Pham and Secretary, Department of Family and Community Services

[2004] AATA 1378

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 1378

ADMINISTRATIVE APPEALS TRIBUNAL        Nº V2004/663

GENERAL ADMINISTRATIVE  DIVISION

Re:         DAVID PHAM

Applicant

And:SECRETARY,

DEPARTMENT OF FAMILY AND

COMMUNITY SERVICES

Respondent

DECISION

Tribunal:       Regina Perton, Member

Date:             22 December 2004

Place:            Melbourne

Decision:      The Tribunal affirms the decision under review.

(sgd) Regina Perton
  Member

SOCIAL SECURITY ‑ Austudy ‑ cancellation ‑ discontinuation of approved course ‑ failure to notify ‑ overseas course of study not approved ‑ qualifying study ‑ overpayment ‑ debt to Commonwealth ‑ waiver of debt ‑ write‑off of debt 

Social Security Act 1991 ss 568, 569, 569A, 569B, 1236, 1237

Student Assistance Act 1973 ss 3(1), 5D

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

REASONS FOR DECISION

22 December 2004  Regina Perton, Member

1.      This is an application by David Pham (the applicant) for review of a decision of the Social Security Appeals Tribunal (SSAT) dated 1 March 2004.  The SSAT affirmed the decision of a delegate of the Secretary to the Department of Family and Community Services (the respondent) dated 6 December 2002 that the applicant was ineligible for Austudy between 19 March 2001 and 7 January 2002 and that he owed $7,420.89 to the respondent.

2.      At the hearing on 26 October 2004, the applicant represented himself.  Ms Elizabeth King, a Centrelink advocate, represented the respondent.  

3. The Tribunal received into evidence the documents lodged under s 37 of the Administrative Appeals Tribunal Act 1975 (T1‑T44).

HISTORY OF THE APPLICATION

4.      The applicant, who was born 4 September 1972 and is 32 years old, had completed part of a Bachelor of Applied Science (Chinese Medicine) degree at RMIT University (RMIT), when he decided to take a year off to undertake a related course in Vietnam.  RMIT gave him a year’s leave of absence for the 2001 academic year.   He was given a letter confirming the leave of absence, from 18 March 2001 to 31 December 2001, on 26 March 2001.

5.      The applicant left Australia on 10 April 2001 and undertook a postgraduate course in cardiovascular disease at the University of Medicine and Pharmacy in Ho Chi Minh City.  He returned to Australia on 9 March 2002.

6.      The applicant had been receiving Austudy payments from the commencement of his Bachelor of Applied Science course.  On 23 December 2000, Centrelink wrote to the applicant advising him of a slight increase in the rate of Austudy payments.  In the letter, he was advised of the requirement to contact Centrelink within 14 days about any change of circumstances.  The specified circumstances included any variation in his enrolment and the requirement to notify Centrelink before any departure overseas.

7.      The applicant did not inform Centrelink that he had been granted leave of absence or that he was intending to leave Australia to undertake study in Vietnam for the 2001 academic year. 

8.      Centrelink next wrote to the applicant on 4 April 2001, which was six days before the applicant left Australia.  He was advised of an increase in the rate of Austudy and reminded again of the need to advise Centrelink if he varied his enrolment or planned to leave Australia.

9.      On 11 September 2001 and 6 November 2001, Centrelink undertook data matches of university enrolment records, Austudy recipients and records of departures from Australia held by the Department of Immigration and Multicultural and Indigenous Affairs (DIMIA).  This revealed that the applicant had left Australia on 10 April 2001, and had withdrawn from the subjects for which he had been enrolled at RMIT for the 2001 academic year; but was still receiving Austudy payments.

10.     On 20 November 2001, Centrelink wrote to the applicant at his last known address, requesting that he confirm whether he had left Australia on 10 April 2001.  The applicant was asked to contact Centrelink by telephone on a designated number by 11 December 2001 or his payments would be suspended.  There was no response to that letter.  There was no response to a further letter sent to the applicant on 18 December 2001 asking that he contact Centrelink by 9 January 2002 concerning his enrolment at RMIT.  He was warned that if he did not make contact, his Austudy payments may cease, a penalty could be imposed and that he may have to repay any Austudy payments he received after he ceased being a full‑time student.

11.     The respondent cancelled the applicant’s Austudy payments with effect from 7 January 2002.  The respondent also determined that the applicant had been overpaid Austudy from 19 March 2001 to 7 January 2002, as he had not been a full‑time student in an approved course, and raised a debt of $7,420.89.

12.     Following his return to Australia on 9 March 2002, the applicant attended an interview at Centrelink on 22 March 2002 where he told Centrelink that he thought that RMIT would inform Centrelink of his leave of absence and departure from Australia to do a course overseas. 

13.     On 24 March 2002, the applicant wrote to Centrelink stating that he now realized that he had unintentionally breached social security law and explained that he was in financial hardship.  He asked that his case be reconsidered.

14.     On 25 March 2002, the applicant applied to RMIT seeking credits towards his Bachelor of Applied Science degree for the subjects studied overseas; and these were eventually granted.  However, RMIT was not prepared to enrol him as a student for the 2001 academic year as he was not undertaking a course with the university while he was overseas.   

15.     On 10 May 2002, a Centrelink officer from the Debt Recovery Unit determined that the applicant was not required to pay back the debt on the basis that Centrelink had not sent any letters to him advising him of his obligation to advise Centrelink of any change of circumstances. 

16.     In late 2002, there was a re‑examination of the applicant’s case, including Centrelink and RMIT’s records.  The cancellation of Austudy payments and the debt of $7,420.89 were reinstated on 6 December 2002 and the applicant informed on 9 December 2002.   

17.     On 22 February 2003, the Centrelink delegate wrote to the applicant with a detailed explanation as to why she had reversed her previous decision to negate the debt.  She indicated that her previous decision in May 2002 was void as a second review revealed that the applicant had actually been sent a letter informing him of his obligations.  She explained the Austudy requirement that the applicant be enrolled as a full‑time student of an eligible institution and the limited circumstances where students studying overseas could still receive payments.  She advised the applicant that a person in his situation, who was granted leave of absence from an Australian university and later obtained credits, did not meet the legislative requirements for Austudy payments while he was overseas.

18.     On 25 February 2003, an Authorised Review Officer (ARO) affirmed the delegate’s decision that a debt of $7,420.89 be imposed.

19.     On 18 March 2003, the applicant lodged an application for review with the SSAT.  His application was initially dismissed on 5 June 2003 as he had failed to respond to letters sent to him by the SSAT.  However, he lodged a further application for review with the SSAT on 24 November 2003 which the SSAT considered.  On 1 March 2004, the SSAT affirmed the decision that the applicant had a recoverable debt to the Commonwealth of $7,420.89. 

20.     An application for review with this Tribunal was lodged on 2 June 2004.  His application was out of time but he applied for and was granted an extension of time.

21.     The sole issue before the Tribunal is whether the applicant owes a debt to the Commonwealth, and if so, whether the debt should be waived or written off. 

EVIDENCE

22.     The applicant told the Tribunal that he thought that RMIT would notify other relevant authorities, when it granted him a leave of absence to do the course in Vietnam.  He said that he did not know that he was required to separately notify Centrelink.  He said that he was not trying to defraud Centrelink and did not know that he was not entitled to Austudy while continuing his studies in Vietnam.  He said that the knowledge and skills he acquired through the course in Vietnam was of benefit to Australia. 

23.     The applicant said that he has now finished his degree in Chinese Medicine and is presently working as a first aid officer in a shopping centre.  He said that he is hoping to set up his own practice when he can afford to do so.  The applicant said that he borrowed money from his family to pay for the cardiovascular course in Vietnam in 2001 as well as a second Vietnamese course he has since undertaken in gynaecological matters.

24.     The applicant said that he does not recall having seen any Centrelink correspondence advising him of his obligation to inform it of any change to his studies or of plans to travel overseas.  He stated that he had not become aware of any of the letters sent to him by Centrelink in late 2001 and early 2002 until he returned to Australia in March 2002.  He confirmed that he has been living at the same address in Richmond for several years.  He told the Tribunal that he shares his Ministry of Housing flat with a Buddhist nun, who was living there while he was overseas.  He said that there were letters waiting for him when he returned from Vietnam, including some from Centrelink and from his bank.  The applicant said that he did not ask his tenant to forward his mail to Vietnam or to open anything that looked official.  He said that he had not talked to her on the telephone while he was away.

25.     The applicant said that he hoped that the debt could be waived as he had worked very hard to succeed in his studies and that he deserved some recognition of his efforts.  He said that he is very grateful to this country, to which he migrated as a young adult.  He completed his secondary schooling here and with English as his second language, worked hard at his tertiary studies.  The applicant said that he is aware of people cheating the system, but that he was not someone who would do so.

26.     Under cross examination, the applicant said that he could not recall receiving five or more letters from Centrelink between 1998 and 2001.  He said that he could not remember seeing Centrelink letters telling him of the amount of Austudy he was receiving.  He said that he would go to the Automatic Teller Machine and check his bank account balance, whenever he wanted to know how much he had been paid.  He said he did not know how much he was getting on a fortnightly basis.  The applicant said that he did not have his Australian mail redirected to Vietnam, or to his brother who lives in Melbourne. Nor did he ask anyone else to check the contents of his letters.  He stated that he communicated with his friends by email while he was away and did not speak to his tenant at all for the whole year.  

27.     The applicant said that his current earnings varied according to the number of hours worked.  He said that he usually has about $200 per week left after paying rent, utilities, food and the like.  He stated that he owes his family about $50,000.  He wishes to repay them as quickly as possible, but they are not forcing him to do so.  The applicant said that he had saved about $4,000 which is held in a Westpac bank account.

CONSIDERATION OF THE ISSUES

28. Section 568 of the Social Security Act 1991 (the Act) sets out the general requirements for qualifying for Austudy as follows:

568.  Subject to this Subdivision, a person is qualified for an austudy payment in respect of a period if, throughout the period:

(a)       the person satisfies the activity test (see Subdivision B); and

(b)       the person is of austudy age (see Subdivision C); and

(c)       the person is an Australian resident.

29.     The requirements of the activity test are set out in s 569(1) of the Act as follows:

569.(1)  Subject to subsection (2), 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 (see section 569A).

30.     Section 569A sets out the meaning of the term undertaking qualifying study:

569A.  For the purposes of this Part, a person is undertaking qualifying study if:

(a)       the person:

(i)is enrolled in a course of education at an educational institution; or

(ii)was enrolled in the course and satisfies the Secretary that he or she intends, and has (since no longer being enrolled) always intended, to re-enrol in the course when re-enrolments in the course are next accepted; or

(iii)was enrolled in the course and satisfies the Secretary that he or she intends, and has (since no longer being enrolled) always intended, to enrol in another course of education (at the same or a different educational institution) when enrolments in the other course are next accepted; and

(b)the course in which the person is enrolled, or intends to enrol, is an approved course of education or study (see section 569B); and

(c)the person is a full-time student or a concessional study-load student in respect of that course (see sections 569C and 569D); and

(d)the person satisfies the progress rules (see sections 569G and 569H).

31.     The term educational institution is defined in s 3(1) of the Student Assistance Act 1973:

educational institution means:

(a)      a higher education institution; or

(b)      a technical and further education institution; or

(c)      a secondary school; or

(d)any other institution (including an educational institution), authority or body, that is in Australia and that, in accordance with a determination by the Minister, is to be regarded as an education institution for the purposes of this Act.

32.     Section 569B of the Act sets out how to find whether a particular course is an approved course as follows:

569B. For the purposes of paragraph 569A(b), a course is an approved course of education or study if it is a course determined, under section 5D of the Student Assistance Act 1973, to be a secondary course or a tertiary course for the purposes of that Act.

33.     Neither the institution attended by the applicant in Vietnam, nor the course he undertook there in 2001, are approved by the Minister for Education, Science and Training pursuant to the Student Assistance Act 1973. Therefore, the applicant was not undertaking qualifying study as prescribed in s 569A and therefore, he was unable to satisfy the activity test prescribed in s 568 of the Act.

34.     The applicant was granted a leave of absence from his approved university course on 18 March 2001.  His Austudy payments were cancelled on 7 January 2002.  The Tribunal finds that during the period 19 March 2001 to 7 January 2002, the applicant did not qualify for Austudy payments.  The Tribunal is satisfied that the calculations undertaken by the respondent are accurate and finds that the debt of $7,420.89 was correctly raised.

35.     Section 1236 of the Act provides for a write‑off of the debt in certain limited circumstances: namely, if it is irrecoverable at law, the debtor has no capacity to repay the debt, the debtor’s whereabouts are unknown or it is not cost effective for the Commonwealth to take action to recover the debt.  In this matter, the applicant is working and has accumulated savings.  The Tribunal therefore finds that the applicant has the capacity to repay the debt, and the debt is not irrecoverable at law.  Therefore, there are no grounds to write‑off the debt.

36.     Section 1237A of the Act provides for waiver of a debt arising from administrative error:

1237A.(1)   Subject to subsection (1A), the Secretary must waive the right to recover the proportion of a debt that is attributable solely to an administrative error made by the Commonwealth if the debtor received in good faith the payment or payments that gave rise to that proportion of the debt.

1237A.(1A)  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 a notification obligation, the debt is not raised within a period of 6 weeks from the end of the notification period;

whichever is the later.

37.     The applicant was advised by Centrelink at least twice, before he left Australia to undertake his studies in Vietnam, that he was required to advise Centrelink of any variation of his studies within 14 days of the change; and to inform Centrelink of any travel overseas before departure.  The applicant failed to do so.  Regardless of the reason for his failure to follow the instructions in the letters, the evidence indicates that Centrelink did notify him of his obligations.  The Tribunal finds that the debt is not attributable solely to an administrative error by the Commonwealth.  As a result, the debt cannot be waived under s 1237A(1A) of the Act.  

38.     Section 1237AAD of the Act provides for waiver of the debt in certain other circumstances:

1237AAD.  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 false representation; or

(ii)failing or omitting to comply with a provision of this 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.

39.     The applicant gave evidence that he would have informed Centrelink about his travel overseas and the variation to his studies had he been aware of the need to do so.  The Tribunal is satisfied that the applicant was genuine in his belief that RMIT would pass on the pertinent information to Centrelink.  However, as his failure to respond to the SSAT’s initial correspondence and the lateness of his application to this Tribunal demonstrate, he has had a somewhat cavalier attitude to official letters.  His decision not to have someone else look at, or forward to him, the correspondence received at his home for the eleven months he was in Vietnam, further reinforces that impression.  Nonetheless, the Tribunal is satisfied that the applicant is careless rather than dishonest.  The Tribunal finds that the applicant did not knowingly make false statements or representations to Centrelink, nor did he deliberately fail to comply with a provision of the Act.  He therefore meets the criteria in s 1237AAD(a) of the Act.

40.     In Re Beadle and Director‑General of Social Security (1984) 6 ALD 1, the Tribunal held that the special circumstances, referred to in s 1237AAD(b) of the Act, must be unusual, uncommon or exceptional.  The Tribunal accepts that the applicant has been a diligent student who migrated to Australia and subsequently undertook senior secondary and tertiary studies in a language that was not his first language.  It is aware of the difficulties that persons in his situation must overcome to achieve success at tertiary level.  The Tribunal also accepts that the applicant’s course in Vietnam was relevant to his later studies and his proposed future career.  It also appreciates how hard it is for the applicant to save up enough to open up a practice and appreciates his wish to repay his sister who financed his studies in Vietnam.   However, the Tribunal is not satisfied that the situation that the applicant finds himself is vastly different from other social security recipients who have received overpayments.  The Tribunal is not satisfied that the circumstances in this case are unusual, uncommon or exceptional.  Therefore, they do not constitute special circumstances (other than financial hardship alone).  Hence, the waiver provisions of s 1237AAD of the Act do not apply.

41.     Therefore, the applicant owes a debt of $7,420.89 to the respondent. 

DECISION

42.     The Tribunal affirms the decision under review. 

I certify that the forty-two [42] preceding paragraphs are a true copy of the reasons for the decision of:

Regina Perton, Member

(sgd)       Olympia Sarrinikolaou

Clerk

Date of hearing:  26 October 2004

Date of decision:  22 December 2004
Advocate for applicant:               Self represented
Advocate for respondent:            Ms E. King, Centrelink