MWPL and Secretary, Department of Social Services (Social security second review) - [2025] ARTA 1499

MWPL and Secretary, Department of Social Services (Social security second review) [2025] ARTA 1499 (19 August 2025)
Applicant/s:  Ms MWPL
Respondent:  Secretary, Department of Social Services
Tribunal Number:                2024/4147

Tribunal:Senior Member M Kennedy (second review)
Place:Adelaide
Date:19 August 2025

Decision:The Tribunal sets aside the decision under review and substitutes a decision that there was no loan in existence and Ms MWPL’s rate of Disability Support Pension at material times is to be calculated on the basis that there was no such asset.
This decision is to take effect only from 20 September 2023, noting that the limitation on the date of effect will mean that Ms MWPL receives no practical benefit from the decision.

Statement made on 19 August 2025 at 11:32am
Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been removed from this decision and replaced with generic information so as not to identify involved individuals as required by subsections 201(1A) - 201(1B) of the Social Security (Administration) Act 1999
Catchwords
SOCIAL SECURITY – Disability Support Pension – rate – assets test – loan as an asset – where moneys given to third party – loan subsequently found to be irrecoverable due to expiry of statute of limitations – circumstances of transaction found to be crime of deception – victim of crime of deception does not have a failed investment or underperforming loan – loan retrospectively found not to exist – new evidence of circumstances on review is not a change to the nature of transaction – delay in seeking AAT review – limitation on date of effect – decision set aside – no practical benefit where rate was already increased by date of review application.
Legislation
Social Security Act 1991
Social Security (Administration) Act 1999
Limitations of Actions Act 1958 (Vic)
Cases
Secretary, Department of Social Security v Brian McLaughlin & Anor. [1997] FCA 1456
Secondary Materials
Guides to Social Policy Law Social Security Guide Version 1.331
Statement of Reasons

On or about 7 February 2018, Centrelink decided that Ms MWPL rate of disability support pension (DSP) was to be calculated on the basis that she had an asset in the form of an unpaid loan to a Mr “S” in the amount of $440,000. The existence of this asset had a very substantial impact of Ms MWPL’s rate of DSP under the asset test.
As has now become apparent Ms MWPL was the victim of a scam and probably the victim of a crime in the relation to the money she provided to Mr S. None of the funds have ever been repaid. According to Mr B, who is representing his sister in these proceedings, Mr S has recently been arrested by Victoria Police in relation to the circumstances and charges are pending.
On review, on 20 October 2018, an authorised review officer reviewed the decision about Ms MWPL’s rate and the identification of a loan as an asset. The authorised review officer…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading MWPL and Secretary, Department of Social Services (Social se...

Details

AGLC: MWPL and Secretary, Department of Social Services (Social security second review) [2025] ARTA 1499
Case: [2025] ARTA 1499
Decision Date: 19 August 2025

CaseChat Overview and Summary

The parties involved in this case were Ms MWPL and the Secretary, Department of Social Services. The dispute centred on Ms MWPL’s eligibility for the Disability Support Pension (DSP), specifically concerning the classification of a loan as an asset and the subsequent impact on her pension rate. The matter was heard in the Administrative Appeals Tribunal (AAT). The central issue was whether the loan in question, which was later found to be fraudulent and irrecoverable, should be treated as an asset for the purposes of the DSP assets test. Additionally, the court had to determine whether Ms MWPL’s lack of understanding and the fraudulent nature of the transaction nullified the existence of the loan contract. Other issues included whether Centrelink failed in its duty of care by not informing Ms MWPL of the hardship provisions and whether she was entitled to back pay and compensation under the CDDA scheme.

The court found that the loan could not be classified as an asset for social security purposes because it was found to be fraudulent and irrecoverable. The fraudulent nature of the transaction and Ms MWPL’s lack of understanding did invalidate the existence of the loan contract. However, the court determined that the delay in seeking AAT review meant that any favourable outcome could not have practical utility, as Centrelink had already increased Ms MWPL’s pension rate by the time the review was applied for. The court set aside the AAT’s decision, noting that no practical benefit could be derived from it, as the rate had already been increased by the date of the review application.

The court concluded that Ms MWPL was not entitled to back pay from the date her pension was reduced, as Centrelink had already disregarded the loan and increased her rate. The court also found that there was no entitlement to back pay from August 2021 or from 20 October 2018, as Centrelink had already adjusted the pension rate. The court further held that no compensation under the CDDA scheme was warranted. The decision of the AAT was set aside, with no practical benefit to be derived from the review given the timing of the events and Centrelink’s actions.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Essentially, this means that no effect could be given to any favourable outcome prior to 20 September 2023, by which time Centrelink had already disregarded the loan and increased Ms MWPL’s rate.Consideration Mr B has helpfully summarised the contentions he advances on behalf of his sister, posing the following issues for determination:·Whether the funds transferred to Mr S should be classified as a loan for social security purposes;·Whether Ms MWPL’s lack of understanding and the fraudulent nature of the transaction invalidate the existence of a loan contract.·Whether Centrelink failed in its duty of care by not informing Ms MWPL of the hardship provisions, ignoring evidence of fraud and delaying the application of the Tribunal’s decision.·Whether Ms MWPL is entitled to back pay from the date her pension was reduced given Centrelink accepts the loan was fraudulent to begin with and ultimately irrecoverable.·Whether Ms MWPL is entitled to back pay from 20 October 2018 as the ARO did not assess the situation correctly.·Whether Ms MWPL is entitled to back pay from August 2021 per the AAT’s findings; and·Whether compensation under the CDDA scheme (the scheme for Compensation for Detriment caused by Defective Administration) is warranted. As discussed during the hearing, the Tribunal does not have jurisdiction or authority to address all of the matters Mr B has posed for resolution. It is important to bear in mind that these proceedings are a review of the decision of the AAT of 6 May 2024, being a second review of an eligible social services decision within the meaning of Part 5A of the Administrative Review Tribunal Act 2024 and through the operation of the Transitional Act. It is not a continuation of a general process whereby Ms MWPL’s legitimate grievances may be addressed at large. The decision under review is a decision about Ms MWPL’s rate of DSP that was made on or about 7 February 2018, although the basis of that decision insofar as it pertained to the existence of the loan as an asset continued to impact every rate decision thereafter. Ultimately, I must decide whether the decision of the AAT was the correct or preferable decision in that regard. Another aspect of this matter that must also be understood is that the delay between the decision of the ARO (20 October 2018) and the application for review in the AAT (20 September 2023) will have consequences that would deprive any successful review in that regard of having practical utility in circumstances where Centrelink has already increased Ms MWPL’s rate of DSP from 8 June 2022, and the date of effect of any favourable determination arising from these proceedings could not be before 20 September 2023. I will elaborate on this aspect later in these reasons. I turn to review the matter by reference to the questions posed by Mr B in his written submissions.Whether the funds transferred to Mr S should be classified as a loan for social security purposes and whether Ms MWPL’s lack of understanding and the fraudulent nature of the transaction invalidate the existence of a loan contract.