Aurelius Vertoudakis as Executor of the Estate of the late Alexandra Vertoudakis and Secretary, Department of Health)

[2017] AATA 881

Aurelius Vertoudakis as Executor of the Estate of the late Alexandra Vertoudakis and Secretary, Department of Health) [2017] AATA 881 (19 May 2017)

Division:General Division

File Number(s):       2016/4188

Re:Aurelius Vertoudakis as Executor of the Estate of the late Alexandra Vertoudakis

APPLICANT

AndSecretary, Department of Health

RESPONDENT

DECISION

Tribunal:The Hon. Dennis Cowdroy OAM QC, Deputy President

Date:19 May 2017

Date of written reasons:        6 June 2017

Place:Sydney

In summary, the deceased simply did not qualify for a fully supported resident status and she had no entitlement at law to receive the amount which is claimed.  Accordingly, it follows that the application must be dismissed and the decision under review affirmed.

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The Hon. Dennis Cowdroy OAM QC, Deputy President

CATCHWORDS

AGED CARE ACT – whether the value of the applicant’s assets exceeds $40,500 – whether applicant is eligible for Government assistance with regard to her residential aged care accommodation costs– whether the applicant met the conditions for a fully supported resident status – decision affirmed.

LEGISLATION

Aged Care Act 1997 (Cth) Sch 1, ss 1.5, 44-23

Aged Care (Transitional Provisions) Act 1997 (Cth) ss 44-8A(a), 44-8A(b), 85-1

SECONDARY MATERIALS

Subsidy Principles 2014 s 39(1)(b)

REASONS FOR DECISION

The Hon. Dennis Cowdroy OAM QC, Deputy President

6 June 2017

1. By application for second review dated 8 August 2016, the late Alexandra Vertoudakis, the deceased, sought review of a decision made by a delegate of the Secretary, Department of Health (‘the Secretary’) which was contained in a letter to her dated 21 July 2016. Such determination was made by an authorised review officer, which affirmed an earlier determination made on 18 January 2016, which is considered hereunder.

2. The deceased died subsequent to the institution of this application and is being continued by her executor, hereafter referred to as ‘the applicant’. 

   FACTS

   Original Assessment

3. On 28 February 2012, the Secretary received an inquiry made by, or on behalf of, the deceased to have the value of her assets assessed to determine whether she was eligible for Government assistance with regard to her residential aged care accommodation costs.  Any entitlement for a subsidy is payable under the Aged Care Act 1997 (Cth) (‘the Aged Care Act’), and/or under a Transitional Act referred to hereunder.

4. On the basis of the assets, which were disclosed as being owned by her, namely shares valued at $12,500 and furniture and effects of $2500, the deceased was informed by letter that the value of her assets was assessed in the amount of $15,000.  Such letter from the Secretary pointed out, as her assets did not exceed the amount of $40,500, she met the conditions for a fully supported resident status.

5. The Secretary sent with the letter to the deceased, an assets summary for completion.  The deceased was informed that if the assets, which she had provided in her initial inquiry were incorrect, it was essential to advise Centrelink to enable a correction and that such correction must be made within 28 days of receipt of the letter.  The letter also advised that a change to the benefit could occur resulting from the information.

6. The deceased duly completed the personal details form and provided greater detail of her assets.  Included in the papers provided by the deceased to the Secretary was a bank statement issued by the Commonwealth Bank in respect of a bank account held jointly between the deceased and her late husband.  Such statement disclosed a credit balance of $137,260.80 as at 17 March 2012.  This asset had not been previously referred to in the initial inquiry made by the deceased.

7. In the particulars provided to the Secretary, the deceased furnished her address as being unit 47, 43 Gladesville Road, Hunters Hill, New South Wales 2110.  She also stated that she was currently residing in permanent aged care at the Maronite Sisters of the Holy Family Village, Marrickville, hereafter referred to as ‘the village’.

   Subsequent Assessment

8. Upon receipt of the information contained in the assets schedule, the Secretary, by a letter dated 29 March 2012, advised the deceased relevantly as follows:

9. Based on the information provided by the applicant, and the information held in the applicant’s Centrelink record, the value of the applicant’s assets has been assessed at $77,042.  This means that the applicant met the conditions for a partially supported resident status and that the accommodation costs will be partially subsidised by the Australian Government.  A reduced daily accommodation charge may still be payable.

10. The letter also relevantly stated:

    This assessment is effective from 14 March 2012 or the date you entered residential care, whichever date is earlier.  It replaces any previous assets assessment for residential aged care for this period…

    You must show prospective residential aged care providers the statement confirming that you are eligible to be a partially supported resident.

11. The deceased’s representative asserts that the deceased never received such letter.  However, the Secretary maintains that it was forwarded to her address as shown on her particulars form as being the relevant address for receipt of correspondence.  As a result, the deceased remained oblivious of the reduced entitlement.  This remained the position until an aged care income and asset assessment was made on 17 January 2016 in respect of the deceased’s husband Emanuel Vertoudakis (who is now also deceased).

12. Surprisingly, by a letter dated 13 April 2012, the Secretary advised the village relevantly as follows:

    I am writing to advise you that Mrs Vertoudakis is eligible to pay an accommodation charge of up to $0 per day while residing at the Maronite Sisters of the Holy Family Village.

13. The letter continued:

    Mrs Vertoudakis has been advised of the rate of accommodation charge that is payable.

14. It is not disputed at this hearing that such letter was informing the village that the deceased was to be regarded as a fully supported aged care resident.  It should be noted that the letter was dated 13 April 2012, almost a fortnight after the letter dated 28 March 2012 which informed the deceased that she was no longer fully supported.  The letter of 13 April 2012 and 28 March 2012 were written by different officers in the office of the Secretary.

15. As a result of the misunderstanding, the village was required to repay to the Secretary that portion of the subsidy which had been received by it from the Commonwealth.  In turn, the village seeks to recover the amount of $17.56 per day backdated from 17 January 2016 to 14 March 2012, amounting to $24,671.80.

16. The Secretary acknowledges that its letter to the village was an administrative error; that is the letter advising the village of the incorrect information on 13 April 2012.  The deceased was unaware that she was liable for such daily accommodation charged for almost four years.  In the determination made on 21 July 2016, the Secretary confirmed that the deceased had a liability to pay the village for the requisite period.

    RELEVANT LEGISLATION

17. The statutory provisions which enable a subsidy to be paid for aged care accommodation are contained in the Aged Care Act  and also in Aged Care (Transitional Provisions) Act 1997 (Cth) (‘the Transitional Act’).  It is the latter Act which directly applies in this instance since the Transitional Act applies only to ‘continuing care recipients’ (See 1-2A of that Act). The term ‘ continuing care recipients’ is defined in the dictionary in Schedule 1 to that Act as follows:

    Continuing care recipient has the same meaning as in the Aged Care Act 1997.

18. ‘Continuing care recipient’ is defined in the latter Act to include ‘continuing residential care recipient’.

19. Such term is defined in the Act as a person inter alia who has ‘entered a residential care service before 1 July 2014 and has not…”

20. It follows that the Aged Care Act does not apply but rather the provisions only of the Transitional Act.

21. Since the deceased entered the village on 4 March 2012, she is, therefore, classified as ‘continuing care recipient’.  Therefore, the provisions of the Transitional Act apply to her circumstances and define her rights and entitlements.

22. The applicant challenges the right of the respondent to deny the deceased the status of a fully supported resident.

    APPLICANT’S SUBMISSIONS

23. The applicant intended at the hearing to raise an issue of service of the notice dated 28 March 2012 upon the deceased.  However, such admission was abandoned.

24. The applicant, however, relied upon a submission which required an examination of the Subsidy Principles 2014 (Cth) (‘Subsidy Principles’). Chapter 7 of the Aged Care Act enables the Minister to make principles. Section 44-23 of the Aged Care Act, contained in chapter 3 thereof, makes provision for a care subsidy reduction to be zero in certain circumstances.  The applicant referred to section 39 of the principles, which makes exemption from reduction in the subsidy for certain classes of persons who have the benefit of a care subsidy reduction deemed to be zero.  Section 39(1)(b) of the Subsidy Principles includes in that class of persons:

    Care recipients who are not, within 6 months of entry to the residential care service, informed of the care recipient’s care subsidy reduction (if any)

25. The applicant submits that this provision applies to the deceased and that, therefore, she is exempt by virtue thereof from meeting any payment for her aged care accommodation.

    FINDING

26. The applicant’s submission cannot be sustained. Section 1.5 of the Aged Care Act provides:

    Chapter 3 and 3A of this Act do not apply in relation to a continuing care recipient. 

27. It follows that sections 44-23 of the Aged Care Act, has no application and, accordingly, the provisions relied upon do not apply to the deceased.  Instead, the only applicable legislation is the provisions of the Transitional Act.

28. The determination of the value of the assets of the deceased in the amount of $77,042 was made under section 44-8A(a) and of section 44-8A(b) of the Transitional Act.  Such sections authorise the Secretary to make a determination described as a ‘resident status determination’ and to make a determination of the value of a person’s assets.  (Section 44-8A(b).  The provisions of section 44 provide for the subsidy which might be payable.

29. A schedule of resident fees and charges from 1 January 2012, published by the Department of Health and Aging, makes it plain that the ‘asset cut-off level’ for a fully supported resident status is $40,500 and for a partially supported resident status, such level is the amount of $107,850.40.

30. The decision under review was made in respect of the determination concerning the asset value of the assets held by the deceased when her application was made. That assessment was made in the amount of $77,042. Part 6.1 of the Transitional Act makes provision for reconsideration and review of decisions.  Section 85-1 refers to reviewable decisions.  Relevantly, such a decision is one made as described as follows:

    ‘39C To determine the value of a person’s assets – subsection 44-8AB(1)’.

31. It follows that the reviewable decision is the decision relating to the valuation of the deceased’s assets.  There is no other decision which can be reviewed.  The applicant does not challenge the accuracy of the assessment of the value of the deceased’s assets.  In reality, the only real challenge is to the administrative error, which is alleged in the failure to notify the deceased of the determination, increasing the value of her assets and the consequential alteration in the deceased’s entitlement.  It should be noted that the respondent does not concede any administrative error in relation to the notification sent to the deceased.  However, it is plain that there was an error in relation to the notification to the village on 13 April 2012.  Further, any error on the part of the Secretary in relation to notification, even if established, is not a reviewable decision.

    CONCLUSION

32. In summary, the facts establish that the deceased was never entitled, under the applicable legislative provisions, to receive the status of a ‘fully supported resident in an aged care facility’. The value of her assets exceeded the requirements for that status.  Since the entitlement did not exist, there can be no claim for payment.

33. Whilst the applicant urged the Tribunal to exercise its discretion, namely the discretion invested in the Tribunal, the discretion held by the Tribunal can only be exercised judicially where no error is demonstrated at law.  The discretion cannot be exercised to depart from the decision under review.  The Tribunal has been informed that an application for an ex gratia payment has been unsuccessful and, in this respect, the Tribunal should exercise its discretion.  However, there is no discretion in these circumstances available to the Tribunal to be exercised where this no legal error.

    DECISION

34. In summary, the deceased simply did not qualify for a fully supported resident status and she had no entitlement at law to receive the amount which is claimed.  Accordingly, it follows that the application must be dismissed and the decision under review affirmed.

I certify that the preceding 34 (thirty -four) paragraphs are a true copy of the reasons for the decision herein of The Hon. Dennis Cowdroy OAM QC, Deputy President

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Associate

Dated: 6 June 2017

Date(s) of hearing:	19 May 2017
Solicitors for the Applicant:	Mr K O'Keefe
Solicitors for the Respondent:	Ms S Sangha, Mills Oakley Lawyers