Parissis and Department of Family and Community Services

[2001] AATA 809

DECISION AND REASONS FOR DECISION [2001] AATA 809

ADMINISTRATIVE APPEALS TRIBUNAL        Nº V2001/676
GENERAL ADMINISTRATIVE  DIVISION
  Re:         KOULA PARISSIS
  Applicant
  And:       SECRETARY TO THE
  DEPARTMENT OF FAMILY AND
  COMMUNITY SERVICES
  Respondent

DECISION

Tribunal:       G.D. Friedman, Member
Date:             31 August 2001
Place:            Melbourne

Decision:For reasons given orally at the hearing, the Tribunal affirms the decision under review.

(sgd) Graham Friedman
  Member

1. SOCIAL SECURITY - application for age pension - sale of investment property - gift to applicant's children - disposal of assets - assets test 
   Social Security Act 1991 s1123, s1124, s1124A, s1125

REASONS FOR DECISION

21 September 2001  G.D. Friedman, Member

1. This is an application by Koula Parissis (the applicant) for review of a decision of the Social Security Appeal Tribunal (SSAT) made on 15 May 2001 which affirmed a decision by a Centrelink delegate of the Secretary to the Department of Family and Community Services (the respondent) made on 28 March 2001.  The original decision by Centrelink was to refuse the grant of an age pension to the applicant because the applicant's assets were held to be above the limit for eligibility.

2. At the hearing of this matter on 31 August 2001 the applicant represented herself, aided by a Greek interpreter. The respondent was represented by Mr M. Todd of the Administrative Law Team, Centrelink. The evidence before the Tribunal comprised oral evidence and the documents lodged under s37 of the Administrative Appeals Tribunal Act1975.
   BACKGROUND

3. The applicant was born on 1 January 1937 and until 31 December 2000 was in receipt of an age pension.  On 22 December 2000 she sold an investment property situated at 596 Canning Street, North Carlton for $370,000 and from the proceeds of sale she gave $100,000 as a gift to each of her two daughters.  She gave $20,000 to her son for repayment of a loan, and she retained the net proceeds of $111,916.25 after legal and other expenses.  On 1 March 2001 Centrelink advised the applicant that her application dated 2 January 2001 had been refused because the investment property had been re-valued, and her total assets, including the amounts given to her daughters, exceeded the limit for eligibility for age pension.  On 28 March 2001 an authorised review officer affirmed the decision and on 28 April 2001 the applicant sought review by the SSAT.  Following the decision of the SSAT to affirm the decision the applicant lodged an application to the Tribunal on 13 June 2001.
   EVIDENCE

4. The applicant told the Tribunal that she owned her own home and she and her late husband had purchased the investment property many years ago.  She said that her husband had promised their two daughters that when both were married the investment property would be sold and that each would receive a share of the proceeds.  She stated that for this reason she sold the property in December 2000 and gave $100,000 to each daughter as a wedding gift, even though she was reluctant to dispose of the property as it had provided her with rental income.

5. The applicant stated that before the sale she was unaware that the share of the proceeds of sale given to her daughters would be included as her assets when Centrelink assessed her eligibility for age pension.  She said that the decision was unfair and that she had lost her rental income and her age pension, and now had insufficient funds from the net proceeds of the sale of the investment property to provide for her living expenses. 
   CONSIDERATION OF THE ISSUES

6. The Social Security 1991 (the Act) provides in relation to the disposal of assets:

   1123   Disposal of assets

   (1)For the purposes of this Act, a person disposes of assets of the person if:

   (a)the person engages in a course of conduct that directly or indirectly:

   (i)destroys all or some of the person's assets; or

   (ii)disposes of all or some of the person's assets; or

   (iii)diminishes the value of all or some of the person's assets; and

   (b)one of the following subparagraphs is satisfied:

   (i)the person receives no consideration in money or money's worth for the destruction, disposal or diminution;

   (ii)the person receives inadequate consideration in money or money's worth for the destruction, disposal or diminution;

   (iii)the Secretary is satisfied that the person's purpose, or the dominant purpose, in engaging in that course of conduct was to obtain a social security

   1124    Amount of disposition
   If a person disposes of assets, the amount of the disposition is:

   (a)if the person receives no consideration for the destruction, disposal or diminution - an amount equal to:

   (i)the value of the assets that are destroyed; or

   (ii)the value of the assets that are disposed of; or

   (iii)the amount of the diminution in the value of the assets whose value is diminished; or

   (b)if the person receives consideration for the destruction, disposal or diminution - an amount equal to:

   (i)the value of the assets that are destroyed; or

   (ii)the value of the assets that are disposed of; or

   (iii)the amount of the diminution in the value of the assets whose value is diminished;

   less the amount of the consideration received by the person in respect of the destruction, disposal or diminution.

   1124A    Disposal of assets in pre-pension years - individuals

   (1)       Subject to subsection (2), if:

   (a)a person is not a member of a couple when the person claims a pension, benefit or payment of a kind referred to in subsection 11 (10A); and

   (b)the person has, during a pre-pension year of the person, disposed of an asset of the person; and

   (c)the amount of that disposition, or the sum of that amount and of the amounts (if any) of other dispositions of assets previously made by the person during that pre-pension year, exceeds the disposal limit;

   then, for the purposes of determining whether a pension, benefit or payment is payable to the person, there is to be included in the value of the person's assets for the period of 5 years that starts on the day on which the disposition took place:

   (d)the amount by which the sum of the amount of the first-mentioned disposition of assets and of the amounts (if any) of other dispositions of assets previously made by the person during that pre-pension year exceeds the disposal limit; or

   (e)the amount of the first-mentioned disposition;

   whichever is the lesser amount.

   (3)       In this section:
   disposal limit means:

   (a). . .

   (b)in relation to assets disposed of on or after 1 March 1991 - $10,000.

   1125  Disposal of assets - individuals

   (1)Subject to subsection (2), if, on or after 1 March 1986:

   (a)a person who is not a member of a couple has, during a pension year of the person, disposed of an asset of the person; and

   (b)the amount of that disposition, or the sum of that amount and of the amounts (if any) of other dispositions of assets previously made by the person during that pension year, exceeds the disposal limit;

   then, for the purposes of this Act, there is to be included in the value of the person's assets for the period of 5 years that starts on the day on which the disposition takes place:

   (c)the amount by which the sum of the amount of the first-mentioned disposition of assets, and of the amounts (if any) of other dispositions of assets previously made by the person during that pension year, exceeds the disposal limit; or

   (d)the amount of the first-mentioned disposition.

7. Mr Todd, on behalf of the respondent, submitted that at the date of the claim for age pension a person who is not a member of a couple and is a homeowner would not be eligible for the pension if that person's assets were valued at $266,750 or above.  He said that in this case the applicant had disposed of assets valued at $200,000 when she gifted $100,000 to each of her daughters, and that this amount, less the disposal limit of $10,000, should be taken into account when assessing her assets.  

8. In reaching its decision the Tribunal takes into account the written material, the oral evidence and the submissions made at the hearing. The Tribunal finds that the decision by the applicant to give $100,000 to each of her daughters on 22 December 2000 represented a gift and exceeded the disposal limit by $190,000 ($200,000 less $10,000). Therefore in accordance with s1124A of the Act this amount is to be taken as an asset of the applicant for a period of five years after the disposal of the asset, that is after the gifts were made. When the amount of $190,000 is added to the applicant's share of the proceeds of the investment property ($111,916.25), together with the value of other assets such as her motor vehicle and personal effects, the Tribunal finds that the assets of the applicant at the time of the claim exceeded $266,760, being the allowable amount for the grant of age pension. Consequently the decision to refuse the grant of age pension was correct.
   DECISION

9. The Tribunal affirms the decision under review.

   I certify that the nine [9] preceding paragraphs are a true copy of the reasons for the decision of
   G.D.Friedman, Member

   (sgd)       Catherine Thomas
                 Clerk

   Date of hearing:  31 August 2001
   Date of decision:  31 August 2001
   Solicitor for applicant:                  Nil - Self-represented
   Solicitor for respondent:              Nil - Mr M. Todd, Advocate with Centrelink