(i) that Mr Ralphs does not have a debt due to the Commonwealth under subsection 1223ABF(1) of the Social Security Act 1991; and

(ii) that the student start-up loan amount of $1,201 paid to Mr Ralphs in July 2023 is instead a recoverable debt to the Commonwealth under Part 2AA.3 of that Act.

SOCIAL SECURITY - student start-up loan debt - paid in addition to austudy - applicant ceased full-time study within 35 days and claimed jobseeker - recovery through taxation system or recoverable immediately - exceptional circumstances beyond applicant's control - mental health and part-time study - ministerial determination and departmental guidelines specify full-time study, but no legislative requirement - most of debt repaid - decision set aside and substituted

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been omitted from this decision and replaced with generic information pursuant to subsection 201(1A) of the Social Security (Administration) Act 1999.

1. This review is about whether Mr Ralphs has a student start-up loan debt that is immediately recoverable.
2. Mr Ralphs, who is 37 years old, was granted austudy payment in 2019 on the basis that he was studying full-time at [University]. On 10 July 2023 Services Australia (Centrelink) paid Mr Ralphs a student start-up loan amount of $1,201 in addition to his austudy payment.
3. On 18 July 2023 Mr Ralphs claimed jobseeker payment. On 20 July 2023 Centrelink granted jobseeker payment to Mr Ralphs from 17 July 2023.
4. On 10 August 2023 Centrelink raised a debt of $1,201 against Mr Ralphs to recover the student start-up loan paid to him the previous month. This debt was raised on the basis that the student start-up loan was immediately recoverable as he had ceased studying.
5. Mr Ralphs requested a review and on 21 June 2025 an authorised review officer affirmed Centrelink's decision. In doing so, the authorised review officer found that Mr Ralphs had a student start-up loan recoverable by Centrelink because he did not continue full-time study for 35 days after his qualification test day of 3 July 2023.
6. Mr Ralphs applied to the Tribunal on 5 July 2025. The application was heard on 10 October 2025, with Mr Ralphs appearing by telephone.

Is there an immediately recoverable debt to the Commonwealth?

1. Mr Ralphs submitted to the Tribunal that his student start-up loan should be recovered in the usual manner through the taxation system, rather than as a debt raised by Centrelink. He said that, like most university students, he was not in a position to pay back his student start-up loan immediately and that he should not be required to do so just because he dropped one subject. In particular, he took issue with the timeframe for repayment changing after his student start-up loan had been paid and highlighted the contradiction in the Commonwealth setting down principles for lending organisations to follow while itself not complying with those principles.
2. By way of background, Mr Ralphs told the Tribunal that he had been doing very well in his university course up until 2022, at which point he 'hit the wall' and suddenly could no longer focus or retain information. He began failing subjects and, in Semester 1 of 2023, he passed only one subject and failed two others. Although he initially intended to undertake a full-time study load of three subjects in Semester 2 of 2023, he later decided to drop one subject before the university census date. He therefore only undertook two subjects that semester, passing one and failing the other. As his mental health did not improve, he ended up taking a whole semester off at the start of 2024.
3. Mr Ralphs submitted to the Tribunal that his health issues were out of his control and should be taken into account when considering why his study status changed. He also emphasised that he was not intending to study part-time when the student start-up loan was paid to him in July 2023 and that continuing to study full-time would have done him more harm than good. Although his symptoms were very real, his general practitioner has told him there is no medical label for burnout. He advised the authorised review officer what happened but they found that it did not change the situation with his debt.
4. With regard to his current circumstances, Mr Ralphs told the Tribunal that he is still studying at university. He confirmed that he has repaid most of his student start-up loan debt but contended that recovery should have occurred through the taxation system in accordance with his original agreement with the Commonwealth.
5. In making its decision, the Tribunal must apply the law in the Social Security Act 1991 (the Act) and related Ministerial Determinations. A student start-up loan is a Commonwealth-funded loan that is payable to eligible students under Part 2AA of the Act. Under subsection 1061ZVBB(2), a person who receives austudy payment is qualified for a student start-up loan in the following circumstances:

(2) A person is qualified for a student start-up loan for a qualification period if:

(a) on the person's qualification test day for the period:

(i) the person is qualified for austudy payment and austudy payment is payable to the person; and

(ii) the person is receiving austudy payment and would be receiving austudy payment if steps 2 and 2A of the method statement in point 1067L-A1 of the Austudy Payment Rate Calculator were disregarded for the purposes of working out the person's rate of that payment; and

(iii) the person is qualified for austudy payment under section 568 in circumstances where subsection 569(1) (about qualifying study) applies and the relevant course of education is an approved scholarship course ...

Note 2: The person might incur a debt if the condition in subparagraph (a)(iii) is no longer met in a certain period starting on the qualification test day: see subsection 1223ABF(1).

1. When a person has been paid an amount of student start-up loan, they incur a debt to the Commonwealth that will normally be recovered through the taxation system when the person's income exceeds the statutory repayment threshold - see section 1061ZVDA and related provisions in Part 2AA.3 of the Act. However, under section 1223ABF, a debt is immediately recoverable in the following circumstances:

(a) a person is paid a student start-up loan for a qualification period; and

(b) the circumstances determined under subsection (2) apply to the person;

(c) the amount of the loan is a debt due to the Commonwealth; and

(d) the debt is taken to have arisen when the person was paid the loan.

(2) The Minister may, by legislative instrument, determine circumstances in which subsection (1) applies to a person who has not met, or who has ceased to meet, the condition in subparagraph 1061ZVBB(1)(a)(iii) or (2)(a)(iii).

(3) Subsection (1) does not apply to a person if, in the Secretary's opinion, the person did not meet, or ceased to meet, the condition in subparagraph 1061ZVBB(1)(a)(iii) or (2)(a)(iii) because of exceptional circumstances beyond the person's control.

1. With regard to subsection 1223ABF(2), the Minister has determined, in subsection 5(1) of the Student Start-up Loan Debts and ABSTUDY Student Start-up Loan Overpayments Determination 2016 (the Overpayments Determination), that subsection 1223ABF(1) of the Act applies to a person in the following circumstances:

... if the person is not enrolled in an approved scholarship course at the end of 35 days after the later of:

(a) the person's qualification test day for a qualification period; and

(b) the person's course start day in a qualification period.

1. Under subsection 592M(1) of the Act, an approved scholarship course is a course determined to be such by the Minister. Under section 6 of the Social Security (Approved Scholarship Courses) Determination 2020 (the Scholarship Determination), the Minister has determined that an approved scholarship course includes an accredited higher education course provided by a higher education institution.
2. In Mr Ralphs' case, it is common ground that he was qualified for austudy payment, and that austudy payment was payable to him, on 3 July 2023, the qualification test day for a student start-up loan. Although a student start-up loan amount of $1,201 was paid on that basis, Centrelink later decided that a recoverable debt existed under subsection 1223ABF(1) of the Act on the grounds that Mr Ralphs had ceased to be a full-time student within 35 days of 3 July 2023. This decision was made in accordance with Australian government policy guidelines in the Social Security Guide (the Guide) at topic 6.3.8.40, which paraphrases subsection 5(1) of the Overpayments Determination as follows (with the Tribunal's emphasis):

• they are not enrolled in an approved scholarship course on a full-time basis 35 days after their qualification test day or course start date for a qualification period, whichever is later ...

1. While mindful of what is stated in the Guide, the Tribunal must apply the legislation, not policy. Relevantly, under subsection 1223ABF(2) of the Act, the Minister may determine circumstances in which a debt arises under subsection 1223ABF(1) for a person who has ceased to be a full-time student for the purpose of austudy payment. While the Tribunal accepts that subsection 1223ABF(2) applies to a person who becomes a part‑time student, this change in study status does not of itself give rise to a debt under subsection 1223ABF(1). Rather, as indicated by the wording of subsection 1223ABF(2), the circumstances in which a debt arises for a part-time student under subsection 1223ABF(1) of the Act are those specified by the Minister. As set out in subsection 5(1) of the Overpayments Determination, those circumstances are that the person is not enrolled in an approved scholarship course at the relevant date. As defined in the Scholarship Determination, such a course includes an accredited university course. As far as the Tribunal can discern, there is no requirement under either the Overpayments Determination or the Scholarship Determination for the course in question to be a full-time course.
2. Accordingly, the Tribunal concludes that the legal position as set out by section 1223ABF of the Act and the related Ministerial Determinations is that a person will have an immediately recoverable debt if they are not a full-time student at the relevant point in time and they are not enrolled in an approved course. In Mr Ralphs' case, he became a part-time student on 17 July 2023 but was still enrolled in his degree at [University], which was an approved scholarship course, at the end of the 35 days after both his qualification test day and his course start day. This being so, the Tribunal finds that the circumstances determined under subsection 1223ABF(2) of the Act do not apply to Mr Ralphs, notwithstanding the fact that he had become a part-time student.
3. The Tribunal therefore concludes that Mr Ralphs does not have a debt to the Commonwealth that is immediately recoverable under subsection 1223ABF(1) of the Act. The Tribunal instead finds that the $1,201 in student start-up loan that was paid to Mr Ralphs in July 2023 is a debt to the Commonwealth that is recoverable at a later point in time under the provisions in Part 2AA.3 of the Act. This means that the repayments already made by Mr Ralphs should not have been recovered.

The Tribunal sets aside the decision under review and in substitution decides as follows:

(i) that Mr Ralphs does not have a debt due to the Commonwealth under subsection 1223ABF(1) of the Social Security Act 1991; and

(ii) that the student start-up loan amount of $1,201 paid to Mr Ralphs in July 2023 is instead a recoverable debt to the Commonwealth under Part 2AA.3 of that Act.