevant period and if so whether the debt, in whole or in part, should be recovered from the applicant.

EVIDENCE

8.      In a student record statement dated 9 September 2003 (T35), Ms A Loneragan, staff member at Student Administration, USQ, recorded that the applicant was enrolled in 2002 in Access and Equity (i.e. preparatory studies) and in 2003 in a Diploma of Community Welfare and Development.  The statement of student record form set out the following rule:

According to this University’s Academic Regulations, enrolment in a combined workload of six (6) units or more in any one academic year is deemed to be full-time study.  Normally, USQ students have a full-time workload of eight (8) units per year.

9.      Ms Loneragan recorded the applicant’s enrolments as follows:

Year	Term 12 (whole year)	Term 1	Term 2	Term 3
2002	NIL	3	1	NIL
2003	NIL	NIL	3	1

10.     The applicant acknowledged in his oral evidence that he was not a full-time student in Semester 2 of 2002 based upon his enrolment status, but he said nevertheless he was undertaking study.  He said that when he commenced his studies he would have preferred part-time study to full-time study but Centrelink did not tell him that he could receive newstart payments while undertaking part-time study.  He said that Centrelink told him that the appropriate payment for people undertaking study was Austudy and he said that he was told he was required to study full-time.  He subsequently has studied part-time and has received newstart allowance while doing so.

11.     The applicant told the authorised review officer in a telephone interview dated 3 September 2003 (T34) that he had failed Mathematics in Semester 1 of 2002, but was told by staff at USQ that he could re-sit the mathematics examination in Semester 2 of 2002 without the need to re-enrol.  He said that in Semester 2 of 2002 he enrolled in one unit, entitled Appreciating Literature, because USQ were unable to provide other suitable courses in that semester.  In oral evidence the applicant said that he completed and submitted Mathematics assignments in Semester 2 of 2002 and achieved satisfactory results but when he attended on the day of the Mathematics examination his name was not on the list of candidates.  The applicant was unclear in his evidence about whether or not he sat the examination.

12.     With regard to Semester 1 of 2003 the applicant told the SSAT that he attempted to enrol but his student enrolment forms were mislaid by USQ.  He said he was told by USQ staff that the problem would be sorted out.  He did not attend classes while he was awaiting enrolment confirmation.  He said in oral evidence that he nevertheless believed he would be able to catch up once the enrolment problem was sorted out.  He was then told by USQ that his enrolment could not proceed because he had missed too much of the course content.

13.     Under cross-examination the applicant said that he did not tell Centrelink that he was having enrolment problems because in the past when he was transferred from Austudy to newstart payments he had experienced an eight-week delay before the payments were restored.  He said that he decided not to tell Centrelink because he wanted to avoid a break in his payments.

14.     In an undated written statement received by the Tribunal on 31 January 2005 (exhibit A1) the applicant denied misinforming Centrelink and said that it was as a result of information that he provided to Centrelink that resulted in further enquiries about his student status.  He said that he relied on information from university staff at USQ and at the time did not realise the importance of keeping Centrelink informed. 

15.     The documents included fifteen letters sent by Centrelink to the applicant (T37), before and during the relevant period.  These letters included, as part of the standard advice about rights and obligations, that a student must advise Centrelink if ceasing full-time studies.  In his statement dated 28 January 2005 (exhibit A2) the applicant said it was unlikely that anyone takes notice of the fine print on the Centrelink letters. 

16.     Three of the notices produced at T37 referred to the applicant’s Austudy being cancelled: namely those on 22 July 2002 (T37, p124); 31 July 2002 (T37, p128); and 23 November 2002 (T37, p144).  The cancellation letters in July reflected that Centrelink were not satisfied that the applicant was studying full-time. A Centrelink computer note dated 6 August 2002 (T12) recorded that the applicant was asked to provide confirmation from USQ about his studies.   The note then recorded:

Advised if is not going to be doing correct workload he will need to xfer (transfer) back onto nsa (newstart allowance).  [Annotations by Tribunal]

When questioned about his recollections of the conversation recorded at T12 the applicant said that it was unlikely that he would have heard what was said to him as he was more concerned with having his payment restored. 

17.     A document was supplied to Centrelink by the applicant, or by USQ, in August 2002, confirming the applicant’s student status, but has been lost.  The applicant could not recall whether he had provided any document and the computer entry recording receipt, which was dated 16 August 2002 stated only:

The following correspondence was received at Centrelink on 16/8/2002: Proof of enrolment.

It was after this proof of enrolment was received and accepted that the applicant’s Austudy payments were restored.

18.     At the time of the hearing the applicant had obtained casual work delivering concrete, and had after tax earnings which he estimated at between $400 and $500 per week.  His wife receives parenting payment and family payments from Centrelink. 

19.     The applicant said that the family is in financial trouble, and cannot cover their outstanding debts.  No comprehensive statement of the applicant’s financial circumstances was presented, however the applicant brought a number of documents to the hearing and the following is a summary of the financial circumstances taken from the oral and written evidence:

§  $150 weekly rent is paid on the family home in Hervey Bay (amount advised by the respondent after the hearing).

§  The family’s outlay on food varies between $50 and $150 per week depending on what money is available after bills are paid.   

§  $38,000 is owed to Esanda Finance in regard to a past failed business venture (exhibit A4) with repayments negotiated at $50 per month.

§  Payments of $150 per month for arrears of rates for two properties in Victoria (exhibit A7).

§  $40 per week mortgage repayments.

§  A disputed Telstra bill totalling $1,337.37 for which the applicant sought the intervention of the Telecommunications Ombudsman (exhibit A6).

§  Estimated $200 per month for telephone.

§  The applicant produced bills for lawyers retained in regard to disputes with Sunraysia Water Authority (Victoria); disputes with councils for unpaid rates on two properties in Victoria; and for legal advice regarding his Centrelink debt.  It was not clear whether these accounts remain unpaid.  

§  Outlays for electricity were estimated at about $400 per quarter.

§  Costs of running a motor vehicle (not itemised).

20.     The applicant and his wife have two properties in Victoria, one of which the applicant says is unsaleable due to the restricted classification of the land.   The applicant said that he has unsuccessfully approached the Victorian government to buy this property as he cannot afford to pay the rates on it.   A letter dated 18 June 2002 (exhibit A7) set out legal advice from Williams Winter & Higgs concerning two complaints in the Magistrates Court of Victoria for unpaid rates and a refusal by Swan Hill Rural City Council to allow the clearing or development of the land for agricultural purposes. The applicant receives rent of $140 per week for the other property which was the family home until their daughter’s death.  The rent does not cover the mortgage payments of $180 per week (the $40 difference appears above as mortgage repayments).   The applicant said that he and his wife have discussed selling this property, but he said they are not yet emotionally ready to do this.

21.     In a written report dated 1 August 2002 (exhibit A3) Dr G Byrne, consultant psychiatrist, reported that the applicant’s wife had suffered an abnormally long and severe grief reaction following her daughter’s death.  He also diagnosed panic disorder and major depressive disorder that were partially responding to antidepressant medication and frequent counselling.  He considered that her prognosis was poor.

CONSIDERATION OF THE ISSUES

22. The provisions that relate to Austudy payments are in Part 2.11A of the Social Security Act 1991 (the Act) and these provide that a person is qualified for Austudy if undertaking qualifying study which, amongst other things, and subject to certain exclusions that do not apply here, must be full-time.  Full-time student means a person is undertaking at least three-quarters of a full-time load: s596C of the Act.  In neither Semester 2 of 2002 or in Semester 1 of 2003 was the applicant a full-time student.  The Tribunal reached this conclusion based upon the following:

§  Written evidence from USQ that a full-time load for a student is normally eight units.  In Semester 2 of 2002 the applicant was enrolled in one study unit.  In Semester 1 of 2003 the applicant was not enrolled.  (A three month course in financial brokerage that the applicant said he undertook with a group called Fair Dinkum Finance cannot be taken into account as the course is not an approved course under the Act). 

§  The applicant’s oral evidence acknowledging that he was not a full time student.

23.     The Tribunal agrees with the SSAT’s conclusion as set out in paragraph 20 of the SSAT’s written reasons that the applicant might have requalified for Austudy at the end of Semester 2 of 2002 on the basis of an intention to enrol full-time in Semester 1 of 2003, except that he lost qualification for the payment because he was not full-time in Semester 2.  After qualification is lost, as here, the legislation requires a new claim.   There was no further claim.

24.     The Tribunal’s finding that the applicant was not qualified to receive Austudy at any time in the relevant period means that he has incurred a debt under s1223 of the Act.  This section of the Act allows recovery where a person has received payments when they were not were not qualified: s1223(1AB) of the Act. 

25.     The issue for the Tribunal then is should this debt be recovered in whole or in part?

26.     The applicant made submissions in regard to recovery of the overpayment, some of which can have no bearing upon the outcome of this case, because they relate to earlier payments made by the Commonwealth Government to him in 1986, 1993 and 1999.  The applicant raised a number of issues where he believes that he was either unfairly dealt with or where the administration of the particular program was mismanaged by the administering authority.  The Tribunal does not accept that these issues have any bearing on the exercise of a discretion to waive a debt that arose when the applicant later received a different Commonwealth payment.    

27.     However any of the applicant’s debts that relate to these earlier payments may be taken into account in considering the applicant’s overall financial circumstances, which he submits are dire.

28.     Other matters raised by the applicant in his submissions relate to inadequate advice from Centrelink about the appropriate payment for him.  He pointed out that the newstart rate of payment was a higher rate than Austudy.   He asked the Tribunal to take into account the barriers faced by mature age students recommencing studies, including unfamiliarity with the plethora of rules imposed by universities as well as by Centrelink.  He submitted that these barriers were not consistent with encouraging people like him to improve their education and reduce their dependence on welfare.  The applicant has addressed a number of these concerns in letters to the Member for Wide Bay, the Honourable Warren Truss MP.

29.     The applicant also referred to the difficult circumstances that his family were placed in at the end of 2003 when, as a result of debt recovery processes by Centrelink, several of their cheques bounced and the family were evicted from their rental premises.  The applicant set out in his written materials that the stress from this further compromised his studies. 

30.     The applicant said he doubted his capacity to pay a further $5000 debt to Centrelink when the family was already heavily in debt.  He said that Centrelink was recovering the Austudy debt by withholding $70 per fortnight from other payments.  The applicant said that they have suffered enough and should be excused further payment on this debt.

31.     Ms Hamilton submitted that the debt should be recovered in full and that no waiver provisions could apply, because the debt was not caused by administrative error (s1237A of the Act), and the discretion to waive a debt for special circumstances (s1237AAD of the Act) cannot be considered where an overpayment results from a person knowingly failing to comply with a provision of the Act.   

32.     Ms Hamilton said that the applicant’s evidence that he did not notify Centrelink because of his previous adverse experiences of delays in the restoration of payments means that he knowingly failed to comply with a provision of the Act, namely the requirement to notify his change to part-time study, this requirement having been set out in numerous official notices sent to him.

33.     Ms Hamilton submitted in the alternative that there were no special circumstances because the family’s income exceeds their expenditure and as a result they have capacity to repay the Austudy debt.  She submitted that the applicant’s wife’s health issues do not affect their daily life when she has access to counselling to assist her.   She said that if the applicant was having difficulty with the amount of $70.00 per fortnight being recovered from his payments of newstart allowance, he could seek a reduced recovery rate. 

34.     Ms Hamilton said, citing the decision in Moon and Secretary Department of Family and Community Services [2003] AATA 676 that the Tribunal should not accept the applicant’s submission that he was notionally entitled to newstart payments in lieu of Austudy.She submitted that there was no evidence that the applicant fulfilled the requirements to qualify for payment of newstart allowance

35.     The Tribunal agrees with Ms Hamilton’s submission that the debt cannot be waived on the basis of administrative error.  The Tribunal considered whether there was administrative error by Centrelink when the applicant’s Austudy payments were restored after the proof of enrolment was received on 16 August 2002.  The question of administrative error is made more difficult by Centrelink’s inability to produce this document.  However the Tribunal was satisfied that the applicant knew he was not a full-time student and further that in his claim form lodged in Semester 2 of 2002 his false answer that he was studying full-time contributed to the debt.  The Tribunal took into account that the applicant had discussions with Centrelink staff on 2 August 2002 and 6 August 2002 and had the opportunity to tell them then that he was enrolled in only one unit of study. The applicant contributed to the debt occurring, therefore it cannot be waived on the basis of administrative error. 

36.     In regard to his state of knowledge in Semester 2 of 2002, the applicant’s evidence was vague, and he had poor recall of detail.   His evidence concerning whether he sat the Mathematics examination was evasive and unsatisfactory.   Whatever his beliefs were about being able to re-sit the failed Mathematics subject in Semester 2 the Tribunal does not accept that the applicant believed he was a full-time student in Semester 2 of 2002, given that he had enrolled in only one unit.  

37.     The applicant’s evidence in regard to Semester 1 of 2003 was that he chose not to tell Centrelink about his enrolment problems, to avoid delays in his payments.  This means that the discretion for special circumstances is not available because the applicant was acting with intention when failing to comply with a provision of the Act.  Section 1237AAD provides:

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

38.     The section rules out the availability of the discretion if a debt results wholly or partly from a knowing failure or omission.  For this reason, the finding of an intentional failure to advise in 2003 means that the discretion cannot be considered for any part of the debt.

39.     In considering the applicant’s ability to repay and the family’s overall circumstances, the Tribunal agrees with the applicant that their financial circumstances are severe.  The SSAT commented in their decision that repaying Centrelink at the rate of $70 per fortnight causes the family financial hardship.  The Tribunal does not accept Ms Hamilton’s submission that the family’s financial circumstances are sufficiently comfortable that a surplus remains after outgoings and expenses each fortnight.  The evidence about financial circumstances was not exhaustive, but even a cursory analysis reveals that the applicant is not exaggerating the financial difficulties that the family faces. 

40.     The Tribunal took into account that the applicant’s circumstances now that he is employed have improved when compared with someone reliant on Centrelink payments.  However the improved employment prospects exist against a background of the family’s struggle with mounting debt as well as the personal tragedy that has affected family life and Mrs Langshaw’s health.  Dr Byrne said that there was a poor prognosis for Mrs Langshaw’s panic disorder and depression and she continues to require counselling.  The report of Dr Byrne recounted the number of moves that the family has made since the daughter’s death, and referred to the effects on the marriage.  The applicant was visibly distressed when discussing his and his wife’s inability to deal with selling the house in Victoria.  Dr Byrne’s report noted the number of moves that the family made around New South Wales, Queensland and Victoria after the death of their daughter.   The financial problems in regard to the properties in Victoria appear to date from this time and these are matters can be taken into account when considering recovery of the Centrelink debt in this case.

41.     For this reason the rate of repayment should be set at $20 per fortnight for twelve months as this allows the applicant to better organise his financial affairs, particularly if his employment continues.

DECISION

42.     The Tribunal affirms the decision under review, namely the decision that the applicant has a debt of Austudy totalling $5,116.50.   This debt should be recovered at the rate of $20 per fortnight, with a review of the rate of repayment in 12 months from the date of this decision.    

I certify that the 42 preceding paragraphs are a true copy of the reasons for the decision herein of Ms MJ Carstairs, Member

Signed:         Camille Banks
  Associate

Date/s of Hearing  2 February 2005
Date of Decision  22 April 2005
The Applicant was self represented
For the Respondent                  Ms J Hamilton, Departmental Advocate