MSXS and SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS
[2011] AATA 466
•4 July 2011
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2011] AATA 466
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2010/4088
GENERAL ADMINISTRATIVE DIVISION ) Re MSXS Applicant
And
SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS
Respondent
DECISION
Tribunal Senior Member K Bean Date4 July 2011
PlaceAdelaide
Decision The decision of the SSAT, which is taken to have affirmed the decision of an officer dated 9 February 2011, is affirmed such that the debt owed by the applicant, of $4,198.05, is written off pursuant to s 1236 of the Social Security Act 1991 until 7 August 2011.
..............................................
K BEAN
(Senior Member)
CATCHWORDS
SOCIAL SECURITY – Allowances – Overpayment of Austudy Allowance – Whether grounds for waiver or write off of debt – Decision under review affirmed.
Social Security Act 1991 ss 198, 593, 601, 1223, 1236, 1237A, 1237AAD
Social Security (Administration) Act 1999 ss 68(2), 74, 180
Sekhon v Secretary, Department of Family and Community Services (2003) 132 FCR 126
Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435
Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25
Oberhardt v Secretary, Department of Education, Employment and Workplace Relations [2008] FCA 1923
Re Moon and Secretary to the Department of Family and Community Services [2003] AATA 676REASONS FOR DECISION
4 July 2011 Senior Member K Bean introduction
1.During 2009 the applicant in this matter was studying at the University of Adelaide toward a Bachelor of Music degree. He initially intended to continue his studies in 2010. However a number of circumstances, including the serious illness of his mother, intervened with the result that he did not re-enrol to continue his studies in 2010. Although he did not re-enrol however, the applicant continued to receive Austudy Allowance until 26 May 2010, when it came to Centrelink’s attention that he was not currently enrolled to study.
2.Having regard to the fact that the applicant was not enrolled to study in 2010, Centrelink subsequently raised a debt against him of $4,198.05, being the total of Austudy Allowance paid to him between 1 March 2010 and 26 May 2010. The applicant has not disputed the fact that he was not enrolled during this period, or the amount of the debt, but has sought to have the debt waived. He accordingly sought review of the original decision by an Authorised Review Officer (ARO) and of the ARO’s decision by the Social Security Appeals Tribunal (SSAT). However, the ARO and the SSAT each affirmed the original decision to raise and recover the debt.
3.On 24 September 2010, the applicant accordingly sought review of the decision of the SSAT by this Tribunal.
4.On 9 February 2011, a delegate of the respondent decided to write off the debt pursuant to s 1236 of the Social Security Act 1991 (the SS Act), until 7 August 2011[1].
[1] Exhibit 11
5.Pursuant to s 180 of the Social Security (Administration) Act 1999 (the Administration Act), it is that decision which is taken to have been affirmed by the SSAT and which has become the subject of the applicant’s application.
issues
6.The issues for my determination therefore are:
(a) whether the applicant owes a debt to the Commonwealth, and if so the amount of that debt; and
(b) whether there are grounds upon which any debt owed by the applicant should be waived or written off, in whole or in part.
7.I propose to address each of these issues in turn, having regard to the evidence before me and the arguments of the parties.
is there a debt?
8.As alluded to above, there is no dispute between the parties that the applicant received Austudy Allowance between 1 March 2010 and 26 May 2010, totalling $4,198.05. There is also no dispute between the parties that the applicant was not entitled to receive those payments as he was not enrolled in or undertaking any study during that period.
9.It is accordingly clear that the amount of $4,198.05 constitutes an overpayment to the applicant, who did not dispute the amount of the overpayment.
10.Section 1223 of the SS Act provides that an overpayment becomes a debt due to the Commonwealth. As I am satisfied on the material before me that the overpayment amount has been correctly calculated, it therefore also follows that the overpayment amount of $4,198.05 is a debt due to the Commonwealth.
should the debt be waived or written off?
11.There are a number of provisions of the SS Act pursuant to which the applicant’s debt may be potentially waived or written off. Those provisions are ss 1236, 1237AAD and 1237A.
12.I propose to address the potential application of each of these provisions in turn, commencing with s 1237A which relates to a debt attributable solely to administrative error.
Should the debt be waived due to administrative error?
13.Section 1237A(1) of the SS Act relevantly provides as follows:
“1237A Waiver of debt arising from error
Administrative error
(1)Subject to subsection (1A), the Secretary must waive the right to recover the proportion of a debt that is attributable solely to an administrative error made by the Commonwealth if the debtor received in good faith the payment or payments that gave rise to that proportion of the debt.
…”
14.The applicant argued that his circumstances fell within this provision, as the debt arose at least partly because of administrative error on the part of Centrelink.
15.His evidence in support of that contention was that he acknowledged receiving a letter from Centrelink in early November 2009 requesting that he indicate his intentions in relation to study for the following year[2]. He said that he telephoned Centrelink at about that time to advise that he intended to continue to study in 2010 and that is corroborated by a Centrelink record dated 16 November 2009[3]. Although it is not mentioned in the record created by Centrelink, the applicant also claimed that he was advised during this telephone call that some forms would be sent out to him for completion in relation to his intention to continue studying. However, he said the forms never arrived and this led to some confusion on his part. He also acknowledged however that in retrospect, he should have advised Centrelink earlier of his decision not to study in 2010, and switched to a more appropriate benefit such as Newstart Allowance. He said that he had left the decision as late as possible and had not decided whether to re-enrol or not until mid-March 2010.
[2] Exhibit 6
[3] T8/59
16.As to whether the circumstances described by the applicant have the result that his debt can be said to have arisen “solely as a result of administrative error” I must have regard to the applicable case law, which, as the SSAT noted in its decision, has held that this test is a very difficult one to satisfy. In the decision of Sekhon v Secretary, Department of Family and Community Services (2003) 132 FCR 126, Justice Selway made the following comments (at [35]):
“The ordinary or usual interpretation of the phrase `attributable solely to' is that it refers to the single or sole cause of the relevant act or event. The word `attributable' means `capable of being attributed'. It involves an objective assessment of causation. The words `a debt attributable solely to an administrative error' can be paraphrased as meaning that the only cause that objectively can be ascribed to the relevant debt is an administrative error. …”
17.The difficulty for the applicant as I see it is that there were a number of factors which contributed to his debt arising. I have no reason to doubt his evidence that Centrelink advised him that they would forward him some forms, that they failed to do so and that this caused some confusion on his part. Even accepting that this occurred however, the debt arose primarily because the applicant failed to advise Centrelink that he had stopped studying when he decided not to re-enrol in 2010.
18.As I consider that to have been the main cause of the debt arising, I am not satisfied that the debt was “solely” attributable to administrative error on the part of Centrelink and accordingly the debt cannot be waived under this provision.
Should the debt be waived due to the existence of special circumstances?
19.Section 1237AAD of the SS Act allows for the waiver of all or part of a debt on the grounds of special circumstances as follows:
“1237AAD 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 a false representation; or
(ii)failing or omitting to comply with a provision of this Act, the Administration 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.”
20.As will be apparent from the terms of the provision, before proceeding to consider the question of special circumstances, I must first consider whether the debt arose in whole or in part from the applicant making a false statement or false representation or failing or omitting to comply with a provision of the SS Act or the Administration Act.
21.There was nothing before me to suggest that the applicant had made any false statement or false representation to Centrelink. However, the respondent submitted that he had failed to comply with his obligations under the Administration Act and for that reason the discretion relating to “special circumstances” was not available.
22.Ms Edwards, who appeared as advocate for the respondent, contended that a number of notices had been forwarded to the applicant advising him that he was required to tell Centrelink if he ceased to study. For example, a notice was forward to him dated 16 November 2009 which, among other things, advised him that:
“Your Austudy is based on you studying full time at UNIVERSITY OF ADELAIDE …”
And:
“If your study load changes or if you cease study you should let us know within 14 days.”[4]
[4] T5/43
23.Ms Edwards also referred to a notice forwarded to the applicant on 17 February 2010 which again advised him that he must tell Centrelink within 14 days if he stopped studying full-time[5].
[5] Exhibit 8
24.Ms Edwards also referred to a letter dated 29 March 2010 forwarded to the applicant advising him in relation to changes to his scholarship assistance and requesting him to advise Centrelink if he was receiving particular forms of scholarship assistance[6].
[6] Exhibit 9
25.Whilst the applicant acknowledged that the address to which these notices were sent was correct, he claimed not to have received the notice of 16 November 2009. He acknowledged receiving the letter of 29 March 2010, but said he had found this very confusing and did not realise that it required him to contact Centrelink. He said he did not realise at that time that he was no longer entitled to scholarship assistance.
26.He also said that there had been numerous occasions when he did not receive letters and three separate occasions on which he had not received health care cards. He said there were “issues” with his mail, but did not explain in detail what these were. He also referred in his evidence to the fact that letters from Centrelink often had detailed notices on the reverse side which he regarded in a similar way to bank statements and did not necessarily always read.
27.As to whether the applicant failed to comply with a provision of the SS Act or the Administration Act, it is relevant that each of the notices forwarded to him was a notice under s 68(2) of the Administration Act which relevantly provides as follows:
“68 Person receiving social security payment or holding concession card
…
(2)The Secretary may give a person to whom this subsection applies a notice that requires the person to do any or all of the following:
(a) inform the Department if:
(i) a specified event or change of circumstances occurs; or
(ii)the person becomes aware that a specified event or change of circumstances is likely to occur;
(b)give the Department one or more statements about a matter that might affect the payment to the person of the social security payment;
(c)give the Department one or more statements about a matter that might affect the operation, or prospective operation, of Part 3B in relation to the person.”
28.Section 74 of the Administration Act also provides as follows:
“74 Offence—failure to comply with notice
(1)A person must not refuse or fail to comply with a notice under section 67, 68, 69, 70 or 70A.
Penalty: Imprisonment for 6 months.
(2)Subsection (1) applies only to the extent to which the person is capable of complying with the notice.
(3) Subsection (1) does not apply if the person has a reasonable excuse.
(4) Subsection (1) is an offence of strict liability.”
29.It is accordingly clear that the applicant was under an obligation to comply with the notices forwarded by Centrelink by advising Centrelink if he ceased to engage in full-time study, and that he failed to comply with that requirement. It also follows that in failing to comply with the notices, he failed to comply with s 74 of the Administration Act.
30.The next question therefore is whether the applicant “knowingly” failed to comply with the Administration Act.
31.The meaning of the word “knowingly” was considered by the Tribunal in Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435, in which the Tribunal observed as follows (at [48]):
“There is nothing in section 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.”
32.The applicant claimed not to have received the notice of 16 November 2009 and I am prepared to accept that he did not receive that notice. I consider it unlikely that he did not receive any of the notices advising him of his obligation to tell Centrelink if he was no longer studying full-time[7]. However, I accept his evidence that he did not carefully read these notices if he did receive them, and did not understand as a result of them that he was obliged to tell Centrelink if he was no longer studying.
[7] See also Exhibit 7.
33.That still leaves the question of whether, regardless of these notices, the applicant was aware that receipt of Austudy was conditional upon him being a student and that he was obliged to notify Centrelink if he was no longer a student. It also leaves the question of when the applicant saw himself as no longer being a student. In his evidence, the applicant said that during the first half of 2010, he still saw himself as a student and intended to re-enrol in his university course in the middle of the year.
34.In relation to these issues, if the relevant question was whether the applicant had some awareness that he may no longer be entitled to Austudy after he chose not to re-enrol in March 2010, then I may well have been satisfied that that had been established. That is not the test however and on balance, having regard to the test set out in s 1237AAD, I am not satisfied that the applicant was positively aware of his obligation to report his change of circumstances to Centrelink, and knowingly failed to do this.
35.It follows that it is open to me to exercise the discretion conferred by s 1237AAD if I am satisfied that there are “special circumstances” that make it desirable to do this.
36.Turning to the question of whether there are “special circumstances”, it is clear from the authorities that in order for circumstances to be “special” in the relevant sense, they must be “unusual” or “uncommon” and there must be something that distinguishes the case from the ordinary or usual case[8].
[8] See Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25.
37.On the evidence before me, there are a variety of matters which, alone or in combination, could potentially amount to “special circumstances” and I propose to briefly address each of these in turn.
The applicant’s health
38.The applicant gave evidence of suffering from a number of medical conditions including tinnitus and periodontal disease. Overall however, the evidence suggested that he was not in especially poor health for a man of his age and at the time of the last hearing day he had plans to move to Melbourne with a view to obtaining work as a pianist.
39.Having regard to this evidence, I do not consider the applicant’s medical conditions amount to or are capable of contributing to “special circumstances” in the relevant sense.
The applicant’s financial situation
40.In relation to this issue, I should note that the terms of s 1237AAD are such that financial hardship alone is not capable of amounting to “special circumstances”. However financial hardship is capable of contributing to “special circumstances” in combination with other matters.
41.I propose to discuss the applicant’s financial situation in more detail in the context of the potential application of s 1236 of the SS Act. For present purposes however, it is sufficient to indicate that I accept that his financial circumstances are straitened. I also accept that he has some significant debts, by far the largest of which is an amount of approximately $18,000 apparently owed to his ex-partner by way of unpaid child support[9]. He also acknowledged in his evidence however that this is simply an amount which has been agreed between them and his ex-partner is not currently proposing to take any enforcement action against him in relation to these monies.
[9] Exhibit 3
42.Whilst the applicant’s financial situation is extremely difficult, I do not consider it to be markedly different from that of many welfare recipients. Therefore in my view his financial situation is not sufficiently unusual and nor is he suffering a degree of financial hardship sufficient to contribute to a conclusion that his circumstances are “special” in the relevant sense.
The failing health and increasing dependence of the applicant’s mother
43.The applicant’s mother is 80 years old and he gave evidence that in late 2009 and the first half of 2010 she had a variety of serious health problems and required significant care and assistance. The applicant has also provided some documentary evidence of his mother’s medical history from her general practitioner[10] and I accept that she suffers from or has suffered from a number of serious conditions including cardiac failure, diabetes mellitus, arthritis, breast cancer, anxiety and depression. I also accept that the applicant’s mother required significant care and assistance in the first half of 2010.
[10] Exhibit 12
44.The applicant also gave evidence that he was effectively the only family member available to provide this care and assistance for his mother during that period, at least during the day. He explained that although his brother lived with his mother during that period, his brother worked during the day and therefore was not available to provide care to his mother. He further explained that one of his sisters was living interstate at that time and the other sister was largely unavailable due to her own family responsibilities. Similarly another brother had very limited time due to working long hours and having a young family. In these circumstances, the applicant gave evidence that the responsibility of caring for his mother during the day while his brother was at work fell to him during this period.
45.The applicant said that this was consequently a very difficult, distressing and draining time for him, and the strain he was under in caring for his mother contributed to his failure to put his Centrelink affairs in order by advising Centrelink that he was no longer studying. He said that in the period February to May 2010 he would have been caring for his mother for an average of approximately 25 hours per week. He also said that the situation with his mother “dragged on” and that during the earlier part of 2010 he still expected to be studying and did not expect that his mother would continue to need care. However the situation went on for longer than he was expecting it to. In a statement filed with the Tribunal, he stated:
“In the hectic period of early 2010, my time was consumed with my mother’s serious medical issue and did not give further consideration of the fact that the Austudy forms had not arrived until I was alerted by Centrelink on the 26 May 2010.”[11]
[11] Exhibit 2
46.There is no doubt on the evidence that the first half of 2010 was a very difficult and stressful time for the applicant and I accept that he shouldered a large share of the burden of caring for his mother during this time. I also accept that the stress and strain he was under at that time contributed to his failure to squarely address his “Centrelink affairs” and in particular advise Centrelink that he was no longer studying. I do not consider this to be a sufficiently compelling or unusual circumstance so as to amount to “special circumstances” in its own right, justifying waiver of his debt. I do consider however that in combination with other matters it could potentially contribute to the applicant’s circumstances having been “special” in the requisite sense.
47.I also consider that these circumstances give rise to another issue which has been held to be relevant in the context of the “special circumstances” discretion, that being whether at the time he was receiving Austudy Allowance, the applicant had a “notional entitlement” to another benefit.
Notional entitlement
48.The potential relevance of a notional entitlement in this context was discussed by Spender J in Oberhardt v Secretary, Department of Education, Employment and Workplace Relations [2008] FCA 1923, at [32] where His Honour observed as follows:
“The term "notional entitlement" is not defined in the Social Security Act, although it is used in s 1237AAC. In essence, the term refers to an unclaimed benefit; a benefit which was not actually claimed by the person, but to which that person would have been entitled had they applied for it. In this case, the appellant began claiming a disability support pension on 7 July 2005. Although she cannot now, or at any time in the future receive payments for periods prior to that date, it is contended that the appellant would have been eligible for the payment throughout the period during which she was being overpaid (11 February 2005 – 7 July 2005). She therefore had, during that time, a "notional entitlement" to the payment.”
49.Later in his judgement, His Honour went on to indicate that the question of notional entitlement “should not be excluded from the range of available relevant considerations in deciding whether there are ‘special circumstances’ to waive a debt under s 1237AAD.”[12]
[12] At [64]
50.It follows that it is appropriate for me to have regard to any entitlement the applicant may have had to a different benefit during the relevant period, in determining whether his circumstances are “special”. There are two potential entitlements which in my view are relevant here, the first being a possible entitlement to Newstart Allowance and the second a possible entitlement to Carer Payment.
Potential entitlement to Newstart Allowance
51.The applicant gave evidence that at about the same time that the Austudy Allowance overpayment was identified, he was placed on Newstart Allowance, which he continued to receive. This tends to suggest that if he had advised Centrelink earlier that he was no longer studying, he may have effectively been eligible to “transfer” to Newstart Allowance.
52.In response to that proposition however, Ms Edwards drew attention to the activity test in s 593 of the SS Act which requires that in order to be qualified for Newstart Allowance a person must satisfy the activity test set out in s 601 of the SS Act, which provides as follows:
“601 Activity test
(1)Subject to subsections (1A) and (5), a person satisfies the activity test in respect of a period if the person satisfies the Secretary that, throughout the period, the person is:
(a) actively seeking; and
(b) willing to undertake;
paid work in Australia, other than paid work that is unsuitable to be undertaken by the person.”
53.Ms Edwards also directed my attention to the decision of the Tribunal in Re Moon and Secretary to the Department of Family and Community Services [2003] AATA 676 at [32] as follows:
“… 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.”
54.Ms Edwards accordingly submitted that as the requirements for payment of Newstart Allowance could not be satisfied retrospectively, it could not be said that the applicant had a “notional entitlement” to Newstart Allowance. More fundamentally however, she submitted that the evidence was not consistent with a conclusion that during the relevant period, the applicant was available and willing to undertake any suitable paid work.
55.As to the submission that the applicant cannot establish a notional entitlement because the requirements for payment of Newstart Allowance cannot be retrospectively satisfied, I have some reservations as to the correctness of that argument. It seems to me that a “notional entitlement” is one which could have been established if a person had claimed that entitlement at the relevant time. In other words, it is a theoretical entitlement to an unclaimed benefit which would have been payable if it had been claimed at the relevant time.
56.However it is unnecessary for me to fully address or resolve this issue as I accept Ms Edwards’ submission that, in any event, on the evidence before me, the applicant would not have satisfied the activity test at the relevant time. The applicant’s evidence was that he was caring for his mother during the day and looking for work as a pianist at night. He said he approached some hotels and also approached the Casino looking for work. However, he said there was very little work for pianists available in Adelaide. The effect of his evidence was that he was only looking for work as a pianist, and only looking for night time work. On the basis of that evidence, in my view, he would not have satisfied the activity test during the relevant period and therefore I am not satisfied that he had a “notional entitlement” to Newstart Allowance during the period in which the debt arose.
Carer Payment
57.As to any notional entitlement to Carer Payment, Ms Edwards drew my attention to s 198 of the SS Act which relevantly provides as follows:
“198 Qualification—disabled adult or disabled adult and dependent child
(1)A person is qualified for a carer payment if the requirements of this section are met.
Note: Sections 198AA, 198AB and 198AC allow the person to qualify in certain short‑term circumstances where the requirements would not be met.
Constant care for disabled adult or disabled adult and a dependent child
(2) The person must personally provide constant care for:
(a) either:
(i)if the person is the only person providing the constant care—a disabled adult (the care receiver) who has been assessed and rated under the Adult Disability Assessment Tool and given a score under that assessment tool of at least 25, being a score calculated on the basis of a total professional questionnaire score of at least 10; or
(ii)if not—a disabled adult (the care receiver) who has been assessed and rated under the Adult Disability Assessment Tool and given a score under that assessment tool of at least 80, being a score calculated on the basis of a total professional questionnaire score of at least 32; or
…
Care in home
(3)The care must be provided in a private residence that is the home of the care receiver or care receivers.
Carer in Australia
(4) The person must be an Australian resident, unless:
(a)the person is in a country in which carer payment may be granted to the person under a scheduled international social security agreement; and
(b)the scheduled international social security agreement entered into force on or before 24 December 1992.
Income and assets tests etc.
(5) The care receiver or care receivers must:
(b) subject to subsection (6), be Australian residents; and
Note: For Australian resident see section 7.
(c)subject to subsection (7), pass the income test under section 198A; and
(d) subject to subsection (7), either:
(i) pass the assets test under section 198D; or
(ii)be the subject of a decision in force under subsection 198N(2), (3) or (4) that subparagraph (i) does not disqualify the person providing the constant care from carer payment.
…”
58.Ms Edwards submitted that there was insufficient evidence to conclude that the applicant would have been entitled to Carer Payment and, for example, there was no evidence as to whether the applicant’s mother would have passed the assets and income tests.
59.Whilst I accept the applicant’s evidence that he was providing care to his mother for on average 25 hours per week during the relevant period, I also accept Ms Edwards’ submission that there is no evidence before me as to whether the applicant’s mother would have met the income and assets tests. Nor is there any evidence before me as to the applicant’s mother’s score under the Adult Disability Assessment Tool referred to in s 198.
60.In these circumstances, I am not satisfied that the applicant has established a “notional entitlement” to Carer Payment.
61.For completeness, I note that an issue arose in Oberhardt as to whether in order to potentially amount to a “special circumstance” a notional entitlement must exist under the same Act pursuant to which waiver of the debt was sought. Spender J expressed doubt as to the correctness of that proposition in Oberhardt[13]. Having regard to my conclusions above however, it is unnecessary for me to address that issue in the context of this matter.
[13] At [34]
Conclusion
62.It follows that of the matters identified as potentially amounting to or contributing to “special circumstances” in the relevant sense, the only one which I consider capable of contributing to a conclusion that the applicant’s circumstances are “special” is the fact that he was under significant stress and strain during the relevant period by reason of the need for him to care for his elderly mother given her failing health. As I indicated in the context of discussing that circumstance however, I do not consider this to be capable by itself of constituting “special circumstances” in the relevant sense. Further, none of the other matters identified above are in my view capable of amounting to or contributing to “special circumstances”.
63.It therefore follows that the matters I have addressed above do not amount to “special circumstances” for the purposes of s 1237AAD, either individually or in combination. I have accordingly concluded that the evidence does not disclose “special circumstances” within the meaning of s 1237AAD and it follows that it is not open to me to waive the debt pursuant to that provision.
Capacity to pay
64.Section 1236 of the SS Act also provides that the Secretary may, in certain circumstances, decide to write off a debt for a stated period or otherwise. The section relevantly provides as follows:
“1236 Secretary may write off debt
(1)Subject to subsection (1A), the Secretary may, on behalf of the Commonwealth, decide to write off a debt, for a stated period or otherwise.
(1A)The Secretary may decide to write off a debt under subsection (1) if, and only if:
(a) the debt is irrecoverable at law; or
(b) the debtor has no capacity to repay the debt; or
(c)the debtor’s whereabouts are unknown after all reasonable efforts have been made to locate the debtor; or
(d)it is not cost effective for the Commonwealth to take action to recover the debt.
…
(1C) For the purposes of paragraph (1A)(b), if a debt is recoverable by means of:
(a) deductions from the debtor’s social security payment; or
(b)deductions under section 84 of the A New Tax System (Family Assistance) (Administration) Act 1999; or
(c) setting off under section 84A of that Act;
the debtor is taken to have a capacity to repay the debt unless recovery by those means would result in the debtor being in severe financial hardship.
…”
65.As referred to at the beginning of these Reasons, at the hearing, Ms Edwards advised me that subsequent to the SSAT decision, a further decision had been made by a delegate of the respondent to write off the whole of the debt pursuant to s 1236, until 7 August 2011. Consistently with that decision, the respondent accepted that the applicant currently had no capacity to repay the debt, pursuant to s 1236(1A)(b), but submitted that he was likely to have capacity to repay it in the future and that it was appropriate that the debt remain written off only until 7 August 2011.
66.Having regard to the evidence before me, I am also satisfied that the applicant currently has no capacity to repay the debt for the purposes of s 1236(1A)(b).
67.The applicant gave evidence at the hearing that he was receiving $570.40 per fortnight by way of Newstart Allowance. From this he was required to pay $340 per fortnight in rent. He said that his food expenses ranged between $70 and $100 per week and that he paid approximately $240 every three months for electricity and $50 per month for his mobile phone. He needed to spend approximately $20 per week on clothing. He also had debts including a traffic infringement which he was paying at $30 per month and the child support debt owed to his ex-partner. I am satisfied that on the basis of those figures, he currently has no additional capacity to repay the debt to Centrelink.
68.Relevantly to this issue however, at the resumed hearing on 16 May 2011, the applicant gave evidence that since the initial hearing on 3 March 2011, he had decided not to pursue his studies in Adelaide but rather to move to Melbourne in an attempt to seek work. He said that his ex-partner’s financial situation had changed and he was under more pressure to contribute to the support of his two sons and repay his debt to her. Consequently the financial strains were too great and it was no longer viable for him to remain on Austudy whilst he attempted to complete his studies. He said that his sister and brother-in-law own a property in Melbourne where he hopes to be able to stay. As there was much more work available for pianists in Melbourne, he hoped to be able to secure work there. He was expecting to move to Melbourne before 30 June 2011 and said he was confident of finding work in Melbourne. He said although it was difficult for him to be precise about this, he expected his expenses in Melbourne to be similar to those he currently had in Adelaide, and that he would be expected to pay rent to his sister and brother-in-law, which he expected to be roughly equivalent to the rent he was currently paying.
69.Having regard to that evidence, I have concluded that whilst the applicant currently has no capacity to repay the debt, there is reason to expect that situation to change once he has moved to Melbourne and hopefully secured work. As the applicant expects to have moved to Melbourne by the end of June 2011, I am satisfied that the period for which the debt is currently written off under s 1236, i.e. until 7 August 2011, remains appropriate, that the debt should remain written off until that date and that further consideration should be undertaken at that time as to whether the applicant’s situation has improved such that he has capacity to repay the debt.
conclusion
70.I have accordingly concluded that the applicant owes a debt to the Commonwealth in the amount of $4,198.05. However I have also concluded that that debt should remain written off pursuant to s 1236 of the SS Act until 7 August 2011.
decision
71.The decision of the SSAT, which is taken to have affirmed the decision of an officer dated 9 February 2011, is affirmed such that the debt owed by the applicant, of $4,198.05, is written off pursuant to s 1236 of the SS Act until 7 August 2011.
I certify that the 71 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member K Bean
Signed: .....................................................................................
AssociateDates of Hearing 3 March 2011 & 16 May 2011
Date of Decision 4 July 2011
Advocate for the Applicant Self-represented
Advocate for the Respondent Ms J Edwards
Legal Services and Procurement Branch
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