Lapanne and Secretary, Department of Family and Community Service S

[2003] AATA 940

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2003] AATA 940

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q2002/749

GENERAL ADMINISTRATIVE  DIVISION		)
Re		STEPHEN LAPANNE

Applicant

And SECRETARY, DEPARTMENT OF FAMILY & COMMUNITY SERVICES

Respondent

DECISION

Tribunal Deputy President Don Muller

Date23 September 2003 

PlaceBrisbane

Decision The Tribunal affirms the decision under review.

..............SIGNED.................................

D.W. MULLER

DEPUTY PRESIDENT

CATCHWORDS

SOCIAL SECURITY – disability support pensioner – the beneficiary of a trust earning income – overpayment – no special circumstances

Social Security Act 1991

REASONS FOR DECISION

Deputy President Don Muller       

1.      This is an application to review a decision to raise and recover an overpayment of Disability Support Pension (DSP), in the sum of $8,586.67, paid to Stephen Lapanne between 11 July 1996 and 22 May 2001, and to recover the said overpayment at the rate of $113.00 per fortnight from his ongoing DSP payments.

2.      The Applicant, Stephen Lapanne, was born on 13 May 1970.  He has received a DSP since 1986 in respect of a profound intellectual impairment which he has had since birth.

3.      The following matters are not in dispute and the Tribunal finds as follows:

(a)The Applicant cannot care for himself.  He has lived with his parents all of his life except for a short period during an unsuccessful trial of living in supported accommodation.  He cannot engage in conversations but he can say a few words.

(b)The Applicant’s father, John, is 80 years of age and in poor health.

(c)The Applicant’s mother, Carmel, is 72 years of age and also in poor health.

(d)John and Carmel are now retired farmers.

(e)Out of concern for the Applicant’s future, John and Carmel took some advice from an accounting firm about the possibility of setting up a trust fund for the Applicant.  They were concerned that when they were finally not able to attend to their son’s needs, he may be liable to be “ripped off”.

(f)After various models of potential trusts were discussed, John and the Applicant’s sister, Andrea, became trustees of the Stephen John Lapanne Trust from the date of its execution in 1994.  The Applicant was the sole beneficiary.

(g)After the Trust was established, Carmel initially loaned the trust $50,000.  She later loaned the Trust further amounts of $80,050 in the 1996/97 tax year;  $9,000 in 1997/98;  $10,000 in 1998/99 and $3,0000 in 1999/2000.

(h)No distributions were ever made to the Applicant.  Interest generated by the deposits in the account remained in the account.

(i)The accountant did not inform John and Carmel that the arrangement would affect the rate of payment of the Applicant’s DSP.

(j)The “distributions” to the Applicant, which remained in the account, and were included in the Applicant’s tax returns in respect of financial years were as follows:

Financial Year  Distribution

1995/96  $    691.00

1996/97  $     858.00

1997/98  $     563.00

1998/99  $  6,453.00

1999/2000  $11,911.00

(k)Neither John nor Carmel advised Centrelink about the distributions because they did not think that they amounted to “income”.

(l)A cross data match between Centrelink and the Australian Taxation Office revealed that the Applicant appeared to have an income which had not been notified to Centrelink.

(m)The rate of DSP is subject to an assets and income test.  The Applicant’s rate of DSP was recalculated for a period of five years.  It was initially determined that he had been overpaid $20,228.  However, after the nature and origin of the money in the Trust account was sorted out between Centrelink, John and his accountant, the overpayment was recalculated to $9,194.67 and then later reduced to $8,586.67.

(n)As a result of the matters outlined above, the trust was wound up in December 2001.  Carmel took back the money she had loaned to the Trust.  Carmel also took $50,000 of the distributions remaining, for “carers expenses” for looking after the Applicant.

4.      The decision of the Social Security Appeals Tribunal contains a discussion of the method of calculation of the overpayment.  There has not been any challenge to the method of calculation of the overpayment and the Tribunal finds that the Applicant was overpaid DSP in the sum of $8,586.67 for the relevant period.

5.      The Tribunal does not accept that the Applicant received no benefit from the trust arrangement.  Clearly, income was generated for the benefit of the Applicant.  It was a matter for his carers, John and Carmel, as to whether they left that benefit in the account, whether they spent it on their son, or whether they put it aside for him in some other way.  At any event, it was income which had to be taken into account for the purposes of the income test for DSP.

6.      There are no circumstances sufficiently special about this case to warrant the waiver of the right of the Commonwealth to recover the debt.

I certify that the 6 preceding paragraphs are a true copy of the reasons for the decision herein of Deputy President Don Muller

Signed:         .......................................................................................
           C.  O’Donovan, Associate

Date/s of Hearing  4 March 2003
Date of Decision  23 September 2003      
Solicitor for Applicant                Mr. R. Silva

Respondent  Ms. H. Wallis-Dunn, departmental advocate