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

This matter concerned an appeal by Ms Blong against a decision of the Secretary of the Department of Social Services regarding an overpayment of family tax benefit. The Administrative Appeals Tribunal was required to determine whether the debt was irrecoverable at law or if Ms Blong had the capacity to repay it.

The primary legal issues before the Tribunal were whether any of the circumstances prescribed by section 95(3) of the *Administration Act* applied to render the debt irrecoverable, and alternatively, whether Ms Blong had the capacity to repay the debt under section 95(4) of the *Administration Act*. This latter question hinged on whether Ms Blong was suffering from "severe financial hardship" as defined by the Act, which presumes capacity to repay unless recovery would result in such hardship.

The Tribunal found that none of the circumstances in section 95(3) were met. In assessing capacity to repay, the Tribunal considered Ms Blong's income and expenses. While Ms Blong reported monthly expenses of approximately $6,080 against an income of approximately $5,750.68, the Tribunal noted that her income included child support disbursements and family tax benefit payments. Furthermore, the Tribunal referred to established principles that severe financial hardship requires severe or extreme financial suffering, and that a person's entire financial position would need to be materially less than the current rate of their pension. Applying these principles and considering that Ms Blong was managing to house herself, care for her child, and that her expenses did not demonstrably outweigh her income, the Tribunal concluded there was no evidence of severe financial hardship or a lack of capacity to pay.

Consequently, Ms Blong's appeal was dismissed, and the decision under review was affirmed. The Tribunal noted that Ms Blong could make a fresh application for waiver if her circumstances changed.