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

This matter concerned a second tier review by the Administrative Appeals Tribunal (AAT) of a decision affirming an age pension debt owed by the applicant to the Commonwealth. The applicant had been in receipt of an age pension, but his employment income from a real estate company and a business in the entertainment industry was not taken into account when calculating his pension rate. This resulted in an overpayment of $53,990.56 for the period between 13 November 2015 and 27 August 2020. The applicant did not dispute the existence of the debt or that it was recoverable at law.

The central legal issue before the Tribunal was whether the applicant's debt should be waived or written off under the relevant provisions of the Social Security Act 1991 (the Act). Specifically, the Tribunal considered sections 1236 (allowing write-off if the debt is irrecoverable at law or the debtor has no capacity to repay), 1237A (requiring waiver if the debt was solely due to administrative error), and 1237AAD (allowing waiver based on special circumstances).

The Tribunal reasoned that section 1236(1A)(a) requires a debt to be irrecoverable at law, meaning there is no proof capable of sustaining legal proceedings for its recovery. As the applicant did not dispute the recoverability of the debt at law, this ground for write-off was not met. Furthermore, section 1236(1A)(b) defines a lack of capacity to repay as recovery resulting in severe financial hardship, which was not established. The Tribunal also noted that section 1237A applied only if the debt was *solely* due to administrative error, and the applicant's failure to declare his income meant the error was not solely administrative. The Tribunal found no evidence to support a waiver based on special circumstances under section 1237AAD.

Consequently, the Tribunal affirmed the decision that the applicant's debt of $53,990.56 was not to be waived or written off.