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

This matter concerned an appeal by an applicant against a decision by the Secretary of the Department of Social Services that the applicant had incurred a debt of $9,998.53 due to an overpayment of his age pension. The debt arose from variations in the applicant's income and assets, including income from private companies of which he was the sole shareholder and director, and personal earnings from various employers. The applicant contended that the debt was not attributable to him and that certain funds transferred to a company should be treated as capital, not a loan.

The legal issues before the Tribunal were whether the applicant had incurred an age pension debt, if the assessed amounts were correct, and whether the recovery of all or part of the debt should be waived. Specifically, the Tribunal had to determine if the applicant's income and assets, including those of his private companies, were correctly assessed for the purposes of calculating his age pension entitlement, and if the circumstances warranted a waiver of the debt.

The Tribunal found that the applicant had incurred a debt due to an overpayment of his age pension. It reasoned that the applicant had failed to notify the Department of changes in his circumstances, including income from various employers and the financial activities of his private companies, Waterford Holdings Pty Ltd and Perth Children’s Contact Services Pty Ltd. The Tribunal applied sections of the *Social Security Act 1991* and the *Social Security (Administration) Act 1999* which require individuals to report changes in income and assets, and which deem certain loans to private companies as financial assets. The Tribunal noted that the applicant's own accountant had reclassified funds as a director's loan, and that financial statements confirmed these loans. The Tribunal also considered the applicant's argument regarding "special circumstances" for waiver under section 1237AAD of the Act, but found that the debt was not solely attributable to an error by the Department, and that the applicant had not provided sufficient evidence to demonstrate special circumstances that would make waiver desirable. The Tribunal affirmed the decision of the Secretary.