Brian Acheson and Secretary, Department of Education, Employment and Workplace Relations
[2013] AATA 500
[2013] AATA 500
Division GENERAL ADMINISTRATIVE DIVISION File Number(s)
2013/1335
Re
Brian Acheson
APPLICANT
And
Secretary, Department of Education, Employment and Workplace Relations
RESPONDENT
Decision
Tribunal Deputy President RP Handley
Date 15 July 2013 Place Sydney While acknowledging that mistakes were made by both Centrelink and the Social Security Appeals Tribunal (SSAT) and that this has proved frustrating for Mr Acheson, those mistakes do not affect the ultimate determination of Mr Acheson’s claim for newstart allowance. The SSAT’s decision to affirm the decision under review rejecting Mr Acheson’s claim for newstart allowance is therefore affirmed.
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Deputy President RP Handley
Catchwords
SOCIAL SECURITY – benefits and entitlements – newstart allowance – applicant member of homeowner couple – whether newstart allowance payable to applicant - whether value of applicant and partner’s combined assets exceeded the asset value limit – decision affirmed
Legislation
Social Security Act 1991 ss 1121, 1122
REASONS FOR DECISION
Deputy President RP Handley
Date 15 July 2013
Mr Acheson has applied for a review of a decision made by the Social Security Appeals Tribunal (SSAT) affirming a decision that he is not eligible for payment of newstart allowance (NSA).
Background
On 15 October 2012, Mr Acheson contacted Centrelink about claiming social security benefits as a result of severe financial difficulties. He subsequently lodged a claim for newstart allowance (NSA) including information about his and his wife, Christine Acheson’s income, assets and liabilities and the income, assets and liabilities of the company of which they are directors and shareholders, Rockgrave Pty Ltd (Rockgrave). There are three issued shares in Rockgrave, of which two are held by Mr Acheson and one by his wife. Rockgrave traded as Acheson Rural Services, its principal business being rural production.
On 20 November 2012, a Centrelink Complex Assessment Officer (CAO) decided to attribute two thirds of the income and assets of Rockgrave to Mr Acheson and one third to his wife. The CAO assessed Rockgrave’s net assets as $908,506. By letter dated 22 November 2012, Centrelink notified Mr Acheson of its decision that he could not be paid NSA because the value of his and his wife’s assets exceeded the allowable limit which, at that time, was $273,500 for a homeowner couple.
On 7 December 2012, Mr Acheson sought a review of this decision which, on 20 December 2012, was affirmed by an authorised review officer and, on 20 February 2013, by the SSAT. On 26 March 2013, Mr Acheson lodged an application with the Tribunal for a review of the SSAT decision.
Issues
There was initially disagreement about the date from which NSA might otherwise be payable but it appears this is no longer in dispute and the agreed date is 15 October 2012 which was when Mr Acheson first contacted Centrelink about claiming a social security benefit.
The other matter in dispute relates to the treatment of Mr Acheson’s assets and liabilities and, in particular, of the net value of a margin loan to Mr Acheson from CommSec. Mr Acheson contends that the figure of $58,458.00 relied on by Centrelink, and apparently accepted by the SSAT, is incorrect. Mr Acheson also disputes the value of Rockgrave’s assets relied upon by Centrelink in assessing his assets, and contends that figures taken from Rockgrave’s financial statements for the financial year ended 30 June 2011 do not represent its true financial position. Mr Acheson contended that Centrelink should rely on the statement of assets and liabilities he had prepared and submitted on 2 November 2012, showing that he and his wife have a net deficiency of $296,968.48.
Discussion
Mr Acheson described the course of his dealings with Centrelink staff and his discontent and frustration with this. I explained to Mr Acheson that the role of the Tribunal is to take a fresh look at his application for NSA and, standing in the shoes of the decision-maker, make the correct or preferable decision based on the evidence before the Tribunal and the applicable law. In this instance, the primary source of the law is the Social Security Act 1991 and the relevant provisions of that Act which apply in assessing the assets of a person in determining when, if a person is qualified for NSA, NSA is payable. I explained to Mr Acheson that the role of the Tribunal is not to enquire into the specific conduct of Centrelink officers.
With regard to the value of the CommSec Margin Loan taken into account in assessing his assets, Mr Acheson denied ever having provided information to Centrelink that the net value of his Margin Loan was $58,458 as Centrelink claimed. At the hearing, there was discussion of the meaning and interpretation of a Centrelink computer record (Attachment C to the Respondent’s Statement of Facts, Issues and Contentions (SOFIC)) which refers to the Margin Loan. Ms Schuster, for the Respondent, explained that this record shows an asset value for the Margin Loan of $31,841 and a gross value of $58,458; it was the asset value which was taken into account in assessing the total value of Mr Acheson’s assets and not the gross value attributed to the Margin Loan of $58,458.
The computer record refers to the source of the information being by phone. Ms Schuster accepted Mr Acheson’s evidence that he never gave Centrelink a gross value for the Margin Loan of $58,458. She acknowledged that there is no other evidence as to the source of the information and accepted that there could have been a clerical error in the computer record. She said it was apparent that the computer entry was made between 24 October 2012 and 22 November 2012, when the assessment was made. She accepted that in any event, the SSAT was incorrect in attributing a value of $58,458 to the Margin Loan (paragraph 29 of the SSAT decision). Ms Schuster referred to p 373 of the T Documents which shows that the value of the financial assets attributed to Mr Acheson in making the original assessment was $35,485, a figure which includes both the Margin Loan as well as other investments shown on p 380 of the T Documents.
I am satisfied from the above evidence that any reference to the Margin Loan having a gross value of $58,458 is incorrect. This is not supported by any other evidence before the Tribunal and, moreover, was not the value attributed to the Margin Loan in the original Centrelink assessment.
With regard to the method used to value Mr Acheson’s assets in determining whether NSA was payable, Mr Acheson contended that it was the market value of his assets that should be used. He produced a copy of extracts from a procedural guide provided to Centrelink officers to assist in their decision-making, which he claimed was a statement of the law. This photocopy was apparently provided to him at the time of his SSAT application. I re-iterated to Mr Acheson that it is the relevant provisions of the Social Security Act 1991 that must be applied in making any assessment of the value of his assets. Those provisions and how they are applied are set out in the Respondent’s SOFIC and I was not persuaded by Mr Acheson’s submissions that those provisions had not been correctly applied in his case.
Particular reference should be made to s 1121(1), which states:
(1) If there is a charge or encumbrance over a particular asset of the person, the value of the asset, for the purposes of calculating the value of the person's assets for the purposes of this Act (other than Division 1B of Part 3.10), is to be reduced by the value of that charge or encumbrance.
Thus, if there is a charge or encumbrance over a particular asset, the value of the asset is reduced by the value of the charge or encumbrance. This appears to be the way in which the value of the Margin Loan was assessed in the original Centrelink assessment.
With regard to the treatment of loans, s 1122 states:
If a person lends an amount after 27 October 1986, the value of the assets of the person for the purposes of this Act includes so much of that amount as remains unpaid but does not include any amount payable by way of interest under the loan.
Thus, the value of a loan made by a person that remains unpaid must be included in the person’s assets. In Mr Acheson’s case, as the Respondent contends, the value of loans made by Rockgrave which have not been repaid are treated as assets of Rockgrave and, in turn, Rockgrave’s assets are attributable to Mr and Mrs Acheson in accordance with the proportion of the issued shares in Rockgrave which they own.
Mr Acheson suggested that the treatment of assets for social security purposes should be similar to that used for assessing liability to tax. I explained to Mr Acheson that this is not the case and the Social Security Act1991 provides for different treatment of income and assets for the purpose of determining a person’s entitlement to social security benefits.
I note that Ms Schuster invited Mr Acheson to provide more up to date financial information for Rockgrave including, for example, its financial statements for the financial year ending 30 June 2012. The Respondent’s SOFIC, at paragraph 63, also notes: “It is open to Mr Acheson as controller of the company to take action, including forgiving shareholder loans or winding up the company, that will eliminate assets which he considered are not productive.” Moreover, if his financial situation is now significantly different than it was in the period October 2012 to January 2013, Mr Acheson may wish to consider making a new claim.
Conclusion
I am satisfied that a mistake was made with regard to the date from which NSA would be payable if Mr Acheson were found to be otherwise qualified and entitled to payment of NSA and that this has now been acknowledged by the Respondent.
I am also satisfied that mistakes were made by Centrelink in assessing the value of the CommSec Margin Loan which formed part of Mr Acheson’s assets and that the value attributed to this Loan by the SSAT was incorrect.
I am, however, satisfied on the basis of the evidence provided by Mr Acheson to Centrelink and the SSAT that, notwithstanding these mistakes, Mr Acheson’s and his wife’s assets exceeded the allowable limit for the payment of NSA, which at the relevant time was $273,500 for a homeowner couple. Thus, he had no entitlement to payment of NSA at the date he first contacted Centrelink on 15 October 2012.
Decision
While acknowledging that mistakes were made by both Centrelink and the SSAT and that this has proved frustrating for Mr Acheson, those mistakes do not affect the ultimate determination of Mr Acheson’s claim for newstart allowance. The SSAT’s decision to affirm the decision under review rejecting Mr Acheson’s claim for newstart allowance is therefore affirmed.
I certify that the preceding 19 (nineteen) paragraphs are a true copy of the reasons for the decision herein of Deputy President RP Handley. ...........................[SGD]................................
Associate
Dated 15 July 2013
Date of hearing 11 July 2013 Date final submissions received 11 July 2013 Applicant In person Advocate for the Applicant H Schuster, Department of Human Services
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