Moon and Secretary to the Department of Family and Community Serv Ices

[2003] AATA 676

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2003] AATA 676

ADMINISTRATIVE APPEALS TRIBUNAL        Nº V2002/1359

GENERAL  ADMINISTRATIVE DIVISION

Re:         ANDREW GEORGE MOON

Applicant

And:       SECRETARY TO THE
  DEPARTMENT OF FAMILY
  AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal:       M.J. Carstairs, Member

Date:             18 July 2003

Place:            Melbourne

Decision:      The Tribunal varies the decision under review and decides that the applicant was qualified for youth allowance until 17 December 1999, and the debt of youth allowance is to be recalculated from that date.  In all other respects the decision under review is affirmed.

(sgd) M.J. Carstairs

Member

SOCIAL SECURITY – overpayment – youth allowance – whether applicant owes a debt to Commonwealth – whether notional entitlement to alternate payment should be set-off – whether applicant should be deemed entitled to another payment – whether debt should be waived - special circumstances

Social Security Act 1991 ss541(1), 541B(1), 1224, 1237AAD

Social Security (Administration) Act 1999 ss12, 15

Re Beadle and Director General of Social security (1984) 6 ALD 1

Hazim and Secretary, Department of Family and Community Services (2002) 68 ALD 39

Wright and Secretary Department of Family and Community Services [2001] AATA 21

Director-General of Social Services vHales (1983) 47 ALR 281

Groth v Secretary, Department of Social Security (1996) 40 ALD 541
Re Callaghan and Secretary to the Department of Social Security (1996) 2 SSR 125

Secretary Department of Family and Community Services and Valori (2002) 35 AAR 66

REASONS FOR DECISION

18 July 2003  M.J. Carstairs, Member

1.      This is an application by Andrew George Moon (the applicant) for review of a decision made by the Social Security Appeals Tribunal (the SSAT) on 27 November 2002.  The SSAT affirmed a decision of a Centrelink delegate of the Secretary to the Department of Family and Community Services (the respondent), to recover an amount of youth allowance paid to the applicant during the period 17 September 1999 to 24 May 2001. 

2.      At the hearing Ms N. Karapanagiotidis of counsel, instructed by Victoria Legal Aid, represented the applicant. Mr R. Huttner, an advocate with Centrelink, represented the respondent. The Tribunal had before it the documents lodged pursuant to s37 of the Administrative Appeals Tribunal Act1975, as well as exhibits marked A1 ‑ A4 for the applicant and R1 ‑ R3 for the respondent. 

BACKGROUND

3.      The applicant was born on 21 December 1977.  During 1999 he received newstart allowance. On 13 September 1999 he claimed youth allowance, as he had enrolled in a Diploma of Information Technology course at the Victorian Business College (the College).

4.      On 19 May 2001 Centrelink made enquiries about the applicant’s student status and on 5 June 2001 suspended the payment of youth allowance.  Centrelink later decided to raise an overpayment.  The relevant notices stated that the applicant had been overpaid $9971.99 for the period 1 January 2000 to 24 May 2001(T41), and $1495.81 for the period 17 September 1999 to 31 December 1999 (T51).

5.      The applicant sought review of the decisions on 30 August 2002.  An authorised review officer affirmed the decisions on 31 October 2002.  The SSAT also affirmed the decisions.  The applicant then sought review with this Tribunal on 12 December 2002.

EVIDENCE.

6.      The applicant said that he was twenty‑one years old when he applied for youth allowance.  Prior to that he was unemployed for five months and was receiving newstart allowance.  He said that he had attended an open day, held for unemployed people, and had won a two-year full scholarship to attend the College.  The applicant gave evidence that after enrolling in August 1999, he attended classes for some weeks.  He said that class attendance rolls were usually completed.  He said he did not sit the scheduled exams in December 1999 because he did not believe that he had sufficient knowledge to pass, and was unwell.

7.      The applicant recalled receiving a letter in early 2000 concerning his enrolment, although he did not retain a copy.  He said that he contacted the College and was told that he would be able to complete the course and sit for the examinations without attending classes.  He said that he attended some classes in 2000, but generally he considered he had sufficient background knowledge, which, when combined with independent library study and discussion of class content with other students, would enable him to make satisfactory progress in the course.  He said that because of his conversation with the College, he believed that he was a full‑time student.

8.      The applicant agreed that he had received letters from Centrelink about his obligations while receiving youth allowance, but said that he had discarded them without reading them.  He said that he believed that if he had not received youth allowance he would have been eligible for some other payment and because he continued to consider himself a student, he had no reason to think that he was not entitled to the payment he was receiving.  He said that throughout the period his main objective was to improve himself through study.

9.      The applicant said that he was homeless from 1999 to 2001 and was experiencing significant personal problems at that time.  He said he had had a substance abuse problem since the death of his father in 1995.  He said that during the period he was on youth allowance he obtained work from time to time, including eight weeks’ work at a vineyard in mid‑2000.  In 2002 he secured full‑time employment at a call centre and currently receives after tax income of $800‑$850 per fortnight.  In 2002 he also obtained counselling which has been of considerable assistance and his substance abuse has ceased.  The applicant said he has student loans amounting to approximately $14,000 and credit card debt of $3000.  He repays each by instalments of $200 per month.  He owes approximately $11,000 in parking fines.  His rent per fortnight is $390.  He said that after these payments are made he has $400 per month for all other expenditure.

10.     In a written report dated 24 December 2002 (Exhibit A2) Dr A. Stratigopoulos, general practitioner, stated that the applicant complained of depression in July 2002, and described episodes of feeing down and upset, of suffering impaired memory, poor concentration, and self-blame in regard to the death of his father.  Dr Stratigopoulos said that despite these problems, the applicant was eating and sleeping well and was managing his relationship with his girlfriend and his job at the call centre.  He referred the applicant to Ms N. Lefkovits, a psychologist, for counselling.

11.     In a written report dated 4 November 2002 (T59), Ms Lefkovits stated that the applicant had attended four counselling sessions.  She stated that she considered that the applicant’s depression, anxiety, post traumatic stress disorder, and self destructive behaviours contributed to an impairment in judgement at the material time.  She considered that ongoing treatment would improve the applicant’s clinical prognosis and arranged for psychiatric assessment through the applicant’s general practitioner, Dr Stratigopoulos.  In a written report dated 9 April 2003 (Exhibit A1) Dr I. Katz, consultant psychiatrist, stated that he had seen the applicant at the request of Victoria Legal Aid on two occasions.  The applicant told him of his substance abuse and described significant physical and sexual abuse, neglect, deprivation and truncated parenting as part of his family history.  Dr Katz described the applicant as mildly depressed and anxious when he first saw him, but he noted that on the second appointment the applicant was less depressed, was in a continuing relationship, was in stable employment, and had ceased substance abuse.  Dr Katz stated that diagnostic features consistent with chronic depression were present but the main diagnostic category was consistent with underlying borderline personality features.

12.     Mr P. Koumides, Director of Studies at the College stated in a document dated 14 June 2001 (T42) that the applicant had not been enrolled at the College in 1999, 2000, or 2001.  In a letter dated 29 August 2001 (T45) he stated that the applicant did not attend any part‑time or full‑time classes during the Academic years of 1999 to 2000..  However, a computer print out (the date of which is obscured) indicates that the applicant last attended the college on 17 November 1999 (T43).

13.     In oral evidence Mr Koumides said that he had been employed at the College since November 1999.  He said that in 1999 the College was small and occupied only one floor of the building, and students were known personally to staff.  He said other staff at the College had told him that the applicant did not attend classes.  However, he acknowledged under cross‑examination that in 1999 the College did not have a reliable system of recording attendances.  He said that it in 2000 the College introduced a computerised system of recording attendances.  This enabled the College to confirm student compliance. 

14.     Mr Koumides said that if the applicant had contacted the College in 2000 in regard to his enrolment, as he had said he did, there would have been a record of the contact.  Mr Koumides said that the applicant was not enrolled in 2000, as he was not on the computer system.  He said that it was up to the student to register for particular courses.  Mr Koumides stated that courses at the College require full participation and submission of class assignments (which the applicant failed to provide) as well as assessment by examinations.

CONSIDERATION OF THE ISSUES

15.     The provisions in the Social Security Act 1991 (the Act) dealing with youth allowance are at Part 2.11 of the Act.  These provisions allow for payment of youth allowance to young people until age twenty‑five (if in full-time education) or until age twenty‑one (if not in full-time education).  Qualification for youth allowance requires that the person satisfy the youth allowance activity test. Section 541(1) of the Act effectively provides that full‑time study is one basis on which the youth allowance activity test is satisfied.   Section 541B then sets out the meaning of full-time study:

541B(1) General. 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.

16. The overpayment of youth allowance which has been raised in this case is dealt with in the provisions at Part 5.1 of the Act, in particular s1224 of the Act. Before 1 July 2001, s1224 of the Act (since repealed) stated:

1224(1)If:

(a)an amount has been paid to a recipient by way of a social security payment … and

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

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

(ii)failed or omitted to comply with the 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.

17.     The provisions dealing with non‑recovery of debts are also in Part 5.1 of the Act.  In special circumstances a debt may be waived, as provided in s1237AAD of the Act:

1237AAD  The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:

(a)the debt did not result wholly or partly from the debtor or another person knowingly:

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

(ii)failing or omitting to comply with a provision of this Act or the 1947 Act; and

(b)there are special circumstances (other than financial hardship alone) that make it desirable to waive; and

(c)       it is more appropriate to waive than to write off the debt or part of the debt.

18.     Ms Karapanagiotidis submitted that the applicant qualified for youth allowance at the time of the claim.  She said that from September 1999 to the end of 2000 he was undertaking full‑time study within the meaning of s541B of the Act, as he was enrolled in the relevant course.  Ms Karapanagiotidis said that had the applicant sat the examinations in 1999 and 2000, it would not have been suggested that he was not undertaking full‑time study, because the course was one where the applicant could sit examinations and make progress despite his lack of attendance at classes.

19.     Ms Karapanagiotidis submitted that for the respondent to raise a debt, the period must be specific and certain.  It was not sufficient for the respondent to say that the applicant lost qualification at some unidentified time.  She submitted that the Tribunal decisions in Hazim v Secretary Department of Family and Community Services (2002) 68 ALD 39 and Wright and Secretary Department of Family and Community Services [2001] AATA 21 are authority for this proposition. She submitted that in early 2000 the applicant re-enrolled for the course and remained qualified. Ms Karapanagiotidis submitted that the College records were not produced, and Mr Koumides’ description of the computer system in 2000 showed that it did not contain a record of attendance. She submitted that the applicant’s evidence that he continued to believe he was a full‑time student should be accepted.

20.     In regard to the discretion not to recover a debt on the basis of special circumstances, Ms Karapanagiotidis submitted that it was open for the Tribunal to apply the discretion because the applicant did not knowingly fail or omit to comply with a provision of the Act.  She said that, following the Tribunal’s decision in Re Callaghan and Secretary to the Department of Social Security (1996) 2 SSR 125, exclusion from consideration of waiver under the special circumstances provision in s1237AAD of the Act required more than a person merely behaving recklessly by not reading the notices sent.

21. Ms Karapanagiotidis submitted that, if the applicant was not a full‑time student, he would have been qualified for newstart allowance or special benefit, had he had lodged the appropriate claim form. Ms Karapanagiotidis said that if the Tribunal decided that the applicant did not qualify for youth allowance, the Tribunal should decide that his claim for that benefit should be treated as a claim for newstart allowance or special benefit under s15 of the Social Security (Administration) Act1999 (the Administration Act). She submitted further that s12 of the Administration Act provides a mechanism whereby the applicant could be transferred to another type of payment. Ms Karapanagiotidis submitted that the alternate entitlements allowed the Tribunal to set‑off the amount that the applicant would have been entitled to under an alternative payment, against the amount of youth allowance paid. In the alternative, she submitted that the issue of an alternative entitlement should be considered as a special circumstance in support of waiver of the debt.

22.     Ms Karapanagiotidis submitted that when considering the exercise of discretion for special circumstances, the applicant’s chaotic and difficult life, substance abuse and hardship in the period 1999 to 2001 should be taken into account.  She said that the applicant was genuine in attempting to improve himself by accepting the scholarship and enrolling at the College.  As a result of undertaking these studies he had incurred large debts.

23.     Mr Huttner submitted that the Tribunal should find that the applicant did not attend classes after 17 November 1999 and after this date he had abandoned any intention to continue the course.  Mr Huttner said that it defied credibility that the applicant considered himself a full‑time student, and that the reality was that he was not undertaking full‑time study. Mr Huttner submitted that the Tribunal should accept Mr Koumides’ evidence that the applicant did not re-enrol in 2000.

24.     Mr Huttner submitted that the applicant’s evidence was unreliable and he demonstrated little recollection of detail, including the subjects that he was undertaking.  He submitted that the applicant acknowledged that he received numerous notices, and therefore it was open for the Tribunal to draw the inference that the applicant knowingly failed or omitted to comply with the Act (s1237AAD), so the Tribunal could not waive the debt on the basis of special circumstances.  Mr Huttner submitted that the medical reports of Dr Katz and Ms Lefkovits were vague, inconclusive, of little assistance in deciding the impact of any medical condition.  He said that there was no corroborating evidence concerning the alleged harshness of the applicant’s upbringing.  He submitted that as the applicant did not establish that he had special circumstances, there was nothing to justify waiving the debt, especially as he was in employment and was able to repay the debt on a negotiated basis, taking into account his other liabilities.

25. Mr Huttner submitted that s12 and 15 of the Administration Act could not be applied to set‑off a debt of youth allowance against a notional entitlement to another benefit. He submitted that the Act only allowed one kind of set-off, specifically for unclaimed family and parenting payment (s1237AAC of the Act). As there was such a specific provision, Mr Huttner submitted that, under the principles of statutory interpretation, no notional entitlement to other kinds of payments was allowed under the waiver provisions in Part 5.1 of the Act. Mr Huttner submitted that the Tribunal could not be satisfied that the applicant qualified for any of the alternate payments suggested.

26.     The Tribunal reached its decision taking into account the oral and written evidence and the submission of the parties.  Having considered all the evidence, the Tribunal finds that the applicant enrolled as a full‑time student at the College in August 1999.  The Tribunal accepts the submission, not disputed by the respondent, that at the time of his claim for youth allowance in September 1999 the applicant was qualified to receive youth allowance. 

27.     The applicant’s evidence was vague, and in parts differed from that given to the SSAT, for example, in regard to the telephone call he made to the College and whether he attended classes at all in 2000.  However, the Tribunal accepts his evidence that he attended some parts of the course in 1999 and although his attendance at classes reduced over time, he believed that he could still complete the course by independent study.  The note of his continued attendance in November 1999 (T43) supports his evidence that he attended classes in 1999.

28.     Sections 541 and 541B of the Act require that the person is undertaking full‑time study..  Many students undertake their studies without full attendance at classes and the applicant said that he was familiar with the work that was being done in class.  However, the applicant’s failure to contact the College about not sitting for his examinations, indicates that he was not intending to re‑enrol (s541B(1)(a)(ii) of the Act).  His evidence about the telephone call that he said he made was that it was general in nature, not directed to the question of his failure to sit for the examinations.  Had he intended to pursue his studies he would have contacted the College either to sit for a supplementary examination, or to establish the consequences of his failure to progress through the first part of the course.  The Tribunal is reasonably satisfied that the applicant continued to satisfy the requirements of the Act until 17 December 1999, the last possible date in which an examination could have been set prior to the Christmas holidays. 

29.     The Tribunal is satisfied that from the time of the failure to sit the 1999 examinations the applicant was not making satisfactory progress towards completing the course (s541B(1)(d) of the Act).  The Tribunal takes into account Centrelink’s policy of paying youth allowance for continuing students during vacation periods.  However, for the reasons given above, the Tribunal does not accept that the applicant had any intention of re-enrolling after failing to sit for the examinations in December 1999 and he should not be given the benefit of the policy in regard to continuing students. 

30.     In regard to the youth allowance paid to the applicant in 2000 and 2001, the Tribunal finds that the applicant did not enrol in subjects at the start of 2000 or in 2001.  The applicant’s evidence about the scholarship being one that covered a period of two years does not assist him in establishing that he was enrolled in any particular classes so as to satisfy s541B(iii) of the Act.  The Tribunal does not accept that the applicant contacted the College and was told that he would be able to sit for the examinations despite not attending classes.  The Tribunal accepts the evidence of Mr Koumides that the College requires that students attend, submit assignments and sit for examinations.  Even if the College had given the applicant the advice that he claims to have been given, he was not enrolled in any subjects in 2000.  Therefore, the Tribunal finds that the applicant was not undertaking full‑time study in 2000 or 2001 within the meaning of s541B of the Act, so he was not qualified for youth allowance on and from 17 December 1999.

31. The Tribunal finds that the applicant received notices from Centrelink setting out his obligations to advise Centrelink if he ceased study as a full-time student. There were seventeen notices in the period between 30 September 1999 (T9) and 20 April 2001 (T33). All were recipient notification notices under the Act and the applicant was required to comply with them by providing relevant information. Section 1224 of the Act (since repealed) provided, throughout the period 1999 to 2001, that if a person is paid an amount of social security payment because the person failed to comply with a provision of the Act, the amount is a debt due to the Commonwealth. The applicant did not dispute receiving the notices, though he said he did not read them. The applicant failed to comply with the notices. This failure to comply means that a debt arose under s1224 of the Act on and from 17 December 1999.

32. The Tribunal rejects the submission by Ms Karapanagiotidis that a notional entitlement to another benefit can be set-off against the debt of youth allowance. Section 15 of the Administration Act does not support such an approach, as the section requires that the claim for youth allowance be an incorrect claim: (s15(1)(b) of the Administration Act). In view of the Tribunal’s finding above that the applicant was qualified for youth allowance at the time of his claim, the claim for youth allowance cannot be an incorrect claim as required under s15 of the Administration Act: Secretary Department of Family and Community Services and Valori (2002) 35 AAR 66. In regard to the provision in s12(3) of the Administration Act dealing with transfer between payments, the section requires that the person be qualified for another payment. The Tribunal is not satisfied that the applicant qualified for either newstart allowance or special benefit at any time in the period from 1999 to 2001. The Tribunal accepts the submission of Mr Huttner that newstart allowance has a number of requirements for eligibility, which cannot be satisfied retrospectively. As the applicant’s evidence was that that he was applying himself to his studies, it is difficult for him to argue that he was genuinely seeking work, which is a requirement for newstart allowance. Nor would he have been eligible for that payment at the times that he was working. The Tribunal is not satisfied that the applicant qualified for special benefit during the relevant period.

33.     The applicant was not consistent or reliable in his evidence and there are numerous discrepancies between his evidence to the SSAT and his evidence to this Tribunal.  However, there was insufficient evidence that he knowingly failed to comply with the Act by not advising Centrelink that he ceased his full‑time studies. The Tribunal accepts the submission of Ms Karapanagiotidis that the Act requires more than mere recklessness for consideration of the exercise of the discretion under s1237AAD of the Act to be excluded.

34.     With respect to the exercise of the discretion to waive the debt where special circumstances exist (s1237AAD of the Act), there are limited circumstances where the discretion is to be exercised. The circumstances must be unusual, uncommon or exceptional (Re Beadle and Director‑General of Social Services (1984) 6 ALD 1, Groth v Secretary, Department of Social Security (1996) 40 ALD 541).

35.     Although the applicant has raised medical issues it is not clear from the medical evidence that the applicant has long-term health issues.  Dr Katz stated that the applicant had symptoms consistent with underlying borderline personality features..  He reported the applicant as improved in his second consultation, as did Dr Stratigopoulos.  Both Ms Lefkovits and Dr Katz reported upon the applicant’s improved behaviour and mood after counselling, and upon important lifestyle changes including securing full-time work, undertaking study, and continuing a successful personal relationship. 

36.     The applicant is now working, and his life appears to be more settled.  His difficult financial circumstances are to be taken into account in considering his overall circumstances.  However, this is to be weighed against his employment and enhanced capacity to repay his debts.  The Tribunal acknowledges that the applicant has a large amount to repay in fines and debts and the recovery of these amounts will take a long time. The Tribunal must balance the several factors that arise in such cases. These include the fact that the applicant received public moneys to which he was not entitled, the circumstances in which the debt arose as well as prospects of recovery and the applicant's general financial circumstances: Director-General of Social Services vHales (1983) 47 ALR 281.

37.     The Tribunal is satisfied that the applicant acted with a degree of recklessness in the approach to his studies and the receipt of benefits under the Act.  Having been on newstart allowance previously he can be taken to have known that the receipt of that payment required that he seek work or satisfy the Secretary that his time is directed towards improving work prospects.  The applicant cannot now say that the debt that he incurred should be reduced by an alternative benefit that he might have been entitled to, if he had applied for it and carried out its obligations.  While notional entitlements might appropriately be taken into account in a suitable case, after considering all relevant matters the Tribunal is not satisfied that this is such a case. Nor is the Tribunal satisfied that this case warrants the exercise of the special circumstances discretion. 

38.     For these reasons the Tribunal decides that the debt must be re-calculated on the basis that the applicant was qualified for youth allowance until 17 December 1999.

DECISION

39.     The Tribunal varies the decision under review and decides that the applicant was qualified for youth allowance until 17 December 1999, and the debt is to be recalculated from that date.  In all other respects the decision under review is affirmed.

I certify that the thirty‑nine [39] preceding paragraphs are a true copy of the reasons for the decision of:

M.J. Carstairs, Member

(sgd)       Olympia Sarrinikolaou

Clerk

Date of hearing:  16 April 2003; 19 and 23 June 2003
Date of decision:  18 July 2003
Counsel for applicant:                  Ms N. Karapanagiotidis
Solicitor for applicant:                  Victoria Legal Aid

Advocate for respondent:            Mr R. Huttner, Centrelink