Muir and Secretary, Department of Family and Community Services [2002] AATA 1199 (22 November 2002)

Last Updated: 25 November 2002

DECISION AND REASONS FOR DECISION [2002] AATA 1199

ADMINISTRATIVE APPEALS TRIBUNAL )

) No Q2002/831

GENERAL ADMINISTRATIVE DIVISION )

Re GEORGE MUIR

Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Mr B J McCabe, Member

Date 22 November 2002

Place Brisbane

Decision The Tribunal affirms the decision under review.

(Sgd) B J McCabe

Member

CATCHWORDS

SOCIAL SECURITY - Austudy - overpayment - whether debt properly raised - waiver of debt - whether administrative error - whether special circumstances exist

Social Security Act 1991

Groth v Secretary, Department of Social Security (1995) 40 ALD 541

Beadle v Director-General of Social Security (1985) 60 ALR 225

Re Secretary, Department of Family and Community Services and Radmilovich [2002] AATA 779

REASONS FOR DECISION

22 November 2002 Mr B J McCabe, Member

Introduction

1. Mr George Muir has appealed a decision of the Social Security Appeals Tribunal (the SSAT). The SSAT affirmed a decision to recover a debt the respondent says arose because the applicant received Austudy benefits to which he was not entitled.

The Material Before the Tribunal

2. The Tribunal was provided with the documents required under s 37 of the Administrative Appeals Tribunal Act 1975. It also heard evidence from Mr Muir who represented himself at the hearing. Ms Wallis-Dunn represented the respondent.

The Facts

3. Mr Muir enrolled as a student at the Kingscliff TAFE Institute in 2001. He was studying a hospitality course as a part-time student. The course commenced on 12 February 2001.

4. The applicant was notified on 19 February 2001 that he would receive Austudy allowance at the rate of $352.30 each fortnight. He continued to receive Austudy until 12 March 2002.

5. The notice provided to him on 19 February 2001 (the text of which is set out in document T6) includes an instruction (at p 54 of the T documents) in the following terms:

"This is an information notice given under the social security law.

THE CHANGES YOU MUST TELL CENTRELINK ABOUT ARE:

If you or your partner (includes a de facto partner):

Stop being a full-time student or a concessional workload student;..."

6. The notice explained that Centrelink must be informed within 14 days of a change in circumstances.

7. A second notice in similar terms dated 9 February 2001 was sent to the applicant. The applicant did not dispute that he received both notices.

8. Prior to the end of the semester in May, the applicant apparently decided he was unhappy with the course. By all accounts he was doing well, but he was uncomfortable with the class room environment. He was older than the other students. They did not have the same level of experience as he did. He tentatively decided to leave the course.

9. Mr Muir says he was negotiating with a member of the faculty about the possibility of transferring to another course. He was undecided as the end of the first semester grew near. He apparently reached an informal arrangement with the teacher to keep a place open for him in the other course in second semester. He explained in evidence that he wanted to keep his options open. It appears he did not formally re-enrol for the second semester in any course.

10. The applicant said it was always his intention to continue studying but he was uncertain what course he would take, or whether he would resume study at some later point. He rang Centrelink on 1 June 2001 to ask them about his options. He concedes he did not expressly tell the Centrelink officer with whom he spoke that he had left the TAFE course he had been studying in first semester, and that he would not return to that course in the second semester. He spoke with Centrelink by phone again on 29 August 2001. At that point he said he had another course in mind, but it appears the Centrelink officer assumed he was still enrolled in the same course at Kingscliff TAFE in the absence of advice to the contrary.

11. Mr Muir says he recalled discussing the options open to him with the Centrelink officers with whom he spoke. It was apparent to me from his testimony that he did not have a clear understanding of his obligation to report changes in his circumstances. He still regarded himself as a student, and did not feel obliged to inform Centrelink formally and in detail of the change in his enrolment that had already occurred when he did not re-enrol for second semester. He says he was encouraged in this belief by a comment (of which there is no record) that it made no difference whether he was in receipt of Austudy or Newstart allowance.

12. Ms Wallis-Dunn acknowledged that Mr Muir would have received the same amount each fortnight if he had been eligible for Newstart allowance instead of Austudy.

13. I am satisfied that Mr Muir was not attempting to defraud Centrelink. I think there was a genuine misunderstanding of his obligations that continued in discussions with Centrelink officers. It is possible he was speaking at cross-purposes with those officers during his telephone conversations on 1 June and 29 August.

The Issues in this Case

14. The applicant appeared to accept there was an overpayment. Whether he did or not, I am satisfied he ceased full-time study by 10 May 2001. (If he had formally re-enrolled for the second semester, I would be prepared to accept he did not cease full-time study until the first day of the second semester in late June. But he did not formally re-enrol). The SSAT decided that the overpayment was the amount paid between 10 May 2001 (after which he ceased full-time study) and 12 March 2002. I think the SSAT is right. He was unable to satisfy the activity test in s 541B, and was therefore not entitled to receive Austudy assistance: s 568. A person who receives benefits to which he or she is not entitled owes a debt in the amount of the overpayment to the Commonwealth: s 1223. The dispute in this case is over whether the debt ought to be recovered.

Recovery of Debts

15. The Secretary may waive debts in the circumstances set out in s 1237A. The power to waive is not an extensive one. It was not meant to be exercised lightly.

16. Section 1237A provides:

"(1) Subject to subsection (1A), the Secretary must waive the right to recover the proportion of a debt that is attributable solely to an administrative error made by the Commonwealth if the debtor received in good faith the payment or payments that gave rise to that proportion of the debt."

17. I am satisfied that Mr Muir received the payments in good faith. But whether or not the Centrelink officers with whom he spoke on the telephone might have asked more probing questions or given him clearer advice, I have already accepted that the applicant was not clear enough in the advice he gave to the officers about the change in his status. If he had read the terms of the notice that was sent to him and complied with it, the Centrelink officers would not have been under any misapprehension about his circumstances. It follows that the debt is not attributable solely to an error by the Commonwealth. The debt cannot therefore be waived under s 1237A.

18. The other waiver power that is relevant in the circumstances of this case is contained is found in s 1237AAD. That section provides:

"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."

19. Mr Muir did not comply with his statutory obligation to inform Centrelink of changes to his circumstances, but I have accepted his failure was not a knowing failure. It therefore becomes necessary to consider whether there are any special circumstances that need to be considered.

20. The phrase "special circumstances" was discussed in Groth v Secretary, Department of Social Security (1995) 40 ALD 541. In that case, Kiefel J said (at 545) that it was necessary to identify circumstances that were unusual and which set the applicant's case apart from others: see also Beadle v Director-General of Social Security (1985) 60 ALR 225 at 228 per Bowen CJ, Fisher and Lockhart JJ.

21. Mr Muir says his case is special because even if he were not eligible for Austudy, he would have received Newstart allowance. Given Newstart allowance was the same (in dollar terms) as Austudy, it would be harsh if he were required to repay the Austudy money when he would have been entitled to the same amount if he had simply filled out a different form.

22. The ability to offset one entitlement against another was considered in the Tribunal recently in Re Secretary, Department of Family and Community Services and Radmilovich [2002] AATA 779. In that case, the respondent received a Widow Allowance to which she was not entitled, although she was notionally entitled to receive unemployment benefits. The Tribunal held that she could not offset the entitlement to a Newstart allowance against the debt.

23. I have already accepted that Mr Muir did not set out to mislead the respondent. He simply failed to understand his obligations and communicate the change in his circumstances to the respondent. That is different to the situation in Radmilovich where the Tribunal was critical of the respondent for misrepresenting her position: at par 39. I have a great deal more sympathy for Mr Muir than for Ms Radmilovich.

24. It is impossible in the circumstances to be sure whether Mr Muir would have been entitled to receive Newstart allowance since eligibility for Newstart depends on an activity test. While I have sympathy for Mr Muir, the Tribunal cannot simply deem him to have satisfied the terms of the Newstart activity test and any other eligibility requirements that might have been imposed under the legislation. That is a hard result for Mr Muir, but it is one of the consequences of failing to keep Centrelink completely informed of changes in circumstances as required under the Act.

Conclusion

25. The decision under review is affirmed.

I certify that the 25 preceding paragraphs are a true copy of the reasons for the decision herein of Mr B J McCabe, Member

Signed: .....................................................................................

Associate

Date of Hearing 11 November 2002 (at Coolangatta)

Date of Decision 22 November 2002

The Applicant Represented Himself

Solicitor for the Respondent Ms Wallis-Dunn, Departmental Advocate