The Executor of the estate of the late Peter Sweeney; Secretary, Department of Social Services and (Social services second review)

The applicant, the executor of the estate of the late Peter Sweeney, sought review of a decision by the Secretary of the Department of Social Services to cancel Mr Sweeney's Age Pension. The dispute concerned whether certain shareholder loans constituted assets for the purposes of the Age Pension assets test and whether the assets hardship test was correctly applied. The matter was heard by Mrs J C Kelly, Senior Member, of the Administrative Appeals Tribunal.

The Tribunal was required to determine two primary legal issues. Firstly, whether the cancellation of Mr Sweeney's Age Pension under the assets hardship provisions was correct. Secondly, the Tribunal considered whether shareholder loans to companies, specifically SST, Carlton, and Manyana, were to be treated as assets for the purposes of the Age Pension assets test, and if so, whether there was a clear intention for these loans to be repaid. The Tribunal also considered the jurisdiction of the Tribunal to make a decision after the death of the respondent.

The Tribunal reasoned that the definition of a loan for the purposes of the Social Security Act 1991 (Cth) requires an actual lending of money or asset and a clear intention to repay. While the loans to Carlton and Manyana were no longer considered assets as those entities were being wound up, the loan to SST was found to be an asset. The Tribunal noted that a significant portion of the loan to SST had arisen after 27 October 1986, and therefore fell within the scope of the assets test. Despite evidence suggesting a lack of intention for repayment, the Tribunal gave little weight to this, finding that for almost 40 years, these sums had been consistently recorded as loans in company financial records. The Tribunal concluded that the assets hardship provisions no longer applied to Mr Sweeney due to the value of his readily available funds and the inclusion of the SST loan, which, when combined with other assets, exceeded the applicable assets test limit.

The Tribunal set aside the reviewable decision and substituted a new decision, finding that Mr Sweeney's Age Pension was properly cancelled on 20 May 2020, with effect from 10 September 2018.