Mills and Secretary, Department of Education, Science and Training
[2007] AATA 1770
•18 September 2007
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2007] AATA 1770
ADMINISTRATIVE APPEALS TRIBUNAL )
) No S 200700005
GENERAL ADMINISTRATIVE DIVISION ) Re WILLIAM BARRY MILLS Applicant
And
SECRETARY, DEPARTMENT OF EDUCATION, SCIENCE AND TRAINING
Respondent
DECISION
Tribunal Senior Member L Hastwell Date18 September 2007
PlaceAdelaide
Decision The Tribunal affirms the decision under review.
..............................................
L HASTWELL
(Senior Member)
CATCHWORDS
SOCIAL SECURITY – pensions, benefits and allowances – Youth Allowance – enrolled in full-time study as an open learning student – fell behind with course – definition of hours of study does not relate to hours of study actually undertaken by applicant but defined by relevant institution – point at which ineligibility commences – failure to qualify for YA due to inability to keep up with course – notified Centrelink of difficulty in completing first semester – no clear advice given by Centrelink as to options – honest mistake by applicant – special circumstances established – decision affirmed
Social Security Act 1991 ss 540, 541, 541B, 1223(1), 1237A(1), 1237AAD
Re Beadle and Director-General of Social Security 6 ALD 1
Secretary, Department of Social Security v Hales (1998) 51 ALD 695REASONS FOR DECISION
18 September 2007 Senior Member L Hastwell 1. Mr Mills (the applicant) was a recipient of Youth Allowance (YA). In 2005 he was receiving YA on the basis that he was studying full-time in a course. Upon review by Centrelink, it was determined that he was not studying what is classified to be a full-time load in 2005. An overpayment was raised on the basis that he had not been entitled to YA during the relevant period.
2. The applicant sought review of that decision. The Social Security Appeals Tribunal (the SSAT) determined on 11 December 2006 that although an overpayment had occurred and the applicant had not been entitled to YA during the relevant period, special circumstances existed and they waived 50 percent of the total debt.
3. The applicant seeks review of the SSAT decision to this Tribunal. The respondent (the Department) argues that the full overpayment should be repayable and that part of the SSAT decision that waived half of the debt should be set aside.
relevant legislation
4. Part 2.11 of the Social Security Act 1991 (the Act) deals with eligibility for YA. Section 540 of the Act sets out the general qualification for YA in the following terms:
“540 Qualification for youth allowance—general rule
Subject to this Subdivision, a person is qualified for a youth allowance in respect of a period if:
(a) either of the following applies:
(i)throughout the period the person satisfies the activity test (see Subdivision B) or is not required to satisfy the activity test (see Subdivision C);
(ii)…
(b)throughout the period the person is of youth allowance age (see Subdivision D); and
(c)throughout the period the person satisfies any requirements relating to Youth Allowance Activity Agreements that apply to the person under Subdivision E; and
(d) throughout the period, the person:
(i) is an Australian resident; or
(ii)is exempt from the residence requirement within the meaning of subsection 7(7).”
5. Section 541 of the Act sets out the activity tests. In this case the relevant provisions are 541(1)(a) and (b) which provide as follows:
“541 Activity test
541(1) Subject to section 541A and subsection (3) of this section, a person satisfies the activity test in respect of a period if:
(a)the person satisfies the Secretary that, throughout the period, the person is undertaking full-time study (see section 541B); or
(b)the person satisfies the Secretary that, throughout the period, the person is actively seeking, and willing to undertake, paid work in Australia (other than paid work that is unsuitable for the person); or
…”
6. Section 541B provides a definition of “undertaking full-time study” in the following terms:
“541B Undertaking full-time study
541B(1)For the purposes of this Act, a person is undertaking full-time study if:
(a) the person:
(i)is enrolled in a course of education at an educational institution; or
(ii)was enrolled in the course and satisfies the Secretary that he or she intends, and has (since no longer being enrolled) always intended, to re-enrol in the course when re-enrolments in the course are next accepted; or
(iii)was enrolled in the course and satisfies the Secretary that he or she intends, and has (since no longer being enrolled) always intended, to enrol in another course of education (at the same or a different educational institution) when enrolments in the other course are next accepted; and
(b) the person:
(i)is undertaking in the particular study period (such as, for example, a semester) for which he or she is enrolled for the course; or
(ii)intends to undertake in the next study period for which he or she intends to enrol for the course;
either:
(iii)in a case to which subsection (1A) does not apply—at least three-quarters of the normal amount of full-time study in respect of the course for that period (see subsections (2) to (4)); or
(iv)in a case to which subsection (1A) applies—at least two-thirds of the normal amount of full-time study in respect of the course for that period (see subsections (2) to (4)); and
(c)the course in question is an approved course of education or study (see subsection (5)); and
(d)in the Secretary’s opinion, the person is making satisfactory progress towards completing the course.”
7. The meaning of the normal amount of full-time study in respect of a course is set out in s 541B(2) of the Act. Section 541B(2) provides as follows:
“Meaning of normal amount of full-time study
541B(2)For the purposes of paragraph (1)(b), the normal amount of full-time study in respect of a course is:
(a) if:
(i)the course is a course of study within the meaning of the Higher Education Support Act 2003; and
(ii)there are Commonwealth supported students (within the meaning of that Act) enrolled in the course;
the full-time student load for the course; or
(b)if the course is not such a course and the institution defines an amount of full-time study that a full-time student should typically undertake in respect of the course—the amount so defined; or
(c)otherwise—an amount of full-time study equivalent to the average amount of full-time study that a person would have to undertake for the duration of the course in order to complete the course in the minimum amount of time needed to complete it.”
8. An alternate meaning of normal amount of full-time study is also provided in s 541B(3) of the Act as follows:
“Alternative meaning of normal amount of full-time study
541B(3)For the purposes of paragraph (1)(b), and without limiting subsection (2), the normal amount of full-time study in respect of a course is an average, taken over the duration of the period for which the person in question is enrolled in the course, of 20 contact hours per week.”
issues
9. The issues to be determined in this case are:
§Was the applicant undertaking full-time study as defined by the Act during some or all of the period for which an overpayment has been raised?
§If the applicant has been overpaid an amount of YA, has that sum been correctly calculated?
§If an overpayment has occurred, are there special circumstances in this case that would enable the Tribunal to exercise its discretion to waive all or part of the debt?
the hearing
10. The applicant spoke to the Tribunal by telephone at the hearing. He had also provided a written submission to the Tribunal. The Tribunal received the T documents into evidence as Exhibit R1. A statement by a Departmental officer, Sarah Iglio, was also received into evidence as Exhibit R2.
11. The applicant gave his evidence in a straightforward fashion, and the Tribunal accepts his evidence as being accurate. There is no dispute between the parties about the facts of this matter.
12. The applicant has been receiving YA for a number of years in the course of his studies.
13. It is common ground that the applicant satisfies all the criteria required for eligibility for YA during the period of the overpayment, save for the issue of whether he satisfies the requirement that he undertake full-time study. The applicant does not contend that he satisfied s 541(1)(b) of the Act in that he was actively seeking and willing to undertake full-time work during the relevant period. His case rests on his contention that he was undertaking full-time study during the relevant period.
14. An overpayment has been raised against him by the Department for the period 15 February 2005 to 2 December 2005 on the basis that he did not satisfy the activity test for YA and was not studying at least 75 percent of a study load during each relevant period of that year for the course.
15. In the first semester of that year the applicant was studying by “open learning”, ie by a correspondence course at the Whyalla TAFE. This was because the units that he wished to study were only available on that basis.
16. Notice was sent to the applicant by Centrelink on 13 December 2004 advising of his obligation to inform Centrelink within 14 days if he stopped being a full-time student or if he applied for or varied his enrolment in the institution in which he was studying. Other similar notices were sent to the applicant in 2005.
17. A Study Plan for the applicant completed by TAFESA dated 4 February 2005 indicated that all his subjects would be completed by 4 August 2005 and the study load required 535 hours of study during that period.
18. The applicant had difficulties managing the study load required and he acknowledged in his evidence that he did not complete the subjects in the time allocated. At least two subjects had to be carried over until the next semester. Based on the way the institution defines hours of study, which is effectively based on units completed or work presented, he did not undertake sufficient hours of study during that semester to qualify as a full-time student.
19. The applicant took seriously his obligation to do all the required reading for each subject. He found the reading onerous and it would take him many hours per week to complete it. He took the view that as he was studying literally for at least 15 to 18 hours per week he was satisfying the requirements to qualify for YA. Nevertheless, he was not completing and submitting work on time.
20. On 13 July 2005 the applicant approached Centrelink (T9/74) and an annotation on his file reads as follows:
“cus states is studying past 30/07 – not sure on % and is it in allow time – please explain as cus confused … cus to request POE from Tafe stating course and % of study and prev course was verified and dated coded until 30.7.05.”
21. On 25 July 2005 the applicant provided proof of enrolment for the next semester stating that he would be a full-time student for semester 2 and the end date of his study was to be 2 December 2005. He was enrolled in the second semester as a full-time open learning student in the course Diploma in Accounting.
22. The applicant still had subjects to carry over from his Certificate IV when he entered the second semester of 2005 and at least two subjects were carried over into semester two. He did not notify Centrelink that he had not completed the study requirements for the first semester and had therefore technically not studied the requisite number of hours as defined by TAFESA to be considered a full-time student.
23. In the second semester of 2005, YA continued to be paid to the applicant on the basis that was a full-time student in the relevant course.
24. A subsequent audit of the studies undertaken by the applicant in that year showed that a full-time study load for the semester one Certificate IV course was 535 hours of study and the applicant completed 140 hours of study in this course, which represented an actual study load of considerably less than 75 percent of the course.
25. A full-time study load for the second semester Diploma in Accounting would have been 360 hours. In the second semester the applicant completed 205 hours of study, which represented a study load of considerably less than 75 percent.
26. The applicant explained to the Tribunal the difficulties of being an open learning student. He had studied at his own pace in 2005 and the reading for the courses took up a lot of his time. He considered that he was satisfying the requirements of Centrelink. He interpreted the concept of hours of study literally and did not appreciate that “hours of study” is equated to (in his case of being an open learning student) completion of units in a course and submission of work.
27. He was aware that he was falling behind with the course and he acknowledged that he did not complete the subjects in the first semester and carried subjects into the second, but still did not complete that course. He ultimately received his Diploma in Accounting in December 2006.
28. The applicant is an honest person who at no stage intended to deceive Centrelink.
29. The applicant now has full-time employment after a period of unemployment. He thought that by presenting the further Study Plan to Centrelink in July 2005, ie the proof of enrolment in the second semester, he satisfied his obligations and he did not appreciate that hours of reading at home did not necessarily correlate with hours of study required at an institution to complete the course.
30. The applicant does not challenge the amount of the overpayment. He concedes that he did not do the hours required for the courses, but he asks that the Tribunal find that there were special circumstances in his case and that 100 percent of the debt be waived.
discussion of the evidence and application of the law
31. The applicant does not dispute that in terms of the way study is treated by the Act, he did not complete the requisite hours in 2005 to be eligible for YA. TAFESA, being an approved higher education institution, determines what amounts to a full-time study load in each course. Study load equates with contact hours required and in the case of an open learning course with units of work completed. It is a notional figure that does not necessarily correlate with the actual amount of study any individual may need to do to produce the work required to complete a unit.
32. The course in question was an approved course of education or study. The only issue in this instance is whether he was undertaking full-time study throughout 2005.
33. To be eligible for YA the applicant must satisfy the activity test. To satisfy s 541B(1) of the Act, the applicant is eligible for YA if he was enrolled in an approved course of education at the time and he was undertaking at least 75 percent of the normal amount of full-time study with respect to the course.
34. On any approach to the hours studied by the applicant in this case, he does not satisfy the requirements for YA during 2005. Whether the total hours required to complete the enrolments for both semesters are aggregated and the total hours studied over the whole year are aggregated, or whether each semester is considered individually, he does not achieve the requisite 75 percent course load.
35. The overpayment has been correctly raised.
36. Pursuant to s 1223(1) of the Act that overpayment becomes a debt to the Commonwealth.
37. The next issue to determine is whether there are any special circumstances that would justify a waiver of the debt in this particular case. The SSAT found that there were special circumstances that justified waiver of 50 percent of the debt. The applicant asks the Tribunal to consider waiving all the debt and the Department asks the Tribunal to set aside that part of the SSAT decision that waives half the debt and to find that the whole debt should be reinstated.
38. There are limited provisions in the Act for waiving the right to recover all or part of a debt. Section 1237A(1) allows for waiver of that portion of a debt which was attributable solely to administrative error and was received in good faith by the debtor. The Tribunal agrees with the SSAT that there appears some confusion in this matter as to whether there was an administrative error. In July 2005 the applicant told Centrelink that he was struggling to finish the units of his course for that first semester, then upon lodging a further Study Plan for the second half of 2005 no further queries were raised about his eligibility. The Study Plan lodged in July 2005 indicated that he was continuing in full-time study. At the least, there was some confusion in the applicant’s mind as to what was required to continue to be eligible for YA and he lodged his next Study Plan to ensure continuity.
39. The Tribunal has some sympathy for the applicant. He commenced 2005 as a full-time student with the best of intentions. He began to fall behind. At what point did he realise that he was no longer satisfying the full-time requirements, particularly if he remained optimistic until the latter part of the semester that he would successfully catch up and complete the course? He become ineligible for YA by virtue of not achieving what he set out to achieve and so in a sense his lack of qualification is then applied retrospectively. The applicant struggled diligently with the reading and he ceased to be eligible at some indefinable point in the first semester because he was not achieving the technical requirements of hours of study - a concept he did not appreciate at all.
40. Section 1237AAD of the Act provides a basis for waiver of some or all of the debt in special circumstances. The concept of special circumstances, although not specifically defined in the Act, has been considered in many prior decisions. It is accepted that for circumstances to be special there must be something “unusual, uncommon or exceptional” about the circumstances in a particular case (Re Beadle and Director-General of Social Security 6 ALD 1). In the recent case of Secretary, Department of Social Security v Hales (1998) 51 ALD 695, French J also commented as to the purpose of that section in the following terms:
“The evident purpose of s 1237AAD is to enable a flexible response to the wide range of situations which could give rise to hardship or unfairness in the event of a rigid application of a requirement for recovery of a debt. …”
41. The applicant did not set out to deliberately misrepresent his situation to the Department and based on the way that hours of study are defined, it appears likely that he would have been eligible for YA throughout the first semester had he managed to catch up his work before the end of July that year.
42. Had he appreciated the situation he was falling into he could have approached the Department earlier and he would possibly have been eligible for another allowance during a period in which he has now been now found to have no entitlement. It may be that because he was working as an open learning student he was not made aware by TAFESA of his status as a full-time student being in jeopardy if he did not keep up with the course.
43. The applicant appears not to have experienced similar problems in his earlier years of the course when he was studying on campus. It is impossible to ascertain the point at which he became a part-time student, and based on the way in which the tertiary institutions define hours of study, it may be that they could not have provided a classification of his status as being part-time until he had failed to hand in work by the end of July. That classification is then applied retrospectively.
44. The applicant’s confusion about the rules was evident in his contact with the Department in July 2005 when he advised that he was unlikely to finish some units of the course he was undertaking in the first semester. There is a question mark over the quality of information that he was provided by the Department at that time as it appears the issue was not properly explored with the applicant when he approached Centrelink in July 2005. In the ideal world, the counter officer that he approached at Centrelink would have spent some time explaining the rules to the applicant at that point and ascertaining whether he was facing a problem of overpayment. Had he been assisted when he made that approach he would have appreciated the difficulty he was in and he would have undoubtedly made a different decision as to how he would proceed in the second semester. As it was, he proceeded with a further full-time enrolment for the second semester believing that he had notified Centrelink of his difficulties and not appreciating that the further he fell behind with his course the worse the potential debt situation became.
45. The Department accepted his further proof of enrolment in a new course for second semester 2005, as proof of ongoing eligibility. No query was raised by Centrelink at that stage as to his entitlement for the first semester, even though he had told them a week or so earlier that he did not think he could finish the study load for the first semester. The overpayment was not raised until mid 2006.
46. The applicant reported his difficulties to Centrelink and having done so, he believed he had satisfied the requirements of his eligibility for YA. His difficulties were exacerbated by studying as an open learning student and not having the direct contact with the institution that may have assisted him in pacing his work and also having a clearer understanding of the point at which his YA was in jeopardy.
47. The applicant is a young man who impressed the Tribunal as a responsible person who has been trying hard to improve his educational qualifications and has been very keen to enter the work force. He is to be commended for persevering with a course that at times he found difficult. He has now commenced employment, but at this stage not yet in his chosen field.
48. The debt is a very large debt in a comparative sense for a young man who is just starting out in adult employment. The circumstances in which the debt arose are, in the Tribunal’s view, sufficiently unusual to justify a finding that they are out of the ordinary and unusual and therefore “special” within the meaning of the Act.
49. The Tribunal notes the approach taken by the SSAT with respect to deciding that 50 percent of the debt should be waived in all the circumstances. It is correct that in most circumstances a debt that is payable to the Commonwealth should be repaid, however the special circumstances provision is there to allow some flexibility in a case such as this.
50. The position taken by the SSAT is an attempt to effectively find a compromise position between the parties in the circumstances of this case. The Tribunal agrees with the approach taken by the SSAT. There is no mathematical precision to the waiver of 50 percent of the debt. The Tribunal is not required to make a precise mathematical justification as to the portion that it waives. A sense of fairness in this case brought the SSAT to the decision that fifty percent of the debt should be waived in this case. The tribunal agrees with that decision and affirms the decision under review.
I certify that the 50 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member L Hastwell
Signed: .....................................................................................
AssociateDate of Hearing 7 August 2007
Date of Decision 18 September 2007
Advocate for the Applicant In Person
Advocate for the Respondent Mr Peter Edwards
Centrelink Legal Services Branch
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