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

This matter concerned an appeal by Mrs McCluskie against a decision of the Secretary of the Department of Social Services regarding a debt arising from the Home Equity Access Scheme (HEAS), formerly known as the Pension Loans Scheme (PLS). The dispute centred on the validity of the loan created under the scheme and whether there were grounds for waiver of the debt. The appeal was heard by Emeritus Professor P A Fairall, Senior Member, of the Administrative Appeals Tribunal.

The primary legal issues before the Tribunal were whether a valid loan was created under the HEAS, and if so, whether the debt could be recovered before the death of the applicant or her partner, and whether there was any provision within the Social Security Act 1991 (Cth) that permitted the waiver or reduction of such a debt. The Tribunal was also required to consider the nature of payments made under the HEAS and their distinction from standard income support payments.

The Tribunal reasoned that payments made under the HEAS are secured against the equity in the applicant's home and are essentially a mechanism for individuals to access funds from their own property, distinct from income support payments which do not create a repayment obligation. The operation of the HEAS is governed by Division 4 of Part 3.12 of the Social Security Act 1991 (Cth), with section 1135 detailing the calculation of amounts owing and section 1139 outlining the conditions for recovery. Crucially, subsection 1139(4) allows for recovery before the death of the applicant or partner if the Secretary decides it is appropriate. The Tribunal found that the non-recovery provisions in Part 5.4 of the Act do not apply to HEAS debts, and Centrelink lacks the authority to offset these debts against future entitlements. Furthermore, the Tribunal determined that there are no discretionary provisions within the Act that permit a decision-maker to waive or reduce an HEAS debt, which continues to accrue interest.

The Tribunal was satisfied that Mrs McCluskie was eligible for the scheme and made a valid application, receiving three payments totalling $1,724.85. It was mutually agreed that no further payments would be made. Given Mrs McCluskie's clear indication of no desire to participate further, the Tribunal found that the Secretary was entitled to exercise the power under subsection 1139(4) to recover the debt at that time. Consequently, Mrs McCluskie was ordered to repay the monies advanced together with accrued interest.