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

This matter concerned an appeal by Mrs Whitby against a decision by the Secretary of the Department of Social Services regarding a debt raised for age pension payments. The dispute centred on the date a testamentary trust was considered to have been established for the purposes of the social security assets test. Mrs Whitby had provided information to Centrelink indicating the trust was established on 3 November 2014, the date of the testator's death.

The legal issues before the Tribunal were whether a testamentary trust is established for the purposes of Part 3.18 of the Social Security Act 1991 (Cth) on the date of the testator's death, or upon the administration of the estate, and consequently, when assets held within such a trust should be attributed to an individual for the purposes of the age pension assets test. The Tribunal was required to determine the correct date for the commencement of asset attribution and whether the debt raised was solely attributable to an administrative error by the Commonwealth.

The Tribunal found that while the legislation, specifically section 1208E, deems assets to be included in an individual's assets for the purposes of the assets test, the common law position regarding the creation of testamentary trusts is displaced by the Act to the extent of any inconsistency. However, the Tribunal ultimately preferred the submissions made on behalf of Mrs Whitby, concluding that the preferable decision was that the correct date for the commencement of the attribution of assets in Mrs Whitby’s testamentary trust was the date on which the administration of the deceased estate was completed and the assets were transferred to the trust, which was 8 December 2015.

Consequently, the Tribunal ordered that no debt arose for the period between 3 November 2014 and 7 December 2015, as Mrs Whitby was not required to notify Centrelink of any change in her financial circumstances during this period. The Tribunal was satisfied that the debt raised for this period was solely attributable to an administrative error by the Commonwealth, and that Mrs Whitby had received her age pension payments in good faith. Therefore, any debt raised for age pension payments received by Mrs Whitby during this period was waived pursuant to section 1237A of the Act.