Lamba and Anor and Secretary, Department of Family and Community Services

[2003] AATA 1244

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2003] AATA 1244

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No N2003/1010

GENERAL ADMINISTRATIVE  DIVISION		)
Re		JAGDISH KAUR LAMBA SURENDRA SINGH LAMBA

Applicant

And SECRETARY, DEPARTMENT OF FAMILY & COMMUNITY SERVICES

Respondent

DECISION

Tribunal Dr M E C Thorpe, Member

Date10 December 2003

PlaceSydney

Decision The decision under review is affirmed.

[Sgd] Dr M E C Thorpe   Member

CATCHWORDS

SOCIAL SECURITY – classification of block of land purchased from proceeds of sale of unit as an assessable asset – block of land not an exempt asset – block of land can not be classified as principal home – decision affirmed

LEGISLATION

Social Security Act 1991, ss. 11(1), 11(7), 1064-G1, 1064-G2, 1064-G3, 1118(1), 1118(2)

REASONS FOR DECISION

10 December 2003   Dr M E C Thorpe, Member  

1.      This is an application for review of the decision of the Social Security Appeals Tribunal (“SSAT”) dated 14 May 2003, affirming the Centrelink decision of 14 April 2003 to class the block of land purchased from the sale of a unit as an assessable asset.

2.      The issue before the Tribunal was whether the block of land purchased with the funds from the sale of a unit in Northlakes, Darwin (“the Northlakes Unit”) was an assessable asset for the purposes of determining pension rates. Mrs Jagdish Lamba represented herself and her husband, Mr Surendra Lamba. Mrs Lamba informed the Tribunal that her husband is now fully incapacitated and has been in a nursing home since August 2003. Mrs Lamba has power of attorney. Mr Larcombe of the Centrelink Service Recovery Team represented the Secretary, Department of Family and Community Services.

3.      The Tribunal had before it the Section 37 documents (“T documents”). No other documents were admitted into evidence.

4.      Mr and Mrs Lamba jointly owned the Northlakes Unit in which they lived until they moved to Sydney in August 2000. The Unit was rented from 2 August 2000 until it was sold on 29 August 2002 for $147,500. Since coming to Sydney, the Lamba’s have lived in rented property as outlined at T25/62.  On 19 December 2002, Mrs Lamba purchased a block of land in her name for $299,000. This purchase was made with the proceeds of the sale of the Northlakes Unit, plus other savings. Mrs Lamba said that she intended to build a home on the land. At this point in time she said she had Council approval to build a house on the block of land, but that no building had commenced. No documents of Council approval were made available to the Tribunal, but neither were they requested.

5.      Mr Lamba has been in a nursing home since August 2003 and Mrs Lamba said he was in receipt of a pension. Mrs Lamba explained to the Tribunal that she considered that they were victims as they are first generation migrants, without a clear understanding of the requirements of Centrelink. They had suffered financial hardship and during this time she had helped her husband in his job as a lecturer in Electrical engineering at the University of Northern Territory. She had received no payment for this work. Her husband had become unwell and for this and other reasons they moved to Sydney. She currently works at K Mart but life’s events have caused mental, physical and emotional trauma. Mrs Lamba considered there was provision in the law to allow Centrelink to decide that the block of land purchased in 2002 should not be assessed as an asset for the purposes of Centrelink payments. She said she understood Centrelink’s rules, but was appealing because she did not agree with the law.

6. Mr Larcombe said there was limited provision to alter the decision. He referred to section 1064-G1 of the Social Security Act 1991 (“the Act”) concerning the effects of assets on maximum payment rate and how to work out the effect of a person’s assets on the rate of payment of disability support pension, age pension or carer pension payment made to them. Section 1064-G2(a) states that the value of the assets of a member of a couple is 50 per cent of the sum of the person’s assets and the value of the person’s partner’s assets. The assets value limit is set out at section 1064-G3. The current limit for a non-homeowner is $311, 000. The figures available to the Tribunal indicate that if the block of land were to be regarded as an assessable asset, the combined assets of Mr and Mrs Lamba would be higher than the assets value limit. The asset tests definition comes under section 11(1) of the Act and ’exempt assets’ mean assets described in any of the paragraphs 1118(1) (a) to (s). Centrelink did not consider the block of land as coming within any of the exempt provisions.

7. The first difficulty for the Lambas was that they did not qualify as having a ‘principal home’. ‘Principal home’ is not defined in the Act but paragraph 20 of the SSAT decision states that “[principal home] has been held in cases in the Federal Court and the Administrative Appeals Tribunal to mean the family home or residence where a person lives and spends most of his/her time.” The Tribunal considered Section 11(7) of the Act, which states:

“11(7)A residence of a person is to be taken to continue to be the person’s principal home during:

(a)any period (not exceeding 12 months) during which the person is temporarily absent from the residence.

8. For the purpose of this decision, the evidence was that the Lamba’s left the Northlakes Unit in August 2000, did not return until the sale of the unit on 29 August 2002, and have lived in various rental accomodation in Sydney from August 2000 until this current time. Section 11(7)(a) of the Act allows for a 12-month period during which time the person may be absent from the residence. The Lambas were absent from the Northlakes Unit for 24 months and therefore the unit did not continue to be their ‘principal home’.

9. The next difficulty for the Lambas was that I do not consider that they satisfy subsection 1118(2) of the Act, which states:

“1118(2)        If

(a)       a person sells the principal home: and

(b)the person is likely, within 12 months, to apply the whole or part of the proceeds of the sale in acquiring another residence that is to be the person’s principal home;

so much of the proceeds of the sale as the person is likely to apply in acquiring the other residence is to be disregarded during that period for the purposes of this Act.”

10.     Another difficulty for the Lambas was that the Northlakes Unit was not and has not been their ‘principal home’ since August 2000, a period of 2 years. Another issue was whether a block of land can be regarded as the ’principal home’. The block of land is considered an asset, meaning property (including property outside Australia). The Tribunal notes the evidence of Mrs Lamba that she intends to build a home on the block of land, but at this point in time there is no dwelling on the block in question.

11. There is no provision in the Act to provide for a block of land with the intention to build, as being a person’s principal home. Subsection 1118(1) states that the value of the ’principal home’ of a person should be disregarded in calculating the value of a person’s assets for the purposes of rates of payment of most Centrelink payments. The Lamba’s unfortunately do not qualify as having a ’principal home’ at this point in time. If in the future they were to build a dwelling on the block of land and that was to become their ‘principal home’ the Lamba’s could then make a fresh application to Centrelink for reconsideration of their assets for the purpose of calculating their rate of Centrelink payments.

12. For the purpose of this decision I therefore consider the block of land is assessable real estate and that the Northlakes Unit ceased to be the Lambas’ ‘principal home’ on 2 August 2000. This means that the Lambas do not qualify for the 12-month exemption from the asset test for the use of funds to purchase a property to be used for a new home. Also to date there is no residence on the block of land and it is not possible to consider it as a home or principal residence. Unfortunately I do not consider there to be any provision in the Act to grant an exemption or special consideration.

13.     The Tribunal therefore affirms the decision under review.

I certify that the 13 preceding paragraphs are a true copy of the reasons for the decision herein of Dr M Thorpe, Member

Signed:         A. Krilis
  Associate

Date/s of Hearing  3 December 2003
Date of Decision  10 December 2003
Representative for the Applicant               Self Represented
Representative for the Respondent          Mr James Larcombe