Inwood; Secretary, Department of Family and Community Services
[2002] AATA 440
•11 June 2002
DECISION AND REASONS FOR DECISION [2002] AATA 440
ADMINISTRATIVE APPEALS TRIBUNAL )
) No Q2001/671
GENERAL ADMINISTRATIVE DIVISION )
Re SECRETARY, DEPARTMENT OF FAMILY & COMMUNITY SERVICES
Applicant
And EDMUND & ELLA INWOOD
Respondent
DECISION
Tribunal Mr. D.W. Muller, Senior Member
Date11 June 2002
PlaceBrisbane
Decision The Tribunal affirms the decision of the Social Security Appeals Tribunal dated 4 July 2001, that the assets of the respondents, Edmund Inwood and Ella Inwood should not be increased by $20,000.
..............(Signed)................................
D.W. MULLER
SENIOR MEMBER
CATCHWORDS
SOCIAL SECURITY – aged pension – assessment of assets
Social Security Act 1991: s11(5), (6)
REASONS FOR DECISION
Mr. D.W. Muller, Senior Member
This is an application by the Secretary, Department of Family and Community Services to review a decision of the Social Security Appeals Tribunal dated 4 July 2001, which determined that in assessing the assets of Edmund and Ella Inwood, the respondents, for the purposes of calculating their aged pensions, the value of their home and the land upon which it stands should be treated as nil.
The following matters are not in dispute and the Tribunal finds as follows:
(a)Mr and Mrs. Inwood are in receipt of the age pension.
(b)They live in a house which is situated on 1.266 hectares of land.
(c)They bought the house and land in February 1996.
(d)At the time they purchased the property it had approximately 230 macadamia nut trees planted on it.
(e)At the time they purchased the property they ran a bus company called Inwood Coaches Pty. Ltd.
(f)They built a bus shelter on the property.
(g)They found that although the macadamia nut trees produced a crop of nuts, they did not produce enough to make the trees an economically viable unit. If the nuts were left on the ground they attracted vermin such as rats. If the trees were maintained and the nuts collected and sold, the sale price for the nuts did not cover the costs of maintenance and collection. They decided to collect and sell the nuts, even though they did so at a loss, because they enjoyed the visual aspects of the trees on the property.
(h)Mr. and Mrs. Inwood sold the bus business. The sale agreement required the Inwoods to supply two thirds of the parking space in their bus shelter to the new owner of the bus company. They use the other third for their own purposes. They collect a small annual rent for the bus shelter from the new owners of the bus company.
(i)For a few years the Inwoods treated income from the macadamias and the bus shelter as a separate business. However, the losses exceeded the income and the practice of accounting for the "separate business" was discontinued.
Mr. and Mrs. Inwood each made a claim for the age pension on 23 July 1996.
In early April 2001, Mr. and Mrs. Inwood were asked to complete an asset value assessment in relation to the property on which their house is situated. They estimated the whole property to be worth $250,000 and the house and curtilage to be worth $250,000. An Australian Valuation Office (AVO) valuation at the time valued the whole property at $260,000, but allowed $20,000 for the macadamia nut trees and the bus shed, giving a valuation of the house and curtilage of $240,000. This resulted in an assessment of the Inwoods' assets being increased by $20,000.
On 17 April 2001, a property consultant from Bangalow, David Kingsley, reported that in his opinion the macadamia nut trees devalued the property.
A further valuation was done by AVO in May 2001. The new valuation was $235,000 for the whole property and $215,000 for the house and curtilage. This still left the Inwoods with an increase of $20,000 on their assets.
The SSAT accepted that the macadamia nut trees were a negative influence on the value of the property and found that the value of the land beyond the house and curtilage was nil.
The Tribunal accepts that Mr. and Mrs. Inwood have long ceased attempting to operate the macadamias and the bus shed as a business, if they ever did. They simply treat the property as a large house block with some nice trees on it, plus a shed.
Sub-sections 11(5) and 11(6) of the Social Security Act 1991, pertain to the definition of "principal home".
"Principal home
11.(5) A reference in this Act to the principal home of a person includes a reference to:(a)if the principal home is a dwelling-house - the private land adjacent to the dwelling-house to the extent that the private land, together with the area of the ground floor of the dwelling-house, does not exceed 2 hectares; or
(b)if the principal home is a flat or home unit – a garage or storeroom that is used primarily for private or domestic purposes in association with the flat or home unit.
Note: for "private land" see subsection (6).
11.(6) A reference in subsection (5) to private land adjacent to a dwelling-house is a reference to land that is adjacent to the dwelling-house and that is used primarily for private or domestic purposes in association with that dwelling house."
The property in question is less than two hectares, namely 1.266 hectares. It is all used primarily for private and domestic purposes in association with the dwelling house of Mr. and Mrs. Inwood. There should be no separate valuation of $20,000 applied to the land occupied by the macadamia nut trees and the bus shed.
The decision of the SSAT that there be no value assigned to the property beyond the dwelling house and curtilage is affirmed – but for different reasons.
I certify that the 11 preceding paragraphs are a true copy of the reasons for the decision herein of Mr. D.W. Muller, Senior Member
Signed: .....................................................................................
B. Hitchcock, Personal AssistantDate/s of Hearing 13 September 2001
Date of Decision 11 June 2002
Applicant Mr. R. McQuinlan, Departmental Advocate
Respondent Mr. & Mrs. Inwood
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