Covello and Secretary, Department of Health and Aged Care (Social services)
[2022] AATA 4181
•11 November 2022
Covello and Secretary, Department of Health and Aged Care (Social services) [2022] AATA 4181 (11 November 2022)
Division:GENERAL DIVISION
File Number: 2022/0648
Re:Rosanna Covello
APPLICANT
AndSecretary, Department of Health and Aged Care
RESPONDENT
Decision
Tribunal:Mr A. Maryniak KC, Member
Date:11 November 2022
Date of written reasons: 7 December 2022
Place:Melbourne
The Tribunal affirms the decision under review.
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Mr A. Maryniak KC, Member
Catchwords
AGED CARE ACT - Where Applicant holds power of attorney for late father - whether applicant's father eligible for financial hardship supplement - at all relevant times assets exceeded threshold - significant expenditure on behalf of father - whether expenses can retrospectively offset assets - decision affirmed
Legislation
Aged Care Act 1997 (Cth)
Cases
YLGY and Secretary, Department of Health [2019] AATA 3272
Secondary Materials
Subsidy Principles 2014 (Cth)
Centrelink, A Guide to Australian Government Payments
REASONS FOR DECISION
Mr A. Maryniak KC, Member
7 December 2022
These Reasons for Decision are provided pursuant to a request from the Applicant dated 14 November 2022.
The Applicant is the daughter of the late Mr Agostino Covello (who unfortunately died in August 2021). She seeks review of a decision of 27 November 2021 which revoked the grant of financial hardship assistance for residential aged care during the period 1 August 2018 to 31 July 2020 (‘the Qualification Period’). The Applicant had power of attorney for her late father and was represented by Ms De Angelis, her financial adviser.
As a preliminary matter, the Tribunal acknowledges that the Applicant has been through a difficult time of late with the unfortunate death of both her parents in the last few years.
The Tribunal is to determine whether the Applicant’s father qualified for the financial hardship assistance supplement (‘FHAS’) during the Qualification Period.
Mr Covello entered permanent residential care on 21 August 2017 and a FHAS claim was lodged by fax on 1 August 2019.[1] On 10 December 2019, the FHAS was granted for the period 1 August 2019 to 31 July 2020. On 24 January 2020, a request was made to back- date the FHAS to 26 August 2018.[2] On 25 January 2020, additional information was requested from the Applicant regarding Bank Statements for all accounts for the three months including 26 August 2018, and the three months including 1 August 2019.[3]
[1] T-Documents (TD), T5.
[2] TD, T29/252; T13.
[3] TD, T29/252.
In February 2020, Mr Agostino’s bank records were provided, indicating that he was over the asset threshold limits during the Qualification Period. Consequentially, on 28 March 2020, the FHAS was revoked.[4]
[4] TD, T29/251.
On 18 January 2022, the Applicant lodged this application for review, providing further evidence dated 26 May, 11 July and 24 October 2022. On 30 October 2022, Ms De Angelis lodged submissions in support of the application; and on 7 November 2022, the Respondent lodged its Statement of Facts, Issues and Contentions (‘SFIC’). The Tribunal has considered the documentary evidence including the documents lodged pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 (the T Documents), Supplementary T Documents and the minimal oral evidence of the Applicant, together with the written and oral submissions of the parties.
At the outset, the Tribunal notes that in both written and oral submissions, Ms De Angelis accepted that Mr Covello’s bank balances were over the applicable asset thresholds during the Qualification Period.[5]
[5] Respondent’s SFIC at [43]-[44].
Save for concerning observations regarding the inefficient and unfortunate history of the Respondent’s handling of Mr Covello’s claim for the FHAS, it was submitted that the Applicant herself had paid numerous expenses on behalf of Mr Covello from her own funds (instead of withdrawing monies from Mr Covello’s accounts). It was submitted that the failure to withdraw funds for these payments was the reason why his bank balances had been permitted to exceed the relevant thresholds. The Tribunal notes that during part of this period, the Applicant was caring for her late mother, who was very unwell.
It was further submitted that the Applicant was buying cigarettes and food for her late father, together with a range of expenses as referred to in paragraphs 38, 39 and 42 of the Respondent’s SFIC. Some of these expenses were incurred by the Applicant prior to the Qualification Period from 17 August 2017. The Applicant submits that such amounts should be offset or deducted from Mr Covello’s bank balances and, once that is done, the adjusted balances will fall below the thresholds. Such expenses included sums for rates and insurance, which were said by Ms De Angelis to fall within “essential expenses”.
The Respondent essentially says that because the bank balances were above the thresholds during the Qualification Period, there is no discretion to permit eligibility for the FHAS.
It seems likely, from the submissions of Ms De Angelis, that she (and the Applicant) were unaware of the relevant bank balances, or that they were increasing during the Qualification Period, until about from the time of the revocation of the FHAS. This is consistent with Ms De Angelis’s statement to the Tribunal, to the effect that she would have arranged a certain sum to be gifted by the Applicant if she had been aware at the relevant time.
The Respondent submitted, and the Applicant accepted, that the relevant bank account funds exceeded the FHAS asset thresholds during the periods; and the Tribunal finds that such balances ranged from $40,065.69 to $45,479.80, whereas the threshold limits ranged from $35,396.40 to $36,827.70.
Such asset limits are calculated by multiplying the annual maximum basic single rate Aged Pension, including the pension and energy supplements by 1.5, pursuant to the Subsidy Principles 2014 (Cth) (‘the Principles’) as referred to in s 44-31 of the Aged Care Act 1997 (Cth) (‘the Act’) and pursuant to s 44-26A of the Act.[6] The Respondent may determine eligibility for a FHAS if in accordance with the Principles ‘financial hardship’ would result.[7]
[6] See also s 47 of the Principles.
[7] See s 44-31(1) of the Act.
The fortnightly maximum payment rate for aged pension, including the pension supplement and energy supplement was $907.60 at 1 August 2018. This increased to $944.30 by 20 March 2020.[8]
[8] STD, ST2: A Guide to Australian Government Payments.
In deciding whether to make such a determination, regard must be had to relevant matters specified in the Principles.
Under the Principles, matters pertaining to “essential expenses” are relevant to determining a care recipient’s total assessable income, if that is in issue.[9] This is a distinct assessment from the assets threshold limit.[10]
[9] See s 44-24 of the Act and s 41 of the Principles.
[10] Principles s 60(2).
In this application, it is only the total assessable assets of Mr Covello which are in issue and thus, in that sense, it is not necessary for the Tribunal to determine whether sums paid by the Applicant were “essential expenses” as defined.
The Applicant submits that all the expenses paid by her were properly incurred on behalf of Mr Covello, and thus should be offset or deducted from his relevant bank balances to bring them under the corresponding asset thresholds. The difficulty with this approach in seeking to retrospectively offset such expenses is the absence of any ability to do so because of the mandatory nature of s 60 of the Principles.
The Principles were relevantly discussed in YLGY and Secretary, Department of Health.[11] Whilst the focus of that decision was not the assets thresholds, some relevant observations were made. The Tribunal stated that: “while s 44-31(2) refers both to the issue of eligibility and the determination of the specified amount, s 60 of the Principles refers only to the first issue [and that] … some of the factors mentioned in s 60 are absolute disqualifications… for example, the asset test in s 60(2)(b) is a hurdle requirement”.[12] This Tribunal agrees with such an interpretation.
[11] [2019] AATA 3272.
[12] YLGY at [37]; see also [65] and [66].
It is apparent that at all relevant times, Mr Covello had assets above the threshold limits and the Principles do not permit a retrospective adjustment of those asset amounts. The FHAS determination must not be made under s 44-31 of the Act unless the requirements of the Principles are satisfied. Section 60(2) of the Principles dictates the circumstances where the Respondent must not determine a care recipient is eligible for the FHAS, that is, an absolute disqualification.
Further, the Tribunal accepts the Respondent’s submission that the discretion in s 60(4) of the Principles does not override the ‘absolute disqualifications’ in s 60(2) of the Principles. The Tribunal finds that the value of Mr Covello’s assets at the relevant times precluded a determination that Mr Covello qualified for the FHAS at any time during the Qualification Period.
Therefore, the Tribunal affirms the reviewable decision.
I certify that the preceding 23 (twenty-three) paragraphs are a true copy of the reasons for the decision herein of Mr A. Maryniak KC, Member
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Associate
Dated: 7 December 2022
Date of hearing: 11 November 2022 Advocate for the Applicant: Ms Mary De Angelis Advocate for the Respondent: Mr Tim Noonan Solicitors for the Respondent: Services Australia
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