Degiorgio and Secretary, Department of Social Services (Social services second review)

[2019] AATA 457

Degiorgio and Secretary, Department of Social Services (Social services second review) [2019] AATA 457 (21 March 2019)

Division:GENERAL DIVISION

File Number(s):      2018/2591

Re:Connie Degiorgio

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

DECISION

Tribunal:Senior Member A Poljak

Date:21 March 2019

Place:Sydney

The decision under review is set aside, and the matter is remitted to the Respondent for reconsideration with the direction that suspension of the applicant’s aged pension for the period 22 May 2017 to 8 March 2018 be considered as an alternative to cancellation.

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Senior Member A Poljak

CATCHWORDS

SOCIAL SECURITY – age pension – cancellation of payment – assets test – principal place of residence exemption – applicant admitted to public hospital – facility not an approved provider of aged care – fees not payable under Aged Care Act – whether exemption continued to apply – applicant still in care situation – direction to consider suspension – decision set aside and remitted

LEGISLATION

Aged Care Act 1997 (Cth) ss 41.3, 49.3, 52F.1, Sch 1

Social Security Act 1991 (Cth) ss 11, 11A, 44, 1118,

Social Security (Administration) Act 1999 (Cth) s 80

REASONS FOR DECISION

Senior Member A Poljak

21 March 2019

1. Ms Connie Degiorgio, the applicant, commenced receiving the age pension from March 1997. She is currently over ninety years of age and suffers from dementia and a number of chronic ailments.

2. The decision under review in these proceedings is a decision of the Social Services and Child Support Division (“SSCSD”) of the Administrative Appeals Tribunal made on 19 April 2018, affirming the decision of an authorised review officer of the Department of Human Services (“the Department”) of 7 March 2018, to cancel the applicant’s age pension with effect from 22 May 2017. The reason for the decision was because the applicant’s assets were found to no longer be exempt from the assets test and exceeded the allowable limit for the age pension from 22 May 2017.

   Background

3. On 3 April 2014, the applicant entered St Joseph’s Aged Care Facility, Hunters Hill (“St Joseph’s”) on a permanent basis. Whilst residing there, the applicant was required to pay a daily care fee and an accommodation charge. The applicant’s principal place of residence, her home in Gladesville (“principal place of residence”), was exempted under the assets test for the age pension from 3 April 2014.

4. In approximately mid-2016, the applicant was moved from St Joseph’s to the Riverglen Unit, Greenwich Hospital, aged care psychiatric unit.   

5. On 20 April 2017, the applicant was referred to Lavender House, an older person’s mental health rehabilitation unit located within Macquarie Hospital (“Lavender House”), by Dr O’Shea, her treating psychiatrist. On 11 May 2017, the applicant was admitted to Lavender House, where she remained for approximately 10 months.

6. As of 22 May 2017, the applicant ceased to be liable for fees at St Joseph’s.

7. On 8 March 2018, the applicant was discharged from Lavender House and moved to S.Antonio Da Padova Nursing Home at North Ryde (“S.Antonio”).

8. At present, the applicant is at the Clermont Aged Care Facility where she receives 24 hour nursing care.

   Relevant Legislative Provisions

9. Section 1118 of the Social Security Act 1991 (Cth) (“the Act”) states that certain assets are to be disregarded in calculating the value of a person’s assets. It relevantly provides:

   (1)  In calculating the value of a person’s assets for the purposes of this Act (other than sections 198F to 198MA (inclusive), Division 1B of Part 3.10, Division 2 and sections 1133 and 1135A), disregard the following:

   (a)  if the person is not a member of a couple—the value of any right or interest of the person in the person’s principal home that is a right or interest that gives the person reasonable security of tenure in the home;…

10. Subsection 11(1) of the Act provides that definitions of “accommodation charge”, “accommodation bond”, “accommodation bond balance”, “daily accommodation contribution” and “daily accommodation payment” all have the same meaning in the Act as in the Aged Care Act 1997 (Cth) (“the Aged Care Act”).

11. Subsection 11A(8) of the Act states:

    (8) A residence of a person is taken to be the person’s principal home during:

    (a) if the Secretary is satisfied that the residence was previously the person’s principal home but that the person left it for the purpose of going into a care situation—any period during which:

    (i) the person is accruing a liability to pay an accommodation charge (or would be accruing such a liability, assuming that no sanctions under Part 4.4 of the Aged Care Act 1997 were currently being imposed on the provider of the care concerned); and

    (ii) the person, or the person’s partner, is earning, deriving or receiving rent for the residence from another person; and

    Note 1: For rent, see subsection 13(2).

    Note 2: A person can be liable to pay an accommodation charge only if certain conditions are met: see Division 57A of the Aged Care (Transitional Provisions) Act 1997.

    (b) if the Secretary is satisfied that the residence was previously the person’s principal home but that the person left it for the purpose of going into a care situation—any period during which:

    (i) the person is liable to pay all or some of an accommodation bond by periodic payments (or would be liable to do so, assuming that no sanctions under Part 4.4 of the Aged Care Act 1997 were currently being imposed on the provider of the care concerned); and

    (ii) the person, or the person’s partner, is earning, deriving or receiving rent for the residence from another person; and

    (ba) if the Secretary is satisfied that the residence was previously the person’s principal home but that the person left it for the purpose of going into a care situation—any period during which:

    (i) the person is liable to pay all or some of a daily accommodation payment or a daily accommodation contribution (or would be so liable to do so, assuming that no sanctions under Part 4.4 of the Aged Care Act 1997 were currently being imposed on the provider of the care concerned); and

    (ii) the person, or the person’s partner, is earning, deriving or receiving rent for the residence from another person; and

    (c) any period during which the residence is, because of paragraph (a), (b) or (ba), the principal home of the person’s partner.

    Note: This subsection is not meant to imply that a person may have more than one principal home at the same time.

    (8A) Subsection (8) does not apply in relation to a person who first enters a residential care service or a flexible care service on or after the commencement of this subsection.

    (8B) Subsection (8) does not apply, and never again applies, in relation to a person if:

    (a) the person enters a residential care service or a flexible care service on or after the commencement of this subsection; and

    (b) that entry occurs more than 28 days after the day the person last ceased being provided with residential care or flexible care through a residential care service or a flexible care service (other than because the person was on leave).

    (8C) An expression used in subsection (8A) or (8B) and in the Aged Care Act 1997 has the same meaning in that subsection as in that Act.

    (9) A residence of a person is to be taken to continue to be the person’s principal home during:

    (a) any period (not exceeding 12 months or any longer period determined under subsection (9A)) during which the person is temporarily absent from the residence; and

    (b) if the person is in a care situation or residential care—the period of 2 years beginning when the person started to be in a care situation or residential care; and

    (c) any period during which:

    (i) the person is in a care situation or residential care; and

    (ii) the residence is, or because of paragraph (a) or (b) continues to be, the principal home of the person’s partner; …

12. Schedule 1 of the Aged Care Act provides the following relevant definitions:

    accommodation bond, in relation to a person, means an amount of money that does not accrue daily and is paid or payable to an approved provider by the person for the person’s *entry to a residential care service or flexible care service through which care is, or is to be, provided by the approved provider, and in respect of which the approved provider holds an allocation of *places.

    Note: This Act contains rules about accommodation bonds, which are paid under the Aged Care (Transitional Provisions) Act 1997.

    accommodation charge, in relation to a person, means an amount of money that accrues daily and is paid or payable to an approved provider by the person for the person’s *entry to a residential care service or flexible care service through which care is, or is to be, provided by the approved provider.

    Note: This Act contains rules about accommodation charges, which are paid under the Aged Care (Transitional Provisions) Act 1997.

    accommodation contribution means a contribution paid for accommodation provided with residential care.

    accommodation payment means payment for accommodation provided with residential care or flexible care.

    aged care means care of one or more of the following types:

    (a) residential care;

    (b) home care;

    (c) flexible care.

    aged care service means an undertaking through which *aged care is provided.

    care means services, or accommodation and services, provided to a person whose physical, mental or social functioning is affected to such a degree that the person cannot maintain himself or herself independently.

    daily accommodation contribution means *accommodation contribution that:

    (a) accrues daily; and

    (b) is paid by periodic payment.

    daily accommodation payment means *accommodation payment that:

    (a) accrues daily; and

    (b) is paid by periodic payment.

    daily payment means:

    (a) *daily accommodation payment; or

    (b)  *daily accommodation contribution.

13. Section 41.3 of the Aged Care Act defines the term “residential care” as:

    (1) Residential care is personal care or nursing care, or both personal care and nursing care, that:

    (a) is provided to a person in a residential facility in which the person is also provided with accommodation that includes:

    (i) appropriate staffing to meet the nursing and personal care needs of the person; and

    (ii) meals and cleaning services; and

    (iii) furnishings, furniture and equipment for the provision of that care and accommodation; and

    (b) meets any other requirements specified in the Subsidy Principles.

    (2) However, residential care does not include any of the following:

    (a) care provided to a person in the person’s private home;

    (b) care provided in a hospital or in a psychiatric facility;

    (c) care provided in a facility that primarily provides care to people who are not frail and aged;

    (d) care that is specified in the Subsidy Principles not to be residential care.

    [Emphasis added]

14. Section 49.3 of the Aged Care Act provides:

    Flexible care means care provided in a residential or community setting through an *aged care service that addresses the needs of care recipients in alternative ways to the care provided through residential care services and home care services.

15. The definition of eligible flexible care service is contained in section 52F.1(2) of the Aged Care Act.

    Consideration

16. The respondent submits that the fees payable at Lavender House were not rendered under the Aged Care Act. Accordingly, the respondent submits that the applicant’s principal place of residence was no longer exempt from the assets test for the aged care pension. As the applicant’s principal place of residence exceeded the allowable assets, the respondent submits that her age pension was appropriately cancelled as of 22 May 2017.

17. In a letter dated 31 August 2018, the Acting Director of Mental Health Drug and Alcohol in the Northern Sydney Local Health District, provided information relating to the applicant’s admission to Lavender House, Macquarie Hospital. The letter confirms that the applicant was admitted to Lavender House with “treatment resistant agitated depression and cognitive impairment”. It is noted that the applicant was admitted for the purposes of “undertaking a psychiatric review of her distress and subsequent treatment options in a longer term sub-acute setting”. The letter also confirms that Lavender House is a ward/unit of a public psychiatric hospital and therefore does not fall under the definition of being an approved provider for providing residential care or an approved provider for providing flexible care. In regards to fees, it is noted that fees for accommodation in a public psychiatric hospital are not subject to the Aged Care Act. Although a daily fee at a rate of $50.30 (11/5/17 to 20/9/17) and $50.70 (21/9/18 to 8/3/18) was payable, these fees accrued as gazetted by order under the Health Services Act 1997- Scale of Fees for Hospital and Other Services. The fees covered accommodation, meals, medical services, tests, transport to and from medical appointments, and the provision of consumables related to the applicant’s care.

18. The applicant’s representatives, her son and son-in-law, reiterated at hearing that the care provided to the applicant at Lavender House was the same as that provided at the other aged care facilities to which she had previously been admitted. They advised that the only reason she moved to Lavender House was because she needed a ‘higher level’ of care and because it was recommended by her doctors. They said that they believed they were paying accommodation fees and a daily fee for the care and that it was a residential facility. I accept this evidence.

19. Whether or not the applicant’s principal place of residence is an exempt asset is an exemption that can never apply again once it has been lost. This is the effect of the cancellation decision here which is incredibly unfortunate. As already stated the applicant is over 90 years of age and is in a very frail condition. She suffers from worsening dementia and has a number of chronic ailments requiring 24 hour nursing care. When she left her principal place of residence in April 2014, she moved on a permanent basis to an aged care facility. She remained in the aged care setting from then on however required increased levels of care for her worsening mental state over the years. It appears on the evidence that she moved to Lavender House on the recommendation of her treating psychiatrist as it was an older person’s mental health rehabilitation unit. Unfortunately for the applicant, Lavender House was located within Macquarie Hospital and the fees were rendered accordingly. Macquarie Hospital is a Mental Health Rehabilitation Hospital funded by New South Wales Health; it is not funded under the Commonwealth as an Aged Care Facility. After a 10 month stay at Lavender House, the applicant once again moved to accepted aged care facilities and she presently requires 24 hour nursing care.

20. Section 44(1) of the Act provides that “…age pension is not payable to a person if the person’s age pension rate would be nil”. If the Secretary is satisfied that a Social Security payment is being, or has been paid to a person who is not qualified for the payment, it is to determine whether or not the payment is to be cancelled or suspended under subsection 80(1) of the Social Security (Administration) Act 1999 (Cth).

21. During her time at Lavender House, the applicant was plainly in a ‘care situation’, being a long term hospital stay. Given the circumstances of this matter, I think it is appropriate to consider suspension over cancellation for the period of time that the applicant was at Lavender House, namely, between 22 May 2017 and 8 March 2018. Whether or not the exemption continues to apply or a new period of exemption for the applicant’s principal place of residence may apply after the suspension period is a question for the Secretary.

    Decision

22. The decision under review is set aside, and the matter is remitted to the Respondent for reconsideration with the direction that suspension of the applicant’s aged pension for the period 22 May 2017 to 8 March 2018 be considered as an alternative to cancellation.

I certify that the preceding 22 (twenty-two) paragraphs are a true copy of the reasons for the decision herein of Senior Member A Poljak

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Associate

Dated:   21 March 2019

Date(s) of hearing:	28 February 2019
Advocates for the Applicant:	Mr D Broom and Mr G Degiorgio
Solicitors for the Respondent:	Dr S Thompson, Department of Human Services