Bastian and Secretary, Department of Social Services (Social services second review) - [2018] AATA 3016

Bastian and Secretary, Department of Social Services (Social services second review) [2018] AATA 3016 (17 August 2018)
Division:GENERAL DIVISION
File Number: 2017/3713
Re:Travis Bastian
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

DECISION
Tribunal:Senior Member Dr M Evans
Date:17 August 2018
Place:Perth

The Reviewable Decision dated 7 June 2017 is affirmed.
..............[sgd]..........................................................
Senior Member Dr M Evans
CATCHWORDS
Social Security – youth allowance – liquid assets – liquid asset test waiting period – monies in bank account – whether Applicant and his parents established a trust – oral bare trust – attribution of assets – when assets or income will be attributed to an individual – attributable stakeholder – designated private trust – controlled private trust – part 3.18 of the Social Security Act 1991 (Cth) – decision under review affirmed.
LEGISLATION
Administrative Appeals Tribunal Act 1975 (Cth), s 25(1)
Social Security Act 1991 (Cth), s 14A(1), s 14A(1), s 19C(2), s 19C(4), s 19C(5), s 549,
s 549A, s 549A(1), (2), (3), (4) and (5), s 549B, s 549B(1), s 549C, s 549C(1) and (2),
s 1207, s 1207B(1)(d), s 1207C, s 1207C(1)(e), s 1207C(1)(j), s 1207P, s 1207P(1),
s 1207V, s 1207X, s 1207V(1), (2) and (4), s 1207X(2), s 1208E(1), s 1208U, s 1209E
Social Security (Administration) Act 1999 (Cth), s 126, s 142(1), s 179(1)
CASES
Biddlecombe and Department of Family and Community Services [1999] AATA 528
Byrnes v Kendle (2011) 243 CLR 253
Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60
Dubois and Secretary, Department of Social Services [2017] AATA 2164
Faulkner and Comcare [2007] AATA 1541
Morice v Bishop of Durham (1804) 9 Ves 399
Re Armstrong [1960] VR 202
Re Jacobsen and Secretary, Department of Social Security [1992] AATA 101
Schwabe and Secretary, Department of Family and Community Services [2005] AATA 248
Twinsectra Ltd v Yardley [2002] 2 AC 164
Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669
SECONDARY MATERIALS
Explanatory Statement, Social Security (Attributable Stakeholders and Attribution Percentages) Principles 2000 (Cth)
G E Dal Pont, Equity and Trusts in Australia (Thomson Reuters Lawbook Co,
6^th ed, 2015)
Heydon and Leeming, Jacobs’ Law of Trusts in Australia (LexisNexis Butterworths, 7^th ed, 2006)
Social Security (Attributable Stakeholders and Attribution Percentages) Principles 2000 (Cth), clauses 6, 6(3), 7, 7(2), 8, 9, 9(1), 9(2), 10, 10(1), 10(2), 11, 11(1), 11(2), 12, 13, 15, 15(3), 16, 17, 18, 19, 20, 21, 22
Social Security (Attributable Stakeholders and Attribution Percentages) Principles 2017 (Cth)
REASONS FOR DECISION
Senior Member Dr M Evans
17 August 2018
OVERVIEW

This matter concerns the Applicant’s application for a youth allowance. His application for a youth allowance was successful; however, Centrelink applied a liquid assets test waiting period of 13 weeks. The Applicant, a young man in his early 20’s, argues, for reasons which are outlined below, that a liquid assets test waiting period should not have been applied.
BACKGROUND
On 23 July 2014, the Applicant opened a bank account (the Savings Account). The Applicant was the account owner (T11, page 78).
On 5 August 2014, a signing authority was loaded to the Savings Account making the Applicant’s father an authorised signatory (T11, page 78). Thus, both the Applicant and his father had to sign to authorise any withdrawals from the Savings Account.
On 8 February 2016, the Applicant made an online claim for the youth allowance (ST3).
In his online claim, the Applicant disclosed, amongst other things, that he had $21,336 in the Savings Account (ST3, page 169). The online claim also required the Applicant to provide information about other savings, assets and investments, which he did. The Applicant made the following declaration under the heading “Private trusts”: “I am not, and have not been, involved in a private trust.” (ST3, page 170). Towards the end of the online claim form, the Applicant further declared that: “[t]he information in this claim … is complete and correct, and reflects my current personal circumstances” (ST3, page 171).
In a letter dated 30 March 2016, the Applicant was granted the youth allowance by Centrelink (part of the Department of Human Services), but was advised that he would only be paid the youth allowance from 2 May 2016 after the expiry of a 13 week waiting period, which ran from 1 February 2016 until 1 May 2016 (ST4, page 173). This is known as a “liquid assets test waiting period”.
On 12 April 2016, the Applicant requested an internal departmental review by Centrelink of the decision of 30 March 2016 to grant the youth allowance from 2 May 2016, on the basis that the money in his Savings Account did not belong to him, but rather to his parents (T6, page 60).
When the Applicant did not receive a response, he wrote to Centrelink again on 29 December 2016 (T7, page 62). There appeared to have been some issues with Centrelink’s records of correspondence because a letter was sent to the Applicant, dated 5 January 2017, stating that his youth allowance had been cancelled from 8 December 2016 because he had not reported (T8, page 63).
Subsequently, an authorised review officer (ARO) affirmed the decision of 30 March 2016 (T9, page 65). In the ARO letter dated 17 January 2017, the Applicant was advised that his review was unsuccessful (T9, page 65-69). In this letter, the ARO erroneously stated that the Applicant contacted Centrelink to ask for a review of the decision on 31 August 2016 (T9, page 66).
The Applicant sought review of the decision of the ARO in the Social Services and Child Support Division of the Administrative Appeals Tribunal (the AAT1). On 7 June 2017, the AAT1 affirmed the decision (the Reviewable Decision) (T2, page 6-10).
On 26 June 2017, the Applicant made an application to the General Division of the Administrative Appeals Tribunal (the Tribunal) for review of the AAT1 decision

(T1, page 1-5).
ISSUES
The primary issue for determination by the Tribunal is whether a liquid assets test waiting period applies to the Applicant’s claim for a youth allowance.
This involves a consideration of whether the Applicant entered into a trust agreement with his parents (under which he was holding the trust money as a trustee for his parents) and therefore, a consideration of whether the Applicant had beneficial ownership of the monies in the Savings Account.
If the Tribunal finds that a trust agreement was entered into by the Applicant and his parents, the Tribunal must then consider whether the assets of the trust should be attributed to the Applicant under part 3.18 of the Social Security Act 1991 (Cth) (the Social Security Act) .
JURISDICTION
The jurisdiction of the Tribunal is established by s 25(1) of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act), which states:
(1)An enactment may provide that applications may be made to the Tribunal:
(a)for review of decisions made in the exercise of powers conferred by that enactment; or
(b)for the review of decisions made in the exercise of powers conferred, or that may be conferred, by another enactment having effect under that enactment.
In summary, s 25(1) of the AAT Act states that the jurisdiction of the Tribunal is given to it by other “enactments”, which grant the Tribunal jurisdiction to review certain decisions made under those enactments.
Section 126 of the Social Security (Administration) Act 1999 (Cth) (the Administration Act) provides that:
(1)The Secretary may review, subject to subsection (2), a decision of an officer under the social security law if the Secretary is satisfied that there is sufficient reason to review the decision.
(2) The Secretary may review a decision:
(a)whether or not any person has applied for review of the decision; and
(b)even if an application has been made to the AAT for review of the decision.
(3) The Secretary may:
(a)affirm a decision; or
(b)vary a decision; or
(c)set a decision aside and substitute a new decision.
(4) If:
(a)the Secretary sets a decision aside under subsection (3); and
(b)the Secretary is satisfied that an event that did not occur would have occurred if the decision had not been made;
the Secretary may, if satisfied that it is reasonable to do so, determine that the event is taken to have occurred for the purposes of the social security law.
Section 142(1) of the Administration Act gives the AAT jurisdiction to conduct an AAT1 review. It provides:
(1)Subject to section 144, application may be made to the AAT for review (AAT first review) of:
(a)a decision of the Secretary, the Chief Executive Centrelink or an authorised review officer made under section 126 or 135; or
(b)a decision under this Act made personally by the Secretary or the Chief Executive Centrelink.
(Original emphasis.)
Section 179(1) of the Administration Act provides that an application may be made to the Tribunal for the review of an AAT1 decision:
(1)Application may be made to the AAT for review (AAT second review) of a decision of the AAT on AAT first review made under subsection 43(1) of the AAT Act.
(Original emphasis.)
Accordingly, the Tribunal has jurisdiction under s 179(1) of the Administration Act to review the AAT1 decision (the Reviewable Decision).
MATERIAL BEFORE THE TRIBUNAL AND THE HEARING
The application was heard by the Tribunal on 17 May 2018.
The Applicant’s father presented the Applicant’s case and made submissions on his behalf. Indeed, the Applicant’s father was a most competent advocate for his son, and appeared to have a sound understanding of trusts from his work in the financial services industry. The Applicant’s father had evidently expended substantial time, effort and expense to prepare the Applicant’s case, including the preparation of detailed written submissions and four affidavits which have the appearances of being settled by a lawyer.
Ms Jones-Bolla of Sparke Helmore Lawyers represented the Respondent at the hearing.
Oral submissions were made by both parties and the Applicant gave evidence under oath. The Applicant’s father and mother also gave evidence to the Tribunal, and were cross-examined. The Tribunal found the Applicant and his parents to be honest witnesses who each gave evidence to the best of their recollections.
The following material was before the Tribunal:
(a)Applicant’s Statement of Facts, Issues and Contentions, dated 28 August 2017 (Exhibit A1);
(b)Applicant’s Supplementary Statements of Facts, Issues and Contentions, dated 27 December 2017 (Exhibit A2);
(c)affidavit of Travis Bastian with Appendix A to D, sworn on 28 August 2017 (Exhibit A3);
(d)affidavit of Stuart Bastian with Appendix A to D, sworn on 28 August 2017 (Exhibit A4);
(e)affidavit of Alison Bastian, sworn on 28 August 2017 (Exhibit A5);
(f)declaration of trust, dated 11 January 2018 (Exhibit A6);
(g)affidavit of Stuart Bastian, sworn on 16 May 2018 (Exhibit A7);
(h)Respondent’s section 37 documents (T documents) numbered T1 to T14 (Exhibit R1);
(i)Respondent’s supplementary section 37 documents (ST documents) numbered ST1 to ST6 (Exhibit R2); and
(j)Respondent’s Statement of Issues, Facts and Contentions, dated 13 September 2017 (Exhibit R3).
The Tribunal has considered all of the material before it, as well as the oral submissions of the parties, and the evidence of the Applicant and his parents. The Tribunal is satisfied that the parties had an adequate opportunity to present their case and to be heard by the Tribunal.
In the Applicant’s Statement of Facts, Issues and Contentions (Exhibit A1), the Applicant made substantial submissions regarding “Errors in the SSCS Division decision”. At this point, the Tribunal regards it as important to clarify the nature of a review by the Tribunal. The role of the Tribunal was aptly described by Senior Member Hunt in Faulkner and Comcare [2007] AATA 1541 at 27. Senior Member Hunt stated:
The Tribunal aims to reach the correct and preferable decision on the basis of the material before it… and often is said to stand in the shoes of the original decision maker and consider all evidence again and from beginning.
The Tribunal’s jurisdiction to review decisions was further described in a decision of the Full Court of the Federal Court in Drakev Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60; 46 FLR 409 at 419. In their joint judgment, Bowen CJ and Deane J explained:
The question for determination of the Tribunal is not whether the decision which the decision-maker made was the correct or preferable one on the material before him. The question for the determination of the Tribunal is whether the decision was the correct or preferable one on the material before the Tribunal.
It is the Tribunal’s role to hear the matter again from the beginning (often referred to as a hearing “de novo”) and to look at the merits of the individual case before it. It is not the role of the Tribunal to find flaws in the original decision, but rather, to make a new decision.
ARE THE MONIES IN THE SAVINGS ACCOUNT THE APPLICANT’S LIQUID ASSETS?
Liquid assets test waiting period
Section 549 of the Social Security Act provides:
(1)A youth allowance is not payable to a person who is qualified for youth allowance while the person is subject to a waiting period.
(2)For the purposes of this Part, a person may be subject to the following waiting periods:
(a)a liquid assets test waiting period (see sections 549A, 549B and 549C);…
Section 549A(1) of the Social Security Act further provides:
When person subject to liquid assets test waiting period – general
(1)Subject to this section, if:
(a)the value of a person’s liquid assets is more than the person’s maximum reserve on:
(i) the day on which the person becomes qualified for youth allowance; or
(ii) the day on which the person claims a youth allowance; and
(b)the person is not a transferee to a youth allowance;
the person is subject to a liquid assets test waiting period.
The terms “liquid assets” and “maximum reserve” are defined in s 14A(1) of the Social Security Act as follows:
liquid assets, in relation to a person, means the person’s cash and readily realisable assets, and includes
…
(b)amounts deposited with, or lent to, a bank or other financial institution by the person (whether or not the amount can be withdrawn or repaid immediately);
…
but does not include:…
(e)in the case of a person who:
(i)     has claimed or is receiving a youth allowance or an austudy payment; and
(ii)    is undertaking a tertiary course of education in any year or part of a year;
an amount necessary to cover the reasonable expenses incurred, or likely to be incurred, by the person in that year or that part of a year and that are directly related to his or her undertaking the course, including:
(iii)    up front course fees; and
(iv)   HECS payments; and
(v)    union fees; and
(vi)   costs of text books; and
(vii)     costs of any tools or equipment required to undertake the course, including computer software; and
(viii)    expenses directly related to any field trips undertaken for the purposes of the course; and
(ix)   such other expenses as are approved by the Secretary.
maximum reserve, in relation to a person, means:
(a)if the person is not a member of a couple and does not have a dependent child – $5,000; or
(b)in any other case – $10,000.
In accordance with s 14A(1)(e) of the Social Security Act, the Applicant’s liquid assets were reduced by $800 which the Applicant stated was for study expenses on his online claim form (ST3, page 168; Exhibit R2).
Section 549C of the Social Security Act provides:
Number of weeks
(1)A person’s liquid assets test waiting period is:
(a)if the result obtained under subsection (2) is 13 or more whole weeks – 13 weeks; or
(b)if the result obtained under subsection (2) is fewer than 13 whole weeks – the number of whole weeks obtained under that subsection.
Working out number of weeks
(2)Subject to subsection (3), the number of weeks is worked out by using the following formula:
Liquid Assets – Maximum reserve amount
Divisor
where:
divisor, in relation to the person, means:
(a)if the person is not a member of a couple and does not have a dependent child – $500; or
(b)otherwise – $1,000.
liquid assets means the person’s liquid assets on the day referred to in subparagraph 549A(1)(a)(i) or (ii) (as the case requires).
The calculation relevant to the Applicant is as follows:
$23,654.88 – $5,000 = 37.3 weeks = 13 weeks
$500
Therefore, the liquid assets test waiting period relevant to the Applicant was 13 weeks

(s 549C(1)(a) and (2) of the Social Security Act).
Section 549B(1) of the Social Security Act provides that “[t]he liquid assets test waiting period of a person who does not have a temporary incapacity exemption starts on the day on which the person became qualified for youth allowance.” The liquid assets test waiting period applied by the Respondent started on 1 February 2016 and ended on 1 May 2016 (T9, page 67, Exhibit R1).
Severe financial hardship
The liquid assets test waiting period may be waived if the Secretary is satisfied that the person is in severe financial hardship. Specifically, s 549A(3) of the Social Security Act provides that:
(3)If the Secretary is satisfied that a person is in severe financial hardship because the person has incurred unavoidable or reasonable expenditure while serving a liquid assets test waiting period, the Secretary may determine that the person does not have to serve the whole, or any part, of the waiting period.
A person is in “severe financial hardship”, pursuant to s 19C(2) of the Social Security Act, if:
… the value of the person’s liquid assets (within the meaning of subsection 14A(1)) is less than the fortnightly amount at the maximum payment rate of the payment, benefit, pension or allowance that would be payable to the person:
(f)if the person’s claim were granted; and
(g)in the case of a person to whom an income maintenance period applies, if that period did not apply.
Further, s 19C(4) of the Social Security Act defines “unavoidable or reasonable expenditure” to include “the reasonable costs of living” specified in s 19C(5) including food costs, rent, regular medical expenses and specified household utility and transport costs.
There is no evidence before the Tribunal to indicate that the Applicant was suffering from any financial hardship during the liquid asset test waiting period. As noted by the Respondent:
[T]he Applicant has not contended that he is in severe financial hardship. Pursuant to his affidavit dated 28 August 2017 at paragraph 13, he states that when he commenced an unpaid electrical apprenticeship in January 2017 he ‘ceased paying board to his … [parents] … and that his … [parents] resumed providing for his needs … in a like manner to what they had done for [his] entire life prior to June 2014’ (Exhibit R3, para [44]).
Are monies in a savings account liquid assets?
The term “liquid assets” in s 14A(1) of the Social Security Act was considered by Member Cunningham in Biddlecombe and Department of Family and Community Services [1999] AATA 528 (Biddlecombe) at [17], who agreed with the following interpretation from Re Jacobsen and Secretary, Department of Social Security [1992] AATA 101:
that the term liquid assets means no more than assets which are capable of ready conversion into cash. Such an assessment is not to be influenced by the possible existence of liabilities ...

Member Cunningham continued on to state at [17] of Biddlecombe that “[s]ection 14A simply refers to amounts deposited with a bank or other financial institutions and the applicant’s monies in the sum of $12,500 held with the Commonwealth bank at the time of her application must necessarily be caught by this section.”
In Schwabe and Secretary, Department of Family and Community Services [2005] AATA 248 (Schwabe), Member B W Davis AM stated at [23] “[t]he Tribunal notes that the term ‘liquid assets’ is clearly defined in s14A of the Act as cash and readily realisable assets and includes amongst other things amounts deposited with a bank or financial institution.”
Applying the definitions of liquid assets from Biddlecombe and Schwabe, there seems to be little doubt that monies in a bank account, such as the Applicant’s Savings Account, would normally be regarded as “liquid assets”. However, what is in contention between the parties is whether the Applicant was the beneficial owner of the monies in the Savings Account. That is, whether the monies in the Savings Account are to be regarded as the liquid assets of the Applicant.
Trust Arrangement
The Applicant argued that he does not beneficially own the monies, and that the money should not be regarded as a liquid asset belonging to him. The Applicant argued that he was holding the money on trust (specifically, as a bare trustee) for his mother and father who are the beneficiaries (Exhibit A1, paras [1]-[2]).
The Respondent did not agree with this submission and argued that the declarations made by the Applicant in his youth allowance claim form (that the monies were his, and that he had no involvement in a trust) should be given greater weight. The Respondent further submitted that the Applicant’s claim of a trust was only made after the Applicant was notified that the liquid assets test waiting period would be applied (Exhibit R3, paras [38]-[39] and [45]-[49]).
In order to assess these submissions, the Tribunal will now examine the evidence before it as to the creation of a trust between the Applicant and his parents.
The Applicant and his parents each filed statutory declarations in which they described entering into a trust in approximately June 2014 (Exhibits A3, A4 and A5). The statutory declarations of the Applicant’s parents were expressed in near identical terms, and the statutory declaration of the Applicant is also expressed in substantially similar terms to those of his parents, less several paragraphs.
The Applicant’s father filed an additional affidavit in which he gave further evidence, including evidence about the preparation of a written declaration of trust dated 11 January 2018 (the Trust Deed) which “confirms in writing the terms of the trust established in around June 2014, between my wife, Alison Bastian, and I as beneficiaries of the trust and my son, Travis… as the trustee of the trust…” (Exhibit A7, para [1]).
According to the statutory declarations, the Applicant and his parents agreed that the Applicant would pay his parents $250 per week in board money (Exhibit A3, A4 and A5, para [7]). In return, his parents agreed that the Applicant could live at home and that they would supply him with food, clothing, healthcare and transport as well as paying for other incidental costs for the Applicant (Exhibits A3, A4 and A5, para [4]).
The statutory declarations lodged by the Applicant and his parents further described that the Applicant’s parents asked him to establish the Savings Account on the condition that the Applicant would pay his board money into the Savings Account and would appoint his father as a signatory (Exhibits A3, A4 and A5, para [5]). Further, the Applicant and his parents agreed that the Applicant would not be able to make any withdrawals from the Savings Account without his father’s approval as joint signatory (Exhibits A3, A4 and A5, paras [5]-[6]).
In his statutory declaration (Exhibit A3, para [8]), the Applicant stated:
I agreed to open the… [Savings] Account and I immediately appointed my father as a third-party joint-to-sign signatory to the account. At this time it was the certain intention and agreement between I, my mother and my father that:
i.       The board money to be paid by me to the… [Savings] Account was my board payment to my mother and father;
ii.      the subsequent accumulating board money in the… [Savings] Account was not beneficially owned by me, but beneficially owned by my mother and father;
iii.      as a result, I was in substance holding the board money beneficially for my mother and father; and
iv.      the board money may only be accessed by my parents at their sole and unfettered discretion and personal use.
v.      The interest earned on the board money was for me to keep for any purpose of mine.
The Applicant’s parents made similar declarations in their statutory declarations (Exhibits A4 and A5, para [8]).
The Applicant and his parents further attested that in early July 2016 they agreed to reduce the rate of his board to $150 per week and that the Applicant would start to provide certain personal expenses for himself (Exhibit A3, para [12]; Exhibit A4, para [15]). At this time, the Applicant ceased paying his board money into the Savings Account and paid it “directly” to his mother and father (Exhibit A3, para [12]). In their affidavits, the Applicant’s parents stated that this money was paid into a different bank account in “our name” (Exhibits A4 and A5, para [15]). Further, in early January 2017, the Applicant commenced an unpaid electrical apprenticeship and ceased paying board to his mother and father altogether (Exhibit A3, para [13]; Exhibits A4 and A5, para [16]).
The statutory declarations further state that on 27 February 2017, the Applicant’s parents directed him to transfer $25,000 from the Savings Account to an account in his father’s name “for a purpose unrelated to Travis” and on 5 April 2017, the Applicant’s father deposited $25,000 back into the Savings Account (Exhibit A3, para [16]; Exhibits A4 and A5, para [19]). On 15 May 2017, the Applicant’s parents directed him to transfer $28,000 from the Savings Account to an account in his father’s name, again “for a purpose unrelated to Travis” (Exhibit A5, para [20]). On 5 July 2017, the Applicant’s father deposited the $28,000 back into the Savings Account (Exhibit A3, para [17]; Exhibits A4 and A5, para [20]).
In their statutory declarations, the Applicant’s parents described their motive for asking the Applicant to establish the Savings Account (Exhibits A4 and A5). In summary, their motive was to demonstrate to their son the “power of a regular savings discipline” and to allow him to demonstrate a savings history to a prospective lender in the future (Exhibits A4 and A5, para [11]). In their statutory declarations, the Applicant and his parents also described potentially using the money in the Savings Account, together with other finances contributed by the Applicant’s parents, to buy a residential property with the Applicant as tenants in common in the future (Exhibit A3, para [11]; Exhibits A4 and A5, para [14]).
In the Applicant’s Statement of Facts, Issues and Contentions, the Applicant stated that the arrangement between the Applicant and his parents regarding the payment of his board money (see para 49 above) was a “bare trust”, under which the Applicant would hold the board money in the Savings Account as trustee for his parents as beneficiaries (Exhibit A1, paras [1]-[2]). Consequently, the Applicant submits that he does not beneficially own the monies in the Savings Account, and therefore, the monies are not liquid assets belonging to the Applicant.
The Applicant has submitted that the bare trust agreement that he entered into with his parents was an oral trust agreement. However, as noted in paragraph [48] above, the Applicant and his parents subsequently recorded their agreement in the written Trust Deed, which referred to the Applicant, as “Trustee”, and his parents, Stuart and Alison Bastian as “Beneficiary” (Exhibit A6).The Trust Deed endeavoured to record the terms of the oral trust agreement in writing.
Recital A of the Trust Deed states “[t]his declaration of trust by the Trustee evidences the Trustee’s oral agreement with the Beneficiary on or around 1 July 2014” (Exhibit A6).
Clause 1.1 of the Trust Deed provides that “…[t]he Trustee holds the trust capital, which is to be provided by the Beneficiary, upon bare trust for the Beneficiary” (Exhibit A6). The “trust capital” is not defined in the trust deed, and it appears that “provided by the beneficiary”, should in fact be “provided by the Trustee” which would more accurately refer to the Applicant’s payment of board money into the Savings Account.
Clause 3 of the Trust Deed deals with the establishment of the Savings Account in the Trustee’s name and the appointment of the Applicant’s father as joint signatory to the Savings Account (Exhibit A6).
In Byrnes v Kendle (2011) 243 CLR 253, 264-265, French CJ cited the following definition of a bare trust:
In the eighteenth edition of Lewin on Trusts the learned authors observe:
‘A bare trustee, holding property for a single beneficiary who is absolutely and indefeasibly entitled, has traditionally been said to be a mere passive repository, owing a duty only to transfer the property to the beneficiary or at his direction. But it is clear that certain trustees holding property in that way owe active duties to manage the trust property, with corresponding powers, notably a trustee of land, a trustee for a minor solely entitled and a trustee with an unsatisfied right of indemnity; and other such trustees also may have powers of management with an associated duty of care.’ (Footnote omitted.)
Clause 4 of the Trust Deed is consistent with the establishment of a bare trust under which a trustee may only act in accordance with the directions of the Beneficiary (Exhibit A6). It states that “the Trustee must at the request of the Beneficiary deal with the trust capital as the Beneficiary directs” (Exhibit A6).
More recent dealings with respect to the trust were described by the Applicant’s father in his additional affidavit (Exhibit A7), however, for the reasons explained in para [63] below, they are not directly relevant to the current decision under review. On 12 January 2018, the day after the trust deed was signed, the Applicant’s parents directed that the Applicant close the Savings Account, and transfer the balance of $27,250 to a joint account in his parents name, which the Applicant did, with his father as joint signatory (Exhibit A7, para [3]). The balance of $1026.40, comprising interest, was paid to the Applicant as remuneration for acting as trustee (Exhibit A7, para [3]).
The Applicant then opened a new bank account (the New Savings Account) in the name of the Applicant, with both of his parents as “third-party joint-to-sign” signatories (Exhibit A7, para [8]). The Applicant’s parents then transferred the $27,250 into the New Savings Account (Exhibit A7, paras [8]-[9]). Under this new arrangement, the Applicant pays board of $150 per week into a joint bank account of his parents’, which they in turn deposit into the New Savings Account (Exhibit A7, para [5], [9] and Appendix G) with the description “S and A Bastian Trust Capital” (Exhibit A7, Appendix E).
The Applicant subsequently made a new claim for a youth allowance on 15 February 2018 in which he disclosed the trust monies of $27,250 but declared a 0% ownership of the monies in the New Savings Account which he was granted without a liquid assets test waiting period being applied (Exhibit A7, para [12] and Appendix H). It appears that the Applicant’s father has submitted this information about the new trust arrangement in his affidavit in order to demonstrate that a liquid assets test waiting period should not have been applied to the decision under review. However, the Tribunal cannot be guided by this new decision by Centrelink, and instead must look at the decision under review itself to determine whether it is the correct and preferable decision.
In the Tribunal’s opinion, the evidence supports the Applicant’s assertion that he entered into a bare trust with his parents. The Applicant and his parents were credible and honest witnesses who gave evidence as to the creation of the trust to the best of their recollections. As well as giving evidence to the Tribunal, and being cross-examined on that evidence, as discussed above, the Applicant and his parents submitted sworn statutory declarations to the Tribunal attesting to the creation of an oral trust. They also attempted to reduce the terms of their agreement to writing in the Trust Deed after the Applicant submitted his online claim for youth allowance, but before he received the response from Centrelink stating that they would apply the liquid assets test waiting period. The Applicant also acted in accordance with his parents directions (as described in para [53] above), when they directed him to transfer money out of the Savings Account on two occasions.
Further, the Tribunal does not draw an adverse inference from the declarations made by the Applicant in his online claim form when he was 19 years of age. The Tribunal finds that the Applicant was honest when submitting his online claim form and disclosed to the best of his knowledge his expenses, earnings, and assets including the monies in the Savings Account. Although the Applicant knew he had made an agreement with his parents regarding the ownership of the monies in the Savings Account, he was likely not aware that such an agreement was called a “trust” agreement, particularly as he was only 19 years of age at the time. Thus, the Applicant’s statement on his claim form that he was not, and had not been involved in a private trust, was most likely an innocent omission.
Professor G E Dal Pont cited the following definition of a “trust” in his book Equity and Trusts in Australia (Thomson Reuters Lawbook Co, 6^th ed, 2015) [16.05] (Dal Pont) from Heydon and Leeming, Jacobs’ Law of Trusts in Australia (LexisNexis Butterworths, 7^th ed, 2006) [101]:
A trust has been described as existing ‘when the holder of a legal or equitable interest in certain property is bound by an obligation cognisable and enforceable in equity, to hold that interest not for his own exclusive benefit but for the benefit, as to the whole or part of such interest, of another person or persons, or of himself and such other person or persons, or for some object or purpose permitted by law’.
The person who alleges that a trust was created has the onus of proving an intention to create a trust (Re Armstrong [1960] VR 202 per Herring CJ at 206, cited in Dal Pont, [17.10]). The Tribunal is of the opinion that the Applicant has discharged this burden and that the requirements of a valid trust were present.
There was evidence of certainty of intention. Specifically, there was an intention to create a trust in the form of an agreement between the Applicant and his parents that the Applicant did not own the money and was holding the money on their behalf. Relevantly, Dal Pont at [17.45], citing Lord Millett in Twinsectra Ltd v Yardley [2002] 2 AC 164, [71], explained “[i]f a settlor enters into arrangements having the effect of creating a trust, it is not necessary that he or she should appreciate that they do so; it is sufficient that he or she intends to enter into them”. Thus, the Applicant can still be regarded as having entered into a trust even though he did not appreciate that he was doing so at the time. The circumstances of the case, as set out above, indicate that he did enter into a trust agreement with his parents.
Further, there was certainty of subject matter in that the trust property, being all of the monies in the Savings Account, was clearly identifiable (see Lord Browne-Wilkinson in Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669, [705]).
Finally, the beneficiaries, being the Applicant’s parents, were specified with sufficient certainty (certainty of object) in the oral agreement between the parties as it was clear to the parties that the Applicant was paying board to his parents and the monies belonged to the Applicant’s parents. As stated by Sir William Grant MR in Morice v Bishop of Durham (1804) 9 Ves 399 (cited in Dal Pont, [17.95]) “[e]very trust must have a definite object. There must be somebody, in whose favour the court can decree performance”. Thus, if a dispute arose between the Applicant and his parents regarding the ownership of the monies in the bank account, it would be sufficiently clear that the Applicant’s parents could, as beneficiaries, enforce the trust.
In conclusion, the Tribunal accepts the Applicant’s evidence that he did not beneficially own the monies in the Savings Account, and that he was holding the money for his parents as a bare trustee. Consequently, the monies in the Savings Account were not liquid assets belonging to the Applicant.
SHOULD THE ASSETS OF THE TRUST BE ATTRIBUTED TO THE APPLICANT?
Part 3.18 of the Social Security Act “…sets up a system for the attribution to individuals of the assets and income of private companies and private trusts” (s 1207 of the Social Security Act).
Assets or income will be attributed to an individual if:
(a)the trust is a “designated private trust” within the meaning of s 1207P of the Social Security Act; and
(b)the trust is a “controlled private trust” within the meaning of s 1207V of the Social Security Act; and
(c)if the Applicant is an “attributable stakeholder” of the Trust in accordance with s 1207X of the Social Security Act.
Section 1208E(1) of the Social Security Act provides for the attribution of assets as follows:
(1)For the purposes of this Act, if:
(a)an individual is an attributable stakeholder of a company or trust at a particular time on or after 1 January 2002; and
(b)at that time, the company or trust owns a particular asset (whether alone or jointly or in common with another entity or entities); and
(c)if, at that time, that asset had been owned by the individual instead of by the company or trust, the value of the asset would not be required to be disregarded by any express provision of this Act; and
(d)at that time, the asset is not an excluded asset (see subsection (2));
there is to be included in the value of the individual’s assets an amount equal to the individual’s asset attribution percentage of the value of the asset referred to in paragraph (b).
“Designated private trusts” are defined in s 1207P of the Social Security Act which provides:
(1)For the purposes of this Part, a trust is a designated private trust unless:
(a)all of the following conditions are satisfied:
(i) the trust is a fixed trust;
(ii) the units in the trust are held by 50 or more persons;
(iii) the trust was not created, continued in existence or operated under a scheme that was entered into or carried out for the sole or dominant purpose of enabling any individual or individuals to avoid the application of this Part and/or Division 11A of Part IIIB of the Veterans’ Entitlements Act; or
(b)the trust is a complying superannuation fund (see subsection (3)); or
(c)the trust is an excluded trust (see subsection (4)).
(Original emphasis.)
The trust involving the Applicant and his parents is a designated private trust within the meaning of s 1207P of the Social Security Act. Both the Applicant and the Respondent agree that if a trust arrangement exists, the trust would be a designated private trust (Exhibit A3, para [92]; Exhibit A2, para [28]).
With respect to “controlled private trusts”, s 1207V of the Social Security Act provides, in part:
(1)For the purposes of this Part, a trust is a controlled private trust in relation to an individual if the trust is a designated private trust and:
(a)the individual passes the control test set out in subsection (2); …
Control test
(2)For the purposes of this section, the individual passes the control test in relation to a trust if:
(a)the individual, or an associate of the individual (other than an associate covered by paragraph 1207C(1)(j)), is the trustee, or any of the trustees, of the trust; or
(b)a group in relation to the individual was able to remove or appoint the trustee, or any of the trustees, of the trust; or
(c)a group in relation to the individual was able to vary the trust deed or to veto the decisions of the trustee; or
(ca)it could reasonably be expected that the trustee of the trust would make an application of the corpus or income of the trust to the individual if the individual could not meet his or her reasonable costs of living (within the meaning of subsection 19C(5)); or
(d)the aggregate of:
(i)     the beneficial interests in the corpus or income of the trust held by the individual (whether directly or indirectly); and
(ii)    the beneficial interests in the corpus or income of the trust held by associates of the individual (whether directly or indirectly);
is 50% or more; or
(da) either or both of the following apply:
(i)     the individual is eligible to receive an application of the corpus or income of the trust;
(ii)    one or more of the individual's associates are eligible to receive an application of the corpus or income of the trust;
and the aggregate number of entities covered by subparagraphs (i) and (ii) is 50% or more of the total number of entities eligible to receive an application of the corpus or income of the trust; or
(e)a group in relation to the individual had the power (by means of the exercise by the group of any power of appointment or revocation or otherwise) to obtain, with or without the consent of any other entity, the beneficial enjoyment of the corpus or income of the trust; or
(f)a group in relation to the individual was able in any manner whatsoever, whether directly or indirectly, to control the application of the corpus or income of the trust; or
(g)a group in relation to the individual was capable under a scheme of gaining the enjoyment or the control referred to in paragraph (e) or (f); or
(h)a trustee of the trust was accustomed or under an obligation (whether formally or informally) or might reasonably be expected to act in accordance with the directions, instructions or wishes of a group in relation to the individual.
…
(4)A reference in this section to a group in relation to an individual is a reference to:
(a)the individual acting alone; or
(b)an associate of the individual acting alone; or
(c)the individual and one or more associates of the individual acting together; or
(d)2 or more associates of the individual acting together.
(Original emphasis.)

For the purpose of determining whether a trust is a designated private trust, s 1207C of the Social Security Act defines an “associate” to include “a relative of the individual” (s1207C(1)(e) of the Social Security Act).
Further, a “relative” is defined in s 1207B(1)(d) of the Social Security Act to include, “a parent, grandparent, brother, sister, uncle, aunt, nephew, niece, first cousin, second cousin or lineal descendant of the spouse of the first person”.
In the Tribunal’s opinion, the Applicant passes the control test under s 1207V(2) of the Social Security Act because he is the trustee (s 1207V(2)(a) of the Social Security Act). He would also pass the control test under paragraphs (b) and (c) because a “group in relation to the individual” (see s 1207V(4) of the Social Security Act), namely the Applicant’s parents, can remove or appoint him, vary the trust deed, or veto his decisions. Additionally, as the nature of the trust is a bare trust under which the Applicant must act in accordance with the directions of his parents, he would also pass the control test under paragraph (h) (see s 1207V(4) of the Social Security Act). Additionally, paragraph (ca) is also relevant because it could be reasonably expected that the Applicant could make an application to access the income of the trust if he were unable to meet his reasonable costs of living (see s 1207V(4) of the Social Security Act). The Applicant also concedes that the trust would be a controlled private trust (Exhibit A2, para [29]).
What is, however, in contention between the parties, is whether the Applicant is an attributable stakeholder (see paras [30]-[32] of Exhibit A2).
Section 1207X(2) of the Social Security Act contains a presumption as to when an individual will be an attributable stakeholder. This section provides:
(2) For the purposes of this Part, if:
(a)a trust is a controlled private trust in relation to an individual; and
(b)the trust is not a concessional primary production trust in relation to the individual (see section 1208U);
then:
(c)the individual is an attributable stakeholder of the trust unless the Secretary otherwise determines; and
(d)if the individual is an attributable stakeholder of the trust – the individual’s asset attribution percentage in relation to the trust is:
(i)     100%; or
(ii)    if the Secretary determines a lower percentage in relation to the individual and the trust – that lower percentage; and
(e)if the individual is an attributable stakeholder of the trust – the individual’s income attribution percentage in relation to the trust is:
(i)     100%; or
(ii)    if the Secretary determines a lower percentage in relation to the individual and the trust – that lower percentage.
(Original emphasis.)
The effect of s 1207X(2)(c) and (d) of the Social Security Act is that, because the trust is a controlled private trust, and not a concessional primary production trust, the Applicant is an attributable stakeholder “unless the Secretary otherwise determines” and the Applicant has an asset attribution percentage of 100% or “if the Secretary determines…[a] lower percentage”.
Pursuant to s 1209E of the Social Security Act, the Secretary may, by legislative instrument, formulate decision-making principles. These include principles to be complied with by the Secretary in making decisions under s 1207X of the Social Security Act. The applicable principles are the Social Security (Attributable Stakeholders and Attribution Percentages) Principles 2000 (Principles). These Principles have now been superseded by the Social Security (Attributable Stakeholders and Attribution Percentages) Principles 2017 which are in identical terms.
In Dubois and Secretary, Department of Social Services [2017] AATA 2164, Deputy President Rayment explained, at [16]:
The Principles are such as to enable the Secretary to ensure that the Act does not operate unfairly in a particular case, consistently with the beneficial purpose of the legislation as a whole in providing pensions for those in need relative to their needs but not otherwise. The division is cast in broad terms because individuals might use private trusts or private companies to avoid the means test, and the discretion exercisable under the Principles will enable a decision-maker to take account of all the circumstances of the particular case…
Hence, the Tribunal, standing in the shoes of the decision-maker, can “otherwise determine” that the Applicant should not be an attributable stakeholder. The Tribunal can also determine whether the Applicant’s asset attribution percentage should be lower than 100%.
Clause 6 of Part 2 of the Principles is relevant:
6 Application
(1)This Part applies if, but for a determination by the Secretary, the individual would be an attributable stakeholder of the company or trust.
(2)The Secretary must consider the relationship between the individual and the company or trust having regard to:
(a)the reason why, but for a determination, the individual would be an attributable stakeholder; and
(b)the circumstances mentioned in this Part.
(3)In particular, the Secretary must consider whether the effect of one or more of the circumstances mentioned in this Part, in relation to the individual and the company or trust, provides a sufficient basis on which to determine that the individual is not an attributable stakeholder of the company or trust.
In summary, clause 6(3) of the Principles permits the decision-maker to consider one or more of the circumstances set out in clauses 7 to 13 of Part 2 of the Principles (as does the corresponding provision in Part 3, clause 15(3) of the Principles with respect to the circumstances in clauses 16 to 22).
Clauses 7 and 8 in Part 2 of the Principles are as follows:
7 Circumstances affecting relationship with company or trust
(1)The Secretary must consider whether there are relevant circumstances that make it inappropriate for the individual to be an attributable stakeholder of the company or trust.
(2)For subsection (1), relevant circumstances include the extent to which the relationship between the individual and the company or trust is affected by any of the following circumstances:
(a)circumstances arising from the legal structure of the company or trust;
(b)circumstances arising from the administrative arrangements of the company or trust;
(c)whether, having regard to the relationship between the individual and the company or trust, the individual can reasonably be expected to exercise effective control in relation to the company or trust.
8 Contribution to company or trust
If the individual has made a contribution to the company or trust, the Secretary must consider the circumstances in which the contribution was made and, in particular:
(a)the value of the contribution; and
(b)the proportion that the value of the contribution has to the total assets of the company or trust at the time of the contribution; and
(c)the effect of the contribution on the financial position of the company or trust; and
(d)if the individual received consideration for the contribution, the amount of consideration.
(Original emphasis.)
In addition to clauses 6, 7 and 8 of the Principles discussed above, clause 9(1) of the Principles provides that “[t]he Secretary must consider whether the individual has received a benefit from a distribution made by the company or trust”, and if so, pursuant to clause 9(2) of the Principles, “the value of the benefit”.
Additionally, clauses 10(1) and 10(2) of the Principles provide that “[t]he Secretary must consider whether it is reasonably foreseeable that the individual may receive a benefit from a future distribution by the company or trust” and if so, “the likely value of the benefit”.
Clause 11 of the Principles provides that:
(1)The Secretary must consider whether the individual receives or derives any kind of benefit (other than a benefit mentioned in section 9 or 10) from the assets or income, or both, of the company or trust.
(2)For this section, benefit:
(a)is not limited to a benefit to which the individual has a legal or equitable entitlement; and
(b)includes benefits received or derived in the form of property or services.
The relationship between the Applicant and the trust, as well as the reasons why the Applicant is an attributable stakeholder, have been discussed in some detail earlier in these reasons for decision (clause 6(2) of the Principles). By way of summary, the Applicant is the trustee of the trust and has a legal claim to the trust assets (namely monies in the Savings Account) which is in his name. He passes the control test under several of the paragraphs in s 1207V(2) of the Social Security Act, including paragraphs (a), (b), (c), (ca) and (h) of the Social Security Act. Indeed, it could be said that the Applicant conclusively passes the control test (clause 7(2)(c) of the Principles).
Clause 7 of the Principles requires the Secretary to consider whether there are relevant circumstances which make it inappropriate for the individual to be an attributable stakeholder of the company or trust. These relevant circumstances include the extent to which the relationship between the individual and the trust is affected by circumstances arising from the legal structure (7(2)(a) of the Principles), administrative arrangements (7(2)(b) of the Principles), and whether the individual can reasonably be expected to exercise effective control in relation to the trust (7(2)(c) of the Principles).
These factors are more readily applicable to companies and more complex trust agreements. For example, in the case of a company, the Tribunal could have regard to the identity and number of directors, the number of shares they hold and the voting rights associated with those shareholdings, and other administrative and governance arrangements set out in a corporate constitution. Some trusts also have issued units, and a trustee may be comprised of more than one person, or may be a company with directors. The Applicant submitted that the trust in the case of the Applicant is a simple bare trust which was created orally, between parents and their child concerning the payment of his board money, and that the Applicant could only deal with the trust property at the direction of the beneficiaries. This administrative and legal structure in and of itself does not indicate any sufficient basis to indicate that it is inappropriate to regard the Applicant as an attributable stakeholder, except insofar as they relate to control. Whilst a bare trust arrangement could be regarded as contradicting some of the control of the Trust by the Applicant, in the Tribunal’s opinion, the existence of a bare trust alone which, as stated by the Applicant had no document establishing the terms (except those retrospectively recorded), is not enough to displace the conclusions regarding control under the express provisions of the Social Security Act (in Exhibit A2, para 32.4).
Clause 8 requires consideration of the value of the individual’s contribution to the trust, but unhelpfully, does not suggest the conclusion to be drawn from the amount of the contribution, and nor does the Explanatory Statement to the Principles assist. As discussed above, the Applicant was directed by his parents to pay his board money into the Savings Account, and thus all the contributions to the trust (with the exception of interest on these monies) were comprised of the Applicant’s board payments. Although, under this arrangement, the board monies were not beneficially owned by the Applicant, they were “contributed” by the Applicant.
As stated by the Applicant and his parents in their evidence to the Tribunal, although the trust monies were held by the Applicant on behalf of his parents, there were a number of benefits to the Applicant from the trust which are relevant to clauses 9, 10 and 11 of the Principles. These Principles refer to the situation where the individual has received, or is likely in the future to receive, a benefit from a distribution (which can include income) or assets from the trust.
With respect to clauses 9 and 10 of the Principles, the Applicant states that he never received a benefit from a distribution made by the trust as at 27 December 2017 (Exhibit A2, para [32.3]). However, the written trust deed provides for the Applicant to receive remuneration in the form of interest (Exhibit A6, clause 2.2). Further, the Applicant did subsequently receive a distribution of $1026.40 as remuneration for acting as trustee of the trust which makes it reasonably foreseeable that he will receive a similar income from the trust in the future (Exhibit A7, para [3]).
With respect to clause 11 of the Principles, the trust was intended to have several benefits to the Applicant including teaching him about the value of savings, demonstrating a savings history to prospective lenders in the future in order to secure finance, and potentially forming part of a deposit on a future investment property which the Applicant would purchase as a tenant in common with his parents. These benefits are consistent with the definition of a “benefit” which is broadly defined in clause 11(2) of the Principles. Thus, the Applicant could be said to receive or derive a benefit from the trust assets (clause 11(1) of the Principles).
Similar principles apply to determine whether the Applicant’s asset attribution percentage should be lower than 100% under s 1207X(2)(d) of the Social Security Act. These are set out in Part 3 of the Principles (clause 15 to 22), which mirrors Part 2 of the Principles. Therefore, the above analysis is also applicable to this issue. It is, however, relevant to address the following submission made by the Applicant:
…As at 30 November 2017, the balance of the …[Savings] Account was $28,233.74, made up of $27,250.00 of capital contributed by the beneficiaries (board money) and $983.74 of undistributed interest income. It follows that the Applicant contends that the attribution percentage as of this date is 3.48% (Exhibit A2, para [32]).
The Tribunal observes that this calculation is based on the Applicant’s income in the form of interest alone (which would relate to clause 18 of the Principles). However, the other clauses in Part 3 of the Principles are also applicable, and thus, this calculation is an over-simplification. Additionally, this amount of interest is 100% of the income for the trust, of which the Applicant is the sole recipient.
After considering the relevant Principles, and the beneficial purpose of the Social Security Act to provide for those in need, the Tribunal is not of the opinion that there is a sufficient basis to determine that the Applicant should not be an attributable stakeholder of the trust under s 1207X(2)(c) of the Social Security Act, or for his asset attribution percentage to be lower than 100% under s 1207X(2)(d) of the Social Security Act. It would be unfair and inconsistent with the beneficial purpose of the legislation as a whole for the Tribunal to exercise discretion to determine that the Applicant, who has a substantial degree of control over the trust and who has reasonably foreseeable future benefits from the trust, should not be an attributable stakeholder or should have an asset attribution percentage lower than 100%. Indeed, the evidence shows that the whole purpose of the trust arrangement was to benefit the Applicant; otherwise, the Applicant’s parents would simply have directed the payment of his board money into their own bank account.
CONCLUSION
For the reasons set out above, the Tribunal finds that:
(a)Although monies in a bank account are “liquid assets”, the Applicant entered into a bare trust agreement with his parents under which he was holding the liquid assets on his parent’s behalf as a trustee. Therefore, he did not have beneficial ownership of the monies (liquid assets) in the Savings Account.
(b)However, the Applicant is an attributable stakeholder under the Social Security Act. In accordance with Part 2 of the Principles, the Tribunal does not find that there is a sufficient basis to determine that it was inappropriate for the Applicant to be an attributable stakeholder, nor is there a sufficient basis to determine that the Applicant’s asset attribution percentage should be lower than 100% under Part 3 of the Principles.
(c)Consequently, the liquid assets test waiting period of 13 weeks was appropriately applied to the Applicant’s claim for a youth allowance.
DECISION
For the reasons outlined above, the Reviewable Decision dated 7 June 2017 is affirmed.

I certify that the preceding 102 (one hundred and two) paragraphs are a true copy of the reasons for the decision herein of Senior Member Dr M Evans

.................[sgd].......................................................
Administrative Assistant Legal
Dated: 17 August 2018

Date of hearing: 17 May 2018

Applicant: In person

Representative for the Respondent: Daphne Jones-Bolla

Solicitors for the Respondent: Sparke Helmore

Date of hearing:	17 May 2018
Applicant:	In person
Representative for the Respondent:	Daphne Jones-Bolla
Solicitors for the Respondent:	Sparke Helmore