Finlayson and Secretary, Department of Health (Social services)

[2018] AATA 477

Finlayson and Secretary, Department of Health (Social services) [2018] AATA 477 (14 March 2018)

Division:GENERAL DIVISION

File Number(s):      2017/5171

Re:Mavis Finlayson

APPLICANT

AndSecretary, Department of Health

RESPONDENT

DECISION

Tribunal:Dr Damien Cremean, Senior Member

Date:14 March 2018

Place:Melbourne

The decision under review is affirmed

[sgd]........................................................................

Dr Damien Cremean Senior Member

AGED CARE – intention to pay moneys into a Trust established for disabled grandson –entry by grandmother into aged care assessment of assets – sum to be paid into trust not paid before that time – whether nonetheless transfer of assets – whether binding gift or not – whether in equity if not under provisions of Trust deed – decision affirmed

Legislation

Aged Care Act 1997 (Cth) ss 44-22, 44-26A

Social Security Act 1991 (Cth) ss 1123, 1209Z

Cases

Corin v Patton (1990) 169 CLR 540

REASONS FOR DECISION

Dr Damien Cremean

13 March 2018

1. The Applicant, Mavis Finlayson, seeks review of a decision made by an authorised review officer of the Department of Health on 7 August 2017 to affirm a decision not to recognise the gift made by her to the Darryn Kearney Special Disability Trust (‘the Trust’) prior to her entering into aged care (at Mercy Place, Warrnambool, Victoria) on 7 April 2017 for the purposes of her aged care residential care asset assessment.

2. The matter is one arising under the Aged Care Act 1997 (Cth) (‘the Act’) and the Social Security Act 1991 (Cth) (the “Social Security Act”).

3. I agree that the issue on review is whether the Applicant’s gift of $45,000.00 to the Trust in question was made prior to her entering the aged care facility on that date of 7 April 2017.

4. This arises because of a complex inter-operation of provisions of both the Act and the Social Security Act whereby it is critical to determine whether at the time of an assessment of the Applicant’s assets and income it may be said that she had achieved a transfer of the asset of $45,000.00. Reference is made in particular to sections 44-22 and 44-26A of the Act and to sections 1123 and 1209Z of the Social Security Act and to the notion of a transfer of an asset.

5. It is important to note that the Trust was set up to provide financial assistance to her severely disabled grandson (Darryn Kearney) without impact on her or her grandson’s Centrelink benefits and also to provide potential longer-term benefits if the Applicant did in fact require permanent aged care.

6. A solicitor was consulted for this purpose and the Trust deed drawn up but with some delay so I am told. Before the Trust deed was finalised the Applicant was offered a permanent bed at the aged care facility which she accepted.

7. It is not in dispute that the Applicant did transfer the amount of $45,000.00 to the Trust and that she did so on 10 May 2017. What is in dispute is whether there was a disposal of this asset in a sense prior to that date and before 7 April 2017 which is over a month before.

8. The Applicant’s legal advisers have contended in a letter dated  23 August 2017 that [the] timing of the payment of the funds is not the critical step and that at the time of the assessment the $45,000 clearly was a liability and should be treated as such when assessing Mavis’s assets.

9. I cannot agree with these remarks. It is plain that the date of payment of the funds is critical and it is also very clear upon analysis that there was in reality no liability at the time of the assessment. 

10. The latter point emerges from perusal of the Trust deed.

11. Schedule A of the deed clearly sets out the amount of the contribution at $45,000.00. But that is all it does. It does not specify a date or a time by which that contribution must be made.

12. None of the other provisions in the deed create the obligation to pay the amount or at least make provision for what may or must happen in the event the payment is not made.

13. In the absence of some obligation to pay arising from the deed itself it simply cannot be said that the Trust deed although nominating the amount creates a liability to pay as the solicitor’s letter states it.

14. There is therefore nothing in my view that obliged the Applicant to pay the sum of $45,000.00 by or before 7 April 2017. No consequences attached to a failure to make the payment. Although it was intended all along that the payment would be made—as it subsequently was—there was no penalty and strictly thus no obligation arising if it was not made.

15. As regards any suggested obligation to pay arising in equity it is sufficient to refer to the decision of the High Court in Corin v Patton (1990) 169 CLR 540 (at 559) and to say for it to be deemed by equity that the gift was made prior to 7 April 2017 the Applicant must have done everything necessary to effect a binding gift.

16. However clearly that was not done by the Applicant.  A clear donative intention alone is insufficient and there was further action which was required on her part to effect a transfer of the money. Accordingly, it was necessary for her in some binding way to achieve that transfer and until then the intended gift remained imperfect in equity. Merely entering into the Trust deed did not achieve the purpose because as I have said above there is no identifiable obligation to pay the sum to be found arising in the terms of the deed itself.

17. My conclusion therefore is, regrettably, that the decision of the authorised review officer  not to recognise the gift made by the Applicant to the Trust prior to her entering aged care on 7 April 2017 is correct. No gift before that date is established either from the terms of the Trust deed or otherwise.

    DECISION

18. In consequence the decision under review is affirmed.

19.     I certify that the preceding 18 (eighteen) paragraphs are a true copy of the reasons for the written reasons herein of Dr Damien Cremean, Senior Member

[sgd].....................................................

Associate

Dated 14 March 2018

Date of hearing	5 February 2018 (by telephone)
Advocate for the Applicant	Ms Emma Arthur, EKA Wealth Management
Advocate for the Respondent	Ms Belinda Lewis, Department of Human Services