Handley and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs

[2011] AATA 143

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2011] AATA 143

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2010/4652

GENERAL ADMINISTRATIVE  DIVISION		)
Re		CHARLESENE HANDLEY

Applicant

And SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal Associate Professor J B Morley RFD, Member

Date3 March 2011

PlaceBrisbane

Decision The Tribunal affirms the decision under review.

............[Sgd]..................................

Member

CATCHWORDS

SOCIAL SECURITY – Benefits and entitlements – Age pension – Applicant member of a couple – Rate of age pension calculated according to value of combined assets – Applicant’s share of combined assets in excess of assets value limit – Rate of age pension nil –  No age pension payable – Decision under review affirmed

Social Security Act 1991 (Cth) ss 44, 1064

Social Security (Administration) Act 1999 (Cth) s 37, Schedule 2 cl 4(1)

REASONS FOR DECISION

3 March 2011 Associate Professor J B Morley RFD, Member

1.      This is an application by Charlesene Ann Handley for a review of a decision by Centrelink on 29 June 2010[1] to reject her claim on 7 June 2010 for age pension (“the original decision”).[2] The decision was affirmed by an Authorised Review Officer on 10 August 2010[3] and again by the Social Security Appeals Tribunal (“SSAT”) on 6 October 2010.[4]

[1] T-Document 8, Folio 53.

[2] T-Document 4, Folios 16 – 37.

[3] T-Document 6, Folio 46.

[4] T-Document 2, Folio 5.

2.      In reaching its decision, the SSAT determined that Mrs Handley's assets are valued at $1,142,256, thereby exceeding the relevant asset value limit of $957,500.[5] Consequently, the calculated rate of her age pension is nil. Section 44 of the Social Security Act1991 (Cth) (“the Act”) provides that age pension is not payable to a person if that person's age pension rate would be nil. Therefore, the SSAT concluded that an age pension is not payable to Mrs Handley.

[5] T-Document 2, Folio 5.

ISSUE TO BE DECIDED

3.      This Tribunal must now determine whether Mrs Handley qualifies for age pension.

BACKGROUND

4. After being widowed for four years, Mrs Handley subsequently qualified for age pension after reaching age pension age on 20 February 1998. On 15 March 2008, at which time she was in receipt of a part age pension, Mrs Handley remarried and became a member of a couple for the purposes of the Act.

5.      Upon declaring her combined assets, in March 2008 Centrelink cancelled her age pension because those combined assets had been calculated to exceed the asset value limit.

6.      On 7 June 2010, Mrs Handley again lodged a claim for age pension, this claim becoming the subject of the original decision. Her claim was rejected. After a Centrelink Authorised Review Officer affirmed that decision, she appealed to the SSAT on 20 September 2010.

7.      In considering its decision, the SSAT noted that Mrs Handley did not dispute the Centrelink valuation of her husband's farm at Lockyer in the amount of $1,150,000.[6]

[6] T-Document 2, Folio 3.

8.      The SSAT accepted Centrelink's valuation of Mr and Mrs Handley's combined assets of $2,284,513[7]. The SSAT used that amount to reach its calculation that, for the purposes of the assets test, Mrs Handley's assets were valued at $1,142,256.[8] In so doing, the SSAT observed:

There is no legislative basis for excluding some part of a partner's assets on the grounds that a person is unable to benefit from them.[9]

[7] T-Document 9, Folio 57.

[8] T-Document 2, Folio 5 (at paragraph 10).

[9] T-Document 2, Folio 5 (at paragraph 10).

STATUTORY REQUIREMENTS

9. The relevant legislation is the Act and the Social Security (Administration) Act1999 (Cth) ("the Administration Act").

10. Section 1064 of the Act specifies that the person's age pension rate is to be determined according to the Rate Calculator at the end of the section. Section 1064-A1 describes the overall rate calculation process, which includes both an income test and an assets test. The outcome or outcomes of either or both of the tests may affect the rate at which a person can be paid age pension.

11.     As submitted in the respondent's Statement of Facts and Contentions[10], it is only the assets test that is relevant to Mrs Handley's appeal.

[10] See paragraph 15.

12. Those parts of s 1064 pertaining to Mrs Handley's claim state:

SOCIAL SECURITY ACT 1991 - SECTION 1064

Rate of age, disability support wife pensions and carer payment (people who are not blind)

(1)       The rate of:

(a)       age pension; and

...

is, subject to subsection (2), to be calculated in accordance with the Rate Calculator at the end of this section.

…

1064-A1 The rate of pension is a daily rate.  That rate is worked out by dividing the annual rate calculated according to this Rate Calculator by 364 (fortnightly rates are provided for information only).

Method statement

Step 1.Work out the person’s maximum basic rate using MODULE B below.

Step 1A.Work out the amount of pension supplement using Module BA below.

Step 3.Work out the amount per year (if any) for rent assistance in accordance with paragraph 1070A(b).

Step 4.Add up the amounts obtained in Steps 1, 1A and 3: the result is called the maximum payment rate.

....

Step 9.Apply the assets test using MODULE G below to work out the reduction for assets.

Step 10.Take the reduction for assets away from the maximum payment rate: the result is called the assets reduced rate.

Step 11.Compare the income reduced rate and the assets reduced rate: the lower of the 2 rates, or the income reduced rate if the rates are equal, is the provisional annual payment rate.

…

Members of a couple

1064-A2 Where 2 people are members of a couple, they will be treated as pooling their resources (income and assets) and sharing them on a 50/50 basis (see points 1064-E2 and 1064-G2 below).  They will also be treated as sharing expenses (e.g. for rent) on a 50/50 basis.

...

Module G – Assets Test

Effect of assets on maximum payment rate

1064-G1 This is how to work out the effect of a person's assets on the person's maximum payment rate:

Method statement

Step 1.Work out the value of the person's assets.

…

Step 2.Work out the person's assets value limit (see 1064-G3 below).

Note: a person's assets value limit is the maximum value of assets the person can have without affecting the person's pension rate.

Step 3.Work out whether the value of the person's assets exceeds the person's assets value limit.

Step 4.If the value of the person's assets does not exceed the person's assets value limit, the person's assets excess is nil.

Step 5.If the value of the person's assets exceeds the person's assets value limit, the person's assets excess is the value of the person's assets less the person's assets value limit.

Step 6.Use the person's assets excess to work out the person's reduction for assets using points 1064-G4 to 1064-G7 below.

...

Value of assets of members of couples

1064-G2 For the purposes of this Module:

(a)the value of the assets of a member of a couple is to be taken to be 50% of the sum of:

(i)        the value of the person's assets; and

(ii)       the value of the person's partner's assets; and

...

13. On completing s 1064-G1, if the value of a person’s assets is calculated to exceed the person’s asset value limit, the result is that the person’s rate of age pension is nil. In that case, s 44(1) of the Act specifies that age pension is not payable. In turn, s 37 of the Administration Act states that the claim must be rejected.

14. Schedule 2 of the Administration Act, subclause 4(1) states:

If:

(a)a person (other than a detained person) makes a claim for a relevant social security payment; and

(b)the person is not, on the day on which the claim is made, qualified for the payment; and

(c)assuming the person does not sooner die, the person will, because of the passage of time or the occurrence of an event, become qualified for the payment within the period of 13 weeks after the day on which the claim is made; and

(d)       the person becomes so qualified within that period;

the claim is taking to be made on the first day on which the person is qualified for the social security payment. 

15.     Therefore, the only question for the Tribunal to determine is whether Mrs Handley is entitled to be paid age pension from the date of her claim on 7 June 2010.

EVIDENCE

16.     There is no dispute that:

·     Mrs Handley is a member of a couple;

·     she is a home owner;

·     she qualifies for age pension; and

·     the valuation of her assets by Centrelink is correct.

17.     The respondent has shown that the combined value of Mrs Handley and her husband's assets at the time that she made her claim was $2,284,513.[11] The value of her assets is calculated at $1,142,256[12] and the relevant asset value limit for a partnered homeowner at the time she made her claim was $957,500.[13] Thus, the value of her assets exceeded her asset value limit by $184,756.[14]  This means that the rate of age pension payable to her is nil.[15]

[11] T-Document 9, Folio 57.

[12] Social Security Act 1991 (Cth) ss 1064-G1 (Step 1), 1064-G2(a)(i) – (ii).

[13] Social Security Act 1991 (Cth) s 1064-G1 (Step 2); T-Document 3, Folio 100.

[14] Social Security Act 1991 (Cth) s 1064-G1 (Steps 3 and 5).

[15] Social Security Act 1991 (Cth) s 1064-G1 (Step 6).

18.     Mrs Handley confirmed at the hearing that, according to her marriage arrangement with her husband, his assets are not hers. Therefore she does not expect any proceeds from his property under his will, the farm being in his name only. Converse arrangements have been agreed to by Mr and Mrs Handley regarding all of her assets.

19.     From this she contended that, because of the circumstances of her marriage arrangement, the 50% apportioning of a couple's assets to each member of a couple amounts to unfair discrimination and precludes her from being eligible for any of the age pension benefits, including a Health Care Card.[16]

[16] T-Document 1, Folio 1.

CONSIDERATION

20. Although the Tribunal is not unsympathetic to the concern expressed by Mrs Handley, it has no discretion not to apply the legislative provisions of the Act. It is bound by those legislative provisions.

DECISION

21.     The decision under review is affirmed.

I certify that the 21 preceding paragraphs are a true copy of the reasons for the decision herein of Associate Professor J B Morley RFD, Member

Signed: ............................[Sgd].................................................
  Associate

Date/s of Hearing  22 February 2011
Date of Decision  3 March 2011
The applicant was self represented
Solicitor for the Respondent was Jasmine Forsyth, departmental advocate