Murphy and Secretary, Department of Social Services (Social services second review)
[2017] AATA 16
•13 January 2017
Murphy and Secretary, Department of Social Services (Social services second review) [2017] AATA 16 (13 January 2017)
Division
GENERAL DIVISION
File Number
2015/5927
Re
Simon Murphy
APPLICANT
And
Secretary, Department of Social Services
RESPONDENT
DECISION
Tribunal Member D K Grigg
Date 13 January 2017 Place Brisbane The Tribunal affirms the decision under review.
.........................[Sgd]...............................................
Member D K Grigg
CATCHWORDS
SOCIAL SECURITY – Austudy allowance – overpayment – where applicant did not notify of change of circumstances – where no administrative error – where no special circumstances – decision under review affirmed
LEGISLATION
Acts Interpretation Act 1901 (Cth)
Social Security Act 1991
Social Security (Administration) Act 1999
CASES
Beadle and Director-General of Social Security (1984) 6 ALD 1
Boscolo v Secretary, Department of Social Security [1999] FCA 106 ; (1999) 90 FCR 531
Groth and Secretary Department of Social Security (1995) FCA 1708
Haggerty v Department of Education, Training and Youth Affairs (2000) 31 AAR 529Pereira v Director of Public Prosecutions (1988) 82 ALR 217
Pledger v Secretary, Department of Family & Community Services[2002] FCA 1576
Prantage v Prantage (2013) 49 Fam LR 197
Secretary, Department of Social Security v Hales [1997] FCA 1565; (1998) 82 FCR 154
Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs v Jones (2012) 89 ATR 267; [2012] FCA 639
Secretary, Department of Family & Community Services v Sekhon [2003] FCA 76
Sekhon v Secretary, Department of Family and Community Services [2003] FCAFC 190
Re Callaghan [(1996) [1996] AATA 413
Charles v Charles [2007] FamCA 276
REASONS FOR DECISION
Member D K Grigg
13 January 2017
INTRODUCTION
Mr Murphy was a recipient of Austudy[1] from 2009 and a start-up scholarship payment in 2013.[2]
[1] Exhibit 1, T Documents, T4, pages 28-36 and Exhibit 2, Respondent’s Statement of Facts and Contentions, paras
1 and 3.
[2] Exhibit 2, Respondent’s Statement of Facts and Contentions, Attachment 1, page 13.
The Respondent contends that during certain periods in 2013 Mr Murphy was overpaid because he failed to disclose that he was no longer undertaking qualifying study.[3] The Respondent is currently deducting some of Mr Murphy’s Newstart allowance towards repayment of the overpayments.[4]
[3] Exhibit 2, Respondent’s Statement of Facts and Contentions, paras 8 and 16
[4] Exhibit 2, Respondent’s Statement of Facts and Contentions, para 22.
The periods of contended overpayment relate to semester 1 and semester 2 of 2013 (“Semester 1” and “Semester 2”) during which Mr Murphy was enrolled in different courses at Griffith University.
Mr Murphy disputes that he has been overpaid and contends that he was undertaking qualifying study for part of Semester 1 and part of Semester 2 of 2013 and was therefore entitled to receive Austudy payments.
Alternatively, Mr Murphy submits that the debt owed to the Department for the overpayments should be waived because:
(a)he notified the Department of Human Services within the requisite time period that he was no longer undertaking qualifying study and that any overpayment therefore was a result of administrative error and should be waived under section 1237A of the Social Security Act 1991 (“the Act”); and/or
(b)special circumstances exist such that the debt should be waived under section 1237AAD of the Act.
Claims History
As a result of the Department’s determination that Mr Murphy had been overpaid the following debts were raised:
(a)$5,414.47 (“Debt 1”) for the period 1 March 2013 to 12 June 2013 (“Period 1”);[5] and
(b)$3,003.06 (“Debt 2”) for the period 22 July 2013 to 13 September 2013 (“Period 2”).[6]
[5] Exhibit 1, T Documents, T6, pages 47-49, Austudy debt calculations.
[6] Exhibit 1, T Documents, T7, pages 50-54, Student start-up scholarship debt calculations.
Mr Murphy requested a review of the decision in relation to Debt 1 on 17 April 2015 on the grounds that he had:
(a)been looking for fulltime work once he had ceased studying on 28 February 2013;[7] and
(b)advised the Department that he was not involved in full-time study soon after ceasing.[8]
[7] Exhibit 1, T Documents, T 10, pages 77-78, Department file notes.
[8] Exhibit 1, T Documents, T 10, page 82, Department file notes.
Mr Murphy also requested a review of the decision in relation to Debt 2 on the grounds that he had advised the Department that he was not involved in full-time study soon after ceasing.[9]
[9] Exhibit 1, T Documents, T 9, pages 61-67, Authorised Review Officer Decision (Debt 2) dated 1 July 2015.
The Authorised Review Officer (ARO) affirmed the decisions to raise Debt 1[10] and Debt 2[11] and found no administrative error on the part of the Department nor any special circumstances which would justify waiving the debts owed.
[10] Exhibit 1, T Documents, T8, pages 55-60, Authorised Review Officer Decision (Debt 1) dated 20 May 2015.
[11] Exhibit 1, T Documents, T 9, pages 61-67, Authorised Review Officer Decision (Debt 2) dated 1 July 2015.
Mr Murphy then sought a further review. The Social Services and Child Support Division (“SSCSD”) rejected Mr Murphy’s claim and affirmed the ARO’s decision on 28 September 2015.[12]
[12] Exhibit 1, T Documents, T2, pages 2-8, SSCSD’s Decision and Reasons for Decision dated 28 September 2015.
On 9 November 2015 Mr Murphy lodged an application for review of the SSCSD’s decision by this Tribunal.[13]
[13] Exhibit 1, T Documents, T1, page 1, Application for Review dated 9 November 2015.
ISSUES FOR DETERMINATION
The issues for determination are whether or not:
(a)Mr Murphy has been overpaid his entitlement to Austudy and Student Start-Up Scholarship in Period 1 and Period 2; and, if yes
(b)Debt 1 and Debt 2 are recoverable; and
(c)Debt 1 and Debt 2 should be waived due to administrative error pursuant to section 1237A of the Act; or
(d)“special circumstances” exist such that Debt 1 and Debt 2 should be waived pursuant to s 1237AAD.
WAS MR MURPHY OVERPAID AUSTUDY AND START-UP SCHOLARSHIP PAYMENTS?
If a person is not entitled to the social security benefit they have obtained, the amount of the payment is a debt due to the Commonwealth by the person and the debt is taken to arise when the person obtains the benefit of the payment: section 1223 (1) of the Act.
Mr Murphy does not dispute the calculations of the amounts of the Debt 1 and Debt 2 only that they should not have been raised at all or alternatively should be waived.
In this instance, for Mr Murphy to qualify for Austudy in Period 1 and Period 2 he must have satisfied an “activity” test: s 568 of the Act.
Section 569 of the Act provides that a person satisfies the activity test in respect of a period if the person satisfies the Secretary that, throughout the period, the person is “undertaking qualifying study”.
Section 569A sets out the requirements for when someone is taken to be undertaking qualifying study. In this instance in order for Mr Murphy to satisfy this requirement he must have been:
(a)enrolled in an approved course of education at an educational institution; and
(b)a “full-time student”.
“Full-time student” is defined in s 569C, relevantly, as a person who “is undertaking at least three quarters of the normal amount of full-time study in respect of the course for that period”.
There is no dispute that Mr Murphy was, for a brief time enrolled in an approved course of education at an educational institution in Period 1 and Period 2.
However, the Department submits that although Mr Murphy was enrolled briefly in Semester 1 and Semester 2, he is not entitled to any Austudy payments during that time because he did not fulfil the requirements of being a “full-time student” as defined by section 569C.
Was Mr Murphy a “full-time student” in Period 1
In Semester 1 of 2013 Mr Murphy was enrolled in a Bachelor of Science at Griffith University. On 21 February 2013 the Department wrote to Mr Murphy confirming his student start-up scholarship payment to be paid on 7 March 2013. The letter also advised My Murphy as follows:[14]
To remain eligible for this scholarship you must be studying full-time… You must study for at least 35 days from the date of qualification…If you do not….the full amount of this scholarship may be raised as a debt. You must notify Centrelink immediately if you stop studying.
[14] Exhibit 1, T Documents, T5, page 40, Advice letter to Mr Murphy dated 21 February 2013.
On 28 February 2013 Mr Murphy withdrew his enrolment. That Mr Murphy ceased his studies at this time is not in dispute between the parties.
On 4 March 2013 the Department wrote to Mr Murphy confirming his Austudy payments based on his full-time enrolment at Griffith University. The letter also advised My Murphy as follows:[15]
You must tell us within 14 days about events or changes in circumstances affecting your payment…If you are paid too much Austudy because you don’t tell us when you are required to do so, we may ask you to pay it back. This is an information notice given under social security law…you must tell us if you…stop being a full-time student
[15] Exhibit 1, T Documents, T5, page 37, Advice letter to Mr Murphy dated 4 March 2013.
The Department argues that there is no evidence that Mr Murphy was attending lectures and tutorials or otherwise “undertaking” any study during Period 1. Mr Murphy accepts he has no evidence of this but he says he was attending classes.[16]
[16] Exhibit 2, Respondents Statement of Facts, Issues and Contentions dated 11 October 2016, Attachment 2, Mr
Murphy’s submissions dated 7 September 2016
The Department says that because he cancelled his enrolment before University fees became due and before any assessment had occurred, it can be inferred that he had not been “undertaking” study during Period 1. The Respondent tendered a Griffith University academic calendar for Semester 1 of 2013 which shows that the date Mr Murphy withdrew his enrolment was before the last day he could withdraw without being liable for fees.[17] Course materials for the subjects Mr Murphy had enrolled in also indicate that within weeks after he cancelled his enrolment he was due to submit an assignment on 28 March 2013.[18]
[17] Exhibit 3, Griffith University Academic Calendar 2013.
[18] Exhibit 2, Respondents Statement of Facts, Issues and Contentions dated 11 October 2016, Attachment 2, page
18, Course profiles and assessment plans.
It is understandable that there would not be any records of Mr Murphy attending classes. It is not uncommon, in my experience (which the parties agreed with) for those sorts of records to not be kept, especially if the student has cancelled their enrolment. Further, even if the records had been kept, they may not now be available. There is nothing to corroborate Mr Murphy’s assertion that he attended and studied as required. Mr Murphy produced no evidence of class notes and study materials or assessment preparation. Mr Murphy says he cannot produce anything because he destroyed any records of class notes or other materials he had.
I accept the Respondent’s submission that in Period 1 there is no evidence that Mr Murphy was undertaking qualifying study.
I find therefore that Mr Murphy owes Debt 1 to the Commonwealth.
Period 2
The Department’s records indicate that on 4 July 2013 Mr Murphy telephoned the Department and said he was changing courses for Semester 2 2013.[19] Mr Murphy says he cannot remember making the call.
[19] Exhibit 1, T Documents, T10, page 68, Department file notes
On 10 July 2013 the Department sent Mr Murphy a letter confirming that his Austudy had been cancelled from 1 March 2013.[20]
[20] Exhibit 1, T Documents, T5, page 42, Advice letter to Mr Murphy dated 10 July 2013.
On 23 July 2013 Mr Murphy applied to re-claim Austudy for the purposes of Semester 2.[21] In Semester 2 Mr Murphy enrolled as a full-time student in a Bachelor of Engineering at Griffith University.[22]
[21] Exhibit 2, Respondents Statement of Facts, Issues and Contentions dated 11 October 2016, Attachment 1, pages
1-8, Re-claim or Transfer for Austudy or Youth Allowance by Mr Murphy dated 23 July 2013.
[22] Exhibit 2, Respondents Statement of Facts, Issues and Contentions dated 11 October 2016, Attach. 2, page 7,
Unofficial Transcript Griffith University.
On 21 August 2013 the Department accepted Mr Murphy’s re-claim for Austudy payments for Semester 2 and back paid his Austudy to the date of enrolment on 22 July 2013.[23] On 21 August 2013 the Department wrote to Mr Murphy confirming that Austudy would be paid for Semester 2 and advised that:[24]
Your Austudy is based on you studying full-time…If your study load changes or if you cease study you should let us know within 14 days… You must tell us within 14 days about events or changes in circumstances affecting your payment…If you are paid too much Austudy because you don’t tell us when you are required to do so, we may ask you to pay it back. This is an information notice given under social security law…you must tell us if you…stop being a full-time student
[23] Exhibit 1, T Documents, T10, page 72, Department file notes
[24] Exhibit 1, T Documents, T5, page 43, Advice letter to Mr Murphy dated 21 August 2013
Mr Murphy was enrolled as a full-time student in a Bachelor of Engineering at Griffith University between 22 July 2013 and 18 August 2013.[25] There is no dispute between the parties regarding the dates Mr Murphy was enrolled in Semester 2.[26]
[25] Exhibit 2, Respondents Statement of Facts, Issues and Contentions dated 11 October 2016, Attach. 2, page 5,
Email from Griffith University confirming date Mr Murphy ceased to be enrolled in Semester 2.
[26] Exhibit 2, Respondents Statement of Facts, Issues and Contentions dated 11 October 2016, Attachment 2, Mr
Murphy’s submissions dated 7 September 2016
I note that by the time Mr Murphy received confirmation on 21 August 2013 that the Department had approved his claim for Austudy for Semester 2, Mr Murphy had already cancelled his enrolment.
The Department again submits that because he cancelled his enrolment in Semester 2 just before University fees payment became due and before any assessment had occurred, it can be inferred that he had not been “undertaking” study during Period 2. The Respondent tendered a Griffith University academic calendar for Semester 2 of 2013 which shows that the date Mr Murphy withdrew his enrolment was the last day he could withdrew without being liable for fees.[27] Course materials for the subjects Mr Murphy had enrolled in also indicate that within 9 days after he cancelled his enrolment he was due to sit an exam on 20 August 2013,[28] submit a laboratory report on 22 August 2013[29] and submit an assignment on 27 August 2013.[30] There is no evidence Mr Murphy had been actively engaged in preparing for these assessments. It also seems unlikely that one would withdraw from the courses if the assessment had been prepared.
[27] Exhibit 3, Griffith University Academic Calendar 2013.
[28] Exhibit 2, Respondents Statement of Facts, Issues and Contentions dated 11 October 2016, Attachment 2, page
43, Course profiles and assessment plans.
[29] Exhibit 2, Respondents Statement of Facts, Issues and Contentions dated 11 October 2016, Attachment 2, page
49, Course profiles and assessment plans.
[30] Exhibit 2, Respondents Statement of Facts, Issues and Contentions dated 11 October 2016, Attachment 2, page
36, Course profiles and assessment plans.
Mr Murphy again says he cannot produce anything because he destroyed any records of class notes or other materials he had.
I accept the Respondent’s submission that in Period 2 there is no evidence that Mr Murphy was undertaking qualifying study.
I find therefore that Mr Murphy owes Debt 2 to the Commonwealth.
ARE DEBT 1 AND DEBT 2 RECOVERABLE?
Even if a debt is owed, the Secretary may write off a debt in certain circumstances set out in section 1236. Section 1236 provides relevantly:
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)...; or
(d)it is not cost effective for the Commonwealth to take action to recover the debt.
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: section 1237A.
Further, the Secretary may exercise its discretion to waive the right to recover all or part of the debt if satisfied that:
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.
SHOULD DEBT 1 AND DEBT 2 BE WRITTEN OFF? (S 1236)
Is the debt irrecoverable at law?
Section 1236(1B) sets out when a debt is taken to be irrecoverable at law:
(1B)For the purposes of paragraph (1A)(a), a debt is taken to be irrecoverable at law if, and only if:
(a)the debt cannot be recovered by means of deductions, or legal proceedings, or garnishee notice, because the relevant 6 year period mentioned in section 1231, 1232 or 1233 has elapsed; or
(aa)the debt cannot be recovered by means of deductions or setting off because the relevant 6 year period mentioned in section 86 of the A New Tax System (Family Assistance) (Administration) Act 1999 has elapsed; or
(b)there is no proof of the debt capable of sustaining legal proceedings for its recovery; or
(c)the debtor is discharged from bankruptcy and the debt was incurred before the debtor became bankrupt and was not incurred by fraud; or
(d)the debtor has died leaving no estate or insufficient funds in the debtor’s estate to repay the debt.
None of those circumstances exist in this case and therefore I find the debt is not irrecoverable at law.
Does Mr Murphy have capacity to repay the debt?
Section 1236(1C)(a) provides that if a debt is recoverable by means of deductions from the debtor’s social security payment 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.
Mr Murphy started receiving Newstart on 14 September 2013.[31]
[31] Exhibit 1, T Documents, T10, page 82, Department file notes.
Debt 1 and Debt 2 are currently being recovered by deducting small amounts, when applicable, from Mr Murphy’s Newstart allowance.[32]
[32] Exhibit 2, Respondent’s Statement of Facts and Contentions, para 22.
Mr Murphy currently has casual employment as a relief high school teacher. He says there is no work now as it is approaching the end of the year. Mr Murphy says his Newstart payments barely or do not cover his costs. He relies on income from his relief teaching and family loans. No money is recovered from Mr Murphy’s employment income by the Department.
There is no evidence to suggest that Mr Murphy suffers from severe financial hardship. Mr Murphy did not submit that the recovery of the Debt 1 and Debt 2 were causing him severe financial hardship.
Is it cost-effective for the Commonwealth to recover the debt?
There is no indication from the Respondent that it is not cost-effective for it to recover the debt.
CONCLUSION
There is no basis for the debt to be written off under section 1236 of the Act.
DID MR MURPHY RECEIVE THE OVERPAYMENT IN GOOD FAITH AND WAS THE DEBT, OR A PROPORTION OF THE DEBT, ATTRIBUTABLE SOLELY TO AN ADMINISTRATIVE ERROR? (s 1237A)
Did Mr Murphy Receive the Overpayment in in Good Faith?
A recipient of a social security benefit is under an obligation to notify the Department of any changes in circumstances that might affect the payment of the social security payment within 14 days after the day on which the event or change occurs: section 66A(2) of the Social Security (Administration) Act 1999 (Cth) (“Administration Act”).
The Secretary may also give a person to whom a social security payment is being paid a notice requiring the person to inform the Department if a specified event or change of circumstances occurs: section 68(2), Administration Act.
The Department sent letters to Mr Murphy on 21 February 2013, 4 March 2013 and 21 August 2013 setting out his obligations to notify the Department if there was any relevant change in his circumstances.[33]
[33]Exhibit 1, T Documents, T5, page 40, Advice letter to Mr Murphy dated 21 February 2013; Exhibit 1, T Documents,
T5, page 37, Advice letter to Mr Murphy dated 4 March 2013; Exhibit 1, T Documents, T5, page 43, Advice letter to Mr Murphy dated 21 August 2013.
Those notices were addressed and sent to Mr Murphy’s residential address. At the hearing Mr Murphy confirmed the address was correct, although he says he does not recall receiving the notices.
The phrase “in good faith” has been considered by the Federal Court on numerous occasions. Whether a payment has been received in good faith is determined by considering the state of mind of the recipient and is a subjective test.[34] “Wilful blindness is itself a state of mind”: Pereira v Director of Public Prosecutions (1988) 82 ALR 217 at 219-220. The words "good faith" should be given their ordinary meaning.[35]
[34] Pledger v Secretary, Department of Family & Community Services[2002] FCA 1576, at [59].
[35] Pledger v Secretary, Department of Family & Community Services[2002] FCA 1576, at [103].
In Haggerty v Department of Education, Training and Youth Affairs (2000) 31 AAR 529 French J (as he then was) described when a lack of good faith will arise as follows:
[16] … want of good faith will arise where there is a positive belief that the payment has been made by mistake. It will also arise where there is a suspicion held by the recipient that he or she may not be entitled to the payment made or a doubt as to the entitlement coupled with some objective basis for such suspicion or doubt. The provision does not, however, authorise the imputation of want of good faith in any of the senses above described simply because there are in existence objective facts which would raise a belief or a doubt or a suspicion of non entitlement in the mind of some imaginary recipient. (emphasis added)
Mr Murphy says that while he was aware that he continued to receive payment after he was no longer enrolled, he was not aware that the payments were Austudy payments. He says he presumed the payments had “rolled over” into Newstart payments.
However, I do not accept that he had that presumption for these reasons:
(a)While Mr Murphy says he did not receive the correspondence from the Department referred to above he confirmed that the address on the correspondence was his correct home address. This was also the address he had provided in his Austudy re-claim form.[36] In any event the letters are deemed to have been served by virtue of section 237 of the Administration Act and sections 28A and 29 of the Acts Interpretation Act 1901 (Cth). Section 29 of the Acts Interpretation Act 1901 (Cth) provides that where an Act authorizes or requires any document to be served by post, the service shall be deemed to be effected by properly addressing, prepaying and posting the document as a letter and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post. There is no evidence that the letters were returned to the Department or any other indication that something had gone awry in their delivery. I therefore find that the letters were sent by normal post to Mr Murphy’s correct residential address. They are deemed to have been received by him in the ordinary course of post;
(b)Mr Murphy also confirmed that he was aware he had to notify the Department of his change of circumstances and for reasons discussed further below did not effectively do so; and
(c)Mr Murphy says he has been on and off Newstart since around 2010. He should therefore have known that in order to receive Newstart he would have had to make an application. For all the Department knew Mr Murphy could have found full time employment. There was no basis for the Department to make the presumption that Mr Murphy was then immediately entitled to Newstart once he had ceased studying. Further, for the reasons outlined below I do not accept that the Department was notified as submitted by Mr Murphy;
(d)Mr Murphy made no attempt to clarify with the Department the basis or classification of the payments he had received.
[36] Exhibit 2, Respondents Statement of Facts, Issues and Contentions dated 11 October 2016, Attachment 1, pages
1-8, Re-claim or Transfer for Austudy or Youth Allowance by Mr Murphy dated 23 July 2013.
This could be argued to amount to “wilful blindness”.
I therefore find that Mr Murphy did not receive the overpayments in good faith.
Was the Debt Attributable Solely to an Administrative Error?
If administrative error was the sole cause for the debt arising, the Secretary must waive the right to recover the debt. The debt “must be "attributable solely" to administrative error. It is not enough that, in the absence of administrative error, the debt would not have arisen. Administrative error must be the sole cause, not merely one of multiple causes”: Secretary, Department of Family & Community Services v Sekhon[2003] FCA 76, per Wilcox J (at [41]) and on appeal to the Full Federal Court Sekhon v Secretary, Department of Family and Community Services[2003] FCAFC 190, at [23].
Period 1
In relation to Period 1 Mr Murphy says he did notify the Department on 22 March 2013. He says he went to the Biggera Waters Office of the Department and spoke to a representative informing them he had ceased studying. He then says he was told by that representative to telephone the Department to notify them of the change. He says he telephoned twice using the phone at the Department’s Biggera Waters Office and that he
was disconnected both times.[37] Mr Murphy acknowledged he did not make any further attempts to notify the Department.
[37] Exhibit 2, Respondents Statement of Facts, Issues and Contentions dated 11 October 2016, Attachment 2, Mr
Murphy’s submissions dated 7 September 2016.
Mr Murphy submitted that when he informed the representative that he had ceased studying this fulfilled his obligation to notify the Department. He further submitted that his attempts to notify the Department by telephone was sufficient.
The Respondent says it was not made aware that Mr Murphy had withdrawn from studying in Semester 1 until 21 June 2013.[38] On this date the Department received data matching information that effective 1 March 2013, Mr Murphy had ceased his studies and ceased making any further payments.[39] The Department says that it had no record of Mr Murphy notifying the Department of the change in his enrolment and that he no longer qualified for Austudy and start-up scholarship payments.
[38] Exhibit 2, Respondents Statement of Facts, Issues and Contentions dated 11 October 2016, para 8.
[39] Exhibit 1, T Documents, T10, page 68, Department file notes.
The Department says that as a result of not being aware of this change in Mr Murphy’s status, the Department had continued to pay Mr Murphy Austudy, a start-up scholarship payment and an income support bonus for nearly 4 months until 21 June 2013 resulting in an overpayment and Debt 1.[40]
[40] Exhibit 2, Respondents Statement of Facts, Issues and Contentions dated 11 October 2016, Attachment 1, pages
13-15, Centrelink records.
There is no Department record to indicate that Mr Murphy contacted the Department and notified it of his change of circumstances on 22 March 2013.[41] In fact the first record the Department has of any contact by Mr Murphy was on 4 July 2013 after he ceased receiving the payments.
[41]Exhibit 1, T Documents, T10, page 68, Department file notes; T13, Customer Record Access Report for the period
1 March 2013 to 13 September 2013.
It seems highly unusual that the Department representative would not have entered a record of Mr Murphy’s notification of his withdrawal from study. It also seems unlikely that (if Mr Murphy had in fact done what he said) a representative would then tell him to take an additional step to telephone the Department. Mr Murphy said he could not remember to whom he spoke and he acknowledged that he received no record of his purported notification on 22 March 2013 either from the representative or subsequently. Mr Murphy also acknowledged that he still kept receiving payments despite his purported notification. He says he thought the payments were for Newstart instead. Although he acknowledges that after withdrawing his enrolment he had not actually applied for Newstart.
Given that Mr Murphy has been a recipient of Newstart in the past, he would, or should, know that he would have to reapply. Further, as there is no record of Mr Murphy attending in person to notify the Department or any record of his telephoning the Department I do not accept that Mr Murphy notified the Department in fulfilment of his obligations on 22 March 2013.
Even if Mr Murphy did attempt to notify the Department as he says, an attempt to notify is not sufficient to fulfil one’s obligation. The obligations set out in the notices deemed to have been sent to Mr Murphy are clear that the recipient “must notify” the Department of a change in circumstances. It does not say must “attempt to notify”. There are no records of any attempts being made nor any actual notification within the requisite time period.
Period 2
In relation to Period 2, Mr Murphy’s submissions on when he notified the Department that he had ceased studying are contradictory. On the one hand he says he “attempted” to notify the Department that he ceased studying on 30 August 2013 by telephone but he says on both occasions he was disconnected.[42] On the other hand he seeks to correct one of the Department’s records and says “this date should read 13/09/2013, which is the day I advised the Department of Social Services of my cease of study”.[43] The Department’s records indicate, and confirm, that he did not notify them until 13 September 2013.[44] I find therefore that Mr Murphy did not notify the Department until 13 September 2013. This is more than 14 days from the date of his cessation of enrolment.
[42] Exhibit 2, Respondents Statement of Facts, Issues and Contentions dated 11 October 2016,
Attachment 2, Mr Murphy’s submissions dated 7 September 2016, para 6.
[43] Exhibit 2, Respondents Statement of Facts, Issues and Contentions dated 11 October 2016,
Attachment 2, Mr Murphy’s submissions dated 7 September 2016, para 4.
[44] Exhibit 1, T Documents, T10, page 73, Department file notes
CONCLUSION
Debt 1 and Debt 2 arose due to a failure to comply with the relevant notification requirements. As a result the debt owed by Mr Murphy was not ‘attributable solely to an administrative error made by the Commonwealth’ for the purposes of section 1237A(1) of the Act.[45]
[45] See Wecker v Secretary, Department of Education Science and Training[2008] FCAFC 108, at [102].
Should Debt 1 and/or Debt 2 be waived under section 1237AAD?
Regardless of whether or not Mr Murphy was fraudulent, he did not comply with his obligations under the Act.
There are a few elements to be satisfied under section 1237AAD before a debt may be waived. First, the debt must not have arisen from the debtor, that is he must not have knowingly made a false statement or a false representation or knowingly failed or omitted to comply with a provision of the Act or the Administration Act. Second, there must be special circumstances (other than financial hardship alone) that make it desirable to waive. Third, it must be more appropriate to waive than to write off the debt or part of the debt.
The question is whether Mr Murphy “knowingly” failed to comply.
“Knowingly” is not defined in the Act.
The meaning of `knowingly' in this section was discussed in Re Callaghan [(1996) [1996] AATA 413; by Deputy Registrar Forgie (at 445):
(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.... That actual knowledge is 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 statements
The meaning of “knowingly” was recently considered in the Family Court in Prantage v Prantage (2013) 49 Fam LR 197 in the context of s 117AB of the Family Law Act 1975 (Cth) which provides in effect that if the court is satisfied that a party has “knowingly” made a false allegation or statement in the proceedings, the court must order that party to pay “some or all” of the costs of the other party or parties. The Full Family Court summarized the authorities and agreed with Cronin J’s discussion in Charles v Charles [2007] FamCA 276that:
[24] “Knowingly” imports a serious subjective element into the question. In respect of many findings of fact as in this case, a trial judge determines which of two versions, sometimes diametrically opposed to one another, he or she believes on the balance of probabilities. Such a finding is not necessarily a statement that one version is patently untrue or that a person is lying; it may simply be that one version is more probable than another. For a court to be satisfied that a person knowingly made a false allegation or statement in the proceedings must mean that a court can be comfortable in finding that the person lied. It would not simply then be a balancing act between two versions. To be satisfied that a lie has been told and to so find requires a careful analysis of two things. The first is that the proffered version of fact is untrue but the second is that it is put knowing it to be untrue. A court must then be cautious about such a finding because of the mandatory consequence. The finding must be elevated above the “probable” level set out in s 140(1) of the Evidence Act 1995 to consider the matters contemplated in s 140(2) of that Act. That is, the Briginshaw v Briginshaw (1938) 60 CLR 336 ; [1938] ALR 334 test applies.
…
[26] “Knowingly” is unequivocal. There can be no room for misunderstanding or doubt; objectively, the person making the statement cannot believe the statement to be true.[46]
[46] Charles v Charles [2007] FamCA 276
Given my findings in paragraphs 58-70 above, I find that Mr Murphy knowingly failed to comply with his obligations and as a result the discretion to waive the debt or a portion thereof does not arise under 1237AAD.
Further, I find that there are no special circumstances that make it desirable to waive the debts.
The Act does not define what constitutes “special circumstances”.
However, decisions of the Federal Court make it clear that “special” denotes something different from the usual or ordinary.[47]
[47] Groth v Secretary, Department of Social Security [1995] FCA 1708; (1995) 40 ALD 541, at 545 per
Kiefel J, Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs v Jones (2012) 89 ATR 267; [2012] FCA 639, at [51], Boscolo v Secretary, Dept of Social Security [1999] FCA 106; (1999) 90 FCR 531, at [18]; Barker J in Kazmierczak v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] FCA 1084, at [37].
French J (as he then was) said in in Secretary, Department of Social Security v Hales[1997] FCA 1565; (1998) 82 FCR 154, at 162:
The concept of special circumstances is broad. A constellation of factors, including financial circumstances, may fall within it. The express exclusion of financial hardship alone as a special circumstance is an indicator that it would otherwise be included. This gives some measure of the range of circumstances which will qualify as special. But as a matter of grammar and ordinary logic, the exclusion of financial hardship alone as a special circumstance does not mandate its inclusion in the range of matters constituting such circumstances for the purpose of enlivening the Secretary's discretion. ... 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 debt. It is inappropriate to constrain that flexibility by imposing a narrow or artificial construction upon the words. It may be that there will be few cases in which the Secretary will be satisfied that there are special circumstances in the absence of financial hardship. It may be that there are few cases in which having found special circumstances to exist, the Secretary would exercise the discretion to waive in the absence of financial hardship. But to anticipate the limits of the categories of possible cases by imposing on the language of the section a fetter upon its application which is not mandated by its words, is to erode its useful purpose.
The AAT has also considered the phrase and held that the interpretation in Beadle and Director-General of Social Security (1984) 6 ALD 1, at [12] (i.e. that the circumstances must be unusual, uncommon or exceptional), applies to the Act.[48]
[48] See Hunnibell and Secretary, Department and Community Services [2004] AATA 992, at [19]; Papps
and Secretary, Department of Family and Community Services [2005] AATA 660, at [37]
Even if Mr Murphy was not aware of his obligations to actually notify the Department, ignorance of the legal requirements is not a special circumstance. “Centrelink is not required to advise claimants about their legal rights to any particular social security payment or the rate of payment”.[49]
[49] See Brian Murphy and Secretary, Department of Families, Housing, Community Services and
Indigenous Affairs [2010] AATA 115, at [17]; Ivor Biddlecombe and Secretary, Department of Families,
Housing, Community Services and Indigenous Affairs [2010] AATA 451; Barnard and Secretary, Department of Social Services [2016] AATA 436, at [47]; Scott v Secretary, Department of Social Security [1999] FCA 1774, and on appeal Scott and Another v Secretary, Department of Social Security [2000] FCA 1241
Mr Murphy said he was suffering from depression at the time and it was difficult to remember his obligations. There are medical records from Metro GP Medical Centre indicating that in 2013 Mr Murphy was experiencing “symptoms” of depression and was placed on a mental health plan.[50] However, there is no evidence that he had been clinically diagnosed with depression by a psychiatrist or clinical psychologist nor is there any medical opinion evidence to confirm that his depressive symptoms were impacting on him in the way he submits.
[50] Exhibit 1, T Documents, T13, page 181, Letter from Metro GP Medical Centre dated 5 September
2013.
No other special circumstances exist within the meaning of section 1237AAD to warrant the exercise of the discretion in section 1237AAD to waive the debt.
CONCLUSION
Mr Murphy’s appeal fails.
The decision under review is affirmed.
I certify that the preceding 88 (eighty -eight) paragraphs are a true copy of the reasons for the decision herein of Member D K Grigg
.........................[Sgd]...............................................
Associate
Dated: 13 January 2017
Date of hearing: 29 November 2016 Applicant: In person Solicitors for the Respondent: Rick McQuinlan, Senior Government Lawyer, Department of Human Services
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