Perrone and Secretary, Department of Family and Community Services

[2004] AATA 775

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 775

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No W2003/112-113

GENERAL ADMINISTRATIVE DIVISION		)
Re		NUNZIO PERRONE KATHE PERRONE

Applicants

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Mr M J Allen, Member

Date22 July 2004

PlacePerth

Decision The decision of the Social Security Appeals Tribunal, made on 25 February 2003, to affirm decisions made on 10 October 2002 to cancel the age pension and wife pension previously paid to the applicants, is affirmed.

.............(sgd M Allen).....................

Member

CATCHWORDS

Social security – aged and wife pensions – asset tests – whether amount held by Public Trustee for investment on behalf of pension recipient is an asset for the purposes of the assets test – whether asset can be disregarded pursuant to s 1118 (1)(n) – finding that paragraph limited to items of physical personal property that are designed to be physically used by the disabled person – an amount of money invested on behalf of the welfare recipient is not designed for use by the person – the amount invested cannot be disregarded as an asset – decision affirmed.

Social Security Appeals Act 1991 (Cth) sections 11, 17, 43, 44, 55, 147, 148, 159, 1064, 1118

Guardianship and Administration Act 1999 (WA)

Melbourne v Secretary, Department of Social Security (1998) 85 ALR 291

REASONS FOR DECISION

22 July 2004 Mr M J Allen, Member        

1.      These proceedings involve applications made on behalf of Mr Nunzio Perrone (by his plenary guardian appointed under the terms of the Guardianship and Administration Act 1999 (WA)) and by his wife, Mrs Kathe Perrone, for review of decisions made by the Social Security Appeals Tribunal (SSAT) on 25 February 2003. On that day the SSAT affirmed decisions made on 10 October 2002 by a delegate of the respondent to cancel the age pension (AP) and wife pension (WP) of Mr Perrone and Mrs Perrone respectively because their combined assets exceeded the allowable maximum value of assets.

2.      The applicants were represented by their solicitor, Mr Leask and the respondent was represented by Ms Bradley, a Centrelink officer.

3. The Tribunal received into evidence the documents filed pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 (T1 to T11) and Exhibit A1 tendered by the applicant. No oral evidence was given at the hearing.

4.      The facts of the matter were not in dispute between the parties and the following findings of fact can be made.

5.      In 1996 Mr Perrone was in receipt of an AP and Mrs Perrone was in receipt of a WP. Mr Perrone, who was 64 at the time, was involved in a serious accident involving his bicycle and a motor vehicle in which he suffered serious head injuries. In August 2002 proceedings instituted on behalf of Mr Perrone were settled by a consent judgement, pursuant to which the sum of $500, 000 was paid to the Public Trustee for Western Australia “for investment on behalf of [Mr Perrone] until further order” (A1).

6.      On becoming aware of the terms of settlement the respondent reconsidered the eligibility of the applicants for the benefits they had been receiving and calculated the value of their combined assets as being approximately $550, 000 (being the $500, 000 held on behalf of Mr Perrone  by the Public Trustee and $50, 000 of other financial assets). That amount exceeded the then allowable value of assets for a homeowner couple, which was $447, 500. Accordingly, the decision was made to cancel the AP and WP benefits.

7.      It was not in dispute that the amount of damages awarded to Mr Perrone did not include any component in respect of past or future economic loss for the purposes of s 17 of the Social Security Act 1999 (‘the Act’) and hence no preclusion period for the payment of benefits was applicable  pursuant to Part 3.14 of the Act.

8.      The issue for determination in the proceedings is whether the decisions to cancel the benefits made in October 2002 were the correct or preferable decisions having regard to the assets and income tests applicable to those benefits.

Statutory Framework

9.      It was not in dispute that the applicants were qualified for AP and WP respectively pursuant to s 43 and s 147 of the Act respectively. Sections 44 and 148 of the Act relevantly provide that AP and WP are not payable to a person if the rate of payment would be nil. Sections 55 and 159 provide that the rate of AP and WP is to be calculated using the rate calculator contained in s 1064 of the Act. That latter section provides that for persons who are members of a couple the combined income and assets of each partner must be taken into account when assessing the rate of payment. The amount payable is to be calculated using both the assets and income tests and the calculation that gives the lower benefit rate is the rate payable.

10.     Module G of the rate calculator deals with the assets test, the effect of which is that, in 2002, the rate of payment of AP and WP benefits would be nil if the combined asset value of the couple exceeded $447, 500.

11.     Section 11(1) defines an ‘asset’ as meaning “property or money (including property or money outside Australia)”. The word ‘property’ is not defined in the Act but Mr Leask for the applicants conceded that the amount held by the Public Trustee on behalf of Mr Perrone was property, and therefore an asset, for the purposes of the Act unless it was an asset that could be disregarded pursuant to s 1118. On the basis of the decision of Northrop J in Melbourne v Secretary, Department of Social Security (1998) 85 ALR 291, I am satisfied that is an appropriate concession.

12.     Section 1118 of the Act sets out a substantial number of asset types that are to be disregarded when calculating the value of a person’s assets for the purposes of the Act. The only asset category that Mr Leask identified as possibly applicable in the present case was that in s 1118(1) (n), which relevantly provides that the value of a person’s asset is to be disregarded if it is “personal property… [that] is designed for use by a disabled person; and the person …is disabled”.

13.     Mr Leask contended that the $500,000 held by the Public Trustee is personal property of Mr Perrone and that Mr Perrone is disabled. He also contended, but acknowledged that it required a “strained construction” of paragraph (n), that the amount of money was “designed for use by a disabled person”.

14.     Ms Bradley for the respondent contended that paragraph (n) should not be interpreted broadly in a way that would include the $500,000 and that the paragraph should be restricted to items of physical personal property – such as a wheelchair, motor vehicle or other apparatus or appliance – that are designed specifically for physical use by a disabled person.

15.     On the assumption that the money held by the Public Trustee is personal property of Mr Perrone and that Mr Perrone is disabled for the purposes of the Act, it is my opinion that the construction of paragraph (n) advanced by Mr Leask places far too much strain on the words of the paragraph. Section 1118 deals with a number of different types of assets, including interests in real property; certain types of interests in other arrangements affecting homes; investments in things such as superannuation funds and other forms of financial investment; the proceeds of a claim on an insurance policy or compensation payments received in respect of the loss of buildings, plant and personal effects; and items such as a motor vehicle in certain circumstances. Paragraphs (n) and (p) deal with personal property that is “designed for use by a disabled person” or is “modified so that it can be used by a disabled person” respectively. In the context in which those paragraphs appear I consider that they refer to items of the type referred to by Ms Bradley, namely items such as wheelchairs, motor vehicles, or other type of appliance that are either specifically designed for physical use by a disabled person or are modified so that they can be used by such a person. The paragraphs refer, in my opinion, to items of physical personal property of that kind and cannot be interpreted to include such things as a financial asset of the type here in question.

16.     At the conclusion of the hearing Mr Leask was invited to make written submissions concerning any other part of s 1118 that may be applicable and render the money held by the Public Trustee an exempt asset.  No such submissions were received.

17.     I find that the sum held by the Public Trustee is an asset of Mr Perrone and it is not an asset the value of which can be disregarded pursuant to section 1118 of the Act. Accordingly, its value must be taken into account when calculating the combined asset values of the applicants for asset testing purposes.

18.     It was common ground between the parties that if the amount was to be treated as an asset then the combined value of the assets of the applicants exceeded the allowable maximum and that the rate of AP and WP payable to the applicants would be nil. That being the case, it is unnecessary to consider the application of the income tests because, even if the income test were to result in a rate of payment that was more than nil, it is the rate calculated under the asset test that would prevail.

19.     Accordingly, I find that the rate of AP and WP payable to the applicants, having regard to their combined assets, was nil and hence the benefits were not payable to them.  I therefore affirm the decision under review.

I certify that the 19 preceding paragraphs are a true copy of the reasons for the decision herein of Mr M J Allen, Member

Signed:         .................................................
  Associate

Date/s of Hearing  8 June 2004
Date of Decision  22 July 2004
Counsel for the Applicant         Mr D Leask
Solicitor for the Applicant          Leask & Co
Counsel for the Respondent     Mr R Bradley
Solicitor for the Respondent     Service Recovery Team Centrelink