Zervos and Secretary, Department of Family and Community Services
[2005] AATA 783
•16 August 2005
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2005] AATA 783
ADMINISTRATIVE APPEALS TRIBUNAL )
) No S2004/439
GENERAL ADMINISTRATIVE DIVISION ) Re GEORGE ZERVOS Applicant
And
SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
Respondent
DECISION
Tribunal Senior Member L Hastwell Date16 August 2005
PlaceAdelaide
Decision The Tribunal affirms the decision under review.
..............................................
L Hastwell
(Senior Member)
CATCHWORDS
SOCIAL SECURITY – pensions, benefits and allowances – Youth Allowance – applicant qualified for Youth Allowance – correct debt raised – debt due to Commonwealth – special circumstances – waiver or write-off all or some of debt – decision affirmed
Social Security Act 1991 ss 540, 541, 541B, 1223, 1236, 1237AAD
Beadle v Director-General of Social Security (1994) 6 ALD 1
REASONS FOR DECISION
16 August 2005 Senior Member L Hastwell 1. On 20 May 2004, a debt of $3,014.88 was raised for recovery from Mr Zervos (the applicant), being an overpayment of Youth Allowance for the period 5 July 2003 to 26 January 2004. This decision was reviewed and affirmed by an Authorised Review Officer on 10 June 2004. There was a further review by the Social Security Appeals Tribunal (the SSAT), and on 12 November 2004 the SSAT decided to affirm the decision under review. The applicant has sought a review of that decision.
background
2. The applicant received Youth Allowance from 5 July 2003 until 26 January 2004. He received this allowance on the basis of Centrelink records showing that he was enrolled in a three year Business Administration course at the Adelaide Institute of TAFE (TAFE), and that he intended studying as a full-time student.
3. During the relevant period the applicant significantly reduced his study load, as he was having difficulty managing a full-time load. It is common ground that he reduced his study load to 14 percent of what would be defined as the normal amount of study for that course. He failed to notify Centrelink of this change.
4. Letters had previously been sent to the applicant by Centrelink advising him of his obligation to notify them if he ceased full-time study or changed his enrolment during the relevant period.
5. It is common ground that the applicant was not actively seeking work during the relevant period.
legislation
6. The relevant legislation to consider is contained in the following sections of the Social Security Act 1991 (the Act).
7. Section 540 of the Act sets out the basic qualifying criteria for Youth Allowance. Section 540(a)(i) of the Act provides as follows:
“540.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) …”
8. Section 541 of the Act sets out ways in which the activity test can be satisfied, and provides inter alia the following provisions:
“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
…”
9. Section 541B of the Act defines “undertaking full-time study” as follows:
“541B(1) For the purposes of this Act, a person is undertaking full-time study if:
(a) the person:
(i)is enrolled in a course of education at an educational institution; or
… and
(b) the person:
(i)is undertaking in the particular study period (such as, for example, a semester) for which he or she is enrolled for the course;
…
either:
(iii)in a case to which subsection (1A) does not apply—at least three-quarters of the normal amount of full-time study in respect of the course for that period (see subsections (2) to (4));
…”
10. Section 541B(2) of the Act defines “normal amount of full time study” with respect to a course.
11. Part 5.2 of the Act sets out amounts that are recoverable under the Act. Section 1223(1) of the Act provides as follows:
“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.”
12. Part 5.4 of the Act sets out the grounds for waiver or write-off of a debt. For the purposes of this case, the applicable grounds would be those set out in s 1236(1A) of the Act which provides:
“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.”
13. The only other basis would be waiver in special circumstances as set out in s 1237AAD of the Act which provides as follows:
“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 1:Section 1236 allows the Secretary to write off a debt on behalf of the Commonwealth.
Note 2:This section has effect subject to section 1237AAE in relation to an assurance of support debt.”
issues
14. The issues for the Tribunal to determine are:
(a)whether the applicant was qualified for Youth Allowance between the dates 5 July 2003 to 26 January 2004; and if not
(b) whether a correct debt has been raised; and
(c)whether that amount is recoverable as a debt due to the Commonwealth; and if so
(d)whether the debt should be recovered in full, or whether there are special circumstances that would give rise to a basis for waiver or write-off of some or all of the debt.
discussion of the evidence
15. Dr Finikiotis, the applicant’s uncle, represented the applicant. The applicant did not attend at the Tribunal to give any evidence on his behalf, and Dr Finikiotis made submissions. The respondent (the Department) was represented by Mr Andrew Goldie, a Departmental advocate.
16. Dr Finikiotis relied on the applicant’s application for review as contained in the T documents [Exhibit R1] at T1. In particular, he referred the Tribunal to his annotations of the SSAT decision which underlined his concerns and which were annexed to his application [Exhibit A1].
17. Dr Finikiotis conceded that during the relevant period the applicant did not qualify for Youth Allowance as he was not undertaking a sufficient workload to qualify under the legislation. He conceded that the applicant was not actively seeking other work during the relevant period, and so he did not satisfy the activity test. The only ground that the Tribunal was asked to consider was that of waiver in special circumstances, as set out in s 1237AAD of the Act.
18. Dr Finikiotis told the Tribunal that the applicant had unwittingly failed to satisfy the activity test. He said that the applicant had progressively fallen behind academically in his studies at TAFE. He relied on a letter from Ruth Frazer, Principal Lecturer, TAFE SA, dated 14 December 2004 [Exhibit R1/T20/79], in which she describes the significant learning difficulties that the applicant was experiencing whilst studying at TAFE. That letter reports that the applicant had resorted to plagiarism because of his inability to manage the workload, and recommended that he seek some assistance from the student support person on the campus.
19. There had been considerable tension between the applicant and his parents over the debt that had been raised, and the applicant was by all accounts particularly distressed at the way in which the debt was notified to him. An account [Exhibit A2] was sent to the applicant requesting payment within four weeks. This caused considerable tension between the applicant and his father.
20. Dr Finikiotis advised that the applicant was now in receipt of Newstart Allowance, and remained convinced that he may be able to return to TAFE. This was despite what was referred to by Dr Finikiotis as the “profound learning difficulties” suffered by the applicant. He requested that the Tribunal waive the debt in question, either in total or in part, because of the emotional and learning difficulties from which he claims the applicant suffers, and which had not been picked up by TAFE until he was well into his course.
21. When the Tribunal enquired as to why the applicant could not come along and give the Tribunal his own story, Dr Finikiotis’ response was that the applicant was significantly anxious about the hearing, and could not face coming to the hearing. Despite this explanation, Dr Finikiotis also assured the Tribunal that the applicant was a sociable person who enjoyed the company of friends, spent $100 per week on entertainment and, it would appear, otherwise led quite a normal life.
22. Dr Finikiotis was unable to explain why the applicant, when interviewed by a psychologist at Centrelink in May 2005 [Exhibit R3], was adamant that he had no psychological problems or difficulties, and Centrelink had therefore not taken the assessment any further.
23. The Department’s submissions were set out in the Secretary’s Submissions which was admitted as Exhibit R2. It was common ground that the applicant did not qualify for Youth Allowance during the relevant period as his study load dropped to 14 percent of the relevant full-time load, and so he was not undertaking the requisite proportion of the normal amount of full-time study for that course to satisfy the activity test. The Department pointed to the fact that in his enrolment form the applicant had indicated that he had no disability of any kind. It was not asserted by the applicant that during the relevant period he was actively seeking work. The Department submitted that during the relevant period the applicant was not eligible for Youth Allowance, and that therefore there was a debt due to the Commonwealth and that no special circumstances existed in this case to justify waiver of the debt.
findings of fact and application of the law
24. The Tribunal did not have the benefit of any direct evidence from the applicant, and had to rely on documentation provided and submissions made by both parties.
25. It is common ground that the applicant did not qualify for Youth Allowance during the relevant period, and that therefore a debt is owed to the Commonwealth. The quantum of the debt is not challenged. The only issue for the Tribunal’s consideration is whether there are special circumstances in this case that would justify waiver of some or all of the debt.
26. The Tribunal is not satisfied on the balance of probabilities that the applicant has “profound learning difficulties”. He certainly found himself in a position where he could not manage his studies and continued to study, but with a much smaller study load. However, the Tribunal does not accept that this decision related to a specific or profound learning disability. There could be many explanations for the applicant’s sudden decline in performance, and without the benefit of his own explanation as to what was happening in his life that year, it is impossible to draw any specific conclusions as to the cause of his declining academic performance.
27. There was no evidence of the applicant having been previously diagnosed with any intellectual problems or any profound learning difficulties. He completed year 12 at St Ignatius College. On his TAFE enrolment form for semester 2 in 2003 the applicant answered “N” to the question “Do you consider yourself to have a disability, impairment or long term condition?”. “Learning” and “Intellectual” were two categories that he could have nominated had he considered himself to have a disability.
28. When interviewed by a Centrelink psychologist for the purposes of Newstart Allowance, he was adamant that he had no learning difficulties, and this was even after he had dropped out of his course of study at TAFE, and after the debt had been raised. In that regard the Tribunal refers to the Assessment Statement [Exhibit R3] prepared by James Tucsok, a psychologist from Centrelink, Norwood, dated 3 May 2005. It reports as follows:
“… Mr Zervos reported that he had completed year 12 at high school and said that he did not have any identifiable learning problems. Mr Zervos was specifically asked whether he had any literacy or numeracy problems (i.e. problems with reading, writing or mathematics) and he said that he did not. … The only difficulties Mr Zervos reported was that his typing speed was “a little down”.
…”
29. Without the benefit of the applicant’s direct evidence on this topic, the Tribunal finds that there is no evidence that the applicant suffers from a specific or profound learning difficulty.
30. It is common ground that the applicant did not actively seek work during the relevant period.
31. The Tribunal accepts that the applicant unwittingly found himself owing a debt to the Commonwealth, and did not deliberately mislead the Commonwealth in any way.
32. Section 1236(1A) of the Act is not applicable in this case. Sections 1237AAD(b) and (c) of the Act allow the Tribunal to waive some or all of the debt in special circumstances. Those special circumstances must be “other than financial hardship alone” (s 1237AAD(b) of the Act).
33. The Tribunal accepts that the applicant is distressed at the situation he finds himself in, and that the repayment to the Commonwealth is currently being withdrawn from his Newstart Allowance at the rate of $10 per fortnight.
34. The Tribunal accepts that there may be some tension in the applicant’s household arising out of the debt, but possibly also arising from his failure to perform up to his parents’ expectations. As neither the applicant nor his parents gave any evidence on this topic, the Tribunal finds that there is no evidence of household or domestic difficulties that go beyond what a family may normally experience when a young adult performs poorly in a course, and as a result faces a debt. This debt is being withdrawn at a modest and realistic rate and should have no dramatic effect on the applicant’s finances. He will need to budget to accommodate this withdrawal.
35. The Tribunal considered the applicant’s Statement of Financial Circumstances [T19]. That document indicates that the applicant appears to live beyond his means. He still resides with his parents. He reports spending $100 per week on food and the same amount on entertainment. He also reports spending approximately $25 per week on clothing. This expenditure is high for a person on a modest income and the Tribunal finds that the applicant is not in particularly difficult financial circumstances, but he may need to budget more efficiently. He does not suffer from any financial difficulties beyond those that anyone may experience who is on a limited income.
36. For the Tribunal to find that there are special circumstances, it must be satisfied that there is something special, unusual or exceptional about the applicant’s case. The matter of Beadle v Director-General of Social Security (1984) 6 ALD 1 is an established authority on this point. In that case Justice Toohey commented as follows:
”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. Whether circumstances answer any of these descriptions must depend upon the context in which they occur. For it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases. 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.”
37. The Tribunal cannot find anything that would put the applicant’s case into the category of being markedly different to the usual run of cases. There is nothing exceptional or unusual about the applicant’s case. Ignorance is not in itself any excuse, and the rate of withdrawal of debt from his income is reasonable. The Tribunal is of the view that the Department has taken a reasonable approach to allowing the applicant to pay off this debt over a considerable period of time. The onus must be on recipients of benefits to be aware of their responsibilities. The applicant had received letters that told him of the requirement that he advise the Department if his circumstances changed in any way. In that regard, the Tribunal refers to Exhibit R1/T6/27 where the applicant received communications from the Department on more than one occasion, which advised him that if his study load changed or if he ceased to study, he must let the Department know. He was able to read these communications and responsibly respond to them and he did not. His family circumstances appear to remain stable. He continues to reside with his parents. He remains by all accounts optimistic that he will return to study in the future.
38. After considering all the evidence, the Tribunal is not satisfied that there is anything special about this case such that the Tribunal could waive all or part of the debt on the basis that special circumstances exist.
39. the Tribunal affirms the decision under review. This means that the application is not successful.
I certify that the 39 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member L Hastwell
Signed: ...........J Coulthard ......................................
AssociateDate of Hearing 19 July 2005
Date of Decision 16 August 2005
Counsel for the Applicant Dr Finikiotis
Solicitor for the Applicant -
Counsel for the Respondent Mr A Goldie
Solicitor for the Respondent Centrelink Legal Services Branch
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