Jolley and Secretary, Department of Social Services (Social security) - [2025] ARTA 1277

Jolley and Secretary, Department of Social Services (Social security) [2025] ARTA 1277 (4 June 2025)

Applicant/s: Mr Jolley

Respondent: Secretary, Department of Social Services

Chief Executive Centrelink

Tribunal Number: 2025/A193237
Tribunal: General Member A Ryding
Place:Sydney
Date:4 June 2025

Decision:The Tribunal affirms the decision under review.

CATCHWORDS

SOCIAL SECURITY – pensions, benefits and allowances – Age Pension – assets correctly applied – primary residence exemption provisions – sale of principal home while in age care – pensioner has not lived in the newly purchased residence – continuity of association broken – decision under review affirmed

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been omitted from this decision and replaced with generic information pursuant to subsection 201(1A) of the Social Security (Administration) Act 1999.

Statement of Reasons

BACKGROUND

This is a decision in an application for review of a decision by Services Australia – Centrelink (Centrelink) dated 14 October 2024 to reduce Mr [Jolley’s] rate of age pension due to an increase in his assets.
[Mr Jolley] receives age pension. He has, since August 2021, resided in government funded aged care. His principal home at the date he went into care was located in [address] ([Property 1]) and [Mr Jolley] had lived there since 1990 with his brother, [Brother A]. [In] April 2022, [Property 1] was sold and in its place a property in [address] was purchased ([Property 2]). [Brother A] has continued to live in [Property 2].
This matter relates to whether [Property 2] should be treated as an asset of [Mr Jolley’s] for the purposes of calculating the rate of age pension [Mr Jolley] is qualified to receive.
On 6 August 2024, Centrelink determined that [Property 2] was an asset of [Mr Jolley’s] (folio 175 of the hearing papers). [Mr Jolley] was informed of the decision by Centrelink’s letter dated 16 August 2024 (folio 198).The decision led to a significant decrease in the rate of age pension received by [Mr Jolley] and the possibility of a debt in respect of past payments of age pension to [Mr Jolley]. It appears that, as at the date of the hearing in this matter, a debt has yet to be raised.
[Brother A] is [Mr Jolley’s] nominee (under an enduring power of attorney dated [in] December 2021)[1] and on 11 September 2024, [Brother A] requested a review of Centrelink’s decision. On 14 October 2024, an authorised review officer of Centrelink affirmed the decision to reduce the rate of [Mr Jolley’s] age pension (folio 20).
[1] The enduring power of attorney is at folio 82. Refer also the Order of the South Australian Civil and Administrative Tribunal dated [in] October 2024 determining that a special powers order made in respect of Mr Jolley and [Brother A] as his guardian should remain in force (folio 13).
On 8 January 2025, [Brother A] applied on [Mr Jolley’s] behalf to the Administrative Review Tribunal (the Tribunal) for a review of Centrelink’s decision. On 14 May 2025, the Tribunal conducted a hearing with [Brother A] attending on behalf of his brother by MS Teams audio. Before the Tribunal were hearing papers supplied by Centrelink numbered 1 to 382 (the hearing papers). Centrelink did not participate and instead relied upon its file. [Brother A] provided evidence on oath, and [Mr Jolley] was also represented by Mr David Starke, of Starke Lawyers.
After the hearing, the Tribunal requested that Centrelink provide an extract from its internal Operational Blueprint.[2] The Tribunal has had careful regard to all of the documents and evidence. Reference below is made only to the documents and evidence relevant to this decision.

ISSUES

[2] Pursuant to section 26 of the Administrative Review Tribunal Act 2024.

The legislation relevant to age pension and assets and therefore to [Mr Jolley’s] application is contained in the Social Security Act 1991 (the Act) and the Social Security (Administration) Act 1999 (the Administration Act).
The issue for consideration in this application is whether [Property 2] is to be treated as an assessable asset for the purposes of determining the applicable rate of age pension payable to [Mr Jolley].

CONSIDERATION

The calculation of the rate of age pension payable to an applicant who qualifies for that pension is set out in section 1064 of the Act. The rate of age pension payable depends on the income and assets tests. The rate of payment is calculated under the two separate tests and the test that results in the lower (or nil) rate is the one that applies. Pursuant to subsection 1118(1) of the Act, a person’s principal home is to be disregarded in calculating the value of their assets.
The Tribunal notes at the outset that this is a difficult matter, with potentially very serious consequences for both [Mr Jolley] and [Brother A] (who is also elderly) should the Tribunal determined that [Property 2] is an asset of [Mr Jolley’s] for the purposes of calculating his rate of age pension. Those consequences appear likely to include [Mr Jolley] having to leave the residential care facility on the basis that he can no longer afford to live there, which the Tribunal understands would mean that he would need to move back in with his brother in [Property 2]. The Tribunal understands from the evidence of [Brother A] that [Mr Jolley’s] conditions mean that this is unlikely to be a workable arrangement either in the mid to long term, or potentially at all.

The facts

As well as the evidence [Brother A] gave to the Tribunal, [Brother A] had sworn a statutory declaration dated 2 September 2024 (folio 78). From his evidence, the Tribunal understands the factual background to be as follows.
[Mr Jolley] had resided with his brother, [Brother A], at [Property 1] since 1990. On 21 June 2009, the brothers entered into an agreement that granted [Brother A] a life tenancy in [Property 1] (folio 118). On the evidence before the Tribunal, [Brother A] did not own any part of the legal title to [Property 1] nor does he own any part of the legal title to [Property 2].
[Brother A] receives age pension, as of course does [Mr Jolley].
On 20 August 2021, [Mr Jolley] went into residential aged care in an aged care home managed by [provider name] (the aged care residential agreement appears at folio 105). [Mr Jolley] was required to pay a returnable accommodation deposit of $450,000 but [Brother A] told the Tribunal that this had yet to be paid. He said that the aged care facility was pressing for payment.
After [Mr Jolley] went into aged care, [Brother A] continued to reside at [Property 1]. In 2022, a decision was made to sell [Property 1] and purchase another home given the very poor condition [Property 1] was in. [Property 1] was rundown and close to uninhabitable. [Brother A] told the Tribunal that although [Mr Jolley] suffers from memory loss, he is able to participate in discussions and make decisions. [Brother A] was able to discuss with him whether to sell [Property 1]. [Brother A] told the Tribunal that part of his brother’s wellbeing is that he knows that he is not destitute, as he fixates on money.
On [a day in] April 2022, the sale of [Property 1] and the purchase of [Property 2] settled. [Brother A] has, since the purchase of [Property 2], lived there. He does not pay rent to [Mr Jolley] but pays all utilities, insurances and upkeep costs for [Property 2], as he did for [Property 1].
[Brother A] told the Tribunal that he picks [Mr Jolley] up from the aged care facility every Tuesday and [Mr Jolley] goes with him on small jobs. He said that on random occasions he picks [Mr Jolley] up on a Thursday or Friday and brings him home to [Property 2]. [Brother A] said that [Mr Jolley] has a sense of ownership of [Property 2]. He said that his brother has consistently had an issue about the property and each time he asks about the place, [Brother A] has to reiterate that it is his and that it is not going to be sold. On these visits, [Brother A] does not have [Mr Jolley] sleep over at the property as he has been advised not to do so in case [Mr Jolley] has an episode overnight and his brother is unable to deal with it. [Mr Jolley] is always keen to return to where he feels secure, which is the aged care facility.
If [Mr Jolley] is forced to leave the aged care facility, he will move into [Property 2] with his brother.
On 3 August 2024, Centrelink was informed for the first time about the purchase of [Property 2]. As a consequence, Centrelink reviewed [Mr Jolley’s] rate of age pension. Centrelink determined that the value of [Property 2] needed to be taken into account as an asset of [Mr Jolley], making the total value of his assets as at 3 August 2024, $925,290.40.

The applicable law and the Tribunal’s consideration

Section 11A of the Act contains principles applicable to the definition of a “principal home” for the purposes of the assets test although it does not contain a definition of “principal home” as such. Relevantly for this matter, subsection 11A(9) provides that the residence of a person is taken to continue to be a person’s principal home, if they are in residential care, for a period of two years, starting from when the person began to be in residential care. For [Mr Jolley], that would mean (leaving aside the sale of [Property 1]) it would continue to be considered to be his principal home for the purposes of the assets test until 20 August 2023. After that date, it would be assessed as an asset of [Mr Jolley’s].
The issue in this case, however, is whether the sale of [Property 1] and its replacement with [Property 2] means that [Property 2] is, or is not, [Mr Jolley’s] “principal home” for the purposes of subsection 11A(9) of the Act.
Centrelink states that it is not. The file note recording its decision made on 6 August 2024 (folio 175) states:
If the home sells during the exemption period and the customer is: Single, the proceeds are immediately assessable for income support purposes. Any new property obtaind [sic] from the sale does not satisfy the exemption provisions

Centrelink’s file note refers in this regard to “OB 108-04070050”. This is a reference to Centrelink’s Operational Blueprint, which is an online resource that explains how Centrelink delivers services. It is intended to operate as an internal resource for Centrelink staff in delivering those services and does not have the same weight in the Tribunal’s determinations as Centrelink’s Social Security Guide. The Social Security Guide is part of the Guides to Social Policy Law, a collection of publications issued by the Australian Government and designed to assist decision makers administering social policy law. The Tribunal should take into account government policy as long as it is not inconsistent with the provisions and objects of the relevant legislation.[3]
[3] Re Drake and Minister for Immigration and Ethnic Affairs (No 2) [1979] AATA 179.
The Tribunal obtained a copy of the relevant extract from the Operational Blueprint from Centrelink after the hearing. This states that, if a customer moves into residential aged care and sells their home within the exemption period and if they are single, “the proceeds are immediately assessable for income support purposes. Any new property obtained from the sale does not satisfy the exemption provisions”. The Operational Blueprint does not provide any basis for Centrelink’s position in this regard.
The Act does not specifically state that this is the position. Subsection 1118(1B) of the Act allows for the proceeds of sale of a principal home to continue to be exempt from the assets test as long as the person intends within 24 months to use all or part of the sale proceeds to purchase, build, rebuild, repair or renovate another residence that is to be the person's principal home.
The Social Security Guide was most recently updated on 12 May 2025. It states (in topic 4.6.3.70):
Where a single pensioner sells their home while in a care situation, the sale proceeds provisions may apply, as long as all the requirements of those provisions are met, that is, they have an intention to apply some or all of the sale proceeds to the purchase of a new principal residence, meet the statutory timeframes, etc. This can include the purchase of a Refundable accommodation deposit (RAD) in a residential aged care service.
The “sale proceeds provisions” is a reference to subsection 1118(1B) of the Act.
The Social Security Guide therefore suggests that in some circumstances a new property purchased by a single aged care resident can be exempt from the assets test as long as it is the person’s “principal home.” The Social Security Guide thus takes a conflicting position to the Operational Blueprint. Again, the Tribunal notes that it should take into account the Social Security Guide as long as it is not inconsistent with the provisions and objects of the Act, but that the Operational Blueprint does not carry the same weight.
This brings the Tribunal back to consideration of what is a “principal home” and whether [Property 2] could be said to be [Mr Jolley’s] principal home notwithstanding that it was not the property he lived in before going into care.
Subsection 11A(9) of the Act refers to “a residence of a person” being “taken to continue to be a person’s principal home”. “Residence” is not a defined term in the Act or the Administration Act, nor is “principal home” save as set out in section 11A.
The Oxford Dictionary defines “residence” as a person’s home, and “home” is defined as the place where one lives permanently.
The Federal Court has described “residency” as involving two elements “physical presence in a particular place and the intention to treat that place as home; at least for the time being, not necessarily for ever”.[4] The Court also stated, in that case, that “once a person has established a home in a particular place …a person does not necessarily cease to be resident because he or she is physically absent. The test is whether the person has retained a continuity of association with the place... together with an intention to return to that place and an attitude that that place remains “home”. It is important to observe, firstly, that a person may simultaneously be a resident in more than one place - ..., secondly, that the application of the general concept of residence to any particular case must depend upon the wording, and underlying purposes, of the particular statute in relation to which the question arises. But, where the general concept is applicable, it is obvious that, as residence of a place in which a person is not physically present depends upon an intention to return and to continue to treat that place as "home", a change of intention may be decisive of the question whether residence in a particular place has been maintained”.
[4] Hazfa v Director-General of Social Security (1985) 6 FCR 444, at p 449 (Hazfa).
This formulation has been adopted in a number of decisions of the predecessor to this Tribunal, the Administrative Appeals Tribunal (the AAT), when considering the meaning of “principal home” in the Act.[5]
[5] See, for example, Re Pople and Secretary, Dept of Families, Housing, Community Services and Indigenous Affairs [2012] AATA 905 and MacNamara and Secretary, Dept of Education, Employment and Workplace Relations [2012] AATA 40.
Given the link placed in subsection 11A(9) of the Act between a person's residence and their principal home, the Tribunal considers that it can draw guidance in construing both of those terms in that subsection from the Federal Court’s decision in Hazfa.
[Mr Jolley] clearly is not physically resident in [Property 2]. It appears from [Brother A’s] evidence that [Property 2] has importance to [Mr Jolley] but the Tribunal does not consider that the evidence supports that [Mr Jolley] has an attitude that this is his “home”. Rather, the importance appears to be that it is an asset of [Mr Jolley’s], providing him with financial security. The Tribunal notes [Mr Jolley’s] desire to return to the aged care facility after his outings with his brother. The Tribunal also considers that the analysis in Hazra contemplates that, when a person is absent from their residence, they continue to have an association with the property, suggesting the requirement of a continuity of association between person and property. In the present case, the Tribunal considers that continuity has been broken by the sale of [Property 1] and the purchase of [Property 2]. [Mr Jolley] does not have the association with [Property 2] as his home that he did with [Property 1].
The Tribunal does not consider that the fact that [Mr Jolley] may need to move into [Property 2] if he is forced to leave the aged care facility means that it is, at present, his principal home. If, however, he does move into [Property 2] it appears likely that, from the date he moves in, it will be his principal home. The Tribunal recognises the absurdity in this but is bound to apply the law.
In all the circumstances and whilst the Tribunal recognises that this has a very serious impact on both [Mr Jolley] and [Brother A], the Tribunal does not consider that, on proper construction of the legislation and on the available evidence, [Property 2] is [Mr Jolley’s] principal home.
The Tribunal has considered the scenarios that the analysis in topic 4.6.3.70 of the Social Security Guide might be intended to contemplate. There must be scenarios where the person in care retains a strong link with the property, by visiting and staying overnight for example, such that the facts of the particular matter support an intention to treat the property as a “home”.
In conclusion therefore, the Tribunal has reached the same outcome as the Centrelink authorised review officer, that [Property 2] does not comprise the principal home of [Mr Jolley] and must be taken into account as an assessable asset. Notwithstanding that the Tribunal has reached this outcome by a different route, the correct course is to affirm Centrelink’s decision.

OTHER MATTERS

The Tribunal makes the following observations but notes that it cannot and should not be taken to be providing advice. As noted earlier in this decision, the two year exemption from treating the principal home as an asset of someone who goes into care only lasts for two years and on any view the exemption would have ended on 21 August 2023.
[Brother A] and Mr Starke raised a number of matters with the Tribunal that went to the potential application of the hardship relief provisions in the legislation. The Tribunal notes in this regard that the Social Security Guide addresses the hardship provisions in topic 4.6.7, and addresses the issue of unrealisable assets where the person is unable to, or it is unreasonable for them to, sell or borrow against the property, in topic 4.6.7.50.
Those are not matters that are before this Tribunal for consideration. The Tribunal notes that the application for financial hardship relief was rejected on 20 January 2025 (folio 190). It is open to [Mr Jolley] to seek review by an authorised review officer of that decision and, if unhappy with the outcome of that review, to bring that matter to the Tribunal.
Similarly the Tribunal notes above the reference to raising a debt in respect of age pension paid to [Mr Jolley]. The hearing papers suggest that the debt could be substantial, over $56,000. Again, any decision to raise a debt is one which it is open to [Mr Jolley] to seek review by an authorised review officer and, if unhappy with the outcome of that review, to bring that matter to the Tribunal.

DECISION
The Tribunal affirms the decision under review.

Date(s) of hearing:	Wednesday, 14 May 2025
Representative for the Applicant:	Mr David Starke, Starke Lawyers