BASILIO TRANCHITA and and SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
[2013] AATA 327
[2013] AATA 327
Division GENERAL ADMINISTRATIVE DIVISION File Number(s)
2012/3951
Re
BASILIO TRANCHITA
APPLICANT
And
SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
RESPONDENT
File Number(s)
2012/3949
Re
LAURINA TRANCHITA
APPLICANT
And
SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
RESPONDENT
DECISION
Tribunal Dr A Frazer, Member
Date 22 May 2013 Place Perth
Decision Summary
The Tribunal affirms the decisions under review
. (Sgd) Dr A Fraser..............................................................
Member Dr A Frazer
Catchwords
SOCIAL SECURITY – payment of age pension – severe financial hardship decisions under review affirmed
Legislation
Social Security Act 1991 (Cth), Guide to the Social Security Law
REASONS FOR DECISION
22 May 2013
INTRODUCTION
Mr and Mrs Tranchita (the applicants) lodged claims for age pension. On 7 July 2011 a Centrelink Officer decided not to pay age pension as their combined assessable assets are over the assets limit. A Centrelink Officer decided on 29 August 2011 to reject their applications to be paid age pension under the hardship rules. This was because the applicants were not considered to be in financial hardship as they had available funds of $46,795.00.
A Centrelink Authorised Review Officer reviewed and affirmed the decisions on 23 September 2011.
On 10 August 2012 the Social Security Appeals Tribunal (“SSAT”) affirmed the ARO’s decisions.
On 11 September 2012 the applicants made an application to this Tribunal for review of the SSAT’s decisions.
THE RELEVANT LEGISLATION
The legislation relevant to this decision is contained in the Social Security Act 1991 (the Act) and the Social Security (Administration) Act 1999 (the Administration Act).
The relevant issues for this Tribunal to consider are:
(i) whether the value of the applicants’ assessable assets prevent the payment of age pension to them; and
(ii) if so, whether age pension is payable under the financial hardship rules.
THE EVIDENCE
The evidence before the Tribunal comprised:
·the “T Documents” (T1-T45,) lodged by the Secretary, Department of Families, Housing, Community Services and Indigenous Affairs (“the respondent”);
·Exhibit A1 – Undated email correspondence from Ray Levin to Office of State Revenue requesting a land tax instalment arrangement.
The applicant’s evidence
·The applicants explained they own shares in a partnership syndicate for the Mandurah Quarry and Farms, land held at 101 Fremantle Rd Lakelands and Lot 105 Stock Road Lakelands. The majority of the syndicate are family members. There is a Restrictive Caveat on the land to deal and there also needs to be the approval of 13 Syndicate members to effect a sale.
·The applicants said they have been trying to sell the land since 2006 however there are no buyers and also the asset does not return any income.
·The applicants said they have not received aged pensions since 2006.
·The declared value of the applicants assets at the time of claim were
(1) Toyota Camry $10,000
(2) Household contents $20,000
(3) NAB Savings $10,000
(4) NAB BA $2,514
(5) NAB Retirement Account $30,245
(6) Mandurah Quarry and Farms $5,870,353
On 21 September 2011 the Australian Valuations Office (AVO) valued the assets of Mandurah Quarries and Farm at $35,700,000.
The 2010 financial statements for Mandurah Quarry and Farm Operations valued the land at $88,800,000.00 (valuing the applicant’s share at $5,870,353.66).
Issue 1 – Is age pension payable under the assets test?
An age pension is payable to a person if their age pension rate is nil (s44 of the Act). The rate of age pension is calculated in accordance with the rate calculator in s1064 of the Act. The rate is calculated using an income and an assets test with the lower of the two rates being the applicable test. Assets are defined in s11 of the Act as property or money and the value of the asset is the unencumbered value.
The combined assets limit, at which the rate of age pension would be reduced to nil, was $998,000 at 7 July 2011 when the applicants claimed age pension.
It is common ground, and accepted by the Tribunal that the lower value of the AVO be used to determine the application. The Tribunal accepts the applicants interest in Mandurah Quarry and Farms Operation is reasonably calculated to be 6.6% of $35,700,000 which is $2,356,200.
The Tribunal is satisfied that age pension is not payable to the applicants in respect of the claims of 7 July 2011 as their rate of age pension would be reduced to nil under the assets test.
Issue 2 – Is age pension payable under the financial hardship rules?
If a social security pension is not payable to a person because the application of an assets test and the person makes the appropriate application, the financial hardship rules will apply if the person, or the person’s partner, has an unrealisable asset and the person would suffer severe financial hardship (s1129 of the Act).
The definition of an unrealisable asset in relation to the age pension is that either the person cannot sell or realise the asset and cannot use the asset as a security for borrowing (s11(12) of the Act) or the person could not reasonably be expected to sell or realise the asset and could not reasonably be expected to use the asset as a security for borrowing. (s11(13) of the Act.).
The Tribunal notes that there is no written evidence from the applicants demonstrating, inter alia, that the property has been on the market or evidence around the its asking price or any offer price, evidence that other syndicate members have refused to sell or evidence that the land cannot reasonably be expected to sell. Exhibit A1 is not dated and it is unclear as to whom the email is between. From the content the email is likely to date prior to 31 August 2012. This email does contain some evidence of a possible joint venture offer for the site. Therefore, the Tribunal does not accept that the asset is unrealisable for the purposes of s11 of the Act.
The term severe financial hardship is not defined in s 1129 of the Act however the policy at chapter 4.6.7.60 of the Guide says that to determine a person is in severe financial hardship their readily available funds (ie assets that can be readily converted to cash) must be equal to or lower than the annual maximum basic rate (MBR) of pension. The annual maximum basic rate including pension supplement, between 1 July 2011 and 19 September 2011, was $28,584.40.
The Tribunal notes that at 22 August 2011 the applicants had readily available funds of $33,000. The Tribunal notes the applicants contends that they have an outstanding debt for land tax however there is no legislative or policy provision that provides for a debt amount that is owed, but not yet paid, to reduce the amount considered readily payable.
Therefore s 1129(1)(e) of the Act is not satisfied and the financial hardship rules cannot be utilised.
DECISION
For the above reasons the Tribunal affirms the decisions under review.
I certify that the preceding 18 (eighteen) paragraphs are a true copy of the reasons for the decision herein of Member Dr A Frazer.
(Sgd) D.A Chapman………………….
Associate
22 May 2013
Date(s) of hearing 6 March 2013 Date of decision 22 May 2013 Representative for Applicant Applicants self represented with Mr Ross Tranchita (son) and Ms Melina Teague (daughter). The Tribunal was assisted by an Interpreter, Mr Sergio Cooper.
Representative for Respondent Ms Lana Gallagher, Sparke Helmore
Key Legal Topics
Areas of Law
-
Social Security Law
Legal Concepts
-
Assets Test
-
Financial Hardship Rules
-
Unrealizable Asset
0
0
0