Paiwan and Secretary, Department of Education and Training

[2004] AATA 818

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 818

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q2003/745

GENERAL ADMINISTRATIVE  DIVISION		)
Re		JOHN PAIWAN

Applicant

And SECRETARY, DEPARTMENT OF EDUCATION AND TRAINING

Respondent

DECISION

Tribunal Senior Member McCabe

Date6 August 2004

PlaceBrisbane

Decision The Tribunal affirms the decision under review.  

.................[Sgd].......................

Senior Member

CATCHWORDS

SOCIAL WELFARE – Abstudy scheme – whether applicant was eligible for Abstudy during relevant periods – whether debts should be waived or method of recovery altered – decision affirmed.

Student Assistance Act 1973

Abstudy Policy Manual

Social Security Act 1991

REASONS FOR DECISION

6 August 2004

Senior Member McCabe    

introduction

1.      This is an application for review of a decision made by the Social Security Appeals Tribunal (the SSAT) on 25 July 2003.  The SSAT affirmed the respondent’s decision to recover amounts of Abstudy paid to the applicant in 1997.  The SSAT also decided the respondent was entitled to recover Abstudy benefits paid after 14 March 1998.

2.      Abstudy consists of a living allowance paid by the Commonwealth and a supplement. The supplement is a loan. The loan is made by the Commonwealth Bank under an arrangement with the Federal government. The Bank receives an amount from the Commonwealth as its fee for providing the money.

3.      The respondent says Mr Paiwan was not entitled to Abstudy in 1997 because he was not enrolled in a course of study. (The course in which he said he intended to enrol was never offered.) The Secretary says the applicant was not entitled to Abstudy after 14 March 1998 because he did not attend the approved course of study in which he had enrolled at the beginning of that year. It follows in the Secretary’s view that Abstudy (both the living allowance and the supplement) ought to be recovered from the applicant.

4.      Mr Paiwan says he is entitled to Abstudy. He adds that even if he was not paid Abstudy, he should have been paid Newstart allowance.

The material before the Tribunal

The Tribunal was provided with the documents required under s 37 of the Administrative Appeals Tribunal Act 1975. The respondent also tendered an extract of the relevant Abstudy policy manual.

5.      Mr Paiwan tendered some documents outlining his role in a native title claim. He also tendered media reports recounting his role in organising cultural and sporting events.

6.      The matter was heard over the course of two days: 25 February 2004 in Townsville and 23 April 2004 in Brisbane (via video linkup).  The applicant represented himself.  The respondent was represented by Mr Honchin of counsel.

The Facts

7.      Mr Paiwan is an Australian citizen. He is recognised as an Aboriginal or Torres Strait Islander for the purposes of the Student Assistance Act 1973 (the Act). He is an intelligent and articulate man. He has worked in a variety of roles. I note in particular that he worked in the student assistance section of the Department of Social Security and later in Centrelink.

8.      The history of the application is as follows. On 30 December 1996 Mr Paiwan applied for Abstudy to undertake a full time course during the 1997 academic year. He proposed enrolling in the Bachelor of Torres Strait Studies (TSS) degree program at James Cook University in Townsville (ff61-71 T5 of the T-documents). The course had not been offered before. Mr Paiwan produced a generic letter of offer from the university that confirms he sought enrolment.

9.      The respondent accepted Mr Paiwan’s application for assistance. He began receiving Abstudy living allowance. He also received a financial supplement loan from the Commonwealth Bank of Australia for that year in light of his plans.

10.     Mr Paiwan did not formally enrol in the Bachelor of Torres Straight Studies for the 1997 academic year, which commenced in March.  In fact James Cook University decided not to offer the course in the first half of 1997.  The university advised Centrelink that it had contacted all applicants for the Bachelor of TSS prior to the commencement of the academic year (f118 T26 of the T-documents).  Mr Paiwan says he did not know the course was not offered.  He certainly did not attend any classes or do any study during the first semester while he received Abstudy.

11.     In June 1997 Mr Paiwan advised Centrelink that he had withdrawn from studies at James Cook University (f71 T6 of the T-documents).  Abstudy ceased at that point.

12.     On 29 December 1997 Mr Paiwan applied for Abstudy again.  In his application he proposed undertaking a full time course of study in 1998 at the Barrier Reef Institute of TAFE. He wanted to enrol in a Certificate III course in Heritage and Interpretive Tourism (ff89-101 T12 of the T-documents). His application was successful, and he began to receive living allowance and the supplement early in 1998.

13.     Mr Paiwan formally changed his enrolment to a Certificate III in Food and Beverage at the commencement of 1998.  He did not notify Centrelink of this change.  Mr Paiwan attended classes in the Food and Beverage course up until mid-March 1998.  The course required students to attend classes regularly, but Mr Paiwan stopped going to TAFE after 14 March 1998 because of family and community commitments. 

14.     Mr Paiwan did not notify Centrelink he had ceased studying after mid-March 1998. The respondent continued paying Abstudy benefits for the entire first semester of 1998.

15.     The SSAT says the applicant was not entitled to payments made between 3 March 1997 and 2 July 1997 (the period he would have been attending the TSSS course at James Cook, if it had been offered and he had enrolled) and payments made after 14 March 1998.  Centrelink says the Abstudy payments and the amount of the loan supplement should be recovered from the applicant.

The Applicant’s Argument

16.     Mr Paiwan says he should not have to repay the amounts.  He says he did not know the university was not offering the course until late in the semester in 1997.  When he discovered the true position he said he promptly notified the respondent by letter in June 1997.

17.     In 1998 he says he stopped attending the Food and Beverage course after 14 March 1998 because he was preoccupied with other important matters in his life.  He says his family was threatened with eviction.  He also had to devote himself to completing a native title application.

18.     The applicant said he was entitled to receive benefits from the Commonwealth in any event. Even if he did not qualify for Abstudy, he says he should have received Newstart or some other form of assistance.

The Law

19.     The Abstudy scheme was established to assist indigenous Australians to access educational opportunities. It is a complex scheme. The operation of the scheme (including issues of eligibility) is outlined in the Abstudy Policy Manual (the Manual).  However as Abstudy is recognised as a “current special educational assistance scheme” for the purposes of the Student Assistance Act 1973 (the Act), one must also have regard to the terms of that Act.

20.     The recovery of overpayments is dealt with in Part 6 of the Act. Section 38 provides (relevantly):

"debt" means an amount of any of the following kinds (whether the amount has arisen before or after the commencement of this Part):

(a) a special educational assistance scheme overpayment;

(b) a student assistance overpayment;

(c) an amount payable to the Commonwealth in relation to an amount of a kind referred to in paragraph (a) or (b)…

21.     Abstudy is a special educational assistance scheme. Section 3 defines special educational assistance scheme overpayment as the receipt of a payment to which the person was not entitled. A student assistance overpayment is defined in s 3 to include:

…a debt due by a person other than a financial corporation to the Commonwealth under paragraph 12QB(2)(d), 12QC(2)(d), 12S(2)(d) or 12U(2)(c) (including a debt accrued under either of those paragraphs as in force before 1 July 1998).

22. Section 12QB, 12QC, 12S and 12U deal with financial supplements. If someone receives a financial supplement they are not entitled to receive or retain, that will amount to a student assistance overpayment – which is a debt within the meaning of s 38. Sections 12R and 12S are particularly relevant here. Section 12R says the applicant is obliged to inform the respondent if he or she ceases to be an eligible student. If the student fails to communicate that fact to the respondent, the respondent must notify the student and the bank from which the supplement was obtained. Section 12S says the effect of the notice is to transfer the right to recover the loan from the bank to the Commonwealth. The Commonwealth becomes the creditor, and the amount of the loan plus the amount of any subsidy paid to the bank may be recovered from the student. The money may be recovered by withholding other social security payments to which the applicant may be entitled. I understand part of the debt has already been repaid out of withholdings from the applicant’s entitlements under the Social Security Act 1991.

23.     Division 3 of the Act deals with waiver and write-off of debts.  I will explore these sections in greater detail below.

The Jurisdiction of the AAT

24.     Divisions 3 and 4 of the Act allow the Administrative Appeals Tribunal (the Tribunal) to review a decision of the SSAT.  Division 2 of the Act relates to the SSAT’s powers of review.  Section 309 says the division applies to

(b) all decisions of an officer under this Act relating to the Student Financial Supplement Scheme; or

(c) all decisions of an officer under this Act relating to the recovery of amounts paid under a current or former special educational assistance scheme.

This section must be read carefully.  Paragraph (b) says the SSAT has jurisdiction to review all decisions relating to the financial supplement scheme.  But paragraph (c) says the SSAT’s jurisdiction in relation to the Abstudy scheme is limited to decisions relating to the recovery of money paid under the scheme.  The SSAT does not have jurisdiction to review decisions relating to the raising of the debt (e.g. whether a debt exists).  This means the SSAT can review the amount of recovery, the method of recovery and the waiver of debt.

25.     Section 324 provides for the Tribunal to review decisions of the SSAT.  Clearly the scope of the Tribunal’s review cannot exceed that of the SSAT.

Consideration and Application of the law

26.     These are the important questions: what was the amount of the Abstudy overpayment?  Should the debts caused by Abstudy overpayments be waived? Should the method of recovery be altered?  Should any decision relating to the financial supplement be varied or overturned?

Amount of Debt

27.     Did Centrelink raise the correct amount of debt?  The Manual says the Tribunal has the power to review the amount of debt recovered.  Mr Paiwan alleges that amount is zero.  The SSAT said it could not review the recovery action without being satisfied that there was in fact an overpayment.  I think it was correct in adopting that approach.  The SSAT found an overpayment had occurred.

28.     Section 3 of the Act says an overpayment will occur if a student is paid money to which he or she is not entitled.  The Abstudy paid to Mr Paiwan will be an overpayment if he was not eligible for it during the relevant periods.  The eligibility criteria for Abstudy are contained in 3.1 of the Manual.  The general Abstudy eligibility criteria are:

• the student is an Australian Aboriginal or Torres Strait Islander person;

• the student is enrolled in an approved course; and

• the student is not receiving or will not receive any other government

assistance to study.

29.     In 1997 Mr Paiwan was not enrolled in an approved course.  In fact the course never came into existence.  Mr Paiwan was therefore not entitled to Abstudy during this period.

30.     In 1998 Mr Paiwan was enrolled in a Certificate course.  This qualifies as an approved full-time course.  However he ceased attending the course after a few months.  None of the workload concessions in the Manual apply to Mr Paiwan.  Chapter 4.6 of the Manual deals with absences from classes where attendance is a requirement of the course.  The Manual distinguishes between approved and unapproved absences.  Approved absences are periods of absence resulting from circumstances beyond the student’s control.  They have no effect on students’ entitlements.  In order to take an approved absence a student must apply to Centrelink.  The student must provide evidence in support of his or her application.  Mr Paiwan did not seek approval from Centrelink for his 1998 absence.  Therefore it was an unapproved absence.  Based on the guidelines in the Manual, I am satisfied Mr Paiwan was not eligible for Abstudy after 14 March 1998.

31.     I have reviewed the documents setting out the calculation of Mr Paiwan’s debt (ff126-139 T31 of the T-documents) and the SSAT decision. I adopt the SSAT’s reasoning and its calculation of the debt.

Write-off or Waiver of Abstudy Debts

32.     I now turn to the legislative provisions concerning waiver and write-off of debts.  Section 43 says the Secretary may write off a debt.  The section provides:

If the Secretary writes off a debt, this means an administrative decision has been made that, in the present circumstances, there is no point in trying to recover the debt. In law, however, this debt still exists and may later be pursued.

33.     There is no evidence to suggest the Secretary should waive the debt under s 43. The money is being steadily recovered from the applicant by way of withholdings.

34.     Section 43B allows the Secretary to waive any part of the debt that is attributable solely to an administrative error made by the Commonwealth, if the debtor received that payment in good faith.  This section is not applicable to Mr Paiwan’s case.  No part of the debt is attributable solely to administrative error.  The debt occurred because Mr Paiwan did not accurately inform the Department of his   circumstances.  In any event I doubt Mr Paiwan received the payments in good faith.  As a former employee of the Department (in the student assistance section) he would have been aware of the conditions attached to Abstudy payments.  Furthermore the Abstudy claim form is clear in that it requires a student to be enrolled in an eligible course.

35.     Section 43F is the only other section that may be applicable in this case.  It provides

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; 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.

Note: Section 43 allows the Secretary to write off a debt on behalf of the Commonwealth.

36.     I do not think s 43F can help Mr Paiwan.  In failing to notify Centrelink of his change of circumstances (i.e. that he did not commence study in 1997; that he ceased study in March 1998) he breached s 48 of the Act.  That section says when certain events happen to a person in receipt of payments under (among other things) a special educational assistance scheme, that person must notify the Department within 14 days.  Did Mr Paiwan knowingly breach s 48?  I think he did.  The Abstudy application signed by Mr Paiwan contains a number of declarations, including one which reads: “I will notify the Department within 14 days of any changes to this information” (f70 T5; f101 T 12 of the T-documents).  “This information” includes Mr Paiwan’s enrolment details.  Furthermore Mr Paiwan was formerly employed by the Department in a Student Assistance Centre in Townsville.  He had also worked for Centrelink.  I think he would have known of his obligation to notify the Department he was not studying.

37.     He cannot satisfy subsection 43F(a).  It is not necessary to consider the special circumstances section any further.  I see no other reason why Mr Paiwan’s Abstudy debts should be waived.

Method of Recovery of Abstudy debts

38.     Mr Paiwan’s debts are being recovered by withholdings from his current Abstudy entitlements.  Section 39AA of the Act authorises the Department to do this.

39.     The debts are being recovered at a rate of $20 per fortnight (f8 T2 of the T-documents).  I note Mr Paiwan says he is short of money and has had trouble obtaining work.  He is living with his mother.  But I am not aware of any matters that suggest the rate of recovery is unreasonable.

Financial Supplements

40.     Mr Paiwan was not entitled to Abstudy in 1997 or 1998 for the reasons I have already explained.  Under s 12C of the Act he was not entitled to the financial supplement loans for those years either.  Under s 3 of the Act those amounts represent a student assistance overpayment.  They also represent “debts” under s 38 of the Act.

41.     Mr Paiwan is liable under s 12S(2)(d) to pay the Commonwealth the amounts of the financial supplement loans.  The respondent decided to recover the financial supplement loans for the years 1997 and 1998.  For reasons I have already given, the debts should not be waived or written off.

Conclusion

42.     The decision under review is affirmed.

I certify that the 42 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member McCabe

Signed:         [Sgd]
  Associate: Thomas Ritchie

Date/s of Hearing: 25 February 2004, 23 April 2004.
Date of Decision: 6 August 2004
The applicant represented himself.
The respondent was represented by Mr Honchin of counsel.