Varhegyi; Secretary, Department of Family and Community Services
[2005] AATA 635
•1 July 2005
CATCHWORDS – SOCIAL SECURITY – Austudy – overpayment – change of course – whether undertaking qualifying study – whether enrolled in an approved course of education – whether debt should be waived – whether special circumstances – whether incorrect claim – decision set aside
Administrative Appeals Tribunal Act 1975 s. 37
Social Security Act 1991 ss. 569, 569A, 569B, 578, 1223, 1237AAC and 1237AAD
Student Assistance Act 1973 s. 5D
Social Security (Administration) Act 1999 ss. 15, 23, 68 and 80
Beadle v Director-General of Social Security (1985) 60 ALR 225
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Menon and Secretary, Department of Community Services (2003) 76 ALD 778
Moon and Secretary, Department of Community Services (2003) 45 ALD 255
Re Callaghan and Secretary, Department of Social Security (1996-97) 45 ALD 435
Re Dobbie and Secretary, Department of Social Security (AAT 8661, 23 April 1993)
Re Grice and Secretary, Department of Education, Training and Youth Affairs [2000] AATA 62
Re Huynh and Secretary, Department of Social Security (1994) 34 ALD 694
Re Secretary, Department of Family and Community Services and Radmilovich (2002) 70 ALD 218
Schulze and Secretary, Department of Family and Community Services (2004) 81 ALD 636
Secretary, Department of Family and Community Services v Chamberlain (2002) 68 ALD 357
DECISION AND REASONS FOR DECISION [2005] AATA 635
ADMINISTRATIVE APPEALS TRIBUNAL )
) S2003/570
GENERAL ADMINISTRATIVE DIVISION )
Re SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
Applicant
AndPAUL VARHEGYI
Respondent
DECISION
Tribunal: Deputy President S A Forgie
Date: 1 July 2005
Place: Adelaide
Decision: The Tribunal:
1.sets aside the decision of the Social Security Appeals Tribunal dated 12 September 2003; and
2.substitute a decision that the decision of the delegate of the Secretary dated 11 June 2003 and varied by a decision of an Authorised Review Officer dated 25 June 2003 to raise an overpayment of Austudy in the sum of $3,417.21 for the period 3 February 2003 to 9 June 2003 is affirmed.
S A FORGIE
Deputy President
REASONS FOR DECISION
The Secretary of the Department of Family and Community Services (“the Secretary”) applied for review of a decision of the Social Security Appeals Tribunal (“SSAT”) to waive further recovery by instalments of an Austudy debt of $3,417.21 from Mr Paul Varhegyi. The SSAT had agreed with the decision made by the Secretary’s delegate that the debt was owed but considered that there were special circumstances justifying its being waived. I have decided that a debt was properly raised and that the circumstances of the case are not sufficiently special to make it desirable to waive the debt. Consequently, I set aside the SSAT’s decision.
ISSUES
The issue is whether Mr Varhegyi was overpaid Austudy for the period 3 February 2003 to 9 June 2003. If he was overpaid, there are two further issues: was there a legally recoverable debt; and, if so, were there special circumstances that make it desirable to waive the debt to be waived.
BACKGROUND
On the basis of the evidence and in light of the agreement between the parties as to many of them, I make the findings of fact set out in the following paragraphs.
On 2 August 2002, Mr Varhegyi was granted Austudy to study computing at the Onkaparinga TAFE (“TAFE”). He told Centrelink that he intended studying a course leading to a IT Network Administration Certificate III and IV certificate. Centrelink wrote to Mr Varhegyi on 17 October 2002 telling him about the amount of his Austudy payments and the events or changes in his circumstances that would affect his payment. It told him that the rate of his Austudy payment might have to be adjusted if there were changes in his circumstances. Centrelink told him that he would have to “… tell us within 14 days about events or changes in circumstances affecting … [his] payment. …”[1] It described the notice it gave him as an information notice. The changes of which he had to notify Centrelink occurred if he:
“… stop[ped] being a full-time student or concessional workload student;
…
… appl[ied]for, or var[ied], … [his] enrolment at school, college or university or other technical institution;
…”[2]
[1] Documents lodged under s. 37 of the Administrative Appeals Tribunal Act 1975 (“T documents”) at 12-13
[2] T documents at 12
On 11 December 2002 Mr Varhegyi advised Centrelink that he would be studying Certificate IV in Information Technology (Network Management) at the TAFE in 2003.[3] The course would start on 3 February 2003 and conclude on 30 June 2003. On 23 December 2002, Centrelink wrote to Mr Varhegyi in terms similar to those it had used in its earlier letter.[4] His payments dated from 20 December 2002. Centrelink wrote to Mr Varhegyi in similar terms on 3 February 2003.[5]
[3] T documents at 15
[4] T documents at 16-17
[5] T documents at 19-20
Mr Varhegyi did not start the Certificate IV in Information Technology (Network Management) at the TAFE in 2003. Instead, he decided at some time in December or January 2003, but after 20 December 2002, to undertake a course conducted by Vision Fix Software and Support Pty Ltd. It is described as: “15453VIC – Course in repairing and upgrading personal computers” (“Vision Fix course”). The course was conducted by correspondence. He did not tell Centrelink that he had not started the TAFE course or that he had started the Vision Fix course.
On 29 May 2003, TAFE advised Centrelink that Mr Varhegyi was not enrolled with it and had not started the Certificate IV in Information Technology (Network Management) course in 2003.[6] Centrelink wrote to Mr Varhegyi about his enrolment and asked for his response by 19 June 2003. On 30 May 2005, Mr Varhegyi contacted Centrelink to tell it he would be ending his study on 30 June 2003 and that he would transfer to a Newstart Allowance. He was advised to call again on or after 30 June 2005 regarding that matter.[7] On 9 June 2003 Mr Varhegyi completed the Vision Fix course with a 95% pass rate.[8] On 10 June 2003, he telephoned Centrelink and was told that his Austudy had been cancelled under s. 80 of the Social Security (Administration) Act 1999 (“Administration Act”) on the basis that he was not a full-time student.[9] In that call, Mr Varhegyi told Centrelink that his course had ended on 9 June 2003 and that he was now a jobseeker. The next day, Mr Varhegyi gave Centrelink a document from Vision Fix showing his enrolment in its course.[10]
[6] T documents at 22
[7] T documents at 23
[8] T documents at 52
[9] T documents at 24
[10] T documents at 22
Also on 11 June 2003, Centrelink raised a debt of $4,776.23 against him for the period from 14 December 2002 to 9 June 2003.[11] On 19 June 2003 Mr Varhegyi asked that the decision be reviewed by an Authorised Review Officer (“ARO”). Before that review took place, the decision-maker varied his decision and reduced the debt to $3,417.21. The reduction came about as the decision-maker decided that the period for which Mr Varhegyi had been overpaid Austudy should have started on 3 February 2003 and not on 14 December 2002. That occurred because, in December 2002, Mr Varhegyi intended to enrol, and to commence study, at TAFE from 3 February 2003. It was only later that he changed his mind and enrolled instead with Vision Fix.[12] The ARO affirmed the varied decision on 23 July 2003.[13]
[11] T documents at 25-26A
[12] T documents at 30
[13] T documents 38-42
In its decision of 12 September 2003, the SSAT affirmed the decision that Mr Varhegyi had been overpaid Austudy in the sum of $3,417.21 but waived the debt and set aside recovery, stating that:
“… the nature and content of the course, the misleading information about its Austudy status and the fact that Mr Varhegyi was seeking full-time work and might otherwise have qualified for newstart allowance, can all be combined as special circumstances that make it preferable to waive recovery of the debt rather than write it off.”[14]
[14] T documents at 11
EVIDENCE
Mr Varhegyi said that he had last worked in 1998 when he was 28 or so. In order to improve his skills, he enrolled in a computing course at TAFE in August 2002. It was a full-time course. Usually, there were three or four lectures each week. They covered six to twelve study units or assignments and took between 12 and fifteen hours. The semester fee was $300 to $400. At the end of his first semester, Mr Varhegyi realised that he still had two years of intense study to complete the certificate. He said that a lecturer at TAFE had told him there were poor employment prospects as a network administrator in Adelaide. Mr Varhegyi said that he was also keen to run his own business. While the TAFE course gave him knowledge, it did not give him hands on experience he needed. Mr Varhegyi completed his enrolment form with TAFE for 2003 but did not pay the fees and so was not enrolled.
During the summer break between the end of 2002 and the beginning of the first semester in 2003, Mr Varhegyi discovered the website for Vision Fix and the Vision Fix course. He thought that it would give him the skills that he needed to run a small business from home or to improve his employment prospects. Study with Vision Fix would be different from that at TAFE as there would be no lectures. As a student, he would have to fend for himself. The Vision Fix course and that at TAFE were similar, he said, in that it dealt with fault finding techniques although on a smaller scale and on a stand alone computer rather than on a network. The Vision Fix course took six months to complete. There were notes and instruction booklets for each week. Reading and understanding them as well as completing the assignments took him 20 to 30 hours each week.
Mr Varhegyi said that he knew that his Austudy payment depended on his being enrolled in, and studying, an approved course of study. He had told Centrelink that he was studying a computer course at TAFE. On the basis of the information he had obtained from Vision Fix, he understood that the Vision Fix course was an approved course of study as well as a TAFE Accredited Course.[15]
[15] Exhibit B
Vision Fix’s website stated, in part:
“Learn to Repair, Upgrade and Build Personal Computers
Accredited Course Number 15453VICThis course is Centrelink approved for Austudy, Abstudy, The Youth Employment Scheme (YES) and the Pensioner Education Supplement (PES)”[16]
[16]T documents at 36 and see also Exhibit B at 1
Vision Fix’s website stated:
“$239 Full Course Fee
(Accredited TAFE courses are not subject to GST)”[17]
It also stated that a:
“… certificate is available on successful completion of an open book assignment for the classroom students which is handed out at the end of the course.
Correspondence students are required to obtain an average of 80% pass mark over the fourteen course assignments to obtain the certificate.
It is issued under the authority of the Victorian Qualifications Authority, and is nationally recognised throughout Australia.”[18]
[17] Exhibit B at 1
[18] T documents at 54
Vision Fix described its course as “A fourteen lesson correspondence course covering the …” topics listed in a note attached to a copy of the certificate given to Mr Varhegyi on his completing it.[19] The introduction to the first lesson stated that the purpose of the course was to teach the theory of operation of a modern personal computer system as well as teaching the student how to troubleshoot, diagnose and resolve hardware problems, upgrade an existing computer and build a computer. More than 80 common computer problems were documented with step by step instructions on how to solve them. To complete the course, a student had to submit the assignments to Vision Fix and, through them, demonstrate an understanding of the subject matter in the lesson.[20] If the assignment did not demonstrate that understanding, Vision Fix might ask the student to attempt it again before permitting him or her to study the next lesson.
[19] T documents at 52
[20] Exhibit F at 2
Mr Alan Mulraney of Vision Fix wrote “14 x 7 hours = 98 hours” when asked by Centrelink about the nominal contact hours for the course in Semester 1 of 2003.[21] Mr Varhegyi said that the course required him to spend anywhere from 20-30 hours each week to read and understand the information and attempt the assignments.[22] The enrolment fees were payable in three instalments: one third on enrolment; one third on submission of the sixth lesson; and one third on submission of the tenth lesson.[23]
[21] T documents at 57
[22] Exhibit A at [8]
[23] T documents at 55
Mr Varhegyi said that he would not have done the Vision Fix course if he had known it was not approved for the purposes of Austudy. Had known that it was not approved, he would have applied for a Newstart Allowance and done the course in his own time although he felt this would have been “pushing it a bit”.
When asked about Centrelink’s letters dated 23 December 2002 and 3 February 2003, Mr Varhegyi replied that he had read them either briefly or not at all as he felt that the letters were often duplicated. Mr Varhegyi said that it was not common knowledge that students had to tell Centrelink about any changes in their circumstances. It might have been a subject that came up in conversations with other students, but he could not recall any. He said he knew he had to tell Centrelink what he was studying but, as far as changes were concerned, he thought that he only had to tell it if he changed to a completely different subject.
Mr Varhegyi said he thought he was doing a TAFE course with Vision Fix. All of the workbooks referred to TAFE on the cover. It was not until he received his certificate that he noticed it did not refer to TAFE.[24] As he thought he was undertaking a TAFE course, he thought that he did not have to tell Centrelink when he changed courses. Mr Varhegyi found the Vision Fix course to have greater depth than the TAFE course, which had, in his view, been haphazard: sometimes the lecturer would not show up or would set homework and then not check it
[24] T documents at 51
Asked about his job seeking efforts in 1993 Mr Varhegyi said he averaged about four job applications a fortnight. He said this was a habit he developed from his previous time on Newstart Allowance. He said that he cold-canvassed companies by phone using the yellow-pages, white pages and local newspapers. He said he chose the businesses on his side of the city but had not kept any of records of his job seeking efforts although he did have a list of the businesses had had canvassed.[25] During cross-examination, Mr Varhegyi denied exaggerating his job seeking efforts and remembered working his way through certain sections of the yellow pages, such as plumbers and computer shops.
[25] Exhibit E
Mr Varhegyi said that his only asset was a car. As he had recently found employment as a trainee, he expected that his financial situation would be a little better. His hourly rate of pay was $12.81 per hour for a 37.5 hour week. He did not then have any money in the bank and owed $400 to $600 on car repairs.
LEGISLATIVE FRAMEWORK
Austudy
The general qualifications for Austudy are set out by s. 578 of the Social Security Act 1991 (“Act”):
“Subject to this Subdivision, a person is qualified for an austudy payment in respect of a period if, throughout the period:
(a)the person satisfies the activity test (see Subdivision B); and
(b)the person is of austudy age (see Subdivision C); and
(c)the person is an Australian resident.
Note: Division 2 sets out situations in which an austudy payment is not payable even if the person qualifies for it.”
Section 569(1) of the Act outlines the activity test:
“Subject to subsection (2), a person satisfies the activity test in respect of a period if the person satisfies the Secretary that, throughout the period, the person is undertaking qualifying study (see section 569A).”
Whether or not a person is undertaking qualifying study is determined by s. 569A of the Act:
“For the purposes of this Part, a person is undertaking qualifying study if:
(a) the person:
(i)is enrolled in a course of education at an educational institution; or
(ii)was enrolled in the course and satisfies the Secretary that he or she intends, and has (since no longer being enrolled) always intended, to re-enrol in the course when re-enrolments in the course are next accepted; or
(iii)was enrolled in the course and satisfies the Secretary that he or she intends, and has (since no longer being enrolled) always intended, to enrol in another course of education (at the same or a different educational institution) when enrolments in the other course are next accepted; and
(b)the course in which the person is enrolled, or intends to enrol, is an approved course of education or study (see section 569B); and
(c)the person is a full-time student or a concessional study-load student in respect of that course (see sections 569C and 569D); and
(d)the person satisfies the progress rules (see sections 569G and 569H).”
“An approved course of study” is set out by s. 569B:
“For the purposes of paragraph 569A(b), a course is an approved course of education or study if it is a course determined, under section 5D of the Student Assistance Act 1973 , to be a secondary course or a tertiary course for the purposes of that Act.”
Obligation to advise Secretary
Section 68 of the Administration Act provides that:
“(1) Subsection (2) applies to a person to whom a social security payment is being paid.
(2)The Secretary may give a person to whom this subsection applies a notice that requires the person to do either or both of the following:
(a)inform the Department if:
(i) a specified event or change of circumstances occurs; or
(ii) the person becomes aware that a specified event or change of circumstances is likely to occur;
(b)give the Department a statement about a matter that might affect the payment to the person of the social security payment.
(3)…
(4)…
(5)An event or change of circumstances is not to be specified in a notice under this section unless the occurrence of the event or change of circumstances might affect the payment of the social security payment or the person’s qualification for the concession card, as the case requires.”
A “social security payment” includes Austudy (s. 23(1)).
Recovery of overpayments
Section 1223 of the Act applies where there has been an overpayment:
“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(1) provides that the Secretary may waive the right to recover all or part of a debt if he:
“… 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.”
Payments of other benefits under the Act
Section 15 of the Administration Act deals with incorrect or inappropriate claims. It states:
“(1) For the purposes of the social security law, if:
(a)a person makes an incorrect claim; and
(b)the person subsequently makes a claim for a social security payment for which the person is qualified; and
(c)the Secretary is satisfied that it is reasonable that this subsection be applied;
the person is taken to have made a claim for that social security payment on the day on which he or she made the incorrect claim.
(2) For the purposes of this section, a claim made by a person is an incorrect claim if:
(a)the claim is for a social security payment, other than a supplementary payment; and
(b)when the claim was made, the person was not qualified for the payment claimed but was qualified for another social security payment, other than a supplementary payment.”
CONSIDERATION
Was Mr Varhegyi undertaking qualifying study?
In December 2002, Mr Varhegyi satisfied s. 569A(a)(ii) as he had been enrolled in the TAFE course and intended to re-enrol in it when enrolments were next accepted. He went on to enrol in the course although he did not pay the fees. That course was an approved course, he was or intended to be a full-time student in the following semester in that course and I have no evidence to suggest that he did not satisfy the progress rule. Therefore, he was regarded as undertaking qualifying study, and so satisfying the activity test, in the period from 11 December 2002 until 3 February 2003.
The period after 3 February 2003 and ending on 9 June 2003 is a different matter. Section 569A, which prescribes the circumstances in which a person is undertaking qualifying study, has four parts. Enrolment in a course of education, as Mr Varhegyi was enrolled in the Vision Fix course, is only one of them. Assuming that Vision Fix is an educational institution, there is no suggestion in the evidence that the course that it offered was either an approved or not an approved course of education determined under s. 5D of the Student Assistance Act 1973. It was accepted, though, that it was not and therefore I find that it was not an approved course. As he must satisfy all four parts of s. 569A, he was not a person undertaking qualifying study in this period and so does not meet the requirements of s. 578 for Austudy.
As Mr Varhegyi was not entitled to Austudy from 3 February to 9 June 2003, the amount of Austudy that he was paid in that period is a debt owed to the Commonwealth according to s. 1223(1).
Should Mr Varhegyi’s debt be waived?
Under Part 5.4 of the Act there are a number of provisions by which the Secretary may waive the Commonwealth’s right to recover the whole or part of a debt. The only section that is relevant is s. 1237AAD(1) of the Act. It has three parts that must be satisfied before the debt can be waived. The first is that Mr Varhegyi’s debt did not arise from his knowingly failing to comply with a provision of the Act.
Each of Centrelink’s letters told Mr Varhegyi that it was an information notice. Each required him to inform Centrelink if he applied for or varied his enrolment. The notice complied with s. 68 of the Administration Act. He varied his enrolment so greatly that he stopped being enrolled at TAFE and enrolled with Vision Fix but he did not advise Centrelink of the variation as he was required to do.
On the basis of the evidence, I accept that Mr Varhegyi thought that he was undertaking a full-time course and that it occupied his full attention for 20 to 30 hours each week. I also accept that he regarded Vision Fix’s course as more valuable to him and his aspirations than the TAFE course. I pass no comment on his view of the TAFE course and his perception of its shortcomings. I also accept that Mr Varhegyi thought the Vision Fix course was an approved course for the purposes of Austudy. He had some foundation for that thought in Vision Fix’s own literature stating that it was “Centrelink approved for Austudy …”[26] I also accept Mr Varhegyi’s evidence that he thought that it was a TAFE approved course and, again, he had foundation for thinking that in Vision Fix’s own material. Finally, I accept Mr Varhegyi’s evidence that he believed his change of course was not a change in status that would require him to notify Centrelink. In his mind he was continuing to undertake computing studies at a TAFE but was shortening the length of his studies while still gaining skills that would make him employable at an earlier time.
[26] e.g. Exhibit B at 1
These matters explain why, in Mr Varhegyi’s mind, he did not have to tell Centrelink about the change in his enrolment. They do not alter the fact, and I find, that he failed to comply with his obligation to notify Centrelink under s. 68 of the Administration Act. Did he “knowingly” fail to comply with his obligation and so with a provision of the Act? The word “knowingly” is used in s. 1237AAD in the sense of actual knowledge.[27] I accept that Mr Varhegyi did not have actual knowledge that he was failing in his obligation. Rather, he misconstrued his obligation but that does not amount to actual knowledge. That means that Mr Varhegyi satisfies s. 1237AAD(1)(a)(i) of the Act.
[27] Re Callaghan and Secretary, Department of Social Security (1996-97) 45 ALD 435 at 445, Deputy President Forgie
The second part of s. 1237AAD(1) that must be satisfied before the debt can be waived is that there are special circumstances other than financial hardship alone. At the time of the hearing, I am satisfied that Mr Varhegyi was finding it very difficult to make ends meet. He had car repair bills to meet and his only asset was a car. I do not need to decide whether or not he was facing financial hardship. “Special circumstances” must exist apart from financial hardship.
The expression, “special circumstances”, has been considered in the past. I have had regard first to the words of the Full Court of the Federal Court when it said that it is not “... possible to lay down precise limits or precise rules.”[28] Of the expression “special circumstances”, it has been said by Kiefel J in Groth v Secretary, Department of Social Security[29] that:
“… although imprecise [it is] sufficiently understood not to require judicial gloss: Beadle’s case [(1985) 60 ALR 225, 7 ALD 670] (at ALR 229; ALD 674), and for present purposes it is sufficient to observe that it would require something to distinguish Mr Groth’s case 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.”[30]
More recently, the expression was considered again by Kiefel J in a different context in Secretary, Department of Family and Community Services v Chamberlain.[31] Her Honour adopted similar principles and considered their application in the context of determining the length of a preclusion period when a person has received a compensation payment. In doing so, she clearly referred not only to the circumstances of the individual affected by the preclusion provisions of the Act but to the effect that those preclusion provisions were intended to achieve and the consequences for every person who was affected by them. Having regard to all of the circumstances, would the result be one that is unfair, unintended or unjust so that the circumstances may be described as special?
[28] Beadle v Director-General of Social Security (1985) 60 ALR 225 at 228 per Bowen CJ, Fisher and Lockhart JJ
[29] (1995) 40 ALD 541
[30] (1995) 40 ALD 541 at 545
[31] (2002) 68 ALD 357
I was referred to the decision of the Tribunal in Re Grice and Secretary, Department of Education, Training and Youth Affairs[32] in which the Tribunal made findings as to failings by the University concerned in its enrolment practices and by the Department of Education Training and Youth Affairs (“DETYA”). Had Mr Grice been aware of the University’s practices, he might not have applied for Austudy at all. The Tribunal found, though, that his being required to care for his brother meant that he did not properly inform himself about the Austudy requirements and so he did not properly inform DETYA of them. It found special circumstances and waived half the debt.
[32] [2000] AATA 62
While Mr Varhegyi believed he was enrolled in an approved course of study and that this was a course that met Centrelink’s requirements to pay him Austudy, I am equally satisfied that he took no care to read his obligations to Centrelink and so to the Secretary. True it is, that Centrelink’s letters seem repetitive. It is easy to understand that a recipient such as Mr Varhegyi would not wade through the large amount of information that they contain. It is not so easy to understand that he would not wade through it once so that he knew of his obligations or, if not know them, at least retain so much of them that a warning bell would ring when he changed his enrolment. It is not unfair to expect that such a warning bell would ring in those circumstances. It is not unfair that it would ring so that he would either consult the letter or contact Centrelink and put his changed circumstances. The letters clearly state that he is to tell them of every change and not only of those changes that he thought were relevant. Unlike Mr Grice, there is no evidence that he was distracted from his obligation by other responsibilities. It is suggested that he was distracted by Vision Fix’s own statements. Vision Fix’s statements regarding Austudy and TAFE accreditation might have been correct in other circumstances but Mr Varhegyi did not check his situation with Centrelink. I make no findings about Vision Fix’s statements but it would be unfair to other recipients of Austudy to permit Mr Varhegyi to rely on his interpretation of his entitlements and his interpretation of his obligations to Centrelink as a basis for waiving the Austudy debt he owes. Mr Grice had difficulties with his University as did other students but Mr Varhegyi created his own by moving to another institution. Neither checked with Centrelink but there remain the other differences to which I have referred between Mr Varhegyi’s case and that of Mr Grice.
Ms Riley raised the concept of “notional entitlement” as one that is relevant and that has found favour in a number of Tribunal decisions in the context of waiving a debt. In Re Huynh and Secretary, Department of Social Security[33] the Tribunal accepted that:
“… where there exists a notional entitlement to another payment under the Act, an applicant is entitled to have this entitlement taken into consideration when the question of waiver is being considered. However, the tribunal is further of the view that in determining whether a nominal entitlement should be offset against an overpayment, the facts which led to the overpayment are important. That is, if the overpayment was fraudulently obtained, this would weigh heavily against the fact there did exist a nominal entitlement to moneys.”[34]
In Re Dobbie and Secretary, Department of Social Security[35] the Tribunal found that the applicant had a “notional entitlement” to age pension, and waived 50% of the overpayment of window’s pension:
“… the applicant had an entitlement to a rate of age pension during the relevant period having regard to the “married” income tests. In other words, if the true state of affairs had been disclosed the applicant would have been paid age pension during the relevant period in excess of $20,000. As the applicant had an entitlement to a rate of age pension that fact should not be ignored despite the fact that she had received public money to which she was not entitled … On the other hand, good administration of the social security system relies in large measure on the honesty of claimants in their dealings with the department. It follows in our opinion that an applicant who, notwithstanding a notional entitlement to a pension, misrepresents her position faces the prospect of having to accept the consequences of her actions.”[36]
[33] (1994) 34 ALD 694
[34] (1994) 34 ALD 694 at 713
[35] AAT 8661, 23 April 1993
[36] AAT 8661, 23 April 1993 at [42]
After these decisions were made, the waiver provisions of the Act were amended with effect from 1 January 1996, introducing specific waiver provisions where there is a notional entitlement to parenting allowance or family allowance.[37] Eligibility for these allowances is not dependent on a person’s satisfying an activity test in order to be eligible for the payment as is the case for Austudy or Newstart Allowance.[38] The effect of these amendments on “notional entitlement” was recently addressed by Deputy President Jarvis in Schulze and Secretary, Department of Family and Community Services:[39]
“Notional entitlement has been found to constitute part of the factual matrix of special circumstances in several cases such as Re Secretary, Department of Family and Community Services and Lyster (2000) 59 ALD 587. However, I note that the legislature has seen fit to amend the Act to provide for set-off of notional entitlement in the circumstances provided for in s 1237AAC. That provision provides for set-off of notional entitlement in only very limited circumstances and by reference to specific payments. It was the respondent’s contention that any attempt to expand notional entitlement by virtue of the special circumstances provision would defeat the intention of Parliament. I think this submission is well founded.”[40]
[37] Act, s. 1237AAC
[38] Re Secretary, Department of Family and Community Services and Radmilovich (2002) 70 ALD 218 at 232
[39] (2004) 81 ALD 636
[40] (2004) 81 ALD 636 at 647
I agree with Deputy President Jarvis. There is no room to introduce a concept of notional entitlement in that of special circumstances in s. 1237AAD(1) of the Act.
As each of the three parts of s. 1237AAD(1) must be satisfied, I do not need to consider whether it is more appropriate to waive the debt than to write it off. I do not consider that the debt should be waived.
Was Mr Varhegyi’s claim for Austudy an “incorrect claim”?
Ms Riley submitted that Mr Varhegyi’s claim for Austudy should be regarded as an incorrect claim for Newstart Allowance so that the payments that he received as Austudy should be regarded as payments of Newstart Allowance. In support of this proposition Mr Varhegyi points to his actively seeking full time employment while undertaking the Vision Fix course.
While I accept on Mr Varhegyi’s evidence that he made serious attempts to find work while studying the Vision Fix course, I must first decide whether he made an incorrect claim within the meaning of s. 15(1)(a) of the Administration Act. His claim for Austudy was made in July 2002 and approved on 2 August 2002. Clearly, that claim was not incorrect. When Mr Varhegyi contacted Centrelink on 11 December 2002 and advised that he was continuing his course at the TAFE in 2003 his “correct claim” continued. Mr Varhegyi did not accidentally put in the wrong claim in 2002. He intended to claim Austudy and was entitled to it based on the information he provided. At all times, Mr Varhegyi claimed for the benefit he wanted at the time i.e. Austudy. He did not make an incorrect claim within the meaning of s. 15(1)(a) of the Administration Act.[41]
[41] A similar conclusion was reached by Ms M Carstairs, Member, in Menon and Secretary, Department of Community Services (2003) 76 ALD 778 at 779 relying on her earlier decision in Moon and Secretary, Department of Community Services (2003) 75 ALD 255 at 262.
Decision
For the reasons I have given, I am not satisfied that there are special circumstance which would make it desirable to waive the debt, and accordingly, I:
1.set aside the decision of the Social Security Appeals Tribunal dated 12 September 2003; and
2.substitute a decision that the decision of the delegate of the Secretary dated 11 June 2003 and varied by a decision of an Authorised Review Officer dated 25 June 2003 to raise an overpayment of Austudy in the sum of $3,417.21 for the period 3 February 2003 to 9 June 2003 is affirmed.
I certify that the forty-one preceding paragraphs are a true copy of the reasons for the decision herein of
Deputy President S A Forgie,
Signed: .(sgd. N. Wills)........................................
Nathaniel Wills Associate
Dates of Hearing 31 May 2004 and 13 August 2004
Date of Decision 1 July 2005
For the Applicant Mr C. Goldsworthy,
Advocate
The Service Recovery Team Centrelink
For the Respondent Ms M. Reilly
Welfare Rights Centre (SA) Inc
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