Mohammed Khan and Secretary, Department of Social Services
[2014] AATA 298
•14 May 2014
[2014] AATA 298
Division GENERAL ADMINISTRATIVE DIVISION File Number
2013/6655
Re
Mohammed Khan
APPLICANT
And
Secretary, Department of Social Services
RESPONDENT
DECISION
Tribunal Ms N Bell, Senior Member
Date 14 May 2014 Place Sydney The Tribunal affirms the decision under review.
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Ms N Bell, Senior Member
CATCHWORDS
SOCIAL SECURITY – Special Benefit – whether discretion to grant special benefit should be exercised – application of policy – decision under review affirmed
LEGISLATION
Social Security Act 1991 (Cth), ss 729
CASES
Re Drake and Minister for Immigration and Ethnic Affairs (No.2) (1979) 2 ALD 634
SECONDARY RESOURCES
Guide to the Social Security Law
REASONS FOR DECISION
Ms N Bell, Senior Member
14 May 2014
Mohammed Khan claimed Special Benefit on 15 July 2013. Mr Khan first arrived in Australia from Fiji in 1987. After spending some time in Australia, during which he purchased a house, he spent some 25 years moving between Australia and Fiji. Since 2012, he has resided in Australia without interruption.
A Centrelink officer rejected Mr Khan’s claim on the basis that he did not meet the Australian residence requirements under section 729(2)(f)(i) of the Social Security Act 1991 to qualify for Special Benefit. This decision was affirmed by an authorised review officer on 29 September 2013.
On appeal, the Social Security Appeals Tribunal found that Mr Khan did meet the residence requirements but concluded Mr Khan did not meet other requirements for Special Benefit and affirmed the decision.
ISSUES
Section 729 of the Act provides:
(1) A person is qualified for a special benefit for a period if the Secretary determines, in accordance with subsection (2), that a special benefit should be granted to the person for the period.
(2) The Secretary may, in his or her discretion, determine that a special benefit should be granted to a person for a period if:
(a) no social security pension is payable to the person during the period; and
(b) no other social security benefit is payable to the person for the period; and
…
(e) the Secretary is satisfied that the person is unable to earn a sufficient livelihood for the person and the person's dependants (if any) because of age, physical or mental disability or domestic circumstances or for any other reason; and
(f) the person:
(i) is an Australian resident; or
(v) is the holder of a visa that is in a class of visas determined by the Minister for the purposes of this subparagraph; and
…
(h) an assurance of support does not apply to the person at any time during the period (see subsection (2C)).
There is no dispute that Mr Khan satisfies the legislative criteria for Special Benefit under s 729 of the Act.
However, Special Benefit is a discretionary benefit. The only issue for me to decide is whether to exercise the discretion in Mr Khan’s favour.
SHOULD MR KHAN BE PAID SPECIAL BENEFIT?
The discretion in section 729(2) of the Act is unfettered. However, it is appropriate for me to have regard to the policy contained in the Guide to the Social Security Law in the exercise of the discretion (Re Drake and Minister for Immigration and Ethnic Affairs (No.2) (1979) 2 ALD 634).
On the exercise of the discretion to grant Special Benefit, the Guide provides at 3.7.1.30 that I must consider certain factors when making a decision about Special Benefit. Relevantly, these include:
·the intention of the Special Benefit legislation;
·ability to earn a sufficient livelihood;
·circumstances which have lead to the hardship;
·other reasonable means of support; and
·the available funds test.
The intention of the Special Benefit legislation
Clause 1.2.5.10 of the Guide states that objective of the Special Benefit as follows:
[Special Benefit] aims to provide income support for people who, due to reasons beyond their control are:
·in financial hardship, AND
·unable to earn a sufficient livelihood for themselves and their dependants.
To receive [Special Benefit] it must be established that the person is not eligible for any other pension or allowance. [Special Benefit] is a discretionary payment. The circumstances under which it is granted and the amount paid are determined by a delegate of the Secretary of the Department.
Mr Khan is not eligible to receive any other social security payment, including the Age Pension.
Ability to earn a sufficient livelihood
Mr Khan was 68 years of age at the date of his claim for Special Benefit and suffers from a number of medical conditions. These include cervical spine degeneration, disc prolapse and degeneration, and ischaemic heart disease. The Secretary acknowledges that these factors suggest that Mr Khan is unable to earn a sufficient livelihood.
Circumstances which have lead to the hardship
The Guide provides at 3.7.1.30 provides that I must carefully consider whether the applicant has placed himself in financial hardship by, amongst other possible actions, “disposing of money, by gifting or other means without adequate return.”
Over the years, Mr Khan has gifted considerable amounts of money to his adult children for their housing, education and weddings, amongst other things. These gifts have contributed to the financial hardship in which Mr Khan now finds himself. As the aim of Special Benefit, noted above, is to provide support to people in financial hardship “due to reasons beyond their control”, these gifts will need to be examined in detail.
The most significant of these gifts was a sum of $38,000 to his son Zaved Khan for renovations to his home in Cartwright, NSW. This amount was expended on the understanding that Zaved would allow his parents to reside there. The monetary amount was also accompanied by labour and assistance from Mr Khan and his friends up to the value of $32,000. After the renovations, Mr Khan and his wife did live there with their son and later their daughter-in-law. However, after the birth of Mr Khan’s grandson, the relationship between the families deteriorated to such a point that Mr and Mrs Khan decided to vacate the house of their own accord to preserve harmony between Zaved and his wife. However, Mr and Mrs Khan did not have anywhere to live after departing their son’s home. Furthermore, Zaved has not repaid the money given to him by his father for the renovations, nor does he financially support his parents. Zaved was declared bankrupt on 3 April 2014.
In 1990, Mr Khan purchased a house in Rockdale for $204,000, using cash he had from Fiji to pay the deposit. This house and the remainder of a mortgage on it were later transferred to another of Mr Khan’s sons, Zaheed Khan. Zaheed did not pay his father for this transaction and does not financially support his parents.
Other significant amounts of money have also been contributed by Mr Khan towards his children’s education and weddings. Mr Khan advised the Authorised Review Officer that he had spent approximately $270,000 to educate his sons. He also contributed large amounts towards the wedding and housing of his youngest son, Zaved. There is however no evidence of these transfers.
These circumstances all suggest that Mr Khan’s decisions have significantly contributed to his current financial hardship. These circumstances were not beyond Mr Khan’s control. He chose to provide considerable sums of money for his children at the expense of his own retirement savings and his ability to provide for himself. While there may be cultural elements to the extent of Mr Khan’s gifts, and while they may have been given in the expectation of familial retirement support now not forthcoming, such gifts, considering Mr Khan’s limited income and savings, were not consistent with providing adequately for his and his wife’s own support.
Other reasonable means of support
Clause 3.7.1.30 of the Guide states that Special Benefit should not be granted if the person is “receiving, or able to receive support from other sources”.
At the time of Mr Khan’s claim, and for the 13 weeks following, Mrs Khan was in receipt of workers compensation payments of $641.76 per fortnight. This amount is more than the rate of Special Benefit which would be payable to Mr Khan, determined by the Authorised Review Officer to be $598.26. While these payments have ceased, Mrs Khan is now of an age to test her eligibility for the aged pension.
Mr Khan also has four sons, two of whom live in Australia. Mr Khan has informed all of his sons of his current financial hardship. Taking into account their employment and the substantial monetary sums that Mr Khan has given them in recent years, it is reasonable to expect that they would financially support their father and mother. Mr Khan himself has stated that he anticipated his children would support him in retirement. Mr Khan’s sons represent potential sources of “other reasonable means of support.”
Zaved and Zaheed are both employed in Australia. Unfortunately, Zaved, with whom Mr and Mrs Khan used to reside in the house at Cartwright, was declared bankrupt on 3 April 2014 and his wife is unemployed. It is perhaps not reasonable for Zaved to support his father at this time.
Zaheed, on the other hand, lives in the house in Rockdale which Mr Khan transferred to him with his wife and two sons. He is employed by Qantas in maintenance, and although he has stated that his job is under threat, he currently retains his position, although with reduced hours. He has recently suffered a concussion causing him to take time off work. However, I heard no evidence to the effect that his injury will prevent him from returning to work. Zaheed has not offered his father any financial support.
Mr Khan also has two sons living in Fiji, Naved and Shaheed. Both are married with children and are currently employed. Naved, formerly employed as an Air Pacific pilot, is now employed by his grandfather’s bus company. Shaheed owns an excavation business.
Both sons in Fiji appear to be in a position to assist their father. Mr Khan submitted that it was difficult for them to support him in Australia due to the low value of the Fijian dollar. However, Mr Khan also stated that they had expressed their willingness to support Mr Khan should he return to Fiji. Mr Khan does not want to do this because he believes the medical care in Fiji would be unsatisfactory.
Mr Khan does not currently receive any financial support from his father who is the owner of a bus company in Fiji. Mr Khan’s evidence was that the business is a going concern, has 5 or 6 partners and is able to fund a number of litigated cases currently occurring. Mr Khan stays with his father when he is in Fiji. Mr Khan has made his father aware of his current financial difficulties but Mr Khan indicated that his father is unwilling to support him financially.
The Guide at 3.7.1.30 states that support may be “in kind” and can include the provision of accommodation, food or clothing. At the time of the original claim for Special Benefit, Mr Khan indicated that he was residing in the home of his son Zaved. Since that time, Mr Khan has been able to access rent-free accommodation with his brother in Carnes Hill, NSW and has also stayed intermittently with friends in Brisbane, Newcastle and Ingleburn. During the day, Mr and Mrs Khan are able to stay at a friend’s bus depot in Ingleburn where they can cook their own food. Currently, Mr and Mrs Khan are also staying there at night. They have also received food from Mr Khan’s brother, Mr Khan’s friend and their sons on occasion.
It is therefore clear that Mr Khan has other reasonable means of support. This weighs against him when determining whether to exercise the discretion to grant Special Benefit.
The available funds test
The Guide at 3.7.1.70 states that where a person’s available funds are more than $5000 Special Benefit is not payable and a claim should be rejected. For the purposes of Special Benefit, available funds are primarily “liquid funds” which are defined in part 1.1.L.60 of the Guide as “money the person has ready access to”. These include the “liquid funds of a partner” and “money in a bank or other financial institution”.
At the date of claim, Mrs Khan had savings of $16,000 earmarked for funeral expenses. These are properly categorised as “available funds”. The amount is above the limit imposed by the available funds test. Even if all the other factors I am to have regard to supported Mr Khan’s claim for Special Benefit, which they do not, the fact of the savings’ existence at the date of claim means I should not exercise the discretion in Mr Khan’s favour. Special Benefit is a payment of last resort and where there are other available funds above the threshold of $5,000 it is expected that they should be expended before a claim is considered.
Mr Khan is not eligible to be paid Special Benefit.
DECISION
The Tribunal affirms the decision under review.
I certify that the preceding 31 (thirty-one) paragraphs are a true copy of the reasons for the decision herein of Ms N Bell, Senior Member. .......[Sgd].................................................................
Associate
Dated 14 May 2014
Date of hearing 24 April 2014 Applicant In person Solicitors for the Respondent S Davidson, DHS Program Review Litigation Branch
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