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

This matter concerned a review of a decision by the Secretary of the Department of Social Services regarding the applicant's eligibility for an aged pension, specifically concerning the asset test and gifting provisions. The applicant and his wife had sold their share in a unit trust to his business partner and his wife. The core of the dispute revolved around the valuation of this share at the time of sale, which impacted the amount considered to have been gifted for the purposes of the social security legislation. The case was heard by Emeritus Professor P A Fairall, Senior Member.

The legal issues before the Tribunal were to determine the true value of the applicant and his wife's interest in the unit trust at the time of its sale, and consequently, the amount that should be considered a gift under the social security legislation. This required an assessment of the financial position of the unit trust, including its assets and liabilities, and whether the sale price of $200,000 accurately reflected the market value of the applicant's share.

The Tribunal found that the valuation provided by the applicant's accountant, which suggested the share was worth "nil value" or a "fair value" of $200,000, was based on a flawed analysis. The Tribunal reasoned that the value of the trust was fundamentally determined by the net market value of its underlying assets, namely the industrial units, rather than the perceived difficulty in selling intangible shares in a private trust. The Tribunal noted that the business partner and his wife were willing buyers and that the trust's assets significantly exceeded its liabilities. The Tribunal determined the value of the applicant and his wife's share in the trust at the time of sale to be $430,501.38.

The reviewable decision was set aside and remitted to the respondent for reconsideration. The Tribunal found that the gifted amount was $230,501.38, representing the difference between the determined market value of the share and the sale price.