Cage and Secretary, Department of Family and Community Services

[2004] AATA 1418

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 1418

ADMINISTRATIVE APPEALS TRIBUNAL      )

)     No  N2004/827

GENERAL ADMINISTRATIVE DIVISION )

Re LESLIE AND ANNIE CAGE

Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Senior Member M D Allen

Date20 December 2004

PlaceSydney

ADMINISTRATIVE APPEALS TRIBUNAL         )       No.      N2004/827
  )
GENERAL ADMINISTRATIVE DIVISION            )

Re          LESLIE AND ANNIE CAGE

Applicant

And       SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal        :      Senior Member M D Allen

Date               :      20 December 2004

Place             :       Sydney

Decision:       For the reasons given orally at the conclusion of the hearing in this matter the decision under review is AFFIRMED.

(Sgd)          M.D. ALLEN
  .............................
   Senior Member

CATCHWORDS

SOCIAL SECURITY – Application to review Centrelink’s decision to reduce Applicants’ age pension by applying pension assets test – whether Applicants’ unit in retirement village constituted an asset and whether or not it was unrealisable – whether Applicants were suffering from financial hardship – decision under review affirmed.

Social Security Act 1991 – ss 55, 1064, 1054-G2, 1129,0. 11(1)

Repatriation Commission v Hall (1988)15 ALD 84
Re Drake v Minister for Immigration and Ethnic Affairs (No. 2) (1979) 2 ALD 634
Pulhoffer and Hillingdon London Borough Council [1986] 1 AC 484
Jebb v Repatriation Commission (1988) 8 AAR 285
re The Licensing Ordinance (1968) 13 FLR 143

REASONS FOR DECISION

Senior Member M D Allen

1. At the conclusion of the hearing of the above matter the terms of the decision intended to be made and the reasons therefor were stated orally. After service upon the Applicant of a copy of the decision that was in fact made, the Applicant pursuant to Sub‑section 43(2A) of the Administrative Appeals Tribunal Act 1975 requested the Tribunal to furnish to the Applicant a statement in writing of the reasons of the Tribunal for its decision.

2.      The oral reasons for decision have been transcribed by Auscript, the Commonwealth Reporting Service.  Whereas those oral reasons may reflect the inelegance of an extempore decision, they are in fact the reasons for the said decision.

3.        The said transcript is annexed hereunto and furnished to the Applicant and to the Respondent as it is the reasons for the Tribunal's decision.

I certify that this and the preceding page are a true copy of the decision and reasons for decision herein of:

Senior Member M D Allen

Signed:         (E.Pope)
          ..................................................................................……………………………….

Associate

Date of Hearing  20 December 2004

Date of Decision  20 December 2004

Solicitor for Applicants                 Self-represented

Advocate for Respondent           Mr George Lozynsky, Department of Family and Community Services

DRAFT DECISION
ADMINISTRATIVE APPEALS TRIBUNAL
Matter No N04/827
By SENIOR MEMBER ALLEN
CAGE and ANOTHER and SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
SYDNEY, MONDAY, 20 DECEMBER 2004

MR ALLEN:   By application made 6 July 2004 the applicants seek review of a decision of a Social Security Appeals Tribunal made 1 July 2004, which decision affirmed a prior determination to reduce the rate of the applicants' age pension by applying the pension assets test and to reject their claims for consideration under the assets hardship provisions.

Two issues were before me. One, whether a unit, being unit number 65 in a retirement village, was properly regarded as an asset of the couple and whether that asset was unrealisable. Two, whether the applicants were in severe financial hardship so as to enable a payment of full pension pursuant to the hardship provisions of the Social Security Act 1991 (as amended).

The relevant sections of the Social Security Act are first of all section 55 which states a person's age pension rate is worked out A, if the person is not permanently blind using pension rate calculator A at the end of section 1064, then section 1054-G2 says under the heading Value of Assets for Members of Couples:

For the purposes of this module the value of the assets of the member of a couple is stated to be 50 per cent of the sum of (1) the value of the person's assets, and (2) the value of the person's partner's assets.

Section 11(1) defines assets as meaning property, including property  outside Australia.  The hardship provisions are then found in section 1129 which reads inter alia:

If (a) either a social security pension is not payable to a person because of the application of an assets test or (b) a person's social security pension rate is determined by the application of an assets test and either (1) sections 1108 and 1109 and various other sections do not apply or (2) the secretary determines that the application of those sections for the person should for the purpose of this section be disregarded and (c) the person or the person's partner has an unrealisable asset and (d) the person lodges with the Department in a form approved by the secretary a request that this section apply to the person and (e) the secretary is satisfied that the person would suffer sever financial hardship if this section did not apply to the person, the secretary must determine that this section applies to the person.

The facts of this matter are quite simple and the applicants agreed with the respondent's recitation of facts in exhibit R1, namely that on 15 November 2003 Mr and Mrs Cage were married and moved in together to live in unit 60.  Prior to their marriage Mr Cage had resided at unit 64 at The Willows Retirement Village, Windsor Road, Northmead while Mrs Cage resided in unit 60.

On 20 November 2003 Centrelink decided to reduce Mr and Mrs Cages' age pension having regard to the assets test and because they were a couple.  The new rate was $378 a fortnight.

On 29 December 2003 the applicants were notified by Centrelink of a further reduction in their rate of age pension due to the combined value of their assets.

On 2 February 2004 Mr Cage requested a review of the decision to reduce their rate of pension since he disagreed with the decision to assess his previous home as an asset.

On 13 February 2004 Mr Cage requested a reassessment of his combined assets under the asset hardship provision.

On 8 March 2004 the applicants' claim for payment under the asset hardship provision was rejected, the reason for rejection being due to available funds being more than the allowable limit of $10,000.

On 15 March 2004 Mr Cage informed Centrelink that he and his wife had gifted $10,000 to their daughter on 9 March 2004.

The unit, being number 65, The Willows, has been placed on the market by Mr Cage.  I understand a deposit has been paid but settlement has not taken place.  An Australian Valuation Office valuation of the unit was $260,000 and that sum has been used for these purposes.  At no time was unit 65 an unrealisable asset.  It may have taken longer to sell because of covenants applying to a unit in a retirement village but it was able to be sold, that is to say realised.

I note that Mr Cage submitted that the unit was not an asset as it was in fact costing him money.  That may well be so, but to hold any property whilst it is in the process of being sold usually incurs costs and those costs may then be set off against the purchase price.  They do not mean that the said property is not an asset.  The very fact that now a deposit has been paid evidences that it is not an unrealisable as opposed to difficult to realise asset.

In considering whether the applicant was suffering severe financial hardship, I was referred to certain guidelines applied by Centrelink.  I reject any argument that those guidelines are binding upon me.  In so saying, I recognise that guidelines have a purpose and I should not readily depart from them.  For example, I refer to the well known passage in Re Drake v Minister for Immigration and Ethnic Affairs (No. 2) (1979) 2 ALD 634 especially at pages 644-645.

Nevertheless, as pointed out by the Full Court of the Federal Court in Repatriation Commission v Hall (1988)15 ALD 84 at 86:

It was in our opinion open to the Tribunal to find severe financial hardship on the evidence before it. We do not read this expression as requiring proof of destitution. The words must be read in the context in which they appear. The levels of pensions and benefits which the Veterans Entitlements Act and the Social Security Act provide and the levels of income and assets which will bring about a reduction in the rate of pensions or benefits provide some guide to the level of income which in Australia is accepted as requiring the provision of government assistance. It would be wrong to read the assets test provision as requiring destitution when the income test provisions do not. What is or what is not severe financial hardship is a matter to be resolved in each case by the Repatriation Commission and on review by the Administrative Appeals Tribunal.

As Lord Brighton, with whom the other members of the House agreed, said in Pulhoffer and Hillingdon London Borough Council [1986] 1 AC 484 at 518:

Where the existence or non existence of a fact is left to the judgment and discretion of a public body and that fact involves a broad spectrum ranging from the obvious to the debatable to the just conceivable, it is the duty of the court to leave the decision of that fact to the public body to whom parliament has entrusted the decision making powers, save in a case where it is obvious that the public body consciously or unconsciously are acting ..... .

A further matter for consideration is whether the applicants were not in severe financial hardship as at the date of application whether this Tribunal could assess up to today's date and hence find that at some stage between the application day, namely 13 February 2004 and today they had reached a position of being in severe financial hardship.

In Jebb v Repatriation Commission (1988) 8 AAR 285 His Honour Davies J considered the matter, although pursuant to the Veterans Entitlements Act 1986. His Honour determined there that the Tribunal had erred in not considering the applicant's entitlement to a pension between the date of his application and the date of the decision by the Tribunal.

I did ask the representative of the respondent if there were any prohibition on my assessing up to date in this matter.  For example, because of legislative imprimatur, entitlement to disability support pension can only assessed as at the application day and for a period of 13 weeks thereafter.  No such restriction was brought to my attention in particular, although Mr Lozynsky referred me to subsection (2) of section 1129 that refers to the date of effect; it does not, as I read it, prohibit an assessment up to date in line with the principle enunciated by his Honour Davies J in Jebb (supra).

The applicants are in straightened financial circumstances.  This will, however, be relieved to some extent when and if unit 65 is sold.  As at the application date they were not in severe financial hardship.  Their assets included a sum of $10,000 which was later gifted away.  Normally I would have regarded such a disposition of assets as disqualifying for the hardship provisions but the applicants told me they had been advised to do this by Centrelink officers.  If so, such advice was, in my respectful opinion, misconceived.

The applicants at the time of application to the Administrative Appeals Tribunal estimated that their weekly expenses were $417 and their income $281.  At the time of the decision of the Social Security Appeals Tribunal their bank balances had been reduced to a total of $7400.  In looking at their assets I do not regard it as appropriate to require Mr Cage to cash in, even if he could do so, his superannuation capital sum.

Even on Centrelink's own guidelines, as at 1 July 2004 the applicants had available to them funds less than those allowed for a couple in severe financial hardship, namely $10,000.  [See exhibit R1 at paragraph 13.]

The applicants income currently is at $213 per week made up in fortnightly sums, a pension of $266, Mr Cage's superannuation of $70 and a carers payment of $90, giving on my mathematics a total of $426 a fortnight.  I note that Mrs Cage is in ill health and requires regular medical treatment.

The situation is, as I see it, that the applicants, as at the date of the Social Security Appeals Tribunal decision, would have been in severe financial hardship except for the possession of unit 65.  That unit was not, as I have found for the reasons stated above, an unrealisable asset.

In paragraph 1129(1)(b) of the Social Security Act the criteria as set out in subparagraph (b) to (e) are, in my opinion, cumulative as designated by the word "and". As was held by his Honour Blackburn J in Re Licensing Ordinance (1968)13 FLR 143 at 147, the proposition that "and" can sometimes mean "or" is true neither in law nor in English usage and the authorities do not show otherwise.

As the assets held by the applicants was not an unrealisable asset, section 1129 cannot apply and the decision under review must be affirmed.