Sara and Secretary, Department of Families, Community Services and Indigenous Affairs
[2006] AATA 708
•18 August 2006
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2006] AATA 708
ADMINISTRATIVE APPEALS TRIBUNAL )
) No Q2005/711
GENERAL ADMINISTRATIVE DIVISION )
Re RODRIGO SARA Applicant
And
SECRETARY, DEPARTMENT OF FAMILIES, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal Ms M J Carstairs, Member Date18 August 2006
PlaceBrisbane
Decision The Tribunal varies the decision under review to provide as follows:
§ that part of Rodrigo Sara’s debt that relates to payments of youth allowance after 15 December 2004 is waived.
In all other respects the Tribunal affirms the decision under review.
.................[Sgd].............................
M J Carstairs
Member
CATCHWORDS
SOCIAL SECURITY – overpayment of youth allowance - recovery - waiver - special circumstances
Social Security Act 1991 s23(4), s534B(2),1237AAD
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Ryde v Secretary, Department of Family and Community Services [2005] FCA 866
Groth v Department of Social Security (1995) 40 ALD 541
Secretary, Department of Social Security v Hales (1998) 153 ALR 259
Schulze and Secretary Department of Family and Community Services [2004] AATA 705
Secretary Department of Family and Community Services and Varhegyi [2005] AATA 635
REASONS FOR DECISION
18 August 2006 Ms M J Carstairs, Member 1. Mr Rodrigo Sara is a university student who was receiving youth allowance in 2004. Early in semester 1 of 2004, he was driving in Brisbane when he ran over a pedestrian. Mr Sara tried to render assistance, but the man died at the scene of the accident. From all accounts it seems to have been a tragically unavoidable accident. It took place late at night, in rainy weather, and the man was clad in dark clothing.
2. After the accident Mr Sara battled a post traumatic stress reaction, and needed psychological intervention throughout 2004. On medical advice Mr Sara reduced his university workload. However Mr Sara’s entitlement to youth allowance (as a student) required him to maintain a certain number of units in his enrolment, expressed in the legislation as a percentage of a full-time enrolment. He dropped below this level without telling Centrelink that he had done so. He now has incurred a youth allowance overpayment of some $6,174.
3. Mr Sara’s overpayment continued past the end of that academic year, that is, well after Mr Sara reduced his workload in semester 2 of 2004. He was paid youth allowance part way into first semester of 2005, until March 2005.
4. Mr Sara has acknowledged at the Social Security Appeals Tribunal hearing and before this Tribunal that he mistakenly believed that he remained a full-time student, and hence eligible for youth allowance payments, despite reducing his enrolment, and that this led to the debt occurring. He had accepted the medical advice to reduce his study units from 6 units to 5 units, but he mistakenly believed that his enrolment in 6 units represented a full-time load, and believed that in reducing to 5 units he was still doing ¾ of a full-time workload. However, the full-time load at Queensland University was 8 units.
5. It follows from this acknowledgement of his error, that Mr Sara does not dispute that he has a debt. Nor does he dispute its amount. I accept Mr Sara’s concessions on matters relating to the debt and its calculation. I note that the debt calculations were comprehensively set out in the documents before the Tribunal. I accept their accuracy. Accordingly, I have limited my consideration to the question of recovery of the debt, in particular the issues relating to one ground of waiver, based on special circumstances, a ground available under s1237AAD of the Social Security Act 1991 (the Act).
ISSUES
6. Section 1237AAD provides for waiver of the whole or part of a debt if there are special circumstances (other than financial hardship alone) that make it desirable to waive. The central issues in Mr Sara’s case are whether his are special circumstances, and whether the discretion should be exercised in his case.
BACKGROUND
7. Mr Sara is now aged twenty five. He was born in Chile and came to Australia in 1985, aged about six. He commenced his university studies in 1998 enrolling as a full-time student in a combined undergraduate degree in science and law.
8. Mr Sara completed his law degree in 2005, but as yet has not completed the science studies in biotechnology. This degree has an Honours component which he intends to undertake on a full-time basis in 2007. At the time of the hearing Mr Sara was in employment, earning about $30,000 per annum, and studying part-time. Despite having a job, Mr Sara’s financial circumstances are not good, as detailed further below. He has no entitlement to youth allowance, or to Austudy. He has exceeded the time periods for which he can be paid by Centrelink as a student (for reasons that are not entirely related to the circumstances giving rise to the debt. They relate also to the length of time he has been studying and to being over 25). He has borrowed money from his mother to fund his living expenses after he lost his entitlements in 2005 and she had supported him with his medical expenses for counselling and psychiatric appointments before this. His mother expects to be repaid the sum of over $10,000 that she has lent to him so that he could continue his studies.
9. The Social Security Appeals Tribunal reached the conclusion that Mr Sara was in very straitened financial circumstances and any requirement upon him to repay the debt immediately would simply place an extra burden on his mother from whom he has borrowed money to subsist. Accordingly that Tribunal decided to write-off Mr Sara’s debt until 3 October 2007, two years from the date of their decision. (Write-off is a procedure under the legislation to defer repayment for a time). They reasoned that it was likely that in 2007 Mr Sara would be professionally employed, earning good money and able to repay Centrelink.
10. The respondent did not challenge the correctness of the Social Security Appeals Tribunal’s decision on write-off.
CIRCUMSTANCES AT THE TIME OF THE DEBT
11. There is no need to recount the details of the car accident, as appear in the police report at the time (T65). Suffice to say that these tragic circumstances, with the victim dying at the scene with Mr Sara in attendance, are well within the recognised circumstances that would lead to the severe stress reaction that Mr Sara then experienced subsequently.
12. Mr Sara sought help from the Queensland University Student Support Services and the University Medical Centre. The Deputy Director of Student Support Services, Mr Ian Mackenzie (T65), in a report prepared in support of an application for Mr Sara to sit special examinations, stated that Mr Sara initially had attempted to deal with issues from the tragedy on his own. Medical reports, including a report from the psychiatrist who treated Mr Sara, referred only to a significant medical condition (T65). I raised with Mr Sara that the terms of medical reports seemed vague, and he said he believed that medical practitioners were concerned not to attach a psychiatric label, which possibly might create problems for his future career.
ARE THERE SPECIAL CIRCUMSTANCES TO JUSTIFY WAIVER?
13. Both parties addressed the case by making submissions about the exercise of the discretion for special circumstances, with the respondent acknowledging that the discretion was one open to be considered, because Mr Sara’s debt had not arisen knowingly on his part. Section 1237AAD of the Act provides:
The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:
(a) the debt did not result wholly or partly from the debtor or another person knowingly:
(i) making a false statement or 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.
14. I accept that it is right to conclude that Mr Sara did not knowingly fail or omit to comply with provisions in the Act.
15. The discretion addresses any circumstances that distinguish a particular case from the usual, in order to justify a departure from the rule by which money paid from the public purse incorrectly should be repaid by the person who received it. In Ryde v Secretary, Department of Family and Community Services [2005] FCA 866 at [26], the Federal Court held that the use of the term special circumstances in the legislation demonstrated an intention to proscribe waiver in ordinary cases and any hardship or unfairness should be sufficient to justify departure from the general rule.
16. The case law relating to the exercise of the discretion acknowledges that the expression special circumstances is incapable of precise or exhaustive definition: Re Beadle and Director-General of Social Security (1984) 6 ALD 1 at 3. The discretion is exercised by attempting to balance that expectation that moneys incorrectly paid from the public purse will be recovered, while being mindful of the different circumstances in which those who have incurred social security debts may find themselves: Secretary, Department of Social Security v Hales (1998) 153 ALR 259.
17. In Hales French J said that the discretion enables a flexible response to the wide range of situations which could give rise to hardship or unfairness in the event of a rigid application of a requirement for recovery of a debt (at p 267). The discretion has also been described as one to avoid unfairness: ….. that something unfair, unintended or unjust had occurred...some feature out of the ordinary (Groth v Department of Social Security (1995) 40 ALD 541 at 545).
18. Mr Sara claimed that a number of matters took his case out of the ordinary and made his circumstances special. His health issues and his inability to manage his anxiety had repercussions on his studies, and on his ability to function generally. His problems were compounded when his delay in finishing the combined degree resulted in other unanticipated effects. Intervening changes to the barristers’ admission requirements in Queensland meant that he will now have to complete a Legal Practice Course and be admitted before being eligible to apply for the Bar Practice Course. If he had graduated in 2004 the procedures were not so onerous. He now will incur additional fees and delays before being able to work in the legal profession.
19. At the time of the hearing however, as noted above, he was earning about $30,000 per year and studying part-time. He told me that this employment will not continue while he undertakes his Honours year full-time next year. Although he is now earning, he has little disposable income because he must repay his mother. He said that after rent and food, fares and health care, he has only $160 per week left over, from which he is repaying his mother and trying to put some money aside to complete his Honours year in 2007. I concluded that there is only a temporary improvement in his financial circumstances, compared with when he attended the Social Security Appeals Tribunal. This temporary change does not call for a departure from the decision taken by the Social Security Appeals Tribunal to write off Mr Sara’s debt until 2007.
20. Mr Sara said that had he been aware of the effect of reducing his enrolment in semester 2 of 2004 he would have applied to Centrelink for a temporary incapacity exemption. This would have allowed him to continue receiving youth allowance while undertaking a reduced study load. It seems likely that his circumstances were appropriate ones for granting an exemption. Mr Sara had a youth allowance agreement in place for his studies until June 2005.
21. If Mr Sara had applied for a temporary incapacity exemption at the time he reduced his study load he would have discharged his disclosure obligations to Centrelink but also he could have continued receiving youth allowance as if full-time. Such an exemption enables a student in special circumstances to continue on a reduced work load without the financial disadvantage of losing youth allowance payments. Youth allowance cannot be paid after age 25, unless the person was receiving youth allowance while undertaking full-time study before turning 25: s543B(2) of the Act. Had Mr Sara successfully made this application, it would have meant that when he turned 25 in October 2004, he would have come within s543B(2) and so continue to receive youth allowance.
22. As the Social Security Appeal Tribunal correctly pointed out, Mr Sara could not obtain the benefit of s543B(2) after he reduced his workload in semester 2 of 2004, because, having done so, he was no longer entitled to youth allowance. This is because s23(4) of the Act provides that a person is taken to be receiving a social security payment only while that payment is payable to them. In Mr Sara’s particular circumstances his reduced workload, not disclosed to Centrelink, meant that youth allowance was not payable.
23. Mr Sara pointed out that as a consequence of not having the temporary incapacity exemption he missed out on three months’ of youth allowance that he would otherwise have received between March and June 2005 (when his initial agreement was due to end). Instead he had to borrow the $10,000 from his mother to cover his living costs in 2005.
24. Mr Sara submitted in his statement and in oral evidence that when he realised that his course completion date was going to be delayed he attended the Toowong Centrelink office on 15 December 2004 (T19) to discuss his course and to discuss obtaining an extension of his youth allowance activity agreement, due to expire in June 2005. Mr Sara had turned 25 in October 2004, some 9 weeks before attending the Toowong office in December 2004.
25. It appears that this attendance at Centrelink and Mr Sara’s request for an extension set in train an enquiry about his enrolment status in 2004 and 2005.
26. I looked carefully at the record of Mr Sara’s attendance at the Toowong office of Centrelink on 15 December 2004. The record of that attendance shows that Mr Sara advised that he had to withdraw from subjects in semester 1 and 2 because of trauma from a motor vehicle accident, and that Mr Sara provided medical reports. Discussion took place about his study plans and future meetings with the University to determine his study plan in 2005. The Centrelink officers note then recorded:
Study plan – ie how long he expects he will need his YAL to be extended and include his preferred course after B laws complete – so we can determine if it is possible to change over before turning 25yo.
27. What is surprising about this note is that Mr Sara had turned 25 some two months earlier, a matter that should have been readily apparent to a Centrelink officer dealing with a person’s Centrelink records in a personal interview. In my view, this was a critical interview and evidenced a degree of administrative error in the handling of Mr Sara’s case.
28. A closer examination of his study-load in the context of how long he had been studying, with an appreciation that he was already 25 years of age, would have alerted staff to problems with continued payment of youth allowance to him.
29. It is important to take into account that Mr Sara still had health issues at this time. He said that he was not coping even in 2005; the medication was not working effectively and he found that a counselling regime implemented in 2005 was more effective (exhibit A1). Mr Sara delayed in providing information requested in the December interview to Centrelink until about February, but it seems to me that this too should be understood in the context of his ongoing medical condition. I note that on 7 February 2005 he telephoned Centrelink to say he was confused about the information that he was asked to provide.
30. Ms Dole submitted, referring to the Tribunal decisions in Re Schulze and Secretary Department of Family and Community Services [2004] AATA 705 and Re Secretary Department of Family and Community Services and Varhegyi [2005] AATA 635 that it would be an incorrect approach to the discretion under s1237AAD of the Act to incorporate a consideration of any notional entitlement to another payment in its exercise. I agree with the reasons expressed in those decisions that there is specific reference in other sections of the Act to particular payments (not including youth allowance) where notional entitlement is recognised. However I do not understand either Deputy President in these decisions to be stating that there are no circumstances in which notional entitlement can be considered in the context of the discretion for special circumstances. There are, after all, no fetters on this discretion, except as expressed in s1237AAD itself.
31. I concluded that Mr Sara’s combination of circumstances is special. He continues to struggle with the burden of repaying the debt to his mother that came about after he lost his entitlement to income support. The completion of his studies has been substantially delayed by the occurrence of this tragic accident.
32. It cannot be right that a young person should go through a tragic experience of this magnitude; struggle to repair his damaged mental state while maintaining as much of his studies as was medically advisable; suffer all the adverse consequences to his studies and career plans; lose his income support; incur other debt and additionally bear the burden of this Centrelink debt. It is relevant that had Mr Sara not made his simple error about his workload he could have applied for a temporary incapacity exemption. In other words he did have a notional entitlement to a payment. It is also significant that when he came into the Centrelink office in December 2004, his case was not properly considered at that time. This failed opportunity led to his youth allowance continuing from December 2004 until March 2005 while he was not entitled to payments.
33. Against these special circumstances that favour the exercise of the discretion it is important to take into account that Mr Sara failed in his responsibilities to inform Centrelink about any changes to his studies. Clearly he was struggling with his reactions to the accident, but he was able, with medical advisers and counsellors to sort out his university studies, sit deferred examinations and it seems, achieve impressive results. In other words, it would not have been beyond him to comply with his obligations to keep Centrelink informed earlier than he did. There is no question however that he was attempting to comply with his reporting obligations when he attended the Centrelink office in December 2004.
34. I consider that, taking into account those matters relevant to the exercise of the discretion, that a proper balance is struck by waiving that part of the debt that relates to the period from 15 December 2004. As will be evident from the reasons above, it seems to me the interview that took place in December was the point at which, if proper consideration had been given to Mr Sara’s circumstances then, the remainder of the overpayment would not have occurred.
35. Accordingly I waive that part of the debt that relates to the payment of youth allowance after 15 December 2004. I otherwise affirm the decision of the Social Security Appeals Tribunal, including their decision to write off Mr Sara’s debt (as will be recalculated on the basis of these reasons) until October 2007.
DECISION
36. The Tribunal varies the decision under review to provide as follows:
§ that part of Rodrigo Sara’s debt that relates to payments of youth allowance after 15 December 2004 is waived.
In all other respects the Tribunal affirms the decision under review.
I certify that the 41 preceding paragraphs are a true copy of the reasons for the decision herein of Ms M J Carstairs, Member
Signed: .....................................................................................
J Lauriston, Admin AssistantDate/s of Hearing 16 May 2006
Date of written submissions 30 May 2008
Date of Decision 18 August 2006
The Applicant was self represented
For the Respondent Ms S Dole, Departmental Advocate
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