Rafty and Secretary, Department of Family and Community Services [2002] AATA 1299 (16 December 2002)

Last Updated: 17 December 2002

DECISION AND REASONS FOR DECISION [2002] AATA 1299

ADMINISTRATIVE APPEALS TRIBUNAL )

) No W2002/109

GENERAL ADMINISTRATIVE DIVISION )

Re DENIS RAFTY

Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Mr Murray Allen (Member)

Date 16 December 2002

Place Perth

Decision The Tribunal: Affirms the decision of the Social Security Appeals Tribunal dated 28 February 2002

.............(sgd M Allen).....................

Member

CATCHWORDS

SOCIAL SECURITY - Austudy payment - qualification for payment - undertaking qualifying study - requirements for full-time or concessional workload student - interpretation of "particular study period" - whether debt is due to the Commonwealth - whether debt should be waived- whether debt is attributable solely to administrative error by the Commonwealth - whether a knowing failure to meet notification obligations - whether special circumstances exist - whether debt should be written off

Social Security Act 1991 ss568, 569C, 569D, 1223, 1236, 1237A, 1237AAD

Re Coleman and Secretary, Department of Family and Community Services [2002] AATA 772

Re Callaghan and S, DFCS (1996-97) 45 ALD 435

Re Saunders and S, DFCS (1999) AATA 952

Re Jonauskas and S, DFCS (2001) AATA 72

Re Beadle and Director-General of Social Security (1984) 6 ALD 1

Boscolo v S,DSS (1999) 53 ALD 277 281

REASONS FOR DECISION

16 December 2002 Mr M Allen, Member

1. This is an application made by Mr Denis Rafty for a review of a decision made by the Social Security Appeals Tribunal (SSAT) on 28 February 2002. On that day the SSAT decided to affirm a decision made on are about 12 September 2001 by a delegate of the Secretary to raise and recover an Austudy debt of $1505.30 for the period 19 February 2001 to 22 June 2001.

2. At the hearing of the application on 9 October 2002 Mr Rafty represented himself and the Secretary was represented by Ms Hackney and Mr Jones from Centrelink's Advocacy and Administrative Law Team.

3. The Tribunal received into evidence the documents (the T documents) lodged by the Secretary in accordance with s37 of the Administrative Appeals Tribunal Act 1975 (the AAT Act). Oral evidence was given by Mr Rafty and the Tribunal also received into evidence the following documents:

Exhibit Description

A1 Letter from Mr Rafty to the Tribunal dated 4 October 2002

A2 Letter from Mr Rafty to the Tribunal dated 5 October 2002

A3 Letter from Mr Rafty to the Tribunal dated 6 October 2002

A4 Letter from Mr Rafty to the Tribunal dated 8 October 2002

A5 Austudy claim form and explanatory notes

R1 Letter from Mr Rafty to Centrelink dated 30 May 2002

R2 Letter from Mr Rafty to Centrelink dated 19 June 2002

R3 Statement of Shane Cummings dated 12 July 2002

R4 Statement of Estelle Newport undated

R5 Applications for payment submitted by Mr Rafty to Centrelink dated 8 March 2001, 23 March 2001, 7 September 2001, 21 September 2001, 5 October 2001

R6 Notes extracted from Centrelink's computer system concerning Mr Rafty

4. A few days after the hearing the Tribunal received a further letter from Mr Rafty dated 10 October 2002 in which he raised various issues concerning the case. A copy of that letter was provided to the Secretary with an invitation to provide written comments or submissions if he wished. The Secretary advised that no comments or submissions would be made.

Background evidence

5. Many of the facts of the case are not significantly in dispute. They can be summarised as follows and I make the findings of fact set out below. Other evidence adduced in the case is referred to later in these reasons.

(a) In June 2000 Mr Rafty was considering enrolling as a student in the Graduate Diploma of Science (Information Technology) course at Edith Cowan University (Edith Cowan). Although this course was usually undertaken as a one-year course (two semesters each of four units), the advice Mr Rafty received from Edith Cowan was that for timetabling and subject prerequisite reasons he would need to do it over three semesters.

(b) He obtained an Austudy application form and explanatory notes in late July and studied it to see if he would be eligible for Austudy. Because of the need to do the course over three semesters rather than two he identified an issue about whether he would qualify as a full-time or concessional load student.

(c) On at least two occasions in early July 2000 he visited the Centrelink office to clarify the issue and was informed that he would need to get a letter from Edith Cowan to confirm the nature of the problem ie why he would take three semesters to complete.

(d) He obtained such a letter (dated 19 July 2000, document T4 page 47), which advised Centrelink that Mr Rafty was enrolled in three units for semester 2, 2000 - "which is 75% of the full time load." The letter advised that "Mr Rafty wishes to undertake this course, of eight units over three semesters, rather than two, due to timetable conflicts and prerequisites."

(e) Mr Rafty completed and lodged his application form (T4) on 25 July 2000. In section D of the form (T4,page 38) he provided the following responses:

2. Full course period:

Official start date: 24/7/00

Official end date: /11/01

3. When will you be attending the course this year?

From: 24/7/00 To: /11/01

4. Are you enrolled on a full time or part time basis?

Semester 1 left blank

Semester 2 "Full time" box left blank, "Part time" and "Don't know" boxes both ticked. The following note was added:

"Note: Applying for concessional workload status"

At question 4 the form carries the following two endorsements:

"To be eligible for Austudy, you MUST meet the course workload rules. Please refer to the notes."

and

"If you are not sure whether your course is full time or part time or it is not semester based, please attach details of your course subjects and Centrelink will assess your workload. If you have more than 2 semesters per year, please attach a separate sheet with the details."

(f) The application form contained details of the three units that Mr Rafty was to undertake in Semester 2, 2000 but not for any subsequent semester.

(g) Mr Rafty was advised by Centrelink, by letter dated 9 August 2000, that he was granted Austudy with effect from 25 July 2000 (T7). This was a standard form notification and contained information about what changed circumstances Mr Mr Rafty was required to notify to Centrelink should they arise. Two items relevant for present purposes were:

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

stop being a full time or concessional workload student;

apply for or vary your enrolment at school, college or university or other technical institution."

A similar letter/notice was sent to Mr Rafty on11 August 2000 (T6).

(h) In semesters 1 and 2, 2001 Mr Rafty enrolled for two units and three units respectively.

(i) Having obtained details of the semester 1, 2001 enrolment, in August 2001 Centrelink informed Mr Rafty that the information from Edith Cowan suggested that he was studying part time in semester 1, sought further information and asked Mr Rafty to contact Centrelink. Thereafter followed contact and correspondence between Centrelink and Mr Rafty, culminating in the decision of 13 September 2001 to raise and recover a debt of $1505.30 in respect of the period of semester 1. It did not include holiday periods between semester 2, 2000 and semester 1, 2001 or between semesters 1 and 2, 2001. That decision was affirmed on internal review in December 2001 and by the SSAT in the decision under review.

The issues

6. The issues for determination in this proceeding are:

(a) Was Mr Rafty overpaid for the period 19 February 2001 to 22 June 2001 and, if so, is the amount concerned a debt due to the Commonwealth?

(b) If a debt does arise, should the debt be recovered, waived or written off?

Consideration of the issues

Is there a debt due to the Commonwealth?

7. Section 568 of the Social Security Act 1991 (the Act) sets out the basic qualification requirement for Austudy as follows:

568 Qualification for austudy payment--general rule

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.

8. Subsections (b) and (c) are not in dispute. The requirements of the activity test for the purposes of s568(a) are contained in s 569(1) of the Act, which provides that a person will satisfy the activity test in respect of a period if the person is undertaking qualifying study. Section 569A of the Act provides that 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).

9. It is not in dispute that Mr Rafty satisfied the requirements of s569A (a), (b) and (d). What is in dispute is whether, as required by s569A (c), Mr Rafty was a full-time student or a concessional study-load student in respect of that course. So far as is relevant, the requirements for full-time and concessional study-load students are contained in s569C and s569D as follows:

569C. For the purposes of this Subdivision, a person is a full-time student in respect of a course if:

(a) in the case of a person who is enrolled in the course for a particular study period (such as, for example, a semester)--the person is undertaking at least three quarters of the normal amount of full-time study in respect of the course for that period; or

(b) in the case of a person who intends to enrol in the course for a particular study period--the person intends to undertake at least three quarters of the normal amount of full-time study in respect of the course for that period.

Note: For normal amount of full-time study see section 569E.

569D.(1) For the purposes of this Subdivision, there are 2 classes of concessional study-load students, namely:

(a) 25% concessional study-load students; and

(b) 66% concessional study-load students.

569D.(3) For the purposes of this Subdivision, a person is a 66% concessional study-load student in respect of a course if this subsection applies to the person and:

(a) in the case of a person who is enrolled in the course for a particular study period (such as, for example, a semester)--the person is undertaking at least two thirds, but less than three quarters, of the normal amount of full-time study in respect of the course for that period; or

(b) in the case of a person who intends to enrol in the course for a particular study period--the person intends to undertake at least two thirds, but less than three quarters, of the normal amount of full-time study in respect of the course for that period.

Note: For normal amount of full-time study see section 569E.

569D.(5) Subsection (3) applies to a person if:

(a) the person cannot undertake the course as a full-time student because of:

(i)the relevant educational institution's usual requirements for the course; or

(ii)a specific direction in writing to the person from the academic registrar or an equivalent officer; or

(b) the academic registrar (or an equivalent officer) of the relevant educational institution recommends in writing that the person undertake less than the normal amount of full-time study in respect of the course for specified academic or vocational reasons for a period not exceeding half an academic year.

10. As regards full-time and 66% concessional students, s569C and s569D both refer to a person "who is enrolled in the course for a particular study period (such as, for example, a semester)", indicating that the person's status as a full-time or concessional load student must be considered in respect of each period of study, rather than in respect of the total time of the course. The reference to a semester by way of an example means that "a particular study period" may be some period other than a semester in an appropriate case. Circumstances in particular courses or within particular institutions may vary and there is a need for flexibility in the legislation. Typically, courses at universities will be organised on a semester basis and I find that that is the case at Edith Cowan in respect of the course undertaken by Mr Rafty. The view I have taken on this point is, I believe, consistent with that taken by the Tribunal in Re Coleman and Secretary, Department of Family and Community Services [2002] AATA 772 when dealing with similar but not identical provisions of the Act (s541B) relating to youth allowance.

11. It is not in dispute that, for semester 1, 2001, the "normal amount of full-time study in respect of the course" was four units and that Mr Rafty was not undertaking "at least three quarters" of that normal amount, that is, at least three units. He was not, therefore, a full-time student in that study period.

12. The possibility of a person being a 66% concessional study-load student under s569D(3) only arises if that subsection applies to the person by virtue of there being circumstances that prevent the person undertaking the course as a full-time student and satisfy the requirements of s569D(5) (a) or (b). In the present case it is not necessary to consider whether the specific requirements of s569D(5) (a) or (b) are satisfied in Mr Rafty's case because, even if it is assumed that s569D(3) applies to him, the two units that he undertook in semester 1, 2001 would not have satisfied the requirement in s569D(3) that he undertake "at least two-thirds, but less than three quarters, of the normal amount of full-time study" for that study period. Mr Rafty was not, therefore, a 66% concessional study-load student in respect of semester 1, 2001.

13. It follows that Mr Rafty did not satisfy the requirements of s 569A © of the Act for semester 1, 2001 and was not, therefore, undertaking qualifying study in that period. He did not, therefore, satisfy the activity test of s569(1) and was not qualified for an Austudy payment for the period of that semester.

14. 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.

15. For the reasons set out above Mr Rafty was not entitled to obtain the benefit of the Austudy payments that he received during semester1, 2001. The amount involved is, therefore, a debt due to the Commonwealth.

Should the debt be recovered, waived or written off?

16. Section 1237(1) of the Act grants to the Secretary, and hence to this Tribunal by virtue of s43(1) of the AAT Act, the ability to waive the Commonwealth's right to recover the whole or part of a debt due from a debtor only in the circumstances described in a number of specified sections of the Act. Two waiver sections are relevant in the current proceeding, namely s1237A and s1237AAD.

Mandatory waiver under s1237A

17. Section 1237A(1) of the Act provides that (subject to the proviso in s1237A(1A), which is not relevant in the present case) 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."

18. It is clear from the section that two questions must be answered in the affirmative for the obligation to waive to arise; first, whether the debt was attributable solely to administrative error by the Commonwealth and, second, whether the payment(s) were received by the recipient in good faith. In its consideration of this provision the SSAT concluded (T2) as follows:

"33. ...A debt may be waived under s1237A(1) if it arose solely through departmental administrative error and was received by a person in good faith. This subsection does not allow a waiver of a debt that arose partly through administrative error and partly by one or more other factors such as error by the debtor. The Tribunal accepts that Mr Rafty did not appreciate prior to August 2001 that he was not a concessional study-load student. Mr Rafty has submitted that this misunderstanding was as a result of poor information and documentation provided by Centrelink. However, the form provided by Centrelink did explain the meaning of concessional workloads and Mr Rafty conceded that he did not read the complete section because he thought that neither of the two concessional workload subheadings applied to his case. It was therefore partly Mr Rafty's fault that he did not advise Centrelink that he was no longer either a full-time or concessional study-load student. As a consequence, it cannot be said that the debt arose solely through departmental administrative error."(emphasis in original)

19. At this stage it is appropriate to set out the evidence given by Mr Rafty to the Tribunal at the hearing on 9 October dealing with the circumstances in which his application for Austudy was made. His evidence in chief can be summarised as follows:

(a) When it became apparent that he would need to take three semesters to complete the course he realised that in one of those semesters he would do only two units and therefore not satisfy the three quarters load requirement for a full time student. He read the explanatory notes document (T28), particularly page 6 thereof - which appears in the T documents at folio 212, a number of times. Because of its significance to the case, an extract from pages 6 and 7 of T28 is set out below.

"Full time student

A full time student for the purposes of Austudy is a person who is enrolled at an approved institution and is undertaking at least three quarters of a normal full time workload for their course.

A normal full time workload is

* For a course which attracts a HECS loading, the standard student load, or

* For a course which does not attract a HECS loading, the amount of full time study as defined by the institution, or

* 20 hours per week if neither of the above apply.

Proof of student status is to be provided to Centrelink along with your Austudy claim.

Concessional workloads

Some students can get Austudy if they are not able to undertake three quarters of a full time study load for reasons beyond their control.

For example, if you if you cannot study 75% of the normal full time workload because of:

* your institutions normal requirements for the course (eg timetable clashes, subject prerequisites not satisfied because of failure or other reasons, subjects cancelled or over enrolled, or reduced workload needed to complete course)

* a specific direction in writing from the academic registrar or equivalent officer, or a recommendation in writing from the academic registrar or equivalent officer for academic or vocational reasons.

If this applies to you will need to provide documentary evidence from your institution to support your reasons for undertaking less than a full time study load.

Concessional workloads for students for academic reasons

The minimum required workload may be reduced to two thirds of the normal full time workload if it is not possible three quarters of the normal full time workload because of:

* an institutions normal requirements for the course

* a specific direction in writing from the deputy principal, an academic registrar, or an equivalent officer

* a recommendation in writing from the deputy principal, an academic registrar, or an equivalent officer, for academic or vocational reasons.

If this applies to you, you will need to provide documentary evidence from your institution to support your reasons for undertaking less than a full time study load.

Concessional workload for students with a disability

Concessions can apply to the normally required study loads for secondary and tertiary students who have a substantial physical, psychiatric or intellectual disability. Under these special rules a student can get Austudy if they are doing 25% or more of the normal full time workload. This includes studying in a course offered on a part time basis where the workload is 25% or more of a comparable course offered full time.

If you would like to know more about Austudy and concessional workloads, please call Centrelink on 13 3490."

(b) On the two occasions in early July 2000 when he saw Estelle Newport at the Centrelink office he was not able to get answers to his queries. She was impatient and not helpful, other than to tell him to obtain a letter from the University. He did not give her his Centrelink reference number so she would not have been able to make a computer report about the conversations.

(c) Despite his concerns about eligibility, he decided to rely on what he thought was the correct interpretation of the documents. He has a predisposition to check everything he reads logically. His reading of the paragraphs set out above was such that he could see no connection between the first dot point under the heading "Concessional workloads" and the three dot points under the sub-heading "Concessional workloads for students for academic reasons".

(d) He therefore saw no logical connection between the references under the sub-heading to "two thirds of the normal full time workload" and the general provisions regarding concessional workloads under the main heading. Had there been a connection it should have been possible to demonstrate that connection by formal logical reasoning and by mathematics. He therefore considered that he was a concessional workload student with an undefined workload requirement and therefore eligible for Austudy even in the semester when he would be undertaking only two units.

(e) When he submitted the application form in late July he dealt with Shane Cummings. He was given no explanation about course loads nor was he asked about future workload levels. Had he been asked about future enrolments he would have provided the information and, presumably, the issue of eligibility or lack of eligibility would have come to the surface and been clarified. He assumes that Centrelink assumed that the following semesters (or at least semester 1, 2001) would also be three-unit semesters - and this was not correct. Centrelink should have conducted a detailed interview with him and should have sought information about the proposed enrolments for the whole course before approving his application.

(f) At the time of his original application in mid 2000 his intention was to do three units in semester 1, 2001 and two units in semester 2, 2001. However, because of some changes to the timetable and unit availability, in about January 2001 he changed his plans and decided to do the two units in semester 1, 2001.

(g) There should have been periodic requests from Centrelink seeking confirmation of workloads or enrolment changes.

(h) The letter advising him of the granting of his application was vague. It should have stated very clearly the basis of his eligibility and clarified any misunderstandings (such as what would happen in the semester breaks).

(i) Because of his belief that he was a concessional workload student and was covered even when only doing two units he showed on the fortnightly form he submitted to Centrelink (R5) that he was a full time student and wrote on the form "concessional workload".

20. When questioned by Ms Hackney, Mr Rafty gave the following evidence (in summary form):

(a) He read all the explanatory notes document and all the notes on the application form because he was trying to work out his eligibility. Despite knowing that he was only going to do two units in one semester, having read the documents he thought he was eligible under the concessional rules when doing the two units.

(b) At the time of the application he knew that Centrelink only had information about his units for semester 2, 2000. In January 2001 when he decided to do only two units in semester 1, 2001 he knew Centrelink was not aware of the change of plans. As regards the obligation to notify changes in enrolment or changes in status (see T28, folio 216), he believed that he had a concessional status that covered both full time and part time enrolments and that the change to two units did not involve a change of status. If that was not the case then someone at Centrelink should have informed him of that.

(c) As regards the obligation to notify changes arising from documents T6 and T7, because these were on the back of the form, and because these were generic forms, he thought they did not apply to him. If they were to apply they should have been clearly stated on the front of the form.

21. Subsequently, when making submissions, Mr Rafty gave further evidence to the effect that he relied totally on the documents being correct and on Centrelink's processing. If there were any problems or uncertainties then he expected Centrelink to raise them with him. As regards the correct interpretation of folios 212 and 213 (particularly whether there was a connection between what was said under the heading "Concessional workloads" and the sub-heading "Concessional workloads for students for academic reasons") he said that he was not prepared to make the connection that thousands of Austudy applicants have made in the past. In response to my question Mr Rafty conceded that, on his interpretation that he was a concessional workload student with no defined workload requirement, he would be eligible for Austudy if he undertook only one unit in a semester.

22. Ms Newport's evidence, by way of a statement (R4) admitted by consent, was that she has worked at the relevant Centrelink office since 1999 as counter staff/customer service officer. She does not recall speaking to Mr Rafty about his claim. It is usual for her to create a document on the computer if she discusses a claim with a customer and the computer system shows that she did not enter a record about Mr Rafty in 2001.

23. Mr Cummings' evidence was also given via a statement (R3) admitted by consent. In mid 2000 he was a customer service officer and recalls accepting Mr Rafty's application from him as a "walkin" customer. He does not recall discussing with Mr Rafty a letter from Edith Cowan about his course being spaced over three semesters. He is emphatic that had there been any discussion about the number of units to be studied he would have explained carefully how many units would be considered full time or part time study. In such a situation he explains that Centrelink considers a load of 75% of what is normal for a course as full time - usually three out of four units. Edith Cowan states quite clearly on its internet enrolment forms that students who vary their load must inform Centrelink immediately and that change to a part time study load may result in loss of entitlement to Youth Allowance or Austudy. Although he remembers seeing Mr Rafty he does not recall the specifics of the conversation. He emphasised the importance he places on explaining the difference between full time and part time study as they relate to Centrelink requirements.

Is the debt attributable solely to administrative error by the Commonwealth?

24. Mr Rafty submitted that the debt arose because Centrelink's documentation and procedures were inadequate. The document explaining the concessional workload rules was too imprecise and not logical and there should have been procedures that warned students about course continuation and sought specific information about workloads each semester. In various documents he had set out for Centrelink's benefit the ways in which the documentation should have been worded and he considered that the changes that had been made to the wording of T28 since mid-2000 vindicated his views about that document's inadequacies. Mr Rafty would not concede that he had misinterpreted T28 as concluded by the SSAT. Rather, he had analysed it logically and found its logic faulty. Even if he had erred in his interpretation, which he would not concede, the error was a direct consequence of Centrelink's errors.

25. Ms Hackney conceded that there had been administrative error by Centrelink that had contributed to the debt arising. However, she submitted that there had also been error by Mr Rafty that had contributed to the problem - namely his failure to notify Centrelink when his enrolment was reduced to two units only, as required by T6 and T7. The letter from Edith Cowan (T4, folio 47) established only that he was enrolled for three units in semester 2, 2000 and established eligibility for Austudy for that semester only.

26. In view of the opinion I have formed about document T28, it seems to me that the only error by Centrelink that can be said to have occurred was a failure to identify and question earlier the statements made by Mr Rafty in the fortnightly forms that he submitted (R5) that his study was both "full time" and "concessional workload." A student can not be both at the same time. However, it is sufficient to say that in my opinion, and I so find, that Mr Rafty's interpretation of the concessional workload rules was not correct and that his interpretation was not reasonably open to him. In my opinion the information about what constitutes a concessional workload is sufficiently clear and, as Mr Rafty said, has apparently been understood by thousands of other Austudy applicants. That error, and Mr Rafty's failure to notify the change in his workload down to two units in semester 1, 2001 were material factors in how the debt arose. Accordingly, it cannot be said that the debt is attributable solely to administrative error by the Commonwealth. The ability to waive the debt under s1237A(1) is not, therefore, available.

Discretionary waiver under s1237AAD

27. In certain circumstances a debt may be waived in the exercise of a discretion to do so. Section 1237AAD of the Act is as follows:

1237AAD. 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.

Note: Section 1236 allows the Secretary to write off a debt on behalf of the Commonwealth.

28. The Secretary has not contended that the requirements of s1237AAD(a) are not satisfied. Nevertheless, I should set out whether I consider that to be the case, specifically in relation to whether Mr Rafty "knowingly" failed to notify Centrelink of the change in the number of units for which he was enrolled in semester 1, 2001. The correct meaning to be given to the that word has been the subject of differing opinions in this Tribunal in recent years: see, for example, Re Callaghan and S, DFCS (1996-97) 45 ALD 435 (Deputy President Forgie); Re Saunders and S, DFCS (1999) AATA 952 (Senior Member Kiosoglous); and Re Jonauskas and S, DFCS (2001) AATA 72 (Deputy President Forgie). The following extracts illustrate the difference of opinion.

Re Saunders, per Senior Member Kiosoglous

"22. Following these decisions, in this Tribunal's opinion, the interpretation to be given the phrase "knowingly failing" requires a standard of conscious, deliberate failure to comply with a provision of the Act. Inadvertent or unintentional failure does not constitute "knowingly", even when an applicant knows he needs to notify. It is a civil standard of proof where "knowingly" is a conscious and deliberate choice (Re Morgan) and also can include recklessness to the consequence of failing to comply with a provision of the Act."

Re Jonauskas, per Deputy President Forgie

"68. Although I am reluctant to disagree with a colleague and have only respect for Senior Member Kiosoglous, I must do so on this occasion and maintain the position I adopted in Re Callaghan when I said:

"(48) There is nothing in s 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 making a false statement or representation or 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 or the act or omission." (page 445)

69. I reached that conclusion after considering the discussion of "knowledge" by Matheson J in Hooi v Brophy (1984) 52 ALR 710; 3 IPR 16. He referred at pp. 712-713, to a discussion of "knowledge" by Devlin J (as he then was) in Taylor's Central Garages (Extra) Ltd v Roper [1951] WN (Eng) 383 at 385:

"...'There are, I think, three degrees of knowledge which it may be relevant to consider in cases of this sort. The first is actual knowledge, and, of course, the justices may find it because they infer from it the nature of the act that was done, for no man can prove the state of another man's mind; and they may find it, of course, even if the defendant gives evidence to the contrary. They may disbelieve him, and think that that was his state of mind. They may feel that the evidence falls short of that, and, if they do, they have then to consider what might be described as knowledge of the second degree: they have to consider then whether what the defendant was doing was, as it has been called, shutting his eyes to an obvious means of knowledge. Various expressions have been used to describe that state of mind. I do not think it necessary to look further, certainly not in cases of this type, than the expression used by Lord Hewart CJ, in a case under this section. Evans v Dell (1937) 53 TLR 310 at 313: "... the respondent deliberately refrained 'from making inquiries', the results of which he might not 'care to have'."

'The third sort of knowledge is what is generally known in the law as constructive knowledge. It is what is encompassed by the words 'ought to have known' in the phrase 'know or ought to have known'. It does not mean actual knowledge at all: it means that the defendant had in effect the means of knowledge.' (my emphasis)" (page 385)

70. It seems to me that it is the first type of knowledge, actual knowledge, that it is meant by the reference to "knowingly" in s. 1237AAD. ...[I]t seems to me that the Parliament has quite deliberately distinguished between "knowingly" and "recklessly". It has done so in the context of offences under the Act and I refer, for example, to s. 1344(1), which provides that a person must not "knowingly or recklessly make a false or misleading statement" in connection with his or her or with another's claim for, among other matters, a social security payment. ..."

...

"73. In the context of the Act, it is clear that Parliament is aware of the "three degrees of knowledge" and has deliberately distinguished between the first two. It has also distinguished the first two from constructive knowledge and examples of that are found in ss. 1358A and 1358B of the Act (ss. 229-232 of the Administration Act). In view of that, it seems to me that its use of "knowingly" in s. 1237AAD is a deliberate choice and means actual knowledge. That is not to say that recklessness is irrelevant in s. 1237AAD for it is relevant in determining, together with other matters, whether or not there are special circumstances."

29. With the greatest of respect to both Members, I prefer the view expressed by Deputy President Forgie. Applying the requirement that there be actual knowledge and a deliberate choice by the person who fails or omits to comply with a notification obligation to the present case, I do not consider that Mr Rafty can be said to have had that actual knowledge. It is true that he, in my opinion, wrongly and unreasonably interpreted the concessional workload rules in T28 and subsequently did not notify enrolment changes because of that mistaken view. I also consider that there was an element of "shutting his eyes" to an interpretation of T28 that seems reasonably clear but which did not meet Mr Rafty's preferred outcome. The same can be said of his explanation that he thought the notification requirements in T5 and T6 did not apply to him because they were on the back of the forms. Nevertheless, on the balance of probabilities, I do not consider that Mr Rafty had actual knowledge of an obligation and made a conscious decision to fail to meet that obligation.

30. Section 1237AAD(a) being satisfied, I must then turn to consider whether there are special circumstances (other than financial hardship alone) in the case that would make it desirable to waive the debt.

31. What should be regarded as special circumstances is an issue that confronts this Tribunal regularly. Reference is frequently made, with approval, to the decision of the Tribunal in Re Beadle and Director-General of Social Security (1984) 6 ALD 1 at 3, that one should look for circumstances that are unusual, uncommon or exceptional. They need not be unique, but they must have a particular quality of unusualness that permits them to be described as special. In Boscolo v S,DSS French J described the core of the requirement as being that there be something unusual or different to take the matter out of the ordinary course, but without requiring that the case be extremely unusual, uncommon or exceptional (1999) 53 ALD 277 at 281, 282.

32. Shortly before the hearing of the present proceeding Mr Rafty submitted to the Tribunal a 16-page submission regarding why he considered special circumstances to exist in his case (A1). I mean no disrespect by not setting out the submission in full. As I understand the written submission and his oral submissions at the hearing, Mr Rafty contends that there are two types of special circumstances in his case.

(a) His scientific training and experience makes him apply a scientific scrutiny to all decisions he has to make in his daily life. The fact that he is the one Austudy applicant out of many thousands who is not prepared to accept a connection between the heading and sub-heading concerning concessional work loads means that his situation is quite out of the ordinary.

(b) Centrelink's administrative processes generated many errors in his case, such as failing to identify his misapprehension about workloads, failing to have a system that identified the error quickly and, generally, failing in its duty of care to him. Having regard to the principles of administration applicable to Centrelink and set out in s8 of the Social Security (Administration) Act 1999, this combination of errors is most unusual and, therefore, a special circumstance. If such a combination of errors is not unusual then it implies a very poor system and poor training of staff.

33. Ms Hackney submitted that there were no special circumstances in the case. The explanation of the concessional work load requirements in T28 is sufficierntly clear and Mr Rafty's interpretation is not a reasonable one. It is clear that Mr Rafty and Ms Newport had a discussion about concessional workload status because Mr Rafty knew after that conversation that he must get a letter from Edith Cowan. The conversation with Mr Cummings was only about lodgement and processing. Even if there was some sort of mis-communication between Mr Rafty and Ms Newport he should have made enquiries when he changed his enrolment in early 2001. Centrelink officers are not expected to volunteer information because that would be too onerous, but they are expected to provide accurate and complete information in response to a specific enquiry.

34. The SSAT recorded that it had looked at whether there were any special circumstances but considered that none arose, although it did not discuss or identify the circumstances considered. Mr Rafty did not argue or present any evidence in the present case that there were special circumstances, such as might arise from financial or health matters, other than the two issues identified in paragraph 32 above. Based only on the limited information contained in the SSAT decision about the financial situation of Mr Rafty and his family (T3, para 20) I would not conclude that there are any financial circumstances that are relevant.

35. Administrative failings that contribute to the existence of a debt may well on their own or together with other circumstances amount to special circumstances in an appropriate case. However, on the evidence presented in the present case and referred to in these reasons I do not consider that there is anything about Mr Rafty's situation that could be said to amount to special circumstances. Specifically, I do not accept his contention that the (asserted) fact that he is the only person to question the "accepted" interpretation of the concessional workload requirements means that this should be treated as a special case out of the ordinary. The position may well be different if his interpretation was an arguable one and he made reasonable efforts to clarify the position with Centrelink and failed to gain that clarification. On the evidence, he was not happy with the response he got from Ms Newport and decided to proceed on the basis of his own interpretation. That position was aggravated by his view that the requirement to notify changes in enrolment did not apply to him because they appeared on the back of the form rather than the front. In my opinion there are no special circumstances and I would not exercise the discretion available to waive the debt under s1237AAD of the Act.

Discretionary write off under ss1236

36. Subsection 1236(1) of the Act permits a debt to written off (ie its collection delayed) for a stated period or otherwise, but only in the circumstances referred to in the section. The section is as follows:

1236.(1) Subject to subsection (1A), the Secretary may, on behalf of the Commonwealth, decide to write off a debt, for a stated period or otherwise.

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.

1236.(1B) For the purposes of paragraph (1A)(a), a debt is taken to be irrecoverable at law if, and only if:

(a) the debt cannot be recovered by means of deductions, or legal proceedings, or garnishee notice, because the relevant 6 year period mentioned in section 1231, 1232 or 1233 has elapsed; or

(aa) the debt cannot be recovered by means of deductions or setting off because the relevant 6 year period mentioned in section 86 of the A New Tax System (Family Assistance) (Administration) Act 1999 has elapsed; or

(b) there is no proof of the debt capable of sustaining legal proceedings for its recovery; or

(c) the debtor is discharged from bankruptcy and the debt was incurred before the debtor became bankrupt and was not incurred by fraud; or

(d) the debtor has died leaving no estate or insufficient funds in the debtor's estate to repay the debt.

1236.(1C) For the purposes of paragraph (1A)(b), if a debt is recoverable by means of:

(a) deductions from the debtor's social security payment; or

(b) deductions under section 84 of the A New Tax System (Family Assistance) (Administration) Act 1999; or

(c) setting off under section 84A of that Act;

the debtor is taken to have a capacity to repay the debt unless recovery by those means would result in the debtor being in severe financial hardship.

37. The SSAT noted (T2, para 35) that withholdings of $20 per fortnight were being made from a then-current social security entitlement that Mr Rafty was receiving and concluded that write off was not an available course of action. Mr Rafty presented no evidence and made no submissions in relation to that aspect of the SSAT decision or to the general issue of write off. From the information available to me it would seem that only s1236(1A) (b) could be applicable to Mr Rafty. In the absence of evidence about financial circumstances, apart from that referred to in paragraph 20 of the SSAT decision, I can not conclude that the severe financial hardship referred to in s1236(1C) would exist and, hence, I can not conclude that Mr Rafty does not have the financial capacity to repay the debt. A write off of the debt is not, therefore, appropriate.

Conclusion

38. For the reasons set out above I have concluded that a debt to the Commonwealth has arisen and that the debt should not be waived or written off. I therefore affirm the decision of the SSAT of 28 February 2002, which in turn affirmed the decision of the delegate of the Secretary to raise and recover a debt of $1505.30.

I certify that the 38 preceding paragraphs are a true copy of the reasons for the decision herein of Mr M Allen, Member

Signed: ...........(sgd V Wong)..................................

Associate

Date/s of Hearing 9 October 2002

Date of Decision 16 December 2002

Counsel for the Applicant In person

Counsel for the Respondent Ms K Hackney

Solicitor for the Respondent Advocacy & Administrative Law Team,

Centrelink