Peat and Secretary, Department of Social Services (Social services second review)

[2020] AATA 1415

Peat and Secretary, Department of Social Services (Social services second review) [2020] AATA 1415 (21 May 2020)

Division:GENERAL DIVISION

File Number:2019/4749          

Re:Jean PEAT  

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

DECISION

Tribunal:Member G Hallwood

Date:21 May 2020

Place:Adelaide

The Tribunal sets aside the decision under review and the matter is remitted to the Department with the directions that:

1.Ms Peat meets the requirements of section 29 of the Social Security (Administration) Act 1999, and

2.If Ms Peat meets the other requirements for an Age Pension, that the commencement of her Age Pension be calculated, as it would have been, from her application date on 10 July 2018.

............[sgnd]............................................................

Member G Hallwood

CATCHWORDS

SOCIAL SECURITY – Age pension – Qualification – Australian residency – Overseas travel -Decision under review remitted - Whether applicant was an Australian resident during the relevant periods - What constitutes "temporary" absence - Meaning of "usual place of residence" - Factors relevant to residence in Australia

LEGISLATION

Social Security Act 1991 (Cth)

Social Security (Administration) Act 1999 (Cth)

CASES

Hafza v Director-General of Social Security (1985)

Re Wybrow v Secretary Department of Social Security [1992]
Re Clifopoulos and SDSS (1994)

Boucat and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2012] AATA 726

SECONDARY MATERIALS

Social Security (Active Participation for Disability Support Pension) Determination 2014

Social Security (Tables for the Assessment of Work-Related Impairment for Disability Support Pension) Determination 2011

REASONS FOR DECISION

Member G Hallwood

21 May 2020

INTRODUCTION

1.The applicant, Ms Jean Peat, lodged a claim for Age Pension on 10 July 2018. Centrelink rejected the claim in the first instance on 5 February 2019 and Ms Peat requested a review of that decision. An authorised review officer (ARO) of Centrelink subsequently affirmed the decision on 27 February 2019. Ms Peat requested a review by the Social Services & Child Support Division of the Administrative Appeals Tribunal (AAT1). The decision under review was affirmed on 4 July 2019. Ms Peat applied to the General Division of the Tribunal for a second review.[1]

[1] T2 p4.

THE ISSUES

2.The issue to be determined by the Tribunal is whether Ms Peat was an Australian resident when she applied for Age Pension on 10 July 2018.

BACKGROUND

3.Ms Peat is a 71-year-old Australian citizen born in Victor Harbor, South Australia, and has lived almost all of her life in Australia. She spent about three years in South Africa between 1972 and 1975.[2]

[2] T2 p5.

4.In late 2016 Ms Peat and her partner of 16 years, Mr Richard Gajda (also an Australian born Australian citizen), bought a house in Thailand which they began to renovate.[3]

[3] T2 p6.

5.In late 2017 Ms Peat and her partner sold the home they had lived in and renovated at Seaford Rise.[4]

[4] T2 p6.

6.On 18 of March 2018 Ms Peat left Australia on an overseas trip. Ms Peat used her leave from the Australian Taxation Office (ATO) where she was employed as a liaison officer to the Inspector General of Taxation.[5]

[5] A8 p10.

7.On 25 June 2018 Ms Peat, while still overseas, received an offer of redundancy which she subsequently agreed she would accept. Her redundancy date was set for 13 July 2018.[6]

[6] T2 p6.

8.Ms Peat returned to Australia on 10 July 2018. On that day she lodged a claim for Aged Pension at her local Centrelink office. She ceased working for the ATO on 13 July 2018.[7]

[7] T2 p7.

9.Ms Peat departed Australia again on 29 July 2018.[8]

[8] T2 p7.

10.Ms Peat’s claim for Age Pension was rejected on 5 February 2019 on the basis that she was not an Australian resident at the time she lodged her claim.[9]

[9] T2 p4.

LEGISLATION

11.The relevant law is contained in the Social Security Act 1991 (the Act) and Social Security (Administration) Act 1999 (the Administration Act).

12.Section 11 of the Administration Act provides that a person who wants to be granted a social security payment must make a claim in accordance with the Administration Act.

13.Section 43 of the Act relevantly sets out that a person qualifies for Age Pension if they have reached pension age and have 10 years qualifying Australian residence.

14.Section 37(1) of the Administration Act provides that a claim for a social security payment must be granted if the Secretary is satisfied that the claimant qualifies for the payment and the payment is payable.

15.Section 29 of the Administration Act relevantly sets out that an Age Pension claim can only be made by a person who is an Australian resident and in Australia.

16.Subsection 7(2) of the Act provides the definition of ‘Australian resident’ relevantly at paragraph (a) as a person who resides in Australia and at paragraph (b) is an Australian citizen.

17.Subsection 7(3) of the Act sets out factors to be considered "in deciding ... whether or not a person is residing in Australia":

a)    the nature of the accommodation used by the person in Australia; and

b)    the nature and extent of family relationships the person has in Australia; and

c)    the nature and extent of the person’s employment, business or financial ties with Australia; and

d)    the nature and extent of the person’s assets located in Australia; and

e)    the frequency and duration of the person’s travel outside Australia; and

f)     any other matter relevant to determining whether the person intends to remain permanently in Australia.

CONSIDERATION

18.The Secretary does not contend, and the Tribunal is satisfied, that Ms Peat was an Australian citizen at the time of her claim and so satisfied subsection 7(2)(b) of the Act.

19.The dispute in this matter is about whether Ms Peat resided in Australia at the time of her claim on 10 July 2018 and so satisfied subsection 7(2)(b) of the Act.

20.Ms Peat contends that she was always a resident of Australia, had bought an investment property in Thailand which she and her partner were renovating, had been out of Australia on holiday prior to returning to make her claim, and always intended to come back to Australia to live.

21.Residence is a concept that has been explored on many occasions by the Tribunal. A key decision was made in Hafza v Director-General of Social Security (1985) where Wilcox J reasoned:

There is a plethora of decisions, arising in various contexts but predominantly matrimonial cases and revenue cases, relating to the legal concept of residence.  As a general concept residence includes two elements: physical presence in a particular place and the intention to treat that place as home; at least for the time being, not necessarily forever. 

22.The term “resides in Australia” was considered in the context of section 7 of the Act in Re Wybrow v Secretary Department of Social Security [1992] referring to Hafza:

It is true that s 7(3) of the Act now requires certain factors to be taken into account in deciding whether, for the purposes of the Act, a person is residing in Australia. They are, however, not expressed to be exhaustive and do not detract from the general observations which His Honour made in relation to the ordinary concept of residence. The definition, however, compels a decision maker to pay some regard to the enumerated factors.

23.The Tribunal, in this matter, will consider each of the factors set out in subsection 7(3) of the Act in turn, and together, placing weight where the factors relate to the ordinary concept of residence and to avoid the potential of reaching a perverse outcome. In Re Clifopoulos and SDSS (1994), the factors in subsection 7(3) were there to guide decision making about a person’s intention as to their place of residence. This decision went on to say that the decision maker is also entitled to consider the converse of each factor offering the example for 7(3)(a) of considering “the nature of the applicant’s accommodation outside Australia”.

The Nature of Accommodation used in Australia

24.The type of accommodation maintained in Australia and the arrangements for their accommodation can inform, to some degree, the extent to which a person regards Australia to be their home.

25.The Secretary contends that Ms Peat, at the time she applied for an Age Pension, was residing in Thailand and was no longer residing in Australia.

26.There is no dispute that Ms Peat and her partner bought a house in Thailand in 2016, or that she had sold her house in Australia in 2017.

27.There is also no dispute that Ms Peat was only temporarily staying at her son’s home at the time of her application following a number of months of overseas travel. It is also agreed that Ms Peat departed Australia again on 29 July 2018, less than three weeks after lodging her application.

28.Ms Peat, in oral evidence, told the Tribunal that she and her partner enjoyed travel and had travelled extensively over the four or five years leading up to her ceasing work. The ATO, and in particular her boss, were flexible allowing her to buy up to 8 weeks of recreation leave a year to add to her annual leave entitlements.

29.Ms Peat said that she knew she would be retiring at some stage and in 2016 she and her partner decided to buy a holiday home in Thailand as an investment property which they could renovate and rent out to provide extra income. They also expected to use this home themselves on occasion for a holiday or as a base for travel in Asia. Ms Peat said that at the time they did not believe they had the finances to buy a property to rent out in Australia.

30.Due to a significant blow out in renovation costs in the Thailand property, Ms Peat said that she and her partner sold their home in Seaford Rise so that they could use some of that money to pay for the escalating renovation costs and leave some money aside to buy something smaller for themselves in Australia once the renovation was complete.

31.Ms Peat said that the renovation was demanding greater oversight and that eventually she and her partner decided Mr Gajda should temporarily move to Thailand in order to finish the work. By late 2017 they had decided they would put the Thailand property on the market and minimise their losses. At the hearing Ms Peat provided evidence that she and her partner had listed the property in Thailand on 4 January 2018.[10] Ms Peat said that they had problems finding a buyer for the property and kept renovating.  A sale agreement dated 15 February 2020 was also provided to the Tribunal.[11]

[10] A10 p26.

[11] A9 pp11-25.

32.Ms Peat contended that she and her partner would still own property in Australia had it not been for the escalating renovation costs of the property in Thailand.

33.The Secretary also provided documentary evidence in relation to the nature of Ms Peat’s accommodation. The Secretary contends that Ms Peat’s Age Pension claim contained answers that demonstrate her home was in Thailand at the time of the claim.

34.Ms Peat answered “No” to question 49 of the claim form: “Have you (and/or your partner) sold your former home within the last 24 months and intend to purchase or construct a new home?”[12] The Secretary contends that in relation to selling the home the statement is not true, and that by indicating no intent to purchase or build Ms Peat demonstrates that she has no intention of owning another home in Australia.

[12] T7 p41.

35.Ms Peat also recorded that her permanent address was in Australia but that her partner’s permanent address was in Thailand[13] and she currently lived in the same home as her partner.[14] The same form also recorded that Ms Peat lived with her son “at present”.

[13] T7 p31.

[14] T7 p38 at question 39.

36.Ms Peat in oral evidence said that she had attended the Noarlunga Centrelink office on 10 July 2017. She had started completing the Age Pension claim form. Ms Peat said that Centrelink staff suggested to her that she should nominate the house in Thailand as her primary residence because it would reduce her assessable assets for pension purposes. Ms Peat said that she accepted this advice in good faith. She said that what was written was not reflective of her intent as to where she called home or would settle.

37.Ms Peat told the Tribunal that originally the claim form had her partner listed as living at her son’s home and that this was crossed out and replaced with the Thailand address.[15] Ms Peat also pointed out that originally the claim form stated that her partner was living in Australia and that this was crossed out and his country of residence was changed to Thailand.[16] The question about whether Ms Peat or her partner owned a home and lived elsewhere had also been changed.[17] Ms Peat says that these changes are evidence that she simply accepted the recommendations of Centrelink staff. She was living in her son’s home.

[15] T7 p31.

[16] T7 p33.

[17] T7 p41.

38.In response to a question about why she had answered “No” to the question “Have you (and/or your partner) sold your former home within the last 24 months and intend to purchase or construct a new home?” Ms Peat said: “We weren’t sure if we could buy or if we would rent.”

39.The Tribunal finds no reason to dispute Ms Peat’s evidence in this regard.

40.It is a matter of fact where Ms Peat was living when she applied for the Age Pension. It is not unusual for travelling older Australians to live with their children during periods when they are not travelling.

41.Ms Peat told the Tribunal that she did not intend to live in her son’s home forever as she and her partner were selling their Thailand property and intended to buy another property in Australia.

42.The evident changes to the claim form satisfy the Tribunal that Ms Peat changed what she had written as a result of advice she received as to how she could improve her access to an Age Pension and the benefits she would receive.

43.Ms Peat stated that she is still a member of the local bowls club in Australia, her GP is in Australia, she maintains her private health insurance and Medicare in Australia, and her much used travel agent is in Australia.

44.For these reasons the Tribunal finds that the accommodation consideration, on balance, weighs in favour of Ms Peat being an Australian resident at the time of her claim.

The nature and extent of family relationships the person has in Australia

45.The Secretary contends that while most of Ms Peat’s family live in Australia, her partner lived in Thailand at the time of her application.

46.Ms Peat put to the Tribunal that all of her family and friends lived in Australia at the time of her application for Age Pension with the exception of her partner. Ms Peat also told the Tribunal that all of her partner’s family and friends lived in Australia at that time and that is still the case.

47.Ms Peat has a son and a daughter as well as two grandchildren in Australia. Her mother and sister live in Australia. Her partner’s son and daughter live in Australia.

48.The Tribunal has already stated that it is satisfied that the evidence provided supports a finding that, as a result of advice from what appears to be well meaning Centrelink staff, Ms Peat changed her application to indicate Mr Gajda was residing in Thailand, when in reality he was temporarily in Thailand renovating the property they intended to sell.

49.The Tribunal is satisfied that all of Ms Peat’s family and close relationships lived in Australia at the time of her application except for her partner who was temporarily overseas.

50.For this reason, the Tribunal finds that the family relationships consideration weighs strongly in favour of Ms Peat being an Australian resident at the time of her claim.

The nature and extent of the person’s employment, business and financial ties with Australia

51.The Secretary contends that Ms Peat took paid leave from her employer in December 2017, briefly returned to work for a month, between 16 February 2018 and 17 March 2018 and, arrived back in Australia on 10 July 2018 three days before she retired.

52.Ms Peat was a permanent, full-time and long-term employee of the ATO at the time of lodging her claim.

53.Ms Peat put to the Tribunal that when she went on leave in December 2017, her holidays had been planned and booked many months in advance, and she had no intention of retiring when she left in December 2017, or when she left again in March 2018. It was not until 25 June 2018, when she received details of an offer of redundancy while still on holidays, that she agreed she would retire from the ATO on 13 July 2018.

54.The Secretary put to the Tribunal that Ms Peat has no business ties in Australia but had business ties in Thailand.

55.Ms Peat provided documents that demonstrated she was a shareholder of the company that owned the Thailand property.[18] Ms Peat put to the Tribunal that for a foreigner to own a property in Thailand they must purchase it through a company.

[18] A9 p11.

56.Ms Peat provided documentary evidence from her Thailand real estate agent that the property had been placed on the market on 4 January 2018[19] and “Takeover Agreement by Transfer of Company Shares” demonstrating a contract of sale dated 15 February 2020 with all signatures by 2 March 2020.[20]

[19] A10 p26.

[20] A9.

57.Ms Peat told the Tribunal that the only bank accounts she has are in Australia. She said all of the payments for maintenance fees in Thailand have been paid out of the Australian account.

58.It would be absurd for the Tribunal to find that a person: living and employed in Australia, but with most of their shareholdings invested overseas; was not an Australian resident simply for the fact of their shareholding. In this case though, the shares representing Ms Peat’s principal asset are all in one company, and that company is a vehicle for owning what Ms Peat describes as a holiday house in Thailand that she and her partner intended to rent out for income. The Secretary also contends that the company in Thailand was a business venture of Ms Peat’s.

59.The Tribunal is satisfied that the Thailand company Ms Peat has a shareholding in, owns a property with the intent of generating revenue.

60.On balance; given that Ms Peat was employed in Australia at the time of the claim, had a shareholding in Thailand at the time of her claim, and maintained all of her banking in Australia at the time of her claim; the Tribunal finds that the employment, business and financial ties factor weighs slightly in favour of Ms Peat being an Australian resident at the time of the claim.

The nature and extent of the person’s assets located outside Australia

61.Ms Peat’s investment and holiday property in Thailand was her principal asset at the time of her application.

62.In evidence Ms Peat said that her savings including the residual from the sale of her Australian house were in her Australian bank account.

63.On balance, the Tribunal finds that the majority of Ms Peat’s financial assets were located outside Australia at the time of her application for Age Pension and this factor weighs against Ms Peat being an Australian resident at that time.

The frequency and duration of the person’s travel outside Australia

64.In the lead up to Ms Peat’s retirement she put to the Tribunal that she and her partner had travelled a great deal.

65.The Secretary submitted that because of the high frequency of Ms Peat’s travel outside Australia, and the comparatively brief periods of time spent in Australia, Ms Peat was not an Australian resident on 10 July 2018.

66.Ms Peat provided a detailed breakdown of her travels between 18 December 2017 when she went on leave, and 10 July 2018 when she applied for an Age Pension. Her travels were extensive including South Africa, Zimbabwe, Botswana, Italy, Mauritius, Jordan, Montenegro, Sardinia, Germany, France and Thailand. During the 203 days Ms Peat spent 30 days in Australia, 72 days in Thailand and 101 days in other places.

67.The Secretary drew the Tribunal’s attention to Boucaut and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2012] AATA 726 where it was observed:

Mr Boucaut’s temporary immigration status in Thailand does not alter the fact that it has become his home and he is no longer a resident of Australia. As he was not a resident at the time of his application, I must affirm the decision under review.

68.The Tribunal notes that in the case cited by the Secretary; Mr and Mrs Boucaut both had medical conditions and Mr Boucaut stated that they had decided to live in Thailand where Mrs Boucaut’s family lived and could help look after her, and where the medication she needed was available. Mr Boucaut had not returned to Australia between December 2009 and March 2012.

69.The Tribunal accepts Ms Peat’s evidence that she had taken extended holidays for each of a number of years prior to her retirement. The Tribunal is also satisfied that Ms Peat and her partner were renovating their holiday home which was also an investment property in Thailand and that is why they spent extra time in that country.

70.It is not unusual for Australians to travel more, either within Australia or overseas, as they near retirement and once retired. The Tribunal is not satisfied that the holidays taken by Ms Peat represent evidence in relation to whether or not Ms Peat was an Australian resident at the time of her application. Based on the evidence before the Tribunal this factor carries no weight in relation to the decision.

Any other matter relevant to determining whether the person intends to remain permanently in Australia

71.The Secretary contends that: applying an objective lens based on evidence rather than relying on a mere statement of intent is required in order to assess a person’s intention to remain a resident of Australia. Much of the evidence submitted by the Secretary relevant to this contention has already been explored under the previous headings.

72.The Secretary pointed to an attachment to Ms Peat’s application for Age Pension dated 10 July 2018 and completed for Ms Peat by a Centrelink staff member.[21]  The statement, signed by Ms Peat states “I will be moving to Thailand…”.  When Ms Peat was asked about this she told the Tribunal that this was what she was advised to write by the Centrelink staff member. Ms Peat also stated, “Australia is my home, always has been, never will be anything else.” Ms Peat said that she was similarly motivated when she wrote to International Services on 16 January 2019 stating, “Please note as previously advised this [Thailand address] is our Primary Residence where we live and we do not pay any rent.”[22]

[21] T3 p13.

[22] T9 p60.

73.The Guide to Social Security (the Guide) at Instruction 3.1.1.10 states:

In general, when a person states that they are leaving Australia with the intention of returning, the person’s ‘intent’ becomes less of a factor as the length of absence increases. A person’s physical ties with a country will normally take precedence over their intentions when lengthy periods of time are involved.

74.In considering what “lengthy periods of time” may mean, the Tribunal finds that in the context of this case, 72 days in Thailand of the previous 203 days does not represent a lengthy period of time when the applicant had lived in Australia for all but a couple of her almost 70 years. In the previously discussed Re Wybrow the applicant had been in Japan for 8 years, except for one brief period.  The Tribunal found in that case that he remained resident in Australia because of his continuing connections to Australia and his ephemeral connections to Japan.

75.The Secretary also put to the Tribunal that Ms Peat had not taken any firm objective steps to resume residency or made permanent arrangement for accommodation or real estate in Australia and that this weighed against Ms Peat being an Australian resident at the time of her application. Given it is still to be found whether or not residency has changed and Ms Peat had already indicated that she and her partner had sold their Australian property in order to allow them to prepare the Thailand property for sale the Tribunal gives no weight to this contention.

CONCLUSION

76.In the light of recently provided documentary evidence detailing the extent of Ms Peat’s travels in the lead up to her retirement, together with the evidence relating to the sale of the Thailand property, there is now far greater clarity about Ms Peat’s residential intent. 

77.The Tribunal is satisfied that the considerations set out in subsection 7(3) of the Act overall weigh in favour of Ms Peat being an Australian resident on 10 July 2018 when she applied for Age Pension. The factors relating to accommodation, family relationships, and employment, business and financial ties weigh toward Ms Peat being an Australian resident at the time of her application.

78.Given the weight of evidence, the Tribunal finds that Ms Peat was an Australian resident in Australia at the time she applied for Aged Pension and so meets the requirements of section 29 of the Administration Act. Subject to all other criteria being met, Ms Peat qualifies for the Age Pension.

DECISION

79.The Tribunal sets aside the decision under review and the matter is remitted to the Department with the directions that:

1. Ms Peat meets the requirements of section 29 of the Social Security (Administration) Act 1999, and;

2.   If Ms Peat meets the other requirements for an Age Pension, that the commencement of her Age Pension be calculated, as it would have been, from her application date on 10 July 2018.

I certify that the preceding 79 (seventy-nine) paragraphs are a true copy of the reasons for the decision herein of Member G Hallwood

...................[sgnd]...........................................

Administrative Assistant Legal

Dated: 21 May 2020

Date of hearing:	11 March 2020
Applicant:	Ms N Zivkovic
Representative for the Respondent:	Mr C Visser, Department of Human Services