Hanna and Secretary, Department of Social Services (Social services second review) - [2018] AATA 1347

Hanna and Secretary, Department of Social Services (Social services second review) [2018] AATA 1347 (22 May 2018)
Division:GENERAL DIVISION
File Number: 2017/6836
Re:Elica Hanna
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

DECISION
Tribunal:Chris Puplick AM, Senior Member
Date:22 May 2018
Place:Sydney

The decision of the Secretary is affirmed.
..........................[sgd]..............................................
Chris Puplick AM, Senior Member
CATCHWORDS
SOCIAL SECURITY – entitlement to carer payment – whether applicant can claim back payment – determining rate of payment - interpretation of “loan” or “gift” and “assessable asset” – Financial Management Order – decision under review affirmed
LEGISLATION
Social Security (Administration) Act 1999 (Cth), ss 109, 110
Social Security Act 1991 (Cth), ss 9, 1126AA
CASES
Kotevski v Secretary Department of Employment [2017] AATA 24
SECONDARY MATERIALS
Australian Government, Guide to Social Security Law, Assessing Loans & Guarantor Arrangements, Ch 4.6.5.60

REASONS FOR DECISION
Chris Puplick AM, Senior Member
22 May 2018

Ms Elica Hanna (also known as Elica Daroy) appealed to this Tribunal on 20 November 2017 following a decision of the Social Services and Child Support Division of the Tribunal (AAT1) on 23 October 2017 to uphold a decision by the Secretary of the Department of Social Services to reduce the Applicant’s rate of Carer Payment.
There are in fact two separate issues before this Tribunal, one related to an appeal against the determination, namely, a claim for back-payment of the Carer Payment if the Applicant’s appeal is successful and the other related to the determination of the Applicant’s assets at the time of the original decision.
In these proceedings Ms Hanna was represented by her mother Mrs Amell Hanna (previously known as Lysa Gylman and other names) who has, since 22 December 2016, held a Financial Management Order from the NSW Civil and Administrative Guardianship Tribunal investing her with control of Ms Hanna’s financial affairs.[1]
[1] Tribunal Documents p. 28.
Issue 1: Was the Applicant entitled to receive Carer Payment before 24 July 2017?
It is necessary to set out a brief narrative of this matter.
·On 20 April 2015 the Department reduced the Applicant’s carer payment rate following advice from her regarding a change in her asset status. The Applicant was notified of this decision on the same day.
·This decision was affirmed by an Authorised Review Officer (“ARO”) on 22 May 2015 and notified to the Applicant on 25 May 2015.
·The Applicant made a claim for a review of the original decision on 24 July 2017.[2]
·Section 109 of the Social Security (Administration) Act 1999 (the Administration Act) specifies two different outcomes depending on whether the application of appeal against the decision has been lodged before or after 13 weeks from the date notice of the original decision is given. This means that for the more favourable of possible outcomes, an appeal had to be lodged within 13 weeks of 20 April 2015.[3]
·It was not lodged until 24 July 2017 – about 22 months later.
[2] Respondent’s Statement of Facts, Issues and Contentions at [4]-[6].
[3] Social Security (Administration) Act 1999 (Cth) s 109(2)(c).
The relevant part of section 109 of the Administration Act provides:
Date of effect of favourable determination resulting from review
1If:
(a)a decision (the original decision) is made in relation to a person's social security payment; and
(b)(a notice is given to the person informing the person of the original decision; and
(c)within 13 weeks after the notice is given, the person applies to the Secretary, under section 129, for review of the original decision; and
(d)the favourable determination is made as a result of the application for review;
the favourable determination takes effect on the day on which the determination embodying the original decision took effect.
2If:
(a)a decision (the original decision) is made in relation to a person's social security payment; and
(b)a notice is given to the person informing the person of the original decision; and
(c)more than 13 weeks after the notice is given, the person applies to the Secretary, under section 129, for review of the original decision; and
(d)the favourable determination is made as a result of the application for review;
the favourable determination takes effect on the day on which the application for review was made.
The Application was not made until 24 July 2017 and clearly is well outside the specified 13 weeks and so there can be no possibility of any back payment – any restitution of payments can take place only from the date of the application for review.
As was pointed out in AAT1, there is no flexibility available to the Tribunal, or to anyone else to vary this date, regardless of the claimed circumstances of the Applicant.[4]
[4] Kotevski v Secretary Department of Employment [2017] AATA 24.
The AAT1 expressed a degree of sympathy for the position of the Applicant’s mother in terms of her inability to seek an earlier review of the original decision because of her daughter’s mental health state.[5] That claim was repeated before this Tribunal which notes that the Applicant’s mother went into some detail about this in her oral evidence. This state of affairs existed between the time of the original decision on 20 April 2015 and the granting of the Financial Management Order on 22 December 2016.
[5] Tribunal Documents p. 7
However I have to observe that there is no actual evidence before the Tribunal, other than the Applicant’s mother’s assertions to support such a proposition at least from the date of the original decision when appeal rights became available. It is difficult to establish exactly when Ms Hanna’s problems became manifest or when her incapacity to act in her own best interests may have commenced.
There is evidence, in the determination of the NSW Civil and Administrative Tribunal Guardianship Division referencing a medical discharge summary from Dr Andy Law (dated 24 October 2016) recording that Elica Hanna was an admitted in-patient at Cumberland Hospital between 19 and 24 October 2016 for her drug-induced psychosis.[6] While this may be a sign of the onset of Ms Hanna’s problems, her mother does record that “When the review was finalised by Centrelink officer, Elica was not yet diagnosed as being mentally ill”.[7]
[6] Supplementary Tribunal Documents p. 259.
[7] Tribunal Documents p. 3.
Finally, the Applicant’s mother’s claim that the payment determination should have been made under section 110 of the Administration Act because of her daughter’s change of circumstances rather than under section 109 is misconceived given that from the date of the decision (20 April 2015) to the date of the Financial Management Order in favour of the Applicant’s mother (22 December 2016) Ms Hanna was legally still responsible for her own affairs and for making reports to the Department about any changes in her circumstances.
Clearly the claim for any backdating of payments (which in any event would only have related to a period from 24 July to 30 August 2017) must fail.
There is no entitlement to any backdating of payments.
Issue 2: What was the value of Ms Hanna’s assets on 20 April 2015?
There was considerable confusion both in the Tribunal documents and at the oral hearing about crucial elements related to the nature of the Applicant’s financial position. The evidence given by Ms Hanna and her mother did not fully clarify matters and indeed some of their evidence was contradictory and confusing.
The Department calculated the value of Ms Hanna’s assets at $509,008 on 20 April 2015 when it made its revised determination of her rate of payment.[8]
[8] Tribunal Documents p. 18.
This calculation consisted of the following:
(i)A gifted sum of $214,000;
(ii)An investment property valued at $285,000; and
(iii)Other assets to the value of $10,008.[9]
[9] Tribunal Documents pp. 100-102.
It is necessary to establish some relevant dates:
·The Applicant first received the Carer Payment in respect of her mother (Amell Hanna / Lysa Gylman) on 8 August 2014.
·On 20 April 2015, Ms Hanna informed the Department that she had made a “gift” to her mother of $224,000 on 1 January 2015.[10]
·This resulted in a reassessment of the Applicant’s Carer’s Payment because of this change in assets status and a new calculation of the Applicant’s assets was made, allowing a $10,000 discount on the gift.[11] As noted above, the new assessment was made on 20 April 2015, confirmed by the ARO on 22 May 2015 and notified to the Applicant on 25 May 2015.
·A bank statement provided by the Applicant on 24 April 2015 showed an opening account balance in the sum of $224,147 as at 14 July 2014.
[10] Tribunal Documents pp. 35-39.
[11] Social Security Act s 1126AA. Respondent’s Statement of Facts, Issues and Contentions at [6].
There is some considerable difficulty arising here from the fact that on 22 May 2015 the Applicant told the Department that her mother had given her $175,000 in late 2012 or early 2013 to build a home on her investment property[12] but on 13 August 2014 she lodged another form in which she stated that the loan from her mother amounted to $224,000 but did not specify when or how that loan was made, nor its purpose.[13]
[12] Tribunal Documents p. 22.
[13] Ibid.
These questions of whether a loan or gift of $175,000 was made from the Applicant’s mother, when it might have been made, and under what conditions, were examined at length before the Tribunal. As best as can be established, it appears that at some time late in 2013 (Ms Hanna thinks November, however her mother is not sure) the Applicant’s mother made a loan or gift to the Applicant in the sum of $175,000. This was subsequently repaid or returned and on 14 July 2014 the Applicant’s mother made another loan/gift to her daughter of $223,204.[14]
[14] Supplementary Tribunal Documents p. 178
There was general agreement that the purpose of this gift/loan was to allow Ms Hanna to undertake building on one of the properties which she has listed in her name. It appears that Council approval of whatever was proposed was not forthcoming and that as a result the money was never used for any productive purpose. It just remained in Ms Hanna’s account.
The Respondent sought to make some point of the fact that there was no formal agreement about the loan/gift, about the arrangements for repayment or for the payment of interest. The Respondent noted that this was a considerable sum which would normally be the subject of some formalised arrangements.
In response, by way of statement provided to the Tribunal, the Applicant’s mother stresses that there was a “verbal agreement” about such matters and that it was for the purposes of making capital improvements to a property to then sell it. She also told the Tribunal that she herself had borrowed some of this money from her mother (the Applicant’s grandmother).[15]
[15] Exhibit A1.
While I appreciate the concerns expressed by the Respondent, I do not find it particularly unusual that inter-family loans have certain characteristics which might be regarded as “informal” and there is no basis to draw any adverse conclusions from the existence of such arrangements or the absence of other formalities.
Details of repayments from Ms Hanna to her mother are very difficult to establish from the Tribunal Documents as there are several bank accounts under a variety of names in evidence. Furthermore there is evidence that some of these accounts were ones where both Ms Hanna and her mother had access linked to a variety of credit card arrangements. Finally there is the matter of the Applicant’s mother having control, via the Financial Management Order, of certain financial decisions made on behalf of her daughter.
However I do not believe these matters, or any attempt to resolve them in detail need detain the Tribunal.
Nor does it matter whether these payments between mother and daughter (in both directions) constituted a “loan” or a “gift” for the purposes of the Social Security Act 1991 (Cth) (the Act).
The Act provides at the outset, in its definitional clause (section 9) that:
“financial investment” means:
(a)available money; or
(b)deposit money; or
………
(e) a loan that has not been repaid in full
……
Section 1122 of the Act provides:
If a person lends an amount after 27 October 1986, the value of the assets of the person for the purpose of this Act includes so much of that amount as remains unpaid but does not include any payment by way of interest under the loan.
There is further direction provided in the Guidelines set out by the Department for the assessing of matters under its legislation. Chapter 4.6.5.60 of the Guide to Social Security Law, under the heading “Assessing Loans & Guarantor Arrangements” provides:
Money loaned by a person is an assessable asset. The value is the amount owed to the person but does not include any interest payable on the loan. The asset value applies whether or not the loan is performing to the terms of the loan agreement. …. Loans are financial assets and are deemed.[16]
[16] Australian Government, Guide to Social Security Law, Assessing Loans & Guarantor Arrangements at Ch 4.6.5.60
Thus a calculation has to be made as to what was Ms Hanna’s asset position when the Department reassessed her payments as at 20 April 2015.
The Tribunal has noted above the determination of a figure of $509,008 of which the principal component is the bank account which includes a “gifted” sum of $214,000.
It should be noted that if the sum in question were not a “gift” but actually a “loan” as the Applicant contends, then this sum would be $519,008 because the discounted sum of $10,000 allowable under section 1126AA of the Social Security Act would not be available to the Applicant.
The plain facts are that, whatever the nature of the money in question, it was in Ms Hanna’s bank account at the relevant date. It was, under the provisions of the Act, an asset to be taken into account in the calculations which the Department was required to make in order to determine the Applicant’s entitlements.
As such the Tribunal finds that there was no error on the part of the Department in making its determination of 20 April 2015.
It should be added that subsequent matters raised by the Applicant’s mother on behalf of her daughter going to other entitlement calculations for other benefits are not matters before this Tribunal. Equally, changes in Ms Hanna’s financial position as of today are not before the Tribunal and may well be the basis for a new application related to benefit levels which Ms Hanna remains entitled to make.
The decision of the Secretary is affirmed.

I certify that the preceding 36 (thirty-six) paragraphs are a true copy of the reasons for the decision herein of Chris Puplick AM, Senior Member

............................[sgd]............................................
Associate
Dated: 22 May 2018

Date(s) of hearing: 7 May 2018

Advocate for the Applicant: Mrs Amell Hanna

Solicitor for the Respondent: Ms Sharon Sangha, Department of Human Services

Date(s) of hearing:	7 May 2018
Advocate for the Applicant:	Mrs Amell Hanna
Solicitor for the Respondent:	Ms Sharon Sangha, Department of Human Services