Editors --- "Austudy: waiver of debt arising solely from administrative error" [2013] SocSecRpr 33; (2013) 15(4) Social Security Reporter, Article 9

• 'F'
• Background
• The legal framework and issues
• The SSAT decision
• Formal decision

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Austudy: waiver of debt arising solely from administrative error

'F'

Decided: 8th October 2013

Background

F was unemployed and receiving newstart allowance. His employment services provider suggested he study through NSW TAFE’s Open Training and Education Network (OTEN), which is a form of online distance education. His provider helped him enrol in a Certificate IV course and claim Austudy. F continued to study throughout this period, but struggled in this course, and in the subsequent similar course he enrolled in for 2013, due to mental health problems. In the end he only completed one unit of his course.

Centrelink granted him Austudy from 25 February 2012 and paid him until 8 May 2013, when it decided that he was not qualified to receive the payment and, in fact, had never been qualified to receive the payment. It raised a debt of $18,021.09. An authorised review officer decided that the debt was correct and should be recovered and F applied to the Social Security Appeals Tribunal (SSAT) for review.

The legal framework and issues

To qualify for Austudy, a person must meet an activity test (s. 568 of the Social Security Act 1991 (Cth) (the Act)). A person who is a full-time student can meet this test by being enrolled in an approved course of education (ss.569 and 569A of the Act). A person is a full-time student if they undertake at least 75% of the normal full-time student load in the relevant study period, which might be in practice a year, a term or a semester (s.569C of the Act).

Applying these rules to different forms of study can be difficult. Departmental policy in the Guide to Social Security Law provides guidance in some cases (especially at section 3.3.4.60). Applying these rules to study through OTEN is especially difficult. Students are generally enrolled for 12 months at OTEN, do not have to attend classes or other face to face contact and can complete assignments

and modules of a course at any time throughout the year. So it is hard, for example, to assess how much study is being undertaken. Despite this, there is no guidance in Departmental policy.

The problem of applying these rules to OTEN students was considered by the Administrative Appeals Tribunal (AAT) in Willmer and Secretary, Department of Education, Employment and Workplace Relations [2009] AATA 22 (Willmer). In Willmer the AAT’s solution to the problem was to make progress a measure of full-time status. This is very different from the ordinary approach to full-time status for face-to-face learning, where a person will be generally treated as full-time so long as they remained enrolled at the required level.

In effect, the AAT decided that full-time status and qualification for Austudy was a matter of enrolment in a sufficient number of hours and satisfactory completion of the minimum hours required. This has a troubling consequence unique to OTEN, which is that a student may be found retrospectively not to have been qualified for the payment if they do not make satisfactory progress by completing a sufficient number of modules by the end of the 12 month study period. The debt could arise even if they have continued to study and not changed their enrolment, the main circumstances they are obliged to notify Centrelink of if they change. As the SSAT commented in this case, this is unsatisfactory as ‘[a] person whose payment was properly granted and who as complied with the requirements, should not have a debt because of facts that come into existence only when the debt is raised’.

The SSAT decision

The SSAT found that the Certificate IV course in which F was enrolled in 2012 had been assigned 405 ‘nominal hours’ by OTEN; that is, OTEN classified it as the equivalent of 405 hours of class time if it were a face-to-face course.

In NSW the normal full time student load for TAFE is 16 hours per week, so that the requirement to undertake 75% of this load to qualify for Austudy means

that 12 hours per week of study must be undertaken.

The SSAT reasoned that, as OTEN enrolled students for 52 weeks (there being no semesters or vacations), the nominal weekly hours for the course F enrolled in 2012 were 405 ÷ 52 = 7.78 hours per week. This meant that even if F had completed all his subjects he would never have reached the required minimum of 12 hours per week.

As he was never a full-time student, F had been overpaid and had a debt (s.1223 of the Social Security Act). However, it was decided he should never have been granted Austudy on the information provided to Centrelink, that he had received the payment in good faith and met his obligations (as his enrolment had never changed and he continued to study throughout the period), and the debt was not raised within 6 weeks. The SSAT therefore decided that it must be waived under s.1237A of the Social Security Act, as it had arisen solely because of Centrelink administrative error. The SSAT emphasised that, given the complexity of this issue, F had no way of knowing how his qualification might be determined.

Formal decision

The SSAT decided that F was not a full-time student, was not qualified for Austudy, but that the resulting debt should be waived in full.

[M.B.]