Thoborough and Secretary, Department of Social Services (Social security) - [2024] ARTA 942

Thoborough and Secretary, Department of Social Services (Social security) [2024] ARTA 942 (20 December 2024)

Applicant/s: Mr Thoborough

Respondent: Secretary, Department of Social Services

Tribunal Number: 2024/B190596
Tribunal: General Member B Walters
Place:Sydney
Date:20 December 2024

Decision:The Tribunal sets aside the decision under review and in substitution decides:

a) Mr Thoborough has a youth allowance debt of $10,837.70 for the period 21 July 2015 to 24 June 2016; and
b) The Commonwealth’s right to recover the balance of the debt outstanding as at 4 December 2024 is waived under section 1237AAD of the Social Security Act 1991 on the basis of special circumstances.

CATCHWORDS

SOCIAL SECURITY – Youth Allowance – recoverable debt – debt written off or waived – impact of mental health issues and homelessness – balance of the debt outstanding waived

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 201(1A) of the Social Security (Administration) Act 1999.

Statement of Reasons

BACKGROUND

This review is about whether Mr Thoborough has a recoverable youth allowance debt.
On 25 January 2017 Centrelink made a decision that Mr Thoborough owed a $10,837.70 youth allowance debt for the period 21 July 2015 to 24 June 2016. The debt was raised on the basis that Mr Thoborough was not undertaking a sufficient amount of study to qualify for youth allowance during the period of the debt.
Mr Thoborough requested a review of this decision on 9 August 2018. The decision was considered and affirmed by an authorised review officer (ARO) on 2 January 2019.
Mr Thoborough applied to the Social Services and Child Support Division of the Administrative Appeals Tribunal (the AAT) on 27 August 2024. From 14 October 2024, the AAT became the Administrative Review Tribunal (the Tribunal). Applications for review to the AAT that were not finalised before 14 October 2024 were taken to be an application for review to the newly established Tribunal. The Administrative Review Tribunal (Consequential and Transitional Provisions No. 1) Act 2024 gives the Tribunal 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 application was heard on 4 December 2024. Mr Thoborough appeared at the hearing and gave affirmed evidence by telephone. The Tribunal had before it 161 pages of documents provided by Centrelink (the hearing papers). These were provided to Mr Thoborough prior to the hearing. The Tribunal also had regard to a Statement of Financial Circumstances prepared by Mr Thoborough.

ISSUES

The statutory provisions relevant to this review are set out in the Social Security Act 1991 (the Act) and the Social Security (Administration) Act 1999 (the Administration Act).
The issues which arise in this case are:
· Whether Mr Thoborough has a youth allowance debt, and
· If so, whether that debt should be recovered.

CONSIDERATION

Issue 1 – Does Mr Thoborough have a youth allowance debt?

Section 540 of the Act sets out provisions concerning qualification for youth allowance. A person is qualified for this payment in respect of a period, subject to other requirements, if throughout the period they satisfied the activity test or were not required to do so.[1]
[1] Paragraph 540(1)(a) of the Act.
A person undertaking full-time study satisfies the activity test.[2] Section 541B of the Act provides that a person undertakes full-time study where they are enrolled in an approved course and undertake at least 75% of the normal amount of full-time study for the course.
[2] Paragraph 541(1)(a).
Mr Thoborough told the Tribunal that he had enrolled in a TAFE course in [Town 1]. He was based in Brisbane at the time but planned to travel to [Town 1] and stay at a hostel during the week, each week. He said that his whole life was a bit of a mess at the time and he was able to complete only three months of the course.
The ARO noted that Mr Thoborough had been granted youth allowance from 8 May 2015.[3] Initially the payment was granted to Mr Thoborough as a jobseeker, rather than as a student. The ARO noted that study details were recorded to Mr Thoborough’s Centrelink file on 27 July 2015.[4] The study details stated that he was completing a [Course 1] at TAFE with the course running from 21 July 2015 to 24 June 2016.
[3] Page 9 of the hearing papers.
[4] See also page 47 of the hearing papers.
On 27 July 2015 Centrelink sent a letter to Mr Thoborough advising of his regular youth allowance rate. The letter also included the following passage under the heading “Important Information”:
Your Youth Allowance is based on you studying full time at [TAFE], Tertiary Group D Course with the course ending on the 24 June 2016. If your study load changes or if you cease study you should let us know within 14 days.
Mr Thoborough would continue to be paid youth allowance on the basis that he was a full-time student until 24 June 2016, when his course was to end.[5]
[5] See page 27 pf the hearing papers for fortnightly payments made.
On 9 September 2016 data match information was received by Centrelink showing that Mr Thoborough had been a part-time student during the period of the debt, in semester 2 of 2015 and semester 1 of 2016.[6]
[6] Page 9 of the hearing papers.
The Tribunal has had regard to the match data contained in the hearing papers at pages 40 to 43. These records suggest that Mr Thoborough had initially enrolled in a full-time study load in the second semester of 2015 and the first semester of 2016. For one unit, [code specified], a result of “J” is recorded with an end date of 19 November 2015. Current TAFE course codes indicate that the grade “J” denotes that a person has achieved competency for the unit. For 11 other units the result “AW” is recorded (withdrawal with participation), suggesting that while Mr Thoborough participated in the unit, he ultimately withdrew. No result is recorded for the five other units Mr Thoborough had enrolled in for semester 2 of 2015. In semester 1 of 2016, no results are recorded for any of the units Mr Thoborough had enrolled in.
While it is clear that Mr Thoborough commenced his course in 2015 and attempted some study, the Tribunal is satisfied on balance that he did not undertake 75% of a full-time study load and was not qualified to receive the amounts of youth allowance paid to him between 21 July 2015 and 24 June 2016. The Tribunal finds that Mr Thoborough has a youth allowance debt of $10,837.70 for that period pursuant to subsection 1223(1) of the Act.

Issue 2 – Should the debt be recovered?

Notwithstanding that Mr Thoborough has a youth allowance debt, the Tribunal will consider whether recovery may be written off or waived pursuant to provisions in the Administration Act.

Write off

When a debt is written off, recovery of the debt is suspended for a specified period or otherwise. A debt can be written off under section 1236 of the Act only in specified circumstances, none of which apply in the present case. In particular, paragraph 1236(1A)(b) provides that a debt may be written off where a debtor has no capacity to repay. Mr Thoborough and his partner both work and are paying down a mortgage on their home. They otherwise have modest living costs and it is evident that they do not engage in extravagant discretionary spending. Mr Thoborough told the Tribunal that the couple have no credit card debt and they tend to break about even each pay. The Tribunal is not satisfied on the available evidence that Mr Thoborough has no capacity to repay his debt. The Tribunal finds that the debt cannot be written off.

Waiver for administrative error

Section 1237A of the Act requires waiver of whatever proportion of a debt is attributable solely to an administrative error made by the Commonwealth so long as other requirements are met, including that the debtor received the amounts proposed to be waived in good faith.
Mr Thoborough told the Tribunal that he did stop studying. He was not mentally well at the time. He had commenced inpatient treatment at [Hospital 1] and while staying there he engaged with a case worker. He understood that this worker was a Centrelink employee who was conducting an outreach service to the hospital. She would come in on Thursdays to help people who could not leave the hospital. Based on his conversation with this worker, Mr Thoborough understood that she was going to arrange for his payments to be changed so that instead of being paid on the basis that he was a student, he would be paid as a jobseeker who had been granted a medical exemption from jobsearch requirements. Mr Thoborough said he did not know what went wrong. In any case, he was not well at the time.
When Mr Thoborough sought review of the debt decision in 2018, he raised that a case worker had undertaken to change his payments for him. A Centrelink worker made a record on his file on 9 August 2018 that they had investigated his records and could find no documents, notes or scanned material to confirm what Mr Thoborough had told them.
The Tribunal has had regard to a medical certificate Mr Thoborough provided to Centrelink from his general practitioner, [named] dated 26 June 2015.[7] The certificate indicates that Mr Thoborough attempted suicide [earlier in] June 2015, was admitted to the [Hospital 2] mental health unit and was discharged [in] June 2015. This hospitalisation occurred one month prior to Mr Thoborough commencing his course and before he was paid youth allowance on the basis that he was a full-time student.
[7] Page 16 of the hearing papers.
A discharge summary that Mr Thoborough provided Centrelink shows that Mr Thoborough would later be admitted to [Hospital 1] [in] September 2016, almost 3 months after he had stopped being paid youth allowance as a student.[8] The discharge summary indicated that Mr Thoborough had been admitted in relation to his mental health. He was discharged [in] October 2016.
[8] Page 18 of the hearing papers.
Mr Thoborough was, in the Tribunal’s assessment, a genuine and honest witness. He was straightforward about the limitations of his recollections of the years in which the debt arose. The Tribunal is mindful that Mr Thoborough’s debt started accruing more than nine years ago, and that Mr Thoborough’s health at the time would impact the quality of his recollection.
The Tribunal accepts that Mr Thoborough spoke with an outreach worker from Centrelink or another organisation about his payments while hospitalised. However, by the time he was an inpatient at [Hospital 1] in September and October 2016, the period of the debt had ended. When Mr Thoborough was a patient at the [Hospital 2] in June 2015 he had not yet commenced his study and was not being paid youth allowance as a student. Further, Centrelink records show that on 25 June 2015 and 7 July 2015 Mr Thoborough attended Centrelink offices to advise of his hospitalisation and provide a medical certificate so he would not be penalised for having missed an appointment with his employment service provider.[9]
[9] See pages 56 and 58 of the hearing papers.
On this background, the Tribunal is not satisfied that the debt was caused by an administrative error made by the Commonwealth and finds that recovery of the debt cannot be waived under section 1237A of the Act.

Waiver for special circumstances

Section 1237AAD provides for waiver of all or part of a debt in special circumstances:
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 a false representation; or
(ii)failing or omitting to comply with a provision of this Act, the Administration 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 has already found that Mr Thoborough’s debt cannot be written off. To contemplate waiver under section 1237AAD the Tribunal must also be satisfied that the debt did not arise because Mr Thoborough, or another person, knowingly made a false statement or knowingly failed to comply with his obligations to Centrelink.
The Tribunal discussed the term “knowingly” in Callaghan and SDSS [1996] AATA 413:[10]
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.
[10] at [48].
In SDFaCS and Jonauskas [2001] AATA 72 the Tribunal clarified that “knowingly” refers to “a deliberate choice and means actual knowledge”, rather than recklessness.[11]
[11] at [73].
Centrelink wrote to Mr Thoborough on 27 July 2015 confirming that Mr Thoborough was being paid as a student. No further letters concerning Mr Thoborough’s study were sent until 30 May 2016 when Centrelink wrote to invite Mr Thoborough to confirm whether his course would end on 24 June 2016 or another date. Mr Thoborough does not recall receiving this letter and it is unlikely he received it because by that time he was homeless. This will be addressed in further detail below.
As discussed, Mr Thoborough’s debt arose some time ago and at the time he was in poor mental health. Further, available medical evidence indicates that, immediately prior to the debt period, Mr Thoborough ceased one mental health medication and commenced another.[12] Mr Thoborough told the Tribunal that he had commenced his course, he was ill, he was unable to continue his study, and he was under the impression that a Centrelink worker had arranged for him to be paid youth allowance on the basis that he had an exemption from the activity test in relation to his mental health. The Tribunal is satisfied that this evidence is genuine.
[12] Page 16 of the hearing papers.
On the background of the above matters, the Tribunal finds that Mr Thoborough’s debt did not arise because he or another person knowingly made a false statement or knowingly failed to comply with a provision of the Act or the Administration Act.
The next question for the Tribunal is whether there are special circumstances which make it desirable to waive all or part of Mr Thoborough’s debt. Special circumstances is not defined in the legislation. The case law indicates that there must be something unusual or out of the ordinary about the circumstances such that the application of the usual rules is unfair, or unjust.[13] However, the circumstances do not need to be exceptional.[14] Ordinarily it would need to be that the circumstances of the case distinguish it from the usual run of cases for waiver to be contemplated.[15]
[13] Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs v Jones [2012] FCA 639 at para 51.
[14] Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25 at [33].
[15] Dranichnikov v Centrelink [2003] FCAFC 133 at para 66.
Mr Thoborough told the Tribunal that, although he had commenced his course at [Town 1], he was not doing well in terms of his mental health and could not continue. The Tribunal is satisfied that during the period of the debt Mr Thoborough’s ability to engage in full time study was significantly impacted by longstanding poor mental health. Further, the time in which the debt was accruing is bracketed by periods in which Mr Thoborough was acutely unwell and was hospitalised in relation to his mental health. Medical evidence before the Tribunal verifies the dates of and reasons for his hospitalisations as well as his ongoing mental health treatment in the years that followed.
Additionally, the Tribunal is satisfied that Mr Thoborough’s ability to continue with his study was impacted by homelessness in addition to his poor mental health. Mr Thoborough told the Tribunal he had left home following his parents’ separation in his teenage years. Mr Thoborough experienced periods of homelessness and housing insecurity in the years that followed. After Mr Thoborough was discharged from hospital in 2015, he returned to the home of one of his parents for a short time however things were not good there and he left. This was shortly before or after the commencement of the debt period. Mr Thoborough said that after that and throughout the rest of the period of the debt he was couch surfing and just trying to survive. An employment services assessment conducted by Centrelink on 22 May 2015 identified that Mr Thoborough was at that time homeless.[16] Mr Thoborough’s Centrelink record also indicates that he had been identified as being homeless on 21 December 2015.[17]
[16] Page 13 of the hearing papers.
[17] Page 61 of the hearing papers.
A person’s notional entitlement to another social security payment is a matter capable of being a special circumstance warranting waiver.[18] The Tribunal is satisfied on the available evidence that during the period of the debt Mr Thoborough was unable to work or study as a result of his poor mental health and his experiences of homelessness. It is relevant to the Tribunal’s considerations that Mr Thoborough would have been able to receive youth allowance as a job seeker with an exemption from jobsearch requirements in relation to his mental health and his homelessness had he known that he needed to seek this.
[18] Oberhardt v Secretary, DEEWR [2008] FCA 1923.
Mr Thoborough provided the Tribunal with a Statement of Financial Circumstances. The financial position of he and his partner is unremarkable. They both work to receive modest incomes and they are paying down a mortgage on the home they live in. They break about even each week. The couple will face additional costs next year as they plan to move to another city for Mr Thoborough’s partner to commence study.
The balance owing on Mr Thoborough’s debt on 14 September 2024, when the hearing papers were compiled, was $8,568.16 (including $1,035.26 in interest which had been applied to the debt).[19] This suggests that Mr Thoborough has made repayments towards the debt of at least $3,304.
[19] Page 19 of the hearing papers.
In consideration of Mr Thoborough’s circumstances outlined above, including the impact of his mental health and homelessness on his ability to continue with study and his consequent notional entitlement to payments made to him during the period of the debt, repayments already made and the Tribunal’s finding that the debt cannot be written off, the Tribunal is satisfied that it is appropriate to waive the balance of Mr Thoborough’s debt. The waiver is to take effect from the date of Mr Thoborough’s hearing, 4 December 2024.

DECISION

The Tribunal sets aside the decision under review and in substitution decides that:

a) Mr Thoborough has a youth allowance debt of $10,837.70 for the period 21 July 2015 to 24 June 2016; and

b) The Commonwealth’s right to recover the balance of the debt outstanding as at 4 December 2024 is waived under section 1237AAD of the Social Security Act 1991 on the basis of special circumstances.

Date(s) of hearing:

Wednesday, 4 December 2024