Lot and Secretary, Department of Education, Employment and Workplace Relations

[2008] AATA 794

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2008] AATA 794

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No   2008/0222

GENERAL ADMINISTRATIVE DIVISION		)
Re		REINHARD LOT

Applicant

And SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS  

Respondent

DECISION

Tribunal  Ms G Ettinger, Senior Member

Date5 September 2008

Place Perth

Decision The Tribunal affirms the decision under review.

........(sgd).............            

Ms G Ettinger  
  Senior Member

CATCHWORDS

Application for disability support pension – whether family home where Applicant has not resided for some years can be considered an exempt asset –Applicant is a non home owner for purposes of social security law – decision under review affirmed. 

Social Security Act 1991
Social Security (Administration) Act 1999

Secretary, Department of Family and Community Services v Kulshrestha (2003) 73 ALD 438
Dickeson and Department of Social Security (1989) 18 ALD 58
Secretary, Department of Employment and Workplace Relations and SAAJ (2007) 92 ALD 491

REASONS FOR DECISION

5 September 2008 Ms G Ettinger, Senior Member

1.      Mr Reinhard Lot is the Applicant in this matter.  He was injured in an industrial accident and finds that due to his circumstances and those of his wife he does not have a source of income.  Accordingly, on 14 June 2007 he applied for the disability support pension.  This was refused by a delegate of the Secretary, Department of Families, Housing, Community Services and Indigenous Affairs on 11 September 2007 on the basis that Mr Lot’s assets exceeded the threshold level. 

2.      He exercised his right of appeal and his application was again refused, this time by the Authorised Review Officer of Centrelink. So, once again, Mr Lot exercised his right of appeal to first appeal to the Social Security Appeals Tribunal and ultimately to this Tribunal.

3.      I noted that it was suggested to Mr Lot that he might be able to receive assistance under the assets test hardship provisions.  He told me he was unsuccessful in his attempt to do so. 

ISSUE BEFORE THE TRIBUNAL

4.      The issue before me today is whether disability support pension was payable to Mr Lot on the date of his application on 14 June 2007. 

5.      In deciding this, I have to consider whether Mr Lot’s property at Rockingham is his principal home, and, if not, whether it can be considered an exempt asset. 

LEGISLATIVE CONTEXT

6.      The relevant legislation in this case is the Social Security Act 1991 and the Social Security (Administration) Act 1999.  The parties also referred me to the Guide to the Social Security Act which may be used to guide decision‑makers.  However, I am mindful it is always the Act itself which must be applied when making a decision.

WAS THE HOUSE AT ROCKINGHAM MR LOT’S PRINCIPAL HOME IN JUNE 2007

7.      Turning then to consider whether the house at Rockingham was Mr Lot’s principal home in June 2007.  Mr Lot explained that he and his wife left the house which they owned in Rockingham and moved to the residence of his parents-in-law at Bull Creek after his mother-in-law died some nine years ago, to look after his father-in-law who is legally blind.  They have lived there ever since. The house at Bull Creek was then, and is still owned by Mr Lot’s father-in-law.

8.      Mr and Mrs Lot arranged tenants for their house at Rockingham.  He said that he and his wife always intended to return to Rockingham and have always regarded it as their principal home – in fact, it is the only home they own.  I accept that Mr Lot’s father-in-law moved to a nursing home in approximately April 2007. 

9.      In approximately 2006, Mr and Mrs Lot contracted with a builder to rebuild a house on the land at Rockingham, but found that he was not doing much so they eventually renegotiated a building contract with Perception Homes.  Mr Lot told me that the new contract was dated 8 April 2008, was to the value of $323,176 and that the anticipated date for building was one and  a half years.  The demolition of the house at Rockingham was subject to a permit dated December 2006 and took place, Mr Lot says, in early 2007.

10.     Mr Lot was a little vague about dates when he gave his oral evidence.  His oral evidence did not accord with the dates he gave in his statement dated 14 March 2008 which is Exhibit A1.  I accept that Mr Lot was not trying to mislead the Tribunal, and accept his explanation that since his accident his memory has been affected. We managed with some adjournments, to ascertain the dates I required to make the decision today. 

11.     Mr Lot believes that the house at Rockingham has always been his principal home and should be considered to be his principal home because the family intends to return to it, and always did after his father-in-law was admitted to a nursing home. He says that it is their current intention as well.

12.     In that regard, Mr Lot referred me to the Social Security Guide, in particular chapter 4.6.3.30 headed ‘Defining the Principal Home’ and referred me to a statement which indicates as follows, and I quote:

“If the income support recipient or their partner spends a considerable amount of time in a home they do not own, the home they own is their principal home.”

13.     Mr Lot also referred me to chapter 4.6.3.60 which is headed ‘Exempting the Principal Home - Temporary Vacation of Property’ and the definition of temporary vacation.  Mr Lot argued he always intended that he always intended to return to Rockingham, so vacating it was temporary. I have already said that I accept that that was his intention.

14.     However, in coming to a decision whether the house at Rockingham can be held to be Mr Lot’s principal home when he applied for the disability support pension in June 2007, I cannot take statements out of context from the Guide to the Social Security law which is unfortunately what Mr Lot has done.  The principal source of my guidance comes from the legislation itself - whilst I can, of course, take the examples given in the Guide into account.  I add here that Social Security law is very detailed and difficult to interpret.  It is, however, beneficial legislation and accordingly where there is a discretion, it is very often exercised in favour of the recipient.

15.     So, I moved then to consider section 11A of the Act which defines a principal home for purposes of the assets test in social security law.  Noting that a principal home can be a house or apartment, but that even if the space in question is a garage or storeroom, if it is used primarily for private or domestic purposes in association with a flat or unit, it can be part of the principal home. 

16.     I then moved to consider section 11A(9)(a) of the Act which specifies that a residence of a person can be taken to continue to be the person’s principal home during any period not exceeding 12 months if the person is temporarily absent from the residence.  However, if a care situation arises, such as Mr and Mrs Lot moving to their parents’ house to care for the father-in-law, then a period of two years applies.

17.     As Mr and Mrs Lot moved to Bull Creek back in 1999/2000, the two‑year care period, governed by section 11A(9)(a) of the Act, had well passed by 2002 or 2003.  Mr Lot argued that as he only applied for the disability support pension in 2007, the circumstances considered should not date back so far.  Unfortunately, I can only apply section 11A(9)(a) as it stands, and as Mr and Mrs Lot moved to Bull Creek in 1999/2000, then after 2002 or latest 2003, Mr Lot’s house at Rockingham cannot be held to be his principal home for the purposes of social security legislation.  After that period, the house at Rockingham became part of the assets which are considered when the asset test must be applied by Centrelink, such as, when considering an application for disability support pension.

18.     Ms Conlon, who represented the Secretary, referred me to some cases which I have also taken into account in coming to a decision.  In the case of Secretary Department of Family and Community Services v Kulshrestha (2003) 73 ALD 438  the Tribunal concluded that the place where Mr Kulshrestha cooks, eats, sleeps, washes himself and his clothes and generally lives is the place where he usually resides and is the place he regards as home. 

19.     In a further case, Dickeson v Department of Social Security (1989) 18 ALD 58 the Tribunal decided that Mr Dickeson’s shed constituted a home based on the following: 

“In assessing the criteria of what constitutes a ‘home’, a substantial degree of occupation is persuasive … whereas, conversely, occupation by occasional visiting is not …. And living away from the family home in other premises, causes the family home to no longer be the principal home.  A ‘home’ is likely to be a place where persons ordinarily eat morning and night, where they sleep and in the case of adults, have the characteristics of permanency.”

20.      Mr Lot has not lived at Rockingham since 1999.  It was rented out until approximately 2003, and the place where Mr Lot usually “cooks, eats, sleeps, washes himself and his clothes and generally lives” is at Bull Creek. 

21.     Further, the house at Rockingham had been demolished by June 2007 at a time before Mr Lot made his claim for disability support pension, so it could not, in those circumstances, be his principal home.

22.     A further case which is relevant is the matter of Secretary Department of Employment and Workplace Relations v SAAJ (2007) 92 ALD 491. There, SAAJ argued that once she had entered into a binding building contract, the new house should be regarded as her principal home.  The Tribunal there found, and I quote:

“During the relevant period she had never resided in or at her new house.  It had not been her principal residence prior to the sale of her old home.  Because it was under construction, the new house was not inhabitable as a home at any time during the period of 12 months after the sale of the old home. The respondent and her children ate, slept and carried out their domestic life within their rental accommodation.  It was the family home even though the respondent viewed it as a temporary home.  I find that the new house did not constitute the respondent’s principal home until she moved into it.”

23.     Now, Mr Lot’s circumstances are not dissimilar to those of SAAJ.  The house at Rockingham was not his principal home prior to the demolition of the existing house because he had vacated it back in 1999/2000, and he had been in a care situation after that.  So it had not been his principal home since 2002 or late as 2003.  It was rented out during 1999 to 2003, and the old home was demolished before the application for disability support pension was made, and construction of a new home had not commenced by June 2007.  Therefore, the Lot family’s domestic activities took place at Bull Creek where they still reside. 

CAN THE HOUSE AT ROCKINGHAM BE CONSIDERED TO BE AN EXEMPT ASSET OF MR LOT

24.     I note, first of all, that section 1118(1)(b) of the Act provides that the value of a person’s principal home is disregarded when calculating the value of a person’s assets. Since July 2007, pursuant section 1118(2), a sale of a house may provide for the proceeds of the sale of a principal home to be an exempt asset for a period of 24 months.  However, this section cannot apply to Mr Lot as he did not sell his house.  He argued that because his wife’s funds from the sale of her shares have been applied to the building of the new house, that amount should be exempt.  I find, however, there is no provision for that situation in the social security legislation.

25.     Section 11A(8) and subsection (9) of the Act allows a person’s principal home to be an exempt asset for up to two years because of a care situation.  Chapter 4.6.3.70 of the Guide to the Social Security Law deals with that situation and I am satisfied, as I have said earlier, the person in the care situation may either be the carer or the care receiver.  So, in Mr Lot’s case, this means that the value of the house at Rockingham would have been exempted from being included in the value of his assets for the first two years after he moved to Bull Creek to care for his father-in-law, but that that did not apply after 2002 or 2003.  So in order to properly assess the level of assets owned by Mr and Mrs Lot, I referred to the list of assets produced by the respondent.

26.     That showed that at 14 June 2007 Mr and Mrs Lot had total combined assets of $1,124,150.  Mr Lot agreed that was correct at the time, although, it has changed now.  That was made up of:

·     the value of Rockingham which was $650,000 and we have a valuation in the T documents which Mr  Lot accepted; 

·     the value of Mrs Lot’s shares, then, $407,800; 

·     bank balance is $29,350; 

·     household contents $17,000; and

·     the value of two cars $20,000. 

27.     Therefore, the decision to include the value of Rockingham in the total combined value of Mr and Mrs Lot’s assets when Mr Lot claimed disability support pension in June 2007 was correct, and must be affirmed. Unfortunately, that took him well over the limit of the assets test for disability support pension. 

WHETHETR DISABILITY SUPPORT PENSION WAS PAYABLE TO MR LOT WHEN HE APPLIED ON 14 JUNE 2007

28.     Finally, I must consider whether Disability Support Pension was payable to Mr Lot when he applied on 14 June 2007.  I have found that Mr Lot was not a home owner for purposes of the social security law in June 2007. At June 2007 Rockingham was no longer Mr and Mrs Lot’s principal home as they had vacated it more than 24 months previously.  Bull Creek cannot be considered their principal home because it is owned by Mrs Lot’s father, and Mr and Mrs Lot don’t have a right or interest in it.  On 14 June 2007, when Mr Lot applied, a disability support pension was not payable to a partner, non home owner, who had assets valued in excess of $640,500. At that date Mr and Mrs Lot had total combined assets of $1,124,150 comprising of the assets I listed earlier on. 

CONCLUSION

29.     So in conclusion I have noted that Mr Lot’s qualification for Disability Support Pension was not assessed when he applied in June 2007, but I am satisfied that his claim for a pension was correctly rejected because even if he was found to be qualified for disability support pension, and he may in the future, it was not payable to him as his rate was nil.  Section 98 of the act provides that disability support pension is not payable to a person if their rate of pension is nil.  Section 37 of the Administration Act provides that a claim for a social security payment can only be granted if the claimant is qualified and the payment is payable.

30.     In the future Mr Lot’s situation may change and he may be able to reapply.  My decision today is the Tribunal affirms the decision under review.  That means Mr Lot cannot be paid disability support pension. 

DECISION

31.     The Tribunal affirms the decision under review.

I certify that the 31 preceding paragraphs are a true copy of the reasons for the decision herein of

Signed: ..(sgd) T Freeman...............
  Associate

Date/s of Hearing  2 September 2008
Date of Ex Tempore Decision        2 September 2008   
Applicant  Self represented
Respondent Representative          Margaret Conlon,
  Centrelink Legal Services