Smith and Secretary, Department of Education, Employment and Workplace Relations
[2009] AATA 866
•10 November 2009
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2009] AATA 866
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2009/3466
GENERAL ADMINISTRATIVE DIVISION ) Re CHRISTOPHER SMITH Applicant
And
SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS
Respondent
DECISION
Tribunal Mr S. Webb, Member Date10 November 2009
PlaceCanberra
Decision The decision under review is affirmed.
.....................[sgd]..................
Mr S. Webb, Member
CATCHWORDS
SOCIAL SECURITY - Austudy - qualifying study - full time study for a particular study period - full time student load during one semester not established - concessional study load not supported by evidence - no qualification for Austudy during one semester - overpayment debt - no grounds to waive or write off the debt in all the circumstances - decision affirmed
Social Security Act 1991 ss 568, 569, 569A, 569C, 569D, 569E, 1223, 1236, 1237A, 1237AAD
Social Security (Administration) Act 1999 s 68
Higher Education Support Act s 73-10
Administrative Appeals Tribunal Act 1975 s 43
Re Secretary, Department of Family and Community Services [2003] AATA 433
Re Coleman and Secretary, Department of Family and Community Services [2002] AATA 772
Dranichnikov v Centrelink [2003] FCAFC 133
Groth v Secretary Department of Social Security (1995) 37 ALD 797
Re Beadle and Director General of Social Security (1984) 6 ALD 1
Secretary, Department of Social Security v Hales (1998) 82 FCR 154
REASONS FOR DECISION
10 November 2009 Mr S. Webb, Member 1. Christopher Smith enrolled in a Library and Information Services Certificate/Diploma course at the Canberra Institute of Technology (CIT) as a full-time student.[1] He claimed and was paid Austudy on that basis. Mr Smith had difficulties with an essential unit in the course; he failed the unit and was denied unit registration in the following semester. In the first semester of 2008 he undertook the unit again, but he did not undertake any other units in that semester. He successfully completed the unit and registered for a full complement of units in the following semester. Mr Smith did not inform Centrelink of this change in his study load. When the change came to light in a data-matching exercise, Centrelink decided that Mr Smith was not a full time student during the first semester of 2008, and raised an Austudy overpayment debt against him. Mr Smith challenged this decision, but his efforts thus far have not been successful. The debt is being recovered from him by deductions from his Newstart Allowance. The matter is presently before the Tribunal.
[1] Exhibit 1.
2. The issues to be decided are:
(a)in the period from 25 February 2008 to 24 June 2008 was Mr Smith paid an amount of Austudy to which he was not entitled, and, if so
(b)is that amount a debt due to the Commonwealth, and, if so
(c)are there sufficient grounds to write-off or waiver recovery of all or part of that debt?
In the period from 25 February 2008 to 24 June 2008 was Mr Smith paid an amount of Austudy to which he was not entitled?
3. It is not disputed that Mr Smith was paid Austudy during the period in issue; nor is it disputed that he was enrolled in only one unit in the first semester of 2008.
4. In Mr Smith’s submission he should be considered to be a full-time student during that semester because the particular unit was an essential prerequisite to further progress in the Certificate IV and Diploma course in which he was enrolled, and the unit was onerous and required a lot of time each week. He says that the unit was not simply one unit like any other in the course – it was a core unit that was essential to further progress in the course.
5. Mr Smith asserts that the normal amount of full-time study for a semester is to be calculated according to section 73-10 of the Higher Education Support Act 2003 (the Support Act). On that basis, he says, his study load should be taken to be that of a full-time student for the first semester of 2008, being at least 0.375 of the full-time study load.
6. Alternatively, Mr Smith asserts that he should be treated as a concessional study-load student because, at the time, he had health problems, including a back condition, dental issues relating to several teeth, a nasty bout of influenza and ongoing mental stress as a result of losing his farms and related legal issues that affected his ability to concentrate.
7. Furthermore, Mr Smith says that there are extenuating reasons why he was studying only one unit in the first semester of 2008: he told me that he encountered difficulties with a particular teacher and was unreasonably denied re-registration in the cataloguing unit in the second semester of 2007. Additionally, Mr Smith says that he faced particular difficulties with the cataloguing tools unit because he is not familiar with computer systems and had to learn these as well as the specific content of the unit. In his submission this difficulty was compounded by his straitened financial circumstances, whereby he was unable to afford an internet connection and this impeded his studies.
8. Finally on this point, Mr Smith asserts that prior to enrolling in the Certificate/Diploma course he was on a Newstart Allowance. For reasons he does not fully understand he was moved onto Austudy. Mr Smith says that his Austudy was erroneously withdrawn in the second semester of 2007, but it was reinstated on review. In or about August 2008 he was moved back on to a Newstart Allowance, while studying full time. In Mr Smith’s submission, on this background, denying him Austudy (or Newstart Allowance) during the first semester of 2008 and raising an overpayment debt against him is akin to a punishment, and it serves no useful purpose. Mr Smith asserts that in order to obtain employment and reduce his reliance on income support payments he requires retraining (he has a background working as a farmer) and that is what he is attempting to achieve and he requires income support to achieve that goal, whether in the form of Austudy or a Newstart Allowance. Mr Smith asserts that raising an overpayment debt against him is unreasonable – if he is not entitled to Austudy, then he should be paid Newstart Allowance, as presently occurs.
9. Mr Smith made additional submissions in writing after the hearing.[2] I have had regard to those submissions, many of which simply reiterate submissions he made during the hearing. Unfortunately for Mr Smith, even though some of his submissions may represent a commonsense approach in lay terms, the applicable legislation results in an outcome different than that for which he contends.
[2] Written submissions dated 4 November 2009, filed on 6 November 2009.
10. During the period in issue Mr Smith was paid Austudy not Newstart Allowance, and there is no evidence that he applied for Newstart Allowance immediately prior to or during the period from 25 February 2008 to 24 June 2008. Thus, there is no basis on which to consider issues concerning Mr Smith’s eligibility for Newstart Allowance during that period and the Tribunal has no jurisdiction in that regard. The Tribunal does not exercise power at large and may only exercise the powers and discretions that were conferred upon the person who made the decision under review for the purpose of reviewing that decision.[3] In the present case, the primary and subsequent decision-makers exercised powers and addressed issues relating to Austudy payments to Mr Smith during the relevant period from 25 February 2008 to 24 June 2008. It is in relation to those matters that the Tribunal has jurisdiction.
[3] Section 43 Administrative Appeals Tribunal Act 1975.
11. Mr Smith’s submissions concerning his age are not made out. The fact that he is presently 58 years old is not a relevant factor in the assessment of his qualification to receive Austudy during the relevant period. The same can be said in relation to Mr Smith’s submissions concerning his farming background and circumstances surrounding the loss of his farms. These are matters to which I will return, however.
12. The qualification criteria for Austudy are set out in Part 2.11A of the Social Security Act 1991 (the Act). The general rule is that a person must satisfy the activity test to be qualified.[4] A person satisfies the activity test if he or she is ‘undertaking qualifying study’,[5] that is relevantly, being a ‘full-time student’ or a ‘concessional study-load student’, and satisfying the progress rules in respect of an approved course of education or study at an educational institution.[6] The term ‘full-time student’ is explicated by section 569C of the Act:
For the purposes of this Subdivision, a person is a full-time student in respect of a course if:
(a)in the case of a person who is enrolled in the course for a particular study period (such as, for example, a semester) – the person is undertaking at least three quarters of the normal amount of full-time study in respect of the course for that period; or
(b)…
[4] Section 568 Social Security Act 1991.
[5] Section 569 Social Security Act 1991.
[6] Section 569A Social Security Act 1991.
The phrase ‘normal amount of full-time study’ is explained by section 569E of the Act to mean, relevantly, the full-time student load for the course.
13. The full-time student load for the course in which Mr Smith was enrolled during the period is a matter for evidence. There is only scant evidence on this point, however. The document at T10 indicates that the full-time student load for the course in which Mr Smith was enrolled is approximately 20 hours per week – a Certificate III course requires 11 units and involves approximately 20 hours per week full-time during one semester; a Certificate IV course requires an additional nine units and involves approximately 20 hours per week full-time over two semesters (including Certificate III); a Diploma course requires an additional seven units and involves approximately 20 hours per week full-time over three semesters (including Certificate IV). Unfortunately, however, the document at T10 is not dated. Mr Smith gave evidence that he undertook full-time study in the first and second semesters of 2007 and the second semester of 2008; by his own account this involved him registering for “about eight” units. The enrolment records reveal that Mr Smith was enrolled in six units in the second semester of 2008, with a total of 400 curriculum hours.[7] Also, by his own account he deliberately decided to register for and concentrate on only one unit during the first semester of 2008. The enrolment records reveal this to be ”Descriptive Cataloguing and Access”, with a total of 80 curriculum hours.[8] I note in passing that Mr Smith asserts the particular unit was “Subject Cataloguing and Classification”.[9] On the evidence in Exhibit 3, this appears to be incorrect.
[7] Exhibit 2, Student Schedule for Semester 2 2008, 25 June 2008.
[8] Exhibit 3, Student Schedule for Semester 1 2008, 4 December 2007.
[9] Written submissions, 4 November 2009, p3.
14. On that basis it appears likely that Mr Smith was engaged in substantially less than the full-time student load for the course. The full-time course load expressed in course units is between 7 and 11 units per semester; Mr Smith was undertaking only one unit in the first semester of 2008. Mr Smith undertook a full-time student load in semester 2 of 2008: a study load of 400 hours for the semester. I have no reason to conclude that a significantly lower number of hours would constitute a full-time student load for that course in semester 1 of 2008. The hourly requirement for the unit in which Mr Smith was enrolled in semester 1 of 2008 was 80 hours or approximately 0.2 of the full-time student load for that semester in that course.
15. Mr Smith asserts that the cataloguing unit he undertook in semester 1 of 2008 “would be considered a ‘semester long course’”. This cannot be supported. There is no evidence that the unit is a stand-alone course; the evidence is that the unit is one component of the Certificate IV course in which Mr Smith was enrolled. Furthermore, a ‘course of study’ for the purposes of subsection 569E(1)(a) of the Act is as defined in Schedule 1 of the Support Act; that definition includes an ‘enabling course’, but that term is defined to exclude ‘a course leading to a higher education award’.
16. Mr Smith asserts that the annualised total of his study load is 480 hours, which exceeds the “annualised average minimum of 404 hours (202 hrs is .75% of the EFTSL per semester of 270 hrs)”. The reference to ‘EFTSL’ appears to be a reference to the ‘equivalent full-time study load’ in section 73-10 of the Support Act. Even though an authorised review officer referred to this provision in a decision concerning Mr Smith’s qualification for Austudy in 2007,[10] it does not assist his case presently. The EFTSL assessment under the Support Act is based on the annual student load in a course. The Austudy qualification criteria in respect of a full-time student must be assessed periodically, “in relation to a particular study period” for the course in which the person is enrolled. I am satisfied that the Certificate IV and Diploma course in which Mr Smith was enrolled in the first semester of 2008 were organised on a semester or sessional basis. The particular unit in which he was enrolled was a semester-long unit. The assessment of his study load must, therefore, be directed to that semester and cannot be spread over a full year. This conclusion is consistent with previous Tribunal decisions on this issue.[11]
[10] T4.
[11] See, for example, Re Secretary, Department of Family and Community Services [2003] AATA 433 and Re Coleman and Secretary, Department of Family and Community Services [2002] AATA 772.
17. I note in passing that in previous discussions with Centrelink officers Mr Smith appears to have conceded that he was in fact a part time student in the first semester of 2008.[12]
[12] T21 folio 133 and T21 folios 136-137.
18. On Mr Smith’s evidence the structure of his course changed at the end of 2007, from four semesters over two years on a full time basis to three semesters full-time and two semesters part-time. This change, however, does not affect the full-time student load in the course in which Mr Smith was enrolled during the first semester of 2008. A previous Centrelink authorised review officer reported that Mr Smith was undertaking 230 hours of relevant study during the second semester of 2007 and that the normal full-time study load for a CIT course is 270 hours per semester, or approximately 18 hours per week.[13] The basis for that assessment is not clear and it does not reflect the full-time student course load for 2008, indicated by the evidence that is before me.[14] Nevertheless, even on that basis, for Mr Smith to satisfy the full-time student load during semester 1 of 2008 the cataloguing unit hourly requirement would need to be 202.5 hours (three quarters of the full-time hourly requirement for that semester). There is simply no probative evidence to support any such finding. The evidence in Exhibit 3 indicates a course study load of 80 hours during semester 1 of 2008.
[13] T4 folio 52.
[14] See, for example, Student Schedule for Semester 2, 2008 in Exhibit 2.
19. I note in passing that the student load in a course refers to the number of units and contact hours required for that course, it does not refer to the number of hours a person may choose to spend privately studying for the particular course.
20. Thus, doing the best with the present evidence, I am reasonably satisfied that by undertaking only one unit in the first semester of 2008, Mr Smith was not undertaking at least three quarters of the normal amount of full-time study in respect of the diploma course in which he was enrolled at that time. That being so, he was not a full-time student during that semester. I so find.
21. That is not the end of the matter, however. Mr Smith asserts that he was a concessional study-load student, because he suffered from back pain and dental problems of long standing. It can be accepted that he suffered from these health problems.[15] This does not assist his case. There are two classes of concessional study-load students: a 25% concessional study-load student and a 66% concessional study-load student.[16] Mr Smith is not within either category. There is no evidence from an appropriate medical practitioner that Mr Smith was not able to undertake the normal amount of full-time study in respect of the course in which he was enrolled because of any physical or psychiatric disability.[17] Considering the medical evidence in Exhibit 3, I am satisfied that his back and dental problems did not prevent him from undertaking the normal amount of full-time study in the course; it appears that the conditions about which he complains were sporadic in nature and they did not prevent him from undertaking full-time study in the course in preceding or subsequent semesters. There is no evidence that he suffered any significant medical incapacity for study during semester 1 of 2008. Furthermore, there is no evidence that Mr Smith could not undertake the course as a full-time student for any reason specified in subsection 569D(5) of the Act. Mr Smith’s submission that the registrar for the course could have made a recommendation that he should undertake less than the normal amount of full-time study in semester 1 of 2008 is simply speculative and not supported by any probative evidence.
[15] Exhibit 4.
[16] Subsections 569D(2) and (3) Social Security Act 1991.
[17] Subsection 569D(4) Social Security Act 1991.
22. I am reasonably satisfied that Mr Smith was not a concessional study-load student in semester 1 of 2008.
23. That being so, it follows that Mr Smith was not qualified to receive Austudy payments during that semester.
24. It is not disputed that Mr Smith was paid $3,731.13 in Austudy payments from 25 February 2008 to 24 June 2008. He was not entitled to those payments and was overpaid $3,731.13. Thus, applying subsection 1223(1) of the Act, the amount of the overpayment is a debt due to the Commonwealth for which Mr Smith is liable.
Are there sufficient grounds to write-off or waive recovery of all or part of Mr Smith’s debt?
25. There is no basis to write-off the debt pursuant to section 1236 of the Act. The debt is recoverable and Mr Smith’s whereabouts are known. It can be accepted that Mr Smith is in straitened financial circumstances: he gave detailed oral evidence about his financial circumstances. Considering that evidence, it appears to me that Mr Smith has only limited capacity to repay the debt by deductions from his Newstart Allowance. He is presently repaying the debt by this means and is making ends meet; he is not in severe financial hardship as a result. It should be noted that the term ‘severe financial hardship’[18] is not simply any financial hardship or difficulty; the term connotes a degree of financial hardship that is severe or substantial or extreme, being greater than straitened financial circumstances but without implying destitution. These are matters of fact and degree to which I will return.
[18] Subsection 1236(1C) Social Security Act 1991.
26. Mr Smith asserts that it is not cost effective for the debt to be recovered from him. I do not agree. The test to be applied is whether it is not cost effective for the Commonwealth to take action to recover the debt. Mr Smith expects that the cost of these proceedings would exceed the sum of his debt. That may be so, but there is a distinction to be drawn between the cost of an action to recover a debt and the cost of review proceedings consequent upon an application by a claimant.
27. Mr Smith asserts that Centrelink was remiss and “cynical” in raising a debt against him at the end of Semester 2 in 2008,[19] and the manner in which his case has been handled “is a direct attack on my ability, financially and otherwise, to concentrate on my studies”.[20] There is no compelling evidence to support these assertions. The evidence reveals that Centrelink conducted a data-matching exercise with the CIT and identified the study-load anomaly in Mr Smith’s Austudy; this was promptly communicated to Mr Smith.[21] As it appears to me, however, Mr Smith failed or omitted to comply with his obligation to inform Centrelink of the change in his study load in semester 1 of 2008. He was notified of this obligation in letters dated 22 August 2007 and 12 December 2007.[22] Those letters, I am satisfied, are notices for the purposes of section 68 of the Social Security (Administration) Act 1999. Mr Smith’s debt is directly attributable to his failure or omission to comply with the notices. Thus, even if there was evidence of an administrative error on Centrelink’s part, in the form of an unconscionable delay for example, and there is not, I would be compelled to find that no part of Mr Smith’s debt is solely attributable to Commonwealth error.[23]
[19] T1 folio 4.
[20] Written submissions, 4 November 2009, p2.
[21] T5 folio 55.
[22] T20 folios 98-105.
[23] Section 1237A Social Security Act 1991.
28. Mr Smith’s assertions that “Centrelink could fairly be accused of maximising its financial gain at the expense of its customers” and “Common law would normally overrule the advisory letters sent out to customers regarding notification period/s” have no merit in fact or law. Mr Smith assertions are not supported by any probative evidence indicating that anything untoward has occurred in his case, with the exception that he did not comply with his obligation to notify Centrelink of a change in his study load. The onus was on Mr Smith to properly comply with his legal obligations and his failure to do so does not render Centrelink’s subsequent actions cynical or unconscionable or inappropriate. If Mr Smith had complied with those obligations, alternative arrangements could have been made and the present overpayment of Austudy may have been avoided. The fact that he did not does not render the raising and recovery of an overpayment debt from him “contrary to the beneficial nature of the legislation”.[24]
[24] Written submissions, 4 November 2009, p2.
29. Mr Smith asserts that his debt should be waived because there are special circumstances in his case that render it desirable to do so. I do not agree. As I have said, it can readily be accepted that Mr Smith is in straitened financial circumstances. He gave evidence that his sole income is derived from Newstart Allowance payments - $456 per fortnight and his expenses include:
Food$80 per week
Bicycle costs $10 per week
Electricity$100 per quarter
Mobile telephone $40 per month
Medications $10 per month
Bankcard repayments $100 per month
Rent$116 per fortnight
On that evidence it appears that Mr Smith incurs regular monthly expenses in the order of $775 against his monthly Newstart Allowance of $912. Additionally it can be accepted that he has other expenses, in the form of course fees, clothing and books for example. Even so, he accepted that he is able to make ends meet, although he does not have much, if any, money left over at the end of each month. He is not able to pay out his Bankcard debt in the order of $5,000. He gave evidence that he has no other present liabilities. He has no significant amounts of cash and no significant assets other than a bicycle and household effects. Mr Smith owns a car, but it is not registered. Mr Smith asserts that his debt is presently being recovered by the deduction of $64 per fortnight from his Newstart Allowance. The evidence before the Tribunal, however, indicates that Mr Smith is having $50.00 per fortnight withheld from his Newstart Allowance.[25] Whichever is correct, Mr Smith asserts that he was not consulted about this and there was no negotiation as to the amount of the deductions. On his evidence it appears that his monthly outgoings may exceed his monthly income by a small margin. Those are matters for Mr Smith to take up with Centrelink if the repayment regime is too onerous.
[25] T7 folio 57.
30. Mr Smith has a farming background. He has little formal education and is presently 58 years old. Mr Smith gave evidence about the circumstances that caused him to lose farms in the Deniliquin area that had been in his family for many years. He explained that this loss was a result of flooding and bank foreclosure was extremely traumatic and is the subject of ongoing litigation. Mr Smith explained that he is hopeful of obtaining compensation from the New South Wales Government in relation to the flooding issue and of getting his farm back. Mr Smith informed me that he claimed an exit grant and has recently obtained a favourable decision in that matter on review – he is hopeful of obtaining a significant lump sum plus accrued interest. Nevertheless, in his submission, these matters have exerted pressure on his mind and have rendered the task of studying more difficult.
31. Mr Smith gave evidence about his health and about members of his family in Canberra.
32. Having carefully considered all of these circumstances and the matters to which Mr Smith has pointed I am not persuaded that his circumstances, separately and in combination, are sufficient to enliven the discretion conferred by subsection 1237AAD(1) of the Act to waive all or part of his debt. Simply put, the particular circumstances are unfortunate for Mr Smith, but they are not the result of anything that is unfair or unintended or unjust, and Mr Smith’s case is not distinguished from so many other cases in which a social security recipient receives a payment or benefit to which they are not entitled and seeks relief on the basis that the particular circumstances are special. Plainly enough, each case may involve specific circumstances that may be distinguished from other cases; in this case Mr Smith is a farmer who lost his farm in unfortunate circumstances, but that does not compel a finding that his circumstances are special. Special circumstances are circumstances that are out of the usual course; being unusual, uncommon or exceptional, or arising where something unfair, unintended or unjust has occurred.[26] One must consider the particular circumstances in which Mr Smith finds himself as well as the circumstances of other social security recipients and the system of administration of the social security scheme as a whole.
[26] See, for example, Dranichnikov v Centrelink [2003] FCAFC 133 at [9]; Groth v Secretary Department of Social Security (1995) 37 ALD 797; Re Beadle and Director General of Social Security (1984) 6 ALD 1.
33. Mr Smith has had the benefit of money paid to him from the public purse without entitlement; waiver of his debt will simply confirm that result and, potentially at least, reinforce any unfairness or injustice that may arise in relation to other cases in which an impecunious social security recipient has been required to repay an overpayment debt. As French J (as he then was) said in Secretary, Department of Social Security v Hales:[27]
The taxpayer is entitled to expect that in the ordinary course money paid to people that they are not entitled to receive will be recovered, albeit in a way appropriate to the circumstances that led to the overpayment and the circumstances of the persons concerned.[28]
[27] (1998) 82 FCR 154.
[28] Ibid at 155.
34. Mr Smith asserts that, at his age recovering the debt from him is tantamount to punishment, especially as there will be “no loss” to the Commonwealth if his debt is waived, as he would otherwise have been entitled to receive a Newstart Allowance. There are a number of things to say about this. Mr Smith did not claim and was not, therefore, entitled to a Newstart Allowance during the relevant period. He claimed and was paid Austudy. His course study load changed and he did not inform Centrelink. As a result he received money to which he was not entitled. The circumstances that led him to this situation are indeed unfortunate insofar as Mr Smith previously lost his farm and his ability to earn a living as a farmer, and he is presently in straitened financial circumstances. He is 58 years old and has a number of health complaints. Nevertheless, requiring a social security recipient who has had the benefit of public money without entitlement to repay those monies as a debt to the Commonwealth is not punitive, it is just and the debt must be repaid in a manner that does not cause undue hardship, unless the circumstances are such that it is desirable to waive the Commonwealth’s right to recover all or part of the debt. Necessarily, for the purposes of section 1237AAD the circumstances must be special circumstances, out of the ordinary course. The particular circumstances in Mr Smith’s case do not accord with that description. Waiving his debt in those circumstances would represent an injustice to other social security recipients who have been required to repay money they received without entitlement.
35. Nevertheless, one can understand Mr Smith’s frustration and confusion regarding his perception that Austudy and Newstart Allowance are simply interchangeable. As can be seen, he has been in receipt of both Austudy and Newstart Allowance at various times during the period he has been studying. All that can be said on this point is that if Mr Smith had complied with his obligation to inform Centrelink of the change in his course study load he may have avoided any overpayment and consequent debt.
36. In conclusion, therefore, I am satisfied that there are no grounds that render it appropriate to waive any part of Mr Smith’s debt. It remains open for Mr Smith, however, to raise and negotiate the rate at which his debt is to be repaid by deduction from his Newstart Allowance.
37. For these reasons the decision under review is affirmed.
I certify that the 37 preceding paragraphs are a true copy of the reasons for the decision herein of Member S. Webb.
Signed: .................... [sgd].....................................
J. Lakin, AssociateDate of Hearing 30 October 2009
Date of Decision 10 November 2009
Applicant self-represented
Advocate for the Respondent Ms J. Furner, Centrelink Legal Services
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