LDJM and Secretary, Department of Health, Disability and Ageing (Social security second review)

[2025] ARTA 1055

LDJM and Secretary, Department of Health, Disability and Ageing (Social security second review) [2025] ARTA 1055 (22 July 2025)

Applicant/s:  Mr LDJM

Respondent:  Secretary, Department of Health, Disability and Ageing

Tribunal Number:                2025/1574

Tribunal:Senior Member M Kennedy 

Place:Adelaide 

Date:22 July 2025  

Decision:The Tribunal sets aside the decision under review and in substitution determines the value of Mr LDJM’s assets at 17 December 2024 to be $215,375.60

Statement made on 22 July 2025 at 11:02am

On 7 July 2025, the Tribunal ordered pursuant to section 70(1) of the Administrative Review Tribunal Act 2024 that a pseudonym is to be used in place of the name of the applicant.  This is to replicate the effect of subsections 201(1A) - 201(1B) of the Social Security (Administration) Act 1999, which do not apply to these proceedings, but where it is nonetheless desirable to protect the privacy of the applicant and his representative.

Catchwords

AGED CARE – accommodation payment – estimate of likely costs incorrect and contradictory – means tested amount – subsidies provided by Commonwealth to providers of aged care – accommodation supplement – maximum accommodation supplement amount – entry (into aged care) – jurisdiction of Tribunal to determine value of persons assets – method of determining value of person’s assets – Subsidy Principles – certain provisions of social security law do not apply – home exemption cap 

Legislation

Aged Care Act 1997
Social Security Act 1991
Veterans’ Entitlements Act 1986
Subsidy Principles 2014

Statement of Reasons

1. On 17 December 2024, after a short period of respite care, Mr LDJM entered aged care to join his wife. To do so, Mr LDJM sold his interest in a unit in a retirement village, the home that he and his wife had previously shared.

2. Mr LDJM’s stepdaughter, Ms R, is Mr LDJM’s nominee and assisted Mr LDJM in dealing with Services Australia who process certain administrative matters for the Department of Health, Disability and Ageing including making means assessments for aged care fees and subsidies under the Aged Care Act 1997 (the Act).

3. The means assessment undertaken by Services Australia, relevantly for the purpose of this review, goes to the capacity of a residential care service to charge an accommodation payment or accommodation contribution in the context where the Commonwealth subsidises providers of residential aged care through a number of different subsidies.

4. Prior to Mr LDJM moving to aged care Ms R had a number of conversations with representative of Services Australia in relation to the likely costs Mr LDJM would face, and received a written estimate of aged care fees on 3 October 2024.  With the benefit of Ms R’s evidence and arguments at the hearing of the review it can now be seen that the letter contained contradictory information and contained errors. 

5. Most relevant to the grievance underlying the application for review is the contradiction between the statement in the estimate: ‘Based on your financial details above, you are not eligible for support with your accommondation (sic) costs.  This means you need to pay the room price that you and your aged care provider agree to’  and the content of the table on the second page of the estimate letter that states Mr LDJM is estimated to face a basic daily fee of $63.57 (this is not controversial) and an accommodation contribution per day of $28.59 based on the financial details contained in the estimate letter.

6. The first remark suggests that the residential aged care service would be able to charge the accommodation payment in full, the second remark suggests that Mr LDJM would be required to pay only a contribution towards that payment.

7. Ms R says that she contacted Services Australia on multiple occasions seeking clarification and attempting to address error in some of the particulars of the value of assets listed in the estimate.  Ms R says she was given assurances that Mr LDJM would be eligible for support with accommodation costs.  Ms R says that in reliance on this Mr LDJM decided to move into aged care.  She says that if there had been a hint that he would need to pay full costs, Mr LDJM would not have moved because he could not afford it.

8. On 2 January 2025 another letter was sent in a similar format to the letter of 3 October 2024, but no longer identifying the document as an estimate.  It also contained the text: ‘Based on your financial details above, you are not eligible for support with your accommodation costs.  This means you need to pay the room price that you and your aged care provider agree to’.  The table also identified the basic daily fee, a ‘means tested care fee’ of nil and then states, ‘Accommodation payment (based on your service provider agreement)’. 

9. With the benefit of Ms R’s evidence about what in reality this all means for Mr LDJM now the table can now be understood to be communicating that the residential care provider would be able to charge the full agreed accommodation payment, and not only the contribution that had been identified in the estimate.

10. To complete the picture of the grievance that underpins the application for review, one can compare the estimate of 3 October 2024 that stated (albeit confusingly and with other contradictory information) that there was to be a subsidy of all but $28.59 per day for the accommodation contribution, with a copy of an invoice from the aged care home that shows that for the month of February 2025 Mr LDJM has been charged $167.60 per day, being a total of $4,692.80.  The invoice also backdates the charges to 17 December 2024 – a further $7,709.60. 

11. At the conclusion of her submissions in the hearing, Ms R reminded me that behind the decision under review are her mother and her stepfather Mr LDJM.  Her mother has dementia and Mr LDJM has hearing loss and some cognitive loss.  They are vulnerable and distressed by the predicament they find themselves in. As Ms R put it, Mr LDJM is watching his life savings vanishing before his eyes in meeting the costs of his aged care in a way that was unexpected, and in a way that he is not sure how to address as he has sold the interest in the retirement village where he once lived with the assistance of an in-home care package.

12. Ms R is frustrated at her experiences in dealing with Services Australia over this issue.  She is frustrated that incorrect information was provided that she and Mr LDJM have relied upon.  She feels that Mr LDJM was denied the opportunity to obtain financial advice and reflect on whether he should move in light of correct information about the cost.  Ms R feels that Services Australia should be required to rectify the situation.

13. Ms R has set out in detail the nature of the appeal from her perspective.  She says the nature of the decision is that Centrelink did not follow its own process by completing an assessment notice without the correct documentation being available (referring to the estimate of 3 October 2024) and provided her and Mr LDJM with flawed advice with correspondence affected by technical errors.  She is frustrated that the authorised review officer (who affirmed the assessment of means on 12 February 2025) only recalculated the values and this approach doesn’t go to the heart of the matter or her grievance.

14. Ms R mentions that it is clear that Mr LDJM’s income and assets were not correctly assessed, but reassessing the assets at the date he entered care will not address the grievance. Ms R want a reassessment of assets once Mr LDJM has had an opportunity to obtain financial advice and for the value of his assets to be assessed as they are now, not 17 December 2024 when he entered care.

    Jurisdiction

15. The nature and depth of Ms R and Mr LDJM’s grievance can be understood from the account set out in summary above.  I have also noted what Ms R wants out of the Tribunal process on behalf of Mr LDJM, and how she would see that the grievance might be partially resolved.

16. However, the Tribunal must stay within the bounds of its jurisdiction and authority.  The Tribunal does not have general authority to resolve all aspects of a dispute. 

17. The Secretary contends that the extent of the Tribunal’s jurisdiction is limited to that conferred by enactment, and in the present matter the Act confers jurisdiction (relevantly) to determine the value of a person’s assets under section 44-26C(1) of the Act.  The conferral of jurisdiction on the Tribunal in this regard is at section 85-1 of the Act, item 47.

18. It is however necessary to go one step backwards to understand the context in which a determination about the value of Mr LDJM’s assets has brought about the consequence that the accommodation payment is being charged in full, and why the Secretary contends that the determination must be made by reference to the date Mr LDJM entered care.

19. Division 52G of the Act imposes rules about accommodation payments and accommodation contributions.  Section 52G-2(a) provides that a person must not be charged an accommodation payment unless the person’s means tested amount, at the date the person enters the service, is equal to or greater than the maximum accommodation supplement amount for that day. ‘Entry’ in relation to a person and an aged care service means the commencement of the provision of care to the person through the aged care service: Schedule 1, section 1 ‘entry’ to the Act.

20. Similarly, section 44-28 of the Act provides for there to be an accommodation supplement as a component of the overall subsidies provided by the Commonwealth to residential aged care providers.  Eligibility for the accommodation supplement (which is paid to the residential aged care provide) turns on whether the care recipient’s means tested amount was less than the maximum accommodation supplement amount for the entry day, being the day on which the care recipient entered the residential care service: subparagraph 44-28(2)(b).

21. In this way, for the purposes of making the determination as to the value of Mr LDJM’s assets in the context of the grievance, only a determination of the value of Mr LDJM’s assets on the day on which he entered the care service is relevant.  Although I have followed why Ms R has requested that a new assessment of the value of Mr LDJM’s assets be undertaken in relation to the present, any such determination would not address the availability of the accommodation supplement to the residential care service or introduce the restriction on the residential care service charging the agreed accommodation payment.

22. Returning to the determination I have jurisdiction to make, section 44-26C of the Act provides for the Secretary to determine the value, at the time specified in the determination, of a person’s assets in accordance with section 44-26A of the Act. I accept the Secretary’s contentions that my jurisdiction is limited to that conferred by the enactment, and in that regard I consider that in exercising the review jurisdiction at section 85-1, item 47 of the Act therefore, I am to make for myself and upon the evidence now before me the determination of the value of Mr LDJM’s assets in accordance with section 44-26A of the Act. For the reasons described above, the only relevant time in respect of which to make that determination is the date on which Mr LDJM entered the residential care service: 17 December 2024.

23. The method for making such a determination is provided for at section 44-26A of the Act, which provides the value of the person’s assets is to be worked out in accordance with the Subsidy Principles, subject to immaterial exceptions pertaining to income streams and certain payments under the Veterans’ Entitlements Act 1986, but subject to a limit on the value of a person’s home as provided for at subsection 44-26A(7).

24. The Subsidy Principles 2014 (the Subsidy Principles) are made under section 96-1 of the Act and relevantly provide for a method at section 47. The Subsidy Principles require that the value of a person’s assets be worked out in accordance with Division1 of Part 3.2 of the Social Security Act 1991. Section 47 of the Subsidy Principles reduces the value of assets by certain identified compensation payments, and provides that certain provisions of the social security law do not apply, generally speaking those provisions that provide for exemptions for the value of interests a person may have in their principal home, accommodation bonds and refundable deposit balances.  As mentioned above, special provisions apply in the Act at subsection 44-26A(7) to incorporate the value of a person’s home up to a limit.

    Reviewing the determination of the value of Mr LDJM’s assets at 17 December 2024

25. The determination I am to review is that affirmed by the authorised review officer on 12 February 2025.  The authorised review officer determined the value of Mr LDJM’s assets to be $218,392.  This was based on Mr LDJM having a 50% share (see subsection 44-26A(8)) of assets jointly owned with his wife.

26. The assets and their values then identified were:

Bank A account #7	$36,135
Bank A account #6	$157,330
Bank B account #0	$1,617
Bank A shares	$29,130
Estimated refund from retirement village	$212,071
Personal effects	$500

1. In her evidence, Ms R confirmed that the figures for each of the bank accounts were correct as at 17 December 2024, as was the figure for the personal effects. As can be understood from my summary of Mr LDJM’s grievance set out at the commencement of these reasons, and as confirmed by Ms R at the conclusion of this line of questioning, Mr LDJM is not questioning those figures.

2. In relation to the estimated refund from the retirement village, the estimate relied upon by the authorised review officer is now the subject of better evidence; namely correspondence from the retirement village dated 10 April 2025 confirming the exit amount to be $215,765.17.  However, this minor variation is immaterial to the determination of the value of Mr LDJM’s assets because it exceeds the home exemption cap of $206,039.20.  In this regard, the Secretary invites the Tribunal to correct the error in the determination of the value of Mr LDJM’s assets because it appears the home exemption cap was not applied.

3. In this regard, subsection 44-26A(7) provides for the value of a home that exceeds the maximum home value limit in force at a particular time to be disregarded, if a person is a ‘homeowner’.  That term in turn is defined in the Subsidy Principles (paragraph 44-26B(1)) at section 48 that expressly includes a person who has a right or interest in their principal home in premises that constitute a retirement village.

4. I am satisfied that the home exemption cap applies.  While I find that the value of Mr LDJM’s interest in his principal home was $215,765.17 in light of the better evidence now available, I find that only $206,039.20 is included in the value of his assets.

5. Returning to section 47 of the Subsidy Principles, I identify that none of the assets are otherwise affected by the provisions of the Subsidy Principles, and none are otherwise assets amenable to be disregarded under Division 1 of Part 3.12 of the Social Security Act 1991.  Essentially, Mr LDJM’s assets on 17 December 2024 were cash, shares, personal effects and in interest in his principal home.

6. Returning from the Subsidy Principles to the Act, and likewise, none of the assets are otherwise affected by the provisions of section 44-26A of the Act other than the value to be applied to Mr LDJM’s interest in his home as discussed above.

7. Therefore, I have worked out, and determine, the value of Mr LDJM’s assets to be 50% of a total of $430,751.20, or $215,375.60.  This determination arises from the following:

Bank A account #7	$36,135
Bank A account #6	$157,330
Bank B account #0	$1,617
Bank A shares	$29,130
Estimated refund from retirement village to maximum home value	$206,039.20
Personal effects	$500

1. I consider that making this determination completes the Tribunal’s review function having regard to the provisions of section 44-26C(1) (and therefore 44-26A) of the Act, and having regard to the conferral of jurisdiction on the Tribunal in this regard is at section 85-1 of the Act, item 47.  I will set aside the decision under review and substitute a determination that the value of Mr LDJM’s assets at 17 December 2024 is $215,375.60.

2. However, I note that the consequences of this determination on review, when applied to other provisions of the Act to produce a ‘means tested amount’ will not change the practical outcome for Mr LDJM.  In this regard, the application of the means tested amount calculator at section 44-22 of the Act produces a ‘per day asset tested amount’ of the overall means assessment of $69.75.  This exceeds the maximum accommodation supplement amount of $69.49 as at 17 December 2024.  It follows therefore that the Act imposes no provision restricting the residential aged care service charging the accommodation charge.

3. Finally, and noting Mr LDJM’s and Ms R’s contentions that Mr LDJM has suffered financial loss due to defective administration through the provision of confusing, inconsistent and inaccurate estimates of aged care fees, I note that the Secretary has drawn attention to the scheme for Compensation for Detriment caused by Defective Administration (CDDA).  The Tribunal has no authority to entertain claims for compensation made under this scheme.

Date(s) of hearing:	3 July 2025
Solicitors for the Respondent:	Ms J Vetter, HWL Ebsworth Lawyers