Kleinhans and Secretary, Department of Employment and Workplace Relations
[2007] AATA 1885
•19 October 2007
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION 2007 AATA 1885
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2007/2521
GENERAL ADMINISTRATIVE DIVISION ) Re Stephen Kleinhans Applicant
And
Secretary, Department of Employment and Workplace Relations
Respondent
DECISION
Tribunal Senior Member P McDermott, RFD Date19 October 2007
PlaceBrisbane
Decision The Tribunal affirms the decision under review.
................[Sgd]..............................
SENIOR MEMBER
CATCHWORDS
SOCIAL SECURITY – Administration of the Act – applicant entitled to newstart allowance for certain periods – appeal against decision of respondent lodged outside of 13 week timeframe – whether payment can be made for those earlier periods for which applicant otherwise entitled to payment – operation of Act precludes back pay where lodged out of time – decision under review affirmed
Administrative Appeals Tribunal Act 1975: s34J
Social Security (Administration) Act 1999: s 11(1), 152(4)
Social Security Act 1991 Part 2.12
REASONS FOR DECISION
19 October 2007 Senior Member P McDermott, RFD Introduction
1. On 8 December 2004 Mr Stephen Kleinhans made a claim for newstart allowance. On 22 December 2004 Centrelink rejected that claim because of the value of his assets. That decision was later affirmed by a complex review officer of Centrelink.
2. The Social Security Appeals Tribunal has decided that Mr Kleinhans was eligible for the payment of newstart allowance for certain periods of 2004 and 2005, being 8 December 2004 – 14 April 2004; and 12 May 2005 – 28 August 2005. That Tribunal also decided that because of the operation of social security law no payment of newstart allowance can be made for those periods.
3. I have to decide whether under social security law Mr Kleinhans can be paid newstart allowance for those periods in 2004 and 2005.
4. The parties have agreed that the application be ‘heard on the papers’ and so, pursuant to section 34J of the Administrative Appeals Tribunal Act 1975, I determined the application in the absence of the parties, on the basis of the documents before me and without holding a hearing.
Reviewable decision
5. The decision under review is a decision of the Social Security Appeals Tribunal which was made on 23 May 2007.
Issues
6. One Issue was whether Mr Kleinhans is eligible for payment of newstart allowance from 8 December 2004 to 14 April 2005; and from 12 May 2005 to 28 August 2005. It has been conceded that he was eligible for the payment of newstart allowance during those periods.
7. The remaining issue for me to consider is whether 152(4) of the Social Security (Administration) Act 1999 (the Administration Act) precludes the payment of newstart allowance to Mr Kleinhans prior to 12 February 2007.
Background
8. Mr Kleinhans was a director and secretary of Kedcorp Constructions Pty Ltd ACN 010 891 004 (‘Kedcorp’) (see Historical Personal Name Extract, ASIC: T19 at fol. 83).
9. On 22 November 2004 the Supreme Court of Queensland made an order that Kedcorp be wound up and appointed a liquidator for that purpose ( Order, Supreme Court of Queenland, 22 November 2004: T4 at fol. 41).
10. On 8 December 2004 Mr Kleinhans made a claim for newstart allowance. On 22 December 2004 his claim was rejected by Centrelink. The reason given for the rejection of the claim was because the value of Mr Kleinhans’ assets exceeded the allowable asset value applicable to a claim for newstart allowance (T5 at fol 42).
11. Mr Kleinhans requested the reconsideration of the decision of Centrelink. On 16 March 2005 the complex assessment officer of Centrelink affirmed the original decision to reject the claim for newstart allowance. Mr Kleinhans then provided additional information to Centrelink and requested that the complex assessment officer reconsider the previous decision.
12. On 1 August 2005 the complex assessment officer decided that Mr Kleinhans not be granted newstart allowance. That officer made a variation to his decision which resulted from an assessment of the additional information supplied by the applicant. The effect of the variation was to reduce the applicant’s attributable assets from $1,345,500 to $393,787. At the request of Mr Kleinhans, the reaffirmed decision was forwarded for review by an authorised review officer.
13. On 7 September 2005 an authorised review officer affirmed the decision to reject Mr Kleinhans’ claim for newstart allowance. The basis of that decision was that the attributable assets of Mr Kleinhans exceeded the assets value limit.
14. On 12 February 2007 Mr Kleinhans sought a review of the decision by the Social Security Appeals Tribunal.
15. On 23 May 2007 the Social Security Appeals Tribunal set aside decisions made by Centrelink on 22 December 2004 and 16 May 2005 to reject the claim of Mr Kleinhans for newstart allowance.
16. The Social Security Appeals Tribunal substituted a decision that Mr Kleinhans be granted newstart allowance from 8 December 2004 to 14 April 2005 and from 12 May 2005 to 28 August 2005. That Tribunal also made a decision that no payment of newstart allowance can be made for the periods stated in the substituted decisions because of the operation of subsection 152(4) of the Administration Act.
Legislative framework
17. Part 2.12 of the Social Security Act 1991 provides that to receive newstart allowance a person must be both qualified and that it must be payable to that person. Whether newstart allowance is payable to a person is dependent upon the value of a person’s assets.
18. The Social Security Act provides that newstart allowance is not payable if the value of a person’s assets is more than the person’s assets value limit: see s 611(1). A person’s asset value limit is worked out using the table contained in subsection 611(2) of the Social Security Act. The Social Security Appeals Tribunal found that by reference to the table, Mr Kleinhans’s asset value limit was $336,500 as at and after 22 November 2004. The Secretary has conceded that this finding is correct. I am also satisfied that this finding is correct,
Assets
19. Mr Kleinhans owned 100% of the shares of Kedcorp and controlled at least 50% of the voting interests. Accordingly, he was regarded by Centrelink as the controller of Kedcorp [T39 at fol 151].
20. As the owner of 100% of the shares of Kedcorp, Mr Kleinhans was attributed for social security purposes with Kedcorp’s assets. As at 31 December 2003 the company had a net asset value of $1,484,079.00 (see Draft Balance sheet, 31 December 2003: T29 at fol 131). On 31 December 2003 the applicant’s asset value solely considered on the basis of the net asset value of the company exceeded the allowable asset value limit.
21. On 22 November 2004, Kedcorp was placed in liquidation and the control of the company passed to the appointed liquidator. The Secretary has conceded that while Mr Kleinhans may still have owned 100% of Kedcorp’s shares at that time of liquidation, he had no voting or controlling interest. The question was also raised whether as a consequence Mr Kleinhans could at that time be attributed with the value of Kedcorp’s assets. There may well be situations where a company that is wound up on the ground of insolvency actually provides for a surplus which can be paid to a shareholder, however I am satisfied this is not such a case. I also mention that Mr Kleinhans later became bankrupt.
Consideration
22. I have already mentioned that that on 7 September 2005 the authorised review officer affirmed the decision to reject the applicant’s claim for newstart allowance on the basis that the applicant’s attributable assets, as varied, still exceeded the applicant’s assets value limit {T39 at fol 144]. I am satisfied that the authorised review officer had overvalued the assets of Mr Kleinhans.
23. The Secretary has also properly conceded that at the time of the liquidation of Kedcorp, the attributable asset value of Mr Kleinhans was less than the asset value limit. Mr Kleinhans was therefore not precluded from the payment of newstart allowance once the company was placed in liquidation.
24. Because of the operation of s 11(1) of the Administration Act, Mr Kleinhans had to lodge a claim before he became eligible for the payment of newstart allowance. He lodged his claim on 8 December 2004.
25. The Social Security Appeals Tribunal determined that he should have been granted newstart allowance from 8 December 2004 to 14 April 2005 and from 12 May 2005 to 28 August 2005. The Secretary has also properly conceded the correctness of this ruling of that Tribunal.
26. In making a decision I have to apply the provisions of s 152(4) of (the Administration Act). This provision provides as follows:
If:
(a) a person is given written notice of a decision under the social security law; and
(b) the person applies to the SSAT more than 13 weeks after the notice was given for review of the decision; and
(c) the SSAT varies the decision or sets the decision aside and substitutes a new decision; and
(d) the effect of the decision of the SSAT is:
(i) to grant the person's claim for a social security payment or a concession card; or
(ii) to direct the making of a payment of a social security payment to the person or the issue of a concession card to the person, as the case may be; or
(iii) to increase the rate of the person's social security payment;
the social security law has effect as if the decision under review had taken effect on the day on which the application was made to the SSAT for review of that decision.
27. Mr Kleinhans was advised of the operation of s 152(4) of the Administration Act. This was done when the authorised review officer wrote to Mr Kleinhans on 7 September 2005. The letter contained the following passage which explained to him the effect of s 152(4):
If you think my decision is wrong, you can appeal to the Social Security Appeals Tribunal (SSAT). If you decided to appeal, it is important to do so within thirteen weeks of receiving this letter. If you appeal after thirteen weeks and the SSAT decided arrears are payable, these may be backdated only to the date your appeal was received by the tribunal. Details of how to appeal are included in the enclosed SSAT pamphlet. If you don’t agree with the decision of the SSAT, you can appeal to the Administrative Appeals Tribunal (AAT).
28. I consider that this letter was proper notice under s 109 of the Administration Act.
29. Mr Kleinhans made his application for review to the Social Security Appeals Tribunal on 12 February 2007. This is certainly more than 13 weeks after he was notified of the decision that the authorised review officer made on 7 September 2005. I appreciate that the true financial position of Mr Kleinhans was only evident after 2007. However, this fact cannot oust the operation of s 152(4) of the Administration Act. There is no scope for me to decide in favour of Mr Kleinhans notwithstanding that the outcome may have otherwise have been favourable.
30. I find that despite his eligibility to be paid newstart allowance from an earlier date, Mr Kleinhans cannot be paid newstart allowance for any period for which he may have been eligible before 12 February 2007.
Decision
31. The decision of the Social Security Appeals Tribunal of 23 May 2007 is affirmed.
I certify that the 31 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member P McDermott, RFD.
Signed: .....................................................................................
B. Hitchcock, Personal AssistantHeard on the papers
Date of Decision 19 October 2007
0
0
0