Bartley and Secretary, Department of Education, Employment and Workplace Relations [2010] AATA 11 (11 January 2010)

Last Updated: 12 January 2010

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2010] AATA 11

ADMINISTRATIVE APPEALS TRIBUNAL )

) No 2009/1014

GENERAL ADMINISTRATIVE DIVISION		)
	Re		KODEN BARTLEY

Applicant

And

SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal

Mr S Karas, AO, Senior Member

Date 11 January 2010

Place Brisbane

Decision

The Tribunal varies the decision under review by waiving that proportion of the debt incurred between 24 June 2008 and 1 October 2008.

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Senior Member

CATCHWORDS

SOCIAL SECURITY – Pensions, benefits and allowances – Abstudy – Prescribed event – Applicant not obliged to inform of prescribed event within a specific context – Centrelink failed to apply information provided to entirety of applicant’s situation – Special educational assistance scheme overpayment – Sole administrative error – Applicant received overpayments in good faith – No special circumstances – Decision under review varied.

Student Assistance Act 1973 (Cth), ss 38, 39, 43A, 43B, 43F, 48

Student Assistance Regulations 2003 (Cth), reg 5B, Sch 1

Groth v Secretary, Department of Social Security [1995] FCA 1708; (1995) 40 ALD 541

Re Allinson and Department of Social Security (1994) 34 ALD 265

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

Secretary, Department of Education, Employment, Training and Youth Affairs v Prince [1997] FCA 1565; (1997) 50 ALD 186

REASONS FOR DECISION

11 January 2010

Mr S Karas, AO, Senior Member

BACKGROUND

1. Mr Koden Bartley (the applicant) was in receipt of Abstudy benefits from Centrelink. On 10 November 2008, Centrelink decided to raise and recover an Abstudy debt from the applicant for the period 1 January 2008 to 1 October 2008. At the hearing of this matter, the respondent revised the debt owed to $5,800.72. The debt was raised because Centrelink determined the applicant had been overpaid by incorrectly receiving Abstudy payments based on the living away from home rate while living with his parents.
2. An authorised review officer from Centrelink affirmed the original decision as did the Social Security Appeals Tribunal (“SSAT”). The applicant now applies for review to the Administrative Appeals Tribunal (“the Tribunal”).

ISSUES

3. The issues the Tribunal must determine are:
   • whether the applicant has a debt due to the Commonwealth; and, if so,
   • whether the debt should be recovered or waived.

LEGISLATION

4. The Abstudy scheme is a special educational assistance scheme as defined by the Student Assistance Act 1973 (“the Act”). The Abstudy scheme is administered in accordance with the Student Assistance Regulations 2003 (“the Regulations”) and the Abstudy Policy Manual (“the Policy Manual”). The main benefit payable under this scheme is the living allowance. This allowance is paid at different rates depending on the recipient’s circumstances, including whether the recipient is considered to be dependant or independent. A person’s primary eligibility for Abstudy is set out in Ch 9.1 of the Policy Manual.
5. Regulation 5B of the Regulations provides for the independent status of an Abstudy recipient. If an independent Abstudy recipient lives in the parental home and is an accommodated independent person, the person receives a lower rate of Abstudy living allowance (see Ch 72.2.4.3 of the Policy Manual). Chapter 56 of the Policy Manual indicates that Abstudy living allowance and rent assistance payments are subject to a means test to determine the level of entitlement payable. Independent Abstudy recipients may be entitled to rent assistance if not living in the parental home. However, an Abstudy recipient is obligated to advise Centrelink within 14 days of the occurrence of a “prescribed event” as referred to in s 48 of the Act. A prescribed event includes any change of address of residence or permanent home (see Schedule 1 of the Regulations).
6. Sections 38 and 39 of the Act provide that a special educational assistance scheme overpayment is a debt owed to and recoverable by the Commonwealth. Section 43A of the Act gives the respondent power to waive the Commonwealth’s right to recover the whole or part of a debt in some circumstances. The respondent must waive the whole or part of a debt where the debt arises solely due to an administrative error by the Commonwealth and the debtor received the payment in good faith: see s 43B of the Act. The respondent has discretion to waive the debt if there are special circumstances as referred to in s 43F of the Act.

EVIDENCE AND SUBMISSIONS

7. After the hearing of this matter, further submissions were received from the applicant by the Tribunal. As well, further material and references were submitted by the respondent.
8. The applicant was assisted at the hearing by his mother, Ms Veronica Bartley.
9. The applicant’s mother stated she went with the applicant to the Centrelink office in Rockhampton in January 2008 and informed Centrelink that the applicant had been living at the Boyd Street address (the parental home) from before Christmas 2007. She said they spent about an hour at the Centrelink office and informed the Centrelink officer (a woman in her 40s or 50s) not only of the change of address but also about the applicant’s situation in its entirety. The applicant’s mother is adamant the visit to Centrelink in January 2008 occurred. She conceded there is no mention of that visit in Centrelink’s records—but said that is due to an error in Centrelink’s record keeping procedures. As well, she referred to the applicant having informed Centrelink in June 2008 that he had changed address to Boyd Street and that he had confirmed this fact in a number of telephone conversations with Centrelink. She handled correspondence from Centrelink on the applicant’s behalf and was sure that Centrelink knew of the changed address and living arrangements from rent receipts submitted, medical certificates and other documents. The applicant also stated he confirmed with Centrelink that he was living at Boyd Street during the early part of 2008.
10. The applicant and his mother both described his living arrangements. The applicant’s mother referred to the applicant “smashing” his leg and how he stayed at a number of places until he came to Boyd Street just before Christmas in 2007. The applicant’s parents were at that time selling their farm. His mother spent time with him at the Boyd Street address while the farm was being sold. His parents moved to Boyd Street in September/October 2008 after the farm was sold.
11. The applicant’s mother noted that the applicant had completed his apprenticeship as a motor mechanic. She indicated that the applicant is currently repaying a debt to the Commonwealth out of “his dole money” for failing to correctly declare his income. She disagreed with aspects of the statement of Ms Clifford from Centrelink.
12. The applicant stated that he had a number of telephone conversations with Centrelink informing it of his change of address to Boyd Street. He noted that he rang Centrelink once a fortnight to inform of his income for payment purposes. He was adamant that rent certificates were lodged with Centrelink showing that he was living at and paying rent for the Boyd Street residence. The applicant’s mother confirmed that he would ring Centrelink regarding his income details and that he had confirmed his Boyd Street address.
13. Karen Clifford, a Team Leader at Centrelink, gave evidence by telephone. She confirmed the correctness of her written statement dated 20 November 2009 (Exhibit C) and further explained certain aspects of it. She confirmed there was no record of the applicant or his mother visiting Centrelink in January 2008 and informing a Centrelink officer of his change of address to Boyd Street. She also stated that the debt owed by the applicant was $5,800.72, not $4,696.08 as referred to in the SSAT decision.
14. The Tribunal notes that Ms Clifford records in paragraphs 29 and 30 of her statement that the applicant advised Centrelink on 11 June 2008 that he had changed address. Ms Victoria Donaghy, for the respondent, submitted that this was the first date Centrelink was advised of the change of address to Boyd Street but that Centrelink did not then know this was his parental home. Therefore, it did not alter his payments. It was not until 14 October 2008 that Centrelink was formally advised the applicant was living with his parents. Although rent receipts and a medical certificate lodged earlier referred to the Boyd Street address, their lodgment did not discharge the applicant from his obligation to formally advise Centrelink he was living with his parents. As the applicant had many dealings and contacts with Centrelink over a substantial period, he should have been aware of his notification requirements.

CONSIDERATIONS AND FINDINGS

15. While a degree of empathy is due to the applicant given the difficulties of his personal circumstances, the Tribunal is bound to apply the legislation to the present facts.
16. The Tribunal is satisfied that Centrelink’s revised calculation of the debt, as stated during the hearing, is correct. The applicant has a legally recoverable debt of $5,800.72.
17. The applicant and his mother were adamant they had told Centrelink in January 2008 of his changed circumstances and change of address to Boyd Street. As noted above, no record of that meeting exists. The applicant’s mother asserts that the Centrelink officer mistakenly failed to record the meeting. However, the Tribunal is unable to accept that submission given the description and duration of the purported meeting and the record keeping procedure at Centrelink as described and referred to by Ms Clifford. However, the Tribunal found the applicant and his mother to be generally honest even though their evidence was confused at times. The applicant admitted he was not good with dates.
18. The Tribunal notes that Centrelink records confirm the applicant rang Centrelink on a number of occasions in January 2008. The records do not record any reporting that month of the applicant’s change of address. However, a medical certificate submitted by the applicant in relation to an injury from December 2007 and received by Centrelink on 15 January 2008 lists the applicant’s Boyd Street address. Also, rent certificates received by Centrelink state that the applicant was living at the Boyd Street address with his parents and paying rent to his mother. Centrelink records from September 2008 reflect the applicant’s change of address to Boyd Street.

Administrative error: s 43B of the Act

19. Section 43B of the Act requires that, for the debt to be waived, the applicant must not have contributed to any administrative error leading to the overpayment. Also, the applicant must have received his overpayments in “good faith”.
20. Centrelink wrote to the applicant on a number of occasions to remind him of his notification obligations. In a letter dated 24 December 2007 (T12, folios 76-77), Centrelink wrote to the applicant stating that:

What you must report for each Centrelink Reporting Period If your circumstances have changed ... Accommodation and Rent change address ... cease to meet the criteria for the independent or away from home rates of Living Allowance

Similar letters were sent on a number of subsequent occasions.

21. The applicant lodged a rent certificate (see ST2, folio 218) with Centrelink on 24 June 2008.[1] The response to question 23 therein states that the applicant shares the Boyd Street address with his mother and father. According to Ms Donaghy, Centrelink did not commit an “administrative error” by failing to apply that information to the applicant’s Abstudy payment rate. The basis of this submission was that “the relevant information ... [was] only provided in a communication which had a different purpose”: see Exhibit D, para 6.38. This submission is not persuasive.
22. The information contained at question 23 of the rental certificate satisfies the reporting requirements prescribed by s 48 of the Act and communicated to the applicant in Centrelink’s correspondence. The applicant was obliged to (and, on the evidence, did) inform Centrelink of changes to his accommodation arrangements; he was not obliged to communicate such information only within a specific context. Centrelink failed to correctly action the information provided by not applying it to the entirety of the applicant’s situation, i.e. the Abstudy benefit he was receiving. Thus, Centrelink fell into administrative error: see Re Allinson and Department of Social Security (1994) 34 ALD 265 at 277 [58]. The Tribunal finds that the continued payment from 24 June 2008 of Abstudy at the away from home rate is attributable solely to that administrative error.
23. For waiver of debt to occur under s 43B of the Act, the applicant must have received the overpayments in “good faith”. The meaning of “good faith” was discussed by Finn J in Secretary, Department of Education, Employment, Training and Youth Affairs v Prince [1997] FCA 1565; (1997) 50 ALD 186 at 189:

Its concern is with the state of mind of a person concerning his or her receipt of the payment: if that person knows or has reason to know that he or she is not entitled to a payment received — ie is not entitled to use the moneys received as his or her own — that person does not receive the payment in good faith. Absent such knowledge or reason to know, the receipt would be in good faith.

24. It is plain from the evidence given at the hearing that neither the applicant nor his mother knew that Abstudy was being paid at a rate to which he was not entitled. Taking into account the applicant’s level of education and the knowledge of the system shown by both the applicant and his mother at the hearing, it was reasonable for them not to query the payment rate—they had no reason to know the applicant was not entitled to payment at the rate being received. Thus, I am satisfied to the requisite standard that the payments were received in “good faith”.
25. The requirements of s 43B of the Act are satisfied, and so the right to recover that proportion of the debt arising from 24 June 2008 (the date the applicant informed Centrelink he resided at his parental home) to 1 October 2008 is waived.
26. Section 43F of the Act allows for the remaining debt to be waived in “special circumstances”. The expression “special circumstances” is not defined in the Act but has been considered in a number of cases (see Re Beadle and Director-General of Social Security (1984) 6 ALD 1 and Groth v Secretary, Department of Social Security [1995] FCA 1708; (1995) 40 ALD 541 at 545). Generally, there must be something out of the ordinary about a person’s case that makes it unreasonable for that person to have to repay the debt. The applicant is employed, resides with his parents and is already paying off a Commonwealth debt. Consequently, the Tribunal does not consider his circumstances to be special as considered by the relevant cases and applicable legislation. As none of the other non-recovery provisions of the Act apply in this matter, the applicant’s remaining debt to the Commonwealth is to be recovered.

DECISION

27. The Tribunal varies the decision under review by waiving that proportion of the debt incurred between 24 June 2008 and 1 October 2008.
    

I certify that the 27 preceding paragraphs are a true copy of the reasons for the decision herein of Mr S Karas, AO, Senior Member.

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

Mátyás Kochárdy, Research Associate

Date of Hearing 2 December 2009

Date of Decision 11 January 2010

The Applicant was assisted by his mother

Solicitor for the Respondent Ms Victoria Donaghy, Minter Ellison Lawyers

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[1] The discrepancy between this date and the date stamps on the document is explained in the Statement of Karen Clifford (Exhibit C) at p 5.