Kirwan and Secretary, Department of Health (Social services)

Kirwan and Secretary, Department of Health (Social services) [2018] AATA 109 (31 January 2018)
Division:GENERAL DIVISION
File Number: 2017/3963
Re:Barbara Kirwan
APPLICANT

AndSecretary, Department of Health
RESPONDENT

DECISION
Tribunal:Deputy President J Sosso
Date:31 January 2018
Place:Brisbane

The Tribunal affirms the decision under review.
........................................................................
Deputy President J Sosso
CATCHWORDS
HEALTH – aged care – assessment of value of Applicant’s assets – were the premises the Applicant’s principal home – close relation – whether premises occupied for past five years – whether close relation had life interest in the premises – decision under review affirmed.
LEGISLATION
Aged Care Act 1997 (Cth)
Social Security Act 1991 (Cth)
CASES
Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634
Helsham and Repatriation Commission [1986] AATA 145
Hughes and Secretary, Department of Health and Ageing [2007] AATA 1558
MacNamara and Secretary, Department of Education, Employment and Workplace Relations [2012] AATA 40
May and Secretary, Department of Health [2016] AATA 881
Samek and Secretary, Department of Social Security (1988) 16 ALD 295
Todd v Nicol [1957] SASR 72
SECONDARY MATERIALS
Guide to Social Security Law
Subsidy Principles 2014
REASONS FOR DECISION
Deputy President J Sosso
31 January 2018
INTRODUCTION

Mrs Barbara Kirwan (the Applicant) is an elderly lady who is currently residing in an aged care facility in Queensland. The Tribunal was informed that the Applicant has suffered a significant hypoxic brain injury and, consequently, the carriage of this matter was undertaken by her Administrator, and daughter, Ms Sharyn Howard.
Ms Howard was appointed her Guardian and Administrator by the Victorian Civil and Administrative Tribunal on 4 April 2016 with all the powers and duties conferred by Part 5 Divisions 3 and 3A of the Guardianship and Administration Act 1986 (Vic) – Exhibit 1 T17 pp.115 - 116.
An Administrator is required, pursuant to the relevant State or Territory guardianship legislation, to act in the best interests of the incapacitated person. The Tribunal accepts that in these proceedings Ms Howard has tried, to the best of her ability, to act in the best interests of her mother and has honestly and competently articulated the case she would have presented if she had been in a position to do so.
The decision under review is that of Ms Cheryl Farrow, Authorised Review Officer, Centrelink who, on 20 December 2016 upheld a determination of the Department of Human Services (the Department) assessing the value of the Applicant’s assets for residential aged care purposes at $414,286 as at 12 July 2016. The Applicant’s claim for assistance under the Aged Care Hardship provisions was rejected – Exhibit 1 T2 pp.4 - 6.
The key issues before the Tribunal are:
(a)Was the Applicant’s property at 1/25 Phillip Street, Frankston (Phillip Street) her principal home.
(b)Did her son Richard Kirwan (Richard) occupy the Phillip Street property for the past five years; and
(c)Does Richard have a life interest in the Phillip Street property.
The following facts are set out in the Statement of Issues, Facts and Contentions (SSIFC) of the Secretary, Department of Health (the Respondent) received by the Tribunal on 23 November 2017. Those facts set out were not disputed in the Applicant’s Statement of Position (ASP) dated 12 December 2017.
Between November 1994 and April 2016, the Applicant resided at various premises in Victoria. In July 1995 she purchased, with her then partner, premises at Phillip Street. The Applicant and her partner borrowed $31,000 to purchase the unit which was then valued at $48,000 – Exhibit 2 pp.1 – 5.
Full ownership of the unit was transferred to the Applicant in 2001. The Applicant’s son, Richard lived in the Phillip Street unit from July 1995 until July 2009. When he first resided at Phillip Street he paid rental of $85 per week – Exhibit 2 pp.1,8.
The unit at Phillip Street is the only real estate owned by the Applicant.
Richard was born in 1962 and is currently 56 years of age – Exhibit 3 p.1. He has been the recipient of a disability pension for many years. Ms Howard described her brother’s condition as follows – Exhibit 1 T14 p.98:
“Richard is on a disability pension, & would essentially be homeless without this unit to live in. He pays a very modest rent & is unable to share with other people (very well) due to complex health concerns.”
Ms Howard has also described Richard’s chronic and complex health conditions as involving dysfunctional, addictive behavioural challenges, self-medicating, substance abuse and mental health issues – Exhibit 1 T25 p.139.
When Richard resided at Phillip Street in the 1995 – 2009 period he paid a modest rent which was taken into account by Centrelink when calculating any benefits payable to the Applicant.
From July 2009 until June 2014 Richard lived at 2/6 Lidgate Avenue, Rowville (Victoria), which premises were rented by the Applicant.
From July 2014 until April 2016 Richard lived at 2/76 Willow Avenue, Rowville with the Applicant, and again this was a rental unit.
The total rent per week for the Willow Avenue unit as at 1 August 2014 was $370 per week, and Richard’s contribution was $150 per week – Exhibit 3 p.3.
Unfortunately at this juncture there was a tragic intervention. The Applicant was hospitalised in early 2016 as a result of a hip injury, but due to complications with the operation she suffered a hypoxic brain injury – Exhibit 1 T15 p.102. Even though the Applicant was born in 1937 (Exhibit 1 T17 p.111) and was at the time of the operation 78 years of age, she was continuing to engage in part-time employment – Exhibit 1 T14 p.100.
In April 2016 Richard moved back into the Phillip Street unit – Exhibit 3 p.4, and shortly thereafter the Applicant was transferred from a rehabilitation centre in Melbourne to a hospital in Queensland – Exhibit 1 T29 p.187, ASP p.3. From 12 July 2016 the Applicant commenced residing in a residential age care facility - Exhibit 1 T16 p.106.
Ms Howard lodged on 5 July 2016 a Request for Combined Assets and Income Assessment form on behalf of the Applicant – Exhibit 1 T8 pp.43-71. In that form Ms Howard reported that the Applicant was receiving the Age Pension in the sum of $873.90 per fortnight - p.43. She stated that her mother’s home address was 1/25 Phillip Street Frankston (p.48) which she owned “100%”. The unit was valued at $300,000 – p.49. Other assets were listed as follows:
(a)2015 Mazda 3 motor vehicle - $20,000 – p.54;
(b)Westpac Bank Account - $3,909 – p.55;
(c)Westpac Reward Saver - $41,482 – p.55;
(d)Bendigo Bank – 500 shares -- p.58;
(e)Hesta Superannuation - $47,808.40 – p.60.
Ms Howard also disclosed (p.65) that the Applicant was receiving $160 per month from Richard as rental for the Phillip Street property.
On 14 July 2016 the Department corresponded with the Applicant in relation to her Age Pension. The Department calculated that the Applicant was eligible, from 28 July 2016, for the Age Pension in the sum of $804.15. The Department also calculated the Applicant’s assets at $397,123 and her annual income at $4,379.99 – Exhibit 1 T9 p.75.
On 19 July 2016 the Department again corresponded with the Applicant, but on this occasion in relation to Residential age care fees. The Department also forwarded a copy of the letter on the same day to Ms Howard – Exhibit 1 T10 pp.82 – 86. As this letter is of central importance to this matter relevant sections will be quoted in full – Exhibit 1 T10 pp.77–78:
“When entering residential aged care, the assessment of your assets and income determines what you may need to pay to your service provider. The three main types of fees you may be asked to pay are a basic daily fee, a means tested care fee and an amount for your accommodation.
All care recipients in permanent aged care can be asked to pay a basic daily fee. The amount is currently $48.25 per day.
Depending on your means, you may also be asked to pay a means tested care fee to your service provider to contribute towards the costs of your care. You may also be asked to contribute either fully or partially towards your accommodation costs.
Some homes may also offer you optional services for a fee. You will need to negotiate these optional fees directly with your aged care provider.
Your assessment details
Based on the information you provided, our service provider can ask you to pay:
·the basic daily fee of $48.25 per day,
·a means tested care fee of $6.85 per day, which will be subject to an annual and a lifetime cap, and
·an accommodation payment. You will agree the amount directly with your service provider before you enter care. The service provider is required to publish their accommodation prices and they cannot charge you above the advertised price. You can pay this amount as either a lump sum, daily payment, or a combination of both.
If you choose to pay your accommodation payment as a lump sum in full or in part, the provider must leave you with a minimum amount of net assets of $46,500.00. Your net assets for the purpose of determining that you have been left with the minimum asset amount if paying at least partly by lump sum are $397,123.00. Your net assets only limit the amount payable as a lump sum, so the provider may also require daily payments to be made to meet the total agreed accommodation price.
These fees are based on the value of your assets for aged care purposes which have been assessed as $397,123.00 and your net fortnightly income which has been assessed as $938.61.”
Attached to the letter was an “Assets Summary Statement”, which outlined the Department’s assessment of the Applicant’s assets. Outlined below are the key elements from the document – Exhibit 1 T10 pp.80 – 82:
Financial Accounts  $39,334.00
Shares   $4,755.00
Managed Investments  $28,034.00
Real Estate  $300,000.00
Other Assets (motor vehicles etc)  $25,000.00
Principal home  nil
Net assets total  $397,123.00
An “Income Summary Statement” was also attached which contained the following assessment:
Government Income Support Payments  $770.15
Other Income (e.g. rental income)  $168.46
Assessed total income  $938.61
The Department further corresponded on 21 August 2017 (this date, on its face, is incorrect as it seems that the correspondence was sent in 2016), and assessed the Applicant’s assets at $414,286. (Exhibit 1 T13 p.90) In doing so, consideration had been given to two letters forwarded to the Department by Ms Howard in August 2016. In those letters she informed the Department that her mother’s Bendigo Bank shares were valued at 25 cents each, with a total value of $125. She also advised that her mother’s motor vehicle was valued at $19,000 and her personal items at $5000. The Applicant’s superannuation account had an estimated value of $47,808.40 – Exhibit 1 T11 p.87.
Relying on this advice, the assessed value of shares was decreased to $125, other assets were valued at $24,000 and managed investments (including superannuation) increased to $50,770 – Exhibit 1 T13 p.92.
On receipt of this correspondence Ms Howard provided further information concerning the Applicant’s superannuation account and shares in a letter dated 23 August 2016. In that letter she stated the following in relation to the Phillip Street premises – Exhibit 1 T14 p.98:
“The unit has been in a state of renovation for years. During the time (off & on) Richard has stayed with Mum @ Rowville.
The unit is an ‘unrealisable’ asset. I respectfully request that this unit not be included in Mum’s aged care assessment.”
Ms Howard followed up with another letter, dated 12 September 2016, and lodged a Claim for Financial hardship assistance Residential Aged Care. Ms Howard made the following submissions – Exhibit 1 T15 pp.102 – 103:
“The unrealisable asset is:-
1.    Barbara Kirwan’s unit at 1/25 Phillip Street, Frankston, Victoria. I am submitting this claim on the basis that it is unreasonable to include her unit in the nursing home fee estimation, as this could result in having to sell her unit to cover nursing home fees.
I am doing this on behalf of my mother and brother on the following grounds:-
1.    My brother Richard Kirwan – Barbara’s son – is living in my mother’s unit as a ‘protected person’.
2.    Richard has been on a disability pension now for a long time…The unit is continuing to help Richard maintain and develop skills of independent living, look after his chronic ill health, and manage living financially on his own.
3.    It is unreasonable to deprive Richard of his home – if the unit is lost – rendering him and the dog homeless.
Richard has lived in the unit since the 1990’s. I understand Richard has lived with Mum intermittently- in recent years – for health reasons, and also on-going, long term unit renovations. Mum has always encouraged Richard towards independent living, and helped him when needed. The renovations of the unit were almost completed just prior to Mum entering hospital (she broke her hip, the operation went wrong, and Mum ended up with hypoxic brain injury).
Mum is no longer able to help Richard due to her condition. Her financial situation is now unsustainable. As Mum’s administrator I am continuing to help Richard by meeting the costs of the unit Body Corp fees, rates, water service fees, maintenance fees and insurance fees on behalf of our mother. Richard can’t manage this on a disability pension in addition to his costs of living, looking after Mum’s dog, and meeting debts. This is in addition to Mum’s on-going personal costs (such as medical, dental, optical, aural, podiatry, medication, essential items, and equipment (medical and otherwise), clothes, bedroom items such as special chairs, potential future costs (phone, medical, personal items, potentially having to move, additional nursing etc). Richard helps Mum by paying $80 per week into Mum’s account, and looking after her little dog, as well as storing her household items (personal affects, family items handed down etc) at the unit for no cost. Without the unit, the storage costs would be a substantial drain on her pension – in addition to other costs.
IRT woodlands are charging Mum at the maximum rates, which are quickly draining her account. They have been doing this since Mum moved into the facility in July…
I am advocating on my brother’s behalf and also my mother’s behalf that –
1.    Richard remains in the unit as a ‘protected person’
2.    The unit is classified as an ‘unrealisable asset’ on the basis that it is ‘unreasonable’ – given his disabilities – and situation – to sell the unit and potentially deprive Richard of a home, and possibly Mum of a nursing home.
3.    Remove the DAP cost completely, as well as the income tested care fee/or means tested care fee.
4.    Review the basic daily fee in conjunction with Barbara’s on-going costs and responsibilities (e.g. personal costs, body Corp fees, insurances, unit maintenance, personal, medical, mobility (as this arises), on-going daily costs and actual and potential future costs etc)…”
The Department rejected the application for financial hardship assistance in correspondence dated 29 September 2016. Relevant extracts from that correspondence are set out below – Exhibit 1 T18 p.117:
“Your application for financial hardship assistance has not been approved. Financial hardship assistance is provided to care recipients who have less than 15% of the maximum single rate of Aged Pension (currently $119.22) left per fortnight after paying essential expenses AND have less than $34,082.10 in assets…
You are not eligible for financial hardship assistance because you have more than $34,082.10 in assets available to assist you in paying your aged care expenses.”
On 4 October 2016 Ms Howard wrote to the Department seeking an urgent review of the above decision. She again addressed the issues previously outlined. First, she dealt with the question whether the Phillip Street unit was the Applicant’s principal home. She said – Exhibit 1 T19 p.119:
“The unit however is Barbara’s only purchased home. She stayed there periodically over the years, and more extensively during the renovating and selling years.”
She also re-iterated that there was a reversionary interest (p.119):
“Richard as we understand – by definition of the Social Security Act 1991 – is the recipient of a ‘life interest’ a ‘reversionary interest’ arrangement whereby the unit was provided to him (by Mum) to use/live in for as long as he need to live there. This was an informal arrangement, that family knew about, and Mum referred to it in her will. The Frankston unit has been Richard’s primary home since it was purchased in 1995 – regardless of him having to stay with Mum at her rented home periodically – and especially in the later years due to illness and on-going renovations.”
Ms Howard also contended that the Phillip Street unit was an unrealisable asset:
“It seems to us that it is unrealisable because the unit has always been Richard’s primary home. He has been living in the unit as a handicapped person with the constant help, motivation and support of my mother, Dad and others have helped too. Family have always encouraged Richard to gain and maintain the life skills of independent living etc. When the unit was being renovated in the later years Richard lived with Mum. He had no choice. Although Mum has currently got some liquid assets these assets would not last long, and the unit would have to be sold to meet expensive nursing home fees. Selling the unit would essentially result in financial difficulty and a great deal of family stress. Regardless of my mother’s current financial situation, and her liquid assets, the situation is unsustainable. Including my mother’s unit – in the assets test – would render my brother Richard homeless. The unit is Richard’s home. It has always been his home. He is the life tenant.
It seems to us that a ‘reversionary’ asset should not be included as an assessable asset, and should be excluded from Barbara’s asset test (for the nursing home and aged pension).”
Ms Howard also outlined her understanding of her mother and brother’s plans for the Phillip Street unit (p.120):
“Their plans with the unit:
1.    Mum always planned to move back into the unit, and renovate it for sale. Richard was very unwell, and had to move out while the later renovations were going on – and the unit was up for sale (buyers looking through the unit).
2.    Mum planned to sell the unit and purchase a new principal home interstate and live in the new home with her son Richard. Richard would continue to be the recipient of an informal ‘reversionary’ agreement, and continue to live in the unit for life. Family were aware of this.
3.    Mum never resigned from her casual aged care job. She was still working at 78 (she was a fit and healthy 78 year old).”
After further correspondence, the Department wrote to Ms Howard on 8 December 2016 as follows – Exhibit 1 T22 p.131:
“After carefully considering the information you have provided, the unit at 1/25 Phillip Street, Frankston Victoria 4551 is an assessable asset for Aged Care Purposes under Section 44-26A of the Aged Care Act 1997.
In regards to entitlement for assistance under Financial Hardship Aged Care provisions, as your total assets are above the Financial Hardship current asset threshold of $34,206.90 under Section 44-31 of the Aged Care Act 1997 and Section 60 of the Subsidy Principles 2014. Your assets include: the value of 1/25 Phillip Street, Frankston Victoria 4551, financial assets of $87267 and other assets $5000.”
As explained above, this decision was upheld by the Authorised Review Officer on 20 December 2016 – Exhibit 1 T2 pp.4 - 6.
A hearing was convened in Brisbane on 19 December 2017. The Applicant did not participate due to her state of heath but was represented by her daughter Ms Howard. The Respondent was represented by Mr Rick McQuinlan.
RELEVANT LAW

The Commonwealth Government subsidises aged care services for persons aged 65 years and over. The Aged Care Act 1997 (Cth) (the Act) Act and the Aged Care Principles (the Principles) contain the legislative framework for the regulation and funding of aged care. The Principles is a generic term which encompasses 18 different sets of prescribed Principles made by the relevant Minister pursuant to s 96-1. Of particular relevance for this matter are the Subsidy Principles 2014.
Subsidised care includes home care, residential care and flexible care.
Care is provided by a variety of providers. For the purposes of this matter, however, the focus is on residential aged care. This type of care is provided in aged care homes (previously and more commonly known as nursing homes) either on a permanent or short-term basis. This form of care is provided to persons who require more care than can be provided in their own homes.
Residential aged care is funded both by payments by the Commonwealth and by contributions from residents. The Commonwealth provides funding to approved providers for each person receiving care.
The key provisions in the Act are explained below.
Section 2-1 of the Act sets out the objects of the legislation. While a number of objects are listed, the key objectives are the provision of funding for aged care (s 2-1(1)(a)), the promotion of high quality care and accommodation (s2-(1)(b)) and the facilitation of access to aged care services to those who need them (s2-1(1)(e)).
The Act specifically mandates (s2-1(2)) that when construing the objects, due regard must be had to:
(a)the limited resources available to support services and programs under this Act; and
(b)the need to consider equity and merit in accessing those resources.
The Act provides for the payment of a residential care subsidy by the Commonwealth to an approved provider of residential care services for each care recipient in their charge in respect of each payment period – s 42-1, s 43-1. Unless otherwise specified in the Subsidy Principles, a payment period is a calendar month – s 43-2.
The amount of the subsidy payable by the Commonwealth is calculated in accordance with formulae contained in Division 44. In particular the quantum of the subsidy is linked to assessment of the care recipient’s income and assets.
Section 44-22 prescribes a means tested amount calculator, which, inter alia, determines how the value of a care recipients assets are to be determined. Section 44-26A provides that the value of a person’s assets, for the purposes of s 44-2, is to be worked out in accordance with the Subsidy Principles.
Subsection 44-26A(6) provides:
“(6) In working out the value at a particular time of the assets of a person who is or was a homeowner, disregard the value of a home that, at the time, was occupied by:
(c) a close relation of the person who:
(i) had occupied the home for the past 5 years; and
(ii) was eligible to receive an income support payment at the time.
The term “close relation” as used in s 44-26A(6)(c) is defined in s 44-26B(1) to include the child of the person who:
(i)had occupied the home for the past 5 years; and
(ii)was eligible to receive an income support payment at the time.
The Respondent properly concedes (SSIFC para 43) that if the Phillip Street unit was the Applicant’s home and Richard had occupied the premises for the past 5 years, then it can be disregarded when assessing the Applicant’s assets.
The first issue, then, is whether the Phillip Street property was the Applicant’s home at or around the time she entered residential care (12 July 2016).
The term “homeowner” for the purposes of s 44-26B(1) of the Act is defined in s 48 of the Subsidy Principles. So far as is relevant for this matter, the definition is as follows:
“(a) a person who is not a member of a couple is a homeowner if:
(i)the person has a right or interest in the person’s principal home; and
(ii)the person’s right or interest in the person’s principal home gives the person reasonable security of tenure in the home.”
“Principal home” is defined in s 4 of the Subsidy Principles as:
“having the meaning given by s 11A of the Social Security Act other than subsections 11A(8) and (9) (which deal with the effect of absences from the principal home).”
Unfortunately the Social Security Act 1991 does not contain a comprehensive definition of the term “principal home” , instead it contains an inclusive definition only that provides little guidance to the Tribunal. Recourse to various Tribunal and Court decisions is, therefore, necessary.
In addition the Guide to the Social Security Law (the Guide) also provides the Tribunal with some guidance. As the Respondent correctly contends (SSIFC para 36), while the Guide is not binding on the Tribunal, it provides cogent guidance which should generally be followed unless there is good reason for not doing so: Re Drake and Minister for Immigration and Ethnic Affairs (No.2) (1979) 2 ALD 634 at 639.
The Guide, at Instruction 4.6.3.30, contains the following general definition of principal home:
“The principal home is generally the home in which the single income support recipient or couple…lives for the greatest amount of time each year.”
A perusal of the voluminous jurisprudence on the issue of what constitutes a “principal home” or “principal place of residence” or like, leads to the very firm conclusion that the Guide provides sound guidance to the Tribunal.
One early Tribunal determination is Helsham and Repatriation Commission [1986] AATA 145. In that matter the Applicant was a retired dental surgeon who had a residential property in Sydney where he had buried the ashes of his first wife. He subsequently remarried and moved to Queensland where he engaged as an opal miner, while living in a caravan. He rented out his Sydney property but said that he did not wish to sell it.
The Tribunal made the following observations:
“7…Maybe because of his past associations with his first wife, Dr Helsham wishes to keep this home where her ashes are buried but he does not wish to live there. Maybe he does not live there simply because of his interest in opal mining, but what is a person’s ‘principal home’ is, in our opinion, a matter of fact and degree…
11…it seems that whatever reasons may actuate Dr Helsham in keeping his proprietary interest in the house at Cromer, it is not, at the relevant times, his ‘principal home’. It may be that in the future it will become his principal home again, but at the relevant times….it has not been his principal home…”
The Tribunal made reference to a decision of Mayo J of the South Australian Supreme Court in Todd v Nicol [1957] SASR 72 at 76 where his Honour referred to a person’s home as a place where people normally go to eat, sleep and take refuge.
In Re Samek and Secretary, Department of Social Security (1988) 16 ALD 295, a husband and wife owned a house in Haberfield, land near Inverell and home units in Toowoomba. In the period 1985 – 1987 they spent varying periods of time living in Inverell and Haberfield. Whilst living in Inverell time was spent at three different locations: camping on their land, living in a rented house and living rent-free in a house owned by their children. Throughout this period their children remained living in their parents’ house in Haberfield where the parents continued to keep their furniture and most of their belongings. The husband and wife, while staying in the Haberfield house for short periods, spent most of the time in Inverell.
The Tribunal made the following determination (296):
“The Act contains no definition of ‘the principal home’. In most cases, there will be no doubt about it. Typically, the principal home will be the family home, in the sense of being the home in which the couple whose assets are to be assessed have lived for most of their married lives while they have raised their children and in which, at the time of assessment, they continue to live. There will be no question but that they will remain living there for the foreseeable future.
A married couple might also, over the course of their lives, acquire other properties. They might ultimately develop a beach or country house, which is used by the family at odd times during the year for recreational purposes. They might also acquire what are clearly investment properties. In this context, the family home will remain the principal home, even though the couple, as they approach retiring age, might progressively shift the focus of their activities to the holiday house, possibly leaving the family home unoccupied for various periods over the year, or occupied by teenage or young adult children who might wish to remain in the city for study or work purposes. Again, notwithstanding this shift, there will be no difficulty in saying that the family home remains the principal home.
The concept of ‘the principal home’ assumes, however, that there is more than one property which is used as a home. If one moves from home to home, then the home in which one spends most of the time would, logically, be the principal home…Thus, as between the city house and the holiday house owned by a retired couple in my earlier example, the city house would remain their principal home for as long as they spent the bulk of their time there. But once they spent the bulk of their time in their holiday house, it would become their principal home.
A person who owns a residential property in the city and who is in the habit of living there, but who spends the bulk of his or her time travelling around the country, living in hotels, and pursuing business or recreational interests from those hotels, can still be regarded as retaining the city property as his or her principal home.”
CONSIDERATION
Was the Phillip Street unit the Applicant’s principal home?
Ms Howard, on behalf of the Applicant, submits that the Phillip Street unit was her mother’s principal home as at 12 July 2016 for the following reasons (ASP paras 44, 45 and 49, pp.4,5):
(a)The Applicant had no other home at this time;
(b)Richard lived in the Phillip Street home at that time;
(c)Richard lived with the Applicant from 2009 to 2016 at two rented premises in Rowville as he has a significant disability and the Applicant provided personal care and support for him;
(d)If the Applicant had not been hospitalised and suffered brain injuries, she would have relocated to the Phillip Street unit with Richard in April 2016;
(e)The Applicant’s possessions were at the Phillip Street unit at the time;
(f)The Respondent provided no submission as to an alternative address it contended was the Applicant’s home;
(g)Statements made by the Applicant in relation to accurately and honestly declaring her assets for income support purposes do not refute the fact that as at 12 July 2016 this was no longer the case;
(h)The previous statements of the Applicant were made at a time when she had an alternative residence;
(i)While the Phillip Street unit may have been an investment property prior to 2009, subsequently it was subject to ongoing renovations and was uninhabitable and untenanted;
(j)As at 12 July 2016 the Applicant did not have any alternative residence, tenancy agreement, interest in property, or other stable and secure place in which to live. Richard had returned to the Phillip Street unit and the Applicant would have taken up residence there had she not suffered a brain injury prior to renovations being completed; and
(k)In the absence of any other property or residence, the only property and residence must be, by definition, the principal home.
Ms Howard contends that the Respondent focuses on an irrelevant question, namely whether the Phillip Street unit was the Applicant’s principal home or whether some other property was her principal home. Ms Howard contends as follows (ASP para 56):
“At the relevant time the Applicant had no other home. Whilst the transition back to the Phillip Street property was gradual, and the Administrator does not have sufficient information, due to the brain injury sustained by the Applicant, to create documentary certainty, there is significant evidence that supports the contention that the transition to the property was underway, and would likely have concluded with the Applicant relocating entirely in April 2016, but for the intervening medical crisis. It is clear that at some point between 2009 and 2016, the Applicant’s principal home became the Phillip Street property, and she was temporarily absent from this property to both effect the necessary renovations, and provide care and support for her son Richard, both of which are allowable exceptions under s 11A of the Social Security Act 1991.”
Ms Howard relied, in support of her contention, on the decision of Deputy President Groom in MacNamara and Secretary, Department of Education, Employment and Workplace Relations [2012] AATA 40.
Mrs MacNamara, and her two daughters, lived (and owned) a property at St Helens. The family had lived there since 1 July 2005. On 6 February 2010 the family moved to rented premises in Launceston so that the two daughters could attend a private school where both had gained scholarships. The family returned to live in the St Helens property on 16 April 2011. While some furniture was taken to Launceston most remained at the St Helens property. Only the “basics” were taken to Launceston, whilst most furniture and the utility motor vehicle remained at St Helens. The St Helens property was not rented out to any other person, and nobody, other than the family, entered or lived on the property. In the 2010 – 2011 period, the family returned 35 times to St Helens, including most weekends and during school holidays.
Prior to moving to Launceston, Mrs MacNamara placed the St Helens property on the market, with the intention of purchasing a property in Launceston. She was, however, unable to sell the property and could not afford to continue to rent premises in Launceston as well as maintaining the St Helens property. Consequently, the daughters were forced to leave their school in Launceston and return to live in St Helens and attend a local school.
In determining that Mrs MacNamara’s St Helens property remained her principal home for the whole of the period from 6 February 2010 until 16 April 2011, Deputy President Groom gave the following reasons:
“35. It was contended on behalf of the respondent that it was at the rented premises in Launceston that Mrs MacNamara and her daughters lived for most of the relevant period. That was the place where they spent most of their time. It was where the family lived, ate, slept and washed. The visits to the St Helens property, it was argued, were principally to maintain the St Helens property because it was then on the market. The rented house in Launceston was set up as a home and in reality was Mrs MacNamara’s and her family’s principal home. It was said by the respondent that this was where the family generally lived and carried out the usual activities of life. Further it was contended that Mrs MacNamara’s original intention was not to return to St Helens but to sell that house and then build a house in Launceston.
36….the Tribunal however finds that the material before it does strongly support the view that the St Helens property did continue to be Mrs MacNamara’s principal home throughout the relevant period. In reaching that view it finds the following factors to be particularly significant:
(a)Mrs MacNamara’s proprietary interest in the St Helens property remained unchanged throughout the relevant period.
(b)Not only did she continue to own that property but she also remained legally in occupation of it.
(c)Most of Mrs MacNamara’s furniture including her own bed, plates, cutlery, tv sets etc and a motor vehicle she owned remained at St Helens throughout the period.
(d)The St Helens property was not leased to anyone nor did any other person, other than Mrs MacNamara and her daughters, occupy the house at any time during the relevant period.
(e)Throughout the relevant period Mrs MacNamara maintained a strong emotional attachment to the St Helens property. She considered it to be her home. This was in stark contrast to her attitude to the rented Launceston premises….
(f)The Tribunal finds that Mrs MacNamara travelled to the St Helens property approximately 35 times whilst she was living during the week at the Launceston house. These were not occasional visits. They were regular returns to the family home not only to maintain the house for the purpose of sale but to spend time there and to relax at home and keep up friendships and undertake various social activities in the St Helens area.
(g)Mrs MacNamara told Centrelink that if the St Helens property did not sell within 12 months she would return to live there. The move to Launceston was to for a particular purpose namely to advance the children’s education. It was obviously very difficult for Mrs MacNamara to maintain both her house in St Helens and also pay the rent for the Launceston premises.
(h)All of the expenses of ownership and maintenance of the St Helens property continued to be paid by Mrs MacNamara as well as the necessary rates, electricity and other outgoings.”
Ms Howard adopted the above approach of Deputy President Groom and submitted to the Tribunal the following reasons why a determination should be made that the Phillip Street unit was the principal home of her mother (ASP para 56):
(a)The Applicant’s proprietary interest in the Phillip Street property remained unchanged in the period 2009 – 2016;
(b)The Applicant not only owned the Phillip Street property but was in legal occupation of it to the extent it was habitable during the period;
(c)Whilst the Applicant’s possessions were split between her rental property and the Phillip Street unit, by the time she was admitted to hospital all her possessions were at the Phillip Street home;
(d)The Phillip Street property was not leased to anyone, nor did any other person apart from Richard and the Applicant occupy the unit at any time;
(e)The Applicant had an emotional and physical connection to the Phillip Street unit as her home;
(f)The Applicant spent considerable time at the Phillip Street unit from 2009 onwards to oversee and progress the renovations;
(g)While the Applicant had discussed selling the Phillip Street unit and moving to Tasmania, she had not done so and it is impossible to ascertain her thoughts prior to her incapacitating brain injury;
(h)The Applicant had two casual jobs and both she and Richard were income support recipients. This negatively impacted on her capacity to quickly renovate the Phillip Street unit and also motivated her to return to the unit and living with Richard rather than paying additional rent money. She could not afford to pay rent once she finished working and her intention was to return to live in the unit as soon as physically possible.
(i)All of the expenses of the Phillip Street unit were paid by the Applicant at all times.
A perusal of the material before the Tribunal does not support Ms Howard’s contention that the Phillip Street property was the Applicant’s principal home at any time up until she was admitted to hospital in 2016. The following factors lead to this conclusion:
(a)The Applicant at no stage claimed in her dealings with Centrelink that the Phillip Street unit was her home. On the contrary, she informed Centrelink that it was simply an investment property. For example, in an Income and Assets form submitted to Centrelink on 25 June 2008, the Applicant, in response to Question A24: “Do you (and/or your partner) own your own home but live somewhere else?”, wrote this explanation – Exhibit 2 p.53: “Do not own own Home only investment Unit”. The Applicant also described the unit as a “Rental Property” – p.56;
(b)When the Applicant applied for the Age Pension she identified her home address as her rented property in Rowville – Exhibit 2 p.24;
(c)The Applicant claimed rent assistance in respect of the Rowville premises. In that form, she described the Phillip Street unit as “investment property only” and “investment property is rented out. I own no other real estate” – Exhibit 2 p.76;
(d)When entering residential tenancy agreement in April 2014 for new rental premises in Rowville, the Applicant’s address was given as Lidgate Avenue, Rowville and not Phillip Street – Exhibit 1 T7 p.37.
(e)The Applicant was paid rental assistance since at least 1996, and, as the Respondent correctly contends (SSIFC para 53), this is inconsistent with the assertion that the Phillip Street property was at any time her principal home.

Ms Howard has pointed out on a number of occasions that the Phillip Street property was purchased for the specific purposes of providing premises for Richard to live in – Exhibit 1 T19 p.120.
Ms Howard also said that the Applicant “sometimes stayed at the unit throughout the years” and “In the years prior to Mum going into hospital Mum stayed at the unit a great deal, renovating the unit, and trying to sell the unit”. She also states: “Mum planned to sell the unit and purchase a new principal home interstate and live in the new home with her son Richard” – Exhibit 1 T19 p.120.
Clearly, based on the information provided by Ms Howard, there was no intention on the part of the Applicant to live in the Phillip Street unit. Her intention was to renovate it so she could sell it and move to Tasmania. Insofar as she visited the unit it was for the purpose of renovation not as a residence. Throughout the lengthy period of renovation she continued to live in, and rent, premises elsewhere. Her visits to the Phillip Street property were not based on sentiment or to rekindle friendships with neighbours, but for the purely utilitarian purposes of readying it for sale.
Further, even if the Applicant’s visits to the Phillip Street property were for more sentimental or family oriented reasons (for which there is no evidence), it is patently clear that the vast bulk of the Applicant’s time was spent in her rented premises. This is for the obvious reason that Ms Howard highlighted: “Richard…had to move out while the later renovations were going on” – p.120. In the Applicant’s Statement of Position Ms Howard specifically asserted (para 62): “Richard could not reside in the Phillip Street residence while it was undergoing renovations”. In short, living in the Phillip Street property was rendered difficult due to the extensive renovations which took years to complete.
The Respondent refers to statements made by the Applicant’s sister (Dulcie Ede) and brother-in-law (Edmund Kirwan) concerning her living arrangements – SSIFC para 54. Neither of those persons was called to give evidence as was a M E Beaver of Raine and Horne. In any event, the information provided by both Ms Ede and Mr Kirwan is brief and in nature of hearsay and not particularly helpful. It does not provide any solid basis for assisting the case advanced by Ms Howard. Further, it was not addressed by Ms Howard in either her written contentions other than the comment: “Not disputed”.
Using the factors outlined by Deputy President Groom, the evidence before the Tribunal leads to the following conclusions:
(a)The Applicant’s proprietary interest in the Phillip Street property has remained unchanged since approximately 2001, and certainly during the 2009 – 2016 period;
(b)There is no evidence that the Applicant was legally in occupation of the unit between 2009 – 2016. Her visits to the unit while frequent at times, appear to have been motivated solely by the aim of facilitating the renovation and not for the purposes of habitation;
(c)During much of the 2009 – 2016 period the Applicant used the Phillip Street property for storage purposes. As Ms Howard stated in her letter of 12 September 2016: “Richard helps Mum by….storing her household items (personal affects, family items handed down etc) at the unit for no cost”- p.102. Unlike MacNamara, the items left at Phillip Street were for storage purposes and not personal use;
(d)The Phillip Street property was only “leased” to Richard, and remained vacant for much, if not almost all, of the 2009 – 2016 period;
(e)There is no evidence that the Applicant had any emotional attachment to the Phillip Street property. It was purchased to provide Richard with a home, the Applicant never used it as her principal home, and there is no evidence that her visits to the home were other than for the purposes of seeing her son or during the renovations. The evidence before Deputy President Groom was direct and compelling – see MacNamara at [36](e). Here, apart from Ms Howard’s assertions, there is no evidence of the Applicant’s views of the Phillip Street property. Insofar there is any evidence on this point, it suggests that the Applicant viewed the Phillip Street property merely as an investment which would be improved and disposed of in order that she could move back to Tasmania;
(f)There is no evidence how regularly the Applicant visited Phillip Street prior to 2009, although the Tribunal assumes that she frequently visited the premises to see her son. The visits after 2009 would have been more regular, but they were purely focused on renovation and not for any emotional or family reasons;
(g)There is scant evidence that the Applicant had any long term intention of living in the Phillip Street unit. The clear tenor of the evidence is that she intended to sell it and move to Tasmania. If her intention changed, then there is no direct evidence that assists the Tribunal in reaching such a conclusion;
(h)At no stage prior to 2016 did the Applicant treat the Phillip Street unit as her principal home, nor is there any direct evidence that the renovation of the unit was for the sole purpose of selling it, rather than improving it so she could reside in it;
(i)The expenses of owning and maintaining the Phillip Street premises were almost entirely paid for by the Applicant.
Whether the Tribunal applies the “majority of the time” test, or the place where the Applicant normally went to eat, sleep and took refuge test, or a more subjective test of emotional attachment and belonging, the same result ensues.
The Applicant never lived in the Phillip Street premises for any long period of time. The Applicant never stayed overnight on a regular basis. There is no evidence that she viewed the Phillip Street property other than a place where son could live and which she would sell when she finished working so she could move with Richard to Tasmania. If she had other intentions, there is no evidence of them, and due to her state of health, it is now impossible to ascertain them.
Ms Howard contends (ASP para 1(d)) that when the Applicant entered age care she had no other home than Phillip Street and all her belongings were stored there.
This contention cannot be sustained. It is not disputed that when the Applicant was hospitalised in January 2016 she was residing at Rowville. Richard was also living with her. It is also not disputed that Richard moved back to Phillip Street on 15 April 2016 – Exhibit 3 p.4. By this time the Applicant had suffered a brain injury, and on 19 April 2016 she was transferred to Queensland.
The fact that due to her incapacitation, the Applicant’s belongings were moved from Rowville to Phillip Street is irrelevant. The belongings had to be stored somewhere. They were not moved there at her request as she was no longer able to take care of her affairs. Nor were they moved there so that she could leave the hospital and reside there. Her belongings were moved there because she was not able to continue to live independently and they could be stored without incurring any fees. If one was to determine what the Applicant’s principal home was after January 2016, one would form the view it was either the hospital she was admitted to or the aged care facilities she later moved into. At no stage was the Phillip Street unit her principal home.
In conclusion the Tribunal finds that the Phillip Street property was not the Applicant’s principal home as at 12 July 2016.
Did Richard occupy the Phillip Street unit for the past five years?
Having determined that the Phillip Street property was not the Applicant’s home, it is not necessary to consider whether Richard was occupying it for the past 5 years – May and Secretary, Department of Health [2016] AATA 881 [at 7]. However, if I am in error I will now address the question of Richard’s occupancy of the Phillip Street unit.
The Tribunal accepts that the term “past five years” in s 44-26A(6)(c)(i) refers to five year period immediately prior to the Applicant entering residential care on 12 July 2016, and, as such, covers the period 12 July 2011 until 11 July 2016.
Departmental records (Exhibit 3 pp.4-5), record Richard’s residences as follows:
(a)Phillip Street - 6 July 1995 – 2 July 2009;
(b)Lidgate Av Rowville – 3 July 2009 – 30 June 2014;
(c)Willow Av Rowville - 1 July 2014 – 14 April 2016;
(d)Phillip Street - 15 April 2016 to the present.
This state of affairs was not disputed by Ms Howard. However, she made the following submissions – ASP paras 62, 64:
“The fact that Richard could not reside in the Phillip Street residence while it was undergoing renovations does not change the fact that it was and is his home. The fact of his disability prevented Richard from spending time at the property in the way that the Applicant did; he simply could not have managed this level of chaos, interaction and work in progress. Richard’s residence of the Phillip Street home was continuous from 1995 to 2016, save and apart from the period when he physically could not stay there due to the works being carried out…
Richard Kirwan has a significant disability and he temporarily relocated from his home whilst he needed caring support from his mother, and the renovations were undertaken. His occupation of the home was not replaced by other tenants; or other family members, apart from his mother’s gradual transition to the home unit; or any alternative use of the property. When renovations were completed he returned to the home unit. In the five years prior to the relevant time and during which the property was habitable – i.e. 3 July 2004 to 2 July 2009 – Richard Kirwan did occupy the home unit.”
The Respondent drew the Tribunal’s attention to Hughes and Secretary, Department of Health and Ageing [2007] AATA 1558. In that matter Professor Walker considered what the phrase “occupied the home” connoted:
“30. On general principles, that language would not seem to require continuous residence throughout the year, and it is true that since 1996 Mrs Follent has spent significant amounts of time at the house, although never as much as half a given year, and generally between one and four months. She arranged for the telephone to be connected or transferred into her own name but did not move her own furniture into the house. Her postal address remained at Gymea and it is clear that her principal place of residence was the family home in that suburb. Mr Follent argued that emotionally his wife was dividing her time equally between the two residences, but occupation is predominantly a physical fact….”
As highlighted by Professor Walker, the task required of the Tribunal when ascertaining if a close relative has occupied the home for the past 5 years is a relatively straightforward. While continuous residence is not required, there must be evidence that the relevant person has resided in the premises for most of the previous five years. The fact that a person may visit the premises and stay overnight from time to time is not sufficient. Nor is evidence of emotional attachment, or living arrangements outside of the relevant five year period. The test of occupancy is clear: has the close relative been living in the premises for most of the previous five years? Clearly from time to time there may reasons why this cannot be met, but the test of occupancy could still be made out. For example, if a person went on an extended holiday or was admitted to hospital for a lengthy period. However, in those instances, the break in occupancy is not born of any intention to change living arrangements.
The evidence before the Tribunal clearly demonstrates that Richard was living in Rowville from 2009 and, to quote Ms Howard, “could not“ reside at Phillip Street during the renovations.
The fact that Richard, no doubt, regarded the Phillip Street unit as his own, and wanted to move back, does not derogate from the fact that for the previous six or seven years he was living with his mother in rented premises in Rowville. The test of occupancy explained by Professor Walker has not been satisfied.
Does Richard have a life interest in the Phillip Street property?
Ms Howard contended that Richard continued to live in the Phillip Street unit as a life tenant under a reversionary situation – Exhibit 1 T19 pp.121 – 122.
The Respondent contested this assertion submitting that the evidence did not support any finding that Richard had a life interest in the Phillip Street unit – SSIFC paras 69 – 76.
This issue arises because the value of any life interest of the relevant person may be disregarded in calculating the value of the persons assets pursuant to s 1118 of the Social Security Act 1991.
The Respondent carefully outlined how life interests can be created (SSIFC para 71) and submitted that there was no evidence of any such arrangements.
Ms Howard did not challenge in her written submissions the contentions of the Respondent – ASP para 69.
However, any suggestion that Richard had a life interest in the Phillip Street property can be disposed of by recourse to the undisputed evidence that the Applicant unilaterally determined to sell the Phillip Street property. The documentation prepared by Raine & Horne in 2014 for the sale of the unit is said to be “Prepared for: Barbara Kirwan” – Exhibit 1 T19 p.123.
The evidence suggests that it was the Applicant who determined to renovate the unit, beginning in 2009. The Applicant paid for all the costs of the renovation – Exhibit 1 T27 pp.145 – 171. The Applicant determined to sell the unit, and the Applicant directly dealt with Raine & Horne. There is no material before the Tribunal that Richard played any part in any of these developments, nor was he a co-signatory to any relevant documentation, and none of the various invoices for renovating the unit mention him. In short, the material directly points to the Applicant having sole and unilateral control over the Phillip Street unit unconstrained by any informal arrangement in place for Richard to live in the premises.
The Tribunal therefore finds that Richard did not have a “life interest” in the Phillip Street unit.
CONCLUSION
It follows from the above findings that the Respondent correctly included the value of the Phillip Street unit in the Applicant’s assets.
This result flows clearly from the evidence presented and the statutory provisions under consideration.
While Ms Howard has argued her mother’s case with vigour and presented the best possible contentions in the circumstances, the evidence and the law require the Tribunal to make the findings it has.
In doing so I refer to the observation of Professor Walker in Hughes where he addressed the issue of what constitutes ‘occupation” and then made this observation (at [31]):
“That interpretation is consistent with the implicit legislative purpose, which is to prevent a situation in which a house could be sold from under a close relative or carer who has been living there and had no other residence to go to.”
This is exactly what will occur in this matter. The costs of the Applicant’s care will require the disposition of the Phillip Street property. Richard will be rendered homeless. Having reached middle age and no longer with the loving care of his aged mother, he will be placed in a very sad and invidious position. It is not surprising that Ms Howard has fought as long and as vigorously as she has, motivated no doubt by the love of her mother and brother and reinforced by the desire to prevent an injustice occurring.
The Tribunal is not vested with any discretion in matters such as these. However, it is appropriate that the Tribunal draw to the attention of the Respondent that although the legal situation is clear, there is a moral imperative to apply the aged care and social security law in a manner which accords with the expectations of the Australian community. This requires a consideration as to whether the exercise of appropriate discretion can be considered so that Richard is not rendered homeless and at risk. Such a scenario would not only be harsh but would be unlikely to result in any cost savings for the taxpayer. On the contrary, any short term gain would be offset by long-term costs resulting from Richard’s homelessness and all of the consequences that may flow therefrom. If, in the scheme of things, such a scenario can be avoided, it would be in the public interest that every effort be taken for this to occur.
DECISION
The decision under review is affirmed.

I certify that the preceding 103 (one hundred and three) paragraphs are a true copy of the reasons for the decision herein of Deputy President J Sosso

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Associate
Dated: 31 January 2018

Date of hearing: 19 December 2017

Advocate for the Applicant: Ms Sharyn Howard

Advocate for the Respondent: Mr Rick McQuinlan

Solicitors for the Respondent: Department of Human Services

[2018] AATA 109

31 January 2018

Key Legal Topics

Areas of Law

Administrative Law

Statutory Interpretation

Legal Concepts

Judicial Review

Statutory Construction

Procedural Fairness

Standing

Date of hearing:	19 December 2017
Advocate for the Applicant:	Ms Sharyn Howard
Advocate for the Respondent:	Mr Rick McQuinlan
Solicitors for the Respondent:	Department of Human Services