A Sri Lankan asylum seeker has become the second person to have an adverse threat assessment overturned by ASIO.
Manokala Jenaddarsan, 41, was in the final stages of getting her refugee claim processed in 2011 when ASIO issued her with the adverse security assessment.
The ruling meant her life was in limbo, and she was kept in detention at Villawood.
ASIO has now overturned the ruling, meaning Ms Jenaddarsan can be released into the community along with her son Ragavan, who turned six on Sunday.
"ASIO has always maintained the position that it can, and would, issue a new security assessment in the event new information of relevance came to light," ASIO said in a statement.
"In respect of this individual, ASIO issued a non-prejudicial security assessment on 13 May 2013, which supersedes the previously issued adverse security assessment."
Representatives from the Tamil community say Ms Jenaddarsan's husband was killed in a bombing raid in 2009.
They say that while he had been a member of the Tamil Tigers, he was not involved in active service at the time of his death.
They say Ms Jenaddarsan had no involvement in rebel activities.
ASIO says its decision was made separately to the review of adverse assessments being conducted by former Federal Court judge Margaret Stone.
Fifty-four asylum seekers who arrived in Australia by boat are currently the subject of adverse assessments.
Ms Jenaddarsan's lawyer, Giri Sivarman, says ASIO's decision may have repercussions for those people.
But he says there are wider issues at play.
"Putting aside the security assessment issue, I'd still submit that even if there is an adverse security assessment, if the person has been determined to be a genuine refugee then at the very least, allow them to live in the community, perhaps in community detention or something like that," he told PM.
"Don't keep them locked up in indefinite detention, that's just inhumane.
"There's probably plenty of people that walk around in Australian society that ASIO think at some point or the other have warranted an adverse security assessment, it doesn't mean that they all get locked up without charge."