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

[2010] AATA 994

ADMINISTRATIVE APPEALS TRIBUNAL

DECISION AND REASONS FOR DECISION [2010] AATA 994

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2010/3022  

GENERAL ADMISTRATIVE DIVISION		)
Re		ALI OMER

Applicant

And SECRETARY, DEPARTMENT OF FAMIILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS  AFFAIRS

Respondent

DECISION

Tribunal   Ms G Ettinger, Senior Member

Date  13 December 2010

Place  Sydney

Decision   The Tribunal affirms the decision under review.

......................[sgd]........................

Ms G Ettinger
  Senior Member  

CATCHWORDS

Application for age pension – assets test – Applicant unable or unwilling to provide documentation to substantiate his claims regarding proceeds of sale of his house – decision under review affirmed.

Social Security Act 1991 (Cth) ss 23, 43, 44 and 55
Social Security (Administration) Act 1999 (Cth) ss 36 and 37

REASONS FOR DECISION

13 December 2010	Ms G Ettinger, Senior Member
SUMMARY

1.      Mr Ali Omer has appealed to this Tribunal because Centrelink denied his application for age pension. Mr Omer is 66 years of age which means he has reached the age after which he can qualify for age pension, and he has lived in Australia for more than ten years. Accordingly, he qualifies for age pension. However both Centrelink and the Social Security Appeals Tribunal (the SSAT) held that age pension was not payable to him because of the level of his assets, and because he could not corroborate some of the claims he made about how he spent $1,000,000 he received from the sale of his house in Sydney.

2.      I have heard Mr Omer give evidence at the Tribunal, and I have taken into account what he said, including his evidence about the state of his health. He gave me some medical reports which dealt with the state of his health. However in applying the social security law, I found that Mr Omer, whilst qualified, is not entitled to receive age pension.

3.      Accordingly he is unsuccessful in his claim for age pension, and I have affirmed the decision of the SSAT.

RELEVANT LEGISLATION

4.      The applicable legislation is the Social Security Act 1991 (Cth) (the SSA), and the Social Security (Administration) Act 1999 (Cth) (the Administration Act).

5. Section 36 of the Administration Act requires the Secretary to determine a claim for social security payment by either granting or rejecting the claim.

6. Section 23 of the SSA defines social security payment as follows:

social security payment means:

(a)    a social security pension; or

…

social security pension means:

(a)    an age pension; or

…

7.      The Secretary contends that a determination must be made in relation to Mr Omer’s claim for age pension lodged on 24 February 2010.

8. Section 37 of the Administration Act provides that a claim must be granted if the Secretary is satisfied that the claimant is qualified for the social security payment and that social security payment is payable.

ISSUE BEFORE THE TRIBUNAL

9.      The issue to be decided in this appeal is whether Mr Omer is entitled to be paid age pension.

BACKGROUND

10.     Mr Omer was born on 1 February 1944, and came to Australia in 1968, as a young man. He became an Australian citizen on 9 July 1969. He has been married, and has two children, now aged 10 and 13. On 14 February 2010, Mr Omer was divorced from his wife.

11.     Mr Omer lodged a claim for age pension and an income and assets form on 24 February 2010. I have noted what he said in the income and assets form, with updates given orally at the hearing before me.

§   He owned a Volvo valued at $5,000 in February 2010, which he told me at the hearing is now worth only $3,500;

§   His savings account then had a balance of $2,043; he told me at the hearing that what remains now is $280, less the bank fees, which are deducted from time to time;

§   In the income and assets form Mr Omer wrote that he had sold his property at Randwick in April 2009 for $1,000,000, details of which he would provide later.

12.     Relevantly, Mr Omer also lodged the following with Centrelink:

§   A contract for the sale of land, indicating that his house was sold for $1,000,000;

§   Letter from a lender dated 25 May 2009, indicating the outstanding mortgage was $147,930.42.  At the hearing Mr Omer first told me that the mortgage was $200,000, but agreed that the figure at T10/80, being $147,930.42 was correct;

§   Letter from a conveyancer dated 26 May 2009 stating that on settlement a bank cheque of $750,873.82 would be made available to Mr Omer;

§   Letter dated 29 May 2009 confirming that settlement took place on 28 May 2009.

13.     Mr Omer also provided Centrelink with other documents on 3 March 2010, including:

§   A statement by Mr Omer dated 3 March 2010 stating that he had spent the money he received from the sale of his house on my treatment overseas…also I gamble. No money left;

§   A letter from Dr Morris dated 12 October 2010, which noted that he was diagnosed with systemic sclerosis, Raynaud’s phenomenon, and a severe skin condition;

§   A report from Dr King dated 5 January 2010 noting a history of scleroderma and smoking;

§   A bank statement that indicated a cheque of $750,873.82 was deposited on 28 May 2009, and $755,028 was withdrawn on 2 June 2009;

§   An international money transfer application dated 2 June 2009 showing that $755,000 was transferred to a beneficiary in Turkey (name different from Mr Omer’s name). Mr Omer told me that the account holder and beneficiary was his mother.  He said in reply to questioning that he had no access to the account, and that when he went to Turkey, his mother withdrew money for him which he spent on gambling. Mr Omer said that when his mother found he had depleted the account and spent the money on gambling, she refused to speak to him.

14.     Centrelink sent Mr Omer a letter requiring, pursuant to social security law, that he provide other documents as follows:

§Copy of settlement sheet regarding sale of his former home;

§Copy of divorce papers;

§A written statement outlining how he had spent the balance of proceeds from the sale of his former home since settlement;

§A written statement detailing how he had been supporting himself in the three months prior to claiming age pension.

15.     Mr Omer lodged a copy of certificate of divorce on 16 March 2010. However, he did not provide the other documents requested.

16.     On 18 March 2010, Centrelink formally advised Mr Omer that his claim for age pension had been rejected because further documents were required. Centrelink reconsidered that decision on 6 April 2010, and determined that the decision was correct and should not be changed.

17.     When Mr Omer requested a review by an authorised review officer, another letter was sent to him inviting him to provide further information that he wanted considered. On 22 April 2010 Mr Omer wrote back saying that he can’t provide any more documents, and advising that he had spent money from the sale of his house on medical treatment overseas, and on gambling. He also provided a pathology report and receipts from chemists. On 23 April 2010, an authorised review officer formally advised Mr Omer that the original decision had been affirmed. Mr Omer exercised his rights to appeal to the SSAT and then to this Tribunal.

What did Mr Omer do with the money received from the sale of his house?

18.     A crucial question in this matter is what Mr Omer has done with the money he received from the sale of his house.  Mr Omer disclosed that he had sent $775,000 overseas, and said it was to his mother’s account, but that he did not have access to that account. He said that of that amount, he gave his wife $320,000, and that he paid off two credit cards belonging to him which his wife had been using, to the value of $50,000 or $60,000.  

19.     I noted that the SSAT also considered that a further amount of approximately $80,000, relating to a deposit that would have been due to Mr Omer on settlement of the sale, and noted that he had not disclosed anything about that amount to Centrelink. The SSAT considered on the basis of that and other matters that Mr Omer was an unreliable witness of fact. This issue of the deposit was not pursued before me.

20.     In reply to questions asked of him in the hearing, and in his evidence, Mr Omer reiterated that he had spent the bulk of the moneys on gambling when he was overseas. I asked him whether he gambled in Australia, and he said that he now does not have any money to gamble, but that in the past he went to clubs.

21.     Nothwithstanding his evidence given to the SSAT that he spent between $70,000 and $80,000 on blood tests and medication in Cyprus between June and November 2009, and that he mentioned medical treatment overseas in correspondence with Centrelink, Mr Omer did not mention overseas medical treatment at all during the hearing at this Tribunal. He only mentioned that he spent all his money on gambling. What he did say though, was that he owes the Child Support Agency money for his children, which he cannot pay. He tendered an account from the agency showing that at 19 November 2010 he owes $4,163.65 (Exhibit A1).

22.     Mr Omer told me there was no documentary information available to corroborate what he said about the money he gave his wife, or payment of the credit cards. I am satisfied from the evidence Mr Omer gave that he has not made adequate efforts to obtain documentation with regard to the credit card payments, or any other information which would assist his claim. He told me his wife would not assist with obtaining information because she wanted him to address the outstanding child support payments which he could not do.

23.     Mr Omer told me that he was upset because he had worked in Australia for 42 years, and had paid his taxes. He said that he had never before applied for any social security benefit. He said that he was sick, and he was depressed. Mr Omer tendered medical reports which are Exhibit A2 before the Tribunal. One was from Dr Mundell, a general practitioner, dated 1 October 2010, stating that Mr Omer was treated on 24 March 2009 for depression, (secondary to marital breakdown), and commenced on antidepressant medication. A second letter dated 11 October 2010 was a referral by Dr Mundell to a Dr Wiren for psychiatric review, and emphasised that Mr Omer suffers scleroderma and depression. There was also a report of Dr Bertouch, a consultant rheumatologist dated 7 October 2010, who confirmed the scleroderma diagnosis, commented that Mr Omer was on anti-depressants, and noted that he had been treating Mr Omer since 4 January 2010.  There was also a report of a CT of Mr Omer’s chest dated 6 September 2010.

24.     Mr Omer said he is struggling to live, he does not have to pay rent because he has a room at a friend’s house, and said that he goes on weekends to Flemington to collect food such as tuna and noodles. Mr Omer said that he spends $150 on fees for a specialist every month, and $60 – $70 on medication. He wants to apply for a health care card but has not done so yet.

25.     I was not satisfied with Mr Omer’s evidence regarding the disposal of the proceeds of the sale of his house by gambling. He was unable to offer any corroborating evidence in regard to expenditures made, and I find that his gambling excuse is a convenient way of disguising what he has actually done with that large amount of money. His evidence was inconsistent throughout.

Whether Mr Omer qualifies for age pension

26. There is no dispute that Mr Omer qualifies for age pension because he is over the age of 65 and because he has lived in Australia for over 40 years which far exceeds the requisite ten years to qualify for Australian residency required by section 43 of the SSA.

27.     However, I have to decide whether the age pension is payable to Mr Omer.

Whether age pension is payable to Mr Omer

28. Section 55 of the SSA provides that a person’s age pension rate is determined using the Pensions Rate Calculator A at the end of section 1064.

29.     Module A of the Rate Calculator contains a method statement that explains the overall rate calculation process. The ordinary income test and the assets test are applied, in turn, to the maximum payment rate to obtain the income reduced rate and the assets reduced rate. The provisional annual payment rate is the lower of these two rates, or, if they are equal, the income reduced rate. The rate of pension payable is the provisional annual payment rate, subject to certain additions and exclusions.

30. However in order to determine Mr Omer’s rate of age pension, it was important for the Centrelink decision maker, and now for the Tribunal to have the actual value of his assets. Section 67 of the Administration Act requires a person who is claiming a pension to provide information to Centrelink if requested to do so. As noted above, Mr Omer gave values for his motor vehicle and bank account. Mr Omer also disclosed that he received $750,873.82 from the sale of his property. As Mr Omer’s total asset value was over the asset limit, the Secretary contended that Mr Omer would be entitled to a nil rate of age pension. Section 44 of the Act provides that age pension is not payable if the pension rate is nil.

31.     Mr Omer claimed that he spent the proceeds from the sale of his property overseas on medical treatment and gambling. I am mindful as already stated above that Mr Omer transferred $755,000 to what he told us was his mother’s account. I did not have satisfactory information that I could accept about the dispersal of those funds, and to therefore be able to make a decision about the level of his assets in relation to whether age pension is payable to him.  Mr Omer claimed that he is unable to provide any further documents as receipts for payment expenses or other similar documents [are] not…available in Turkey.  That is perhaps to his detriment.

32.     I am not satisfied, therefore, based on the evidence before me, and the legislation, that age pension can be paid to Mr Omer.  Accordingly the decision of the SSAT must be affirmed.

DECISION

33.     The Tribunal affirms the decision under review.

I certify that the 33 preceding paragraphs are a true copy of the reasons for the decision herein of Ms G Ettinger, Senior Member

Signed:         .............................[sgd]...................................................
  Associate

Date of Hearing  1 December 2010
Date of Decision  13 December 2010
The Applicant  Self Represented 
Respondent’s Advocate           Ms R Prasad