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

This matter concerned an appeal by an applicant against a decision by the Secretary of the Department of Social Services to cancel his age pension. The dispute centred on the applicant's asset value for the purposes of the means test, specifically in relation to the transfer of two-thirds of a farm property to his son. The Administrative Appeals Tribunal was tasked with determining whether the cancellation of the age pension was correct.

The Tribunal was required to consider the operation of Division 2, Part 3.12 of the relevant Act, which deals with the deeming of assets upon disposal. Specifically, the Tribunal had to determine if the applicant was to be treated as possessing assets exceeding the allowable threshold for an age pension, notwithstanding the transfer of the farm property. A further issue was whether the applicant's personal circumstances warranted an exercise of discretion by the Tribunal to allow the pension, despite exceeding the asset limit.

The Tribunal found that the provisions of s 1124 of the Act applied to the transfer of the farm property. This section deems a person to have assets equal to the difference between the value of the disposed asset and the consideration received. In this instance, the value of the transferred interest was $733,334, and the consideration received was $248,825, resulting in a difference of $484,509. Pursuant to s 1126AA of the Act, the applicant was treated as having assets including this difference, less $10,000, meaning $474,509 was included for the means test. This, combined with other assets, exceeded the cut-off limit of $556,500. While the Tribunal acknowledged the applicant's personal hardship, it concluded that this was not the legal criterion for exercising discretion to pay a pension.