Pearce and Department of Education, Training and Youth Affairs

DECISION AND REASONS FOR DECISION [2001] AATA 523

ADMINISTRATIVE APPEALS TRIBUNAL )

) N2000/1231

GENERAL ADMINISTRATIVE DIVISION       )
           Re      ELIZABETH PEARCE
  Applicant
           And    SECRETARY, DEPARTMENT OF EDUCATION, TRAINING AND YOUTH AFFAIRS
  Respondent

DECISION

Tribunal Ms G Ettinger - Senior Member

Date13 June 2001
PlaceSydney (Newcastle Hearing)

Decision           The Administrative Appeals Tribunal affirms the decision of the Respondent as affirmed by the Review Officer on 30 November 1998 and the Social Security Appeals Tribunal on 6 July 2000 to raise and recover a debt on 1 September 1998 in the amount of $5,235.74 from the Applicant, Mrs Elizabeth Pearce, in respect of AUSTUDY payments she received on behalf of Ms Emily Wade for the period 1 January 1997 to 3 July 1998.
  ..............................................
  Ms G Ettinger
  Senior Member
CATCHWORDS
AUSTUDY – whether sole administrative error – whether special circumstances – decision affirmed

LEGISLATION
Austudy Regulations reg 85
Social Security Legislation Amendment (Youth Allowance Consequential and Related Measures) Act 1998
Student Assistance Act 1973 ss 43B and 43F
Student and Youth Assistance Act 1973 ss 289, 290C

CASES
Beadle v Director-General of Social Security (1985) 60 ALR 225
Colaiacolo and Secretary, Department of Social Security (AAT 2109, 24 April 1985)
Commonwealth v Daniels (1994) 33 ALD 111
De Neumann and Secretary, Department of Social Security (AAT 11280, 4 October 1996)
Director-General of Social Services v Hales (1983) 47 ALR 281
Re Beadle and Director General of Social Security (1984) 6 ALD 1
Re Gerhardt and Department of Employment, Education and Training (AAT 10941, 17 May 1996)
Re Ivovic and Director-General of Social Services (1981) 3 ALN N95
Re Krzywak and Secretary, Department of Social Security (1988) 15 ALD 690
Secretary, Department of Social Security v Banks (1990) 20 ALD 19
Secretary, Department of Social Security v Ellis (1997) 24 AAR 535
Secretary, Department of Social Security v Hulls (1991) 22 ALD 570
Secretary, Department of Employment, Education, Training and Youth Affairs v Prince (1997) 50 ALD 186
Secretary, Department of Family and Community Services v Smith (1991) 23 ALD 277

REASONS FOR DECISION

13 June 2001 Ms G Ettinger Senior Member

The decision under review before the Administrative Appeals Tribunal, ("the Tribunal") was the decision of the Respondent, Secretary, Department of Education, Training and Youth Affairs ("DETYA"), as affirmed by the Review Officer on 30 November 1998 (T24) and the Social Security Appeals Tribunal on 6 July 2000 (T2) to raise and recover a debt on 1 September 1998 (T25) in the amount of $5,235.74 from the Applicant, Mrs Elizabeth Pearce, in respect of AUSTUDY payments she received on behalf of Ms Emily Wade for the period 1 January 1997 to 3 July 1998.
At the Tribunal hearing, the Respondent, DETYA, was represented by Mr G Peek, of the Australian Government Solicitor and Mrs Elizabeth Pearce, the Applicant in these proceedings, by Mr Robert Howard, her brother who is not a lawyer.
ISSUES BEFORE THE TRIBUNAL
The issues before the Tribunal were:
·Whether Mrs Pearce was entitled to waiver of all or part of the debts incurred in respect of AUSTUDY payment she received on behalf of her daughter, Emily Wade, on the grounds of administrative error pursuant to section 289 of the Student and Youth Assistance Act 1973 or section 43B of the Student Assistance Act 1973.
·In the alternative, whether Mrs Pearce was entitled to waiver of all or part of the debts incurred in respect of AUSTUDY payments she received on behalf of her daughter, Emily Wade, as a result of special circumstances pursuant to section 290C of the Student and Youth Assistance Act 1973 or section 43F of the Student Assistance Act 1973.

LEGISLATIVE FRAMEWORK

The relevant legislation in this matter was the Student and Youth Assistance Act 1973, the Student Assistance Act 1973 and the AUSTUDY Regulations.
The Tribunal was mindful that the legislation relating to the provision of financial assistance for students has undergone a number of changes in recent years and the relevant period in respect of Mrs Pearce's application for review spans two such changes. For the purposes of clarity, the Tribunal notes the following:
·For the period 1 January 1995 to 30 June 1998, the legislation in force was the Student and Youth Assistance Act 1973 ("the SYA Act"). The SYA Act provided for the waiver of debt in circumstances of administrative error or for special circumstances in sections 289 and 290C respectively.
·On 1 July 1998, the SYA Act was amended by the Social Security Legislation Amendment (Youth Allowance Consequential And Related Measures) Act 1998, which created the Student Assistance Act 1973 ("the SA Act"). In the SA Act, sections 289 and 290C of the SYA Act were replaced with the effect that waiver for administrative error is now dealt with pursuant to section 43B of the SA Act and waiver for special circumstances is pursuant to section 43F of the SA Act.
Section 289 of the SYA Act deals with waiver of debt arising from administrative error of the Commonwealth, and states as relevant:
"289 Waiver of debt arising from error
Administrative error
(1) 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.
Note: Subsection (1) does not allow waiver of part of a debt that was caused partly by administrative error and partly by one or more other factors (such as error by the debtor).
…

Proportion of a debt
(3)For the purposes of this section, a proportion of a debt may be 100% of the debt."

Section 290C of the SYA Act deals with waiver of debts raised on or after 1 January 1996 or to the balance of debts as at 1 January 1996 as a result of special circumstances:
"Waiver in special circumstances
290C The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:
the debt did not result wholly or partly from the debtor or another person knowingly:
making a false statement or a false representation; or
failing or omitting to comply with a provision of this Act; and
there are special circumstances (other than financial hardship alone) that make it desirable to waive; and
it is more appropriate to waive than to write off the debt or part of the debt.
Note: Section 287 allows the Secretary to write off a debt on behalf of the Commonwealth."
Section 43B of the SA Act outlines the circumstances for waiver of debt for administrative error post 1 July 1998:
"43B Waiver of debt arising from error
Administrative error
(1)Subject to subsection (2), 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.
Note: Subsection (1) does not allow waiver of part of a debt that was caused partly by administrative error and partly by one or more other factors (such as error by the debtor).
Circumstances under which subsection (1) applies
(2)Subsection (1) only applies if:
(a) the debt is not raised within a period of 6 weeks from the first payment that caused the debt; or
(b) if the debt arose because a person has complied with an obligation to provide information or documents to the Department under this Act, the debt is not raised within a period of 6 weeks from the end of the period within which the person was required to comply with that obligation;
whichever is the later.
…
Proportion of a debt
(4) For the purposes of this section, a proportion of a debt may be 100% of the debt.
(5)In this section:
parent, in relation to a person, means:
(a) if the person is not an adopted child—a natural parent of the person; or
(b) if the person is an adopted child—an adoptive parent of the person.
partner has the same meaning as in the Social Security Act 1991."
Since 1 July 1998, section 43F of the SA Act outlines the circumstances for waiver of debt in special circumstances:
"43F 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; 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."

Regulation 85 of the AUSTUDY Regulations outlines "parental income test" – which parent's income is to be used to calculate AUSTUDY entitlement:
"85 Whose income is taken into account?
(1) The parental income test takes account of the income of a student's parents.
(2)Parent means:
(a)any natural or adoptive parents with whom the student normally lives; and
(b)a spouse of a student's parent if the student normally lives with the spouse; and
(c)any other adult on whom the student is wholly or substantially dependent (not including a spouse of the student); and
(d)the natural or adoptive parent with whom the student last lived, if the student does not live with either parent and if there is no supporting adult."

EVIDENCE BEFORE THE TRIBUNAL

The Tribunal had before it documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 ("the AAT Act") and the following exhibits:
ITEM DATE NAME
Statement of Emily Wade 19 November 2000 Exhibit A1
Letter from Robert Howard to Greg Peak – Australian Government Solicitor with Attachments            29 March 2001        Exhibit A2
AUSTUDY Information Booklet                Exhibit A3
T-Documents  Exhibit R1

Mrs Pearce and her daughter, Ms Emily Wade gave oral evidence before the Tribunal.
EVIDENCE OF THE APPLICANT – MRS ELIZABETH PEARCE
Mrs Pearce, whose date of birth was 4 January 1955, said that she completed her schooling until the equivalent of year 10 and was currently married to Mervyn Pearce. She said that he could not work and was in receipt of a disability support pension. Mrs Pearce said that during the relevant period, she was in receipt of Job Search Allowance and was hoping to find work doing housekeeping.
Mrs Pearce said that her emotional/physical state at the relevant time was not good, and she was going to counselling for support. She said that one daughter, Clarissa, did not want to have anything to do with her, and that her relationship with Emily was not optimum either. However, she said that she was trying to be a good mother and look after Emily.
Mrs Pearce said that she found it difficult to comply with the custody orders which gave her husband custody of the children, but afforded her certain access (T22/110), particularly after her ex-husband moved from Nowra to Sydney. Mrs Pearce said that she sought counselling to help her deal with the difficult access arrangements.
She said that when she did go to see her daughters, her ex-husband would come out and verbally abuse her, and that she would leave crying. She added that no matter what she did, her ex-husband would interrupt; she said that he had made it very difficult for her during the marriage. Mrs Pearce also said that she was only able to see her children through her brother and his wife.
Mrs Pearce told the Tribunal that in approximately late 1996, her daughter Emily, who was living with her father in Blacktown, was coming to stay with her more and more during weekends. When asked what "more and more" meant, Mrs Pearce said that Emily was coming to her house on Friday nights and staying until late Sunday. She also added she believed that Emily, was, at the time, wanting to see her more and was considering moving in with her.
Mrs Pearce said that the arrangement prior to that was that she was seeing Emily periodically, approximately six to eight times per year. She said that as a result of the custody arrangements, she was required to give one month's notice prior to every visit.
Mrs Pearce said at the time (1996), she was in receipt of social security benefits and was struggling financially. She said that two of Emily's teachers had told her that Emily was struggling and needed extra tuition in mathematics and English. Mrs Pearce also said that her ex-husband was supposed to be providing for the needs of the children but that he was not doing so adequately. She said that Emily had reported to her that she was not getting enough food, or clothing and that her medical needs were not being attended to. Mrs Pearce said that she did not report her ex-husband to anybody as she had had enough of courts and welfare. She added that while she could not afford it, she had to find the money somehow to help her daughter.
Mrs Pearce said that she went to Centrelink on a number of occasions and explained her situation, in the hope that "Child Endowment" could be split between herself and her ex-husband. However, she was advised that this was not possible. She said that Centrelink also advised her that she was not eligible for family payment as it is not paid after the relevant child reaches the age of 16 years.
When cross-examined as to the number of times she contacted Centrelink to make general inquiries, Mrs Pearce said that she could not recall the number of times, but thought it was more than ten. She also added that she could not recall if Centrelink looked into whether she was eligible for additional assistance through the social security benefit she was receiving.
Mrs Pearce said that Centrelink suggested that she contact AUSTUDY or Youth Allowance, though she was not sure which one it was at the time, and said that after she explained her situation, she was advised to apply for AUSTUDY or Youth Allowance on Emily's behalf.
Mrs Pearce said that she took the forms home but did not really understand them. She said that she relied on the people working at AUSTUDY at Liverpool to help her with the forms and make sure that they were filled out correctly, and attended there in person to do so.
When questioned about the AUSTUDY forms at T3, Mrs Pearce said that some of the handwriting was not hers. She said that because she could not understand the forms, she sought assistance at the Liverpool office. Mrs Pearce said that the officer went through the questions which she answered orally, with the officer writing in the answers. Mrs Pearce also said that there were a number of errors in the applications, where she had first tried to complete the form on her own. She said that this was evidence that she was struggling with the questions and indicated that she did not know what was being filled in.
Mrs Pearce said that once completed, the forms were sent to AUSTUDY at Blacktown, and not long afterwards, AUSTUDY was granted.
She said that initially the money went into her account, however, she later opened a joint account with Emily, which Emily could access as she needed. She said that the money was strictly for Emily's needs and not her own.
Mrs Pearce said that the reasons why she applied for AUSTUDY on Emily's behalf was that:
·Money was needed to pay for tutorials in mathematics and English for Emily;
·Emily required clothes and other personal needs which Mrs Pearce could not provide from her social security allowance;
·Emily needed food and was not being fed properly where she was living;
·The money gave Emily some independence.
Mrs Pearce said that on each occasion when she explained her situation and that of her daughter Emily to AUSTUDY, she informed them fully regarding the fact that her daughter was living with her father, and not with her. In this respect, I noted that when Mrs Pearce filled out the AUSTUDY form, she wrote her daughter's home address as 45 Ball Street, Colyton, which is where she resided with her father, and only her postal address care of herself at 4 Keato Close, Hammondville.
Mrs Pearce said that she applied for and received the AUSTUDY payments in good faith and at no time was she told that the means test was supposed to have been based in her ex-husband's income, because Emily resided with him. She added that in her conversations with "Centrelink" and on all the paperwork, she told the truth and did not deceive "Centrelink".
Mrs Pearce also said that she encouraged Emily to read the forms prior to signing them.

EVIDENCE OF MS EMILY WADE

Ms Wade, whose date of birth was 14 February 1981, and whose statements dated 3 August 1998 and 19 November 2000 were before the Tribunal as T22/109 and Exhibit A1, was called to the Tribunal by her mother on the day of the Hearing from the Belmont TAFE. She came in to the Hearing to give evidence at short notice. Ms Wade presented as a nervous 20 year old, clearly fearful of giving answers which would afterwards cause her problems with her family.
Ms Wade informed the Tribunal of the custody arrangements between her parents. She said that she had lived with her father since 1991, and up until 1996 saw her mother only occasionally. She said that from 1996 onwards, she stayed with her mother every weekend, and had lived with her for the last two to three years.
Regarding her statement dated 3 August 1998 (T22/109), Ms Wade said she did not write the statement, but rather that it was written by a Department of Social Security officer, who wrote down what she told him. She added that as far as she could see, the officer had written down what she said, though she was not sure whether the statement exactly repeated what she had said. I noted that it was stated there:
"I have lived with my father Mr John Murray Wade since 21 June 1991. The Youth Allowance is currently payable to my mother Elizabeth Pearce of 4 Keato Avenue, Hammondville 2170. she has not, legal custody of me since the above mentioned date. My mother completed the Austudy forms to which I signed knowing the money payable by Austudy until 30 June 1998 and at present Youth Allowance would go to my mother even though she was not entitled to it. Due to my father and his defacto income I know that I am not eligible for Youth Allowance."
Ms Wade said that her father had told her that she was not eligible for AUSTUDY because of his level of income, and that she understood she was not eligible through her mother because her mother did not have custody.
When asked whose idea it was to apply for AUSTUDY, Ms Wade informed the Tribunal that it was her mother's. She said that her mother told her that she had applied for AUSTUDY and that there would be some forms to fill out.
Ms Wade said that when she first completed the forms she was aged 17 years. She said that whilst she did read the forms and understood a little bit of the content, she did not look at the AUSTUDY booklet or guidelines. When cross-examined as to whether she completed the forms herself, Ms Wade said that she filled them out herself, however, asked her mother for assistance for some parts. She said that she was also aware that her mother had some help filling out the forms.
She also said that at the time she was not aware that her mother was not entitled to AUSTUDY. When asked when she found out that her mother was not eligible, Ms Wade replied that it was when her father told her a few days after she had signed the forms in 1998. Clearly there was a contradiction in the oral evidence given regarding when Ms Wade discovered she was not eligible to receive AUSTUDY when compared with the statement at T22/109.

Ms Wade said that initially AUSTUDY was paid into her mother's account and she was able access it for school needs, including books, paper and writing equipment. She also said that her father was giving her money and pocket money from the child endowment payments. Ms Wade also said that for the 1998 AUSTUDY, a joint account was opened with her mother so that she had direct access to the funds.
Ms Wade told the Tribunal that her mother arranged tutorials in mathematics and English almost every weekend for six months. When asked whether she had requested the additional tuition, Ms Wade replied that her mother thought she needed it, but said that it did not help as she continued to get low marks.
In this respect, I noted that the only time when Ms Wade was quite emphatic in giving her evidence was when asserting that the coaching in mathematics and English which her mother arranged for her at weekends over a period of perhaps six months, did not assist her.

SUBMISSIONS AND CONCLUSIONS

Having heard the evidence, I had to take it into account the submissions of the parties, the case law and legislation to make the correct and preferable decision as regarding the decision by the Respondent to raise and recover a debt in the amount of $5,235.74 from the Applicant, Mrs Elizabeth Pearce, in respect of AUSTUDY payments she received on behalf of Ms Emily Wade for the period 1 January 1997 to 3 July 1998.
In coming to my decision, I noted that I was required to consider:
·Whether Mrs Pearce was entitled to waiver of all or part of the debts incurred in respect of AUSTUDY received by her on behalf of her daughter, Emily Wade, on the grounds of administrative error pursuant to section 289 of the Student and Youth Assistance Act 1973 or section 43B of the Student Assistance Act 1973.
·In the alternative, whether Mrs Pearce was entitled to waiver of all or part of the debts incurred in respect of AUSTUDY received by her on behalf of her daughter, Emily Wade, as a result of special circumstances pursuant to section 290C of the Student and Youth Assistance Act 1973 or section 43F of the Student Assistance Act 1973.
The Tribunal was mindful that the legislation relating to the provision of financial assistance for students has undergone a number of changes in recent years and the relevant period in respect of Mrs Pearce's application for review spans two such changes. For the purposes of clarity, the Tribunal notes the following:
·For the period 1 January 1995 to 30 June 1998, the legislation in force was the Student and Youth Assistance Act 1973 ("the SYA Act"). The SYA Act provided for the waiver of debt in circumstances of administrative error or for special circumstances in sections 289 and 290C respectively.
·On 1 July 1998, the SYA Act was amended by the Social Security Legislation Amendment (Youth Allowance Consequential And Related Measures) Act 1998, which created the Student Assistance Act 1973 ("the SA Act"). In the SA Act, sections 289 and 290C of the SYA Act were replaced with the effect that waiver for administrative error is now dealt with pursuant to section 43B of the SA Act and waiver for special circumstances is outlined in section 43F of the SA Act.
For this reason, the Tribunal has considered the Mrs Pearce's application in light of the legislation in force prior to and following 1 July 1998.
As a preliminary matter, I was mindful that there was no disagreement between the parties that if Ms Wade's entitlement to AUSTUDY had been assessed on her father's household income, she would not have been eligible for AUSTUDY for the period 1 January 1997 to 3 July 1998.
In this regard, I noted that the regulation 85 of the AUSTUDY Regulations sets out which "parental income test" – which parent's income is to be used to calculate AUSTUDY entitlement. It follows:
"85 Whose income is taken into account?
(1) The parental income test takes account of the income of a student's parents.
(2)Parent means:
(a)any natural or adoptive parents with whom the student normally lives; and
(b)a spouse of a student's parent if the student normally lives with the spouse; and
(c)any other adult on whom the student is wholly or substantially dependent (not including a spouse of the student); and
(d)the natural or adoptive parent with whom the student last lived, if the student does not live with either parent and if there is no supporting adult. "

I was mindful of the evidence of Ms Wade, who freely admitted, at all material times, to have been residing with her father. I noted that her mother did not dispute this, and I accepted from the Family Court document before the Tribunal and the other evidence that at the relevant times when AUSTUDY was applied for and received, she was residing with her father and visiting her mother. Based on the level of income in her father's household, she was not eligible for AUSTUDY during the relevant periods the subject of this claim.
I noted there was no argument regarding the calculation of the debt and have not concerned myself further with this point.
Therefore, I must turn to the issue of whether waiver was appropriate in the circumstances.
WHETHER WAIVER WAS APPROPRIATE DUE TO ADMINISTRATIVE ERROR PURSUANT TO SECTION 289 OF THE STUDENT AND YOUTH ASSISTANCE ACT 1973 OR SECTION 43B OF THE STUDENT ASSISTANCE ACT 1973
Section 289 of the SYA Act provides:
"289 Waiver of debt arising from error
Administrative error
(1) 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.
Note: Subsection (1) does not allow waiver of part of a debt that was caused partly by administrative error and partly by one or more other factors (such as error by the debtor).
…

Proportion of a debt
(3)For the purposes of this section, a proportion of a debt may be 100% of the debt."

As to whether there was administrative error on the part of the Department; Mr Howard submitted on behalf of the Applicant that she applied for AUSTUDY as a result of advice she obtained. The Applicant's evidence he submitted, had been that she attended the offices of Centrelink on a number of occasions regarding financial assistance for her daughter, Emily Wade. He emphasised that although Centrelink officers told Mrs Pearce they could not help her, they recommended that she attend the offices of AUSTUDY as it then was. He submitted that, Mrs Pearce had at all times explained her daughter's living arrangements to the staff with whom she dealt, namely, that Emily's principle place of residence was at 45 Ball Street, Colyton with her father and that Emily resided with her at weekends at 4 Keato Avenue, Hammondville.
Mr Howard also submitted that the Applicant found it difficult to complete the documentation due to her inability to follow detailed instructions. He said that she sought assistance from staff at AUSTUDY when completing the form. Mr Howard drew my attention to the form at T3, noting that Mrs Pearce in her attempts to fill in the form, had made mistakes which were evident on the form. I was mindful that Mrs Pearce's evidence was that she did not personally complete the AUSTUDY forms at T3, but that an officer at the counter took her through the questions which she answered orally and which were then recorded by the officer. I noted that some of the answers to questions had indeed been struck out.
I was mindful that Mrs Pearce also said in evidence that at no time during her dealings with AUSTUDY was she was informed that Emily's eligibility for AUSTUDY was based on her ex-husband's household income, despite informing AUSTUDY on a number of occasions that Emily's primary residence was with her father at 45 Ball Street, Colyton.
Mr Howard added that it was not a question of the Applicant receiving payments in "bad faith" as she believed she was receiving benefits for which she was eligible pursuant to the advice received from staff at AUSTUDY.
In reply to a claim by the Applicant that the relevant officers did not record or act on the information she had given them regarding her daughter's living arrangements, Mr Peek submitted that the evidence of Mrs Pearce was not sufficiently clear regarding what advice she had provided variously to Centrelink or AUSTUDY, if at all, regarding Emily's living arrangements and thus, the Tribunal could not be satisfied that AUSTUDY failed to record or act on information from Mrs Pearce.
I noted that Mr Peak, in his Statement of Facts and Contentions dated 6 April 2001, disputed whether Mrs Pearce had advised AUSTUDY of Emily's living arrangements. He stated:
"While Mrs Pearce claims that she advised the Department that her daughter actually lived with her father, this appears to have occurred in a conversation with an officer of the then Department of Social Security in relation to Mrs Pearce's own benefit, or the Liverpool Student Assistance Centre, which referred her to the Blacktown office, and does not excuse her from disclosing Mr Wade's income details on the application form."

Therefore, he submitted that administrative error could not be made out.

Even if the Tribunal found that AUSTUDY failed to act on information given by Mrs Pearce and paid her AUSTUDY on behalf of her daughter, Emily, Mr Peek argued that there was objective contribution on the part of the Applicant in that she did not provide the correct information as to her ex-husband's financial circumstances:
"… when the applications provided Mrs Pearce's income details (and those of her second husband on the 1998 application), when the AUSTUDY Guide indicated that the relevant parent's income was that of the parent with whom the student lived, and her bank account details when the application form indicated that payments could only be made to a parent with whom the student was living."

Mr Peek also submitted that the AUSTUDY scheme operated on a self-assessment basis, where students would be provided with funds at the time that they were required and any checks on applications would take place at a later stage.
I was mindful that Mr Howard submitted, referring to Ms Wade's evidence, that there were "family secrets" involved. I also noted that Mr Peek had submitted in his closing remarks that Ms Wade had been less than candid in giving her evidence, and I accepted that to be the case, particularly comparing her oral evidence with the statement at T22/109.
As to a further ground of administrative error, Mr Howard submitted that the two different addresses listed for Emily on the AUSTUDY form should have alerted the relevant AUSTUDY officers to the fact that Mrs Pearce may not have been eligible for the AUSTUDY payments. He said that the debt arose as a result of the administrative error of Centrelink in failing to follow up the anomaly of the two addresses on the application form.
In this regard, I noted that in a letter to Mr Peek dated 29 March 2001, Mr Howard stated that:
"Centrelink's failure to notice the discrepancy between Elizabeth's and her daughter Emily's addresses on both the 1997 and the 1988 (sic) Austudy application forms (consecutive questions on the same page). Given the haphazard manner in which the form was completed one would have expected that the Centrelink checking officer would have been on the alert and scrutinised the information provided more closely than normal in search of potential anomalies."
Mr Peek, on behalf of the Respondent, submitted that pursuant to section 43B of the SY Act (and section 289 of the SYA Act), the overpayment of AUSTUDY had to be waived if it resulted solely from Commonwealth error and the payments were received by the Applicant in good faith.
Mr Peak argued that the claim that AUSTUDY had erred in processing Ms Wade's application by not checking the two different addresses listed in the application would not amount to administrative error, as nominating a different postal address from a residential address would not necessarily raise the concerns of a processing officer.
He added:
"Even if the Tribunal were to find that the respondent had erred, for example by not investigating the differing postal and residential addresses, the way in which the application forms were completed contributed to the error so that the overpayments were not solely Commonwealth error."
I was mindful that there was a compulsory requirement in section 289 of the SYA Act to waive a debt which could be attributed solely to the administrative error of the Department and for which the payments amounting to the debt were received in good faith.
Turning to the departmental errors alleged by the Applicant, I was not persuaded that recording two different addresses on the AUSTUDY application would have been sufficient to alert staff to the fact that Ms Wade's principle place of residence was with her father, and that failure to do so amounted to administrative error on the part of staff at AUSTUDY. I am aware that it is not unusual for a student to reside at an address which is different from the postal address during the school term, particularly in the case of students who are required to travel or move away from their homes in order to study. Administrative error of the Respondent is not made out in that regard.
Moreover, I was not persuaded that the Applicant made her daughter's living arrangements clear to staff at AUSTUDY at the time when she completed the AUSTUDY forms. Ultimately, even if she had disclosed the information, it was Mrs Pearce's form, which she signed, and it was her responsibility to ensure that the forms contained the necessary information regarding details of where Ms Wade resided. I noted that Mrs Pearce was required over the relevant period to fill in forms on two occasions relating to two periods of payment of AUSTUDY and that both times she did not disclose the information regarding Ms Wade's place of residence. In T3/32 in reply to question 36 the box which indicated she was separated when clearly at the time she was married to Mr Pearce, Mrs Pearce told me she could not remember whether she or the departmental officer had ticked that box. Regardless, it was her responsibility.
I am satisfied that if the Applicant had advised the departmental officers that her daughter was only visiting her at weekends, and not residing with her, those officers would have advised her that the application must relate to the income of the parent with whom the student was residing.
In respect to the difficulties Mrs Pearce said that she experienced comprehending and/or filling out complex forms; I noted that she was portrayed as an anxious woman who had faced considerable stress over the last few years. While I do not dispute that Mrs Pearce has experienced a number problems including a difficult custody arrangement, strained relationships with her daughters, financial difficulties and medical problems related to her feet, I found that at the Hearing, Mrs Pearce spoke quite clearly and articulately.
I further observed that Mrs Pearce, while in the witness box, was asked to read a document. She claimed she could not because she did not have her reading glasses so I lent her mine. She at first she refused to read until advised that if magnification was all that she required, she could adjust the distance at which she held the document.
I was also mindful that Mrs Pearce remained at school until the equivalent of Year 10, and while she did ask for certain questions to be repeated at the Hearing, I found that it was not because she did not understand what was being asked, but rather it was an attempt to play for time.
I do not accept that Mrs Pearce gave AUSTUDY the information required which was that her daughter was living with Mr Wade, but in any event, even if I accepted that AUSTUDY did not act upon the information given by Mrs Pearce regarding Emily's living arrangements, I was not satisfied that such a failure was the sole reason why an overpayment of AUSTUDY occurred in the relevant period.
In this respect, I was guided by decision of this Tribunal in Re Gerhardt and Department of Employment, Education and Training (AAT 10941, 17 May 1996) which held as follows in respect to the word "solely":
"Applying those ordinary meanings to the sub-section mean that the Secretary must waive the right to recover the proportion of the debt that is attributable only to the Commonwealth's administrative error. The Secretary's duty to waive does not extend to those debts which are attributable to errors or other factors which are independent of the Commonwealth's administrative error. It makes no difference that those other errors or factors are minor."
This approach was approved by the Tribunal in De Neumann and Secretary, Department of Social Security (AAT 11280, 4 October 1996).
Notwithstanding that I have found that the overpayment of AUSTUDY did not result from sole administrative error, I have also considered for the purpose of completeness whether the Applicant received the payments in good faith.
I am mindful that the issue of good faith has been considered by the Federal Court in Secretary, Department of Education, Employment, Training and Youth Affairs v Prince (1997) 50 ALD 186. Finn J, in determining the question as to whether the payments were received in "good faith", held (at 189), that the concept of "good faith" as envisaged by the Act was concerned:
"… with the state of mind of a person concerning his or her receipt of the payment: if that person knows or has reason to know that he or she is not entitled to a payment received – ie is not entitled to use the moneys received as his or her own – that person does not receive the payment in good faith. Absent such knowledge or reason to know, the receipt would be in good faith."
I was mindful that even Mr Howard in his closing submissions noted commenting on Ms Wade's evidence that there were "family secrets" involved. Mr Peek submitted in his closing submissions, and I accepted, that Emily had been less than candid in giving her evidence.
I therefore found that the payments of AUSTUDY were not received in good faith because both Mrs Pearce and Ms Wade knew they were not eligible for the payment due to the level of income of Mr Wade's household and the fact that Emily resided with him at the relevant time. I noted Mrs Pearce's evidence that she received and read, albeit fleetingly, the AUSTUDY Guide.
Thus, having found that the overpayment of AUSTUDY to the Applicant could not be waived pursuant to section 289 of the SYA Act because the payment could not be attributable solely to the administrative error of the Commonwealth, for the purposes of completeness, I turned to consider whether waiver was appropriate pursuant to section 43B of the SA Act.
WHETHER WAIVER OF THE DEBT WAS APPROPRIATE PURSUANT TO SECTION 43B OF THE SA ACT
Section 43B of the SA Act outlines the circumstances for waiver of debt for administrative error post 1 July 1998:
"43B Waiver of debt arising from error
Administrative error
(1)Subject to subsection (2), 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.
Note: Subsection (1) does not allow waiver of part of a debt that was caused partly by administrative error and partly by one or more other factors (such as error by the debtor).
Circumstances under which subsection (1) applies
(2)Subsection (1) only applies if:
(a) the debt is not raised within a period of 6 weeks from the first payment that caused the debt; or
(b) if the debt arose because a person has complied with an obligation to provide information or documents to the Department under this Act, the debt is not raised within a period of 6 weeks from the end of the period within which the person was required to comply with that obligation;
whichever is the later.
…
Proportion of a debt
(4) For the purposes of this section, a proportion of a debt may be 100% of the debt."

I was mindful that this provision discloses a similar compulsory requirement on the Secretary, to waive a debt where the overpayment has resulted solely from Commonwealth error and for which the payments were received in good faith.
However, for the reasons outlined in respect of section 289 of the SYA Act, I am not satisfied that the overpayment of AUSTUDY to Mrs Pearce resulted from administrative error of the Department.
I turned then to consider whether Mrs Pearce had received the payments in good faith. I took into account her difficulties with regard to her family and comprehended that she felt in need of financial assistance to involve herself with Emily's education and welfare. I accepted that Mrs Pearce visited Centrelink offices for advice on several occasions and that intent on finding a way of funding Emily's needs, she also went to the offices which administered AUSTUDY.
I was not satisfied however that Mrs Pearce disclosed the circumstances in full, in particular that Emily Wade did not at the relevant time reside with her. I am convinced on the balance of probabilities that Centrelink officers and staff administering the AUSTUDY scheme would have informed Mrs Pearce in the application for AUSTUDY, of the need to take into account the income of the parent with whom Emily resided. It is not in dispute that that parent was, at the relevant time, Emily's father, and that the income in his household would have made Emily ineligible for AUSTUDY.
I am satisfied therefore to the requisite standard that the payments were not received in good faith. The claim that the overpayment resulted solely from administrative error, therefore, is not made out.
I then turned to consider whether waiver was appropriate as a result of the special circumstances surrounding Mrs Pearce's application and receipt of AUSTUDY.
WHETHER WAIVER WAS APPROPRIATE DUE TO SPECIAL CIRCUMSTANCES PURSUANT TO SECTION 290C OF THE STUDENT AND YOUTH ASSISTANCE ACT 1973 OR SECTION 43F OF THE STUDENT ASSISTANCE ACT 1973
In the alternative, the Applicant's case can be considered on the basis as to whether waiver was appropriate due to the special circumstances of the claim. I have therefore considered section 290C of the SYA Act and section 43F of the SA Act in light of the evidence before me. These sections provide a discretion for the consideration of "special circumstances", which may result in the Secretary waiving a debt. There is quite a deal of case law on this area and the discretion is exercised by taking into account all the circumstances of the case, a global view or aggregate of all the circumstances of the case.
Section 290C of the SYA Act provides as follows:
"Waiver in special circumstances
290C The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:
the debt did not result wholly or partly from the debtor or another person knowingly:
making a false statement or a false representation; or
failing or omitting to comply with a provision of this Act; and
there are special circumstances (other than financial hardship alone) that make it desirable to waive; and
it is more appropriate to waive than to write off the debt or part of the debt.
Note: Section 287 allows the Secretary to write off a debt on behalf of the Commonwealth."
In considering whether "special circumstances" apply in this case, I was mindful that the Applicant received AUSTUDY on behalf of her daughter for the period from 1 January 1997 to 3 July 1998. As outlined above, Ms Wade was not eligible for AUSTUDY based on the fact that the income of her father's household, the parent with whom she resided, exceeded the threshold for her to qualify for AUSTUDY during that period. Therefore, unless "special circumstances" could be found to justify making a decision that all or part of the payment should be waived due to "special circumstances", then the debt remains a debt owing to the Commonwealth.
I find, relying on authority in Re Beadleand Director General of Social Security (1984) 6 ALD 1, Re Krzywakand Secretary, Department of Social Security (1988) 15 ALD 690, Re Ivovic and Director-General of Social Services (1981) 3 ALN N95, and Colaiacolo and Secretary, Department of Social Security (AAT 2109, 24 April 1985) that unless the circumstances of Mrs Pearce's case are so "unusual, uncommon or exceptional" that I would consider the recovery of the overpayment of AUSTUDY would be "unjust, unreasonable or otherwise inappropriate", then I am precluded from exercising the discretion to hold that all or part of the debt should be waived.
In this respect, I noted that the Tribunal held in Ivovic (supra) at N96-97 that:
"Whilst it would be unwise, if not impossible, to attempt to lay down any precise delineation of what may amount of 'special circumstances' … the use of the word 'special' is, we think, intended to allow the decision-maker the fullest opportunity to consider the particular circumstances of each case … The reference to special circumstances 'by reason of which' a person liable 'should be released' requires, in our view, that there must exist in the circumstances of the case, a factor or factors which justify the making of an exception in whole or in part to the principle of liability which the Act otherwise establishes."
Similarly, in Re Beadle and the Director-General of Social Security (1984) 6 ALD 1 at 3, the Tribunal held that
"An expression such as 'special circumstances' is by its very nature incapable of precise or exhaustive definition. The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional. Whether circumstances answer any of these descriptions must depend upon the context in which they occur. For it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases. This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special."
This approach was approved by the Federal Court on appeal in Re Beadle and Director-General of Social Security (1985) 60 ALR 225. The Court did note, however, that they would place less emphasis on the dictionary definition of special.
This approach to the issue of "special circumstances" has been reinforced in the following cases that have been decided since Beadle (supra) including: Secretary, Department of Social Security v Hulls (1991) 22 ALD 570, Secretary, Department of Family and Community Services v Smith (1991) 23 ALD 277, Commonwealth v Daniels (1994) 33 ALD 111, Secretary, Department of Social Security v Banks (1990) 20 ALD 19 and Secretary, Department of Social Security v Ellis (1997) 24 AAR 535.
I then turned to consider the totality of the circumstances surrounding Mrs Pearce's receipt of AUSTUDY payments on behalf of Emily, and her claim that "special circumstances" should be found in her case to waive all or some of the debt.
Mr Howard submitted for the Applicant that the "special circumstances" that the Tribunal should consider included the fact that Mrs Pearce was heavily reliant on staff of AUSTUDY at the time she was filling out the application in late 1996. He also submitted that her relationship with her ex-husband had been very strained since their separation, and the loss of custody of her daughters since 1991 had been quite difficult for the Applicant. He added that the relationship between Mrs Pearce and her daughters was not good during this time.
In this regard, I was mindful of the Applicant's evidence that she required counselling during this period to help her work out how to see her daughters. I further noted also that Mr Howard in a letter to Mr Peek dated 29 March 2001 outlined the matters which he submitted, gave rise to "special circumstances" in Mrs Pearce's case:
"The major setbacks Elizabeth experienced from 1988 to 1996 which contributed to her deteriorating emotional and physical state included:
·A breakdown of her first marriage which ended with physical abuse and an acrimonious divorce in 1988;
·Entry into a second marriage to Mervyn Pearce in 1990 which resulted in isolation from her extended family. Conflict between Elizabeth, Mervyn and her 2 daughters quickly developed with Mervyn leaving home on a number of occasions out of frustration with Elizabeth's erratic and, at times, violent behaviour.
·Loss of custody of her 2 daughters, Emily and Clarissa, to her first husband, John Wade, in 1991 as a result of an unsuccessful custody defence in the Family Law Court at Sydney …
·Limited access to her daughters who were living with her father at Bermagui from 1991 to 1995 due to court restrictions, geographical distance and difficulty funding travel and accommodation costs. Conflict and stress increased over this period as Mr Wade frustrated Elizabeth's attempts to arrange access visits …
·The realisation by Elizabeth in 1996 that her youngest daughter no longer wished to have any contact with her.
·Failure of Elizabeth and Mervyns Amway business in 1996 after 2 years of considerable effort and expense in striving to develop it.
·An inability to hold down casual employment for extended periods due to stress, limited skills and inability to develop workable relationships throughout 1995 to 1996, Elizabeth began to experience increasing pain from bilateral foot problems … which have added to her stress and prevented her from staying with casual jobs requiring time on her feet. Medical consultations were put off at the time due to financial contraints. She has recently undergone surgery but is still in considerable pain and suffering insomnia. Two further operations have been specified but are on hold until funds have been saved to pay her share."

Mr Howard also queried why the Department would waive a smaller debt in the amount of $338. on the basis of "special circumstances", and not the one subject of this claim. He said that the Applicant's position was exactly the same in both cases, and that they had provided the same information regarding the Applicant's health and emotional problems. He said further that the only difference between the two debts was that one was called AUSTUDY and the other Youth Allowance.
Mr Peek submitted in Respondent's Submissions in Relation to Waiver Under Section 43F of the Student Assistance Act 1973 dated 10 April 2001 that:
"In support of the application of section 43F of the Act [and section 290C of the SYA Act] to the overpayment, the applicant has submitted to the Tribunal evidence in relation to a chronic foot disorder she suffers. In a covering submission it is submitted that this, along with difficulties in her family situation and financial difficulties she was experiencing constitute special circumstances which make it desirable to waive the debt.
It is submitted by the respondent that there is not a sufficient link between these circumstances, which appear to have arisen many years before and after the debt, and the circumstances in which the debt arose, to make it desirable to waive the debt. While acknowledging there is no "time limit" on the circumstances which could be considered to invoke this provision it is noted that the orders granting custody of the applicant's children were made in June 1991 and, while her foot problem has persisted for many years, her operation appears to have taken place last year. There is no evidence of what if any impact these circumstances had on the circumstances in which the applicant completed the AUSTUDY applications and received payment."
Mr Peek further submitted that:
"It could not be said to be desirable to not require repayment of the overpayment by the applicant on the basis of such circumstances, particularly where the debt arose as a result of providing incorrect details in the applications for both 1997 and 1998, resulting in payments of AUSTUDY when the income of Ms Wade's custodial parents precluded her from entitlement. The respondent suggests that it would be viewed as unconscionable by persons in the community who have not received AUSTUDY due to the application of the parental income test for this overpayment to be waived."
Before the waiver may be considered by the decision-maker, it is necessary pursuant to section 290C of the SYA Act to consider whether the debt arose wholly or in part arose from the debtor knowingly making a false statement or representation or failing or omitting to comply with a provision.
In this respect, Mr Peek submitted that the Applicant:
"By completing the AUSTUDY applications in 1997 and 1998 and providing the income details of herself and her present husband when Ms Wade was not living with her … made a false statement or representation. Unless the Tribunal is satisfied that her, and/or Ms Wade, did not know this to be the case, section 43F of the Act [and section 290C of the SYA Act] cannot be applied."
I have already found in the paragraphs above that Mrs Pearce did not apply for or receive AUSTUDY for her daughter on the basis of full disclosure and therefore, in good faith.
Mr Howard also advised that Mrs Pearce had a limited capacity to pay back the debt if the Tribunal found that waiver was not appropriate in the circumstances. In this respect, I noted his comments regarding her financial difficulties at the time she applied for AUSTUDY for Emily and continuing to the present. I do accept the Applicant's evidence that the money was for Emily's use, and to provide for additional tuition and personal needs.
I was mindful however, that financial hardship is not, of itself, sufficient to warrant a waiver on the basis of special circumstances. I respectfully agree with the findings in Beadle (supra) and Director-General of Social Services v Hales (1983) 47 ALR 281 that financial hardship is a circumstance of almost every person who is obliged to rely on income support.
In considering the global view of what might be termed to be "special circumstances" of the case, I turned to consider Mrs Pearce's health issues. Provided to the Tribunal were copies of reports from Dr J Powell, orthopaedic surgeon, dated 24 August 1998, Dr M Giblin, orthopaedic surgeon, dated 1 September 1998 and Dr Gordon Kerridge, orthopaedic surgeon, dated 15 September 1999, which detailed the Applicant's ongoing problem with her feet. I was also provided with a copy of a handwritten note from a general practitioner dated 11 October 2000, and a report from the Liverpool Women's Health Centre dated 5 December 2000, which outlined the depression suffered by the Applicant. The documentation confirmed that she attended counselling for stress and to deal with self confidence issues arising from the loss of custody of her children.
It was clear from the submissions made on her behalf, the medical evidence and Mrs Pearce's evidence that she has a number of medical complaints including problems with her feet, depression and insomnia. However there was no item of a medical nature so compelling that I could find it to be so unusual, uncommon or exceptional as to qualify as a "special circumstance".
Indicia which can also be taken into account in assessing whether
"special circumstances" can be found to apply so that waiver of a debt can be made in full or in part are amongst others, incorrect legal advice or changes to legislation which might adversely affect the Applicant. I did not find that the Centrelink or AUSTUDY officers had been anything but helpful to Mrs Pearce and did not find that she had been given incorrect information by any such officer or anyone else. Indeed I have already said above that the debt arose because she did not disclose her circumstances and those of Emily's residential circumstances in full. I did not find in assessing the total global situation that circumstances existed to enable me to exercise the discretion to find Mrs Pearce could qualify for "special circumstances" so that her debt to the Commonwealth could be waived in full or in part.
For the purposes of completeness, I have also considered whether section 43F of the SA Act is applicable. It provides:
"43F 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; 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."
I am mindful that section 43F of the SY Act essentially mirrors the provisions in section 290C of the SYA and thus, for the reasons outlined above, I find that a discretion to waive the overpayment of AUSTUDY in Mrs Pearce's case for "special circumstances" pursuant to section 43F of the SY Act should not be exercised.
Therefore, in considering all of the evidence before me and the submissions which have been made with regard to Mrs Pearce's circumstances, I am not convinced that the correct and preferable decision would be, in applying the law regarding "special circumstances", to waive all or part of the debt pursuant to section 290C of the SYA Act or section 43F of the SY Act. There has been nothing so unusual, uncommon or exceptional in viewing the totality of circumstances in this case so as to warrant applying the discretion regarding "special circumstances" in favour of Mr Pearce's case.
DECISION
The Administrative Appeals Tribunal affirms the decision of the Respondent as affirmed by the Authorised Review Officer on 30 November 1998 and the Social Security Appeals Tribunal on 6 July 2000 to raise and recover a debt on 1 September 1998 in the amount of $5,235.74 from the Applicant, Mrs Elizabeth Pearce, in respect of AUSTUDY payments she received on behalf of Ms Emily Wade for the period 1 January 1997 to 3 July 1998.

I certify that the preceding 112 paragraphs are a true copy of the reasons for the decision herein of Ms G Ettinger
Signed:         .....................................................................................
  Associate
Dates of Hearing  12 April 2001
Date of Decision  13 June 2001
Applicant's Representative      Mr R Howard, brother (non lawyer)
Solicitor for Applicant               Mr G Peek

[2001] AATA 523

13 June 2001

Key Legal Topics

Areas of Law

Administrative Law

Legal Concepts

Administrative Appeals Tribunal

Judicial Review

Special Circumstances