Does the applicant owe a debt to the Commonwealth for overpayment?

(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.

1. Prior to July 2014, the applicant was enrolled with [College 1] and in receipt of youth allowance as a student. The applicant referred to this payment as austudy.
2. The applicant withdrew from this course on 24 July 2014 (see page 23 of the hearing papers). The applicant concedes this is correct.
3. The applicant's youth allowance continued to be paid until 24 June 2015 when it was cancelled as Centrelink had information that she had ceased studies from 24 July 2014.
4. The Address History (ADH) screen at page 57 records the applicant had moved from her [Suburb 1] address (i.e. the address close to the [Office 1] Centrelink office) to [Town 1] by 27 May 2014. The Tribunal notes letters sent to the applicant on 1 July 2014 at page 118, 2 July 2014 at page 121, 8 July 2014 at page 123, and 11 July 2014 at page 125, were all sent to the [Town 1] address.
5. The applicant confirmed to the Tribunal that the address on these letters was her correct address at that time. She does not recall seeing the letters before receiving the papers recently that contained copies. It was a share house, and it is possible she never received the letters. Things did go missing at the house throughout the time she was living there, including some personal items. This was not a good time in her life.
6. The letter dated 11 July 2014 advised that the applicant's youth allowance was based on her studying full time at [College 1 variant]. Among other things, it required the applicant to notify if she stopped being a part-time or full‑time student or left a training course before it ended.
7. The letter dated 11 July 2014 was sent by pre-paid post to the applicant's correct postal address. By virtue of the Acts Interpretation Act 1901, unless the contrary is proven, this letter is deemed to have been given to the applicant at the time it would be delivered in the normal course of post.
8. In the absence of corroboratory evidence, the Tribunal is not satisfied that the applicant notified Centrelink she had withdrawn from her course at [College 1] as required by the letter dated 11 July 2014.
9. After withdrawing from her course on 24 July 2014, the applicant ceased to qualify for youth allowance as she was no longer studying full time.
10. As a result, the Tribunal agrees with the analysis of the authorised review officer that the effect of section 94 of the Admin Act was to cancel the applicant's youth allowance from 24 July 2014, and that youth allowance payments made to the applicant for the period 24 July 2014 to 24 June 2015 should not have been paid.
11. Accordingly, the Tribunal finds there is a debt under section 1223 of the Act in respect of the youth allowance paid for the period 24 July 2014 to 24 June 2015 totalling $12,529.22.

Is there any reason the debt should not be recovered?

1. The Act allows for a debt to be waived or written off in specified circumstances. Waiving recovery of the debt means that although the debt exists, a decision is made to forgo the legal right to recover the monies. This means that no recovery action is possible, and the debt cannot be pursued. Write off means that, although the debt is recoverable, recovery of the debt is postponed.

1. Section 1237AAD of the Act allows for waiver of a debt 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.

1. The term "special circumstances" is not defined in the legislation. However, the Federal Court and the Tribunal have considered the issue of special circumstances on many occasions. In each case, the individual circumstances of the case were examined to determine whether the circumstances were such that it would be unjust, unreasonable or inappropriate for the debt to be recovered. The Full Court of the Federal Court in the matter of Dranichnikov v Centrelink [2003] FCAFC 133 determined that whether there are special circumstances in a particular case is dependent on whether there are circumstances that would distinguish the case from the usual case.
2. In Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25 the Federal Court stressed that the exercise of the discretion is not to be confined to the exceptional case, but rather that there is something that distinguishes the case from the ordinary or usual case.
3. The applicant told the Tribunal that she moved out of home when she was [age], as she was not able to live with her mother.
4. She has been on antidepressants since she was 16.
5. In 2013, she commenced studying at [College 1] and was living independently but struggling. Her mental health deteriorated. While living at the [Suburb 1] address, she attempted suicide. Since 2014 she has gone through ebbs and flows with her mental health and seen therapists sporadically when she's needed assistance. Her life at that time, and during the time she lived in the share house at [Town 1], was chaotic.
6. Her mother has been trying to get her to connect to regular therapy, and since September last year she has been seeing a psychologist every fortnight. Her medication regimen has changed over the years. She is currently prescribed sertraline and Seroquel.
7. The applicant told the Tribunal that in 2014 or 2015 she did another course at [University 1]. It was a bridging course to undertaking tertiary studies and didn't provide a qualification by itself. It was called something like a [course name]. From memory it was six months full time. She can't recall exactly when she did this and doesn't think she advised Centrelink of this.
8. She was living at [Town 1] at the time, her mental health was poor, and the share house was problematic. She wanted to do anything and everything to be away from that house. and studying meant she had somewhere to go that wasn't at that house.
9. Before the Tribunal can waive recovery of any part of the debt under section 1237AAD of the Act, it first needs to be satisfied paragraph 1237AAD(a) applies.
10. The Tribunal notes the applicant's evidence that she told Centrelink shortly after withdrawing from her course in 2014. However, this is not supported by the contemporaneous documents in the hearing papers. The Tribunal notes there are other instances in the file papers of incorrect information provided to Centrelink during the debt period.
11. The Tribunal finds that the debt resulted from the applicant's knowing failures to notify Centrelink of the relevant changes in her circumstances and that paragraph 1237AAD(a) of the Act is not satisfied.
12. The Tribunal acknowledges the extremely difficult circumstances of the applicant since 2014 and accepts that they are "special" within the meaning of section 1237AAD, but waiver under section 1237AAD of the Act is precluded as paragraph 1237AAD(a) is not satisfied.
13. Accordingly, the Tribunal finds that the debt of $12,529.22 in respect of the youth allowance paid for the period 24 July 2014 to 24 June 2015 cannot be waived under section 1237AAD of the Act.
14. The Tribunal notes that the current balance outstanding includes interest that has presumably been levied by Centrelink under section 1229A or 1229B of the Act.
15. The applicant told the Tribunal that she has paid off most of the debt, including by garnisheed income tax returns. Interest has been added over time, but she is unsure of the reasons for this.
16. She checked her account online and told the Tribunal that interest had increased the total debt to nearly $15,000, she had repaid over $12,000 and the outstanding balance was $2,787.93.
17. Her current financial position is very poor, and she is considering bankruptcy. Her mother is assisting financially, including by paying for her mental health appointments and medications.
18. Sections 1229A and 1229B of the Act provide for interest charges in some circumstances where no repayment arrangement is in effect or there is a failure to comply with or termination of a repayment arrangement.
19. Section 1229F of the Act provides a discretion for the Secretary to exempt a person from interest charges that include (but are not limited to) the Secretary being satisfied that the person has a reasonable excuse for failing to enter into a repayment arrangement or having entered an arrangement, failing to make a payment in accordance with that arrangement.
20. The Tribunal has not been provided with details of how the interest amounts have been calculated, including the basis for them. The Tribunal does not have sufficient information to consider whether the interest charges have been properly levied or whether an exemption under section 1229F of the Act is appropriate. Given the applicant's mental health issues, it is possible that an exemption would be appropriate for at least some of the interest charged. In view of the Tribunal's remaining analysis and reasons it was unnecessary to further consider this.
21. The Tribunal then considered section 1237AAD of the Act in relation to the interest debt.
22. Subsection 1229C(2) of the Act explicitly provides that an interest charge is a debt due to the Commonwealth.

(2) The interest charge under section 1229A or 1229B for a day is a debt due to the Commonwealth by the person.

1. Section 1229C of the Act is within Part 5.2 of the Act. Section 1237AAD of the Act is in Part 5.4 of the Act, as is section 1235. Insofar as it is relevant, section 1235 states:

(a) a debt recoverable by the Commonwealth under Part 5.2; or

1. Accordingly, the Tribunal considers that section 1237AAD of the Act can be considered in relation interest that would otherwise apply.
2. Any interest that may apply arises by virtue of sections 1229A or 1229B of the Act and not for the reasons the underlying debt arose. As noted above, the Tribunal has limited information or evidence about the basis for, and calculation of, the imposition of any of the interest charges. However, the Tribunal does have evidence of the chaotic lifestyle and mental health challenges of the applicant, and the Tribunal is satisfied paragraph 1237AAD(a) of the Act applies to the interest debt and does not preclude further consideration of waiver of the interest debt under section 1237AAD.
3. The Tribunal finds that the applicant's circumstances are special within the meaning of section 1237AAD(b) of the Act making it desirable to waive any interest charges that would otherwise apply (i.e. the interest levied to date).
4. The applicant has repaid more than $12,000 and, in the circumstances of this case, the Tribunal finds it is more appropriate to waive recovery of the interest charges, than to write off recovery under section 1236 of the Act.

The Tribunal sets aside the decision under review and remits the matter for reconsideration in accordance with the order that:

• The applicant incurred a recoverable debt of $12,529.22 in respect of youth allowance paid for the period 24 July 2014 to 24 June 2015.
• Interest charges levied in relation to that debt are waived under section 1237AAD of the Social Security Act 1991.