Darwall and Secretary, Department of Social Services (Social security) [2025] ARTA 316 (24 February 2025)

Applicant/s:	Miss Darwall 
Respondent:	Secretary, Department of Social Services
	Chief Executive Centrelink    
Tribunal Number: 	2024/C191883  
Tribunal:                                           	General Member A Ryding
Place:	  Sydney
Date:	24 February 2025

Decision:		The Tribunal sets aside the decision under review and, in substitution, decides that the debt in its entirety (including any interest accrued) is waived pursuant to section 1237A of the Social Security Act 1991.
			
CATCHWORDS
SOCIAL SECURITY – Youth Allowance – overpayment – severe financial hardship – client advised studies had ceased – waiver for administrative error – special circumstances – decision under review 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.

Statement of Reasons

REASONS FOR DECISION
1.	This is an application for review of a decision by Services Australia – Centrelink (Centrelink) that Miss Darwall received youth allowance when she was not entitled to it, giving rise to a debt owed to Centrelink. 
2.	Miss Darwall had received youth allowance from 21 July 2021 on the basis that she was studying full-time at [School 1] until 30 November 2022. 
3.	On 7 April 2022, Centrelink apparently conducted a review of Miss Darwall’s entitlement to youth allowance. As a result of that review, on 22 June 2022, Centrelink raised a debt of $3,915.34 for the period 31 January 2022 to 12 May 2022. Miss Darwall’s youth allowance was cancelled effective from 31 January 2022. Both the debt and cancellation were as a result of information that Miss Darwall was either not studying full time or had stopped studying. Miss Darwall was informed of this by letter dated 27 June 2022 (folio 89).
4.	Miss Darwall requested a review of that decision on 11 October 2022 (folio 39). On 14 August 2023, an authorised review officer of Centrelink affirmed the decision to ask Miss Darwall to repay the debt (folio 4). They decided that there were no grounds to waive the debt.  
5.	Miss Darwall applied, by her grandmother [Mrs A], to the Tribunal for a review of Centrelink’s decision on 5 November 2024. 
6.	On 19 February 2025, the Tribunal conducted a hearing in this matter by MS Teams audio. Before the Tribunal were hearing papers supplied by Centrelink numbered 1 to 93 (the hearing papers). [Mrs A] participated as Miss Darwall’s representative and also gave evidence. Miss Darwall and [Mrs A] each gave evidence on affirmation.
7.	The Tribunal has had careful regard to all of the documents provided to it and the evidence provided by Miss Darwall and [Mrs A]. Reference below is made only to the documents and evidence relevant to this decision.
ISSUES
8.	The legislation relevant to this matter is the Social Security Act 1991 (the Act) and the Social Security (Administration) Act 1999 (the Administration Act).
9.	The issues for consideration on this application are:
•	Was Miss Darwall, at the relevant time, entitled to youth allowance?
•	If not, is there a debt due to Centrelink? and
•	If so, should that debt be recovered, written off or waived?
CONSIDERATION
Issue 1: Was Miss Darwall entitled to receive youth allowance?
10.	Youth allowance is an income support payment for students, apprentices and job seekers under 25. Eligibility for youth allowance is governed by Part 2.11 of the Act. Section 540 of the Act relevantly provides that an applicant for youth allowance must be undertaking full-time study.
11.	Miss Darwall does not dispute that she was not undertaking full-time study at [School 1] from term 1 in 2022. [Mrs A] said she informed Centrelink of this on or about 19 December 2021 (this is discussed further below). 
12.	The Tribunal therefore finds that, from the beginning of term 1 in 2022, Miss Darwall was no longer undertaking full-time study, and as a consequence was not entitled to receive youth allowance.
Issue 2: Was Miss Darwall overpaid and is there a debt?
13.	As a consequence of the above finding, the Tribunal finds that any payments of youth allowance paid to Miss Darwall from the start of 2022 are an overpayment, and that Miss Darwall was overpaid $3,915.34 for the period 31 January 2022 to 12 May 2022 in this regard. 
14.	The Tribunal has considered the debt calculations and is satisfied that they are correct. The Tribunal therefore finds that the debt of $3,915.34 is a debt due to Centrelink.
15.	As at 20 November 2024, the amount outstanding was $4,648.67, inclusive of $733.33 interest (folio 24). The Tribunal has not, given its ultimate findings in this application, verified the rate or amount of interest charged.
Issue 3: Should that debt be recovered, written off or waived?
16.	As a general principle, there is an expectation that, where a person has received more by way of payments from the government than the amounts to which they were entitled, those overpayments will be recovered, in a way appropriate to the circumstances which led to the overpayment and the circumstances of the person concerned.
17.	Part 5.4 of Chapter 5 of the Act provides for certain circumstances in which a person may be relieved from the obligation to pay a debt either temporarily (by write off) or permanently (by waiver). 
Temporary write-off
18.	Section 1236 of the Act provides the discretion to write off temporarily a debt on certain grounds. The Tribunal has had particular regard to the ability to write off the debt where the applicant has no capacity to pay it. 
19.	Section 1236(1C) of the Act relevantly states that a debtor is taken to have capacity to repay a debt if it can be repaid from the debtor’s social security payments unless recovery by those means would result in the debtor being in severe financial hardship. ‘Severe financial hardship’ is not defined in the legislation and depends on the debtor's individual circumstances.
20.	Miss Darwall is now [age] years old. From the evidence Miss Darwall gave to the Tribunal she lives currently with friends in Queensland (where she moved towards the end of 2024), has no income and does not receive any government assistance. She appears to have limited, if any outgoings, as her friends are currently paying them. Miss Darwall is currently looking for work. [Mrs A] told the Tribunal that she receives disability support pension for her [medical condition 1] and cannot assist.
21.	The Tribunal finds that requiring Miss Darwall to pay the debt would cause her severe financial hardship. However, in circumstances where there is no evidence before the Tribunal to suggest that Miss Darwall’s financial circumstances will improve sufficiently enough in the short to medium term for the position to change in this regard, the Tribunal does not consider that it is appropriate to write off all or any part of the debt.
Waiver for administrative error
22.	Section 1237A of the Act provides that a debt or part of the debt attributable solely to an administrative error by the Commonwealth must be waived if:
•	the debtor received in good faith the payment or payments that gave rise to that proportion of the debt and 

•	where the debt was not raised within a period of six weeks from the first payment that caused the debt.

23.	[Mrs A] told the Tribunal that, in or about October 2021, Miss Darwall had moved from Western Australia, into her care. In Western Australia, Miss Darwall had been living in youth accommodation provided by [Agency 1], paid for by government assistance. Miss Darwall was at that time aged [age] and in year 11, and enrolled in the Western Australian Department of Education [Program 1] at [School 1]. There was no equivalent of the [Program 1] in New South Wales and Miss Darwall did not intend to complete schooling beyond year 11. As there was only 8 weeks of terms left, [Mrs A] decided there was little point Miss Darwall attending school for those final 8 weeks.
24.	[Mrs A’s] firm recollection in the hearing was that she went into the [Town 1] Centrelink centre, she believed on or about 19 November 2021, with Miss Darwall. [Mrs A] said that she told the male Centrelink officer she spoke to that Miss Darwall’s circumstances had changed in that she was now living with [Mrs A]. She was asked whether Miss Darwall would be continuing at school, and replied that she would not because [Program 1] was not available in NSW and she was not planning to attend year 12. [Mrs A] recalled asking the Centrelink officer whether Miss Darwall could remain on the payment she was on, and being told that she could. 
25.	[Mrs A] said that it was not until Centrelink (later) sent the paperwork that Miss Darwall was not entitled to her youth allowance that they got in touch again with Centrelink.
26.	The hearing papers contain two file notes of discussions with Centrelink on 16 (not 19) November 2021 in person at the [Town 1] office, at folios 38 and 39. As the discussion was in person, it will not have been recorded. [Mrs A] said that she thought it was around the 19th, but it could have been the 16th. The first file note states (verbatim):
Customer contacted [Town 1] on 16 NOV 2021 regarding General Enquiry for Youth Allowance. Information was obtained via Personal - In Office.
Document created by [Officer ID] on 16 NOV 2021
Cust presented at [Town 1] SC for addr update and cancellation of centrepay for previous board. SO updated accirdingly and confirmed with cust that they were not paying board at this time
27.	The second file note states (again verbatim):
Customer contacted [Town 1] on 16 NOV 2021 regarding General Enquiry for Client. Information was obtained via Liaison Advice using Personal - In Office. Document created by [Officer ID] on 16 NOV 2021.
Customer requested End Instruction Immediately of Centrepay Deduction for reason Customer Request
from Newstart to [Agency 1]
28.	These file notes do not record that it was Miss Darwall’s grandmother who spoke to Centrelink, and erroneously refer to newstart allowance. It is unclear why, when Miss Darwall’s address was updated from Western Australia to NSW, Centrelink would, without further enquiry, assume Miss Darwall would continue to attend a school in Western Australia.
29.	The Tribunal considers that [Mrs A’s] recollection of the discussion is more reliable than these file notes. The Tribunal has taken account of the different reasons [Mrs A] apparently gave for Miss Darwall moving to her care when she sought review in October 2022 and when she spoke to the authorised review officer in August 2023 (her having an auto immune disease and at the time it being at the peak period of COVID-19, refer the notes at folio 9 and the file note at folio 46). Even if [Mrs A] has given inconsistent reasons for Miss Darwall not attending school after she moved to NSW, her recollection that she told the Centrelink officer that Miss Darwall would not be attending school and asked if she could still remain on youth allowance has remained consistent throughout. The Tribunal accepts [Mrs A’s] evidence in this regard.
30.	The Tribunal therefore finds that [Mrs A] did tell Centrelink on 16 November 2021 that Miss Darwall was not going back to school, that she asked whether Miss Darwall could remain on youth allowance, and that she was told that she could.
31.	The Tribunal finds that the decision following that discussion to keep Miss Darwall on youth allowance was an administrative error by Centrelink and was the sole cause of the debt. 
32.	In circumstances where the Tribunal accepts that [Mrs A] was told Miss Darwall could continue to receive youth allowance, the Tribunal finds that Miss Darwall received those payments in good faith. Youth allowance was relevantly paid from 31 January 2022 and the debt was raised on 22 June 2022. The Tribunal therefore finds that the debt was not raised within six weeks of the first payment that caused the debt.
33.	As the Tribunal has found that the requirements for waiver for administrative error pursuant to section 1237A of the Act are met, the Tribunal must waive the entirety of the debt, including the interest charged on the debt.
Waiver for special circumstances
34.	The Tribunal notes that, had it not found waiver pursuant to 1237A of the Act was required, it would have waived the entirety of the debt, including interest, pursuant to section 1237AAD of the Act. This provides a discretionary power to waive some or all of the debt where:
•	the debt did not result wholly or partly from the debtor or another person knowingly:
o	making a false statement or a false representation; or
o	failing or omitting to comply with a provision of the social security law; and
•	there are special circumstances (other than financial hardship alone) that make it desirable to waive; and
•	it is more appropriate to waive than to write off the debt or part of the debt.
35.	On the findings the Tribunal has made, Miss Darwall meets the first requirement, and the Tribunal has found that a write off of the debt is not appropriate.
36.	The Tribunal would have taken into account as special circumstances, as well as Miss Darwall’s difficult financial circumstances,:
•	The administrative error (if not available as a ground for waiver of itself).  

•	Miss Darwall’s likely notional entitlement to jobseeker payment in the relevant period. It is open to the Tribunal to take this into account as a special circumstance.

•	Miss Darwall’s turbulent family background. Miss Darwall told the Tribunal of her difficult childhood with an emotionally and physically abusive mother, who abandoned her once and then, after taking her back into her care, abandoned her again. Miss Darwall was forced to live in a youth hostel for a while as a consequence, before she moved back to NSW to live with her grandmother, [Mrs A].

37.	Taken together, the Tribunal would have considered the matters raised by Miss Darwall to be special circumstances that make it desirable to exercise the discretion under section 1237AAD of the Act to waive the debt and interest accruing on the debt.

DECISION
The Tribunal sets aside the decision under review and, in substitution, decides that the debt in its entirety (including any interest accrued) is waived pursuant to section 1237A of the Social Security Act 1991.

Date of hearing:	Wednesday, 19 February 2025	
Representative for the Applicant:	[name]