SOCIAL SECURITY - Jobseeker payment - Coronavirus Supplement - debt recovery - annual distributions from a family trust - trust distributions attributed in the wrong financial year - debts recoverable in full - decision under review affirmed

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been omitted from this decision and replaced with generic information pursuant to subsection 201(1A) of the Social Security (Administration) Act 1999.

1. Mrs Dillon is a 62-year-old woman who was in receipt of jobseeker payment (JSP) and coronavirus supplement (CVS) between 23 March 2020 and 23 June 2021 (the debt period). During the debt period, Mrs Dillon was partnered. Both she and her subsequently deceased partner received annual distributions from a family trust.
2. On 16 January 2023, Centrelink decided that Mrs Dillon had been paid both JSP and CVS in excess of her entitlement during the debt period. They raised and sought recovery of a JSP debt in the sum of $10,756.64 and a CVS debt in the sum of $2,200. Both debts and their recovery were affirmed by a Centrelink authorised review officer (ARO) following internal review on 8 July 2025.
3. On 22 July 2025, Mrs Dillon applied to this Tribunal for internal review of both debts.

1. The statutory provisions relevant to this review are set out in the Social Security Act 1991 (the Act).
2. Under section 643 of the Act, a person's rate of JSP is worked out using the Benefit Rate Calculator in section 1068 of the Act. This calculator includes both a personal income test and a partner income test. In summary, both income tests have an income free area (fortnightly earnings that have no effect on the rate of JSP). Once the income free area is reached, any further income reduces a person's rate of JSP. For the personal income test, the rate reduction is 50 cents for each dollar of income in excess of the income free area which, at the beginning of the debt period, was $1,086.50. For the partner income test, the rate reduction is 60 cents for each dollar of income in excess of the income free area which, during the debt period, was $9,994 per fortnight.
3. Under section 1073 of the Act, when a person receives income that is not in the form of periodic payment, ordinary income from remunerative work, or an exempt lump sum, they are taken to receive one fifty-second of that amount as ordinary income during each week in the 12 months commencing on the day on which the person becomes entitled to receive that amount.
4. CVS payments were supplementary to social security payments, including JSP. They were only payable if the person had an entitlement to at least some amount of the relevant social security payment. If JSP was not payable under the income test, CVS was not payable to a person who was otherwise entitled to receive JSP.
5. Under section 1223 of the Act, when a person is paid any amount of a social security payment that they were not entitled to receive (whether because of lack of qualification or lack of payability), this amount is a debt due to the Commonwealth. Under section 1229A of the Act, if a person is notified about a debt and the person fails to make a repayment arrangement by the day the debt is due, an interest charge can be added to the debt.
6. Under section 1236 of the Act, a debt can be written off if it is not recoverable in law or not recoverable for other reasons, or where the debtor has no capacity to pay. Under section 1237A of the Act, Centrelink may waive its right to recover a debt if the debt arose solely as a result of administrative error and was received in good faith. Waiver under section 1237A is not available if the debt is raised within six weeks of the first payment giving rise to the debt. Under section 1237AAD of the Act, Centrelink may waive its right to recover a debt in special circumstances, but only if the debt did not arise wholly or partly from a person knowingly making a false statement or representation, or failing to comply with a reporting requirement. Under section 1237AAD, financial hardship alone is not a special circumstance.
7. The issues which arise in this case are:
   • Whether Mrs Dillon has a JSP debt; and, if so, in what sum.
   • Whether Mrs Dillon has a CVS debt; and, if so, in what sum.
   • Whether Mrs Dillon's JSP and/or CVS debt(s) must be recovered in full.

(i) documents submitted by Centrelink (the hearing papers) as being relevant to the original decision and the internal review of that decision;

(ii) sworn evidence provided by Mrs Dillon during a telephone hearing on 13 October 2025, during which she was represented by her son, Mr [A], and the Tribunal was assisted by an interpreter in the Mandarin language; and

(iii) additional documentary evidence, a Statement of Financial Circumstances, provided by Mrs Dillon.

1. Centrelink's position is set out in the ARO's decision statement. The ARO found that, during the debt period, Mrs Dillon and her partner received distributions from a family trust. Mrs Dillon had not advised this income and was paid JSP and CVS without regard to this income. When the income was taken into account, it was such as to preclude any payment of JSP when the CVS payments were made to her. This meant that any JSP or CVS paid to Mrs Dillon were overpayments that were debts. The ARO found that Mr Dillon did have some subsequent entitlement to JSP because distributions from the family trust reduced. However, the amount of DSP paid to Mrs Dillon exceeded her entitlement, and the overpayments of JSP were a debt, pursuant to section 1223 of the Act. The ARO found that none of the overpayments that caused the debt arose because of administrative error and that Mrs Dillon was not affected by special circumstances such as to make waiver of recovery of part or all of the debt desirable.
2. During the hearing, Mr [A] submitted that Centrelink had erred in attributing the trust distributions to the financial year during which they were paid and not to the financial year from which they were allocated. He submitted that, had Centrelink properly attributed the trust distributions, Mrs Dillon's JSP debt would have been less than calculated by Centrelink and there would be no CVS debt.
3. Mr [A] told me that if I found that the debts had been properly and lawfully determined, Mrs Dillon would have no objection to paying them. Mrs Dillon had applied to this Tribunal because of concerns that the debts had been wrongly determined, not because she believed that any legitimate debt should not be recovered.

1. Section 1073 of the Act requires that an annual payment such as the distribution from a trust be divided by 52 to yield a weekly sum and attributed to the 12-month period that commences on the day that the person becomes entitled to receive the payment.
2. In this case, the entitlements that are relevant to the debt period arose because of trust resolutions that were passed on 26 June 2019 and 24 June 2020. While these resolutions are in respect of the 2018-19 financial year and the 2019-20 financial year respectively, it is the dates of the resolutions that determine the income period that applies for the purposes of the income test because it is the resolution that determines the entitlement.
3. I am satisfied that on 26 June 2019, by resolution of the family trust, Mrs Dillon became entitled to a distribution of $24,000 and her then partner, [Mr A], became entitled to a distribution of $31,500. It follows that for the purposes of the JSP income test Mrs Dillon is taken to be receiving fortnightly income of $923.08 and [Mr A] is taken to be receiving fortnightly income of $1,211.54. This fortnightly income is applicable for that part of the debt period that falls between 23 March 2020 and 24 June 2020.
4. Under the personal income test Mrs Dillon was entitled to receive a small amount of JSP between 23 March 2020 and 24 June 2020. However, that entitlement was reduced by a further $130.52 under the partner income test, with the result that no JSP was payable to Mrs Dillon during the debt period prior to 24 June 2020.
5. The distributions authorised by the family trust on 24 June 2020 were $18,000 to Mrs Dillon and $21,000 to [Mr A]. When applied as fortnightly income to the personal income test and the partner income test, from 24 June 2020, these distributions substantially reduced Mrs Dillon's JSP entitlement but did not preclude her from receiving some JSP.
6. Centrelink has determined that Mrs Dillon had an entitlement to JSP in the total sum of $6,584.71 during the debt period but received $17,341.35 because Centrelink was unaware of the family trust distributions to her and her partner. This meant that she was overpaid $10,756.64.
7. The debt calculations are set out in the hearing papers and appear to be correct. I am satisfied that Mrs Dillon was overpaid JSP in the sum of $10,756.64 during the debt period.
8. Pursuant to section 1223 of the Act, this sum is a debt due to the Commonwealth.

1. I am satisfied that Mrs Dillon received four CVS payments, each of $550, during the period between 23 March 2020 and 24 June 2020.
2. I have already found that JSP was not payable to Mrs Dillon during this period (see paragraphs 17 and 18 of this decision). Her entitlement to CVS was contingent on an entitlement to at least some JSP. As there was no entitlement to JSP, Mrs Dillon was not entitled to receive these four CVS payments.
3. It follows that, pursuant to section 1223 of the Act, Mrs Dillon has a CVS debt in the sum of $2,200.

Must Mrs Dillon's JSP and/or CVS debts be recovered in full?

1. I am satisfied that the debts are recoverable which means there is no basis for writing them off.
2. The evidence before me indicates that the debts arose because Mrs Dillon did not advise Centrelink about the family trust distributions that she and her late partner received. I am satisfied that the debts were not caused solely by administrative error. It follows that there is no basis for applying section 1237A of the Act to waive recovery of part or all of either debt.
3. Mr [A] (representing Mrs Dillon) did not seek waiver of recovery in special circumstances. Rather he advised that Mrs Dillon was willing to repay any debts that arose because of overpayments of JSP and or CVS. Mrs Dillon's Statement of Financial Circumstances indicates that she relies on distributions from the family trust for her income and that her only asset is the family home. She advised that her former partner is now deceased.
4. Overall, I am not satisfied that there is any basis for applying section 1237AAD of the Act to waive recovery of part or all of either debt.
5. It follows that both debts must be recovered in full, albeit in manageable instalments.