Harangozo and Secretary, Department of Education, Employment and Workplace Relations [2010] AATA 359 (14 May 2010)

Last Updated: 22 May 2010

Administrative Appeals Tribunal

ADMINISTRATIVE APPEALS TRIBUNAL )
) No: 2009/5286
GENERAL ADMINISTRATIVE DIVISION )

Re: Csaba Harangozo
Applicant

And: Secretary, Department of Education, Employment and Workplace Relations
Respondent

DIRECTION

TRIBUNAL: The Hon R J Groom (Deputy President)

DATE: 20 May 2010

PLACE: Hobart

The Tribunal directs the Registrar, pursuant to subsection 43AA(1) of the Administrative Appeals Tribunal Act 1975, to alter the text of the decision in this application in the first sentence in paragraph 5 to read:

For the purpose of determining the duration of Austudy payments the course was for a fulltime equivalent period of 14 weeks.

[Sgd Hon R J GRoom]
Deputy President

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2010] AATA 359

ADMINISTRATIVE APPEALS TRIBUNAL ) ) No 2009/5286

GENERAL ADMINISTRATIVE DIVISION		)
	Re		CSABA HARANGOZO

Applicant

And

SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT & WORKPLACE RELATIONS

Respondent

DECISION

Tribunal

The Hon R J Groom (Deputy President)

Date 14 May 2010

Place Hobart

Decision

The Tribunal sets aside the decision under review and in substitution decides in the special circumstances of this case that the amount of $4,277.50 of the debt be waived and that the remaining amount of $2,000.00 is a debt due to the Commonwealth.

[Sgd Hon R J Groom]
Deputy President

CATCHWORDS

SOCIAL SECURITY - Austudy - overpayment - whether satisfies progress rules - `whether debt should be waived - whether special circumstances - errors by Commonwealth - applicant partly responsible - financial hardship - special circumstances exist - decision set aside - portion of debt waived

Social Security Act 1991, ss 568, 569H, 1223, 1236, 1237A, 1237AAD, Part 2.11A

Secretary, Department of Social Security and Hales (1998) 82 FCR 154

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

Riddell v Department of Social Security [1993] FCA 261; (1993) 42 FCR 443

REASONS FOR DECISION

14 May 2010

The Hon R J Groom (Deputy President)

INTRODUCTION

1. Mr Harangozo commenced a TAFE (NSW) course in Property (Real Estate) Cert. III on the 30 January 2008. He was granted Austudy to undertake the course. The fulltime equivalent duration of the course was 14 weeks concluding on the 6 May 2008. Mr Harangozo continued to receive Austudy until the 31 October 2008. The question for determination is whether he was entitled to receive Austudy from the 7 May 2008 until the 31 October 2008. If he had no such entitlement then is the $6,277.50 paid to him as Austudy during that period recoverable as a debt due to the Commonwealth and if so should that amount, or any part of it, be written off or waived?

BACKGROUND

2. Mr Harangozo was born in Hungary and presently resides in that country. He is a citizen of Australia. He is 51 years of age.
3. He completed a TAFE course in Information Technology in 2007. In January 2008 he advised Centrelink that he intended undertaking a further course at TAFE. Mr Harangozo provided details of the course in a signed document dated the 28 January 2008. He named the "College/Campus" as "Blue Mountains College", the course as "Property (Real Estate) Cert. III" and the "Course Code" as "PRD 30101". He ticked a box in that document indicating that he would be studying "... by distance education or correspondence". It is noted that the space for specifying the "course end date" was not completed by Mr Harangozo. (See Exhibit 2 Attachment 1/1).
4. Although Mr Harangozo stated that he was studying at the "Blue Mountains College" in fact the course he was undertaking in 2008 was conducted by the TAFE NSW "Open Training and Education Network" or "OTEN". The Tribunal considers this error to have been an honest mistake and of no particular significance. Mr Harangozo explained that he informed Centrelink several times that the course he was studying was conducted by OTEN. The Tribunal accepts that explanation as true.
5. For the purpose of determining the duration of Austudy payments fulltime equivalent period of 14 weeks. This ended on the 6 May 2008. However for purposes other than Austudy the course appears to have been of longer duration. In a letter sent to Mr Harangozo on the 29 January 2008 reference is made to the course "... ending on the 30 June 2008" (T4 Page 18). It is recorded elsewhere that the "last date assignments can be submitted..." is the "15 November" 2008. (T12 page 46).
6. Mr. Harangozo travelled to Hungary on the 19 June 2008 to visit his elderly grandmother who was then ill. It is noted that he had informed Centrelink of his intention to travel overseas and had been told by officers of Centrelink that his Austudy entitlement was portable and would continue. However on 30 June 2008, whilst he was still overseas, his Austudy payments were cancelled. But after he returned from overseas on the 21 August 2008, Mr Harangozo's Austudy payments were restored and back paid to the 1 July 2008. The respondent was unable to provide any explanation as to why Mr Harangozo's payments were restored at that time. The course he was undertaking had concluded on the 6 May 2008.
7. On the 24 September 2008 Centrelink reviewed Mr. Harangozo's Austudy entitlement. (T7/ 30 and Attachment 4).
8. On the 27 March 2009, following the earlier review, it was determined that Mr Harangozo had not been a fulltime student in the period 31 January 2008 to the 31 October 2008 and that the sum of $10,005.01 he had received during that period was a debt due to the Commonwealth. (T7 and T8).
9. Mr. Harangozo subsequently left Australia on the 1 April 2009.
10. On the 26 June 2009 an authorised review officer (ARO) varied the earlier decision. On review Mr. Harangozo was considered eligible to receive Austudy from the 30 January 2008 to the 6 May 2008. However it was decided that he was not entitled to Austudy from 7 May 2008 to the 31 October 2008 and that he must repay a revised debt of $6,277.50. (T 10).
11. The Social Security Appeals Tribunal ("SSAT") affirmed the ARO decision on the 28 September 2009.
12. On 5 November 2009 Mr Harangozo sought a review of the SSAT decision by this Tribunal.
13. It is not disputed that the amount paid to Mr. Harangozo as Austudy from 7 May 2008 to the 31 of October 2008 was $6,277.50. The Tribunal is satisfied that was the amount of Austudy paid to him during that period.

THE ISSUES

14. The principal issues to be determined by the Tribunal are:

(a) Was Mr. Harangozo entitled to receive Austudy from 7 May 2008 until the 31 of October 2008?

(b) If not, is the amount of $6,277.50 paid to him during that period a debt due to the Commonwealth?

(c) Should that debt or any part of it be written off or waived?

WAS MR HARANGOZO ENTITLED TO RECEIVE AUSTUDY FROM 7 MAY 2008 UNTIL 31 OCTOBER 2008?

15. The qualifying criteria for Austudy are described in Part 2.11A of the Social Security Act 1991 ("the Act"). To be entitled to Austudy a person must satisfy the activity test. That test is satisfied if he or she is "undertaking qualifying study" which, inter alia and relevantly, requires a person to satisfy the "progress rules" in respect to an approved course at an educational institution.
16. It is not in contention that Mr Harangozo was a fulltime student from 30 January 2008 until 6 May 2008, that the Property (Real Estate) Certificate III Course was an approved course, and that he was enrolled in that course (see paragraph 4.9 of Exhibit 2). He also satisfies the other criteria in section 568 being of "Austudy age" and then an "Australian resident".
17. The only basis on which the respondent challenged Mr Harangozo's entitlement to Austudy during the relevant period was the Secretary's contention that he had not satisfied the progress rules as set out in section 569H of the Act.
18. In Mr Harangozo's case he would satisfy the progress rules if:

"... the time already spent by the student on the course, or on one or more other tertiary courses at the same level as the course, does not exceed the available study time for that course". (The Tribunal's emphasis) (See section 569H(1)(b) of the Act)

19. Section 569H(3) relevantly provides as follows:

"(3) The allowable study time for a course undertaken by a fulltime student ... is:
(a) if the minimum amount of time needed to complete the course as a fulltime student is one year or less - that minimum amount of time;"

20. The Tribunal is satisfied that the Property (Real Estate) Certificate III Course was less than one year's duration and so the time to complete the course as a fulltime student was the minimum study time.
21. The minimum amount of time needed to complete the course in question as a fulltime student was 14 weeks (see Attachment 2/1 of Exhibit 2).
22. Mr Harangozo was therefore only entitled to receive Austudy for 14 weeks After that 14 week period had expired he no longer satisfied the progress rules and from that point in time was ineligible to receive Austudy. The 14 week period expired on 6 May 2008.
23. Mr Harangozo has not contested the respondent's principal contentions. He acknowledged at the hearing that the course was a 14 week course. (Transcript page 8). He appeared to dispute that he had only completed one unit of the 13 units of the course.
24. When asked how many units he had completed Mr Harangozo said:

"A few of them. I think two or three".

But when pressed he said:

"I don't recall". (Transcript page 8).

Mr Harangozo's recollection is quite unclear. The Tribunal is satisfied on the written material before it that only one unit of the course was completed by Mr Harangozo. (See T12 page 46).

25. Mr Harangozo was critical of officers of Centrelink. He said:

"... Centrelink as a big institution is just not always on the top, so they're not knowing what the students are doing, or its officers were not really competent in the Katoomba office in the Blue Mountains. And, as I think I have done all I could, always to tell them what I was doing".

In oral evidence he said that he had left to go overseas but:

"... planned to finish off my studies when I came back in August or September". (Transcript page 5).

26. He later said:

"... I intended to send in my exams when I came back from overseas ...".

27. After considering all of the material before it the Tribunal finds that Mr Harangozo satisfied the progress rules from 30 January 2008 until 6 May 2008 being the 14 week duration of his course. However from 7 May 2008 until 31 October 2008 he did not satisfy the progress rules set out in section 569H of the Act and is not entitled to Austudy for that period. The amount paid to him as Austudy during that period is a debt due to the Commonwealth pursuant to section 1223(1) of the Act.
28. Mr Harangozo said that if he was not entitled to Austudy at that time then as he was unemployed and living in an area with high unemployment he would have been entitled to unemployment benefits.
29. The Tribunal cannot now consider whether Mr Harangozo had any entitlement to unemployment benefits. The Tribunal has no jurisdiction to consider matters "at large" but is confined to a review of the SSAT decision of 28 September 2009.
30. The Tribunal concludes that from 7 May 2008 until 31 October 2008 Mr Harangozo did not satisfy the progress rules but was paid Austudy during that period for which he was not entitled. It is satisfied that the amount paid to him during that period as Austudy was $6,277.50 and that amount is now a debt due to the Commonwealth.

SHOULD THE DEBT OR ANY PART OF IT BE WRITTEN OFF OR WAIVED?

31. Mr Harangozo, a self represented applicant, did not expressly asked for the debt to be written off or waived nevertheless the Tribunal will give consideration to whether the facts justify such a step.
32. There is no basis for writing off the debt under section 1236 of the Act even though it is clear that the applicant has no present capacity to repay the debt. He is currently living in Hungary but has no income of any kind. His essentials of living are being provided by a friend. He has no entitlement to social security in Hungary. However should Mr Harangozo return to Australia it is possible that he may then have a capacity to repay the amount by deductions over time from any social security entitlements he may then have or perhaps from his earnings should he gain paid employment following his return to Australia.
33. The Tribunal also concludes that Section 1237A of the Act has no application in these circumstances. It is not satisfied that the debt is attributable solely to an administrative error made by the Commonwealth. The Tribunal is satisfied that there were significant errors and omissions by Centrelink but the Tribunal does not consider those errors or omissions to be the sole cause of the overpayment.
34. Section 1237AAD of the Act provides for a waiver of the debt when "special circumstances" are present.
35. The evidence satisfies the Tribunal that although Mr Harangozo did not fulfil all of his obligations he acted honestly when applying for Austudy and in informing Centrelink of his circumstances. In the; "course details" form dated the 20th January 2008 he named; "Blue Mountains College" as the; "college/campus" he was attending. As previously mentioned the Tribunal considers this to have been an honest mistake by Mr Harangozo. He did tick the box stating that he would be "studying by distance education or correspondence". He correctly named the education institution as "TAFE New South Wales". There is evidence that Mr Harangozo contacted Centrelink several times to keep them informed and/or to make enquiries. The Tribunal accepts that evidence as reliable. It is satisfied that neither Mr Harangozo nor any other person made a "false statement" or "false representation" within the meaning of those terms in Section 1237AAD (a)(i).
36. The Tribunal is also satisfied that neither Mr Harangozo nor any other person knowingly failed or omitted to comply with the relevant legislative requirements. It is noted that Mr Harangozo said he intended to continue with his studies after he returned from overseas in August 2008. The Tribunal accepts his evidence on that point. It is further noted that in his TAFE record of results for the 2008 academic year it is stated that the last date assignments could be submitted was: "15 November". It adds; "if not completed by this date the student can re-enrol for the following year". That suggests that the completion date for the course for the purposes other than Austudy entitlements was 15 November 2008. To add further to the confusion in T 13 it is said: "Inst. course end date: 15 December 2008".
37. It is now necessary to consider whether in this case special circumstances exist. French J , as he then was, when discussing the discretion in section 1237AAD said in Secretary, Department of Social Security and Hales (1998) 82 FCR 154 as follows:

""The evident purpose of s 1237AAD is to enable a flexible response to the wide range of situations which could give rise to hardship or unfairness in the event of a rigid application of a requirement for recovery of debt. It is inappropriate to constrain that flexibility by imposing a narrow or artificial construction upon the words. It may be that there will be few cases in which the Secretary will be satisfied that there are special circumstances in the absence of financial hardship. It may be that there are few cases in which having found special circumstances to exist, the Secretary would exercise the discretion to waive in the absence of financial hardship. But to anticipate the limits of the categories of possible cases by imposing on the language of the section a fetter upon its application which is not mandated by its words, is to erode its useful purpose".

38. In Groth v Secretary, Department of Social Security [1995] FCA 1708; (1995) 40 ALD 541 at 545 Kiefel J said that special circumstances:

".....would require something to distinguish Mr Groth's case from others, to take it out of the usual or ordinary case...It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary.

39. In Riddell v Department of Social Security [1993] FCA 261; (1993) 42 FCR 443 at 450 the Full Court of the Federal Court said;

"Each particular case must be considered on its merits. It is the essential nature of the provision to create a broad discretion to meet the great variety of circumstances which must occur, raising considerations of individual hardship, need, fairness, reasonableness, and whatever else may move an administrator, keeping in mind the scope and purposes of the Act, to make a decision one way or the other"."

40. Every circumstance is likely to have some distinguishing feature. However for circumstances to be special requires some element of injustice and unfairness which justifies exercising the discretion so that money paid to a person not entitled to receive it will not then be recovered. As French J also said in Hales (supra) at page 155:

"The taxpayer is entitled to expect that if the ordinary course of money paid to people that they are not entitled to receive will be recovered, albeit in a way appropriate to the circumstances that led to the overpayment and the circumstances of the persons concerned".

41. An important circumstance in this case is the failure by Centrelink to ascertain Mr Harangozo's entitlement to Austudy. The information provided by Mr Harangozo was insufficient to determine his entitlement. He did not include an end date for the course when completing the form dated 28 January 2008. Centrelink had an obligation to assess the claim. This could not be done without essential information. Inquiries should have been initiated to obtain that necessary information.
42. Mr Sparkes for the respondent quite properly acknowledged Centrelink's failures to make due inquiries. He said at the hearing:

"There’s no end date specified. Now, I can understand why he may not have put 14 weeks, you know, whatever that date was. And indeed, it may be that Centrelink should have said, “Well, we need to know when the course ends.” But in effect, what he’s declaring there is that for the next available semester, he’s a full-time student. Arguably, he - that should have provoked a response from Centrelink; it didn’t, which is unfortunate. And indeed, when he came back to Australia after going to Hungary and reclaimed Austudy again, he didn’t indicate, or didn’t provide the details of the course, the fact that it was 14 weeks". (Transcript page 14 and 15)

43. The failure by Centrelink to make due inquiries about the end date of the course played a major part in the overpayment of Austudy to Mr Harangozo. It does suggest, in this instance, inefficient administration of the scheme by Centrelink.
44. Mr Haranzogo is not free from fault. Under social security law there is a clear onus on the claimant to provide complete and accurate information. He obviously did not apply himself to conscientiously completing his course of study and assignments in a timely manner nor to providing full and accurate information to Centrelink as required.
45. The Tribunal is satisfied that the lack of accurate information about the length of the course and therefore the duration of Mr Harangozo's Austudy entitlement was not due to dishonesty by him. The cause was in part a result of Mr Harangozo's own carelessness but principally by serious inaction and inefficiency by Centrelink. Reasonable inquiries would have avoided most of the overpayment.
46. Mr Harangozo lives in Hungary but has no job and no income. He has been attempting to find work but so far without success. He is concerned that he may not know obtain gainful employment because of his age. He is essentially without means and is dependent on the support of a friend. Mr Harangozo is suffering very severe financial hardship which is likely to continue for an indefinite period of time.
47. The Tribunal is satisfied that it is more appropriate to waive than to write-off the debt of part of the debt.

CONCLUSION

48. After considering all of the material before it the Tribunal concludes that there are special circumstances in this case which go beyond financial circumstances alone. The facts distinguish this matter from the usual or ordinary particularly the failure by Centrelink to act in a reasonably efficient manner and in particular to inquire into the duration of the course for Austudy purposes. That failure, on the evidence, is the principal cause of the overpayment in this case.
49. Mr Harangozo's present and likely future difficult financial circumstances are also part of the matrix of unusual circumstances which together make them special.
50. Because of those combined special circumstances and in order to avoid unfairness and injustice to Mr Harangozo the Tribunal will exercise the discretion in section 1237AAD and will waive a major portion of the debt. However in all the circumstances it is only fair that Mr Harangozo should share in the responsibility. As has been pointed out applicants for social security benefits do have obligations to keep Centrelink properly informed. The Tribunal will therefore waive $4,277.50 of the debt. The balance of $2,000.00 remains a debt due to the Commonwealth.

DECISION

51. The Tribunal sets aside the decision under review and in substitution decides in the special circumstances of this case that the amount of $4,277.50 of the debt be waived. The remaining amount of $2,000.00 is a debt due to the Commonwealth.
    

I certify that the 51 preceding paragraphs are a true copy of the reasons for the decision herein of The Hon R J Groom (Deputy President)

Signed: R Hunt (Administrative Assistant)

Date/s of Hearing 30 March 2010

Date of Decision 14 May 2010

Solicitor for the Applicant Applicant on his own behalf

Solicitor for the Respondent Brian Sparkes, Centrelink Advocacy Branch