Linkler; Department of Family and Community Services - [2002] AATA 674

DECISION AND REASONS FOR DECISION [2002] AATA 674

ADMINISTRATIVE APPEALS TRIBUNAL )

) No N2001/1393

GENERAL ADMINISTRATIVE DIVISION          )
           Re      SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
  Applicant
           And    HENRY LINKER
  Respondent

DECISION

Tribunal Ms N Bell, Member

Date9 August 2002
PlaceSydney

Decision The decision under review is affirmed.

[SGD] Ms N Bell
Member
CATCHWORDS
SOCIAL SECURITY – Youth Allowance – overpayment of Youth Allowance due to Respondent's change of status from a full time student to a part time student at university – debt owed to the Commonwealth – whether any special circumstances to provide for waiver of the debt – confusion in Respondent's dealings with Centrelink - Respondent's difficult circumstances including loss of possessions in a fire – discretion exercised pursuant to section 1237 AAD of the Social Security Act 1991 to waive 50 per cent of the debt

Social Security Act 1991 sections 541B, 543B, 561B, 1224, 1236, 1237AAD

Re Callaghan and Secretary, Department of Social Security (1996-97) 45 ALD 435
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Secretary, Department of Social Security v Thompson (1994) 53 FCR 580

REASONS FOR DECISION

9 August 2002 Ms N Bell, Member

This is an application by the Secretary, Department of Family and Community Services ("the Applicant") for review of the decision of the Social Security Appeals Tribunal ("the SSAT") on 14 August 2001 to waive recovery of 50 per cent of a debt of overpayment of Youth Allowance to Mr Henry Linker ("the Respondent") raised by a Centrelink delegate of the Applicant on 17 April 2001 in the sum of $4,835.97. The delegate's decision had been affirmed by an authorised review officer on 29 May 2001.
At the hearing before the Tribunal, the Applicant was represented by Mr Bernard Slattery and the Respondent appeared on his own behalf. The Respondent gave oral evidence to the Tribunal and the following documentary evidence was before the Tribunal:

Exhibit          Document    Date
TD 1 Documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975, T1-T17, pp1-44
A1      Applicant's Statement of Facts and Contentions          24 June 2002
A2      Computer printout of letter from Centrelink to the Respondent          14 February 2000
A3      Computer file note of Centrelink   24 February 2000
A4      Computer file note of Centrelink   6 March 2000
R1      Respondent's letter to Applicant 26 June 2002

Background

It is not in dispute that the Respondent was enrolled as a full time student at the University of Sydney ("the University") at the beginning of 2000 and received Youth Allowance on that basis. In second semester of 2000 the Respondent became a part time student but continued to receive Youth Allowance.
On 15 February 2000 and 3 March 2000 the Applicant wrote to the Respondent advising him of the changes of circumstances that he was required to notify Centrelink of (see T3 and T5). These changes of circumstances included ceasing full time study. The Respondent did not so advise the Applicant until 3 April 2001 when he advised the Applicant that he had ceased study and was about to begin work. Having confirmed with the University the Respondent's enrolment details (see T9), the Applicant raised a debt of $4,835.97 for the period 10 July 2000 to 3 April 2001 (see T11).
Issues and legislation
The Applicant and Respondent agree that the Respondent was not a full time student during the period 10 July 2000 to 3 April 2001 (see T9, advice from the Universtity to the effect that the Respondent had a study load of only 0.25 in semester 2 of 2000 and was not enrolled in semester 1 of 2001). Sections 543B and 541B of the Social Security Act 1991 ("the Act") operate to require a person over the age of 21 years to be undertaking full time study in order to qualify to receive Youth Allowance.
It is not in dispute that the Applicant wrote to the Respondent on two occasions in February and March 2000 advising him of the requirement that he inform Centrelink if he ceases to be a full time student. Nor is it in dispute that the Respondent failed to do so in the time required. Section 1224 of the Act provided, at the time of the original decision, for debts arising out of a recipient's contravention of a provision of the Act. The letters sent to the Respondent by Centrelink were each expressed to be a "Recipient Notification Notice" under section 561B of the Act.
If the Tribunal concludes that there is a debt owed by the Respondent to the Commonwealth then the issue which remains to be considered is whether the debt should be recovered. The relevant provisions of the Act in this respect are sections 1236, which provides for the write off of a debt in certain circumstances and 1237AAD, which provides for the waiver of a debt where there are "special circumstances" that make waiver desirable and where the debt did not result wholly or partly from the debtor "knowingly" failing or omitting to comply with a provision of the Act.
Applicant's evidence
The Applicant relied on the "T documents" and the absence of evidence of job search activities by the Respondent during the relevant period to establish that there are no special circumstances that make desirable the waiver of recovery of the debt.
In relation to the question of whether the Respondent "knowingly" failed to comply with a provision of the Act, the Applicant conceded that the Respondent had not done so "knowingly".
Respondent's evidence
The Respondent confirmed his evidence given to the SSAT that he studied at the University as a part time student in the second semester of 2000 and for part of the first semester of 2001.
The Respondent said that in 1999 he was attending the University as a part time student and was in receipt of Youth Allowance. He said he was in contact with an officer named "Selva" at the Maroubra Office of Centrelink about his Youth Allowance payments and provided to her documentation from organisations from which he had sought work. He referred the Tribunal to his letter to Selva dated 24 February 2000 (T4) and said he had also written another letter to Centrelink about his efforts to obtain work.
The Respondent told the Tribunal that he had been thrown out of his parents' home on 13 September 1999 and had had to live at his girfriend's parents' house until late in 2001. He said that when he was made to leave his parents' house he felt very isolated and his ability to study was greatly affected. He said he had received, shortly before that, a tax return of about $500.00 and had gambled that money away and that, after he had paid rent to his girlfriend's mother he would spend the rest of his Youth Allowance on alcohol and gambling. He told the Tribunal that by the year 2000 he wasn't spending money so recklessly and was focussing more on his studies.
The Respondent said that he thought Centrelink was aware of his status as a part time student because when he had arranged his classes for the second semester of 2000 he was told by staff at the University, after they had consulted a computer screen, that his course choices could affect his entitlement to Youth Allowance. Thereafter, he assumed that staff at the University undertook informing Centrelink of the study loads of students. He said that had he known that University staff do not inform Centrelink of students' study loads, or that he would become ineligible for Youth Allowance, he would have applied for newstart allowance as he was looking for work anyway.
When asked by the Tribunal what he thought after he dropped a course and there was no alteration to his Youth Allowance payment, the Respondent replied that he thought that his study load must have decreased but not enough to affect his entitlement to Youth Allowance or that he was in the same situation as he had been in, in 1999, where he was allowed to study part time, look for work and still receive Youth Allowance. However, the Respondent said that his judgement at that time was poor and he should have checked on this issue.
The Respondent told the Tribunal that he applied for mainly office junior jobs during the period 10 July 2000 to 3 April 2001. He said he would locate the vacancies by reading the newspaper or using the touch screens at the Bondi Junction Centrelink Office and telephone about a position or attend an interview. He said he would make an average of 10 to 20 job inquiries every week.
The Respondent said he is currently living in a shared unit in Randwick for which his share of the rent is $140.00 per week. He said he is not employed and nor is he in receipt of any social security payment. He said he has chosen not to apply for newstart allowance because he feels that having received social security payments has done him more harm than good and does not want to be dependent on the social security system any longer. He receives some financial assistance from his ex-girlfriend and from his mother with whom he has now reconciled.
The Respondent told the Tribunal that at present he has debts of $6,000.00 for HECS (Higher Education Contribution Scheme), $2,000.00 to friends and "countless" moneys to his ex-girlfriend and her parents, in addition to any debt he may owe in relation to his Youth Allowance payments.
The Respondent also said that in February 2002, while he was staying overnight at his ex-girlfriend's house, his room in his flat in Rosebery (where he was then living) caught fire, destroying most of his possessions including documentary records, furniture and clothing. He said the fire also damaged the bathroom, hallway and some of the living area of the flat. He said none of his possessions was insured. He said he has contacted the NSW Fire Brigades to obtain a record of the fire. The Tribunal delayed its determination of the application to allow the Respondent to obtain a copy of the report of the New South Wales Fire Brigades on the incident. The Respondent provided a copy of that report to the Tribunal and to the Applicant on 15 July 2002. The report noted the fire as having occurred on 1 February 2002 at 23:40 hours and described it as follows:
"Fire in 2nd bedroom of unit on fourth level. Bedroom and contents severely damaged by fire, remainder of unit suffered smoke damage. Area was ventilated and power had been isolated."

Consideration

Sections 543B and 541B of the Act operate to require a person over the age of 21 years to be undertaking full time study in order to qualify to receive Youth Allowance. There is no dispute that the Respondent was a part time student from July 2000 to April 2001. It follows that the Respondent was not qualified to receive Youth Allowance during that period.
It is not in dispute that the Applicant wrote to the Respondent on two occasions in February and March 2000 advising him of the requirement that he inform Centrelink if he ceases to be a full time student. Nor is it in dispute that the Respondent failed to do so within the required time. Section 1224 of the Act provided at the time of the original decision:
"1224 Debts arising from recipient's contravention of law
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 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."
Given that the letters sent to the Respondent by Centrelink were each expressed to be a "Recipient Notification Notice" under section 561B of the Act, the requirement that the Respondent notify Centrelink was a requirement under a provision of the Act. The Respondent's failure to comply with that requirement therefore amounts to a failure to comply with a provision of the Act and it follows that the operation of section 1224 of the Act renders the overpayment of Youth Allowance to the Respondent a debt due to the Commonwealth.
Having established that there is a debt due by the Respondent to the Commonwealth, it must be considered whether that debt should be recovered. Section 1237AAD of the Act provides:
"1237 AAD 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 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."
The Respondent contended that he did not knowingly fail to comply with a requirement of the Act, that his circumstances are "special" and that he would have been entitled to receive newstart allowance anyway and so should not be made to repay the Youth Allowance he received during the relevant period.
The Applicant contended that the Respondent's circumstances are not "special" and in particular submitted that the Respondent has no "notional entitlement" to newstart allowance, it being a payment that requires to be claimed and one that is subject to an activity test. The Applicant conceded that the Respondent did not "knowingly" fail to comply with a requirement of the Act and that he was simply confused by his receipt of Youth Allowance when he was a part time student in 1999 and was unsure of the role of the University in reporting changes in study loads.
The meaning of the word "knowingly" was considered by Deputy President Forgie in the Tribunal's decision in Re Callaghan and Secretary, Department of Social Security (1996-97) 45 ALD 435. Deputy President Forgie said:
"(48) There is nothing in s 1237AAD which suggests that the word 'knowingly' should be given any meaning other than that a person has actual knowledge, rather than constructive knowledge, that he or she is making a false statement or representation or that he or she is failing or omitting to comply with a provision of the Act. That actual knowledge is to be ascertained by reference to the statements of the person as to his or her actual state of knowledge at the time and to events surrounding the false statement or the act or omission." (page 445)
The Tribunal adopts, with respect, the reasoning of Deputy President Forgie and her conclusion that the word "knowingly", as it appears in section 1237AAD, refers to "actual knowledge". While the Respondent, in some ways, exhibited an understanding of the requirement that he inform Centrelink of changes to his study load (see T4), he had the experience, in the previous year, of having received Youth Allowance while studying part time and looking for work and had discussions in 2000 with a Centrelink officer about that receipt of Youth Allowance which did not result in a debt of overpayment being raised. The Tribunal finds that the Respondent relied on that experience and it influenced his view of his obligations at least to the extent that he was confused about what those obligations were. In this way he did not have "actual knowledge" that he was failing to comply with a requirement of the Act and it follows that he did not "knowingly" do so.
As to whether the Respondent's circumstances are "special" within the meaning of section 1237AAD, the Respondent gave evidence of being made to leave his parents' home in September 1999, his consequent difficulty with his studies, lifestyle and living arrangements, the confusing effect of his dealings with Centrelink concerning his 1999 Youth Allowance payments, the destruction of his room and posessions in a fire in February 2002 and his current indebtedness and lack of income. The Tribunal accepts that evidence. He also gave evidence, uncorroborated, of his efforts to find employment between July 2000 and April 2001 and submitted that had he claimed newstart allowance he would have been qualified to receive it given his jobsearch activity.
The decision of the Tribunal in Re Beadle and Director-General of Social Security (1984) 6 ALD 1 is often quoted in relation to the interpretation of "special circumstances". In that decision, the Tribunal said at 3:
"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."
The Tribunal considers that the Respondent's circumstances are special, particularly when the confusion in his dealings with Centrelink and the damage to his possessions and residence from the fire are viewed in the context of his forced departure from his parents' home as a young person of 19 years. The Tribunal considers that background and its consequences, in terms of the Respondent's lifestyle, studies and living arrangements, lends a quality of unusualness to the Respondent's circumstances.
The decision under review is that recovery of 50 per cent of the Respondent's debt is waived. The Tribunal considers that the reasoning of the SSAT in support of that decision is sound in that it takes into account the competing interests of the public purse and those of the Respondent whose circumstances have been found to be special. In Secretary, Department of Social Security v Thompson (1994) 53 FCR 580 the Federal Court said, in relation to the provisions of the Act concerning the discretion to disregard compensation paid to a person on the grounds of special circumstances,:
"The width of the discretion under the section clearly extends to all the circumstances of the case, including circumstances not specifically related to a particular portion of the compensation payment. It is not therefore outside the section for the Tribunal to consider the general factors such as the mental health and social conditioning of the individual in concluding that the preclusion period should be shortened. Indeed it was not suggested by the Department that the Tribunal erred in so doing in this case.
This conclusion has significance here. In some cases the special circumstances identified by the Tribunal will direct attention to a specific part of the compensation payment that ought to be treated as not having been made. One example, referred to in Smith, is where a payment is not received by the intended recipient because of a defalcation by an agent to whom the money is paid on his behalf. In such a case the decision-maker might treat that payment as not having been made.
But when a special circumstance relates not to a specific element of the compensation award, but to the general circumstances of the recipient, the decision-maker (in this case the Tribunal) would rather direct its mind to the effect on the recipient of any reduction in the preclusion period. It may be that after such consideration the Tribunal decides on some time by which the period should be reduced. If so, and having determined on a time, accepting the Department's argument would mean that the Tribunal must then go through the mechanical process of justifying the reduction by working back to or from a decrease in the compensation sum. According to this argument the Tribunal must at least include in any reasons for judgment a formula to the effect that, for example, "the compensation payment be reduced by such an amount as will have the effect of reducing the preclusion period by" whatever time has been decided.
To invalidate a decision of the Tribunal for failure to engage in this process would in my opinion take legalism and bureaucratic pedantry too far, especially in a socially beneficial legislative framework where intuitive justice will often be as fair a criterion and as faithful to the legislative intention as any other approach. "

The Tribunal considers that the Federal Court's approach in Secretary, Department of Social Security v Thompson (supra) has equal application to the determination of amounts to be waived under the provisions of section 1237AAD of the Act. Therefore, the Tribunal considers that, given the special circumstances of the Respondent and given the public's interest in the confinement of payment of income support to those eligible, under the Act, to receive it, that recovery of 50 per cent of the Respondent's debt should be waived.
Determination
The decision under review is affirmed.

I certify that the 32 preceding paragraphs are a true copy of the reasons for the decision herein of Ms N Bell, Member
Signed:           H. Sim           .....................................................................................
  Associate
Date of Hearing  2 July 2002
Date of Decision  9 August 2002
Advocate for the Applicant  Mr Bernard Slattery
Representative for the Respondent Self-represented