NEIL BILNEY and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs

[2013] AATA 659

Division GENERAL ADMINISTRATIVE DIVISION

File Numbers

2012/0737 & 2013/1382

Re

NEIL BILNEY

APPLICANT

And

Secretary, Department of Families, Housing, Community Services and Indigenous Affairs

RESPONDENT

DECISION

Tribunal
Ms G Ettinger, Senior Member

Date 13 September 2013

Place Perth
Decision Summary
In Matter 2012/0737:
DECISION A
This Tribunal affirms the decision of the SSAT, and finds that 3 June 2011 was the correct or preferable date to consider that the assets of the Wattledale Family Trust were transferred under the granny flat provisions.
DECISION B
Mr Bilney does not dispute, and this Tribunal affirms that the value of the assets of the Bilney Farming Trust as at 22 April 2010 was $3,051, and that arrears of pension have been paid to Mr Bilney accordingly.
In Matter 2013/1382:
DECISIONS C AND D
This Tribunal cannot be satisfied to the requisite standard from the evidence before it that Mr Bilney was medically qualified for DSP in the period from 30 December 2008 to 31 March 2009 (ie, whether he obtained the requisite number of points on the Impairment Tables, and was, due to his disability, unable to work for more than 15 hours per week).
This Tribunal was therefore not required to calculate the correct value of Mr Bilney's assets for the purpose of calculating his rate of DSP, including whether the value of Mr Bilney's assets during the period 30 December 2008 to 31 March 2009 was below the asset threshold.
The Tribunal affirms the decision of the SSAT rejecting Mr Bilney’s eligibility for DSP as at 30 December 2008, and accepts the date of 22 April 2010 as the start date for Mr Bilney’s DSP.
DECISION E
This Tribunal is satisfied that the AVO report dated 9 July 2012 has complied with the directions of the SSAT in that it is not a kerbside valuation; it also addresses the cost of removal and the cartage of debris from demolition of the house to the tip site. The proper value of the Kojonup propertyas at 21 November 2011 is $200,000. The Tribunal affirms the decision which found that the value of the Kojonup property was $200,000 at 21 November 2011 for the purposes of calculating Mr Bilney’s DSP entitlements.
..(Sgd) G Ettinger.................
Ms G Ettinger, Senior Member
CATCHWORDS
DSP – date of commencement - assets test – value of farming trusts – date Applicant applied for DSP and eligibility - value of Kojonup property - decisions affirmed.
Legislation
Social Security Act 1991 ss 11, 11A, 12A, 12C , 94
Social Security (Administration) Act 1999
CASES
Kirkovski v Secretary, Department of Family and Community Services [2004] FCA 790
Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60
The Guide to Social Security Law
REASONS FOR DECISION
Ms G Ettinger, Senior Member
13 September 2013
SUMMARY

Mr Neil Bilney is the Applicant in two matters before the Tribunal. He is appealing various decisions of the Social Security Appeals Tribunal (SSAT). The SSAT has had a number of issues to decide, including whether the level of Mr Bilney’s assets has excluded him or reduced his eligibility in regard to receiving Disability Support Pension, (DSP), at relevant times, and whether he was eligible to receive the DSP at a date earlier than the grant to him in 2010.
This Tribunal has accordingly also had to deal with the value of Mr Bilney’s assets at the relevant times, including issues relating to the valuation of his property at Kojonup, the situation in regard to his family trusts, Mr Bilney’s health, and his eligibility for DSP.
Mr Bilney has complained about experiencing difficulties in obtaining accurate information to assist him in his communications with, and applications to Centrelink. He has also complained about the attitude to him of one of its officers which he believes has impacted upon his rights, and the negotiations with Centrelink.
I have made decisions in each of the issues in dispute before the Tribunal.
BACKGROUND
Mr and Mrs Bilney have a farming background. They sold their farm in 2005, and have, over the years, had interests in the Bilney Farming Trust, Wattledale Family Trust and Slamp Pty Ltd (the latter described by Mr Bilney as an R&D company). Mr Bilney is a trustee of the trusts.
Following the sale of the farm, Mr Bilney provided an amount of $539,573 to his son Lyndsay or for the purchase of a house in Dunsborough where Mr and Mrs Bilney have resided for some time with their son. Mr and Mrs Bilney also own a motor home in which they travel, and have lived from time to time. Centrelink characterised the motor home as the Bilneys principal place of residence at one time, based on the Bilney’s disclosures to Centrelink. Mr Bilney told me that this occurred due to Centrelink’s incorrect understanding of what he disclosed, and a failure to record his change of address in a timely fashion.
Mr and Mrs Bilney’s assets also include a property at Kojonup which was purchased for $85,000 in 2005. Mr Bilney told me that it was subdivided, and that some years ago two blocks were sold for $110,000. He told me that they had a house built on one block, and that the remaining blocks are not suitable for building upon. Mr Bilney’s evidence is that the house is uninhabitable because of the large number of faults in the construction. In 2008 he had an Order of the Building Disputes Tribunal in connection with rectification of the building, but has been unable to enforce the Order against the builder which was that he pay $241,475. Mr Bilney has quotes for demolishing the house, and was concerned about the costs of removal of the ensuing rubble.
The value of the Kojonup property, and therefore the Bilney’s assets, is a matter of dispute between the parties, and evidence was given about it at the hearing and in the documents before the Tribunal. It has impacted upon Mr Bilney’s eligibility for pension benefits. I have various valuations before me, and evidence which I shall discuss below.
I am mindful that Mr Bilney also has serious health issues, such as sero-negative polyarthritis, and has been in receipt of DSP since 22 April 2010.
Mr Bilney says he first lodged an application for DSP, in early 2008, and that he heard nothing further from Centrelink about that till December 2008. He said that at the time in 2008, he was persuaded by a Centrelink officer that Newstart Allowance was the correct benefit for which he should apply. Newstart was subsequently refused in February 2009 on the basis that Mr Bilney’s assets exceeded the then threshold. He has been in protracted discussions with Centrelink since that time, and has had various decisions reviewed by Centrelink officers and the SSAT.
The applications before me have raised a number of issues which I have discussed below.
ISSUES BEFORE THE TRIBUNAL
In application 2012/0737, Mr Bilney seeks review of a decision made by the SSAT on 23 December 2011. The decision of the SSAT was to:
·affirm a decision of a Centrelink Authorised Review Officer (ARO) made on 30 September 2011 that the value of assets transferred under the granny flat provisions occurred on 3 June 2011, and not an earlier date, and that the value of Mr Bilney's assets are to be assessed on that basis;
·vary the decision of the ARO of 30 September 2011, to the extent that the asset value of Mr Bilney's interest in the Bilney Farming Trust from 22 April 2010 is $3,051 and not $4,306, and that his assets are to be assessed on that basis with effect from 22 April 2010; and
·set aside the decision of the ARO to grant DSP to Mr Bilney from 22 April 2010 and not an earlier date, and further to send the matter back to the Chief Executive Officer of Centrelink for reconsideration in accordance with the following directions:
(a) Mr Bilney's claim for Newstart Allowance lodged on 30 December 2008 is taken to be a claim for DSP;
(b) Mr Bilney's qualification for DSP in the period 30 December 2008 to 31 March 2009 is to be assessed to determine if Mr Bilney qualified for DSP in that period;
(c) If Mr Bilney qualified for DSP in that period, his rate of DSP is to be assessed taking into account Mr Bilney's income and assets including the various adjustments that have been made to the value of his assets.
(d) If Mr Bilney was not qualified for DSP in the period 30 December 2008 to 31 March 2009 the claim is to be rejected, and the start date for Mr Bilney's DSP is 22 April 2010.
In application No 2013/1382, Mr Bilney seeks review of a decision of the SSAT made on 21 February 2013, which decided as follows:
·affirmed a decision of an ARO, made on 31 May 2012, that Mr Bilney was not qualified for DSP on 30 December 2008; and
·set aside a decision of an ARO to determine the rate of DSP payable to Mr Bilney from 13 December 2011 by taking into account the value of Mr Bilney's Kojonup properties as at 21 November 2011 as $200,000, and remitted the matter to the Chief Executive Officer of Centrelink for reconsideration in accordance with the direction that the valuation of the Kojonup properties as at 21 November 2011 is to address the cost of removal and the cartage of the debris from demolition of the house to the tip site.
It has been convenient for the parties and this Tribunal to consider the issues as stated below. For ease of all concerned, I have followed the course taken by the SSAT and the Respondent in its Statement of Facts, Issues and Contentions, and designated the issues as ‘Decisions A’, ‘B’, ‘C,’ ‘D’ and ‘E’.
DECISION A
The issue to be determined in relation to Decision A is whether the date of 3 June 2011 is the correct date to consider that the assets of the Wattledale Family Trust were transferred under the granny flat provisions.
DECISION B
The issues to be determined in relation to Decision B are:
(a)whether the value of the assets of the Bilney Farming Trust as at 22 April 2010 is $3,051 or some other amount; and
(b)whether Centrelink has implemented the decision of the SSAT, that the value of the assets of the Bilney Farming Trust as at 22 April 2010 are $3,051, and accordingly paid arrears to Mr Bilney.
DECISIONS C AND D
The issues to be determined in relation to Decisions C and D are:
(a)whether Mr Bilney was medically qualified for DSP in the period from 30 December 2008 to 31 March 2009 (ie, whether he obtained the requisite number of points on the Impairment Tables and was, due to his disability, unable to work for more than 15 hours per week); and
(b)if Mr Bilney was medically qualified for DSP, the correct value of Mr Bilney's assets for the purpose of calculating his rate of DSP, including whether the value of Mr Bilney's assets during the period 30 December 2008 to 31 March 2009 was below the asset threshold.
DECISION E
The issue to be determined in relation to Decision E is the proper value of the Kojonup property as at 21 November 2011.
RELEVANT LEGISLATION
The relevant legislation in this matter is the Social Security Act 1991, (the SSA) and the Social Security (Administration) Act 1999. The various relevant sections will be referred to as the issues are addressed below.
DECISION A
The issue to be determined in relation to Decision A is whether the date of 3 June 2011 is the correct date to consider that the assets of The Wattledale Family Trust were transferred under the granny flat provisions.
The importance to Mr Bilney of the date when the assets of the Wattledale Family Trust can be found to have been transferred under the granny flat provisions is in regard to his rate of pension, which is determined in part by the level of his assets.
Mr Bilney’s assets comprise, amongst other things, interest in two trusts, being the Wattledale Family Trust, and the Bilney Farming Trust and an interest in Slamp Pty Ltd. Documents before me indicate that following a decision of the SSAT on 12 November 2009, Centrelink accepted that the attribution of assets from 30 December 2008 in the Wattledale Family Trust was to be divided equally between Mr and Mrs Bilney and their son Lyndsay. Centrelink was satisfied that Mr Bilney could write-off loans made to him and his wife from the Wattledale Trust because he had full control of the Wattledale Trust. They were thus able to write off the loans without incurring a gifting or deprivation penalty.
However, Centrelink held that the amount of $539,573 attributed to Lyndsay for the purchase of a residence, (which Mr Bilney said was to house himself, his wife and Lyndsay), was to be treated as a loan from the Wattledale Family Trust. Centrelink characterised the money as an unsecured loan, noting that the Trust did not earn income from the loan.
Mr and Mrs Bilney also own a motor home which has from time to time, been characterised as their principal residence, and they also own a house which they had built for them on land in Kojonup in 2005. Mr Bilney’s evidence was that the Kojonup property has been the cause of his financial problems, as the house, rather than being their dream home, is uninhabitable. His evidence was that there were a very large number of faults in the construction which have not been rectified, and that he is in possession of an Order of the Building Disputes Tribunal for payment of $241,475 from the builder, which he cannot enforce. The valuation of the Kojonup property, demolition of the house, and disposal of the resulting rubble is discussed below at Decision E, and was the subject of SSAT decisions of 14 May 2012, and 21 February 2013.
Mr Bilney, who had back surgery in 2003, and says he has not worked since that time, suffers other health problems as well, in particular sero-negative inflammatory arthritis, which Dr Ng, rheumatologist, opined he has been suffering since 1989. By 2008, Mr Bilney had health and financial problems, and was applying to obtain a pension benefit. He had many discussions with Centrelink about the issue, some of which are documented in the T-documents, particularly at Exhibit R1.
Mr Bilney told me that in 2008 he and his wife signed a letter to their accountant, purporting to forgive all loans owing to them from the Bilney Farming Trust and Wattledale Family Trust, and pointed to the letter, dated 16 September 2008 to Mark Mathews at PHBB, signed by him and his wife, which stated as follows:
We wish to advise that we wish to forgive all loans owing to us from The Bilney Farming Trust and the Wattledale Family Trust as of the 30^th June 2008.
Mr Bilney told me he understood that the above letter (which appears at page 41 of Exhibit R1), served to forgive all the loans as he intended, and that the amount lent to his son was therefore included in the transaction. However, Centrelink treated the loan to Lyndsay as an unsecured loan and as an asset of the Trust. Because Mr Bilney had control of the Trust, the amount of the loan was attributed to him.
All of that became relevant in connection with Mr Bilney’s application to receive DSP, and the date for the granny flat provisions to commence. Mr Bilney says that when he applied for DSP in 2008, he was advised by a Centrelink officer that the more appropriate benefit for which he should apply was Newstart Allowance. I have noted that, and note also that there appears to be no written application for DSP by Mr Bilney in 2008 on file. It seems that he applied for Newstart Allowance accepting advice he says he received from a Centrelink officer, which was either that Newstart was more appropriate, or the same.
However, following Mr Bilney’s application for Newstart Allowance on 30 December 2008, Centrelink, on 25 March 2009, refused him Newstart Allowance on the basis that his assets exceeded the threshold for receiving it. (I will be dealing with the commencement date for Mr Bilney’s DSP in the section below headed Decisions C & D).
Mr Bilney claims that he was not properly advised about the application of the granny flat provisions, and that Centrelink should have so advised. What occurred was that Centrelink decided from conversations with Mr Bilney that Mr and Mrs Bilney were home owners, that their motor home was their principal residence, and could therefore, because its value was below the threshold, be exempted from being included in the calculation of assets which determined the level of Mr Bilney’s pension entitlement. Mr Bilney told me that they were using the motor home to attend doctors in Perth, to go caravan hosting at camp sites, and that in fact their principal residence was at their son’s house commencing in 2007.
Centrelink by way of file notes dating back to March 2009 indicates that Mr Bilney had discussed his address, change of address notification, the location of his principal place of residence, and his appeal rights with its officers over a period time. Its decision was that 3 June 2011 was the correct date at which to consider that the assets of the Wattledale Family Trust were transferred under the granny flat provisions, because prior to that date, Centrelink’s understanding was that the Bilneys were still living in their motor home, and only discussing the situation regarding a life estate in Lyndsay’s house.
Clearly the letter of the Bilneys to their accountant dated 16 September 2008 purporting to forgive the loans was not acceptable to Centrelink in relation to enlivening the granny flat provisions.
A Centrelink file note of a conversation with Mr Bilney on 13 June 2011 records:
I explain that there is no evidence to support this contention [that he has exchanged the proceeds of the Trust for the right to live in Lyndsay’s house].
I ask him for some evidence of the formalisation of this agreement. He claims that he was waiting for c’link to tell him what evidence c’link needed.
…
I explain that usually, when there is an agreement covering such sums and such an important interest (i.e. the lifetime right to occupy) then it makes fundamental good sense to have an agreement drawn up to protect everybody’s interests.
…
I state, in the short term, I will be happy to use an exchange of emails with his son confirming the details of the arrangement i.e. that in exchange for the $x of the loan that Lindsey (sic) owes the trust, mr and mrs bilney have a lifetime right to occupy part of the property at ….
Without this most fundamental of documentary evidence, I am unable to accept the fact that he has purchased the right to occupy.
Mr Bilney disputes the above, saying that he and his wife’s principal residence was at their son’s house from April 2007. He also said that even though he had advised a change of address in September 2008 to indicate he and his wife were living at Lyndsay’s house, Centrelink failed to record it correctly.
As to the granny flat situation, Mr Bilney said that he did not know about those provisions, and was not told about them by Centrelink as he feels he should have been. He said that when he was told that the money advanced to his son to purchase his residence was to be treated as an asset of the Trust, he tried to dispose of the loan by asking his lawyers and others about writing-off the debt.
The Centrelink file notes record conversations with Mr Bilney in March/April 2011 about his housing and assets situation. The file note of 13 June 2011 reproduced above indicates that Centrelink was satisfied that initially an email exchange between Lyndsay and his parents confirming that they had a life estate in Lyndsay’s house would suffice to enliven the granny flat provisions. Evidence is that that exchange of emails stating the intention of both the parents and Lyndsay took place on or about 14 June 2011, and that Centrelink accepted the arrangement from 3 June 2011 pending a more formal agreement.
I have noted the evidence above, and am mindful of the application of the relevant sections of the SSA. Section 11(4)(b) provides that a person who is a member of a couple is a homeowner if the person or their partner has a right or interest in one residence that is the principal home of the person, their partner or both of them, and that person’s right or interest gives the person or their partner reasonable security of tenure in the home. Pursuant to section 11A principal home may include a motor home which was held by Centrelink to be the Bilneys principal home prior to 3 June 2011.

Section 12A provides that a person has a granny flat interest in their principal home if it is a private residence, and the person has acquired for valuable consideration, or has retained a right to accommodation for life in the residence, or a life interest in the residence. Subsection 12C(2) provides that a granny flat is a 'special residence' and subsection 12C(3) provides that a person who is a granny flat resident is a special resident. Chapter 3 Part 3.12 Division 5 of the SSA sets out the general provisions in relation to treatment of special residences.
As the Bilney’s were found to have a granny flat interest from 3 June 2011, that has ameliorated the effect of any deprivation rule which might otherwise apply. Accordingly the loan of $539,573 to Lyndsay could be treated, not as a loan or deprivation by the Bilneys as previously held by Centrelink, but that forgiveness of it could be recorded from 3 June 2011.
I am mindful that discussions about Trust moneys may have been taking place from the time of the sale of the farm in 2005, and that from 2008, Mr Bilney was seeking to establish his entitlements to a pension, probably DSP. I note also discussions between Mr Bilney and Centrelink officers as recorded in file notes in Exhibit R1 regarding his principal place of residence in 2011, including in April 2011. However, I was not able from the evidence to find that the arrangements confirming a life estate in Lyndsay’s house were confirmed before 3 June 2011, and note they had not actually been formalised by that date. However, I accept that it was on 3 June 2011, that the granny flat provisions were enlivened with the Bilneys confirmed at least informally into a life estate in Lyndsay’s house.
Accordingly I find the decision of Centrelink as confirmed by the SSAT on 23 December 2011 that the value of assets transferred under the granny flat provisions occurred on 3 June 2011 and not an earlier date. I am satisfied that the value of Mr Bilney’s assets are to be assessed on that basis, and that that is the correct or preferable decision in regard to Decision A.
DECISION B
The issues to be determined in relation to Decision B are:
(a)whether the value of the assets of the Bilney Farming Trust as at 22 April 2010 is $3,051 or some other amount; and
(b)whether Centrelink has implemented the decision of the SSAT that the value of the assets of the Bilney Farming Trust as at 22 April 2010 are $3,051 and accordingly paid arrears to Mr Bilney.
Mr Bilney indicated at the hearing that he was not pursuing Decision B, and stated that he was satisfied that the assets of the Bilney Farming Trust at 22 April 2010 are as assessed by the SSAT, that is $3,051, and not $4,306. He agreed that arrears of DSP had been paid to him as appropriate. The Respondent was satisfied with that concession.
Accordingly I affirm the decision of the SSAT of 23 December 2011 in regard to the value of the Bilney Farming Trust as noted above.
DECISIONS C & D
The issues in Decisions C and D are:
(a)whether Mr Bilney was medically qualified for DSP in the period from 30 December 2008 to 31 March 2009 (ie, whether he obtained the requisite number of points on the Impairment Table and was, due to his disability, unable to work for more than 15 hours per week); and
(b)if Mr Bilney was medically qualified for DSP, the correct value of Mr Bilney's assets for the purpose of calculating his rate of DSP, including whether the value of Mr Bilney's assets during the period 30 December 2008 to 31 March 2009 was below the asset threshold.
In regard to the above, I noted that the SSAT in its decision of 23 December 2011 set aside the decision of Centrelink in respect of Mr Bilney’s start date for DSP (determined by Centrelink to be 22 April 2010), and remitted the matter to Centrelink for determination with directions that:
·Mr Bilney’s claim for Newstart Allowance taken to be lodged on 30 December 2008 was to be taken as a claim for DSP;
·Mr Bilney’s qualification for DSP in the period 30 December 2008 to 31 March 2009 should be assessed to determine if Mr Bilney was qualified for DSP in that period;
·If he was found to be qualified for DSP in that period, his rate of DSP was to be assessed taking into account his income and assets and the various adjustments which had been made to their value;
·If Mr Bilney was not qualified for DSP in the relevant period then the claim was to be rejected and the start date for his DSP would be 22 April 2010.
On 10 September 2012, a Centrelink Authorised Review Officer (ARO), provided a decision (Exhibit A2). The ARO noted that Mr Bilney suffered rheumatoid arthritis and hypercholesterolemia, but held that Mr Bilney did not qualify for DSP from 30 December 2008. The reasons given were that from the available evidence (including that of Dr Ng and Dr King), Mr Bilney’s conditions could not be held to have been fully treated, stabilised and likely to continue for at least two years in the period 30 December 2008 to 31 March 2009. Further, Centrelink held that Mr Bilney did not have a continuing inability to work as at 30 December 2008, and that his DSP commencement date should remain at 22 April 2010 which was the date of his actual application for DSP.
Mr Bilney appealed to the SSAT which, in its decision of 21 February 2013, affirmed the decision of Centrelink to reject a claim that DSP commence on 20 December 2008. The SSAT decided that whilst it accepted Mr Bilney suffered an impairment due to sero-negative inflammatory arthritis, and accepted the condition could be regarded as permanent in 2008, it had insufficient medical evidence available to assign the relevant impairment rating. It also noted that given the lack of contemporaneous evidence, it would have found it difficult to conclude that Mr Bilney had a continuing inability to work at that time.
Mr Bilney has appealed that decision which is now an issue before this Tribunal.
I moved then to deal with Mr Bilney’s claim for DSP to be backdated to 30 December 2008. I have noted above Mr Bilney’s evidence that he feels he was incorrectly advised to apply for Newstart Allowance rather than DSP in 2008, and noted that he was not granted Newstart at that time on the basis that his assets exceeded the threshold.
Mr Bilney then applied for DSP on 22 April 2010, which was granted some months later, effective to the date of the application. However, Mr Bilney feels that he was medically as well as financially qualified to receive DSP from the time he thought he had applied for the benefit in early 2008. Centrelink simply records on 29 April 2008 that Mr Bilney expressed an interest in claiming a payment, but it seems no claim was made at that time. Unfortunately it seems that Mr Bilney did not take any action until December 2008, and the period now in question to determine whether he was qualified for DSP as dealt with by the SSAT, concerns the period from 30 December 2008 to 31 March 2009.
I must decide whether Mr Bilney was medically qualified for DSP in the period from 30 December 2008 to 31 March 2009 (ie, whether he obtained the requisite number of points on the Impairment Tables and was, due to his disability, unable to work for more than 15 hours per week). In addition, in order to calculate Mr Bilney’s rate of DSP, the value of his assets, which is discussed below, had to be taken into account.
As to Mr Bilney’s medical conditions; I note that he suffers from a number of disorders, including hypercholesterolemia and sero-negative rheumatoid arthritis (active with intermittent flares) since 1989 according to Dr Ng, a rheumatologist whose reports were at Exhibit R3/T1. Dr Ng’s reports date from 2007, to 2009 and 2010, and he has been treating Mr Bilney for sero-negative inflammatory polyarthritis. Mr Bilney’s evidence is that he has not worked since his back surgery in 2003. Mr Bilney told me that he did not have the appropriate medical reports to support his claims because he was not told he needed further reports or what they had to address.
The Job Capacity Assessment Report (JCA) dated 11 May 2010 assisted Mr Bilney with obtaining the grant of DSP from 22 April 2010. A later JCA carried out on 8 May 2012 referred to the JCA of 11 May 2010, and indicated that at both times it was found that Mr Bilney’s sero-negative inflammatory polyarthritis was fully diagnosed, treated and stabilised, which meant it could be held to be permanent. The JCA officer noted on 8 May 2012 that it was beyond the scope of that Assessment to comment on the historical circumstances and advise when Mr Bilney’s condition might originally have been considered to be permanent.
The report of Dr Johnson dated 27 July 2012 commented that Mr Bilney had back surgery, but did not provide a date for that (Mr Bilney’s earlier evidence was that it was in 2003). Dr Johnson’s report did not mention functional impairment, and did not mention 2008 at all. It did not assist me in deciding whether Mr Bilney was qualified for DSP in 2008.
In order to decide whether Mr Bilney was qualified for DSP in 2008, I had to take into account all the evidence, including Mr Bilney’s evidence, the medical reports and JCAs. I am satisfied from the reports of Dr Ng that Mr Bilney suffered an impairment from sero-negative inflammatory polyarthritis in satisfaction of s 94(1)(a) of the SSA at the relevant time.
The impairment rating is measured pursuant to s 94(1)(b) of the SSA and the Impairment Tables which are at Schedule 1B of the SSA. The JCA dated 11 May 2010 found that Mr Bilney satisfied the 20 impairment point test, and Centrelink accepted that when it found him qualified for DSP commencing on 22 April 2010.
I have noted Dr Ng’s opinions that Mr Bilney has suffered sero-negative rheumatoid arthritis since 1989, and had treatment for the condition since at least 2007, that he suffers intermittent flare-ups, and that he had back surgery in 2003. I have also noted Mr Bilney’s evidence that he has not worked since 2003. I do not have the medical evidence before me to conclude what functional impairment Mr Bilney suffered in the period 30 December 2008 to 31 March 2009, and accordingly the possibility of being satisfied regarding a measurement of impairment points pursuant to the Impairment Tables. I am also not in a position to gauge (see also JCA of 8 May 2012), Mr Bilney’s continuing inability to work at the relevant time.
Unfortunately I am in a position similar to the one the SSAT confronted, which was having insufficient medical information to know what Mr Bilney’s functional impairment was in 2008, whether his impairment rating would have been at least 20 points under the Impairment Tables, and whether he had a continuing inability to work at that time (sections 94(1)(b) and (c), and 94(2) of the SSA). Accordingly his claim that he was medically qualified for DSP in 2008 must fail. I affirm the decision that DSP was granted from 22 April 2010 when Mr Bilney applied for the benefit.
As I have found that Mr Bilney was not qualified for DSP in 2008, or before he applied the benefit on 22 April 2010, he could not receive the benefit before that date, and I am not required to decide whether the value of his assets during the period 30 December 2008 to 31 March 2009 was below the asset threshold.
DECISION E
The issue to be determined in Decision E is the proper value of the Kojonup properties as at 21 November 2011.
The value of the Kojonup properties as at 21 November 2011 is important to Mr Bilney because it forms part of the decision making regarding the rate at which his DSP can be paid from 13 December 2011. The rate is calculated in accordance with the Pension Rate Calculator A in section 1064 of the SSA.
By way of background, I note that the Kojonup properties comprise five lots, and an additional two lots which were sold some years ago for $110,000. Mr Bilney’s evidence is that he had a house constructed on the only block on which that was feasible, as the remaining blocks are not suitable for building upon.
Mr Bilney’s evidence that the house is uninhabitable and has to be demolished has already been noted above. The report of the hearings at the Building Disputes Tribunal which corroborated his evidence was also before me. The Tribunal had ordered the builder to pay the Bilneys $241,475 in connection with the faults found in the construction.
The SSAT dealt with the demolition and removal of rubble costs in its decisions of 14 May 2012 and 21 February 2013, holding that the Australian Valuation Office (AVO) had not addressed the cost of demolition and removal of debris adequately. On 14 May 2012, the SSAT set aside the decision of the ARO, and remitted the matter back to the CEO of Centrelink for reconsideration with the direction that the rate of DSP payable to Mr Bilney from 13 December 2011 was to be calculated taking into account:
(a)A detailed valuation (not kerbside assessment) of the Kojonup properties, Lot 1, Lot 102, Lot 108, Lot 109 Lot 110.
(b)The valuation was to address the cost of demolishing the house and removing the debris including any associated costs such as tip fees.
For the sake of completeness I note that previous AVO valuations had taken place on 17 February 2011 conducted by Senior Valuer Ron Sawyer who assigned a value of $232,500, followed by a kerbside assessment by Senior Valuer Mark Houlahan on 21 November 2011, who assigned a value of $235,000 for the property.
Following the SSAT remittal, Centrelink arranged for a valuation to be conducted by a valuer of the AVO. The inspection was carried out on 22 June 2012 by Senior Valuer Mark Houlahan, and the report was produced on 9 July 2012. It stated that the market value of the Kojonup properties as at 21 November 2011 was $200,000, exclusive of GST. The front page of the report indicated that it related to the value of the property as at 21 November 2011, and was carried out under instructions from SSAT. I understood that to be, that the valuation was a detailed valuation, not a kerbside valuation. I noted that the report also dealt with demolition ($30,000) and tip fees ($15,000). The $200,000 value for the property as calculated by the AVO on that occasion was applied by Centrelink in working out Mr Bilney’s pension entitlements from 13 December 2011.
Mr Bilney appealed the decision of Centrelink adopting the $200,000 full valuation of his property as the basis for calculating his rate of pension to the SSAT. The SSAT in its further decision of 21 February 2013, set aside the decision of Centrelink, and again remitted the decision for reconsideration with the direction that the valuation of the Kojonup properties as at 21 November 2011 was to address the cost of removal and cartage of the debris from demolition of the house site to the tip site. Clearly the SSAT was not satisfied that the updated AVO report of 9 July 2012 had included the required information about demolishing the house and removing the debris including any associated costs such as tip fees.
Independently of the AVO, Mr Bilney provided a valuation dated 15 September 2011 carried out by PL Bolto & Co of Katanning (Exhibit A1), as at 12 September 2011, which valued the Kojonup properties at $140,000. Mr I R Bolto signed off on the report as a Certified Practising Valuer, and notably practises in the relevant district. He described the valuation at $140,000 as an overall figure, and stated that if sold individually, the blocks would have a very low value. In Mr Bolto’s opinion, Lots 102, 108, 109 and 110 have no viable market value because of requirements of access to Lot 1, and granite outcrops and lack of building areas. He also noted that the level of sales of vacant blocks even in the larger adjoining town of Katanning were low.
Mr Bolto stated:
I realise that this value is very low, but any prudent buyer would or should make himself aware of the serious limitations on the blocks and the house that at this stage will probly (sic) require demolition. In the current very depressed market for vacant lots – this I consider is the price level that a sale would take place.
I am mindful that both the AVO valuers and Mr Bolto are certified valuers. I also noted Mr Bolto’s familiarity with the area due to his location in nearby Katanning. Both valuers have used sales of adjoining properties for comparison where possible, notwithstanding the low number of sales of vacant land in the area as they have reported.
The Respondent has urged upon me that the valuation of 9 July 2012 complied with the SSAT’s direction that the demolition and associated removal costs of debris be addressed. In that regard I noted Appendix G to the valuation at T78/840 headed ‘Demolition Quote’ attaching a quote from Keybrook Holdings Pty Ltd dated 5 July 2012 for demolition only, amounting to $29,910.65. Appendix H to the report at T78/842, related to tip fees, and confirmed what it said was the previous estimate of $12,000 for tip disposal fees. It specified that this did not include any demolition or cartage from the building site. By way of further clarification, the Respondent tendered an email from Keybrook Holdings Pty Ltd (Exhibit R5), dated 18 September 2012 in response to a query from the Program Litigation and Review Branch, Legal Division, Department of Human Services. The email stated:
The quote already given did include transporting to the refuge site in Kojonup which is approx 4km round trip.
Mr Bilney said that he did not agree with the Centrelink valuation, and argued that it did not address the SSAT’s and his concerns about tipping fees and removal of rubble from the demolition. He told me that the four kilometre distance from the demolition site to the tip mentioned in the email of Keybrook Utility Services was incorrect and an underestimate. He says that the round trip to the land fill site is 22 kms, but that Keybrook personnel told him they were not interested in carting further, and hence the quote from the shire contractor.
Mr Bilney, also produced documentation, a spread sheet and photographs he had prepared, which indicated that the demolition and removal of rubble would cost $124,669.77. I also had a quote from Warren Blackwood Waste dated 15 October 2012 addressed to Mr Bilney which gave the cost of picking up rubble as follows: 5m3 Hook-lift Building Rubble Bin - $385.00 (inclusive of GST) per Bin/Per Pickup (Exhibit A3).
At Exhibit R3 page 110 there is an email from the CEO of the Shire of Kojonup dated 2 July 2012 confirming the previous estimate of $12,000 for tip disposal fees. He emphasised that this was only to receive any demolition material/builder’s rubble at the Kojonup tip site, and not to undertake any demolition or cartage from Mr Bilney’s property.
I have noted that both the AVO and Bolto attempted to use sales in the area of Mr Bilney’s house as far as they could, given the poor sales record in the area. I also noted Mr Bilney’s comment that comparing sales in towns 80 – 120 kms distant from his property did not provide proper comparisons. The AVO, in its report, also referred to the definition of market value from ‘The International Valuation Standards 2011’ as follows: (T78/763):
The estimated amount for which an asset should exchange on the valuation date between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing and wherein the parties had each acted knowledgeably, prudently and without compulsion.
I am mindful that there is no statutory provision in the SSA giving a particular method for valuation of assets. The Federal Court endorsed the approach in Kirkovski v Secretary, Department of Family and Community Services [2004] FCA 790 at [17]. Bennett J stated as follows:
Under the Social Security Act 1991 (Cth) there is no statutory provision specifying any method for the valuation of assets. The test which seems to have been applied by the AAT in a majority of cases is a net market value approach based on comparable sales and the ‘best use’ to which the asset could be put…

I have noted that the AAT has adopted this approach various times, including in decisions handed down in 2012, in particular as noted at paragraph 18 of the SSAT decision of 14 May 2012 (Exhibit R3). The approach referred to above is reflected in ‘The Guide to Social Security Law’ (Centrelink’s Guide), and I am satisfied that such a Guide, whilst not having the binding nature of legislation is nevertheless to be followed provided it is not contrary to other principles (Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60).
Before coming to a decision regarding the value to be attributed to Mr Bilney’s Kojonup property, I noted the evidence before me, and a submission of the Respondent about the jurisdiction of this Tribunal to deal with the issue, given the SSAT had remitted that calculation of the valuation of Mr Bilney’s property to Centrelink. The SSAT had twice, (decisions of 14 May 2012 and 21 February 2013) remitted to Centrelink, the calculation of the value of Mr Bilney’s property for purposes of calculating his DSP, holding that the AVOs had not adequately addressed the cost of demolition and removal of debris and any associated costs such as tip fees.
I am satisfied from the report of the AVO dated 9 July 2012, its attachments, and Exhibit R5, the additional information from Keybrook Utility Services which clarified that their quote included the transporting to the refuge (sic) site in Kojonup, that the AVO had complied with the SSAT’s direction (decision of 21 February 2013).
I am not satisfied that Mr Bolto addressed all the issues necessary, including demolition, removal of debris and tip fees in coming to his valuation of $140,000 for the value of Mr Bilney’s property.
Accordingly, I have preferred the AVO valuation of $200,000. I therefore set aside that part of the decision of the SSAT related to 2012/SO52413 (Exhibit R4/706) which remitted the valuation issue to Centrelink, and affirm the decision of Centrelink to adopt $200,000 as the value for Mr Bilney’s Kojonup property and the basis for calculating his pension entitlement.
DECISIONS
In Matter 2012/0737:
DECISION A
This Tribunal affirms the decision of the SSAT, and finds that 3 June 2011 was the correct or preferable date to consider that the assets of the Wattledale Family Trust were transferred under the granny flat provisions.
DECISION B
Mr Bilney does not dispute, and this Tribunal affirms that the value of the assets of the Bilney Farming Trust as at 22 April 2010 was $3,051, and that arrears of pension have been paid to Mr Bilney accordingly.
In Matter 2013/1382:
DECISIONS C AND D
This Tribunal cannot be satisfied to the requisite standard from the evidence before it that Mr Bilney was medically qualified for DSP in the period from 30 December 2008 to 31 March 2009 (ie, whether he obtained the requisite number of points on the Impairment Tables and was, due to his disability, unable to work for more than 15 hours per week).
This Tribunal is therefore not required to calculate the correct value of Mr Bilney's assets for the purpose of calculating his rate of DSP, including whether the value of Mr Bilney's assets during the period 30 December 2008 to 31 March 2009 was below the asset threshold.
The Tribunal affirms the decision of the SSAT rejecting Mr Bilney’s eligibility for DSP as at 30 December 2008, and accepts the date of 22 April 2010 as the correct or preferable start date for Mr Bilney’s DSP.
DECISION E
This Tribunal is satisfied that the AVO report dated 9 July 2012 has complied with the directions of the SSAT in that it is not a kerbside valuation; it also addresses the cost of removal and the cartage of debris from demolition of the house to the tip site. The proper value of the Kojonup property as at 21 November 2011 is $200,000. The Tribunal affirms the decision which found that the value of the Kojonup property was $200,000 at 21 November 2011 for the purposes of calculating Mr Bilney’s DSP entitlements.

I certify that the preceding 84 (eighty four) paragraphs are a true copy of the reasons for the decision herein of Ms G Ettinger, Senior Member.

..(Sgd) T Freeman.....................
Associate
Dated 13 September 2013

Dates of hearing 30 and 31 July 2013

Applicant

Respondent

In person

Ms A Ladhams

Australian Government Solicitor

[2013] AATA 659

Key Legal Topics

Areas of Law

Administrative Law

Social Security Law

Legal Concepts

Administrative Decisions (Judicial Review) Act 1977

Judicial Review

Standing

Social Security Act 1991

Disability Support Pension

Asset Valuation

Division	GENERAL ADMINISTRATIVE DIVISION
File Numbers	2012/0737 & 2013/1382
Re	NEIL BILNEY
APPLICANT
And	Secretary, Department of Families, Housing, Community Services and Indigenous Affairs
RESPONDENT

Tribunal	Ms G Ettinger, Senior Member
Date	13 September 2013
Place	Perth