Bensen and Secretary, Department of Social Services (Social services second review)

This matter concerned an appeal by Mr Bensen against decisions of the Secretary, Department of Social Services, relating to overpayments of social security benefits. The dispute centred on whether payments received by Mr Bensen under an income protection insurance policy constituted "ordinary income" for the purposes of calculating his entitlement to Newstart Allowance, Sickness Allowance, and Austudy Payment. The Administrative Appeals Tribunal (AAT) considered the matter on the papers.

The primary legal issues before the Tribunal were whether the income protection insurance payments were to be characterised as "ordinary income" under the relevant social security legislation, and consequently, whether the social security payments received by Mr Bensen were debts owed to the Commonwealth. If debts were owed, the Tribunal also had to determine whether these debts should be written off or waived under the provisions of the Act, specifically considering the grounds of sole administrative error and special circumstances.

The Tribunal reasoned that the cancellation of Mr Bensen's Newstart Allowance was correct as his entitlement rate would have been nil due to the income protection payments. Regarding the characterisation of the insurance payments, the Tribunal referred to the statutory definition of "ordinary income" which excludes maintenance income and exempt lump sums. It found that the income protection payments did not fall within these exclusions. The Tribunal clarified that questions of fairness or the applicant's extraordinary circumstances were irrelevant to the calculation of ordinary income, but could be relevant to debt waiver or write-off.

Ultimately, the Tribunal found that the first and second debts were indeed owed by Mr Bensen to the Commonwealth. The Tribunal then considered the recovery of these debts, noting that the grounds for writing off a debt under s 1236 of the Act were not met, as the debts were recoverable at law, Mr Bensen's whereabouts were known, and it was cost-effective to recover the debts. Furthermore, there was no evidence of severe financial hardship to support a waiver. The Tribunal also found that the conditions for waiving a debt attributable solely to administrative error under s 1237A were not satisfied.