Gallagher and Department of Family and Community Services

[2000] AATA 761

ORAL DECISION AND WRITTEN REASONS FOR ORAL DECISION
[2000] AATA 761

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No S99/474

GENERAL ADMINISTRATIVE  DIVISION       )          
           Re      JAMES GALLAGHER      
  Applicant
           And    SECRETARY, DEPARTMENT OF  FAMILY AND COMMUNITY SERVICES     
  Respondent

ORAL DECISION

Tribunal       Senior Member J.A. Kiosoglous MBE    

Date30 August 2000

PlaceAdelaide

Decision      The Tribunal affirms the decision under review, pursuant to section 43 of the Administrative Appeals Tribunal Act 1975.
  (Signed)
  J.A. KIOSOGLOUS       
  (Senior Member)
CATCHWORDS
SOCIAL SECURITY – pensions, benefits and allowances – Austudy – Newstart Allowance – liquid assets test – relevant assets to be considered – offsetting of study expenses – offsetting of mortgage – application of financial hardship provisions
Social Security Act 1991 ss.14A, 19C, 598

WRITTEN REASONS FOR ORAL DECISION

30 August 2000        Senior Member J.A. Kiosoglous MBE                   

1. This is an application by Mr James Gallagher (the applicant) for review of a decision of the Social Security Appeals Tribunal (SSAT) dated 21 October 1999 (T2) which affirmed a decision of an authorised review officer (ARO) of the respondent dated 10 August 1999 (T18) affirming a delegate's decision of 13 July 1999 (T11) to impose a liquid assets waiting period of 12 weeks for the period 8 June 1999 to 30 August 1999.

2. The applicant did not attend the hearing but indicated in a letter dated 28 August 2000 that he wished the hearing to proceed in his absence and on the documentary evidence. The respondent was represented by Ms Lee-Anne Odgers, of counsel. The Tribunal received into evidence the documents lodged pursuant to s.37 of the Administrative Appeals Tribunal Act 1975 (T1-T21), together with five exhibits, lodged by the respondent (Exhibits R1-R5).

3. The applicant applied for Newstart Allowance on 6 July 1999 (T6), having ceased his employment on 31 May 1999.  In his request for review by the SSAT he stated that his contract had expired (T20).  The applicant intended to commence full-time study on 26 July 1999.  In his Newstart Allowance claim form, he indicated assets totalling $8,758, being $5,218 in Credit Union accounts and $3,540 held in Harris Scarfe shares.  He also indicated a mortgage in the amount of $34,000 on a property at Goolwa, South Australia (T8).

4. The applicant applied for Austudy on 12 July 1999, but this application was rejected as his intended course of study was not Austudy approved.

5. Following the ordinary one week waiting period from 1 June 1999 to 7 June 1999, the delegate decided on 13 July 1999 to impose a liquid assets waiting period of 12 weeks from 8 June 1999 to 30 August 1999.  Newstart Allowance was granted with effect from 31 August 1999 (T11).

6. The delegate's decision was affirmed upon review by an ARO (T18) and the SSAT (T2).
   legislation

7. Sub-section 14A(1) of the Social Security Act 1991 (the Act) states (inter alia):

   ""liquid assets" in relation to a person, means the person's cash and readily realisable assets, and includes:

   (a) the person's shares and debentures in a public company within the meaning of the Corporations Law; and
   (b) amounts deposited with, or lent to, a bank or other financial institution by the person (whether or not the amount can be withdrawn or repaid immediately); and

   …
   "maximum reserve" in relation to a person, means:

   (a) if the person is not a member of a couple and does not have a dependent child - $2,500; or

   …"

applicant's evidence

1. The applicant is recorded as telling the SSAT (inter alia) at page 4 (T2/6):

   "Mr Gallagher told the Tribunal that whilst he has not actually paid HECS, the legislation does not require that it be paid, simply that allowance be made for it, along with the other allowable expenses.  Mr Gallagher believed that the Tribunal should calculate his study expenses and deduct them from his assets, thereby reducing or nullifying the liquid assets waiting period."

2. The Tribunal also notes in a request for review form dated 23 July 1999 (T13) the applicant stated (inter alia):

   "… I fail to see how liabilities have not been (apparently) not accounted for.  It seems extreme that you are asking me to deprive myself of assets when I owe more than I have."

respondent's submissions

1. Ms Odgers submitted, on behalf of the respondent, that pursuant to the liquid assets test definition in sub-sections 14A(1)-(5) of the Act it was appropriate to have regard to the total amount of $8,758 in determining the liquid assets test waiting period pursuant to section 598 of the Act.

2. She submitted that the amount owing on the mortgage could not be disregarded in determining the waiting period.  She further submitted that pursuant to sub-paragraph 14A(1)(e) of the Act, study expenses were only able to be excluded with regards to people on Youth Allowance or in receipt of Austudy.
   discussion and findings

3. The Tribunal notes that the applicant has not apparently disputed the actual calculations of the liquid assets test waiting period.  From the Tribunal's assessment, the length and commencement date of the waiting period have been correctly determined in accordance with the legislation, and the Tribunal so finds this to be the case.

4. The applicant is instead challenging the actual existence of the waiting period, and considers that it should not apply in his case. It is clear from the definitions contained in sub-section 14A(1) of the Act however, that the applicant had assets at the relevant time of application for Newstart Allowance which come within the definition of liquid assets. Further to that, on the figures that he provided the respondent, his liquid assets exceeded the maximum reserve amount referred to in sub-section 14A(1) of the Act, which was $2,500 in his case.

5. Whilst the applicant has asserted that his study expenses should be factored into the assessment of his liquid assets, the Tribunal concurs with the SSAT's interpretation of sub-paragraph 14A(1)(e) of the Act, in that such expenses can only be taken into account in respect of a claimant for, or in receipt of Youth Allowance or an Austudy payment.  The applicant was not in either of these categories as at the time of his application for Newstart Allowance, given that, perhaps somewhat unfortunately for him, his application for Austudy had been rejected.

6. The Tribunal so finds that any study expenses cannot be taken into account in assessing his liquid assets.  Furthermore, there is no provision that the Tribunal can find, which would allow the applicant to offset his mortgage payments on the house at Goolwa.  It notes the applicant's concern (T13) that he considered his liabilities to exceed his assets, however the legislation is clear in its intent; namely, that people with available liquid assets must exhaust such funds before laying claim to a Social Security benefit.  The Tribunal finds that the mortgage expenditure cannot be offset against the applicant's liquid assets.

7. Accordingly, the Tribunal is satisfied that the amount of the liquid assets, as determined by the delegate, was correct and so finds.  It further finds that the resultant waiting period has been correctly calculated by the delegate.

8. Section 19C of the Act provides for some relief in the case of severe financial hardship, and the Tribunal notes the provisions of sub-section 19C(2) in particular That sub-section provides (inter alia):

   "A person …
   …
   is in severe financial hardship if the value of the person's liquid assets (within the meaning of subsection 14A(1)) is less than the fortnightly amount at the maximum payment rate of the payment or allowance that would be payable to the person:
   …"

9. In this case, the applicant's liquid assets, as properly assessed by the delegate, clearly exceeded the fortnightly amount at the maximum payment rate of the payment that would have been payable to the applicant, which in this case, was $162.85 (T11). Accordingly, the Tribunal finds that section 19C of the Act is not applicable.
   decision

10. For the reasons outlined, and pursuant to section 43 of the Administrative Appeals Tribunal Act 1975, the Tribunal affirms the decision under review.

    I certify that the 19 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member J.A. Kiosoglous MBE

    Signed:         .....................................................................................
      Personal Assistant

    Date/s of Hearing  30 August 2000
    Date of Decision  30 August 2000
    Counsel for the Applicant        Non-appearance
    Solicitor for the Applicant         -
    Counsel for the Respondent    Ms L. Odgers
    Solicitor for the Respondent    Centrelink