Talsma and Secretary, Department of Education, Science and Training

[2006] AATA 1094

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2006] AATA 1094

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q2006/493

GENERAL ADMINISTRATIVE  DIVISION		)
Re		CHRISTINA TALSMA

Applicant

And SECRETARY, DEPARTMENT OF EDUCATION, SCIENCE AND TRAINING

Respondent

DECISION

Tribunal Dr EK Christie, Member

Date30 November 2006

PlaceBrisbane

DecisionThe Tribunal sets aside the decision under review and, in substitution thereto, decides that the debt due to the Commonwealth accrued over the 17 week period, commencing 25 May 2005 be waived under the “special circumstances” provision of the Act.

The Tribunal remits the matter to the respondent with a Direction that the fortnightly amount to recover the outstanding debt due to the Commonwealth be determined by mutual agreement by Mrs Talsma and Centrelink following the completion of a Statement of Financial Circumstances by Mrs Talsma.  

.......[Sgd]……

E K Christie

Member

CATCHWORDS

SOCIAL SECURITY – youth allowance –- overpayment – debt due to the Commonwealth –- special circumstances – words and phrases: “full-time course of education” – decision set aside.

Social Security Act 1991 s1237AAD

Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60
Haidar v Secretary, Department of Social Security (1998) 157 ALR 359
Riddell v Secretary, Department of Social Security (1993) 42 FCR 443
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Dranichnikov v Centrelink [2003] FCAFC 133
Re Secretary, Department of Social Security and McAvoy (1996) 23 AAR 543
Secretary, Department of Social Security v Jordan (1998) 49 ALD 496

WRITTEN REASONS FOR ORAL DECISION

15 December 2006     Dr EK Christie, Member

1.      This is an application by Mrs Christina Talsma for a review of the decision of the Social Security Appeals Tribunal (the “SSAT”) made on 20 June 2006 to raise and recover a youth allowance debt of $4,850.85 for the period 25 May 2005 to 18 December 2005.

2. The evidence before the Tribunal comprised the documents filed pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (the “T” Documents) [Exhibit 1] and the various exhibits lodged by the parties.

3.      The applicant was represented by Mr DW Marks of Counsel at the hearing. The respondent was represented by Mr P Flintoff, a Departmental Advocate.

Issues Before The Tribunal

4.      The only issue for the Tribunal to decide was whether a youth allowance debt of $4,850.85 that accrued over the period, 25 May 2005 to 18 December 2005,  paid during the relevant period could be written off, or waived, in part or in full, under the “administrative error” or the “special circumstances” provisions of the Social Security Act 1991 (“the Act”). 

Facts

5.      On the basis of the evidence before it, the SSAT made the following Findings of Fact [T1 , Folios 24,25]:

(a)Mrs Talsma enrolled in a Certificate III in Financial Services at the Open Learning Institute (OLI) in May 2005, enrolling in 5 subjects with attached time credit of 135 hours.

(b)A full-time study load in this course was 166 hours across 17 weeks  [¾ load was 124.5 hours].

(c)Between 25 May 2005 and 23 December 2005, Mrs Talsma undertook 135 hours study.

(d)On 19 December 2005, Mrs Talsma commenced three new subjects with OLI”.

Statutory Requirements And Case Law

6.      The Tribunal has applied the following legal requirements and principles in its interpretation of the law in its consideration of the outcome for Mrs Talsma’s factual situation.

§  The Tribunal’s Decision Making Powers

7.      There are a number of decisions possible in this application for review: whether the debt due to the Commonwealth can be waived, in part or in full, under the “administrative error’ or “special circumstances” provisions of the Social Security Act 1991. Therefore, the question for the determination of the Tribunal is whether the decision under review is the preferred one.

[see Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60 at 68]

8.      In this application for review, the Tribunal considers all the evidence and information before the Tribunal as at the date of the hearing, to the extent those facts are relevant to the decision by reference to the subject matter, scope and purpose of the legislation pursuant to which the discretion is conferred.

[See Haidar v Secretary, Department of Social Security (1998) 157 ALR 359 at 367].

9.      The Explanatory Memorandum [“EM”] to the Social Security Legislation Amendment (Carer Pension and Other Measures) Bill 1995 is significant in relation to the pathway for the Tribunal to consider in deciding the preferred decision for Mrs Talsma’s factual situation. Under “4. Explanation of the Changes”, the EM states that “Consideration as to the circumstances of a debtor are central to a decision to write off a debt under section 1236 of the [Social Security] Act and should not be the basis for a decision to waive.  Where a debtor has no present capacity to repay it is proper that write off action be taken, leaving the Commonwealth with the right to commence recovery proceedings at a later stage if the person’s financial circumstances improve.” 

The Special Circumstances Waiver Provision

10.     In this application for review the “special circumstances” provision is another issue in dispute for the Tribunal to decide. Section 1237AAD of the Act provides for a debt due to the Commonwealth to be waived, either in part or in full, because of “special circumstances”:

“1237AAD – WAIVER IN SPECIAL CIRCUMSTANCES

“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.”         [Tribunal emphasis].

11. For this section of the Social Security Act to apply to Mrs Talsma’s factual situation, there must be “special circumstances” that led to the overpayment of social security entitlements. In addition, Mrs Talsma must not have “knowingly” made a false statement or false representation or “knowingly” failed to have complied with a provision of the Act. Both these requirements must be satisfied for Mrs Talsma to succeed under the “Waiver in Special Circumstances” provision of the Act.

12. During the hearing, Mr Flintoff for the respondent conceded that Mrs Talsma had not knowingly failed to comply with her statutory obligations so that waiver was not precluded by the operation of s 1237(AAD)(a) of the Act. Earlier, the SSAT had made a similar conclusion (T1, Folio 28).

§  The Meaning of Special Circumstances

13.     The common law meaning and application of the expression “special circumstances” has been considered by the Federal Court and the Tribunal on many occasions. The relevant legal principles that have emerged, over time, that have been applied to provide a meaning for “special circumstances” can be summarised as follows;

“Each particular case must be considered on its merits.  It is the essential nature of the provision to create a broad discretion to meet the great variety of circumstances which must occur, raising considerations of individual hardship, need, fairness, reasonableness, and whatever else may move an administrator, keeping in mind the scope and purposes of the Act, to make a decision one way or the other’ (emphasis added)

[The Full Federal Court in Riddell v Secretary, Department of Social Security(1993) 42 FCR 443 at 450]

(a)“An expression such as ‘special circumstances’ is by its very nature incapable of precise or exhaustive definition.  The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional. …This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special’ (emphasis added)

[See Re Beadle and Director-General of Social Security (1984) 6 ALD at 3)]

(b)“…[special circumstances] would require something to distinguish [the case to be decided] from others, to take it out of the usual or ordinary case…It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary” (emphasis added).

[See Groth v Secretary, Department of Social Security (1995) 40 ALD 541 at 545]

(c)“To some extent the question whether there were special circumstances must depend on how it came about that the error occurred …There will be a requirement that the circumstances are such that takes the case out of the ordinary” (emphasis added)

[See Dranichnikov v Centrelink [2003] FCAFC 133]

14.     The Tribunal agrees with the following observations of Senior Member Handley in Re Secretary, Department of Social Security and McAvoy (1996) 23 AAR 543, with respect to advice given to social security recipients by Departmental officers:

“Any failure to regard the seriousness of the consequences of the giving of wrong advice as not being a circumstance special to the person or persons who have suffered as a result of that advice would be cruel.  Citizens are entitled to act upon the advice given to them by representatives of government through its departments and agencies.  Citizens also are entitled to have confidence in the advice that they are given by persons in authority and who represent government departments and agencies.  Citizens should be entitled to expect nothing less.”

and

“…the responsibility for efficient and effective administration of departmental practice and policy must carry with it a responsibility for any error or mistake which is made by the departmental officers alone.  The presence of the debt in the circumstances of this case is a circumstance undoubtedly special.  That the department would seek to enforce it and recover it only reinforces the circumstances being special” (emphasis added).

§Full Time Course of Education

The meaning of “full-time course of education” was considered by the Federal Court in Secretary, Department of Social Security v Jordan (1998) 49 ALD 496, where at 502 - 503 Hill J commented:

“The classification of the course by the educational institution offering it is a factor to consider; indeed it may provide at the least a prima facie indication and perhaps often will, absent other factors, determinative.  But that classification can not be the only factor to be considered…

Other relevant facts will include the number of hours the student is required to attend the university, the number of hours expected to be spent working at home on study and assessments and the times and days the student is required to attend the university.”

Consideration of the Issues

15.     The Tribunal finds Mrs Talsma to be a witness of truth who has answered all questions asked of her honestly.

16.     In respect of writing off the debt, the evidence before the Tribunal leads to a conclusion that the circumstances of the Talsma family may be straitened but they could not be described as “dire”.  As Mr Flintoff contends, there is also a positive balance between family income and expenditure exceeding $200 per fortnight.  Consequently, the Tribunal considers that the financial circumstances of Mrs Talsma do not differ from many other recipients of social security and do not represent financial hardship.  The Tribunal considers that is not appropriate to write off the debt.  

17.     In its consideration of whether “special circumstances” exist in relation to the overpayments of youth allowance paid to Mrs Talsma, the Tribunal makes the following conclusions:

(a)Applying Jordan’s case, the OLI/TAFE Certificate III in Financial Services cannot be characterised, relative to a University course, in terms of the number of hours Mrs Talsma was required to attend the OLI of TAFE as there were no lectures or tutorials, the course being undertaken externally.   In addition, the times for assessment work and study at home, and the times and days required to attend the TAFE create further uncertainty for characterising this course, relative to a course offered by a University based on teaching subjects in a semester.  In these circumstances, the uncertainty for Mrs Talsma is that there is some degree of uncertainty for her in fully understanding the requirements to be engaged in full-time studies at the OLI of TAFE.  The Tribunal accepts Mrs Talsma’s evidence that she had difficulty in understanding these requirements as provided to her by OLI of TAFE.  Based on the advice given by Centrelink staff to Mrs Talsma, it could be inferred that a similar problem also existed for Centrelink staff.  Taken together, this fact situation could be considered an uncommon one for education in further and tertiary training institutions in Australia;

(b)Not only did Mrs Talsma not understand the OLI of TAFE Guide as to what represented a full-time status for enrolment, she also did not understand the completion date when subjects had to be finalised in each Module.  The completion date had a direct effect on full-time study status and in turn, youth allowance entitlements.  Following a query in this regard to TAFE, Mrs Talsma then acted on the TAFE advice and sought assistance from Centrelink by directing this query to Centrelink.  Mrs Talsma made it very clear to the Tribunal that she was very much aware of her obligations as a social security recipient to provide correct information – not false or misleading information, to Centrelink.  Because of her uncertainty in terms of knowing the full course period (official start date) and the official end date (Question 11, Exhibit 2), she raised this query with Centrelink.  The advice she received from Centrelink was that the course at the OLI of TAFE ended on 31 December 2005 (T13, T17).  She sought advice directly from “Margaret” and “Norma” of the Ipswich Centrelink office and another Centrelink staff member, Cassandra Wilson.  All of these actions by Mrs Talsma indicate that she made queries about her enrolment – in relation to full time status and the official end date for completion of subjects.  Rather than provide incorrect advice, when completing the application form for youth allowance she raised these queries and sought advice from Centrelink staff, upon which she relied.  In addition, there is no dispute between the parties that Mrs Talsma advised Centrelink of the changes in her enrolment status for subjects undertaken, following the variation in her enrolment in May 2005.  The Tribunal accepts Mrs Talsma’s evidence and concludes that it is a relevant consideration in understanding how the problem of overpayments arose:  Dranichnikov’s case;

(c)The Tribunal further concludes that the advice provided by Centrelink staff in response to Mrs Talsma’s queries in May 2005 was incorrect and led to a situation where the problem of overpayments was triggered off.  Applying McAvoy’s case, the presence of debt in circumstances where a citizen acts upon advice given to them by a Government department is relevant for any consideration of special circumstances.  Such a conclusion would not be made if a social security recipient had queries or doubts in relation to entitlements to social security, but had made no attempt to raise any such query with Centrelink to obtain advice.  Clearly, this is not the situation in Mrs Talsma’s case.

(d)The evidence of Mrs Talsma was that the OLI of TAFE did not provide her with any advice or reminder when the 17 week period for the five subjects she had been enrolled in from 25 May 2005, had been reached – or was about to be reached.  In these circumstances, Mrs Talsma would not have any check or balance provided by the OLI of TAFE to determine whether her enrolment status, and so her entitlement to youth allowance, may have been placed in jeopardy at some time in September 2005.  As the OLI Course is offered by flexible delivery, each student commences and finalises their study at a different date.  This situation is entirely different from the University Semester System where the entire student population commences (and completes) their course of study at the same time.

18.     On consideration of all of the above conclusions, the Tribunal finds that there are facts in how the overpayment problem arose that warrant the description of “special circumstances” as being “uncommon” or “unusual” – although not necessarily “extremely unusual or uncommon”; moreover, the facts are out of the ordinary:  see Riddell’s case; Beadle’s case; Boscolo’s case.

19.     Accordingly, the Tribunal finds that because of “special circumstances” the Youth Allowance debt should be waived – but not for the entire period 25 May 2005 to 18 December 2005.  Rather, the debt should be waived for the 17 week period 25 May 2005 to 20 September 2005.  The basis for this finding is that the OLI of TAFE Guide provided to students enrolled in Mrs Talsma’s course Certificate III Financial Services, contains the following information under “Study Requirements for Payment by Centrelink” (T5, Folio 59).

“STUDY REQUIREMENTS FOR PAYMENT BY CENTRELINK

If you are applying for a Centrelink allowance such as Austudy or Pensioner Education Supplement, you will need to complete the required courses in a period of time that is much less than the OLI maximum 12 month enrolment. 

To be a Full time student in this program you would normally enrol in 166 hours of courses and complete them in 17 weeks.  Students who complete at least 75% of this workload (125 hours) in the 17 weeks may be recognised as full-time students by Centrelink.

The full-time duration of the entire program is 51 weeks.  Payments are normally limited to this time.

…

Please note the following important information:

·     If you plan to apply for an allowance contact Centrelink prior to enrolling at the Open Learning Institute of TAFE to ensure that you are able to fulfil all Centrelink requirements.

·     Advise Centrelink of any changes to your study program as soon as they occur to avoid being overpaid.”

20.     The information in the OLI of TAFE  Guide makes it quite clear that a specific workload (in hours) for subjects enrolled in must be completed within 17 weeks and that the period of 17 weeks is a factor directly affecting whether a student is undertaking a full-time workload.  Consequently, Mrs Talsma had a responsibility to be aware that her youth allowance entitlements were dependent on her completing the five subjects she commenced in May 2005 in 17 weeks.  However, at no time after May 2005 did Mrs Talsma raise any query with OLI of TAFE or Centrelink to advise about her enrolment and the requirements for full-time education and youth allowance when she had not completed the subjects within 17 weeks by 20 September 2005.  The responsibility for undertaking full-time education and recovering youth allowance in accordance with the Social Security Act is a two-way process requiring ongoing care after commencing studies, by both Mrs Talsma and Centrelink.  As no action was taken, in this regard, by Mrs Talsma, after May 2005, there is no alternative for the Tribunal other than to find that waiver for special circumstances can only apply for the 17 weeks period commencing 25 May 2005, when she commenced her studies.

21.     The debt is currently being recovered at the rate of $52 per fortnight.  Evidence before the Tribunal is that this amount was determined without any Statement of Financial Circumstances being prepared by Mrs Talsma.  Consequently, the Tribunal will remit this matter to the respondent with a Direction that the outstanding debt to be recovered by the Commonwealth be based on a Statement of Financial Circumstances prepared by Mrs Talsma and for both Mrs Talsma and Centrelink to arrive at a mutually agreeable amount for the debt to be recovered – based on the Statement of Financial Circumstances.

22.     The Tribunal makes the following observations for the respondent to consider in order to avoid problems, such as in this case, recurring to the OLI of TAFE:

·     The OLI of TAFE needs to provide students with a check or balance to determine whether their enrolment status, during their period of study, and so entitlement to youth allowances, may be in jeopardy.  As the course is offered by flexible delivery, each student commences and finalises their study at a different date.  A simple electronic reminder by OLI of TAFE to all students, equivalent to a library reminder of book return dates, is all that is required;

·     The OLI of TAFE does not necessarily have an effective safeguard for students to validate that an assessment item which has been submitted has been received.  Universities, for example, provide students with a confirmation (the return of a duplicate cover sheet completed by the student) which is issued to the student, immediately an assessment item is submitted to the “collection centre”.   Such a process would avoid any dispute whether the hours of workload for full-time study at the OLI of TAFE had been achieved as a student would be aware from the outset whether a submitted assessment item had been received.

23.     The Tribunal makes the further observation that Mrs Talsma was advised by a Centrelink staffer that if she did not commence repaying the debt due to the Commonwealth, she could not pursue her appeal to the Administrative Appeals Tribunal.  This information is not in accordance with the legal rights Mrs Talsma would have, in this regard, and could be regarded as a form of coercion.  Information such as this, given to a social security recipient is inconsistent with the beneficial nature and objects of the legislation and may justify some administrative review.

24. For all of the above reasons, the Tribunal sets aside the decision under review and, in substitution thereto, decides that the debt due to the Commonwealth accrued over the 17 week period, commencing 25 May 2005, be waived under the “special circumstances” provision of the Act.

25.     The Tribunal remits the matter to the respondent with a Direction that the fortnightly amount to recover the outstanding debt due to the Commonwealth be determined by mutual agreement by Mrs Talsma and Centrelink following the completion of a Statement of Financial Circumstances by Mrs Talsma. 

I certify that the 25 preceding paragraphs are a true copy of the reasons for the decision herein of Dr EK Christie, Member

Signed:         Michelle Brazier

Legal Research Officer

Date/s of Hearing  30 November 2006
Date of Decision  30 November 2006
Date of written reasons             15 December 2006
For the Applicant  Mr DW Marks of Counsel
  Welfare Rights Centre
For the Respondent                  Mr P Flintoff, Departmental Advocate