Paketama and Secretary, Department of Education, Employment and Workplace Relations

[2008] AATA 908

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2008] AATA 908

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2008/0008

GENERAL ADMINISTRATIVE DIVISION		)
Re		HALBERG PAKETAMA

Applicant

And SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal Dr P McDermott, RFD, Senior Member

Date10 October 2008

PlaceBrisbane

Decision The Tribunal affirms the decision under review.

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

Senior Member

CATCHWORDS

SOCIAL SECURITY – Pensions, Benefits & Allowances – austudy payment – applicant owes debt to Commonwealth – whether debt should be written off or waived – no special circumstances – decision under review affirmed.

Social Security (Administration) Act 1999 ss 68(2)

Social Security Act 1991 ss 1223(1), 1236, 1237A

Secretary, Department of Social Security v Hales (1998) 51 ALD 695

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

Dranichnikov v Centrelink (2003) 75 ALD 134

REASONS FOR DECISION

10 October 2008 Dr P McDermott, RFD, Senior Member  

INTRODUCTION

1.      Mr Halberg Paketama has sought the review of a decision to raise an austudy payment debt against him.  I have to determine whether Mr Paketama has been overpaid austudy payment.  If I decide that he has been overpaid this benefit I must then consider whether the debt should be recovered or whether it is appropriate for the debt to be written off or waived.

BACKGROUND

2.      Mr Paketama has been in receipt of austudy payment from 21 February 2004 on the basis that he was undertaking full-time study.

3. On 10 November 2006, the Applicant was sent a notice, under s 68(2) of the Social Security (Administration) Act1999 (“the Administration Act”), enclosing his reporting statement. The notice informed the Applicant that Centrelink records listed him as a full-time student. Further, that notice advised the Applicant of his obligation to notify Centrelink of changes to his circumstances (including changes to his study details).

4.      On 24 November 2006, Mr Paketama attended the Fortitude Valley office of Centrelink and advised that office of his intention to study four subjects in the next semester.

5.      On 29 November 2006, Mr Paketama attended a Centrelink office and advised that office that he was being evicted on the next day from his house. He made an enquiry regarding study over the summer semester. The Applicant advised that he had failed a subject and would be resitting that subject over the summer semester.

6.      On 23 January 2007, Mr Paketama advised Centrelink of his new postal address.

7. On 2 February 2007, Mr Paketama was sent a notice, under s 68(2) of the Administration Act, enclosing his reporting statement. The notice informed the Applicant that Centrelink records listed him as a full-time student. Further, the notice advised the Applicant of his obligation to notify Centrelink of changes to his circumstances (including changes to his study details).

8.      Mr Paketama attended Centrelink offices on 2 February 2007, 16 February 2007, 2 March 2007 and 16 March 2007.

9.      On 10 May 2007, Mr Paketama attended the Centrelink office at Fortitude Valley and applied for an advance payment of his austudy payment in the amount of $300.00.  The Applicant was advised repayments would be $23.10 per fortnight.  Mr Paketama advised Centrelink that he had $150.00 left each fortnight after expenses. After being satisfied that the repayments were not likely to result in financial hardship, the delegate granted the application for advance payment.

10.     On 14 May 2007, Centrelink became aware, through an enrolment review, that the Applicant had not undertaken sufficient study in semester 1 of 2007 to qualify for austudy payment as a full-time student.

11.     On 10 August 2007, a debt of $3,794.95 was raised against the Applicant on the basis that he was not entitled to payments of austudy payment made in relation to the period 5 March 2007 to 29 June 2007.

12.     On 24 September 2007, a Centrelink authorised review officer affirmed the original decision.

13.     On 25 October 2007, Mr Paketama lodged an application for review by the Social Security Appeals Tribunal.

14.     On 5 December 2007, the Social Security Appeals Tribunal varied the decision under review so that Centrelink’s right to recover 50% of the debt was waived.

15.     On 2 January 2008, Mr Paketama applied for review of that decision by this Tribunal.

16.     On 7 August 2008, the Applicant attended the Centrelink office in Hervey Bay to apply for an advance payment of austudy payment in the amount of $500.00.  The Applicant was advised that repayments would be $38.50 per fortnight.  The Applicant advised Centrelink that he has $50.00 left each fortnight after meeting his expenses. After being satisfied that the repayments were not likely to result in financial hardship, the delegate granted the application for advance payment.

ISSUES

17.     In determining this application of Mr Paketama, I have to consider the following issues:

(a)whether Mr Paketama was overpaid austudy payment in excess of his entitlement for the period 5 March 2007 to 29 June 2007 in the amount of $3,794.26;

(b)if so, whether the amount overpaid constitutes a legally recoverable debt under s 1223(1) of the Social Security Act 1991 (“the Act”);

(c)whether the debt should be written off for a period under section 1236 of the Act;

(d)whether all or part of the debt should be waived on the grounds of sole administrative error under section 1237A of the Act; and

(e)whether all or part of the debt should be waived on the grounds of special circumstances under s 1237AAD of the Act.

ENTITLEMENT TO AUSTUDY

18. Section 568 of the Act provides that for a person to be qualified for an austudy payment in respect of a period, that person must satisfy the activity test.

19. A crucial element of the activity test that is provided for in s 569 of the Act is that a person must be “undertaking qualifying study”: that expression is defined by ss 569A, 569C and 569E of the Act.

20. It is not in dispute that Mr Paketama was undertaking an approved course of education or study at an educational institution within the meaning of s 569A of the Act. What is really in issue is whether he was during the relevant period a full-time student as required by s 569A(c) of the Act.

21. I also make the observation that the material before me does not raise for consideration whether he was a concessional study-load student: s 569A(c).

22. Whether or not a person is a full-time student is subject to the requirements of s 569C of the Act. In essential respects, a person is a full-time student if that person is undertaking at least three quarters of the normal amount of full-time study in respect of that course: s 569C(a). The expression, the normal amount of full-time study in respect of a course, is defined to be the full-time student load for the course: s 569E(1)(ii).

23. The Secretary contends that the normal amount of full-time study for the course, in which Mr Paketama was enrolled, was 8 subjects per year. I accept this contention as advice from his University confirms that a full-time workload is 8 units a year. As Mr Paketama only studied one subject in semester 1 2007, he did not undertake at least three quarters of the normal amount of full-time study for that period. In my view, Mr Paketama was not undertaking “qualifying study” under s 569A of the Act and consequently did not qualify for austudy payment as he did not meet the requirements of the activity test.

24. Mr Paketama in evidence before me has confirmed that he did not advise Centrelink that he was not a full time student in semester 1 2007. I therefore find that he has failed to comply with the information notice that was issued to him on 2 February 2007 pursuant to s 68(2) of the Administration Act. Mr Paketama at the hearing stated that he was aware of the importance of notifying Centrelink of a change in his circumstances.

25.     I am also satisfied that Mr Paketama attended Centrelink offices on 2 February 2007, 16 February 2007, 2 March 2007 and 16 March 2007.  On each of those occasions he failed to inform Centrelink that he was not a full-time student in semester 1 2007.

26. I am therefore of the opinion that Mr Paketama had no entitlement to receive austudy payment for the duration of the relevant period by virtue of the operation of s 94(1) of the Administration Act. Mr Paketama was, during the relevant period, paid austudy which amounted to $3,794.26 to which he was not entitled.

OVERPAID AMOUNT IS A DEBT DUE TO THE COMMONWEALTH

27. The amount of $3,794.26 which is the amount of the overpayment of austudy is a debt due to the Commonwealth under s 1223(1) of the Act. It is understandable in this case for the Secretary to recover the overpayment. As French J explained in Secretary, Department of Social Security v Hales:[1]  “The taxpayer is entitled to expect that in the ordinary course money paid to people which they are not entitled to receive will be recovered”.

[1] (1998) 51 ALD 695 at 696.

RECOVERY OF OVERPAYMENT

28.     I must now consider whether there are any reasons why the overpayment of austudy should not now be recovered.

29.     Under the Social Security Act it is possible for an overpayment of austudy to be not recovered where the Secretary writes off the debt (see s 1236); where the Secretary is required to waive the debt due to error (s 1237A(1)) or where the Secretary may waive the debt due to special circumstances (s 1237AAD).

30.     I will now consider whether it is appropriate to write off or waive the debt.

WRITE OFF DEBT

31. I have considered whether it is appropriate to make a determination to write off the debt. The Secretary may write off the debt if the debtor has no capacity to repay the debt: s 1236(1A)(b).

32. The Act provides that if the debt can be deducted by deductions from social security payments, then the debtor is taken to have a capacity to repay the amount unless these deductions would result in severe financial hardship: s 1236(1C). Mr Paketama has the capacity to repay his debt by way of deductions from his austudy payment. I appreciate that Mr Paketama has a tight budget. However, there is no evidence that payment of the debt would result in severe financial hardship. I have taken into account the fact that as recently as 7 August 2008, Mr Paketama advised Centrelink that he then had $50.00 left each fortnight after meeting his expenses.[2]  

[2] Exhibit 3.

33.     I do not consider that it is appropriate to write off the debt.

SOLE ADMINISTRATIVE ERROR

34. The Secretary may waive a debt under s 1237A(1) of the Act where the debt arose solely due to an administrative error and the person received the payments that give rise to the debt in good faith. I am satisfied that s 1237A(1) of the Act has no application as there is no evidence before me that the debt arose because of an administrative error on the part of Centrelink.

SPECIAL CIRCUMSTANCES

35. A debt may be waived under s 1237AAD of the Act where there are “special circumstances”.

36. The Act does not contain a definition of what constitutes “special circumstances”. The Federal Court of Australia has provided guidance on the meaning of that term. It has been held that “special circumstances” are present where the circumstances are “unusual, uncommon or exceptional”[3] or where the “circumstances are such that takes the case out of the ordinary”.[4]  After reviewing the material before me, I consider that special circumstances are present in this case. The Secretary has quite properly acknowledged that Mr Paketama has had a significant period of homelessness that has impacted upon his ability to undertake full-time study.

[3] Re Beadle and Director-General of Social Security (1984) 6 ALD 1.

[4] Dranichnikov v Centrelink (2003) 75 ALD 134 at 148.

37. I accept the submission of the Secretary that the discretion contained in s 1237AAD of the Act should not be exercised any further than the decision of the Social Security Appeals Tribunal. I consider that the decision of the Social Security Appeals Tribunal to waive half of the debt is appropriate having regard to the particular circumstances of Mr Paketama. I have also had regard to the fact that Mr Paketama will complete his course at the end of the forthcoming summer vacation and is investigating his options for employment. Mr Paketama is to be commended for improving his employment prospects through his education.

38. In considering the application of s 1237AAD of the Act the Social Security Appeals Tribunal had regard to the fact Mr Paketama was excluded from using university study facilities. Evidence was placed before me in the form of a statement from an officer of the university to the effect that Mr Paketama was excluded from using those facilities only outside of normal business hours.[5]  Mr Paketama took issue with that statement and mentioned that he was asked by the University to “clean out his locker”. As the officer of the university was not available for cross-examination I have taken the view that it would not be fair to place any weight upon that statement. I also mention that Mr Paketama has confirmed in his evidence that he currently has access to university study facilities.

[5] Exhibit 4.

DECISION

39.The Tribunal affirms the decision under review.

I certify that the 39 preceding paragraphs are a true copy of the reasons for the decision herein of Dr P McDermott, RFD, Senior Member

Signed: .......................[Sgd]...............................................
              Elizabeth Young, Research Associate

Date/s of Hearing  26 September 2008
Date of Decision  10 October 2008
The Applicant was self-represented
Solicitor for the Respondent     Mr Joe Guthrie, Departmental Advocate