Kalpouzos and Secretary, Department of Education, Employment and Workplace Relations [2009] AATA 91 (12 February 2009)

Last Updated: 13 February 2009

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2009] AATA 91

ADMINISTRATIVE APPEALS TRIBUNAL )

) No 2007/3848

GENERAL ADMINISTRATIVE DIVISION		)
	Re		MELINA KALPOUZOS

Applicant

And

SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal

Mr Egon Fice, Member

Date 12 February 2009

Place Melbourne

Decision

The Tribunal affirms the decision under review.

(sgd) Egon Fice
Member

SOCIAL SECURITY – youth allowance – full-time study – cancellation of enrolment – failure to notify Centrelink – debt due to the Commonwealth – debt write-off – waiver where debt attributable solely to administrative error – waiver in special circumstances – emotional stress due to surgery – notional entitlement

A New Tax System (Family Assistance) (Administration) Act 1999 s 101

Social Security Act 1991 ss 540, 541, 541(3), 541A, 541B, 541B(1), 541B(1)(d), 542, 542A, 542C(2), 543B(2), 593, 601, 1223(1), 1223(1AB), 1236(1A), 1236(1B), 1236(1C), 1237A, 1237A(1), 1237AAD

Social Security (Administration) Act 1999 ss 68, 68(2), 74

Dranichnikov v Centrelink [2003] FCAFC 133

Re Secretary, Department of Families and Community Services and Jonauskas [2001] AATA 72

Oberhardt v Secretary, Department of Education, Employment and Workplace Relations [2008] FCA 1923

Sekhon v Secretary, Department of Family and Community Services [2003] FCAFC 190; (2003) 132 FCR 126

Taylor’s Centra Garages (Extra) v Roper [1951] WN (Eng) 383

REASONS FOR DECISION

12 February 2009

Mr Egon Fice, Member

1. Ms Kalpouzos applied to Centrelink for youth allowance (YA) in April 2003 to enable her to study full-time. Centrelink is the service provider for the Department of Education, Employment and Workplace Relations (the Secretary). Centrelink granted her YA. She was enrolled at Charles Sturt University in the School of Community Health for a Bachelor of Health Science (Speech Pathology) degree. The normal duration for the course was four years as a full-time student.
2. Charles Sturt University excluded Ms Kalpouzos from further study in the speech pathology course from the second semester 2005 because she failed to pass a key subject in two attempts. Ms Kalpouzos did not notify Centrelink of the cancellation of her enrolment. After making enquiries about Ms Kalpouzos’ enrolment for the second semester of 2005 with the university, Centrelink was informed that her enrolment had been withdrawn by the university and she had ceased to be a student from 25 July 2005. In a letter dated 12 April 2006, Centrelink advised Ms Kalpouzos that her YA had been cancelled as of 25 July 2005 because she had failed to provide proof of enrolment for Semester 2 of 2005 and was therefore no longer entitled to receive YA. The letter also advised her that as she had been paid YA until 19 March 2006, she had been overpaid $6,515.54 between 25 July 2005 and 19 March 2006. She was told that Centrelink was required to recover this amount from her.
3. Ms Kalpouzos sought an internal review by an authorised review officer (ARO) of Centrelink’s decision to recover the $6,515.54. The ARO affirmed Centrelink’s decision and Ms Kalpouzos sought review of that decision by the Social Security Appeals Tribunal (SSAT). On 17 July 2007 the SSAT decided to affirm the decision of the ARO. Ms Kalpouzos now seeks review of the SSAT decision by this Tribunal.
4. The questions which I need to decide are:
   • (a) was Ms Kalpouzos entitled to the YA between 25 July 2005 and 19 March 2006;
   • (b) if she was not entitled to be paid the YA, whether she has incurred a debt to the Commonwealth; and
   • (c) if Ms Kalpouzos owes a debt to the Commonwealth, should all or part of the debt be recovered?

BACKGROUND FACTS

5. The following facts are taken from the documents which were in evidence before me. I did not understand there to be any controversy about them.
6. Ms Kalpouzos lodged a claim for YA with the Centrelink office at Albury on 16 February 2003. On the claim form Ms Kalpouzos described herself as a full time student. As part of that form, Ms Kalpouzos made a declaration which included the following:

I will notify Centrelink of any changes to this information, within fourteen (14) days of the change occurring.

She signed and dated the claim form.

7. In a letter dated 1 April 2003 Centrelink told Ms Kalpouzos that she would be paid the YA from 17 February 2003. In the paragraph immediately below the statement indicating she was to receive the YA, was the following:

Your Youth Allowance is based on you studying full-time at CHARLES STURT UNIVERSITY – MUR, Tertiary Group D Course with the course ending on the 15 November 2007. If your study load changes or if you cease study you should let us know within 14 days.

That letter also set out under the heading WHEN TO CONTACT US the following:

You must tell us within 14 days about events or changes in circumstances affecting your payment. You can tell us by writing, phoning or coming into any of our offices. This is an information notice given under the social security law.
The rate of your Youth Allowance may need to be adjusted if there are changes in your circumstances. If you are paid too much allowance because you don’t tell us when you are required to do so, we may recover money from you. There are also penalties for not telling us when required.

Also, under the heading WHAT YOU MUST TELL US was the following:

...stops being a full-time student; or
...
leaves or decides to leave Australia; or
returns to Australia after travelling overseas; ...

8. Ms Kalpouzos was sent letters which contained the above cautions on 29 July 2003, 19 January 2004, 22 June 2004, 2 August 2004, 31 January 2005 and 1 July 2005.
9. After completing her first semester exams in June 2005, Ms Kalpouzos travelled to Greece to attend her brother’s wedding. On her return, she was notified by Charles Sturt University that her enrolment for the second semester of 2005 had been withdrawn due to her poor grades in the subjects studied to that time. Ms Kalpouzos did not notify Centrelink that her enrolment had been cancelled. She did not study in the second semester of 2005, although she did lodge an appeal against her exclusion from the course. That appeal was unsuccessful and Ms Kalpouzos then lodged a formal complaint against the university.
10. Ms Kalpouzos, who was born with a bilateral cleft pallet and lip abnormality, underwent major surgery in September 2005. She had major surgery before, in April 2003.
11. In a letter dated 7 December 2005, a Centrelink customer service officer (CSO) wrote to Ms Kalpouzos stating that recent information received from Charles Sturt University indicated that her education details may need to be updated. The CSO requested that Ms Kalpouzos provide confirmation of her enrolment at Charles Sturt University in the second semester of 2005 and an official record of her student status. That letter cautioned Ms Kalpouzos that if she did not respond to the letter, her YA payments may be stopped and a penalty may be imposed. It also cautioned her that if there was no response to the letter, Centrelink would accept the information it had received from Charles Sturt University, amend its records, and that she may have to repay any YA which was incorrectly received.
12. After Ms Kalpouzos failed to respond to the letter of 7 December 2005, in a letter dated 20 March 2006, a Centrelink CSO notified Ms Kalpouzos that her YA had been suspended because of her failure to supply the documents requested. Ms Kalpouzos was then sent the letter dated 12 April 2006 regarding the cancellation of her YA and the recoverable debt. Ms Kalpouzos did not respond to that letter.
13. After receiving notification that Centrelink would seek repayment of YA paid to Ms Kalpouzos between 25 July 2005 and 19 March 2006, she finally telephoned Centrelink stating that she did not believe she was required to repay the sum claimed. The file note of that conversation with a CSO records that Ms Kalpouzos said she was in hospital for two operations and was not aware that the university had cancelled her enrolment until November 2005.

THE LEGISLATIVE SCHEME

14. The general rule regarding qualification for YA is set out in s 540 of the Social Security Act 1991 (the Act). As far as Ms Kalpouzos is concerned, the essential qualifications which she must meet are that:
    • (a) throughout the period she satisfied the activity test (subdivision B) or was not required to satisfy the activity test (subdivision C);
    • (b) throughout the period she was of the Youth Allowance age (subdivision D).
15. Insofar as it is relevant, the activity test is set out in s 541 of the Act. It provides:

(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) subject to subsection (4), 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
(c) throughout the period, the person complies with the terms of a Youth Allowance Activity Agreement applying to the person.

Sections 541A and subsection (3) of s 541(1) do not apply to Ms Kalpouzos.

16. Section 541B of the Act sets out what is meant by undertaking full-time study:

541B Undertaking full-time study
General
(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
(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 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; or
(ii) intends to undertake in the next study period for which he or she intends to enrol 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)); or
(iv) in a case to which subsection (1A) applies—at least two-thirds of the normal amount of full-time study in respect of the course for that period (see subsections (2) to (4)); and
(c) the course in question is an approved course of education or study (see subsection (5)); and
(d) in the Secretary’s opinion, the person is making satisfactory progress towards completing the course.

17. There are circumstances in which a person is not required to satisfy the activity test in respect of the period. These are set out in s 542 of the Act. The only circumstance which might apply to Ms Kalpouzos is that if she had a temporary incapacity exemption under s 542A for any part of the period in question. Therefore, where a person undertaking full-time study does not have the capacity to undertake the course of education in respect of which he or she is undertaking full-time study because of sickness or an accident, and the incapacity is caused wholly, or virtually wholly by a medical condition arising from the sickness or accident, where the incapacity is or is likely to be of a temporary nature; and the person claiming the temporary incapacity obtains a certificate from a medical practitioner in the approved form, a temporary incapacity exemption may be granted. A person may be granted an exemption for a maximum period of 13 weeks (s 542C(2)).
18. The maximum age for being eligible for YA, for a person not undertaking full-time study, is 21 years. Where a person is undertaking full-time study the maximum age is generally 25 years, unless that person was receiving YA before turning 25. However, if the person is more than 25 years of age and ceases to study full-time, they exceed the maximum age for YA (s 543B(2)).

DID MS KALPOUZOS RECEIVE YOUTH ALLOWANCE IN EXCESS OF HER ENTITLEMENT?

19. There is no issue that Ms Kalpouzos qualified for YA for 2003 and 2004. She was enrolled in a course of education at an educational institution on a full-time basis. Her student transcript indicates that she sat for exams throughout those two years, which seems to indicate that she was undertaking study at the full-time rate. There is no question that her course was an approved course of education for the purposes of the Act.
20. There may well be a question about whether Ms Kalpouzos met the requirement to make satisfactory progress towards completing the course because, as her results indicate, she passed two subjects but failed the remainder. The evidence also indicates that Ms Kalpouzos had some time away from university during those two years because she was undergoing surgery to correct her medical problem. Ms Kalpouzos indicated, in a letter she wrote to the university setting out a complaint she had about the way she had been treated at the university, that she was unable to attend university for a period of eight weeks in 2003. However, there is no evidence that Ms Kalpouzos either notified Centrelink or gave to Centrelink a certificate from a medical practitioner in an approved form explaining the period for which she was incapacitated for study. While clearly some questions arise as to whether Ms Kalpouzos was entitled to a temporary incapacity exemption for the period she was absent due to her medical condition, the Secretary has not sought recovery for any of those periods and the evidence before me is insufficient for me to conclude that she failed to satisfy the activity test as a consequence of any absence due to her medical condition.
21. Ms Kalpouzos studied in the first semester of 2005 despite the fact that she had been given a Show Cause Notice as a result of her poor performance in the first two years. However, the Faculty Show Cause Panel decided in February 2005 that she should not be excluded from the course at that time. In a letter dated 11 February 2005, Ms Kalpouzos was told that the Dean had decided that she could continue with her course of study unconditionally. However, she failed all three examinations which she sat in June 2005. As a consequence, Ms Kalpouzos was excluded from study at the university for two years commencing with the second semester of 2005. The university’s Academic Progress Regulations provide that if a student fails to pass a key subject of a course in two attempts, their enrolment is suspended.
22. As she was entitled to do, Ms Kalpouzos appealed against her exclusion from the university for two years. On 1 November 2005 the Academic Secretary wrote to Ms Kalpouzos informing her that her appeal would be considered by the Academic Appeals Committee on 15 November 2005 and that she would be advised of the committee’s decision shortly after that date. The letter also stated that she may remain enrolled and continue her studies until her appeal against the exclusion was decided by the Academic Appeals Committee. However, Ms Kalpouzos did not continue with her studies because, shortly thereafter, her appeal against the decision to exclude her was affirmed. She then instituted a formal complaint against the university. This complaint was made under the university’s Grievance Resolution Policy. Although there are no documents before me to indicate the outcome of that grievance procedure, it is common ground that Ms Kalpouzos did not continue with her studies at the university.
23. As s 541B(1) provides, for the purposes of the Act, a person is undertaking full-time study if the person is enrolled in a course of education at an educational institution. Quite clearly, when the university cancelled Ms Kalpouzos’ enrolment at the end of June or early July 2005, she no longer satisfied that requirement. However, the letter from the Academic Secretary dated 1 November 2005 appears to alter that position retrospectively. It plainly states that Ms Kalpouzos may remain enrolled until her appeal against exclusion was decided. It is therefore arguable that Ms Kalpouzos remained enrolled between 25 July 2005 and 15 November 2005, when it appears that her appeal was decided against her.
24. However, even if that is correct, it does not help Ms Kalpouzos to meet the requirements of undertaking full-time study. That is because s 541B(1) requires the student not only to be enrolled for the period in question, but he or she must be undertaking at least three quarters of the normal amount of full-time study in respect of the course for the period in question, or at least two-thirds of the normal amount of the full-time study, depending on the student’s situation. The evidence is that Ms Kalpouzos did not study at the university after 25 July 2005. Further, it is my opinion that Ms Kalpouzos did not satisfy s 541B(1)(d) because it could not be reasonably said that she was making satisfactory progress towards completing the course for which she was enrolled.
25. At the end of 2005, Ms Kalpouzos had studied some 19 subjects, three of which were repeated, one of them for a second time, but had only passed two subjects overall. I therefore find that Ms Kalpouzos did not satisfy the requirements set out in s 541B of the Act and therefore cannot be said to have been undertaking full-time study at any time after 25 July 2005.
26. In order to satisfy the activity test, Ms Kalpouzos was required to satisfy the Secretary that throughout the period in question, she was undertaking full-time study. Because I have found that she was not studying full-time after 25 July 2005, I must necessarily find that she failed the activity test for the period following that date. She therefore did not satisfy the qualifications for YA after 25 July 2005.
27. Ms Kalpouzos could have satisfied the activity test if, after 25 July 2005, she was actively seeking and willing to undertake paid work in Australia. However, there are two problems with this possibility. The first is that there was no evidence before me that Ms Kalpouzos was actively seeking paid work during that period of time. In fact, as well as having a major operation in September 2005, she spent much of the period in question in dispute with the university over her continuing studies. The second problem is that Ms Kalpouzos was over 21 years of age during that period of time. She was not studying full-time and therefore she was in excess of the maximum age to receive YA as a job seeker. It must necessarily follow that any payments of YA that Ms Kalpouzos received after 25 July 2005 were payments to which she was not entitled under the Act.

RECOVERABLE DEBT

28. Section 1223(1) of the Act provides:

1223 Debts arising from lack of qualification, overpayment etc.
[see Note 6]
(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.

29. Section 1223(1AB) sets out the circumstances under which a person is taken not to have been entitled to a benefit. Among those circumstances is one where the person for whose benefit the payment was intended to be made was not qualified to receive the payment.
30. As I have found above, Ms Kalpouzos was not qualified to receive YA at any time after 25 July 2005.
31. Centrelink’s computer generated documents record that Ms Kalpouzos continued to receive YA payments between 25 July 2005 and 21 March 2006. Those payments amounted to $6,515.54. That sum included YA rental assistance. Therefore, the sum of $6,515.54 must necessarily be a debt due to the Commonwealth by Ms Kalpouzos.

RECOVERY OF DEBT

32. Not every debt due to the Commonwealth is necessarily recoverable by the Secretary. There are some exceptions.
33. Under s 1236(1A) of the Act, the Secretary may write off a debt for a stated period 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.

The circumstances in which a debt is taken to be irrecoverable at law are set out in s 1236(1B) of the Act. There was no evidence before me to suggest that this debt is irrecoverable at law. It does not fall with any of the exceptions listed in s 1236(1B).

34. A debtor is taken to have the capacity to repay a debt unless recovery would result in severe financial hardship for the debtor (s 1236(1C)). There was no evidence before me that Ms Kalpouzos would suffer any form of financial hardship if she were required to repay the debt. Her evidence was that she is currently employed.
35. The remaining two bases upon which the Secretary may write off a debt do not apply to Ms Kalpouzos. Her whereabouts are known and it would be cost effective for the Commonwealth to take action to recover the debt. Accordingly, it is not open to the Secretary to exercise his discretion to write off Ms Kalpouzos’ debt to the Commonwealth.
36. There is another reason why the debt may not be recoverable. Under s 1237A of the Act, 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.
37. The reason for the debt arising in this case is that Ms Kalpouzos failed to notify Centrelink of the fact that her enrolment had been cancelled from the second semester of 2005 onward. Numerous notices were sent to her stating that she was required to advise Centrelink of any changes to her studies. These notices were given in accordance with s 68(2) of the Social Security (Administration) Act 1999 (the Administration Act). The recipient of a notice given pursuant to s 68 of the Administration Act must not refuse or fail to comply with that notice. To do so is a serious offence punishable by six months imprisonment (s 74 of the Administration Act). The offence is one of strict liability; although a person is required to comply with the notice only to the extent to which they are capable of compliance and does not apply if the person has a reasonable excuse. Nevertheless, the importance and significance of failing to complying with the notice provided by Centrelink should be readily apparent.
38. The meaning of the phrase attributable solely to was discussed in Sekhon v Secretary, Department of Family and Community Services [2003] FCAFC 190; (2003) 132 FCR 126 where Selway J, said at 135:

[35] The ordinary or usual interpretation of the phrase 'attributable solely to' is that it refers to the single or sole cause of the relevant act or event. The word 'attributable' means 'capable of being attributed'. It involves an objective assessment of causation. The words 'a debt attributable solely to an administrative error' can be paraphrased as meaning that the only cause that objectively can be ascribed to the relevant debt is an administrative error. ...

39. Ms Kalpouzos’ failure to notify Centrelink of the fact that her enrolment in her university course had been cancelled for the second semester of 2005 was the sole reason why she continued to receive YA. It should therefore be clear that the waiver provisions set out in s 1237A(1) of the Act cannot apply to Ms Kalpouzos.

WAIVER IN SPECIAL CIRCUMSTANCES

40. Section 1237AAD of the Act provides:

1237AAD Waiver in special circumstances
The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:
(a) the debt did not result wholly or partly from the debtor or another person knowingly:
(i) making a false statement or a false representation; or
(ii) failing or omitting to comply with a provision of this Act, the Administration Act or the 1947 Act; and
(b) there are special circumstances (other than financial hardship alone) that make it desirable to waive; and
(c) it is more appropriate to waive than to write off the debt or part of the debt.
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.

41. On the evidence before me, no question arises about whether Ms Kalpouzos made a false statement or a false representation. However, it is clear that Ms Kalpouzos failed to comply with notices given to her under s 68 of the Administration Act. The only question which I have to decide is whether she knowingly did so.
42. In Re Secretary, Department of Families and Community Services and Jonauskas [2001] AATA 72, Deputy President Forgie, after considering what Devlin J said in Taylor’s Centra Garages (Extra) v Roper [1951] WN (Eng) 383, said that what is meant by the word knowingly, as it is used in s 1237AAD, is actual knowledge. Actual knowledge is to be distinguished from shutting one’s eyes from an obvious means of knowledge by deliberately refraining from making enquiries and from constructive knowledge or that the person ought to have known about a fact. Devlin J said, at 385:

... There are, I think, three degrees of knowledge which 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 has been called, shutting his eyes to an obvious means of knowledge. Various expressions have been used to describe that state of mind. ...
... The third sort of knowledge is what is genuinely 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.
I agree with Deputy Forgie’s analysis of the word knowingly as it is used in s 1237AAD of the Act.

43. The problem for Ms Kalpouzos is that the evidence, on the balance of probability, points to the fact that she had actual knowledge, despite her oral evidence to the contrary. The evidence which points to such a finding is that on her application for YA, she signed a declaration stating that she would notify Centrelink of any changes to the information set out in the form within 14 days of the change occurring. Included in the information given on her application form, she indicated that she was a full-time student.
44. It is obvious that following the university’s decision to cancel her enrolment for the second semester of 2005, the information entered on her application form had altered significantly. It was clearly an event about which Centrelink should have been notified, in accordance with her declaration. However, Ms Kalpouzos did not do so. In addition to that evidence, there is evidence that she was provided with letters from Centrelink on no less than seven occasions prior to her enrolment being cancelled. Each of those letters stated that she was required to tell Centrelink within 14 days about events or changes in circumstances affecting her payment. The letters also specifically required her to notify Centrelink if she stopped being a full-time student.
45. Although in her evidence Ms Kalpouzos said that she did not look at any of those letters because of her emotional state, particularly as a result of the surgery which she had in April 2003 and September 2005, there was significant objective evidence to the contrary. Six of the seven letters were sent to Ms Kalpouzos between 29 July 2003 and 1 July 2005.
46. Despite her medical condition, she continued with her course of study and, although her results were unsatisfactory, it appears she did pass two subjects out of four in the first semester of 2003. Her first semester exams were conducted in June 2003, after she had her first major operation. While it is true that she appears to have failed all of her exams for the second semester 2003, both semesters in 2004 and the first semester in 2005, she did go overseas to Greece to attend her brother’s wedding in June 2005. It was upon her return from Greece in late June or early July 2005 that she became aware of her enrolment being cancelled. The fact that Ms Kalpouzos was able to continue with her studies and travel overseas is inconsistent with her claim that she was emotionally incapable of dealing with letters from Centrelink.
47. Also indicative of Ms Kalpouzos’ ability to communicate with Centrelink is a series of contacts she had with a CSO after July 2005. A file note dated 13 July 2005 indicates that a CSO actioned Ms Kalpouzos’ Centrelink record after she failed to respond to correspondence from Centrelink. Ms Kalpouzos was sent a letter on that day, again stating that her YA had been cancelled from 14 July 2005 because Centrelink had been unable to contact her at the address she had given.
48. A file note prepared by a Centrelink officer on 1 August 2005 records that Ms Kalpouzos contacted Centrelink on 1 August 2005 regarding the cancellation of payment of her YA. According to the file note, Ms Kalpouzos was notified of the reason for the cancellation and the CSO recorded that she was to attend a customer service centre with details of her new address for update and restart of payment of her YA. No mention is made in that file note of Ms Kalpouzos telling the CSO that, as she was by then aware, her enrolment had been cancelled at Charles Sturt University.
49. It appears from Centrelink’s file notes that Ms Kalpouzos contacted Centrelink again on 15 August 2005 regarding her cancelled YA payments. Mail had once again been returned from the address Centrelink held on file and Ms Kalpouzos was asked to provide verification of her current address for her YA to be restored. According to the file note, Ms Kalpouzos advised the Centrelink CSO that she did have problems with mail at her current address and that she would try to make other arrangements regarding her mailing address. Again, Ms Kalpouzos made no mention at all of the fact that her enrolment at Charles Sturt University had been cancelled and that she was not studying in the second semester of 2005.
50. On 16 August 2005 Ms Kalpouzos contacted Centrelink and applied for an advance of $500 on her YA. It appears from Centrelink’s record that Ms Kalpouzos had a discussion with the Centrelink CSO regarding repayments of the advance and her obligation to repay any outstanding balance of the advance if payments ceased. Again, Ms Kalpouzos made no mention at all of the cancellation of her enrolment at Charles Sturt University.
51. There is one further file note in evidence, dated 16 August 2005, which indicates that Ms Kalpouzos attended Oakleigh Centrelink regarding what is described as general enquiry for newstart allowance (NA). However, the reference to NA seems to be incorrect because the subject matter of Ms Kalpouzos’ enquiry was said to be the reinstatement of the payment she was receiving and also the non-payment of rent assistance. It appears to relate to her YA. Ms Kalpouzos was said to have stated that she continued to live in Albury but had problems with mail due to broken mail boxes and that she had provided a different postal address, that of her parents. The file note indicates that payments were restored. Again, she made no mention of the cancellation of her enrolment at Charles Sturt University.
52. Although Ms Kalpouzos disputed the accuracy of the contents of the Centrelink file notes, that is not to the point. What those file notes indicate is that Ms Kalpouzos’ emotional state, contra to her claim, did not prevent her from contacting Centrelink, by telephone and in person, to ensure that her YA payments and rent assistance were restored. The fact that she was able to do so weighs heavily against her evidence that she was not in an emotional state to advise Centrelink of the cancellation of her enrolment at Charles Sturt University from 25 July 2005 onwards. In addition, Ms Kalpouzos offered no explanation for her failure to respond to Centrelink’s request of 7 December 2005 regarding her enrolment. Centrelink had requested a proof of enrolment for the second semester of 2005 and, when Ms Kalpouzos did not respond, Centrelink suspended payment of YA allowance on 20 March 2006. Ms Kalpouzos did not respond to Centrelink’s letters until Centrelink informed her, for the second time, that she would have to repay the sum of $6,515.54.
53. Ms Kalpouzos said in evidence that she was of the view she was not required to notify Centrelink of the university’s decision that her enrolment for the second semester of 2005 would be cancelled. She pointed to the letter of 11 February 2005 in which the Dean stated; you may continue with your course unconditionally. She said that indicated that she was entitled to complete her course of study and therefore the university could not cancel her enrolment. However, that is not what the 11 February 2005 letter states. It specifically refers to her continuing with her course without condition rather than completing her course. It is not my view that the letter could be construed to mean that Ms Kalpouzos was entitled to remain enrolled in the course until she completed it satisfactorily. There was no suggestion that she would not remain subject to academic progress regulations, and in particular regulation 3.5.2.1, which provided that if she failed a key subject for the second time, she was not entitled to re-enrol in the subject without the permission of the course co-ordinator. This in fact had occurred before the first semester results in 2005 were published. It appears that Ms Kalpouzos was allowed sit in one of the subjects on three occasions but did not manage to pass it.
54. Ms Kalpouzos said that she understood her enrolment would continue while she appealed against the decision to cancel her enrolment in the second semester of 2005. While there seems to be some basis for that belief, particularly as on 1 November 2005 the Academic Secretary wrote to Ms Kalpouzos stating she may remain enrolled and continue her studies until her appeal has been decided by the Academic Appeals Committee, the undisputed fact is that Ms Kalpouzos did not continue with her studies in the second semester of 2005. That alone would, in my opinion, have alerted Ms Kalpouzos to the need to notify Centrelink, because her continued study was the very basis for the payment of YA. Logically, the cessation of her studies would have alerted her to the fact that she was no longer entitled to receive YA.
55. The above evidence regarding the events which took place after July 2005 weighs heavily against Ms Kalpouzos’ evidence that she did not know she was required to notify Centrelink of the fact that her enrolment was cancelled for the second semester of 2005. Accordingly, I find that, on the balance of probability, Ms Kalpouzos knowingly failed to comply with the provision of the Administration Act. The consequence of this is that she is not eligible to have the discretion exercised in her favour to waive the right to recover all or part of her debt.
56. Even if I am wrong about whether Ms Kalpouzos knowingly failed to comply with a provision of the Administration Act, I would nevertheless find that there are no special circumstances which make it desirable to waive her debt. For the reasons I have already explained above, regarding her failure to comply with notices provided by Centrelink, I am not satisfied that Ms Kalpouzos’ circumstances can be described as special.
57. The expression special circumstances has been considered on a number of occasions by the Federal Court of Australia over the years. More recently, the Full Court (Hill, Kiefel and Hely JJ) in Dranichnikov v Centrelink [2003] FCAFC 133 was required to deal with that expression in the context of s 101 of A New Tax System (Family Assistance) (Administration) Act 1999. Hill J, with whom Kiefel and Hely JJ agreed, said at paragraph 66:

To some extent the question whether there were special circumstances must depend on how it came about that the error occurred. Again that is not a matter to which the decision maker apparently averted. Other cases which have considered analogous words such as “special reasons” has [sic] tended to conclude, albeit in different contexts, that what is required will be circumstances which distinguish the case in consideration from the usual case. There will be a requirement that the circumstances are such that takes the case out of the ordinary: Jess v Scott (1986) 12 FCR 187 and the cases in various contexts in the decision which Lockhart, Shepherd and Burchett JJ discuss.

58. In the context of social security payments, it is not unusual for applicants to be suffering from substantial emotional stress as well as physical and psychological problems. While each case must be assessed on its merits, it is not sufficient, in my view, for an applicant to simply state that he or she was under substantial emotional stress during the relevant period of time. That, by itself, does not take the case out of what can properly be described as the usual.
59. At the conclusion of the hearing, Ms Kalpouzos sought further time in which to obtain medical reports to support her claim that her surgery placed such emotional stress on her, she was unable to comply with the requirement to notify Centrelink that she was no longer enrolled in her university course. I granted her request, allowing her 90 days to obtain any reports upon which she wished to rely. She failed to produce any medical reports within that time and she then requested a further 2 weeks to complete that task. Finally, on 30 January 2009, Ms Kalpouzos lodged with the Tribunal two reports: one from Dr A Dickinson, a prosthodontist; and a report from Mr A A C Heggie, an oral & cranio-maxillo-facial surgeon.
60. The problem for Ms Kalpouzos is that neither report makes any reference at all to her emotional state. Dr Dickinson described briefly the treatment Ms Kalpouzos received as a consequence of her medical condition up until the surgery performed on 24 September 2005. As a result of that surgery, Dr Dickinson said Ms Kalpouzos would have been unavailable to study or work for the following two weeks. He also described some subsequent treatment on 13 February 2006 which would have left her unable to work or study for a couple of days. Mr Heggie also referred to the surgery carried out in September 2005 and February 2006 and said: During this time, she was unable to work/study as the surgery left her with a speech impediment for approximately six weeks.
61. While I accept that the circumstances regarding Ms Kalpouzos’ operations placed her under some emotional pressure, I do not consider that pressure to have been unusual. In fact the objective evidence indicates that Ms Kalpouzos was able to function as one would have expected, particularly with regard to her subsequent contacts with Centrelink in the latter half of 2005. Those contacts underscore the fact that her circumstances could not be described as unusual. I cannot therefore find that there are special circumstances, other than financial hardship alone, that make it desirable to waive the debt incurred by Ms Kalpouzos.
62. Ms Kalpouzos also submitted that there were special circumstances because she had a notional entitlement to NA at the time her enrolment at Charles Sturt University was cancelled. The Federal Court (Spender J) in Oberhardt v Secretary, Department of Education and Workplace Relations [2008] FCA 1923 (17 December 2008) dealt expressly with the subject of notional entitlement and the exercise of discretion under s 1237AAD of the Act. His Honour said, at paragraphs 62-64:

The words in s 1237AAD(b) should not be fettered, or narrowed, in the manner argued for by the respondent and accepted by the Tribunal in this case. ...It follows that, in my view, notional entitlement should not be excluded from the range of available relevant considerations in deciding whether there are “special circumstances” to waive a debt under s 1237AAD.

63. Spender J also noted that the expression notional entitlement was not defined in the Act. He said, at paragraph 32:

In essence, the term refers to an unclaimed benefit; a benefit which was not actually claimed by the person, but to which that person would have been entitled had they applied for it.

64. As I understand Spender J, to have a notional entitlement means an applicant must qualify in every respect for the benefit sought, save only that no application has been lodged with Centrelink.
65. Ms Kalpouzos submitted that she would in any event have been entitled to NA after 25 July 2005. However, in order to be qualified for NA, an applicant must satisfy the activity test (s 593 of the Act). Section 601 sets out the activity test for the purposes of NA and it requires an applicant to be actively seeking and willing to undertake paid work in Australia. There was no evidence before me that Ms Kalpouzos was actively seeking work in the period between 25 July 2005 and 30 March 2005. Therefore, Ms Kalpouzos could not have qualified for NA during the period she was overpaid YA. It follows that Ms Kalpouzos is not entitled to waiver of the debt or any part of it by reason of s 1237AAD of the Act on the ground of a notional entitlement to NA.

CONCLUSION

66. Ms Kalpouzos ceased to be eligible to receive YA on 25 July 2005. Despite that, she continued to receive YA payments up to and including 21 March 2006. She was not entitled to receive the benefit of those payments and therefore the sum of those payments is a debt due to the Commonwealth in accordance with s 1223(1) of the Act. The debt has been accurately calculated at $6,515.54.
67. Ms Kalpouzos’ debt is recoverable. Therefore, it cannot be written off. The debt was not due solely to administrative error and therefore the waiver provisions in s 1237A(1) of the Act do not apply in this case. The waiver in special circumstances provisions of s 1237AAD also do not apply to Ms Kalpouzos. It follows that the decision of the SSAT made on 17 July 2007 was correct and must be affirmed.

I certify that the sixty-seven (67) preceding paragraphs are a true copy of the reasons for the decision herein of

Mr Egon Fice, Member

(sgd): Leah Berardi

Clerk

Date of Hearing 9 October 2008

Date of Decision 12 February 2009

Advocate for the Applicant Melina Kalpouzos

Advocate for the Respondent Andrew Carson, Legal Services Centrelink