Editors --- "Overpayment of austudy: special circumstances waiver" [2008] SocSecRpr 18; (2008) 10(1) Social Security Reporter, Article 18

• DELUCA and SECRETARY TO THE DEST
• Background
• Legislative background
• The issues
• The course
• Special circumstances
• Consideration of the Issues and findings
• Formal decision

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Overpayment of austudy: special circumstances waiver

DELUCA and SECRETARY TO THE DEST

(2007/1925)

Decided: 5th December 2007 by E.K. Christie

Background

From June 2004 until June 2006DeLuca was enrolled in and undertaking courses at the Australian Institute of Applied Sciences (AIAS). On 6 December 2006 the SSAT affirmed the Department’s decision to raise and recover an austudy debt in the sum of $4731.64 for the period 1 August 2005 to 31 January 2006. The basis for the overpayment was that during this period DeLuca was not a full time student.

Legislative background

Section 568 of the Social Security Act 1991 (Cth) (“the Act”) sets out the qualifications for austudy.

“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. “

A person can satisfy the activity test by “undertaking qualifying study” which is defined in s.569A and requires the person to be a full-time student.

Section 1237AAD of the Act provides for a debt to be waived if it did not result from a person knowingly making a false statement or failing to comply with their obligations under the Act and there are special circumstances justifying waiver.

The issues

The first issue was whether DeLuca was a full-time student. The Department’s case was that he was not because his enrolment in one of the three semesters he received austudy was less than that required of a “full-time student”.

Section 569C states:

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; ...”

Section 569E(1)(a) defines the “normal amount of full-time study” in respect of the course as the “standard student load determined in respect of the course by the institution” under s.39(2) of the Higher Education Funding Act 1988. That subsection provides for the institution to determine a standard student load representing “an equivalent full-time student unit” (EFTSU). Subjects undertaken by a student are then accorded a proportion of the EFTSU in accordance with the number of subjects required to be undertaken by the student for that student to be maintaining a standard student load.

The second issue was, if there had been an overpayment, whether the debt could be waived under s.1237AAD of the Act on the basis of special circumstances.

The course

The Tribunal exerted its inquisitorial powers in order to clarify specific issues on enrolment and external course teaching and assessment procedures that operated at the AIAS.

The Tribunal received a report from the AIAS which provided details on enrolment, teaching and austudy requirements relating to courses it offered:

(a) The academic year for external students was a 12 month period made up of two six month semesters. Each semester averaged 17 weeks of study/coursework;

(b) An external student could commence study at any time throughout the year. For external students, the start date for the 12 month academic year was the date AIAS despatched the course materials purchased by the student;

(c) AIAS did not provide any notification to the student on course duration status as they progressed through their external studies. It was discussed with the student on enrolment and was set out in the student handbook. It was also listed on the prospectus; and

(d) Students could change their course of study within the Institute.

In terms of full-time study requirements and equivalent full-time student units (EFTSU):

(e) The Advanced Diploma of Naturopathy was registered as a three year course of 36 subjects. To be classed as full-time a student had to complete 12 subjects, or 6 subjects per semester. For Centrelink purposes a person would have to complete 9subjects per academic year to be classified as a full-time student or a minimum of 4 subjects a semester.

(f) The Diploma of Remedial Massage was registered as a two year course of 20 subjects. To be classed as full-time a student had to complete 10 subjects per year. For Centrelink purposes a person would have to complete 8 subjects per academic year or a minimum of 4 subjects per semester to be classified as a fulltime student.

The Tribunal accepted the SSAT’s summary of DeLuca’s course progress:

· In the period June/August 2004 to 31 October 2004,DeLuca was enrolled in four subjects but did not complete any. He was not a full-time student but the austudy overpayment was waived.

· In the period 1 November 2004 to 31 March 2005, DeLuca completed four subjects over a 22 week period and so he was a full-time student for austudy purposes.

· In the period 1 April to 31 July 2005, DeLuca completed three subjects. Allowing two weeks during this period for a break he completed enough subjects to be a full-time student for austudy purposes.

· In the period 1 August 2005 to 31 January 2006 his workload was too low to be classed as full-time.

· In the period 1 February to 4 July 2006 (after which austudy was cancelled at DeLuca’s request) he undertook seven subjects and was a full-time student for austudy purposes.”

DeLuca’s evidence was that he contacted the Institute in March 2005 and changed his enrolment from naturopathy to remedial massage. The Tribunal found that occurred from semester two on. The Tribunal found that during the relevant debt period 1 August 2005 to 31 January 2006 his academic progress was too low for him to be classed as a full-time student.

Special circumstances

DeLuca gave evidence about the traumatic events in his life in 2004:

· He unexpectedly became unemployed in June 2004. He and his wife decided to move from their residence at Coolum to Rockhampton as both their families lived in Rockhampton.

· All their furniture and belongings were stored at the home of DeLuca’s parents.

· Their daughter was born at Rockhampton on 28 July 2004. For three weeks after birth, the baby was placed in a special care unit with breathing difficulties.

· In September 2004, his family’s home was burnt to the ground. All of DeLuca’s furniture and belongings stored at his parents’ home was lost. He was uninsured.

· DeLuca’s mother suffered burns and smoke inhalation from the fire. She was later hospitalised suffering from depression and post-traumatic stress disorder;

· DeLuca’s father was wheel chair bound with muscular dystrophy and DeLuca was needed to help around the family home destroyed in the fire “searching for stuff, erecting fences and cleaning up the mess”.

· As his parents had nowhere to live, he spent a great deal of time converting a barn into a temporary dwelling until such time as they could be re-established in a permanent home;

· This period was a devastating one for himself and his entire family. Following the fire a great deal of time was spent travelling from his residence 6½ hours away to assist his parents. This assistance continued for a number of months.

· During this time DeLuca described himself as “running on empty with the shock of it all”. The worry and stress about his family, together with the constant travel, made study impossible. It was not until the end of November 2004, that he returned to a normal study routine.

· The stressful and traumatic events in 2004 continued to affect him in 2005. His judgement was impaired and he was confused. He lost perspective of time frames. His capability to undertake assessment work in his studies was affected. All his studies in remedial massage involved practical work. Because of his depression, his confidence deteriorated, so that progress in his studies was hindered.

The impact of trauma and stress on DeLuca from August 2005to January 2006 was corroborated by an allied health professional, a practising iridologist. She saw DeLuca three times over this period and gave evidence that he was emotionally distressed, unhappy in life and the direction he was in. She said that he spoke of his feelings of depression, that he was physiologically very sad and had broken down.

Consideration of the Issues and findings

The Tribunal found DeLuca to be a credible witness who at all times acted honestly in his dealings with Centrelink and the AIAS.

The Tribunal found that at no time over the period June 2004 to January 2006 did he knowingly make a false statement or false representation to Centrelink or knowingly fail to comply with a provision of the Act.

Based on the Institute’s records, the start date for the Associate Diploma of Naturopathy was 3 June2004. Therefore the first semester of external study ended on 3 December 2004. He claimed Austudy on 9 August 2004.

On 21 September 2004,Centrelink wrote to Mr DeLuca advising that he would be paid Austudy from 9August 2004 based on his full-time enrolment at AIAS. The commencement date for Austudy was later varied to 26 July 2004.

The Tribunal noted that an overpayment raised in April 2005 in relation to an earlier period (9 August2004 – 31 October 2004) had been waived by a Centrelink officer due to special circumstances.

The Tribunal found that DeLuca’s knowledge of events was affected by the emotional distress and depression arising from the traumas in his life. It noted that he raised queries with Centrelink and the AIAS about his austudy eligibility but received conflicting information on some occasions - information upon which he relied.

The Tribunal found that there were “special circumstances” in this case for the debt to be waived and cited the facts outlined in his evidence as being “unusual” or “uncommon”– even “exceptional” so as to take DeLuca’s case “out of the usual or ordinary case”.

The Tribunal concluded that the events left him distraught, confused and depressed and impaired his capacity in terms of the extent he could manage his affairs or make rational decisions. The Tribunal referred to the analysis of AAT case law on mental and emotional distress and depression and their impacts on a social security recipient’s capability to manage their affairs - including limitations on rational thought in Re Dean and Secretary, Department of Education, Employment and Youth Affairs [2005] AATA 586.

The Tribunal concluded that over the relevant period DeLuca’s ongoing depressive condition and emotional distress were such as to warrant the description of “special circumstances” because of the sources of the trauma he had experienced, and their impacts(i.e. a depressive condition and emotional distress which affected his ability to think rationally and to manage his day to day affairs, together with his impaired judgement, confused and lost perspective of time frames). This took DeLuca’s case out of the usual or ordinary case.

Formal decision

The AAT set aside the decision under review and substituted a decision that the overpayment for the period 1August 2005 to 31 January 2006 was waived for “special circumstances”.

[C.E.]