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

This matter concerned an appeal by Mrs Liu against a decision by the Secretary of the Department of Social Services to cancel her Parenting Payment Partnered (PPP) and raise a debt for the period 23 July 2009 to 25 August 2014. Mrs Liu had declared minimal assets and income when she applied for the payment in 2009. However, the Department later determined that assets and income of the Ruixing Family Trust (the Trust), established by her mother-in-law, Madam Huang, should be attributed to Mrs Liu. The Tribunal considered evidence from Mrs Liu, her husband, her mother-in-law, and her tax agent, all of whom required the assistance of a Mandarin interpreter, except for the tax agent.

The primary legal issues before the Tribunal were whether the Ruixing Family Trust was a "designated private trust" and, if so, whether Mrs Liu was an "attributable stakeholder" whose assets and income should be included when assessing her eligibility for PPP. Specifically, the Tribunal had to determine if the Trust met the criteria for a controlled private trust and if Mrs Liu, or her husband, controlled or contributed to the Trust's capital or corpus, as required by Part 3.18 of the relevant Act. The Tribunal also considered the nature of a purported loan from Madam Huang to her son, Mu Hong Xing, which appeared on the Trust's profit and loss statement.

The Tribunal reasoned that Part 3.18 of the Social Security Act 1991, which allows for the attribution of assets and income of private trusts to individuals who control or contributed to them, was applicable to Mrs Liu's PPP claim. The Tribunal found that the Ruixing Family Trust was a discretionary, non-exhaustive trust with a closed class of beneficiaries, thus meeting the definition of a designated private trust. Furthermore, the Tribunal determined that both Mrs Liu and her husband, Mu Hong Xing, were discretionary beneficiaries, and Mu Hong Xing was a trustee since the Trust's inception. Crucially, the evidence established that Madam Huang provided all the funding for the Trust, and Mu Hong Xing made no financial contribution. The Tribunal also concluded that a significant entry on the Trust's profit and loss statement, labelled as a loan from Madam Huang to Mu Hong Xing, was merely a book entry without any actual transfer of funds or consideration, intended to encourage Mu Hong Xing's involvement in the business.

Based on these findings, the Tribunal determined that the Trust was a controlled private trust and that Mrs Liu was an attributable stakeholder. Consequently, the assets and income of the Trust were to be attributed to Mrs Liu for the purpose of assessing her eligibility for PPP. The Tribunal therefore affirmed the decision of the Secretary, Department of Social Services.