Almosawi and Secretary, Department of Social Services
[2015] AATA 968
•30 November 2015
Almosawi and Secretary, Department of Social Services [2015] AATA 968 (30 November 2015)
Division
GENERAL DIVISION
File Number
2015/4192 (Second Review)
Re
Majed Almosawi
APPLICANT
And
Secretary, Department of Social Services
RESPONDENT
DECISION
Tribunal Egon Fice, Senior Member
Date 30 November 2015 Date of written reasons 16 December 2015 Place Melbourne The decision under review is affirmed.
............................[sgd]............................................
Egon Fice, Senior Member
Catchwords
SOCIAL WELFARE – pensions, payments and allowances – aged pension – entitlement – requirement to inform Centrelink of income and assets – Centrelink requested information regarding private family trust – applicant did not provide requested information – aged pension suspended – decision under review affirmed
Legislation
Social Security (Administration) Act 1999 (Cth) ss 63, 64, 192, 196
REASONS FOR DECISION
Egon Fice, Senior Member
16 December 2015
Mr Majed Almosawi began to receive the Age Pension on 1 July 2005.
In about November 2014 it came to Centrelink’s attention that Mr Almosawi may not have disclosed all of his assets when he applied for the Age Pension. On 26 November 2014 a Centrelink officer contacted Mr Almosawi asking him if there had been any changes to his income and assets. Mr Almosawi said there had been no changes. He told Centrelink about his bank account details but they did not match the data held by Centrelink. He also advised the Centrelink officer that he had a family trust which had not been previously disclosed. The Centrelink officer notified Mr Almosawi that he would be sent a form to complete as a follow-up.
Centrelink sent to Mr Almosawi a letter dated 26 November 2014 requesting that he complete a MOD PT – Private Trust Form and to provide all supporting documents. That letter also stated:
If you do not provide this information
If you do not provide this information to us by 10 December 2014 your Age Pension payments may be stopped. If you cannot provide the information by the due date you need to contact us.
Centrelink’s computer records indicate that the payment of Mr Almosawi’s age pension was cancelled on 7 January 2015 for failure to respond to the request for further information. An entry made on Centrelink’s records for 9 January 2015 indicates that in the course of a telephone discussion, Mr Almosawi was asked for the details of the sale of his family home and how much money he had taken out of Australia to an overseas destination for the purpose of buying land. According to the record, Mr Almosawi told the Centrelink officer that he sold his family home to buy a burial plot in Iraq. However Centrelink had information that the family home was not sold but put into a trust. Centrelink also provided Mr Almosawi with another request for information in a letter dated 9 January 2015 in which it sought information about a property in Plenty Road, Morang and another in Alexander Avenue, Thomastown. That letter again contained a warning indicating that if information was not provided by 23 January 2015, Mr Almosawi’s age pension payments would cease. Centrelink sent a further letter on 9 January 2015 following the telephone discussion with the Centrelink officer requesting details of the sale of the family home and how much money was taken overseas to buy land. It also sought information about the purchase of two units and the trust documents which had previously been requested. The letter informed Mr Almosawi that he needed to provide statements for all of his bank accounts showing the account balance as at 2 October 2014 and all transactions for the three months before that date; the latest council rates or valuation notice for the two Alexander Avenue units; a bank valuation statement in respect of both units; a copy of the loan application papers as well as the previously requested documents regarding the family trust which had not been provided.
On the basis of the discussions had on 9 January 2015, Centrelink restarted
Mr Almosawi’s age pension payments from 7 January 2015.
On 26 February 2015 Centrelink sent Mr Almosawi a further letter seeking information about M Property Developments Pty Ltd and the M Family Trust. Mr Almosawi had apparently told Centrelink that he was the sole director and shareholder of the trustee company. For that reason, Centrelink pointed out to Mr Almosawi that under Social Security Law, the assets and the income of the M Family Trust (the Trustee) would be attributed to him and used to assess his past and ongoing entitlement to the age pension. The information was said to be required within 14 days of receiving that letter, failing which his age pension could be stopped.
When Mr Almosawi failed to provide the requested information, Centrelink suspended his age pension payments and notified him of that decision on 19 March 2015.
In a letter dated 2 April 2015 Centrelink referred to Mr Almosawi’s responding letter of
23 March 2015 and indicated that not all of the information requested had been supplied. Therefore, his age pension could not be restored at that time. Centrelink again requested the further information within 14 days of Mr Almosawi receiving the letter.
On 2 April 2015 Mr Almosawi contacted Centrelink requesting a review of the decision made on 19 March 2015 to suspend his age pension payments. On 5 May 2015 Centrelink affirmed that decision. Mr Almosawi then sought review of that decision by an Authorised Review Officer (ARO). The ARO made his decision which was given to
Mr Almosawi in a letter dated 8 May 2015. Mr Almosawi then requested a review of the ARO decision by what was then the Social Security Appeals Tribunal (SSAT) (now the Social Security and Child Support Division (SSCSD) of the AAT (first review)). The SSCSD affirmed the ARO decision on 23 July 2015. Mr Almosawi then lodged an application with the General Division of the AAT on 17 August 2015 seeking a review of the SSCSD decision.
I heard this application on 30 November 2015 and handed down an oral decision at the conclusion of the hearing in which I affirmed the SSCSD decision made on 23 July 2015. On 7 December 2015 Mr Almosawi requested written reasons for my decision. These are those reasons.
LEGAL BASIS FOR INFORMATION REQUESTS
The general power granted to the Secretary to require persons to provide information is set out in s. 192 of the Social Security (Administration) Act 1999 (the Administration Act). Relevantly, it provides:
192 The Secretary may require a person to give information, or produce a document that is in the person’s custody or under the person’s control, to the Department if the Secretary considers that the information or document may be relevant to one or more of the following:
(a)…
(b)the question whether a social security payment is payable to a person who is receiving the payment;
…
Section 196 of the Administration Act provides that a notice requiring a person to provide information must be made in writing and given to the person from whom the information is sought.
Division 6 of the Administration Act deals with requirements to provide information or to undergo medical examinations etc. Section 63(1) relevantly provides:
63(1) Subsection (2) applies to a person if:
(a)the person is receiving, or has made a claim for, a social security payment;…
Section 63 (2) provides:
63 (2) [Notification of person attending] If the Secretary is of the opinion that a person to whom this subsection applies should:
(a)attend an office of the Department; or
(b)contact the Department; or
(c)attend a particular place for a particular purpose; or
(d)give information to the Secretary;
the Secretary may notify the person that he or she is required, within a specified time, to do that act or thing.…
There was no issue in this matter about whether Mr Almosawi received the notices to which I have referred above. In any event, s. 63 (5) provides that the Secretary may give notice by sending the notice by prepaid post addressed to the person at his or her postal address last known to the Secretary. That is what happened in this case.
Section 64 deals with the consequences of failing to comply with a notice given by the Secretary. Relevantly, it provides:
64 (1) If:
(a)a person is receiving, or has made a claim for, a social security payment; and
(b)the Secretary notifies the person under subsection 63 (2) or (4); and
(c)the requirement in the notice is reasonable; and
(d)the person does not comply with the requirement; and
(e)except if the person is receiving, or has made a claim for, a participation payment – the Secretary is not satisfied that the person had a reasonable excuse for not complying with the requirement; and
(f)the Secretary is satisfied that it is reasonable for this subsection to apply to the person;
the payment that the person is receiving or has claimed is not payable.
In my opinion, the notices issued to Mr Almosawi requesting the provision of information and documents were reasonable because it appeared to Centrelink officers that there were assets which Mr Almosawi had not declared when claiming the Age Pension. An asset and an income test applies to Age Pension payments. There was no issue before me that Mr Almosawi claimed he had a reasonable excuse for not complying with the notices and that the Secretary was not satisfied that that excuse was reasonable. The only issue raised by Mr Almosawi on the hearing of this matter was that he had complied with those notices and therefore his Age Pension payments should not have ceased.
WAS THERE NON-COMPLIANCE BY MR ALMOSAWI
I had in evidence a copy of the Deed of Trust for the M Family Trust. The first point to make about that Deed is that there is only one beneficiary named in the Schedule, that person being Mr Almosawi. The Deed describes him as a Corpus Beneficiary. According to the Deed, beneficiary means any person included in the Discretionary Class and any Corpus Beneficiary but it does not include any person named in the Schedule as an excluded beneficiary. The Schedule does not name any excluded beneficiary nor does it name any Discretionary Class beneficiary. The Trustee is named as M Property Developments Pty Ltd. Mr Almosawi admitted he was the sole director and shareholder of that company. In that case, it should be immediately apparent that the attribution provisions regarding assets which apply to persons who control a private trust must come into play in this case. Accordingly, I find that not only was it reasonable for the Secretary to request information and documents dealing with the M Family Trust, but also any documents evidencing the assets it had acquired. Such assets may or may not be subject to an encumbrance, such as a mortgage, and that information must also be disclosed to the Secretary. That information permits the net value of an asset to be calculated. Relevant financial and asset information will also be obtained from income tax returns lodged by the trustee in its own right and also in its capacity as trustee.
I had in evidence a copy of the 2011, 2012, 2013 and 2014 income years Balance Sheet and Profit & Loss Statement for the M Family Trust. There were no financial documents in evidence regarding the trustee company, M Property Developments Pty Ltd. I also had in evidence a Trust Tax Return for the 2010, 2011, 2012, 2013 and 2014 income years which identified the trust as the M Family Trust. I did not have in evidence a tax return for the trustee company. I did not have in evidence any security documents relating to property held in the trust. I had in evidence a single page from a NAB Internet Banking account which was described as a Personal Account although Mr Almosawi had written the words Trust Account on that document. I also had a single page from another NAB Internet Banking account described as Home Loan. What is clear from those documents is that there was property purchased either by Mr Almosawi or the Trustee of the M Family Trust with the interest owing on the loan account being charged to the Personal Account. Furthermore, the Personal Account discloses rental income from what is described as Alexander 4 and Alexander 1, which appear to be the two units located on Alexander Avenue.
It appears that Mr Almosawi provided to the Secretary a copy of the 2016 year rates and charges for units 1 & 4 located on Alexander Avenue. Those rates and charges notices are addressed to M Property Developments Pty Ltd. While that may be indicative of ownership, it is not necessarily so.
In the course of hearing submissions from Mr Almosawi for failure to provide all of the documents relevant for the purpose of allowing Centrelink to properly calculate or determine his right to age pension payments, it was clear to me that Mr Almosawi did not understand that the corporate trustee, M Property Developments Pty Ltd, was a discrete legal entity which, although also acting as Trustee for the M Family Trust, could nevertheless hold assets in its own right and have other transactions. That is why the Secretary insisted on having documents which related to the Trustee in evidence.
Mr Almosawi repeatedly said that the Trustee’s income tax return and financial statements had been provided despite the fact that I pointed out that those documents provided related to the trust and not the trustee company. The headings on all of those documents make that plain and yet, Mr Almosawi purported not to understand that there was a distinction between the trustee and the trust itself. In fact, he seemed to be under the impression that the trust was itself a legal entity, rather than simply assets held by the corporate entity as their legal owner for the benefit of a beneficiary, the equitable owner.Furthermore, Mr Almosawi considered it was sufficient to provide the Home Loan account as evidence that the two units were encumbered to the extent of loan monies outstanding. However, that is not necessarily the case. It is not unusual for security to be given to the bank for a home loan by what is generally described as a third party. For example, in this case, Mr Almosawi disposed of his principal home, presumably gifting it to the Trust. It is entirely possible that security for the funds provided by the home loan account was provided by a mortgage over the principal home. That may or may not make a difference to Mr Almosawi’s entitlement to receipt of the age pension. In any event, any security documents taken by a lender for the advance granted to either the trustee or Mr Almosawi in his own right should have been disclosed to the Centrelink.
Given the evidence to which I have referred above and its relevance for the purposes of determining Mr Almosawi’s right to age pension payments and the calculation of the amount if any, I find that Mr Almosawi’s refusal to provide the additional documents sought by the Secretary was unreasonable. In those circumstances, I find he did not comply with the requirements of the notices given to him pursuant to s. 63(2) of the Administration Act and therefore, the age pension was not payable to Mr Almosawi for failure to comply with the notice issued on 26 February 2015. That position will subsist until such time as Mr Almosawi complies with the Secretary’s request thereby allowing a correct assessment to be made of his assets and income.
CONCLUSION
The decision made by the SSCSD on 23 July 2015 affirming the ARO decision of
8 May 2015 was the correct decision. I affirm that decision.
I certify that the preceding 24 (twenty -four) paragraphs are a true copy of the reasons for the decision herein of Egon Fice, Senior Member ..............................[sgd]..........................................
Associate
Dated 16 December 2015
Date of hearing 30 November 2015 Applicant In person Advocate for the Respondent Mr J Henderson Solicitors for the Respondent Department of Human Services
Key Legal Topics
Areas of Law
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Administrative Law
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Social Welfare
Legal Concepts
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Judicial Review
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Natural Justice & Procedural Fairness
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Statutory Interpretation
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Compliance
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Entitlement
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