Stafford and Secretary, Department of Social Services Chief Executive Centrelink (Social security) - [2025] ARTA 318

Stafford and Secretary, Department of Social Services Chief Executive Centrelink (Social security) [2025] ARTA 318 (10 February 2025)

Applicant/s: Mr Stafford

Respondent: Secretary, Department of Social Services

Chief Executive Centrelink

Tribunal Number: 2024/B189365
Tribunal: General Member K Hamilton
Place:Brisbane
Date:10 February 2025

Decision:The Tribunal sets aside the decision under review and remits the matter for reconsideration in accordance with the order that:
·Mr Stafford has been overpaid ABSTUDY in the period 13 October 2021 to 17 May 2024, in the amount of $48,753.20;
·80% of the debt is to be waived on the basis of special circumstances, with effect from the day after the debt was raised; and
·The balance of the debt is to be written off for a period of 2 years from the date of this decision.

Statement made on 07 February 2025 at 4:26pm

CATCHWORDS

SOCIAL SECURITY – ABSTUDY – overpayment – no longer studying and enrolment cancelled – recovery, writing off or waiving – special circumstances – periods of homelessness – notifications not passed on by friend whose street address applicant was using – misunderstanding of requirements – mental health and treatment – administrative delay by Centrelink – notional entitlement to alternate income support – period of consistent work – priority of mental health treatment, securing housing and re-entering workforce – most of debt waived, remainder written off for two years – decision under review sent back with directions

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been omitted from this decision and replaced with generic information pursuant to subsection 350(2) of the Student Assistance Act 1973.

Statement of Reasons

BACKGROUND

This matter concerns a decision made by Services Australia – Centrelink (Centrelink) to raise and recover a debt against Mr Stafford for overpayment of ABSTUDY.
On 12 October 2021 Mr Stafford lodged a claim for ABSTUDY. In that claim, Mr Stafford advised that he would be studying a Bachelor of [Subject] at the [College]. Mr Stafford stated that he would be studying full-time for the entire duration of the course, 20 September 2021 to 22 June 2024.
On 28 September 2023, Centrelink received information from [the college] via data-matching, indicating that Mr Stafford was no longer studying full-time and had been withdrawn from his course on 5 April 2023. Further information received from [the college] indicates that Mr Stafford enrolled to study 2 subjects in trimester 1, 2021 and 2 subjects in trimester 2, 2022, with each subject worth 0.1250 credit points. [The college] advised that a full-time study load for the relevant course was 1.0 equivalent full-time study load per year.
On 22 May 2024, Centrelink made a decision to raise and recover from Mr Stafford an ABSTUDY debt in the amount of $48,753.20 for the period 13 October 2021 to 17 May 2024.
Mr Stafford sought review of that decision, and on 6 June 2024 an authorised review officer (ARO) found Centrelink’s decision to cancel ABSTUDY was correct and that Mr Stafford had a debt of $48,753.20, but found that the amount of $10,000 should be waived from the debt on the basis of special circumstances.
On 27 June 2024, Mr Stafford applied to the Administrative Appeals Tribunal (the AAT) for further review of the decision.
From 14 October 2024, the AAT became the Administrative Review Tribunal (the Tribunal). Under the transitional provisions in the Administrative Review Tribunal (Consequential and Transitional Provisions No. 1) Act 2024 (the Transitional Act), applications for review to the AAT that were not finalised before 14 October 2024 are taken to be an application for review to the Tribunal. The Transitional Act gives the Tribunal the authority to continue and finalise any aspect of the review not already completed by the AAT. This decision and statement of reasons is made by the Tribunal.
The matter was heard on 28 January 2025. Mr Stafford appeared in person and gave evidence under oath. He was represented by [Ms A] of [Legal service]. The Tribunal had regard to relevant documents produced by Centrelink, numbered as pages 1–303, along with written submissions and additional documents filed on behalf of Mr Stafford, numbered by the Tribunal as pages A1–A10.

ISSUES

The statutory provisions relevant to this review are contained in the Student Assistance Act 1973 (the Act).
The issues which arise in this case are:
· Was Mr Stafford overpaid ABSTUDY?
· If so, is there any basis on which recovery of the debt can be waived or written off?

CONSIDERATION

ABSTUDY is paid to recipients pursuant to a non-statutory scheme, with provisions regulating the payment set out in the ABSTUDY Policy Manual (the Manual).
The Tribunal’s jurisdiction in relation to ABSTUDY is derived from Division 2 of Part 9 of the Act, which allows a person to seek review by the Tribunal of specified decisions including “all decisions of an officer under this Act relating to the recovery of amounts paid under a current or former special educational assistance scheme”: paragraph 310(1)(b) of the Act.
ABSTUDY is defined by section 3 of the Act to be a current special educational assistance scheme.
The Tribunal’s review power in respect of ABSTUDY is limited by section 310 of the Act to decisions related to debt recovery. However, in Secretary Department of Employment Education Training & Youth Affairs v Allen [1999] FCA 25, the Full Federal Court confirmed that the Tribunal’s jurisdiction extends to permit consideration of “anterior decisions” – that is, those decisions that are necessary to establish that an overpayment has occurred and the amount of such overpayment.
To be eligible for ABSTUDY for tertiary studies, a person is required to satisfy a number of criteria set out in the Manual, including that they must:
·be studying full-time;
·meet the progress and duration of assistance rules; and
·meet the institution’s requirements in relation to attendance and submission of coursework.

Issue 1 – Was Mr Stafford overpaid ABSTUDY?

Centrelink’s records show that Mr Stafford was in receipt of youth allowance up until 12 October 2021. His youth allowance was cancelled from 13 October 2021 as he was paid ABSTUDY from that date.
Mr Stafford was unable to recall how long he actually studied before ceasing his attendance at [the college]. He said it was not very long before he dropped out due to personal circumstances. Mr Stafford thinks that he studied part-time for one or 2 trimesters, and then deferred his studies entirely for 12 months. There was no evidence before the Tribunal that Mr Stafford completed any of the subjects he enrolled in.
At the end of the 12-month deferral period, as Mr Stafford had not resumed his studies, [the college] cancelled Mr Stafford’s enrolment.
[Ms A] confirmed at hearing that Mr Stafford did not dispute that he was not entitled to receive ABSTUDY in the period 13 October 2021 to 17 May 2024, and that he was therefore overpaid ABSTUDY in the amount of $48,753.20.

Issue 2 – Is there any basis on which recovery of part or all of the debt can be waived?

Part 6 of the Act makes provision for the recovery of overpayments and also prescribes the circumstances in which a debt may not be recovered. Where a person has received a special educational assistance scheme overpayment, this is a debt due to the Commonwealth: sections 38 and 39 of the Act.
Division 3 of Part 6 of the Act provides for the non-recovery of debts in certain circumstances.
Section 43 of the Act allows debts to be written off. If a debt is written off, this means that the debt still exists and may be later pursued, but recovery is deferred given the debtor’s present circumstances.
Section 43A of the Act provides that a debt, or part thereof, may be waived in the circumstances prescribed under sections 43B, 43C, 43D, 43E or 43F. If a debt is waived, this means that recovery of the portion of the debt waived is permanently barred.
In the present case, the only waiver provision of relevance is section 43F, which allows for waiver if:
·the debt did not arise wholly or partly as a result of the debtor or another person knowingly making a false statement or false representation, or knowingly failing to comply with a provision of the Act;
·there are special circumstances, other than financial hardship alone, that make it desirable to waive part or all of the debt; and
·it is more appropriate to waive rather than to write off the debt or part of the debt.
What amounts to a “knowing failure” was considered by the Administrative Appeals Tribunal in the matter of Callaghan and Secretary Department of Social Security [1996] AATA 413 where the Tribunal said (in the context of the Social Security Act 1991) [at 48]:
There is nothing in section 1237AAD which suggests that the word “knowingly” should be given any meaning other than that a person has actual knowledge, rather than constructive knowledge, that he or she is failing or omitting to comply with a provision of the Act. That actual knowledge is to be ascertained by reference to the statements of the person as to his or her actual state of knowledge at the time and to events surrounding the false statement of the act or omission.
However, in Cox and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2011] AATA 350 the Tribunal considered that actual knowledge could be inferred in certain circumstances, stating [at 38]:
Whilst it is clear from this passage that actual (as compared to) constructive knowledge is required, the Tribunal has recognised that the presence of actual knowledge may be inferred from the circumstances where a debtor had the opportunity to gain that knowledge, and there were no obstacles preventing him acquiring that knowledge: see also Anderson and Department of Family and Community Services [2002] AATA 239; (2002) 68 ALD 494, Secretary, Department of Family and Community Services and Temesgen [2002] AATA 1290; (2002) 72 ALD 563 at 564-565 and Balancio and Secretary, Department of Family and Community Services [2003] AATA 466; (2003) 74 ALD 204 at 209.
Special circumstances is not defined in the legislation, but is generally accepted to require that there is something out of the ordinary or unusual about a person’s circumstances, other than financial hardship alone, which set it apart from other similar cases (Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25).
Mr Stafford told the Tribunal that he did not recall attending Centrelink when he first claimed ABSTUDY. He said he had been assisted by his adoptive mother to claim ABSTUDY and he did not (and still does not) understand the requirements of this payment or the difference between Centrelink payments. He remembers that his adoptive mother simply told him that he needed to be on ABSTUDY in order to go to university.
Mr Stafford was questioned at length at hearing as to why, when he was issued with a number of letters that ought to have made it apparent to him that he was required to be studying in order to be paid ABSTUDY, he did not notify Centrelink when he ceased study. Mr Stafford said that he did not receive the letters that were addressed to him at [Location] or at [Street]. The former was his biological mother’s address and Mr Stafford said he had no contact with his biological mother. [Street] was the address of a friend that he used as his address for mail while he was homeless. However, he said that this friend never passed on to him any mail at all.
Mr Stafford acknowledged that he did recall receiving some letters from Centrelink addressed to him at [Address]. This was a place he was renting at the time. These letters from Centrelink, issued between December 2021 and March 2022, variously indicated (among other things) that Mr Stafford:
·was being paid “ABSTUDY – Secondary/Tertiary”;
·was receiving a “relocation scholarship”;
·was being paid an incidentals allowance that was specified to be “to assist with study expenses, eg. books and stationery”;
·was studying full-time at [the college] with an expected end date of 22 June 2024; and
·was required to tell Centrelink if you “stop studying as a full time student”, “do not start a course or do not enrol in a course or the enrolment is cancelled”, or “change study workload (tell us if any subjects are started or stopped or if your enrolment changes) in any way”.
Mr Stafford said that while he appreciates now that there were particular requirements that must be met in order to receive ABSTUDY, at the time he did not understand that his receipt of ABSTUDY was tied to study. He thought that [the college] and Centrelink talked to each other and that Centrelink was paying him the benefit that he was entitled to.
Mr Stafford explained that he has been diagnosed with autism spectrum disorder (ASD), complex PTSD and borderline personality disorder. His treating practitioners have told him that he is at high risk of a psychotic disorder and have placed him on
anti-psychotic medication. Mr Stafford’s PTSD stems from serious physical, emotional and sexual abuse that he was subjected to from the age of [Age]. It causes significant problems for him sustaining relationships and friendships.
Mr Stafford said that his ASD means that he needs to follow consistent behaviours. He said that unless something deviates from an existing pattern, he does not pick up on any problems. Mr Stafford said that it was only when his ABSTUDY was stopped due to his earnings (as his working credits had been exhausted) that he called Centrelink and was informed that he should not have been paid ABSTUDY if he was not studying.
Mr Stafford said his mental health was not great when he started studying. He persisted with part-time study for a while before he stopped study altogether in early 2022 as his mental health deteriorated significantly. He had started having auditory hallucinations at this time. He was also subjected to domestic violence from his then-wife, with her behaviour leading them to be evicted from their unit. He was seeing various doctors and also started seeing a psychologist. He was unable to work or study throughout 2022 due to his declining mental health.
In 2023, Mr Stafford said that his psychologist recommended to him that a job may be good for his mental health. Centrelink’s records show Mr Stafford working consistently from early April 2023 onwards. Mr Stafford said that his employers reported his earnings on his behalf. He has not worked since May 2024 as his mental health declined again and he started experiencing dissociative states that would last for hours.
Mr Stafford said that around March 2023, he and his wife were homeless and living in a van. Mr Stafford relied (and still relies) on an inexpensive gym membership ($20 per month) to access shower facilities. Around September 2023, his wife left him.
Mr Stafford is currently still homeless living out of his van, which is [Number] years old and in poor repair. Mr Stafford said that most weeks he barely scrapes by on his jobseeker payment. If a large bill such as his vehicle registration renewal came in, he would be short in those weeks.
Mr Stafford notes that he has previously attempted suicide by overdosing. A friend had called the police for a welfare check and the police found him in time.
Documents provided by Basic Rights on behalf of Mr Stafford include:
·A letter from [Dr B] of [Health Service] dated 20 December 2024. This letter confirms that Mr Stafford has been diagnosed with ASD, complex PTSD and depression, and was currently seeing a psychiatrist at [Health Service] for potential psychotic disorder and borderline personality disorder. It notes “he has had frequent contacts with our counsellors and GPs for mental health concerns. Due to Mr Stafford’s longstanding diagnosis of ASD since childhood, he will always struggle to navigate complex government systems and administrative processes that other adults would find straightforward. This includes Centrelink. It appears his debt is in part related to a misunderstanding of what Centrelink expected of him at the time.”
·An undated letter from [Organisation] confirming that Mr Stafford is currently experiencing homelessness.
·A letter dated 7 November 2024 from [Mr C], social worker with [Mental Health Services]. This letter noted that Mr Stafford advised that “he stopped studying due to his poor relationship with his wife, and that he was not aware that he needed to notify Centrelink at the time of the change. He also disclosed that he was struggling with his mental health during this time.” [Mr C] notes previous mental health referrals in 2020, when Mr Stafford presented as “agitated, reporting hearing voices, engaging in
self-harm, and disclosed being a victim of childhood abuse.” He also noted a further presentation to hospital in 2022 and that Mr Stafford was living in an emergency youth shelter before his admission to [Facility] (a short-term subacute residential mental health facility).
[Ms A] submitted that Mr Stafford experiences a high level of vulnerability and disadvantage. He has limited experience in engaging with Centrelink and the complexities of Centrelink’s payments were too much for him to understand given his mental health. He put his trust in Centrelink to ensure he was paid correctly, and incurring this debt has been very bad for his anxiety. Mr Stafford said the debt has made him physically ill from anxiety and he cannot see any way that he could pay off this debt in his lifetime.
[Ms A]’s submissions also drew attention to an acknowledgement by the ARO that Centrelink had received information from [the college] on 28 September 2023 showing that Mr Stafford was no longer enrolled in his course. However, it took almost 8 months for Centrelink to act on this information, which was not actioned until 22 May 2024. This resulted in a sizeable increase to Mr Stafford’s debt in the meantime. [Ms A] submitted that Centrelink’s administrative delay should be a factor that is taken into account in considering any waiver for special circumstances.
I am of the view that Mr Stafford had been provided with information in Centrelink’s letters that, objectively, indicated that his ABSTUDY payment was predicated on him remaining enrolled and engaging in tertiary studies. However, I accept that Mr Stafford’s mental health conditions, his ASD, his experience of childhood abuse as well as domestic violence at the hands of his spouse and his homelessness made him particularly vulnerable, such that he was not able to understand the nature of the payment he was receiving or the obligations placed on him to continue receiving that payment. The ARO found that Mr Stafford did not recklessly or knowingly fail in his notification obligations. I am likewise satisfied, given Mr Stafford’s acute vulnerabilities, that the application of the special circumstances discretion is not excluded due to any knowing failure on Mr Stafford’s part.
I am satisfied that Mr Stafford’s circumstances, as set out in paragraph 32 to 39 above, are sufficiently unusual or uncommon such that it is appropriate to waive part of the debt.
In making an assessment of the extent to which the debt ought be waived, I take into account not only Mr Stafford’s poor mental health, his homelessness and other vulnerabilities, but also Centrelink’s failure to promptly act on information received from [the college] confirming that Mr Stafford was no longer enrolled, which resulted in him incurring a debt that was significantly larger than it would have been had Centrelink stopped Mr Stafford’s ABSTUDY when it received that information.

I also take into account the fact that Mr Stafford would, had he not been receiving ABSTUDY, have been entitled to receive an alternate income support payment such as jobseeker or youth allowance, at least in the periods when he was not working. “Notional entitlement” is a relevant factor which can be considered in deciding whether there are special circumstances justifying waiver of a debt (Oberhardt v Secretary, Department of Employment, Education and Workplace Relations [2008] FCA 1923).
However, I also note that Mr Stafford was working quite consistently for approximately 12 months from April 2023 onwards, often earning quite a good income each fortnight. The income reduction that would apply to jobseeker or youth allowance would have been much higher than any income reduction applied to his ABSTUDY payment. While I accept that Mr Stafford continued to struggle with his mental health over this period, his capacity to undertake full-time employment suggests that he may also have had the capacity to engage sooner with Centrelink regarding his payments. Balancing these factors against Mr Stafford’s clear vulnerabilities, I find it appropriate to waive 80% of his debt on the basis of special circumstances.
This means that Mr Stafford will still owe a debt to Centrelink, however the balance of the debt owing will be less than $10,000. I acknowledge that this is still a significant sum for Mr Stafford to repay, which he does not currently have capacity to repay and which is likely to contribute to his ongoing anxiety. Given Mr Stafford’s present circumstances of homelessness and the need to stabilise his mental health, I find that it is appropriate to write off the balance of the debt for a period of 2 years. This will enable Mr Stafford to prioritise his mental health, and to hopefully secure stable housing and re-enter the workforce as his mental health improves.

DECISION

The Tribunal sets aside the decision under review and remits the matter for reconsideration in accordance with the order that:

Mr Stafford has been overpaid ABSTUDY in the period 13 October 2021 to 17 May 2024, in the amount of $48,753.20;
80% of the debt is to be waived on the basis of special circumstances, with effect from the day after the debt was raised; and
The balance of the debt is to be written off for a period of 2 years from the date of this decision.

Date(s) of hearing:	Tuesday, 28 January 2025
Representative for the Applicant:	[Ms A]