Jankulovski and Secretary, Department of Social Services (Social services second review)

[2018] AATA 4047

Jankulovski and Secretary, Department of Social Services (Social services second review) [2018] AATA 4047 (26 October 2018)

Division:GENERAL DIVISION

File Number:           2017/7659

Re:Riste Jankulovski

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

DECISION

Tribunal:Mr A. Maryniak QC, Member

Date:26 October 2018

Place:Melbourne

The Tribunal affirms the decision under review.

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

Member

Catchwords

SOCIAL SECURITY – entitlement to age pension – value of applicant’s assets – whether applicant to be attributed with assets of any private companies and trusts – decision under review affirmed

Legislation

Social Security Act 1991 (Cth)

REASONS FOR DECISION

Mr A. Maryniak QC, Member

26 October 2018

1. The Applicant, Mr Jankulovski, seeks a review of the decision of the Social Services and Child Support Division of the Administrative Appeals Tribunal (AAT1) dated 23 November 2017 which affirmed a decision by an authorised review officer of the Department of Human Services (“the Department”) on 11 September 2017 to reject Mr Jankulovski’s claim for the age pension.

2. For the following reasons, the Tribunal finds that the Applicant’s assets, including attributed assets, exceed the asset value limit as at the relevant date, 29 December 2016 (“date of claim”).

3. The issues for determination in this application are:

   (a)the value of the Applicant’s assets at the date of claim;

   (b)whether the Applicant is to be attributed with assets of any private companies and trusts; and, if so,

   (c)the value of the assets to be attributed from those private companies and trusts.

   BACKGROUND

4. As outlined by the Respondent, and accepted by the Tribunal, the following documents were lodged by the Applicant with the Respondent:

   (a)on 29 December 2016:

   (i)a claim for age pension, advising:

   ·     he was partnered;

   ·     his address in Greensborough;

   ·     that he owned his own home (T3 p3-37);

   (ii)an Income and assets form, advising:

   ·     the estimated value of his household contents and personal effects was $25,000;

   ·     the estimated value of his motor vehicle was $12,000;

   ·     bank balances of:

   §$2,500 in an ANZ cheque account;

   §$8,000 owed to a NAB MasterCard;

   ·     he received income from Prestige Home Builders;

   ·     he has other assets, described as “apartments new development”, the current market value was $2,000,000 and the amount owed was $2,000,000;

   ·     he was not involved in a private trust;

   ·     he was involved in a private company;

   ·     he was involved in a business (T4 p38-58).

   (b)On 20 March 2017:

   (i)Mod PC Private Company form advising:

   ·     the name of the company is Prestige Home Builders Pty Ltd;

   ·     he is the sole Director of the company;

   ·     the company was incorporated in 1988;

   ·     the company assets consist of one vehicle valued at $15,000;

   ·     the company owed:

   §$840,000 to Sky Sea Pty Ltd;

   §$50,000 to Mirko Grujoski;

   ·     there was a bank loan of $940,000 secured against “home”, described as collateral security;

   ·     the company paid him a wage (T7 p60-75).

   (ii)Mod PC Private Company form advising:

   ·     the name of the company is C. Jankulovski Pty Ltd;

   ·     he is the sole Director of the company;

   ·     the company had no assets and no liabilities (T8 p76-91).

   (c)On 3 May 2017:

   (i)a second Mod PC-Private Company form for Prestige Home Builders Pty Ltd, advising:

   ·     he is the sole Director of the company;

   ·     there are two shareholders, himself and Ilo Jankulovski, each held one ordinary share;

   ·     the company was incorporated in 1998;

   ·     the company assets are:

   §vehicle valued at $15,000;

   §loan to MK-1 Pty Ltd of $160,000;

   ·     the company owed:

   §$840,000 to Sky Sea Pty Ltd;

   §$50,000 to Mirko Grujoski;

   ·     there was a bank loan of $940,000 secured against “home” described as collateral security;

   ·     in 2016 the company paid:

   §him a wage of $69,500;

   §Ilo Jankulovski a wage of $32,500; (T10 p93-108).

   (ii)financial statements for Prestige Home Builders Pty Ltd for the year ending 30 June 2016, advising:

   ·     total assets valued at $2,247,130, including loans to R. Jankulovski, MK-1, and S. Stojanoski totalling $2,164,918;

   ·     total liabilities valued at $1,999,607, including unsecured loans to R. Jankulovski, I. Jankulovski and M. Grujoski totalling $1,000,058 and a secured bank loan of $949,449 (T11 p109-117);

   (iii)company tax return for 2016 for Prestige Home Builders Pty Ltd, advising the company paid $25,000 in franked dividends (each) to R. Jankulovski, and I. Jankulovski, and $108,340 in interest to Qianru Gu (T12 p125-137);

   (iv)NAB bank statement for account number ending in x631 in the name of Prestige Home Builders Pty Ltd (T14 p139);

   (v)comparative trial balance at 30 June 2017, advising of a liability being an ANZ business loan a/c with balance of $952,227.16 and equity included retained profits of $247,520.63 (T14 p141);

   (vi)a second Mod PC – Private Company form for C. Jankulovski Pty Ltd advising:

   ·     the company was incorporated in 2005;

   ·     he is the sole Director and shareholder of the company;

   ·     the company is the trustee for C. Jankulovski Family Trust (T15 p143-158);

   (vii)NAB bank statement for account number ending in x171 in the name of C. Jankulovski Pty Ltd (T16 p159);

   (viii)a Mod PT - Private Trust form for C. Jankulovski Family Trust advising:

   ·     the trust was set up on 16 March 2005;

   ·     the trust holds shares in MK-1 Pty Ltd;

   ·     assets of the trust are bank balance of $4,130 and 5 shares MK-1 Pty Ltd;

   ·     the trust owes:

   §$296,917 to R. Jankulovski,

   §$3,959 to I. Jankulovski,

   §$10,000 to S. Stojanoski,

   §$10,000 to S. Jankulovski, and

   §$38,540 to M. Mo; (T17 p160-182)

   (ix)trust tax return for 2016 for C. Jankulovski Family Trust, advising:

   ·     total income of $44,506 and total expenses of $67,706;

   ·     total assets of $784,156 and total liabilities of $1,030,734 (including tax losses carried forward of $231,047 (T18 183-191);

   (x)financial statements for C. Jankulovski Family Trust for the year ending 30 June 2016, advising:

   ·     total assets valued at $784,156;

   ·     total liabilities valued at $1,030,734, including unsecured beneficiary loans totalling $359,416, and secured loan with nab for $671,318 (T19 p192-205);

   (xi)letter of offer dated 23 June 2015 regarding a business loan from ANZ of $950,000, addressed to R. Jankulovski, as Director of Prestige Home Builders Pty Ltd, to have a registered mortgage over the property at Greensborough, given by R. Jankulovski and M. Mo (T21 p209-217);

   (xii)individual tax returns for 2015 for:

   ·     R. Jankulovski (T22 p218);

   ·     M. Mo (T23 p223).

   (d)On 6 June 2017:

   (i)a Mod PC - Private Company form for MK-1 Pty Ltd advising:

   ·     the Directors and shareholders are:

   §R. Jankulovski;

   §V. Nikolovski;

   §P. Pang;

   ·     the company was incorporated in December 2013;

   ·     the main business is investment;

   ·     the company owns one property at Cowes;

   ·     the estimated value of the property is $5,000,000 (T25 p230-245);

   (ii)financial statements for Prestige Home Builders Pty Ltd for the period 1 July 2016 to 31 December 2016, advising:

   ·     total assets valued at $2,476,205, including loans to R. Jankulovski, MK-1, and S. Stojanoski totalling $2,362,086;

   ·     total liabilities valued at $2,472,960 including unsecured loans to I. Jankulovski, M. Grujoski, and others totalling $1,480,586 and a secured bank loan of $947,599 (T26 p246-259);

   (iii)financial statements for MK-1 Pty Ltd for the year ending 30 June 2015, advising:

   ·     total assets valued at $3,018,221;

   ·     total liabilities valued at $3,073,043 including unsecured loans to V. Nikolovski and Prestige Home Builders P/L totalling $3,073,043 and a secured bank loan of $947,599 (T27 p260-267);

   ·     company tax return for 2015 for MK-1 Pty Ltd (T28 p269-281);

   ·     trust tax return for 2016 for C. Jankulovski Family Trust (T29 p282-290);

   (iv)documentation dated 9 May 2017, regarding sale of Unit 3 in Greensborough, including a statement of adjustments advising:

   ·     purchase price of $620,000;

   ·     $353,596.66 paid to NAB a/c C. Jankulovski Pty Ltd;

   ·     $200,000 paid to Sky Sea Pty Ltd (T30 p291-294);

   (v)documentation dated 9 May 2017, regarding sale of Unit 5 in Greensborough, including a statement of adjustments advising:

   ·     purchase price of $593,000;

   ·     $80,668 paid to Sky Sea Pty Ltd;

   ·     $450,000 paid to NAB a/c C. Jankulovski Pty Ltd (T31 p295-298);

   (vi)balance sheet for C. Jankulovski Family Trust at 31 December 2016 advising:

   ·     total assets valued at $126,278;

   ·     total liabilities valued at $126,268, including unsecured beneficiary loans totalling $62,748 (T32 p299-301).

   (e)On 14 August 2017:

   (i)individual tax returns for 2016 for:

   ·     R. Jankulovski (T34 p305-310);

   ·     M. Mo (T35 p311-315).

   (ii)individual tax returns for 2017 for:

   ·     R. Jankulovski (T36 p316-321);

   ·     M. Mo (T37 p322-327);

   ·     documents regarding the trust:

   §Trustee resolution, signed on 24 May 2017 (T39 p329);

   §Notice of resignation of Chris Jankulovski as appointor of the trust (T40 p330);

   §Appointment of Ilo Jankulovski as appointor of the trust (T41 p331);

   §Deed of amendment of C. Jankulovski Family Trust (T42 p332-338);

   ·     ASIC documentation for C. Jankulovski Pty Ltd (T43 p339);

   ·     ASIC documentation for MK-1 Pty Ltd (T44 p340-341);

   ·     ASIC documentation for Maxholme Pty Ltd (T45 p342-373);

   ·     acknowledgement of loans between:

   §Ilo Jankulovski and Prestige Home Builders Pty Ltd, signed 8.8.17  (T47 p374);

   §Alex Grujoski and Prestige Home Builders Pty Ltd, signed 8.8.17  (T48 p375);

   §Sneza Stojanosvki and Prestige Home Builders Pty Ltd, signed 8.8.17 (T50 p377);

   §Suzi Jankulovski and Prestige Home Builders Pty Ltd, signed 8.8.17 (T51 p378);

   §Sonia Jankulovski and Prestige Home Builders Pty Ltd, signed 8.8.17 (T52 p379).

   (f)On 18 August 2017:

   (i)a Mod PC - Private Company form for Bestchoice Pty Ltd advising:

   ·     the Directors are:

   §R. Jankulovski;

   §I. Jankulovski;

   ·     the company was incorporated in on 6 March 2015;

   ·     there are 10 ordinary shares, all held by Transport by Janks Pty Ltd (T53 p380-395);

   ·     Self-managed superannuation fund annual return for the year 2016 for the Kanino Superannuation Fund (T54 p396-411);

   ·     a statement of adjustments at 2 March 2015, regarding sale of property at  Brunswick, by Kanino Nominees Pty Ltd (T55 p414);

   ·     a statement of adjustments at 10 March 2015, regarding sale of a further property at Brunswick, by Kanino Nominees Pty Ltd (T55 p415);

   ·     Members statement – R. Jankulovski (T55 p416);

   ·     financial statements for Kanino Superannuation Fund for the year ending 30 June 2016 (T56 p418-435);

   ·     company tax return for 2016 for MK-1 Pty Ltd (T57 p437-447);

   (ii)financial statements for MK-1 Pty Ltd for the year ending 30 June 2016 advising:

   ·     total assets valued at $3,686,858;

   ·     total liabilities valued at $3,777,680 including unsecured loans to V. Nikolovski, Prestige Home Builders P/L, and P. Peng totalling $3,777,680 (T58 p448-455);

   ·     company tax return for 2016 for Best Choice Building & Construction Pty Ltd (T59 p458-468);

   (iii)financial statements for Best Choice Building & Construction Pty Ltd for the year ending 30 June 2016 advising:

   ·     total assets valued at $463.34;

   ·     total liabilities valued at $469.36 including unsecured loans to Prestige Home Builders P/L $469.36 (T60 p469-476);

   ·     renunciation of interest in C. Jankulovski Family Trust, signed by:

   §M. Mo; undated (T61 p477);

   §R. Jankulovski undated (T62 p478);

   ·     acknowledgement of loan between Prestige Home Builders Pty Ltd and MK-1 Pty Ltd, signed 17.8.17 (T47 p374).

5. On 3 September 2017 the Department issued a notice to Mr Jankulovski advising that his claim for age pension had been rejected due to the value of his assets. The notice advised Mr Jankulovski that the total combined value of his assets was $2,491,671.00 (T64 p480). On 11 September 2017, an authorised review officer of the Department issued a notice advising Mr Jankulovski that the decision to reject his claim for age pension was affirmed (T66 p487-491).

6. On 23 November 2017 the AAT1 affirmed the decision under review (T2 p3-14) and on 27 December 2017, Mr Jankulovski lodged an application for a second review of a decision with this Tribunal (T1 p 1-2).

7. At the hearing Mr Jankulovski gave very limited and vague evidence. He spoke of numerous loans and pending litigation pertaining to various related entities. However, he did not produced any documents or provide any credible or persuasive detail with respect to his assertions. The Applicant had no substantive response to the Respondent’s case. The Tribunal considers the Respondent’s Statement of Issues, Facts and Contentions to be a comprehensive overview of the facts and evidence relating to this matter, and unless otherwise specified, agrees with the contentions made.

   LEGISLATION

8. Section 55 of the Social Security Act 1991 (“the Act”) provides that the rate of age pension for a person who is not permanently blind is to be worked out using Pension Rate Calculator A in section 1064 of the Act.

9. Module A of section 1064 of the Act provides that the rate of age pension is subject to an income test (Module E of section 1064) and an asset test (Module G of section 1064). The age pension rate is to be calculated under whichever test results in the lower rate of pension.

10. Step 1 in Module G requires a calculation of the value of the person’s assets. Note 2 of that step refers to assets that are to be disregarded in accordance with section 1118 of the Act and Note 3 refers to the valuation of an asset that is subject to a charge or encumbrance in line with section 1121 of the Act.

11. Part 3.18 of the Act provides for a person to be attributed with the value of assets from private companies and private trusts where that person holds and controls, or is the source of, the assets of the company and/or trust.

    THE APPLICANT’S ASSETS

12. In relation to his personal assets, Mr Jankulovski advised the Department that, at the date of claim, his assets and the estimated value of the assets were:

Asset

household contents and personal effects

$12,500[1]

vehicles - Honda Civic 2008

$12,000

financial assets

bank account - ANZ cheque

$2,500

bank account - 900527748

$16,708

loan to trust - Ms Mo

$38,540

loan to trust - Mr Jankulovski

$249

superannuation

$20,837

(T54 p403)

Total

$103,334

[1] Derived from the estimated value advised on the income and assets form at T4 page 40.

1. Mr Jankulovski is, or at some point has been, involved in:

   (a)a number of private companies including:

   (i)Prestige Home Builders Pty Ltd (a construction company);

   (ii)MK-1 Pty Ltd (comprising 3 partners);

   (iii)Best Choice Building and Construction Pty Ltd (no longer a Director);

   (iv)C Jankulovski Pty Ltd (holds the trust property); and

   (b)a private trust, the Jankulovski Family Trust.

2. It was submitted by the Respondent, and the Tribunal accepts, that in order for the assets and income of a private trust or private company to be attributed to an individual, the trust or company must be:

   (a)a designated trust or company (sections 1207N and 1207P of the Act), and

   (b)a controlled trust or company in relation to the individual (sections 1207Q and 1207V of the Act), and

   (c)the individual must be an attributable stakeholder of the trust or company (section 1207X of the Act).

3. A company is considered to be a designated private company if:

   (a)the company satisfies at least two of the following conditions in relation to the financial year ending immediately before the assessment period:

   (i)the consolidated gross operating revenue for the financial year for the company and its subsidiaries is less than $25 million,

   (ii)the value of the consolidated gross assets at the end of the financial year of the company and its subsidiaries is less than $12.5 million,

   (iii)the company and its subsidiaries have fewer than 50 employees at the end of the financial year, or

   (b)the company is a new company and came into existence after the end of the last financial year, or

   (c)the company is a declared private company, and

   (d)the company is not an excluded company.

4. Having considered the relevant material, the Tribunal finds that the abovementioned companies in which Mr Jankulovski is involved are all designated companies. The financial statements for each company indicate that the gross operating profits are less than $25 million and the value of consolidated gross assets is less than $25 million.

5. The Tribunal accepts the Respondent’s contention that, at the date of claim:

   (a)Prestige Home Builders Pty Ltd was a controlled company as Mr Jankulovski holds 50% of the total shares, thereby holding 50% of the direct voting interests in the company and satisfying paragraph 1207Q(2)(a)(i) of the Act;

   (b)C. Jankulovski Pty Ltd was a controlled company as Mr Jankulovski was the sole shareholder, thereby holding 100% of the direct voting interests in the company and satisfying paragraph 1207Q(2)(a)(i) of the Act;

   (c)MK-1 Pty Ltd was a controlled company as C. Jankulovski Pty Ltd holds one third of the total shares in the company and Mr Jankulovski was the sole shareholder of that company, thereby holding more than 15% of the direct control interest in the company and satisfying paragraph 1207Q(2)(a)(ii) of the Act;

   (d)Best Choice Building and Construction Pty Ltd was not a controlled company, Mr Jankulovski was neither a Director nor a shareholder in the company and had no interests in the company that held 100% of the shares.

6. Furthermore, the Tribunal finds that, at the date of claim, the Jankulovski Family Trust was a controlled private trust as Mr Jankulovski was the appointor of the trust and held the controlling interest in the trustee company, thereby satisfying paragraphs 1207V(2)(a) and (b) of the Act.

7. Section 1207X(1) of the Act states that a person is an attributable stakeholder of a controlled private company unless the Secretary determines otherwise, and the person will be attributed with 100% of the assets of the private company or trust unless the Secretary determines otherwise.

8. Section 1207X(2) of the Act states that a person is an attributable stakeholder of a controlled private trust if the trust is not a concessional primary production trust, unless the Secretary determines otherwise, and the person will be attributed with 100% of the assets of the private trust unless the Secretary determines otherwise.

   Prestige Home Builders Pty Ltd (“Prestige Home Builders”)

9. Based on the relevant material, the Tribunal finds that Mr Jankulovski owns 50% of the shares in Prestige Home Builders. The remaining 50% are owned by his son, Ilo Jankulovski. Mr Jankulovski should therefore be attributed with 50% of the assets of Prestige Home Builders Pty Ltd in accordance with his shareholding percentage.

   Assets of Prestige Home Builders

10. Mr Jankulovski provided financial statements for Prestige Home Builders for the periods ending 30 June 2016, 31 December 2016 and a comparative trial balance at 30 June 2017 (T11, T26 and T14).

11. The financial statements for Prestige Home Builders for the period 1 July to 31 December 2016 advise the assets of the company were valued at $2,476,205.

1. Section 1208G of the Act provides that the value of an asset can be reduced by a charge or encumbrance over one or more assets of the company or trust.

2. The Tribunal acknowledges that the company has liabilities of $304,314, comprising of loans from Mirko Grujoski of $50,000 and Ilo Jankulovski of $209,539. These loans are evidenced by loan agreements.

3. The Tribunal accepts that there is an “acknowledgement of loan” between Prestige Home Builders and:

   (a)I. Jankulovski, dated 8 August 2017 for an amount of $280,000 (T47 p374);

   (b)Alex Grujoski dated 8 August 2017 for $45,000 (T48 p375);

   (c)Sky Sea Pty Ltd, unsigned, for $690,000 (T49 p376);

   (d)Sneza Stojanosvki, dated 8 August 2017 for $165,000 (T50 p377);

   (e)Suzi Jankulovski, dated 8 August 2017 for $150,000 (T51 p378);

   (f)Sonia Jankulovski, unsigned but dated 8 August 2017 and witnessed for $180,000 (T52 p379).

4. The Tribunal agrees with the Respondent’s submissions that:

   (a)the acknowledgements do not provide the date the loans were first made to Prestige Home Builders;

   (b)the acknowledgement of a loan from Sonia Jankulovski has been witnessed but not signed;

   (c)four of the purported loan amounts are not detailed in the financial statements even though the loan amounts exceed the loan from Mirko Grujoski that is listed;

   (d)the acknowledgement of a loan from Ilo Jankulovski is for an amount greater than that in the financial statements;

   (e)it is unclear if Alex Grujoski (on the acknowledgement of a loan) is Mirko Grujoski (listed on the financial statements). If they are the same person, the loan amount listed in the financial statements is different to that on the acknowledgement.   

5. Mr Jankulovski gave no evidence at the hearing to establish that the acknowledgements were evidence of bona fide liabilities of Prestige Home Builders as at the date of claim.    

6. The comparative trial balance for Prestige Home Builders for the period at 30 June 2017 includes an amount of $1,066,045.87 as a liability and is described as “Loan - Skysea P/L (Q Wang)” (T14 p142).

7. The Respondent submitted, and the Tribunal accepts, that there is no reference to a loan from Skysea (or SkySea) in the financial statements for the period 1 July 2016 to 31 December 2016, or for the period 1 July 2015 to 30 June 2016.

8. Mr Jankulovski provided an unsigned acknowledgement of a loan between Prestige Home Builders and Sky Sea for an amount of $690,000 (T49 p376).

9. The Tribunal accepts the Respondent’s submission that:

   (a)the loan agreement, dated 2 December 2013:

   (i)names the lenders as three individuals (Qinfen Wang, Qianru Gu and David Ngai)

   (ii)there is no evidence that this agreement was transferred to Sky Sea P/L;

   (iii)the borrower is given as Mr Jankulovski and Ms Mo and C. Jankulovski Pty Ltd

   (iv)there is no evidence that this agreement was transferred to Prestige Home Builder;

   (v)lists the properties at Mountain View Road and Mr Jankulovski’s home as security, but the letters advising of the settlement arrangements for the sale of the Mountain View Road properties refers to amounts paid to the Caveator, the amounts match the cheques drawn to Sky Sea P/L;

   (b)the acknowledgment of a loan between Prestige Home Builders and Sky Sea Pty Ltd, is unsigned and for an amount of $690,000 (T49 p376);

   (c)the amount given in the acknowledgement of a loan bears no resemblance to the amounts reported in the financial statements.

10. The Tribunal further accepts the contention of the Respondent that:

    (a)there is no evidence of a loan agreement between Prestige Homes and Sky Sea Pty Ltd and any amount reportedly owed by Prestige Home Builder to Sky Sea  cannot be recognised as a liability for the purpose of determining the value of the company’s assets;

    (b)the financial statements list “Bank loans” as secured liabilities but there is no evidence regarding the bank/s that provided the loan/s, who were the borrowers, or the security offered to the lenders;

    (c)the only ‘evidence’ of a loan that Prestige Home Builders has from a bank is a “letter of offer” dated 23 June 2015, from the ANZ bank addressed to R. Jankulovski as Director of Prestige Home Builders. The letter of offer indicates that Mr Jankulovski’s home is the security for the loan and was unsigned; and

    (d)if the bank loan reported in the financial statements is that which resulted from the ANZ letter of offer, it was/is not secured against any of the assets of the company. Section 1208G of the Act therefore does not apply and the value of the company’s assets cannot be reduced by the balance of the loan.

11. The Tribunal finds that the value of the assets of Prestige Home Builders Pty Ltd is $2,431,430 being the total of assets $2,476,205 (as reported on the financial statements for the period ended 31 December 2016) less $44,774 being the current tax liabilities.  Hence, the amount attributable to Mr Jankulovski in respect of Prestige Home Builders as a 50% shareholder is $1,215,715.

    MK-1 Pty Ltd (“MK-1”)

12. The Tribunal finds that C. Jankulovski Pty Ltd:

    (a)owns 33.33% of the shares in MK-1 (as trustee), the remaining 66.66% of the shares are owned by two other individuals; and

    (b)Mr Jankulovski is a Director and Secretary of MK-1.

13. The Respondent submitted, and the Tribunal finds, that in keeping with the shareholding percentages, 33.3% of the value of MK-1 Pty Ltd should be attributed to C. Jankulovski Pty Ltd.

    Assets of MK-1

14. The Respondent assessed the value of the company’s assets at $5,364,656, consisting of property valued at $5,000,000 (T25), plus other assets $364,656 (cash assets + tax assets + deposits paid, T58 p451). The Tribunal accepts this assessment.

15. The financial statements report total liabilities valued at $3,777,680, being loans from two shareholders (totalling $2,272,085) and Prestige Homes Builders for $1,505,594.

16. Given the existence of a loan agreement, the Tribunal accepts that the loan from Prestige Home Builders is a liability. However, the remaining two loans cannot be recognised as liabilities as at the date of claim as there is no persuasive or credible evidence of loan agreements between the company and the two shareholders.

17. The only documentary evidence of a loan from Prestige Home Builders to MK-1 is an acknowledgment of loan dated 17 August 2017, which does not include any details of when the loan was actually made. Further, the acknowledgment has been signed by Mr Jankulovski on behalf of the lender, Prestige Home Builders, and the borrower, MK-1.

18. As calculated above, the Tribunal finds that the value of the assets of MK-1 Pty Ltd at the date of claim was $5,364,656.

19. An amount of $1,788,039, being 33.33% of this amount, is to be attributed to C. Jankulovski Pty Ltd.

    C. Jankulovski Pty Ltd and Family Trust

20. In accordance with the Respondent’s submissions, the Tribunal accepts that at the date of claim Mr Jankulovski:

    (a)was the appointor of the trust; and

    (b)was the sole director and shareholder in C. Jankulovski Pty Ltd.

21. The Tribunal finds that Mr Jankulovski was the controller of the trustee company and on the basis of his control of the trust through that company; he should be attributed with 100% of the value of the assets of the trust and trustee company.

    Assets of C. Jankulovski Pty Ltd and Family Trust

22. The Tribunal notes the financial statement dated 31 December 2016, stated that the:

    (a)assets of the trust are valued at $126,273, being cash assets and a loan to Prestige Home Builders;

    (b)liabilities of the trust are valued at $102,309, being GST clearing $63,520 and beneficiary loans of $62,748, including loans of $249 to Mr Jankulovski and $38,540 to Ms Mo; and

    (c)net assets are valued at $10 (T32 p300).

23. The Tribunal accepts the position as outlined in the financial statement.

24. The Tribunal further accepts the Respondent’s submission that, in establishing the amount to be attributed to Mr Jankulovski, the amount of $1,788,039 that was attributed to the trustee company from MK-1 is to be added to the net asset value of the trust and trustee company. Hence, the amount attributed from the trustee company and the family trust to Mr Jankulovski is $1,788,049.

    Best Choice Building and Construction Pty Ltd (Best Choice)

25. The Respondent submits and the Tribunal finds that:

    (a)C. Jankulovski Pty Ltd transferred ten shares (the total shareholding) in Best Choice to Transport by Janks on 8 December 2016; and

    (b)Mr Jankulovski’s appointments as Director and Secretary ceased on 8 December 2016 and appointment as Director recommenced from 3 March 2017 (T129).  Hence, at the date of claim, Mr Jankulovski was not formally involved in Best Choice as either a shareholder or Director. No amount is attributed from the assets of Best Choice to Mr Jankulovski.

    ASSET LIMITS

26. The relevant asset limit thresholds, that is the limit at which no pension is payable, for a homeowner couple:

    (a)at 29 December 2016 was $1,178,500;

    (b)at 1 January 2017 was $816,000.

27. The Tribunal accepts the Respondent’s contention that at the date of claim, the value of Mr Jankulovski’s assets for the purpose of assessing age pension was $3,107,098, comprising:

asset
personal assets	$103,334
T & C (amounts attributed)
Prestige Homes	$1,215,715
C. Jankulovski Pty Ltd	$1,788,049
total	$3,107,098

1. It therefore follows that the assessed value of Mr Jankulovski’s assets exceeds the amount at which age pension is payable.

   DECISION

2. For the abovementioned reasons, the Tribunal affirms the decision under review.

3. The Tribunal notes that Mr Jankulovski may elect, if so advised, to make a fresh application to the Department for the age pension, should he now be in a different financial position.

I certify that the preceding 53 (fifty-three) paragraphs are a true copy of the reasons for the decision herein of Mr A. Maryniak QC, Member

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

Associate

Dated: 26 October 2018

Date of hearing:	8 June 2018
Applicant:	In person
Solicitors for the Respondent:	Ailsa Bramley Department of Human Services