Stoddart and Secretary, Department of Family and Community Servic Es

[2003] AATA 293

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2003] AATA 293

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No   N2002/956

GENERAL ADMINISTRATIVE DIVISION		)
Re		Colleen STODDART

Applicant

And Secretary, Department of Family and Community Services

Respondent

DECISION

Tribunal Ms N Isenberg, Member

Date28 March 2003

PlaceSydney

Decision The decision under review is set aside and the Tribunal substitutes therefor in relation to the period from 23 June 2001 to 24 July 2001 that the debt is waived.  The Tribunal remits the matter to the Department for calculation of the debt for the period 25 July 2001 until 23 August 2001.

[Sgd] Ms N Isenberg
  Member

CATCHWORDS

SOCIAL SECURITY – Youth Allowance - debt raised due to overpayment of Youth Allowance - Applicant ceased to be full time student - two parts of debt raised over two periods – whether debt could not be waived if attributable solely to administrative error - Applicant did not receive payments in good faith - whether special circumstances exist -special circumstances found to exist for first part of debt - first part of debt waived - no grounds for waiving second part of debt.

LEGISLATION

Social Security Act 1991 sections 540, 541, 543A, 1223 and 1237AAD

CASE LAW

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

REASONS FOR DECISION

28 March 2003   Ms N Isenberg, Member

DECISION UNDER REVIEW

1.      The decision under review before the Administrative Appeals Tribunal (“the Tribunal") was the decision of the Respondent, the Secretary, Department of Family and Community Services ("the Department") dated 29 August 2001 (T15) as affirmed by the Authorised Review Officer on 25 February 2002 (T20) and the Social Security Appeals Tribunal (“the SSAT") on 12 June 2002 (T2), to raise and recover a youth allowance debt of $1450.50 arising from an overpayment of youth allowance during the period 15 June to 23 August 2001.

BACKGROUND

2.      The Applicant had been a fulltime school student during 2000 and was in receipt of youth allowance. In January 2001 she commenced fulltime study at TAFE and her youth allowance was continued.  When the TAFE course concluded in mid June 2001 she was no longer entitled to youth allowance as a fulltime student.  She commenced work in July 2001.  Youth allowance continued to be paid until 23 August 2001.

3.      Prior to the Hearing, the Respondent had received information from TAFE that the Applicant’s course did not conclude until 22 June 2001.  This resulted in an extension to the period for which the Applicant had been understood to be entitled and the alleged debt reduced to $1284.64.

ISSUES BEFORE THE TRIBUNAL

4.      Whether the Applicant qualified for youth allowance in the period 23 June 2001 to 23 August 2001.

·     Whether youth allowance was overpaid, such that a debt of $1284.64 is owed.

·     Whether any of the debt amount ought not to be recovered.

APPEARANCES

5.      A hearing was held before the Tribunal on 13 February 2003 at which the Applicant appeared without representation but with the assistance of her (foster) mother Mrs Carmel Ferguson and her (foster) sister Ms Janine Ferguson. The Respondent was represented by Marian Buckley, an advocate from the Advocacy and Administrative Law Team at Centrelink.

LEGISLATION

6.      The relevant legislation in this matter is the Social Security Act 1991 (“the Act”), in particular sections 540, 541, 543, 543A, 1223, and 1237AAD. These sections, so far as is relevant, provide as follows:

Section 540 Qualification for youth allowance—general rule

Subject to this Subdivision, a person is qualified for a youth allowance in respect of a period if:

(a) either of the following applies:

(i) throughout the period the person satisfies the activity test (see Subdivision B) or is not required to satisfy the activity test (see Subdivision C);

(ii) the person is a CDEP Scheme participant (see section 1188B) in respect of the period;

(b) throughout the period the person is of youth allowance age (see Subdivision D); and

(c) throughout the period the person satisfies any requirements relating to Youth Allowance Activity Agreements that apply to the person under Subdivision E; and

(d) throughout the period, the person:

(i)is an Australian resident; or

(ii)is exempt from the residence requirement within the meaning of subsection 7(7).

Note 1: Subdivision G provides for prospective qualification for youth allowance.

Note 2: Division 2 sets out situations in which youth allowance is not payable even if the person qualifies for it.

Section 541 Activity test

General

541(1) Subject to section 541A and subsection (3) of this section, a person satisfies the activity test in respect of a period if:

(a the person satisfies the Secretary that, throughout the period, the person is undertaking full-time study (see section 541B); or

(b) the person satisfies the Secretary that, throughout the period, the person is actively seeking, and willing to undertake, paid work in Australia (other than paid work that is unsuitable for the person); or

(c) the person takes reasonable steps, throughout the period, to comply with the terms of a Youth Allowance Activity Agreement applying to the person; or

(d) the person takes reasonable steps to comply, throughout the period, with a requirement of the Secretary notified to the person under subsection (2).

Note 1: See section 541D on paid work that is unsuitable.

Note 2: See section 541F on taking reasonable steps.

Section 543 Youth allowance age

For the purposes of this Part, a person is of youth allowance age if the person:

(a) has attained the minimum age for youth allowance (see section 543A); and

(b) has not yet attained the maximum age for youth allowance (see section 543B).

Section 543A Minimum age for youth allowance [see Note 13]

General

543A(1) Subject to this section, the person has attained the minimum age for youth allowance if the person:

(a) is at least 16 years old; or

(b) is 15 years old and is independent.

Note: For independent see section 1067A.

Persons not yet 18 years old

543A(2) Subject to subsections (2A) and (2B), a person who satisfies paragraph (1)(a) or (b) but is not yet 18 years old is not taken under subsection (1) to have attained the minimum age for youth allowance unless the person:

(a) has completed the final year of secondary school, or an equivalent level of education; or

(b) is undertaking full-time study; or

(c) has agreed to enter into a Youth Allowance activity agreement.

543A(2A) Subject to subsection (2B), subsection (2) does not apply to the person if the Secretary considers that the person does not have the capacity to undertake full-time study or training because he or she:

(a) is ill or has had an accident and the incapacity is, or is likely to be, of a temporary nature; or

(b) has a physical, psychiatric or intellectual disability, or a learning difficulty such as attention deficit disorder; or

(c) is pregnant and the expected date of confinement is within 6 weeks; or

(d) has given birth within the previous 6 weeks; or

(e) has been in full-time employment for 6 weeks or more within the last 13 weeks; or

(f) has been refused enrolment and no other education or training place is available within a reasonable distance; or

(g) is required to provide full-time care for a family member who is incapacitated due to illness or accident and the incapacity is, or is likely to be, of a temporary nature; or

(h) has suffered a personal crisis such as the death of an immediate family member, a marriage breakup, family dislocation or physical, emotional or sexual abuse; or

(i) is homeless and unable to obtain stable accommodation; or

(j) has suffered a major disruption of their home such as fire damage, flooding, earthquake damage, vandalism or burglary; or

(k) suffers from alcohol or drug abuse sufficient to cause intermittent or temporary absences from full-time study or training; or

(l) is engaged in part-time work, education, training or a combination of these for not less than 20 hours per week; or

(m) is a refugee whose capacity to undertake full-time education is reduced because:

(i) the person has suffered torture, imprisonment or other traumatic circumstances; or

(ii) lacks sufficient English skills; or

(iii) is recently arrived and lacks stable accommodation; or

(n) is the subject of a community service or juvenile justice order which reduces the person's capacity to engage in full-time education; or

(o) will become 18 years old within three months; or

(p) is receiving Commonwealth funded intensive assistance for jobseekers or State, Territory or community provided case management approved by the Secretary or, where no intensive assistance or case management place is available to the person, is suitable for and agrees to undertake intensive assistance or case management; or

(q) is in other circumstances which, in the opinion of the Secretary, make it unreasonable for the person to be in full-time education or training.

Section 1223 Debts arising from lack of qualification, overpayment etc. [see Note 13]

1223(1) Subject to this section, if:

(a) a social security payment is made; and

(b) a person who obtains the benefit of the payment was not entitled for any reason to obtain that benefit;

the amount of the payment is a debt due to the Commonwealth by the person and the debt is taken to arise when the person obtains the benefit of the payment.

Section 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 a 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.

Note: Section 1236 allows the Secretary to write off a debt on behalf of the Commonwealth.

EVIDENCE: Documents

7.      The Tribunal had before it documents lodged pursuant to section 37 of the Administrative Appeals Tribunals Act 1975 ("the T-documents"), which the Tribunal took into evidence. In addition, the following documents were tendered:

Exhibit	Description	Date
A1	Letter from Carmel Ferguson	Received 20 September 2002
A2	Letter from Hawkesbury District Health Service Ltd	11 September 2002
A3	Academic Transcript	6 July 2001
A4	Letter from Mat Flynn Aftercare Resource Centre	5 February 2003
R1	Statement of Facts and Contentions	6 February 2003
R2	Fax from TAFE	13 January 2003
R3	Centrelink Computer Printouts	6 February 2003

ORAL EVIDENCE

8.      The Applicant, her mother and sister all gave sworn evidence.  Cross-examination was conducted on behalf of the Respondent.  Questions were also put to the witnesses by the Tribunal.

9.      Mrs Ferguson told the Tribunal that the Applicant had come to their family as a troubled 14 year old, and had come a long way in the nearly four years she has been with them.  She completed her School Certificate in 2000, achieving results in the 60s - 80s. At the end of that year she enquired about undertaking a TAFE course, commencing in January 2001.  She successfully undertook the course at the Campbelltown campus.

10.     Mrs Ferguson said that ‘a few days after the course finalised’ she, the Applicant and her daughter all went to the Centrelink office at Windsor near where they live.  There they told one of the counter officers at reception that the Applicant sought a travel concession card because she had finished her course and was then looking for jobs.  The Applicant said she already had a student travel concession card but that was due to expire at the official conclusion of the course, a few days later  Ms Ferguson confirmed that she also was seeking a travel concession card that day and was aware that student travel cards were to the exact date the course was to officially finish. 

11.     All confirmed this account and that no computer entry was made at the time of the attendance. The Applicant said she was told that she could not have a travel concession card but there was no explanation why this was the case.

12.     Mrs Ferguson and the Applicant agreed that TAFE reported (Exhibit R2) that the course officially finished on 22 June 2001. However, as the Applicant had finished all the course work she no longer had to travel daily from Windsor to the Campbelltown campus, as she was not required to attend after Friday 15 June.  They estimated that they had attended Centrelink on or about Monday 18 June.

13.     From then on, for the next month, the Applicant and her sister travelled daily all around the area, usually driven by Mrs Ferguson, applying for numerous jobs.  The Applicant said she also searched the Centrelink computer, on the internet and looked in local papers for jobs.  On 21 June 2001 she attended Wesley Employment at Windsor (T23/69) for the first time.  On 23 July 2001 Wesley Employment referred her to IGA.  She undertook their test and on 25 July 2001 she commenced work there.  She remains in their employ.

14.      In cross-examination it was brought to the attention of the Applicant and Mrs Ferguson that the Applicant’s youth allowance had been cancelled in December 2000 (T6).  They surmised that this was because the Applicant had finished her School Certificate in November and had not returned to school.  When Mrs Ferguson attended Centrelink and informed them that that the Applicant was to go to TAFE in the new academic year the youth allowance was re-instated (T7).

15.     Both the Applicant and her mother confirmed that they were aware that she was obliged to inform Centrelink when she stopped being a fulltime student.  All the correspondence from Centrelink was to this effect.  They were adamant, despite lengthy cross-examination, that they did inform Centrelink on 18 June 2001, and it was Centrelink’s mistake if that information was not recorded. 

16.     The advocate for the Respondent asked the Applicant and her mother if they thought to follow up with Centrelink when youth allowance payments continued to be made.  The Applicant said she was just focussing on looking for a job.  It did not occur to them that payment should have stopped, as it had when the Applicant had ceased school the previous year.

17.     The Applicant and her mother conceded that there was an obligation to repay the amount of youth allowance paid from the time the Applicant started work but they thought it was unfair that she should not be entitled to youth allowance while she was looking for work.  The advocate for the Respondent informed the Tribunal that, the proper course, on receipt to the Applicant’s advice that she had completed studying, was then to have her enter a youth allowance activity agreement.  That would have stipulated obligations such as a minimum number of jobs the Applicant would have to apply for per fortnight.  Assuming she met the requirements of the activity agreement then her youth allowance would have been continued.

18.     They said they knew the payments would stop when she started work.  Mrs Ferguson said that after the Applicant received her first pay, which was only a couple of days after she started work she (Mrs Ferguson) phoned Centrelink to advise them that the Applicant was working.  She said she had to give her daughter’s Centrelink number so assumed they entered the information onto the computer.  She was sure this occurred at the beginning of August.  She said she knew this was important and something she had to phone up about.  When she saw that the Applicant was still getting payments through August she knew they would have to be repaid.  She just assumed that the information she had provided had not caught up with the payments arrangements which she understood to be prepared in advance.  It was noted that that the payments were made to 23 August, whereas the Centrelink entry of 29 August 2001 (T13) purports to record the first notification.  The advocate for the Respondent invited the Applicant and her mother’s attention to that Centrelink computer entry which records:

“A/N ADVISED CEASED STUDYING MID JUNE 2001 AND HAD NOT NOTIFIED US BEFORE THIS. ADVISED THAT SHE DID NOT KNOW THAT SHE HAD TO. WHEN I ADVISED THAT THE OBLIGATIONS RE NOTIFICATION WITHIN 14 DAYS ARE ON THE YAL CLAIM, SHE THEN STATES THAT SHE DID TELL US RECENTLY WHEN SHE CAME IN TO APPLY FOR TRAVEL CONCESSION CARD… APT BOOKED WITH OTO TO DISCUSS POSSIBLE DEBT. NO EXEMPTIONS FOR NOT STUDYING AND UNDER 18 YEARS OLD”

19.     Mrs Ferguson thought it was more likely she who attended as the Applicant was probably at work, although, the Applicant could have attended as she did not start work until 11 am on Wednesdays.  Mrs Ferguson said the entry was incorrect in that they had previous informed Centrelink when they had attended seeking the travel concession card, in mid June.  In fact the document notes that she brought this prior attendance to the officer’s attention at the time.

20.     The Applicant presently earns $9.63 per hour before tax.  She works 38 hours per week and netts $306.10.  From this she pays $100 per week in board, $10 union fees, $10 savings, $30 for her phone card and $10-$20 on her bookclub subscription.  She buys all her own clothes, including those she buys specifically for work, because her employer only issues its staff with aprons.  She might spend $30-$70 on entertainment such as going to the movies, depending how much she has left over after expenses.

SUBMISSION: Applicant

21.     It was the Applicant’s position that she and her mother and sister had attended the Centrelink office on 18 June 2001 and she had enquired for a travel concession card because she was job-hunting.  (The advocate for the Respondent conceded that the most likely reason a person seeks a travel concession card is because he or she is job-hunting).

22.     It is not her fault if Centrelink did not record this and continued to pay youth allowance.  In any event, while it was conceded that there was an obligation to repay the amount of youth allowance paid from the time she started work, it was unfair that she should not be entitled to youth allowance while she was looking for work.

SUBMISSION: Respondent

23.     The advocate for the Respondent submitted that after the Applicant attended enquiring about a travel concession card she should have followed up with Centrelink when she continued to receive youth allowance payments despite understanding that she was not entitled to them.  The Applicant and her mother already knew from their experience in December the previous year that the consequence of cessation of studies was that entitlement to youth allowance ceased.

24.     As to Mrs Ferguson advising Centrelink in early August that the Applicant was working, the advocate for the Respondent observed that there was no record of this attendance or telephone advice.  Again there was no follow up and payments continued.  It was not until 29 August that Centrelink appears to have been first notified.

25.     In referring to the letters from the Hawkesbury District Health Service Ltd  and the Aftercare Resource Centre (Exhibit A2), the advocate said there was no evidence of any learning difficulties, as evidenced by the Applicant’s School Certificate and TAFE results.  She now lives in a stable and supportive family environment.

26.     The advocate said it was clear that the Applicant’s outgoings are less than her income and so there is a capacity to repay her debt to Centrelink and this could be undertaken with some flexibility.  If Centrelink had made an error, which was not conceded, it was not solely through this error that the debt had arisen.

FINDINGS

27.     In coming to the correct and preferable decision, the Tribunal took into account all the evidence, submissions, case law and relevant legislation.

28. The Tribunal finds that when the Applicant ceased to be a fulltime student she no longer met the quite specific terms of section 543A(2(b) of the Act. Payments made after that time give rise to a debt due to the Commonwealth.

29.     It was clear, however, that the payment to the Applicant of youth allowance falls into two categories – that is, from the day after completion of her course, namely from 23 June 2001 to 24 July 2001, the day before she started work.  The second period is from 25 July 2001 until 23 August 2001 when payments ceased.

30.     As to the first period, it was the evidence of the Applicant, her mother and sister that they had attended the Windsor Centrelink office on 18 June 2001 in order to enquire about a travel concession card on the basis that she was job-hunting.  The advocate for the Respondent conceded that this is the most likely reason a person seeks a travel concession card.  The attendance was not recorded, the Applicant’s file was not noted and hence payments continued.  According to the advocate for the Respondent the proper course, on receipt to the Applicant’s advice that she had stopped studying, was to have her enter a youth allowance activity agreement which would have imposed obligations upon her such as engaging in job-hunting.  If she met these obligations her youth allowance would have been continued, albeit on a different entitlement basis.  Instead, the Applicant continued receiving youth allowance on an incorrect premise, that is, as a fulltime student.  However the evidence was that the Applicant was vigorously pursing job opportunities from the time she was no longer studying.  For example, the evidence was that her first attendance at Wesley Employment was within a week of her last day as a student. 

31. The Tribunal turned to consider the first period. S1236(1A) of the Act provides that a debt may be written off as follows:

1236.(1A)  The Secretary may decide to write off a debt under subsection (1) if, and only if:

(a)       the debt is irrecoverable at law; or

(b)       the debtor has no capacity to repay the debt; or

(c)       the debtor’s whereabouts are unknown after all reasonable efforts have been made to locate the debtor; or

(d)       it is not cost effective for the Commonwealth to take action to recover the debt.

The Tribunal finds that none of these circumstances apply to the Applicant and the debt cannot be written off under this section.

32.     The Tribunal then turned to consider the circumstances under which the debt may be waived.  Section 1237A provides as follows:

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.

Section 1237A provides that a debt must be waived if it is attributable solely to an administrative error made by the Commonwealth which in this case, is Centrelink. 

33.     The Tribunal accepts the evidence of the Applicant, her mother and sister that they attended the Centrelink office in Windsor and advised, in the course of seeking a travel concession card, that she was no longer fulltime student.  The Tribunal accepts that the failure to record the attendance and the information provided was an administrative error by Centrelink.  However there was also evidence before the Tribunal that the Applicant and her family knew from previous experience that payments as a fulltime student ceased when she stopped studying.  She also said that she knew of the obligation to inform Centrelink and, it follows, that she was not entitled to payments.  The Applicant continued to receive payments past that time and for a further 2 months.  It cannot then, in the Tribunal’s view, be said that she received those payments in good faith. 

The Tribunal therefore finds that the debt is not to be waived under section 1237A(1) of the Act.

34.     The Tribunal then turned to consider S1237AAD, as follows:

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.

The Tribunal finds that the debt did not result from the Applicant making a false statement nor from a failure to advise of her change of circumstances.  The Tribunal then turned to consider if there were special circumstances in this case so as to make it desirable that the debt be waived.

35.     The Tribunal has accepted that the Applicant notified Centrelink within days of her ceasing studies.

36.     The advocate for the Respondent informed the Tribunal that on receipt of the Applicant’s advice that she had completed studying Centrelink should have required to have her enter a youth allowance activity agreement.  She would have been obliged to search for jobs, and assuming she did so, her youth allowance would have been continued under Section 543A(2)(c).

37.     It was the Applicant’s evidence, and that of her mother and sister, that in the month after she ceased studying (until she commenced employment) she vigorously searched for a job.  The Tribunal finds, that it is more likely than not, on the available material, that the Applicant would have qualified for youth allowance, albeit on this different basis, for this first period.

38.     The Tribunal also observes the difficulties which the Applicant has experienced as discussed in the reports of Mr Flynn and Ms Bailey (Exhibits A2 and A4).  She is obviously now in a supportive and caring environment and is engaged in work which she finds rewarding.  She is to be commended for her efforts in overcoming  the problems associated with her early life.

39.     The Tribunal finds that the Applicant's likely entitlement to youth allowance on the different basis, together with the evidence of her background and her current efforts at self-improvement, amount to circumstances which are special in that they are "unusual, uncommon or exceptional" and "have a particular quality of unusualness that permits them to be described as special" (Re Beadle and Director-General of Social Security (1984) 6 ALD 1). While it may be that no single one of the circumstances is sufficiently exceptional or uncommon to be described as special, the combination of those circumstances in one unfortunate young woman is indeed unusual.

As to the first period, the Tribunal finds that the debt should be waived under section 1237AAD.

40.     As to the second period, the Applicant does not dispute that she is responsible to repay the amount paid to her during the second period.  The Tribunal agrees that she was aware that she should have advised Centrelink as soon as she commenced her job and that she knew that repayments would have made.  The Tribunal therefore finds that there is a debt in respect of the second period and that there are no grounds for writing off or waiving the debt.

DECISION

41.     The decision under review is set aside and the Tribunal substitutes therefor in relation to the period from 23 June 2001 to 24 July 2001 that the debt is waived.  The Tribunal remits the matter to the Department for calculation of the debt for the period 25 July 2001 until 23 August 2001.

I certify that the 41 preceding paragraphs are a true copy of the reasons for the decision herein of Ms N Isenberg, Member

Signed:         L Bonouvrie
  Associate

Date of Decision  28 March 200
Representative for the Applicant               self
Representative for the Respondent          Marian Buckley