Bong; Secretary, Department of Employment and Workplace Relations

[2005] AATA 1184

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2005] AATA 1184

ADMINISTRATIVE APPEALS TRIBUNAL          № V2005/642

GENERAL ADMINISTRATIVE  DIVISION

Re:            SECRETARY,
  DEPARTMENT OF EMPLOYMENT

AND WORKPLACE RELATIONS

Applicant

And:         PETER HAN JUNG BONG

Respondent

DECISION

Tribunal:       Mr E. Fice, Member

Date:1 December 2005

Place:Melbourne

Decision:The Tribunal sets aside the decision made by the SSAT on 21 June 2005 and in substitution decides that the liquid assets waiting period of 13 weeks must be applied to the applicant's application for newstart allowance.  

(sgd) Egon Fice

Member

SOCIAL SECURITY – newstart allowance - liquid assets –legal and beneficial ownership of assets- liquid assets test waiting period – financial assistance given by parents - money in bank accounts- moneys to pay expenses - relevant assets to be considered

Social Security Act 1991 s 598

Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353

Murless v Franklin (1818) 36 ER 278

Re Wade and Repatriation Commission (1990) 21 ALD 308

REASONS FOR DECISION

1 December 2005  Mr E. Fice, Member

1.      Mr Peter Bong won a scholarship to Southern Illinois University in the United States, where he studied between 16 January 2001 and 18 December 2004.  After he returned to Australia on 30 December 2004, he lodged an application for newstart allowance with Centrelink.  On his application form he disclosed that he had money principally in two bank accounts: $6407 in HSBC Bank Australia Limited ("HSBC Bank") and $29,382 in an ANZ V2 Plus account.  There is a requirement under the Social Security Act 1991 (the Act) to apply a waiting period to applicants who have a certain value of liquid assets Centrelink, acting as agent for the Secretary to the Department of Employment and Workplace Relations (the Secretary), wrote to Mr Bong informing him that his newstart allowance could not be paid before 26 March 2005 because of the value of his liquid assets.  This decision was reviewed by an authorised review officer (ARO) on 18 February 2005, who affirmed the original decision.  

2.      Mr Bong appealed to the Social Security Appeals Tribunal (SSAT). The SSAT set aside the decision made by Centrelink and remitted the matter to Centrelink for reconsideration in accordance with a direction that, subject to Mr Bong satisfying the other conditions of qualification or eligibility for newstart allowance, he was to be paid newstart allowance on the basis that no liquid assets test waiting period applied to him.   The Secretary seeks a review of that decision.

3. For the reasons which I have set out below, it is my view that the decision of the SSAT must be set aside and, it follows, that Mr Bong's application for the newstart allowance is subject to the liquid assets test waiting period set out in s 598 of the Act.

BACKGROUND

4.      Mr Bong obtained a scholarship to attend the Southern Illinios University at Carbondale in the spring of 2001.  As part of his student visa conditions, he was required to have sufficient funds in a bank account to demonstrate his financial independence for the duration of his studies.  Mr Bong's parents provided Mr Bong with the moneys required to meet the visa requirements. There were at least two accounts opened: one with HSBC Bank and the other with the ANZ Bank.  The accounts were in the name of Mr Peter Bong, although Mrs Bong became a third party signatory to the ANZ account.  The moneys placed in those accounts apparently satisfied Mr Bong's visa requirements.

5.      Mr Bong completed his studies, graduating with a Bachelor of Science  Accounting degree on 18 December 2004.  On the following day, 19 December 2004, Mr Bong had $29,023.01 in his ANZ V2 account and $6407.64 in the HSBC Bank account.  Mr Bong arrived back in Australia on 30 December 2004.  On 31 December 2004, he registered intent to claim the newstart allowance, lodging his claim on 20 January 2005.  The balance of the moneys in the ANZ V2 account was transferred to Mr Bong's brother's account on 11 January 2005. 

CONSIDERATIONS

6.      The term "liquid assets", according to the Act, means "…the person’s cash...and…readily realisable assets". Where an applicant for social security has liquid assets, a liquid assets test waiting period may apply. Section 598(1) of the Act provides:

598.(1)     Subject to subsections (4A), (5), (6), (7) and (8), if:

(a)the value of a person’s liquid assets exceeds the person’s maximum reserve on:

(i)the day following the day on which the person ceased work or ceased to be enrolled in a full time course of education or of vocational training; or

(ii)the day on which the person claims a newstart allowance; and

(b)the person is not a transferee to a newstart allowance;

the person is not qualified for a newstart allowance for a period unless the person has served the liquid assets test waiting period in relation to the claim before the beginning of that period.

7.      The liquid assets test waiting period is calculated by subtracting from a person's liquid assets the maximum reserve amount (in this case $2500) and dividing that sum by $500 (s 598(2A)).  If the number which results from the application of the formula is equal to or greater than 13 weeks, then the liquid assets test waiting period in relation to the claim is limited to 13 weeks (s 598(2B)).

8.      Mr Bong submitted that the moneys in the ANZ Bank and the HSBC Bank accounts were not his but belonged to his parents.  Mr Bong's father provided a statement to Centrelink to that effect.  However, he also said that the  money was deposited in accounts which were solely in Mr Bong's name to fulfil the requirements of  a student visa to allow Mr Bong to study in the United States, and also to enable him to continue post‑graduate studies if he so desired.  Furthermore, in a statement given to Centrelink on 11 February 2005, Mr Bong said that he did not owe the money to his parents.  From that statement, I take it that there was no loan arrangement between Mr Bong and his parents.  In fact, Mr Bong simply maintained that the money, at all times, belonged to his parents and not to him.

9.      In the course of the hearing I asked Mr Bong's father whether he intended that his son should have absolute control over the moneys placed in the bank accounts.  Mr Bong's father said that although that was the case, he did not expect his son to use the moneys other than for the purpose for which they were provided.  I asked Mr Bong’s father if there was any arrangement between him and his son under which he could lawfully prevent his son from using the moneys as he wished after those moneys were placed in Mr Bong's accounts.  He said there was no such arrangement.  Accordingly, I find that Mr Bong's father gave to Mr Bong the moneys which were placed in the bank accounts in such a way that transferred to Mr Bong both legal and beneficial ownership of the money.  There was nothing that Mr Bong's father could to do to prevent Mr Bong from using those moneys as his own, even though he had the expectation that Mr Bong would not do so. 

10.     Mr Bong's father also confirmed that, in the event that Mr Bong failed to complete his studies or incurred liabilities in the United States, he would not become personally liable for any resulting debts, but that they would be the liability of his son, Mr Bong.  In other words, the United States' authorities could only look to Mr Bong for the payment of debts he incurred from the moneys held in his accounts as a condition of his student visa.  That fact simply confirms that Mr Bong's father intended to give legal and beneficial ownership of the moneys to Mr Bong in the event that Mr Bong might be required to meet liabilities incurred as a consequence of his studies in the United States.

11.     The accounts were not held in joint names, nor were the moneys held in trust by Mr Bong for any other beneficiary.  There was no loan agreement between Mr Bong and his parents.

12.     The Secretary also contends that in close family situations, when no consideration passes for the transfer of an asset, a legal presumption, called the presumption of advancement, applies to displace any claim that moneys are held in trust.  The Secretary relied upon the decision in Re Wade and Repatriation Commission (1990) 21 ALD 308, where the Tribunal applied that presumption when dealing with funds supplied to a child by elderly parents for the purchase a home unit. The Tribunal relied on the statement by Lord Eldon in Murless v Franklin (1818) 36 ER 278 at 280, where he said:

The general rule that on a purchase by one man in the name of another, the nominee is a trustee for the purchaser, is subject to exception where the purchaser is under a species of natural obligation to provide for the nominee.

13.     The presumption of advancement is rebuttable by proof of an intention that the person who receives the money should take as a trustee (Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353 at 365‑366). However, in this case, there was no evidence of an intention to create a trust; and in fact that would not have satisfied Mr Bong's student visa requirements. Therefore, I agree with the submissions made by the Secretary that the legal presumption in this case must be that Mr Bong's parents intended to benefit Mr Bong by giving him the money to satisfy the requirements for his student visa to study in the United States.

14.     The fact that Mr Bong was the legal and beneficial owner of the moneys in the HSBC Bank and ANZ Bank accounts is supported by two other pieces of evidence.  On 20 November 2003 Mr Bong applied to renew his Health Care Card in Australia and he noted on the application form that he had an account with the ANZ in his own name which had a balance of $29,382.10.  He did not state that those moneys belong to anybody else or that they were held on trust.  Also, in his application for the newstart allowance, he noted the bank details including the term deposit with the HSBC Bank and the ANZ Funds Management V2 account in the sum of $29, 382.  On the Customer Declaration Form Newstart Allowance it is stated that the ANZ account was 100 per cent owned by him.  Mr Bong initialled each of the pages of that declaration and signed the last page.

15.     In light of the above evidence, on balance, it must be that the moneys in both the ANZ and the HSBC Bank accounts on 19 December 2004 were the legal and beneficial property of Mr Bong.

CONCLUSION

16.     The liquid assets test waiting period applies where, if the claimant ceases to be enrolled in a full‑time course of education, the value of that person's liquid assets exceeds the maximum reserve on the day following the day on which that person ceased to be enrolled in a full‑time course of education.  For present purposes, that day is 19 December 2004.

17. Because I have found that the moneys in the ANZ Bank and HSBC Bank accounts were the assets of Mr Bong on that day, the liquid assets test waiting period must apply to him. Furthermore, when the formula set out in s 598(2A) is applied, it is clear that the waiting period in Mr Bong's case would exceed 13 weeks except for the capping provisions set out in s 598(2B). Accordingly, the appropriate liquid assets waiting period for Mr Bong is 13 weeks. Therefore, the decision made by the SSAT on 21 June 2005 must be set aside and the liquid assets waiting period of 13 weeks must be applied to Mr Bong's application for newstart allowance.

I certify that the seventeen [17] preceding paragraphs are a true copy of the reasons for the decision herein of

Mr E. Fice, Member

(sgd)     Catherine Thomas

Clerk

Date of Hearing:  22 November 2005

Date of Decision:  1 December 2005
Advocate for the applicant:        Mr D. Perdon

Advocate for the respondent:     IN PERSON