Pettiott and Secretary, Department of Social Services - [2018] AATA 4674

Pettitt and Secretary, Department of Social Services (Social services second review) [2018] AATA 4674 (21 December 2018)
Division:GENERAL DIVISION
File Number: 2018/0766
Re:Stanley Pettitt
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

DECISION
Tribunal:Member C Edwardes

Date:21 December 2018
Place:Perth

The decision under review is set aside and in substitution the Tribunal decides that the disputed amount of $200,000 consists of $110,000 as payment to the Applicant’s son for the construction of the granny flat and $90,000 as an early inheritance payment.
..........................[sgd].............................................
Member C Edwardes
CATCHWORDS
SOCIAL SECURITY – rate of aged pension – gift as a disposed asset – payment of past loans – oral agreements between family – granny flat interest – decision set aside and substituted
LEGISLATION
Social Security Act 1991 (Cth) – s 9(1), s 9(4), s 11(1), s 12A(2), s 55, s 1123, s1124,
s 1126AA, s 1126AB.
Social Security (Administration) Act 1999 (Cth) – s 179
CASES
Drake and Minister for Immigration and Ethnic affairs (No 2) [1979] AATA 179
Evans and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] AATA 578
Fine and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2007] AATA 1094
SECONDARY MATERIALS
Department of Social Security, Guide to Social Policy Law: Social Security Guide (Department of Social Security, Version 1.250, 5 November 2018)
REASONS FOR DECISION
Member C Edwardes
21 December 2018
BACKGROUND

On 6 February 2018, the Social Services and Child Support Division of the Administrative Appeals Tribunal (AAT1) handed down a decision which affirmed a decision made by Centrelink, which was that the Applicant’s payment to his son, John Pettitt, of an amount of $200,000 in November 2014 be treated as a gift for the purposes of the Applicant’s Age Pension.
The Applicant now seeks a review of the AAT1 decision.
The Applicant was granted an Age Pension on 23 April 1992 (T35, page 278).
The Tribunal has jurisdiction to determine this application pursuant to s 179 of the Social Security (Administration) Act 1999 (Cth) (the Administration Act).
RELEVANT FACTS AND EVIDENCE
The Applicant sold his house in Midvale in February 2012 for the amount of $267,813.68 (T7, page 67).
He moved into a granny flat located on his son’s property in March 2012 (T34, page 274).
Centrelink was advised by Teresa Pettitt, the Applicant’s daughter-in-law, on

12 November 2014 that the Applicant had gifted $200,000 to her and her husband, John (T36, page 339).
On 8 December 2014, the Applicant declared in an Income and Assets Update that, on the 16 November 2014, $200,000 had been advanced to his son as an early inheritance (T16, page 128).
On 14 November 2016 the Applicant’s application form for “Permanent Residential Aged Care” stated that $190,000 had been repaid by the Applicant to his son for a loan given to him by his son in 1985 to purchase a home and for the purpose of an advance of inheritance (T20, page 164).
On 9 January 2017, the Applicant’s son advised Centrelink that there had been a mistake made by the Applicant in terms of declaring the $200,000 as a gift in December 2014 (T23, 177).
Centrelink determined, after an assessment in October 2017, that the withdrawals of $9,903, $12,500 and $110,000 between February 2012 and July 2012 represented payments for the granny flat (T10, pages 100,103 and 106).
An appeal to an Authorised Review Officer (ARO) was requested (T27, page 238).
The ARO stated the following (T31, page 250-251):
The rate of a person’s Age Pension depends on the income and assets of the person and any increase of the value of these income and/or assets can reduce the amount of Age Pension that can be paid.
In your case, in the absence of evidence to support otherwise, I am satisfied that the depletion of you (sic) funds between 27 February 2012 and 6 July 2012, correlate and support that your funds were invested in gaining a life interest / purchase of the granny flat constructed on your son’s property. I am satisfied that your this (sic) life interest was established on 27 February 2012.
You have contributed in excess of $135,000 to the construction of your home/granny flat and retain an interest/right to occupy your home/granny flat for the life of the residence.
You are assessed as a homeowner as your contribution of more than $135,000 was more than the relevant extra allowable amount of $135,000.
I am satisfied that as your granny flat interest was established on 27 February 2012, the amount of $200,000 transferred to Teresa Pettit (sic) on 16 November 2014, is considered a gift.
I have taken into consideration information provided by your nominee (John Pettit) (sic), stating that this money was not a gift, but rather a reimbursement of funds owed to him. However I am not satisfied that there exists sufficient substantive evidence to support your liability to do so.
As such, in your case the amount of $190,000 is assessable as a financial asset to calculate the rate of your Age Pension. The amount of $190,000 is an assessable gift amount and is assessed as a financial asset for 5 years till (sic) 15 November 2019. There is no provision in the legislation to disregard this amount.
The decision to pay you a reduced rate of Age Pension from 16 November 2014 due to the value of your total income and assets was therefore correct.
The Applicant, on 21 November 2017, asked AAT1 to review the decision of the ARO (T32, page 256).
AAT1 affirmed the decision on 6 February 2018 and stated:
24. The tribunal concluded the $110,000 paid to the applicant’s son by the applicant in 2012 was properly treated as the monies paid to the applicant for the granny flat.
25. Subsequently in November 2014, the applicant paid another $200,000 to his son. In the absence of evidence the tribunal does not accept there was a loan agreement between the applicant and his son. It accepts there was an understanding that in the normal course of events the applicant’s estate would become his son’s when the applicant died. While there is nothing to prevent a person providing an early payment in anticipation of an inheritance, there are consequences if a person in receipt of a social security pension does it, in that the value of the asset (less the legislated amount) is regarded as their asset. The tribunal concluded the $200,000 paid to the applicant in November 2014 is properly treated as a gift.
On 16 February 2018, the Applicant lodged an application for second review to the General Division of the Administrative Appeals Tribunal (Tribunal) (T1, page 1-5).
The Applicant stated the reason for this application was:
All relevant receipts and info as to where the money was received and sent as proof was ignored Centerlink (sic) asked for receipts and info they knew could not be supplied. Original ammounts (sic) were outside the 5 year questioning and therefore not relevant in the case. Monies that centerlink (sic) are deeming were not relevant in context. They did not supply any proof that we were telling lies. finally the end result still leaves my father in financial difficulties AS WE HAVE PROOF OF WHER (sic) THE MONEY WAS SPENT.
ISSUES
The issue for the Tribunal to determine is how the $200,000 transferred in November 2014 from the Applicant to his son is to be treated for the purpose of calculating the Applicant’s Age Pension rate.
RELEVANT LEGISLATION AND POLICIES
The relevant legislation for this matter is contained in the:
·Social Security Act 1991 (Cth) (the Act); and
·the Social Security (Administration Act) 1999 (Cth) (the Administration Act).
Government policy set out in The Guide to Social Security Law (the Guide) is also relevant and is usually applied in the absence of cogent reasons not to follow such policy: Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 at 645.
Section 55 of the Act sets out how a person’s rate of Age Pension is determined.
Section 9(1) of the Act provides the financial assets and income definitions. The term “financial asset” is defined as “a financial investment or a deprived asset”. Section 9(4) of the Act states:
(4)For the purposes of this Act, an asset is a deprived asset if:
(a)a person has disposed of the asset; and
(b)the values of the asset is included in the value of the person’s assets by section 1124A,1125, 1125A,1126, 1126AA,1126AB, 1126AC, or 1126AD or an amount included in the value of the person’s assets in respect of the disposal by section 1126E (so far as that section relates to section 1126AA, 1126AB, 1126AC or 1126AD).
(Original emphasis.)
Section 11(1) of the Act relevantly defines “asset” to mean “property or money (including property or money outside Australia)”.
“Granny flat interest” is defined by s 12A(2) of the Act:
(2) A person has a granny flat interest in the person’s principal home if:
(c) the residence that is the person’s principal home is a private residence; and
(d)(b) the person has acquired for valuable consideration or has retained:
(i) a right to accommodation for life in the residence; or
(ii) a life interest in the residence.
Disposal of assets for the purpose of the assets test is contained in ss 1123, 1124, 1126AA and 1126AB of the Act. Section 1123 of the Act states:
(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; or
(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 advantage.
(2)For the purposes of subsection (1), a person has a purpose of obtaining a social security advantage if the person has a purpose of:
(a) obtaining a social security pension, a social security benefit, a parenting allowance, a service pension, income support supplement or a veteran payment or enabling the person's partner or someone else of whom the person is a family member to obtain such a pension, benefit, allowance or supplement, or a youth training allowance; or
(b)obtaining a social security pension, a social security benefit, a parenting allowance, a service pension, income support supplement, or a veteran payment or enabling the person's partner to obtain such a pension, benefit, allowance or supplement, or a youth training allowance, at a higher rate than would have otherwise been payable; or
(c)ensuring that the person or the person’s partner would be qualified for fringe benefits for the purposes of this Act or the Veterans’ Entitlements Act.
(3)For the purposes of subsection (1), the value of a person's granny flat interest is to be taken not to be consideration received by the person if the interest was acquired or retained before 22 August 1990.
(4)If, under subsection 1147(1A), the value of a granny flat interest is less than the amount paid, or agreed to be paid, for the interest, then, for the purposes of this section, so much of the amount paid, or agreed to be paid, as exceeds the value of the interest is not consideration for the interest.
The amount of disposal or disposition of assets is governed by s 1124 of the Act.
Section 1126AA of the Act relates to the disposal of assets post 1 July 2002 by individuals. It states:
(2)If the amount of the relevant disposal, or the sum of that amount and the amounts (if any) of other disposals of assets previously made by the person during the income year in which the relevant disposal took place exceeds $10,000, then, for the purposes of this Act, the lesser of the following amounts is to be included in the value of the person’s assets for the period of 5 years starting on the day on which the relevant disposal took place:…
Multiple disposals are dealt through s 1126AB of the Act. There is a limit of $30,000 over 5 years.
EVIDENCE
The application was heard in Perth on 2 November 2018. The Applicant appeared in person and was represented by his son, John Pettitt. The Respondent was represented by Ms Jones-Bolla of Sparke Helmore Lawyers who appeared in person.
The Tribunal has the following evidence before it:
·Exhibit A1 – Applicant’s Response to Secretary’s Statement of Facts, Issues and Contentions, received by the Tribunal on 13 August 2018.
·Exhibit A1(1) – Statutory Declaration by Kelly Pettitt and bank statement dated 31 July 2018.
·Exhibit A1(2) – Westpac Bank Statement of Stanley Pettitt, received by the Tribunal on 13 August 2018.
·Exhibit A1(3) – Extract from bank book, received by the Tribunal on 13 August 2018.
·Exhibit A1(4) – Westpac Bank Balance for Stanley Pettitt (funeral funds) printed 6 August 2018.
·Exhibit A1(5) – Letter from Centrelink regarding overpayment dated 3 November 2014.
·Exhibit A1(6) – Letter from John Donald of IPAC to John Pettitt regarding Super contribution dated 26 September 2017.
·Exhibit A2 – Letter from John Pettitt to the Tribunal, dated 28 May 2018.
·Exhibit A2(1) – Letter from John Pettitt to Respondent dated 28 May 2018.
·Exhibit A2(2) – Invoice for replacement of wall dated 4 July 1995.
·Exhibit A2(3) – Receipt for interim payments to [building company], received by the Tribunal on 30 May 2018.
·Exhibit A3 – Applicant’s response to litigation documents, dated 25 April 2018.
·Exhibit A3(1) – Applicant’s Support Plan from myagedcare, received by the Tribunal on 27 April 2018.
·Exhibit A3(2) – Full summary of the Applicant’s medical history and medication, dated 11 January 2018.
·Exhibit A3(3) – Facsimiles from Baptistcare dated 26 June 2017 and 22 November 2017.
·Exhibit A3(4) – Applicant’s admissions and discharges record from Albany hospital, received by the Tribunal on 27 April 2018.
·Exhibit A3(5) – Facsimile from SilverChain dated 13 February 2017.
·Exhibit A3(6) – Letter from Alison Steer, Optometrist, dated 10 February 2017.
·Exhibit A3(7) – Medical reports by Joline Roberts, dated 7 December 2016.
·
Exhibit A3(8) – Applicant’s Subacute Care Services Care Management Plan dated

1 December 2016.
·Exhibit A3(9) – Applicant’s discharge summaries and medical details from Albany Hospital, received by the Tribunal on 27 April 2018.
·Exhibit A3(10) – Applicant’s podiatry records, dated 1 April 2016.
·Exhibit A3(11) – Letter from Alison Steer, dated 19 October 2015.
·Exhibit A3(12) – Letters from Professor David Joseph (Radiation Oncology), received by the Tribunal on 27 April 2018.
·Exhibit A3(13) – Facsimile from SilverChain dated 16 April 2013.
·Exhibit A3(14) – Applicant’s Subacute Care Services Care Management Plan dated 31 January 2013.
·Exhibit A3(15) – Letters from North Superannuation dated 4 and 5 December 2014.
·Exhibit A4 – Excerpt from Assets and Incomes Form (question 107), received 27 April 2018.
·Exhibit A4(1) – Letter from Department of Human Services regarding the Applicant’s home care fees, dated 31 January 2018.
·Exhibit A4(2) – Letter from Department of Human Services regarding the Applicant’s residential aged care fees, dated 26 November 2016.
·Exhibit A4(3) – Bank statements received by the Tribunal on 27 April 2018.
·Exhibit A5 – Certificate of Title, dated 5 November 1984.
·Exhibit A6 – Applicant’s submissions, dated 24 February 2018.
·Exhibit A7 – Statutory Declaration of John Pettitt, attaching the Respondent’s Statement of Facts, Issues and Contentions.
·Exhibit A8 – Applicant’s timeline of events.
·Exhibit A9 – Applicant’s final submissions, dated 22 November 2018.
·Exhibit R1 – T documents, including T1 to T36, comprised of pages 1 to 356.
·Exhibit R2 – Respondent’s Statement of Facts, Issues and Contentions, dated 20 June 2018.
·Exhibit R3 – Annexures A, B and C.
·Exhibit R4 – Section 196 documents from John Donald (Chartered Financial Planning).
·Exhibit R5 – Respondent’s Supplementary Statement of Facts, Issues and Contentions, dated 14 November 2018.
The Tribunal has reviewed all of the material before it and is satisfied that all relevant evidence was before it, and that both parties were provided an opportunity to address the evidence, either orally or in writing. Relevant aspects of the evidence and material before the Tribunal will be analysed and referred to below.
The Respondent contends (R2):
Has there been a disposal of an asset in the $200,000 payment?
27.There is no dispute that the Applicant transferred $200,000 to the Applicant's daughter in-law, Teresa Pettitt on or about 3 October 2014, who then placed the funds in her superannuation account [T12 p113].
28.The primary issue is whether that transfer of $200,000 amounts to a disposal of an asset which can be assessed under ss 1123, 1124, 1126AA and 1126AB of the Act, or whether, as the Applicant contends, it was the repayment of a debt, specifically, consideration for a granny flat interest [T34, Annexure B].
29.In an Income and Assets Update form completed on 8 December 2014, only two months after the transfer and almost three years after the construction of the granny flat, the Applicant's nominee stated under question 37 that $200,000 was given away within the past 5 years. The gift was described as ‘Money savings (Advanced early inheritance due to part senility’ and that the Applicant had paid it to his son for ‘nil (paid to son in return for care)’ consideration [T16 p128].
30.The Applicant also advised the Unearned Income Intervention (UII) officer on 3 November 2014 that the funds from the 2012 withdrawals were used to repay John for the granny flat. It was on this basis that the Department did not assess any deprivation of assets at this time, pursuant to the granny flat rules [Annexure C].
31.Since the statement in 2014 that the transfer of $200,000 was an advance of early inheritance, the Applicant or his representative has made a number of inconsistent statements that the transfer was consideration for the granny flat. These statements include:
a)In a Permanent Residential Aged Care request for a Combined Assets and Income Assessment form dated 14 November 2016, some two years after the transfer, John Pettitt stated that an amount of $190,000 was "Repayment of old debt to son for house purchase in 1985 and advance of inheritance." [T20 p164]
b)In a letter to the Department dated 9 January 2017, John Pettitt stated that the $200,000 was incorrectly listed as a gift in 2014. In this letter, the cost of the granny flat was listed as $110,000 with an additional $9,982 for the front veranda and $15,000 for the rear veranda, walls, and other assorted jobs. The letter listed the total cost as $135,000 [T23 p177].
c)On 26 September 2017, John Pettitt stated that the $200,000 was ‘Repaid to John and Teresa Pettitt reimbursement for house building in Albany. Money went back in to Teresa's super a/c.’ [T26 p184]
d)Mr John Donald, John Pettitt's financial advisor, stated in a letter dated 26 September 2017 that, ‘As per our advice provided at the time, it is our understanding that the origin of these funds was from the sale of your father Stanley Pettitt's home... and represented the reimbursement to you of the costs incurred by you in the construction of his current home.’ [T26 p189].
e)John Pettitt stated in a letter to the AAT1 dated 24 February 2018 that ‘It was decided not to take the repayment of the granny flat sale from my father at that time (2012) (Agreed $200,000)... These funds were repaid to the son (myself) in November 2014.’ [T34 p272]
f)In further submissions to the Tribunal dated 25 April 2018, John Pettitt stated that the $200,000 was repayment for the granny flat and that previously listing it as 'Nil' and subsequently 'Advanced early inheritance' in the forms submitted in 2014 was a mistake. John Pettitt further stated that the reference to advanced inheritance was the granny flat itself, not the money [Annexure B pp6-7].
32.The purpose of the $200,000 was firstly noted in 2014 as early inheritance; in 2016 it was noted as the payment for a debt from 1985; and then in 2017, it was contended that this amount was repayment for the granny flat interest.
33.The Applicant's representative has relied on letter from Mr Donald to support the contention that the $200,000 was reimbursement for construction of the granny flat. The Secretary notes that the letter, dated 26 September 2017, was provided three years after the initial Income and Assets Form provided on 8 December 2014 and that the financial advisor does not reference any objective document to support his conclusion, other than the telephone conversation with John Pettitt [T26 p189]. The Secretary contends that the (sic) Mr Donald's evidence should be given little weight.

The granny flat interest
34.There is no dispute that John Pettitt constructed a granny flat on his property [address omitted] in around 2010-2012 and that the Applicant sold his residence on 17 February 2012 for $259,653.10 and moved into the granny flat in approximately March 2012.
35.The Secretary contends that the Applicant reimbursed John Pettitt for the granny flat interest at the same time he moved into the granny flat which is evidenced by a number of large withdrawals in early 2012, the sum of which correlate with the cost of the granny flat.
36.Bank statements between February and July 2012 show large withdrawals (being over $2,000) from the Applicant's bank account[T10 pp100, 103, 106 and 111]:
(a)$110,000 on 27 February 2012;
(b)$10,500 on 8 March 2012;
(c)$8,000 on 12 March 2012;
(d)$12,500 on 29 May 2012; and
(e) (e) $9,903 on 6 July 2012.
37.John Pettitt provided evidence of the building of the granny flat at his property between 2010 and 2011 [T26].
38.Through an assessment of receipts, the Department calculated the cost of the granny flat to be approximately $155,000 [T27, p237]. The above withdrawals total $150,903, which corresponds with the cost of the granny flat as calculated by the Department.
39.Furthermore, in a conversation with the Department on 3 November 2014, the Applicant confirmed that the withdrawals made in 2012 were for payment of the granny flat [Annexure C].
40.The Applicant's representative has disputed that the granny flat interest was created in 2012 with the payment of $110,000. He has stated that the amount of $110,000 paid at that time was repayment for past debts, in particular, the purchase/construction of a house in 1985. [T34, Annexure B].
Was the transfer(s) in 2012 reimbursement for past debt(s)?
41.Generally, the discharge of a debt is not considered a disposal under section 1123 of the Act (Howlett and Department of Family and Community Services [1999] AATA 317 at [31] to [35]). However, substantiated evidence of a debt is required.
42.There is no documentary evidence of an agreement between John Pettitt and the Applicant in regards to repayment of a debt related to the purchase/construction of a house in 1985 ("the Kewdale house"). In fact, there is no objective evidence that John Pettitt even paid for a property for the Applicant in 1985, let alone that he purchased the entire property for the Applicant.
43.John Pettitt provided receipts of various dates from 1984 and 1985 issued from Perceptions Builders as evidence that he had previously paid for his father's home and his father subsequently owed a debt to him. John Pettitt stated that he found the receipts after clearing out the Applicant's old paperwork. Further, it is noted that John Pettitt's name only appears on one of the receipts for $9,445, which supports that, at best, he only partly contributed to the building of the Kewdale house. One receipt indicates that the Applicant had provided an interim deposit. The other two receipts have the name 'Pettitt' but do not indicate from whom the amounts originated. There is no objective evidence that the Applicant's representative purchased the land [Annexure A].
44.John Pettitt stated in a letter dated 24 February 2018 that he made a verbal agreement with the Applicant in 2011 about the repayment of $110,000 for past debts [T34].
45.The Tribunal has previously found where an oral agreement has been made between close relatives certainty is required in order to find that a legally binding or enforceable agreement existed (Fine and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2007] AATA 1094). This is especially so where the evidence of dates is contradictory and where there is no reliable corroboration of such an agreement (Evans and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] AATA 578).
46.The Secretary contends that there was no legally enforceable contract between the Applicant and John Pettitt for the following reasons:
(a)There is no written documents evidencing an agreement;
(b)There is no reference to a specific time for repayment of the money used to purchase the Kewdale property;
(c)There is no reference to the circumstances in which repayment would be made; and
(d)There is no evidence to rebut the presumption that close relatives such as a parent and child do not intend their arrangements to create legal relations (Jones v Padavatton [1969] 2 All E.R. 616).

The Applicant contends (A1):
I wish to point out that many statements have been made on both sides over this continuing disagreement of mr s. pettitts (sic) distribution of his own personal funds since January 2012.
One of the major accusations, (sic) you have accused him of, (sic) is that he paid monies to myself for the repayment of the granny flat that I (the son) financed for him in2010/2011 (sic) (obviously expecting to get my money returned at a later stage). le, $110,000 plus assorted withdrawells (sic) from his account.
As already told to you, this is not the case as the $110,000 was the only amount he paid to me in .feb. (sic) 2012 . These funds were repaid to me (the son) for debts owed back from the year 1984 onwards.
Note. these funds should be well beyond your usage as any evidence for any matters in this case, as your rights only go back for 5 years. (not 35 years), or indeed six and a half years from feb.2012 (sic)
I do admit he should have informed you of this amount, but at 91 years old I believe that these mistakes should be allowed for especially as he was depleting his asset and would probably have increased his pension, had you been told. In fact any amounts that he did not divulge to you were all depletions of his asset so your assertion that it was done deliberately to take advantage of centerlinks (sic) payments is not true. In fact he reduced his own pension.
After all the pressure you have put my father and myself through over the last 2 years, whilst providing no proof at all ,only (sic) deeming it is having serious issues on his health.
All information on figures and costs including dates were supplied to you over the last 7 years and have been on a trying to remember basis also myself trying to extract old information from a senile 91 year old, third party. Even you must appreciate this is a difficult thing to do. Let alone you asking me to supply documentary evidence from 35 years ago (which you already know to be nearly impossible). When I do manage to supply evidence you either say its (sic) not true or ignore it. I will also point out that every time I have asked you to supply evidence you have never done so.
However, as you keep on pressing with this case (with no proof supplied) I have had to spend a lot of time and effort to prove some of these accusations to be false .Most of which you completely dispute or ignore.
After a lot more investigation with my fathers (sic) early accounts during 2012, I have investigated your statement that certain withdrawels (sic) from his account after the $110,000 oId debt was paid, were part of his repayment to me (as you say) for the granny flat build. It seems you have gone through his account at that time, selected any larger unrelated amounts and added them to the $110,000 to produce a figure that you say corresponds to the cost of the amount that the son paid for the granny flat back in 2010.
Where did you get the information that these amounts were part of the payment? What checking and with whom did you do this, to prove this point?
Please find enclosed full and financially proved statements, including bank statements and an affidavit to support what we have been telling you all along.
A)The $110,000 was withdrawn from S.Pettitt"s (sic) account and paid to the son J.Pettitt (sic) for repayments for an old agreed loan, back in 19834 (sic) onwards.
B)The $10,500 was withdrawn from S.Pettitt"s (sic) account on the 12^th march 2012, By himself and used for a holiday that was had with his son between the end of march (sic) and beginning of april (sic) which included a road trip to the north of Australia ,including Derby, Broome and a short stay at Exmouth and shark bay (sic) on the return trip. Some of these funds were also used to purchase some small items of furniture as he had just moved in to the granny flat in Question. (all as already told to you, from memory at the start of this case.) No receipts saved by my father, and could not be found. (nearly 7 years ago)
C)The $8000 was withdrawn by S. Pettitt and given to son on12th (sic) march (sic) 2012, who was asked to hold the money for further use at his funeral. These funds remained in my safe until the end of may (sic) 2012.
D)On the 29th may (sic) 2012, $12.500 was withdrawn from my fathers (sic) account by hirnself (sic), just after this time, my father asked me for the return of the $8000. And it was given to him. At that time I (son) had no knowledge of why he wanted the funds and did not know that he had withdrawn them, as he was in charge of his own finances, at that time. Upon my investigations now with the bank, I find that my father used the money to pay to his granddaughter, Into (sic) her personal account ie (sic) $20,000 on the 29th May 2012.
E)On the 6th july (sic),2012 (sic) my father withdrew $9903 from his own account and paid it to his gandaughter"s (sic) account for her own use. (again unbeknown to me (son). On 5th july (sic) 2012. All bank statements enclosed for proof.
Please note, as my father wanted to settle all of his debts before he became too ill, I wish to confirm that he subsequently paid the original $8000 for his funeral costs, back to me at a later stage, and this money remains in an account for future use, when necessary. (Bank statement enclosed).
These amounts and statements are consistent with what has been told to you from the beginning.
Financial, bank statements enclosed, along with an affidavit from the granddaughter to confirm receipt of funds.
As shown this money was proved to be supplied for the grandaughter"s (sic) use and not mine. This being the case, it confirms that it could not have been used for the repayment of the grannyflat (sic), as you claim.as these funds were not paid to me.
We now come back to my original question to you, in earlier letters If (sic) the original $110,000 was the repayment of the grannyflat (sic) (as you say) then why did he only pay the $110,000 why not the full amount of the agreed amount of $200,000. As he had the funds in his account at that time. Approximately $140,000 in his personal account and $259,000 received from sale of his Midvale unit. He had more than enough to pay the full amount. The reason he only paid $110,000 was because it was the agreed debt from 1984 onwards.
Could you please provide some proof that this is not so.
Finally on this point, you have stated that the cost of the grannyflat (sic)   assessed to be   approximately $155,000 and that corresponds with the $150,903 which is your false, figure that I have now proved to be wrong. Even though the two figures do not correspond at all, I wish to point out that all the   receipts already supplied to you actually total $159,964.48 and if you were to total the cost allowing for a further $8254 balance that was not receipted to you, being for the balance of the $124,000 contract agreed (cant (sic) find the receipt, but did pay the account) then the full total for the granny flat was $168,218.48. This is further evidence that your department has fudged and altered figures to support your case.!!!
From all of this information I have supplied, I Deem that the amount of $200,000 on the law of probability alone is the true figure that was paid for the repayment of the gannyflat (sic) and not a gift.
Furthermore, they confirm that when an adverse descision (sic) is made, the DM is reqd (sic) to contact the applicant and discuss, the fact,( as they state) that the gift would continue to be assessed as a gift; as the Granny flat was deemed to have been created in 2012. They admit that they did not do this. If they had done what their rulings say they should do, then S.pettitt (sic) woul (sic) have known three years earlier that this problem existed.He (sic) was not given the chance to solve a problem that he did not now (sic) existed. Therefore would not be in this court case and not have a climbing debt that continues till nov (sic) 2019 totalling about $40,000. Which even after this court case is finished he still wont (sic) be able to pay due to no funds, and will have to go bankrupt. This is centerlinks (sic) DEBT. If my father is to be penalised for not reporting his payments, please do so, but don't put an old man through (sic) the hell that you have, over the last 2 years, considering the amount of genuine proof that has been supplied.
It also is interesting that you confirmed the grannyflat (sic) was created in 2012, which it was not ,it was created when built In 2010/2011.Furtheremore, whichever date you seem to want to choose they are outside the 5 year rule you have applied ,so even all of this is irrelevant to this case.
ltem9 (sic)
This answer to question 107, has already been answered, The (sic) answer given is divided into 2 parts the first shows that $190,000 was paid in return for old debt for son for house purchase in 1985 and advance on inheritance. This has previously been told to you, that this figure was a typing mistake. This figure should have been $110,000. As it is written it does not make sense,no where (sic) in this case has ,any other figure ever been referred to as an" old Debt repayment other than the $110,000. And the ‘advance on lnheritance (sic) ‘referral was relevant to the $200,000 repayment for the grannyflat., (sic) not even relevant to the question This was a mixed. up (sic) answer given to the question,
Change the $190,000 to $100,000 and the answer makes sense.
Note .in your submitions (sic) I note that you have made many mistakes, such as daughter ,who does not exist) and amounts of money wrongly attributed etc.
Item 13
Proved wrong and all figures incorrect.
Item 22
B (I A (sic) right to accomodation (sic) for life was given to S pettitt (sic) at the time of the commencement of the grannyflat (sic) build.Even (sic)though this was his home to live in, he was aware that he did not own it, due (sic) the fact that the land was not his. The payment he made for construction of the property at a later stage,he (sic) made of his own will, because he did not want (son) to carry the burden of the debt into his own ,old age.
ltem23 (sic)
lb (sic) iii         You infer and accuse S. pettitt (sic) of trying to defraud centerlink (sic), through his actions of not confirming, his own personal monies (that he has already paid his legal Taxes (sic) on), that he has either spent or received.
Admittion (sic). He is guilty of not telling you of some of his transactions of spent funds. He also did not tell you when he received the funds from the sale of his Midvale unit. However please note that you wrote to him at that time 2014 and made him aware that because he had not told you that he owed $2802 in pension overpayments. He paid the amount in full, immediately. Therefore this old age oversight ,that I the son had to intervene and put right, assumed that that mistake was soughted (sic) and finalised. The only other old age oversight"s (sic) I understand to be the 2012 withdrawels (sic) That you incorrectly stated to be funds used to pay for the Grannyflat (sic). These amounts although again not reported, were payments out, and therefore would have depleted his asset. This I logically presume, would be more likely to increase his pension, not take money from centerlink (sic). Obviously he would not have done this for purpose or gain, as it only lost him money. Does this mean you owe him some entitlements that he mistakenly did not claim?
ltem27 (sic)
There is no dispute, (sic) that the $200,000 repayment for the effort and rebuild of the grannyflat (sic) went into Teresa pettitt"s (sic) superannuation account. This is where the funds used for the granny flat build where intended to go back in 2010/2011, when my own house (sons) (sic) in [suburb], was sold.. They were diverted on agreement with S Pettitt to build the grannyflat (sic) as he did not have the funds at that time ,as he had not sold his unit in Midvale.
Item 30
The information acquired from S pettitt (sic) at this time was incorrect. S.Pettitt"s (sic) mind at this time was not good.(due to strokes and onset of really ill health). Therefore any answer he gave was not relevant to the granny flat as he knew the funds were for old debts. He does not even remember the conversation, let alone his answer. He may have used the term flat as an old English person he often related (sic) to his unit in Midvale as a flat (he lived in these sorts of buildings for many years in the uk.) please note why was centerlink (sic) trying to extort information that they well knew to be unreliable from a very old part dementia"d (sic) man They knew I was the applicant"s (sic) spokes person (sic) with all the correct details, why not ask me.. Even if they can prove this conversation happened I doubt that the answer they say given was true. I feel very little weight should be given to this contact that they say happened with S Pettitt as they should not have contacted him in the first place. Bearing in mid (sic) that he had no idea or relevant information of what exactly was happening at that time, I (the son) was the only one to know. Note, as already shown the fund withdrawels (sic) have been paid to another person. Therefore either centerlink (sic) is not being truthful about the call or it shows S Pettitt"s (sic) frame of mind to be extremely faulty.
Also note, as previously shown these funds referred to, were paid to a completely different source, so as said, if he did make this statement as centerlink (sic) says, he was completely wrong. The same money could not have gone to ,Two (sic) different people.!!!!
Item 31
A)Already answered, No logical sequence between $190,000 and the following statement. (should have been $110,000.)
B)Correct statement, although the monies related to (sic) were only approx (sic) amounts from memory at that time.These (sic) statements were made at the very beginning of January 2017 in 1 of 2 letters that were sent to centerlink (sic) to try and clarify the true nature of the 2 amounts, we are disagreeing about. Note ,these (sic) are the 2 letters that I never got a reply to at all . We were again told nothing about the outcome that has occurred, and it only became apparent to us that a major problem was eminent in sept (sic) of 2017 ,after my father had to go into care,with (sic) their refusal to pay for his care payments.
C)       Correct statement.
D)       Correct Statement (sic)
E)        Correct statement The (sic) funds were delayed for repayment to give s.pettitt (sic) time and security for a while.
F)        This statement made at the last hearing was made to try and confirm that the so called ‘advance on Inheritance’ reference ceased to be the funds in question, as they became the grannyflat (sic) itself. This grannyflat (sic) was then returned immediately as always intended in 2010/2011 when built, to s pettitt (sic) to live there for the rest of his life. Therefore no transfer of inheritance happened.I (sic) (son) could not live there or sell it to gain any advantage ,and still cant (sic) until my fathers (sic) death.
Item 32
In 2014 already answered, that ‘advance of lnheritance’ (sic) was made without the future problems known, it was approved (incorrectly) by financial adviser, and was made with no predjuice (sic) as no advantage of anything was to be gained. In 2016 it was noted to be a debt from 2016. Already confirmed as a typing error as is not consistent with statement made. Finally in 2017 it was contended that this was repayment for the granny flat loan. This is correct (sic)
Item 33
The letter from J. Donald (sons (sic) financial adviser) was received three years later as it was only required to confirm the money trail and where it came from for centerlink (sic) and the tribunals (sic) proof and information. The only interest the financial adviser needed at time of reinvesting this money was the amount and where it came from for his own legal purposes. The point of the letter from him was to confirm these facts to centerlink (sic) and what he was told.Also (sic) when i(son) (sic) was asked where it came from, I told him it originally came from the sale of his unit in Midvale,which (sic) he confirms in the letter. This is true but as already said it was diverted to build the granny flat, before he received it at a later date.
I also wish it to be noted, centerlink"s (sic) accusation in the original file sent to me, that the funds were used to buy a pension insurance which benefits me for my old age. Again where did they get this information from? Accusations without proof or correct details statement made just to boost there (sic) own case.
As proved by subsequent letter from J. Donald It was stated that on my retirement (son) in 2015, the pension insurance was purchased for me ,by my financial adviser, at that time with funds from my own superannuation. Note the $200,000 being repayment for the grannyflat (sic) were never paid to me anyway ,they were paid to my wife"s (sic) account as originally intended.
This again shows centerlink (sic), making up accusations that never happened.
Item 34/35/36.
Already answered at beginning of this letter, with proof to show centerlink (sic) incorrect.
Item 37
Having centerlink (sic) state and seemingly accepting the grannyflat (sic) was built in 2010/2011, This was obviously its time of conception. Why do centerlink (sic) keep referring to its date as 2012? Either way are not both these dates well over the 5 year ruling they have,. (sic) Therefore, not assessable.
ltem38 (sic)
Centerlink (sic) again wrong Refer (sic) to opening of this letter.
Item 39, (sic)
This statement again incorrect, $.Pettitt (sic) could not have confirmed that the withdrawels (sic) were payments made for the grannyflat (sic). As shown earlier they were paid to a third party that had nothing to do with the structure built. Again, either centerlink (sic) fudging the figures to prove their case or This (sic) is what happens when relying on info obtained from an old man, that they know they should not have rung in the first place. My father has no real memory of actual facts.
Item 40
The latter part of this statement is true ,and a verbal agreement is nether (sic) the less acceptable in law. Both original parties are still alive and present, and demand from centerlink (sic) to prove it otherwise.
Also this agreement was made well before any of centerlinks (sic) up to date rulings so they should not be entitled to diminish its legal ruling, or even use it in this case as it all was well before there (sic) 5 year ruling. The grannyflat (sic) was created in 2010/2011 when built and the payment was provided from j and t Pettitt (sic) the son with funds from his own accounts (receipts supplied, note; 7 years of credit statements) Finally paid back from S.Pettitt (sic) innov. (sic) 2014. The $110,000 (no extra funds supplied) was paid back for early house build and other repairs for second house in 1985 +. In 2012 Feb.
If centerlink (sic) has any proof to say this is incorrect, please provide it.
Item 42/43
Centerlink (sic) states that there is no documentary evidence of an agreement between father and son Families (sic) that get on well and respect each other don't always have to have documents signed between them for an agreement. Many people have personel (sic) agreements that were not then, and not now, relevant for any one elses (sic) perusal or knowledge. In 1983 I doubt that any agreement was any one"s (sic) business, even centerlink"s (sic). So for centerlink (sic) to ask for receipts. and contracts from 35 years ago is totally unreasonable and unlikely. However when as (sic) I did (purely by luck,) go through the remainder of my fathers (sic) last account papers .I found 4 receipts that showed the purchase of the 1st Kewdale house in question, 1 receipt showed the !st (sic) payment paid for the deposit $250 paid by s and a pettitt (sic) (my parents) as a deposit. I agree they possibly did pay the deposit as I was probably not available ,but knowing the always trusting ,relationship I have always had with my parents ,I would have paid them back later. The next payment of$9445 (sic) was receipted on17/10/1984 to j pettitt (sic). The third receipt dated 7/12/1984 was for $9445 and made out to J. Pettitt. The final receipt for $9640.50 was made to pettitt (sic) With no initial. ( I presume laziness on the secretary"s (sic) behalf) But law of probability again says it was likely to be me. No proof either way can be sure, however I feel enough facts from these receipts should be proof enough that I did (son) purchase s. Pettitts (sic) !st (sic) house.    Original receipts available if reqd (sic).
Its (sic) interesting that when proof is available, however unlikely, it seems that centerlink (sic) deems it irrelevant. Even when both partners in the agreement are present to confirm.
Item 44
This statement is correct and true.
ltem45 (sic)
Very little of the evidence supplied in this case has been proved to be contradictory, especially as proof has been supplied by us to confirm otherwise. Just because in the past that centerlink (sic) has found some agreements made to be non legally (sic) binding it does not mean that this case is the same. From centerlinks (sic) assertions, I get the full impression that what they do or say is completely above   the law of the land .ie, a person is innocent until proven guilty. In this case the two people that made personel (sic) agreements are still alive and present to confirm there (sic) own actions. Throughout this entire case centerlink (sic) has deemed and accused my father and myself of many things but never yet has any proof been given.
ltem46 (sic)
a)        I deem no written evidence is necessary, as this was a family private agreement made well before centerlinks (sic) rules. And is still accepted by law as an oral contract. Its (sic) up to centerlink (sic) to prove it did not happen. On oath I wish to confirm it did, and we will be in court for confirmation.
b)B) Reference to a time for repayment, was introduced to centerlink (sic) in recent statements. ie, that the funds would be repayed (sic) at a later time in life, when possible . This was not done until 2012 until the sale of his unit in Midvale. This was the first time in s.pettitt"s (sic) life that funds were ever available for old debts to be repaid.
c) The repayment would obviously be in a monetary form, exactly as given (logic)
d) This is a full legal statement that I don't quite understand. However I think it ·refers to the fact that centerlink (sic) accuses my father and I of colluding to defraud centerlink (sic) out of money.? I and my father totally refute this accusation and as proof and information given, I hope has proved otherwise.   Please supply some genuine proof to the hearing or If continued We (sic) will take this to a higher court.
Item 47
a) The grannyflat (sic) as already stated was created in 2010/2011,and refunded in 2014. Funds randomly selected by centerlink (sic) in 2012 have shown not to be paid to J. Pettitt but a third party who had nothing to do with the contract. The amounts as shown did not correspond in the first place, and after false statements by centerlink (sic) ( proved to be false) are deducted the monies no where (sic) near correspond at all.
Finally These statements We have made are fully true, Some on affidavit .I wish to confirm that my father(however sick) (sic) will attend the hearing on Nov. 2nd 2018.with myself (son)and possibly legal representation. Please be prepared to supply actual proof to your accusations.

The Applicant has provided further submissions in the form of an affidavit made by his son, John Pettitt, which states:
1.My name is John Pettitt, I am the son of Stanely (sic) Pettitt.
2.Mr Stanley Pettitt is currently 91 years of age.
3.This matter originates back in 1984.-1988
4.During this time, my father had a number of debts.
5.In order to assist my father, I lent him a sum of money with a verbal agreement that he would pay me back later in life when he could afford it.
6.At this point in time, he had no capacity to pay the debt,as my parents came to this country with little savings (approximately $17,000 ) so I let the debt lay still.
7.As a loving son, I did not apply any pressure to my father in relation to the debt however we both agreed the debt was there.
8.The size of the debt was Agreed at $110,000.
9.These debts arose as my father purchased a new house and also needed repaires (sic) to his 2nd house. Over three to five years.
The first house was purchased by myself (son) for them this was in the area of Kewdale in perth (sic). The second house was purchased by themselves with funds from the sale of the Kewdale home This house wa (sic) located at greenmount (sic) in perth (sic) this house needed much reconstruction ,also paid for by the son (sic)

In approximately 2004 my father Purchased his final home unit in Midvale in perth (sic) with the proceeds of the sale of his greenmount (sic) property. This was his last owned residence before moving to Albany. His intention was to use the funds from the sale of his final Midvale unit to fund a granny flat build on sons (sic) primary home, land.
…
11... The Midvale unit was finally sold in feb (sic) of 2012 for $259,000.
12....In 2009 I ( Son) had purchased my primary property … in Albany. In early 2010 The actual agreement was struck to allow my father to build a grannyflat (sic) on my land, as it was the cheapest way for my father to have his retirement small home.
…
14.Soon there after (sic), my father was having health issues and it was decided that I build and pay for the granny flat on my property for him to live in. With intentions that my father repay the cost of the build when , and from the sale of his Midvale unit.
15.At this stage my father had another stroke and his health was declining.By (sic) the end of 2011 ,the grannyflat (sic) had been completed .
16.He finally sold his property in feb. 2012 in Perth for $259,000. He banked these funds and added together with the $140,000 he already had in his own account ,this gave him a total of approx. $399,000 in his account. At that time this was the maximum amount of money my father has ever accumulated over his life.
17.As my father now had funds and his future residence was assured (sic),lt was agreed from his request that he would repay the $110,000 owed from agreed past debts from 1983 -88. This was done and received by the son in February 2012.
18.My father eventually moved into the grannyflat (sic) in march (sic) 2012
19.It was decided and agreed between us both that we would delay the repayment of the funds for the grannyflat (sic) to allow my father to settle in his new home and gain a small amount of interest to assis (sic) him.           ·
20.He finally repayed (sic) the Agreed $200,000 in Nov. 2014. All debts between us were now complete.
21.The $200,000 repayment loan for the grannyflat (sic),was originally obtained from the sale of the sons previous home in inglewood (sic) (perth) (sic) prior to moving to Albany. The $200,000 at that time was destined to go to our superannuation account, however it was altered and used instead to finance the grannyflat (sic) build for S. Pettitt.The (sic) intention was to repay the money to the superannuation later from the sale of his Midvale unit. When finally in Nov 2012. it was repayed (sic) by S.Pettitt (sic).
22.This was done in Nov. 2014.and it went to my wife:s (sic) super Account.
23.In Nov 2014 my father was issued by centerlink (sic) with an account stating that he owed $2802 in overpayed (sic) pensions (due to him not reporting his sale of unit proceeds from Midvale) This was an honest mistake due to his memory and the start of losing his cognitive function. The funds were paid back immediately and we felt that was the end of the matter.
…
25.At the date of nov.2014 (sic), we had no idea that centerlink (sic) pursuing Deeming (sic) accounts against my father or the concequences (sic) this could hold.
26.At this time upon filing new documents for advice to centerlink (sic), it became apparent that they were deeming my father to still have the $200,000 that he used to pay for the build of the grannyflat (sic) (being his new home). It was never made clear to us that this action could have serious consequences later in life. Therefore it was never queried.
27.It needs to be noted that references made by centerlink (sic) relevant to assets and income forms supplied to them on behalf of S. Pettitt ie. Question 107. Can I request the tribunal to take careful note of this please, The writing of this statement, clearly shows that the statement is in 2 parts with a line between them. As already told to centerlink (sic) the amount of $190,000 was a typing error .It should have been $110,000.to be consistent with all previous statements .Next to it there is a clear statement that the funds were for old debts back in 1984. Never have we ever referred to the old debts being $200,000.They are using this typing mistake against my father to better their own claims. In this, form it is written in, is out of context and does not make sense. Item9 (sic).
28.At this time we were seeking advice from John Donald my financial advisor. As how to fill in the forms correctly.
29.He advised me that transaction should be recorded as an advance on inheritance as it was in the form of the grannyflat (sic).It would not matter, as I could not get any monetry (sic). gain as I had given him rights to live there for the rest of his life. (thus it could not be sold)
30.Note; further letter from J. Donald (financial advisor) To confirm these funds originated from the sale of S pettitt"s (sic) unit in Midvale, and the $200,000 in question was not a gift, as centerlink (sic) keeps trying to imply but is confirmed from a very reliable source that it was the repayment of the debt to, build his grannyflat (sic).
31.This is indicated in document E supplied. Please note this letter was supplied for centerlink (sic) as far back as 2014.0ur position has been consistant (sic), and has never changed. I cannot understand centerlink"s (sic) consistant (sic) argument that little weight should be given to this piece of evidence. Centerlink (sic) has consistently asked for evidence, when I give it they ignore it, as with the four receipts I luckily managed to supply for the purchase of his 1st house in 1984.
32.Please be aware that throughout this ordeal we have supplied numerous amounts of receipts and papers to prove our point. Centerlink (sic) has only provided rejection of our proved claims and only one piece of evidence taken from a typing error.ref (sic) in item 27.
33.During this point of time, my father was 88 years old (sic)
34.He was, with due respect, losing his cognitive function. Over the next 2 years he suffered 2 more strokes and was heading towards needing full time care.
35.He was managing his own finances at this time in 2014
36.And it appears that weird things occurred as he made numerous errors in forms, and forgot a number of particulars .such as reporting money transactions to centerlink (sic).
37.I do however concede that his failure to declare the amounts was wrong and such has been paid back. With my help he is up to date with all finances From (sic) this time on I have handled his Finances personally.
38.I appreciate that upon consideration of the facts presented by the prosecution, there are concerns which we hope to have addressed in order to clarify the facts and resolve the issue without the neec (sic) for further resources to be spent on the matter.
39.My father agrees with the facts contained in this submission and we would invite the court to hear his evidence direct from him, to the best of his limited ability.
40.I would further like to point out, that if my father had declared his payment of $100,000 for old debts and the payment of $200,000 for the grannyflat (sic) not only would this case not be happening, it also would have depleted his asset and the likelihood is that his pension would have gone up. Therefore he has lost money over the years not gained any. Can it please be recognised that this would not have been done for purpose, it was only a memory and age mistake.
41.At point 36 of the submssions (sic) from the DSS, After fishing through my father’s accounts they state that the sum of $39,000 (made up of various payments that my father had paid out) were added to the $110,000 and that these funds were then used to repay the granny flat debt.
42.This (sic) not the case.
43.A large amount of The sum of $10,500 was spent on a holiday.in the north of Australia during april (sic) of 2012.Including myself (son) why wife and stanley (sic) Pettitt.
44.The sums of $8000, $12500 and $9903 was transferred to my daughters (sic) account. We hereby attached as document F, the statement of her account with each transaction highlighted. This also matches original proof given to centerlink (sic) by us that these funds were used to pay debts accrued by the granddaughter and some for holidays.
45.Please note I the son was not aware of these payments at that time.
46.We would respectfully submit that the conclusion in paragraph 38 is incorrect. Also where did the information come from that lead centerlink (sic) to make this claim. I suspect it was falsely used just to strengthen their false claims?
47.As these funds are now shown to be Wrong in their usage it shows that the repayment of the old debt loan $110,000 would have been no where (sic) near enough to repay the grannyflat (sic) repayment of $200,000. Also why would my father only pay $110,000, he clearly had enough funds in his account to pay the entire amount. This is because it was the repayment of the old debt from years ago as we have already asserted.Finally could it please be noted that the $200,000 is a lot closer to the actual amount paid for the grannyflat (sic) so by law of probability it should be treated as so.
48.Could it be noted, in item39 (sic) that centerlink (sic) states that they had a conversation with my father as to what the payments were for at the relevant time, they say he said they were for the grannyflat (sic).
a.He does not remember the conversation
b.He was not likely to have said that, as he knew he had given it to his granddaughter
c.If, he did say that then it proves his state of mind at that time and was not capable of genuinely answering such questions. His memory has been declining for many years
d.Centerlink (sic) should never have rung an old person when they knew I was the only one with the true facts
e.They even rang and fished for information from my wife, who new (sic) very little of the facts. Why no contact me?
49.We would respectfully question the basis of the assertion.
Final noteable (sic) points for consideration.
Item 7, The $200,000 refered (sic) to that s.pettitt (sic) paid to son was in reference to care given over the years including the loan for the cost supply and building of his grannyflat (sic) in Albany on my own land. Thus all help given.
Item8   If the dept (sic) assessed the $200,000 as a gift it seems strange that they did not enquire or ask as to how S pettitt paid for the grannyflat (sic) loan by the son As now proved the first $110,000 was not possible to be the grannyflat (sic) payment then why do they still insist that the $200,00 was a gift It could only have been the house payment, as s.pettitt (sic) had no funds left to pay his bills.
Item 9 copy of question 107 is supplied DocumentG (sic). This document is to confirm genuine typing error note, $190,000 is referenced relevant to old loan from early debt in 1985 It should have been $110,000.The $200,000 was reference to the amount of inheritance in the form of the grannyflat (sic). No info here withheld just badly written and a genuine typing error, also not lack of space for explanation.
Item11 (sic)   Why did centerlink (sic) request info from s. pettitt (sic) at this time when they knew I was his spokesman How did they contact him?
Item 12           Please note the huge amout (sic) of receipts supplied. These receipts have never been queried and were accepted. Also all receipts were supplied to prove the build of the granny flat by the son These also accepted. If it can be accepted by the tribunal that the payment of the grannyflat (sic) was not from the original $110,000 as hopefully shown, then the $200,000 must have been the true repayment and not a gift (sic)
Item27 (sic) We confirm the funds of $200,000 was deposited to Teresa pettitt (sic) super account as a refund for the build of his grannyflat . This is were (sic) it was originally intended to go, albeit at a later date.
Item 29           This reference to the $200,000 paid as early inheritance was only referred to as an answer to the question Please look at the true facts. Le (sic), the funds repaid the debt of the grannyflat (sic), therefore if a gift was made as centerlink (sic) suggests then it was in the form of the grannyflat (sic) itself. It was then given back to S. pettitt (sic) immediately with confirmation that he could live there for the rest of his life ref page 47. Therefore I could not sell it or make any gain until his death. My father can not (sic) own or sell the property because he does not own the land.and (sic) because of my commitment to him ,we can not (sic) sell our property either. Please refer to centerlinks (sic) own submitions (sic) in their original file ,sent to S. Pettitt. Copies enclosed Documents H.and J . Doc H is relevant to the fact that when a disposed Item (grannyflat) (sic) or money is returned immediately to the person then the deprived amount cease to become assessable. The grannyflat (sic) was returned immediately for S Pettitt to live in for the rest of his life. Doc J is referred to as vacating the grannyflat (sic). I refer this as sudden onset of illness. By their own rules as he had to leave and go into care ,it states that the amount inferred to is either the $200,000 or the granny flat itself. as the amount was the repayment of the building then the building itself is the Assessed item and the deprivation rules would not apply. Note centerlinks (sic) deeming period is from November 2014 to November 2019. My father had full onset of illness and had to go to full care help, during the month of july (sic) 2017 after having a massive stroke This hospitalised him for 60 plus days and completely changed his life.
Please note, this is all this case is about, centerlink (sic) has reversed the monetary payments in question so that they can call it a gift so they then will not pay his monthly payments at the home.
Item 31 a Already confirmed the $190,000 was a genuine typing. error
b not aware that total costs were needed. reference to costs spent on grannyflat (sic) was approx. at that time, and we were not aware that a problem existed by non payment (sic) of centerlink (sic) until after S. pettitt (sic) was admitted to the home in july (sic) of 2017.
d letter from j. donald (sic) already supplied Doc.E
Item32 (sic) Which as shown inheritance was in the form of the grannyflat (sic) where no gain was received. In 2016 it was not noted as a payment for an old debt IT was a typing error should have been $110 ,000.
Lastly in 2017 it was contended to be the repayment for the grannyflat (sic) itself. This is a true statement and consists with what was told to centerlink (sic) way back in 2014.
Item 42/43      Even the law recognises a verbal agreement, especially if both people are here to corroborate It, which they are. Evidence has been supplied for this in the form of receipts. Centerlink (sic) ask:s (sic) one to supply receipts as far back as 1984. Knowing it is pretty well impossible, and then uses the information against you. When you do supply it they ignore it.
Item44/45 Can centerlink (sic) please supply some actual proof that this did not happen
Item 46           I dispute that there is a need to have written evidence of an agreement between family members that are honourable . The time of repayment was referenced to centerlink (sic), that it would be repayed (sic) later in life when available (hence the sale of his last unit in Midvale). Payment to be made was not relevant. Obviously such large amounts would be by the bank transfers that already have occurred.
d Please supply some actual proof that backs up your claim.
Item 47a now that the amounts added to the $110,000 have been eliminated and shown not to be true, I wish to point out that the amount of $110,000 is no where (sic) near the repayment of the grannyflat (sic) loan. So if centerlink (sic) still insists that the$200,000 was a gift. Where do I (son) get the balance of my building money back from.?
I feel we have supplied more than enough genuine proof for this case ,where centerlink (sic) has only supplied 2 pieces. One I Now (sic) is an obvious mistake. The other lack of the written word and space to explain things properly.(especially ,when one does not know that a problem exists or will exist at a later date.) As my father has no further funds to defend this case and I am having to try and do it(asl (sic) do not have a legal mind or background) I feel centerlink (sic) has taken full advantage of these facts.
My father is now almost 92 years old and although having another recent stroke will endeavour along with his granddaughter to attend on Nov 2^nd (sic)
Finally, my father only has $8000 left for his funeral expenses and $8500 left in cash. With a debt levelled against him of over $20,000 already from the home he is living in, this will increase to $39,000 by the end of centerlink:s (sic) deeming period. They are already taking about 96% of his pension to help cover intermediate costs. Centerlink (sic) Knows (sic) he cannot pay the.bill (sic) but still insists on their accusations without any proof. All we ask for is a fair hearing so my father can relax in his very few final years.
The Tribunal notes the decision of AAT1 and provides relevant excerpts (T2, page

6-11):
10.In this case Centrelink has decided the applicant ‘gifted’ $200,000 to his son on 16 November 2014. Consequently it has attributed a financial asset of $190,000 to the applicant from 16 November 2014. Income is deemed based on this asset. Income above a certain level reduces the rate of age pension which the person is paid. In this case, because of the attribution of the asset, the applicant’s deemed income exceeds the income limit and his rate of age pension is reduced.
11.…
12.On 27 April 2012, a duplicate Record of Certificate of Title was issued to the applicant’s son and wife for an ancillary dwelling on their property that ‘shall be occupied by direct family members of the occupiers of the main dwelling’. Various receipts show the building of the dwelling took place in 2010/2011/2012. The applicant moved into his dwelling in 2011. He sold his Midvale house in February 2012 and received approximately $260,000. On 27 February 2012, he withdrew $110,000 from his bank and it is not disputed this money was paid to the applicant’s son.
13.In 2014, Centrelink assessed the payment the applicant made to his son ($110,000) in 2012 as a payment he made to purchase a life interest in the granny flat his son had built on the property.
14.Centrelink assessed a later payment made in November 2014 ($200,000) as a gift from the applicant to his son.
15.The consequence of this sequence of events is that the amount of $110,000 does not figure as part of the applicant’s assets (the granny flat provisions of the Act are relevant) but the $200,000 (less the $10,000 gifting provision per annum to a maximum of $30,000 in 5 years) does.
16.On 8 December 2014, the applicant, with assistance from his son and his daughter-in-law, completed and signed an income and assets update form at Centrelink’s request. The following questions and answers are relevant:
Question 4: Do you ...own, or are buying, or have a life interest in your home?
Answer: Yes (no other information provided on this form)
Question 28: Do you...own your principal home?
Answer: Yes home only (not land)
Question 37: In the last 5 years have you...given away, sold for less than their market value, or surrendered a right to any cash, assets, property or income?
The form and responses continued:

What you gave away for less than its market value (e.g. money...)

Date given or sold

What was it worth?

What you got for it?

Money savings

(advanced early

inheritance due to part

senility)

16/11/2014

$200,000

Nil

Paid to son in return for

care

17.Later, on 14 November 2016, the applicant’s son (as nominee) completed a Request for a Combined Income and Assets Assessment form for permanent residential aged care. Question 107 put to the applicant a question similar to the one above. The form and responses continued:
Q: What you gave away or sold for less than its market value (e.g. car...)
A: $190,000 repayment of old debt to son for house purchase in 1985 and additional for inheritance
Date given or sold
2/10/2014

18.The applicant’s son told the tribunal that when he assisted his father fill in the form signed on 8 December 2014, the son’s financial advisor advised the son how to fill it in. That is to state $200,000 was gifted by his father to the son in return for the care provided to him.
19.The tribunal notes there is not a document supporting the assertion a financial advisor gave this advice.
20.The applicant’s son said when he filled in the form he signed on 14 November 2016, he was attempting to correct the record. He said he had made a mistake and had meant to write in response to question 107 an amount of $110,000.
21.The tribunal does not accept this explanation. On 14 November 2016, the applicant’s son clearly wrote in response to question 107 the amount of $190,000 was to settle the debt and $10,000 was to be a payment for an early inheritance, or a gift. In addition, question 111 asked:
At the relevant date did you ...have any outstanding credit card debts or other personal loans?
The applicant’s son wrote that his father owed him $200,000.

22.The tribunal concluded the reason the applicant’s son said he had made an error and said he had intended to write $110,000 in response to question 107, reflected the applicant’s son’s attempt to have the $200,000, gifted to him on 14 November 2014, treated as the applicant’s payment to him for the granny flat.
23.The tribunal also noted that Centrelink’s recordings of discussions with the applicant’s son showed apparent inconsistencies in his explanations. For example, on 15 September 2017 a file note recorded:
Spoke to nominee ... (he) advised the withdrawals from Cust’s bank account in 2012 was used for a holiday and to pay outstanding debts of family members.

The authorised review officer invited the applicant’s son to show evidence of this expenditure. The authorised review officer recorded on 6 November 2017 that the applicant’s son denied the money was used for holidays or to retire family debts.

The Tribunal notes two further submissions made by the Applicant’s son, received by the Tribunal on 27 April 2018 (A3), specifically focussing on the two sums of money:
This money was a loan repayment for payments made for my father over his life ie, purchase of first house and subsequent repairs to his second house between 1985 and 1992. Approx.
Verbal agreement he would pay this money back when possible later in life, assumed from the final sale of his primary home. Re paid (sic) February 2012.
Verbal, or written, or implied agreements are all acceptable by law.
I have been asked by centerlink (sic) to supply documents for proof. Not possible as centerlink (sic) well knows as to (sic) long ago.
Approx two weeks ago I requested a document from centerlink (sic) for the last hearing, from my fathers (sic) application for his pension in 1992 (26 years ago) I was told if at all available from so long ago it could take them quite a time to produce it . ?? It seems that IF they cant (sic) produce docs or receipts from that far back, How do they expect me to. (dual standards?)
Only been able to find one document as proof. this is from Landgate showing the 1st property purchased for S. Pet tit t (sic) on the 5th. November 1984 (document enclosed) This was paid for by the son with cash Proceeds from the sale of his own motor vehicle. Apparently govt. registrations don't go back before the year 2000.How can I. (sic)
The $110,000 centerlink (sic) states used to pay for the grannyflat (sic) in question. There assumption is that it matches the same time approx (sic) thats. (sic) pettitt (sic) moved in to the granny flat.
They also refer to 3 withdrawels (sic) from his own account on the 29th may (sic) ($12,500) 3rd. july (sic) ($1500) and 6th july ($9903). Ref page 100 and 103. And page 235. These amounts were explained as $12,500 was for a holiday in june of 2012 3 week road trip to wyndham (sic), broome (sic) port headlad (sic) ,shark bay (sic) and Exmouth.including (sic) approx. $3000,for fuel. Cost of campsites hotels Fishing trips and food including restaurants (sic). Any balance left was from memory probably on furniture and other expenses for his new grannyflat (sic). My father cannot remember. The $1500 was I assume for personel (sic) expenses
S pettitt (sic) often withdrew living funds in bulk to cut down on bank fees that were relevant in those years .The final$9903 (sic) was given to my daughter (his granddaughter) or used to pay off her debts and problematic lifestyle at that time. Note this was without my knowledge. Confirmed page340 txt (sic)Please note no receipt s available for these amounts as my father has never kept any.
Also not unusual as over 7 years where receipts can be discarded (ATO rules)I (sic) believe now down to 5 Years. Relevance page 343
It seems that centerlink (sic) is putting the amount of $110,000 plus the amounts in may (sic) ,june (sic) withdrawels (sic) totalling $23,903 together giving a full total of $133,903. And they are saying this is the same amount as the building of the grannyflat (sic) ,therefore it must be the actual payment.
I wish to point out, the total amount to build the granny flat was in excess of $165,000 or up to $190,000 as paid. These amounts have never been disputed by centerlink (sic),and are no where (sic) near equivalent amounts as centerlink (sic) suggests.
Also please note that centerlink (sic) states that only $135,000 is the max. that can be spent on an ancillary home. I want to point out that although extras were spent for necessities and comfort over the following year, the full contract price of the grannyflat (sic) was only $124,000.
Final point.. if as centerlink (sic) wants you to believe that the $110,000 plus was payment for the grannyflat (sic), why did my father only pay that amount ($110,000) when the full cost he owed was $165,000 or $190,000 that was paid. In his bank accounts it shows he had approx.$130,000 of his own savings and a further $259,000 from the sale of his unit in Midvale He had more than enough funds to pay the $190,000 in full. Page 344 txt (sic) 1 and 2
THE AMOUNT OF $110,000 WAS NOT PAYMENT FOR THE GRANNYFLAT (sic).
These amounts were due to be paid at that time when he had the funds finally available, the fact they were paid then when he also moved into the grannyflat (sic) is coincidental, as he had just been paid for the sale of his unit.
Page 345        Bottom Text.   Quote the granny flat was created in 2012 and the 2014 funds are a gift? (if created 2012 then over the 5 year period.)Expired Feb. 2017 amount should now not be assessable (sic)
How and when did my father manage to pay for the grannyflat (sic),and what with. The builder and materials had to be paid, and so did the debt if the money was borrowed (which it was from the son) When does the son get his money repaid? If the loan had been from a bank institution, would not centerlink (sic) have expected him to pay it back.
outcome (sic) txt. Whatever money was used, centerlink (sic) confirms entity was created on 27thfeb 2012. This is incorrect the grannyflat (sic) was created when building was finalised in march 2011 on final payment from the son. Either way, both dates are over the five year period and should not be assessable.
Page 342 u11 review. quotes that centerlink (sic) spoke to mrs pettitt (sic) re payment,( fishing) for information on $110,000 payment she stated she did not know but that s pettitt (sic) lived there. Centerlink (sic) then proceeded to ring my father at 90 years old and ask similar questions.
They had no right to ring either of these people as they knew I was the one and only power of Attorney with the correct information and knowledge. Especially my father who at 90 has known very little of his finances for the last 3 years or more.
They not only acquired information incorrectly but are using it against my father to suit there (sic) own purposes. This I find to be completely unethical.
Page 337 Last txt s.pettitt (sic) states he had not gifted any money, advised the money$110,000 (sic) was a loan only for the purchase of original ppr (sic). He then sold his unit in Midvale and the funds of $110,000 were repaid to the son. Centerlink (sic) goes on to say that the son then built a grannyflat (sic) on sons (sic) ppr (sic). Centerlink (sic) is stating that I then built the grannyflat (sic) with the $110,000 received . This is not possible as the son had already built the granny flat in dec (sic) 2010/ jan (sic) 2011. This was paid for from the funds obtained, from the sale of his own home in Inglewood WA approx. October 2010.
s.pettitt (sic) was due to move in to grannyflat (sic) on sale of his unit in Midvale this did not happen till (sic) early 2012. Finally re paid (sic) for with $200,000 in nov (sic) 2014
He was given the right to live there for the rest of his life. (confirmed stat dee (sic) on10th april (sic) 2017).
He knew at that time he could never own it as it was built on my land. confirmed it did not matter all he wanted was surety for the rest of his life.
The funds used to build the grannyflat (sic) by the son as told earlier came from sale of my own house in Inglewood. The $110,000 when paid in feb (sic) 2012 was used to rebuild my own house [address omitted]. This was being done at that time and still going a couple of years later. Full bank receipts have been provided and highlited (sic) to show amounts spent.
Finally, on page 238 item 6     centerlink (sic) states that if the $190,000 was payment for the grannyflat (sic), (which it was) then the amount of $110,000 would have been declared as a gift? (by them). I assume because no receipts (other thanl (sic)) can be supplied, If this is the case, why would centerlink (sic)not go that way?? By the obvious law of probability the funds of the $190,000 paid is a lot closer to the actual cost paid to build the granny flat. Therefore is more likely to be the truth. If they had done this would they not, have a stronger case against a 91 year old who just wants to pay his debts (sic)
I wish to point out that they did not go that way because they knew it is harder to prove for themselves. They know that all of this information and timeline is well beyond there (sic) jurisdiction.
Just because information cannot be supplied from both sides it does not mean my   fathers (sic) statement is not true. centerlink (sic) has provided absolutely no proof that the $110,000 was not a loan and by there (sic) rules is so far over the deeming time limits. They have reversed these amounts because they feel it makes there (sic) task stronger. PLEASE GIVE ACTUAL PROOF MY FATHER IS NOT TELLING THE TRUTH. Considering proof of payments etc. has been supplied by him.”
References to the $200,000 payment for the Grannyflat (sic)
In 2011, my father confirmed to me (son) that he wished to sell his midvale (sic) unit and move closer to myself in Albany.
At·this time his assets were approx (sic) $130,000 held in his bank account and the ownership of his unit in Midvale, valued at approximately $250,000 Totalling $380,000 This amount of money is the total and maximum amount of money along with my deceased mother that he has ever accumulated over his whole life.
His options were to buy a unit or house in Albany, on investigation it was considered to be to (sic) costly, He wanted to downsize, if possible to give himself some spending money for his limited future.
On November 2010, It was decided the cheapest option was to allow him to pay and build a small grannyflat (sic) on the rear of the sons (sic) own property at … Albany W.A. He understood that it could never be owned by himself as he could not buy the land. However he would be given the right to have a life interest,and live there for the rest of his life. Confirmed by stat declaration on 10th of April 2017 as requested by centerlink (sic).
His unit in Midvale was not sold at this time, so he could not finance the build.
To save him money from borrowing the funds from the bank (with huge interest), it was decided that the son would loan the amount to build, and act as owner builder to organise the huge amount of work involved.
These funds would be repaid afters pettitt:s (sic) sale of his unit were finalised.
Granny flat was approved and built (all documents supplied) between the dates of December 2010 and approx (sic) march (sic) 2011. The building was built by [company name omitted] (all receipts supplied) and finalised at the end of march (sic) 2011. For $124,000. (Never disputed by centerlink (sic)).
Further work was done on the project over the next 8 months, this being accessories and further comfort requirement necessary for Mr s pettitt (sic). On final calculation, the amount was shown to be $165,000.
All was paid for by the son (receipts supplied and never disputed by centerlink) and paid for from the sons personel (sic) account with proceeds from the sale of his own home at Inglewood WA. Approximately a year before.
S. pettitt finally decided he wanted to pay back the loan in full. His intention was, that he wanted to pay $200,000 in full payment for the grannyflat (sic) build plus all work involved in construction and organisation on my behalf. This he intended to do on the sale of his unit in Midvale.
His Midvale unit was finally sold and he was paid $259,000 in February 2012. This gave him approximately $380,000 in the bank at that time. Due to senility and age my father did not notify centerlink (sic) of the payment of the $110,000 or the receival (sic) and final payment of the $200,000 to the son. Nb. I was not aware of this, as I was not in control of his finances at that time. He was subsequently ordered by centerlink (sic) to repay overpaid pensions at an amount of $2802 For failing to disclose these amounts. This he did at that time. Therefore this debt has been finalised and paid page 116 .It is important to note that he did not do this for purpose or for any gain. In fact the opposite, had he told centerlink (sic) of both transactions it would have depleted his assets at that time and centerlink (sic) would have probably increased his pension accordingly. Therefore he has lost money by not realising that he had to report it.
At the time of his moving in during feb/march (sic) 2012,work was still being done on his property to finalise it, and after discussions with him (s.pettitt) (sic) it was decided to give him a little more time, before he had to pay back the loan. This enabled him to settle and feel more comfortable with his finances. It also allowed him to earn a small amount of interest.
He finally paid back the agreed loan of $200,000 in November of 2014.
Note, this was the repayment of the money that was loaned to build the grannyflat (sic). NOT A GIFT as centerlink (sic) implies. (building of grannyflat (sic) receipts supplied).
The funds paid for the build of the granny flat, by the son in 2011, as indicated already was paid from proceeds from the sale of his own house in Inglewood. These funds were used to purchase the primary house at… Albany and the balance was intended to be put into superannuation at that time. However it was decided to divert these funds and use them for the grannyflat (sic) build for my father;s (sic) Loan. On repayment of the $200,000 in nov. (sic) 2014 the money was subsequently paid to the super account as first intended.
Page138 centerlink (sic) infers that the $200,000 repayment for grannyflat (sic) loan,(although paid into super account, as already explained) was used to purchase an allocated pension for myself(son john Pettitt) (sic). This is not true. My personel (sic) retirement at that time was 11^th April 2015. On the 5th march (sic) 2015 is when this allocated pension was purchased for me by my financial adviser, Who handles all of my superannuation business. It was purchased for my impending retirement one month later. It was paid for with funds from my own pension plan. (confirmed letter from financial adviser enclosed).
The $200,000 amount paid into super was paid to my wifes (sic) super account, NOT MINE. This is also confirmed by my financial advisor ,letter enclosed. This allocated pension would have and was purchased anyway due to my retirement. This again centerlink (sic) Deeming and stating facts without any Proof.
Page 128 This statement is where it shows the filling in of an assets and income form on the 8th December 2014.This form was signed by my father but was filled in by myself (as he does not have the mental ability to do so).This amount of money was the repayment of the building loan for the granny flat. Therefore as a loan it cant (sic) be regarded as a gift, ( note, only centerlink (sic) has stated it was a gift.My (sic) referrals have always been an advance on inheritance).The $200,000 referred to, when paid was then turned into the grannyflat (sic) building. This although not stated very well(due to lack of space)was intended to mean the grannyflat (sic) would be the advance on inheritance not the money. It ,as stated on the form was paid to the son in the form of the grannyflat (sic) in return for care and full help given over the years.
This could only have been an inheritance at that time if I could gain an advantage from the advance. This could not be so, as the property was given back to s. pettitt (sic) immediately, with a right to live there for the rest of his life .Page 47 DISPOSSED (sic) ASSETIS (sic) AND/OR INCOME RETURNED TO THE PERSON. Under centerlinks (sic) own ruling, if the income or asset is returned to the person (s pettitt) (sic) then it no longer becomes assessable. Note this is a fact only if it was a gift Which it was not It was repayment of the granny flat loan. Either way it is NOT ASSESSABLE.
Also note Mr s pettitt (sic) does not own the building in question, so it is not possible to gift away something that he does not own.
By myself giving the grannyflat (sic) back to my father for the rest of his life, means I could not even sell my own property (which we do not want to do). Therefore I can only gain a full inheritance of it and make a gain when he dies. This is what his will states so no actual inheritance can be attained at this time. (Will can be supplied if required).
Page 10 This is part of the asset and incomes form filled in by son, myself. Again a reference that was meant to be for the grannyflat (sic). The granny flat was the intended inheritance. Paid to the son for help and care and all work done over the years including the ist (sic) house and repairs from 1985. As already stated this inheritance was not available at that time. It was still his living address until s.pettitt (sic) died .Then the building would have passed to me by his will.
Page 164 This is from an up to date Assett (sic) and incomes form dated 14th nov. (sic) 2016. This was filled in just before my first letter was sent to centerlink (sic) when I began to realise that centerlink (sic) was assessing my father with the $190,000 gift assessment.
On page 10 question 17, I have already confirmed that this statement was incorrectly written. The $190,000 stated should have been $110,000. A genuine mistake on my behalf. This can and is confirmed by the actual statement, ie. $190,000 repayment of old debt for son for house purchase in1985 (sic). Any house or repairs purchases has already been established was relevant to the $110,000 amount. Otherwise the question does not make sense. Also already stated to centerlink (sic) back in 2016 that the amount was incorrectly stated ie. Question 20.
Page164 coincides with my answer. Please note the answer given although wrong shows confused state of mind when written. The answer was given in 2 parts with a line between them. The top half again relates to $190,000 This should have been $110,000 Repayment for old debt to son for house purchase in 1985. This is obviously a mistake because no where (sic) in all of centerlinks (sic) statements or mine has the sum of $190,000 been linked to house purchase in 1985. It would not make sense. The second half below the line again refers to the granny flat being the advance of inheritance in nov. (sic) 2014. This also has been shown it cant (sic) be an advance as the building was given back to him immediately. For the rest of his life. le. No gain to myself at that time.
My use of the term Advance on Inheritance, was a wrong phrase to use, but was genuinely meant to indicate the granny flat building, which it became after my fathers (sic) debt was repaid to me.
All receipts for purchase of the grannyflat (sic) building are proof on pages 190-231.
THE GRANNY FLAT WAS ACCORDING TO CENTERLINKS (sic) OWN DECLARATION BECAME AN ENTITY ON FEB. 2012. I BELIEVE IT BECAME AN ENTITY ON MARCH 2011 WHEN PAID IN FULL BY THE SON TO THE BUILDER. Either way the time factor is over the deeming period of 5 years.. Why does centerlink (sic) continue to infer deceipt (sic) on my fathers (sic) behalf, when there (sic) own rules dictate it is over   the time. It was only an action to sell one home and put up funds for another. The payback of the loan in this case and the timing of it and how it was paid is irrelevant (Nov 2014.) for this case.
Interesting point; If the money for the build of the grannyflat (sic) $200,000 was borrowed from the bank, would not centerlink (sic) expect it to be repaid at some fixed time of agreement? I would like to know if that had been the case would centerlink (sic) be asking the bank the questions they are asking my father?
Page 47 Please note Disposing of an asset or income. exception 2. It is not considered that disposal of an asset".has (sic) occurred if, He does not derive an income from the asset. My father was given the right to live there for the rest of his life He never paid rent or any monies for it other than the initial construction of it. And he has no income from the grannyflat (sic).
Therefore not assessable.”
Hearing

The Applicant, represented by his son who made all submissions on the Applicant’s behalf, opened by stating that the $200,000 was not a gift but was instead payment for the construction of the granny flat. He did admit mistakes had been made, in respect as to how some of the comments might be construed on various documents in evidence, but given the age and health condition of the Applicant at the time, the Tribunal accepts that this was not inconceivable. He further stated that in 2016/2017 the Applicant’s health had deteriorated to the point where he, the Applicant’s son, had to take full control of the Applicant’s affairs by means of an enduring power of attorney
The Respondent opened by relying on its Statement of Facts, Issues and Contentions. The Respondent tendered Exhibit R4, which was accepted on the basis that the Applicant and the Respondent would both have the opportunity to make further written submissions to address the content of the document.
The Respondent stated that the transfer of the $200,000 was a gift and was not used for the purpose of constructing the granny flat. The Respondent claimed the evidence before the Tribunal shows that the $200,000 was transferred by the Applicant to his

daughter-in-law as a gift and was not used for the purpose of payment to do with the construction of the granny flat.
During cross-examination the Applicant’s son stated the money from the sale of the Applicant’s Midvale home was used for the cost of constructing the granny flat.
He claimed the $110,000 was used for the purpose of loans to the Applicant in the 1980s.
The Applicant’s son claimed he funded the construction of the granny flat, as the Applicant did not have the financial capacity to do so until he sold the Midvale property.
He was referred to T16, at page 128, to the comments concerning the amount of $200,000 – “money savings (advanced early inheritance due to senility” contained in the Income and Assets Update of 8 December 2014. He stated the Applicant filled in the form; however, it was a mistake to describe the amount as an early inheritance.
He claimed that no documents show the $200,000 was a gift. He stated it was a mistake to assume the $110,000 was for the granny flat when the cost of construction and fittings for the facility was in the vicinity of $150,000.
The Applicant’s son was referred to T20, at page 164, in respect to the Asset and Income Assessment for Permanent Aged Care of 22 November 2016, which he filled in on behalf of the Applicant, which states “Repayment of old debt to son for house purchase in 1985 & advance of inheritance”. He claimed it was a mistake to describe it as an “advance of inheritance”.
He was referred to T27, at page 235, where the UII review stated “Nominee advised that funds from Stanley’s term deposit and a savings account were gifted to her husband John to put into his super”. The Applicant’s son claimed this was a mix up and was incorrect.
The Respondent put to the Applicant’s son that he said in 2012/2014 that the Applicant was in control of his own financial affairs. The Applicant’s son agreed.
The Applicant’s son was referred to a document at page 115 of Exhibit R4, dated 4 September 2014, which stated – “Investing the funds to come from John’s father, Stanley as reimbursement of the costs of building his home at the rear of your … property. We have assumed $100k of additional funds) (sic) in the most efficient way to earn a higher rate of return”. The Applicant’s son stated these were only discussions and advice at the time.
The Applicant’s son was then referred to a document at page 125 of Exhibit R4, dated

18 November 2016, which stated – “The complicating factor is that some 2 years ago, John & Teresa received a sum of $200k from Stan after he sold his house and moved into the Granny Flat attached to John & Teresa’s residence. These funds were in effect the return of money to John which he outlaid when he came to Australia in the early 80’s and used his funds to purchase a home for his mother and father who also moved to Perth”. The Applicant’s son said this was not correct.
It was put to the Applicant’s son a number of times that the transfer of $200,000 was a gift and not repayment for the construction and fit out of the granny flat. He maintained that it was not a gift, but was repayment for the granny flat.
The Applicant’s son also stated the agreements between the Applicant and him were verbal only. He further stated that the Respondent had no proof that the $110,000 was used for the purpose of the granny flat and that it was inconceivable given the cost of the granny flat was in the vicinity of $165,000. He stated the Applicant withdrew additional sums of money of approximately $30,000 for his granddaughter.
The Applicant’s son called his daughter as a witness who confirmed that the Applicant gave her approximately $30,000. The Respondent did not cross-examine her.
The Respondent contended that the Applicant was in control of his finances until 2016/2017. The online document recording at T36, page 354, of 12 November 2014, shows the Applicant’s daughter-in-law state in discussion with Centrelink that – “funds from term deposit and one of the savings accounts recorded on SVS were gifted to her husband, John to put into his super”. The Respondent referred the Tribunal to T27 at page 235, which stated “UII spoke to Stanley Pettitt 3 November 2014 who advised the $110,000 was used to purchase the residence on son’s property”. The Respondent drew to the attention of the Tribunal multiple inconsistences in the evidence of the Applicant’s son.
Further evidence was provided in the form of written submissions addressing Exhibit R4. They are marked as Exhibits A9 and R5, respectively.
The Respondent’s contended (R5):
2.1      The Secretary submits that the cost incurred by John and Teresa Pettit to build the granny flat was approximately $100,000 and not $135,000 or $200,000 or ‘in excess of $165,000 or up to $190,000’ as submitted by the Applicant’s son, John Pettitt. The secretary relies on the following in support of this submission:
(a)       A record of advice dated 16 February 2012 notes:
Following previous discussions, John and Teresa advised that their father’s house in Albany has now been sold. John and Teresa used around 100K of their own funds in building a new house for John’s father at the rear of their property in Albany, so the sale of the old property will now ensure they receive their money back.
(b)       A further record of advice dated 28 July 2014 notes:
In reality John and Teresa are owed approx. $100K by Stanley as reimbursement of the cost of building a new home (flat) at the rear of their property....
(c)This is also supported by the statement of John Pettitt dated 9 January 2017 which states ‘to pay for new accommodation, ie a granny flat unit built onto my primary existing home $110,000
2.2      The Secretary maintains its previous submission and further submits that the entry dated 16 February 2012 evidences that the proceeds from the sale of the ‘old property’ being the residence at … Midvale was used by the Applicant to repay the cost incurred by John Pettitt to build the granny flat in February 2012.
2.3      However, the Secretary submits that if the Tribunal finds as contended by the Applicant that the transfer of $110,000 in 2012 was repayment of an old debt (which is not conceded) then it is open for the Tribunal to find, based on the evidence outlined at 2.1(a) and 2.1(b) that the transfer of $200,000 in 2014 was made up of two components:
(a)       $100,000 as reimbursement by the Applicant to John Pettitt for the granny flat and accordingly, not a disposed asset; and
(b)       $100,000 as an ‘early inheritance’ to John Pettitt and accordingly a disposed asset.
2.4      The Secretary submits that the inconsistencies made by John Pettitt as the Applicant’s representative are numerous and his oral evidence should be given no weight by the Tribunal where his evidence is not corroborated by the contemporaneous records. In addition to the inconsistences noted in Exhibit R2, the Secretary relies on the following in support of this submission:
(a)       A record of advice dated 18 November 2016, notes:
The complicating factor is that some 2 years ago, John & Teresa received a sum of 200K from Stan after he sold his house and moved into the Granny flat attached to John & Teresa’s residence. These funds were in effect the return of money to John which he outlaid when he came to Australia in the early 80s and used his funds to purchase a home for his mother and father who also moved to Perth. [emphasis added]
(b)The Secretary submits that the above record of advice evidences another inconsistency in the narrative proffered by John Pettitt. When John Pettitt was taken to question 107 of the form dated 22 November 2016 which records ‘$190,000 repayment of old debt to son for house purchase in 1985 + advance of inheritance’ John Pettitt stated during cross-examination that he never said that    $200,000 was repayment of old debts. This evidence of John Pettitt is clearly inconsistent with the information noted on the form dated 22 November 2016 and the records of advice dated 18 November 2016.
(c)John Pettitt gave evidence during cross-examination that the agreement by the applicant to reimburse John Pettitt for the 1985 loan was created in 1985 which is inconsistent with John Pettitt’s statement dated 24 February 2018 where it was noted
‘In 1985, when my parents arrived in Australia, they had very little money in savings, so as the only son, I purchased a house and land for them in Kewdale WA. Over the next 10 years my parents upgraded again to an old house in Greenmount WA. This property needed much upgrading and over a period of time I (son) paid for this to be done approx. $50,000. A verbal agreement was reached between father and son at the beginning (2011) that he would repay me these funds without interest when he was able later in life.’ [emphasis added]
2.5      The Secretary also notes that the documents produced under the section 196 notice evidence that John Pettitt made enquiries into utilising the $200,000 which was invested into a superannuation account to generate an income stream for the Applicant. The Secretary makes no submission in relation to this but notes the following entries for completeness:
(a)       A record of advice dated 28 July 2014 noted:
John wants our advice on investing the $100k in order to make a higher medium to longer term return than bank interest and to grow the capital value over time. John did say he would also pay Stanley an ‘interest return’ on these funds.
(b)       A summary dated 4 September 2014 noted:
2. Allow you to pay Stanley a return from the invested funds each 6 months to ensure he retains some cash flow given the capital amount has been reallocated.
(c)       A record of advice dated 29 June 2015 noted:
John also wants some return figures on the 200K they added to Teresa’s super plan last year as these funds are part the funds from John’s father and that John wanted to provide him with an ‘interest payment’ if he can.
2.6      The Secretary submits that there have been a number of inconsistencies in the narrative proffered by John Pettitt in relation to the cost of the granny flat; the consideration for the $200,000 transferred by the Applicant in 2014; the consideration for the $110,000 transferred by the Applicant in 2012; and the circumstances surrounding the creation of the 1985 loan agreement. Accordingly, the Secretary submits that the evidence of John Pettitt which is not corroborated by the contemporaneous records should be given less weight in the above circumstances. The Secretary submits that the intention of the parties at the time of the transaction is relevant and substantial weight should be given to the evidence at the time of the transaction namely, the form dated 8 December 2014 which records that $200,000 was given away for ‘nil’ consideration and was an ‘advanced early inheritance’. In cross examination, John Pettitt confirmed that he assisted the applicant in completing this form.
2The Applicant contends (A9):
1         1.4/ 1.5           None of these documents should be regarded as acceptable evidence, as it was not introduced correctly to the court (sic). It was produced at the opening address of the hearing without any prior introduction to the applicant. The applicant had no time to read correctly its contents. Centerlink (sic) obviously tried to take advantage of this.
As I the applicant"s (sic) spokesperson, I did feel that there was no actual information in these documents, so I allowed it to continue.
None of the facts within these documents were proved to be true but, I still feel that the action was totally unacceptable.
2         2.1      All of the contentions already answered in previous statement. ‘Points for the Applicants (sic) Defence.’ Page 2 Question 7 re a,b,andc.
3         2.2      This statement seems to be stating that the money from the sale of the unit in Midvale, which was $259,000 was used to   pay for the granny flat build. I agree ,part of these funds would have gone to part of the build. But was not paid until Nov. 2014. Centerlink (sic) does not seem to be able to grasp the facts of this action.. (sic)
The funds were not paid to Mr.S.Pettitt (sic) until 21st of February 2012.(not the 16th .) At which time they went into his bank account, and were added to his already held funds. This gave him a total amount of aprrox. $390,000. AS we have many times before confirmed that, $110,000 was then withdrawn and repaid to the son ,that same month of feb (sic). These funds were for the repayment of the Old (sic) loans back in 1984/5. The final loan repayment of $200,000 was not repaid until Nov. 2014 (for reasons already mentioned in earlier transcripts). This loan repayment was for the build of the granny flat in Albany.
Centerlink (sic) has supplied absolutely no Proof (sic) that the $110,000 funds were used for Payment (sic) for the grannyflat (sic). It is impossible for them to differentiate what money was used for what Purpose. They   are only Deeming (sic) (which means guessing to try and make their case) I ask the member to recognise THIS IS NOT PROOF. And has no bearing or validity towards this case.
4         2.3      This statement is very interesting. It shows that centerlink (sic) is now backtracking and altering there (sic) accusations, and claims. They now concede that if member Edwards (sic) agrees that the first $110,000 was actually a repayment for the old debt ,(as always claimed by the applicant). Then the $200,000 which must have been the payment for the grannyflat (sic) (it's the only amount left). Should be split into 2 halves. They now confirm the first $100,000 would be payment for the grannyflat (sic) but the final $100,000 must be a gift.
This statement is totally ridiculous as it has already been shown that the grannyflat (sic) build cost a minimum of $165,000 ( and up to $200,000 with work and labour supplied by the son) with full receipts that have been accepted by centerlink (sic) and never disputed. If the member ever considers that an amount should be refered as a GIFT.I would find this unfair as all work has a price,and was agreed by father and son.
The son has the right to have this debt repayed (sic) as the legal, verbal agreement was made between father and son. (note centerlink (sic) has never provided any proof that this agreement was not made. THEY CANT (sic) because they were not present at the time).
I wish to point out where centerlink (sic) requests that no weight should be given to my oral evidence at the hearing, because of inconsistencies made. Also where his evidence is not corroborated by the contemporaneous records.
The only reference I can make to contemporaneous records, are the evidence centerlink (sic) asked for from way back in 1884/5 (sic). Knowing it was virtually impossible to supply. Further more (sic) I would ask the member to see that very few of my inconsistencies ever occurred, but were only created by centerlinks (sic) accusations. Nearly all of which have been disproved.
5         2.4    a) ·centerlink (sic) has confused themselves on this statement as it makes no sense.
l can confirm that two years prior ,being November 2014, $200,000 was received from S. Pettitt as repayment for the build of the grannyflat (sic) ,as agreed by father and son at the start of the build (2010/2011) .
Centerlink (sic) states these funds were in effect the return of money to john which he oulaid (sic) (son)when he came to Australia in the early 80"s (sic), and used his funds to purchase a home for his mother and father.
I wish to know where on earth (sic) does centerlink (sic) get this information from.? This is a complete fabrication on their behalf. In earlier information supplied I confirmed that I supplied the funds and purchased a house and land (documented proof supplied from Landcorp and Receipts (sic) of house build in Kewdale for my parents in 1984. The cost was total approximately $40,000 (consistent With (sic) housing costs of that time). Further confirmation was supplied that a further $50,000 (approximately) was spent on his second house purchase for repairs and renovations at that time. Thus the repayment of $110,000 for ‘old debts (sic)
The statement that the $200,000 was the return of money to john (sic) ,outlaid when he came to Australia I the early 80"s is completely untrue, and a fabrication by centerlink. It does not even coincide with any statements ever made in this case. I (son) did not have that amount of money when I first came to australia (sic). This is unsubstantiated Rubbish (sic) and I ask for them to supply some proof, Again.
b}        As already explained many times . This statement is referring to a typing error already answered in previous answers. Again this shows centerlink (sic) is relying on typing errors to advance their case, I refer member to ‘mistakes made by centerlink (sic) ‘already supplied’. Please read form (sic) Nov 2016 again and note conflicting note written next to the amount which should have been $110,000 and not $190,000. If read as I confirm it then makes sense.
c)        This statement was deemed correct when it was written, but on later checks, I found that I had made a mistake in the typing (again). This was rectified on the 6th march (sic) 2018 by an e- mail (sic) that was sent to the tribunal. A copy of the e-mail (sic) is enclosed as Item C.
Can the member please note, that the 2011 date that was originally sent did not make sense anyway. But as 1984/5 which it should have been it does. (old debts are longer than 1 year( ie 2011 paid in 2012)???. More like 1984/5 paid in 2012. The term later in life has only ever been used by myself when in reference to old debts ie. 1984/5.
6         2.5      All information requested in this statement was, to obtain information from a private personel (sic) Adviser, on what could be done with xtra (sic) funds that will in the future be received from my father as loan repayments. I confirmed at the hearing that all of these requests were true, but were only requests for advice for the future.
Note, None of the advice was used or implemented with the financial advisor, as it was deemed not correct at the time . Please find confirmation of these facts as given to centerlink (sic) in an E-mail (sic) from the Advisor. Dated 28.8.2014 doc.A.
7         2.6      If the member can please take the time to wade through all of the points mentioned, I feel that he will find very few inconsistencies proffered by John and Stan Pettitt that have not been adequately explained. The funds repaid were done so with full agreement of the applicant, upon honouring agreed debts. These we have both stated and are still alive to confirm. No inheritance or gain has been made by either applicant.
I wish to confirm that l (son) did help Mr. S.Pettitt (sic) to fill in forms only because his age makes him unable to do so himself.
CONSIDERATION

The Tribunal notes the Applicant’s son gave the following evidence to AAT1:
11.      The applicant is born in 1927. He has been a widower since 1999. He has one child, his son. His son explained the background to the application for review in the following way:
I came to Australia in the 1980s. My parents followed. At the time they had about 11,000 pounds sterling. It was not enough for them to purchase a house. I purchased a house for them with the understanding that in due course they would pay me back. The arrangement they would pay me back was informal and I have no documentation to prove that I loaned money to my parents. They moved houses and I helped them. In all there were three or four moves. After my father was widowed he purchased a unit in Midvale. He lived there for several years until 2011.
I moved to Albany and purchased a house on a large block. It was large enough for two houses. By 2011 we (my wife and I) were worried about my father. He was unwell. He has had several strokes in the last few years.
In 2011, my father moved to live with us. In 2012, he sold the Midvale unit. He paid me
$110,000 to honour the debt repayment agreement we had from the 1980s. In November 2014, he paid me $200,000 for a life interest in a granny flat I had built on my property in 2011/2012. I utilised approximately $165,000 of the funds to build the granny flat.
My father lived at my property until July 2017, when ACAT (aged care assessment team) assessed he needed to move into residential care. He now lives at Baptist Care Albany. I understood his costs in Baptist Care Albany would be met from his pension. However, I have had an account from Baptist Care Albany for $11,000 (at a rate of about $57 per day).
The reason for this appeal is not really about the rate at which my father is paid age pension it is because he will not have enough money to meet the charges associated with his residential care.
…
18.      The applicant’s son told the tribunal that when he assisted his father fill in the form signed on 8 December 2014, the son’s financial advisor advised the son how to fill it in. That is to state $200,000 was gifted by his father to the son in return for the care provided to him.
…
20.      The applicant’s son said when he filled in the form he signed on

14 November 2016, he was attempting to correct the record. He said he had made a mistake and had meant to write in response to question 107 an amount of $110,000.
…
26.      The applicant’s son explained he is attempting to represent his father’s interests. He is concerned his father will not be able to pay the costs associated with his residential care. The applicant’s son said he was effectively holding $35,000 of the applicant’s money (the difference between the $200,000 paid to him and the $165,000 he said he spent on the granny flat.”
The primary dispute between the Applicant and the Respondent revolves around whether the money that the Applicant transferred to his son should be treated as a gift, consequently resulting in a reduced rate of entitlement for his Age Pension.
The Tribunal is faced with different explanations which have been given at different times by the Applicant’s son, who has had an enduring power of attorney over the affairs of the Applicant since 2016. The Tribunal also understands that the Applicant’s son will be, at some point in time, the sole beneficiary of the Applicant’s estate.
The Tribunal is being asked to unravel the intents of alleged oral agreements dating back to the early 1980’s between the Applicant and his son. The Tribunal is being asked to determine what the purpose was behind large sums of money withdrawn from the Applicant’s accounts. The Applicant’s son, on behalf of the Applicant, contends these withdrawals, were, first, as a result of the Applicant repaying a loan given to him in the early 1980s and, second, repaying a loan which had been created for the purpose of constructing a granny flat for the Applicant on the Applicant’s son’s property .
The first amount relates to a sum of $110,000 withdrawn in 2012 from the Applicant’s bank account, which the Respondent contends is for the purpose of payment for the granny flat. The Applicant claims this amount was used to repay a loan made to him in the early 1980s. The Tribunal notes there is no legal documentation or corroborating evidence to support the fact that such a loan occurred. In fact the opposite is the case in that when the Applicant was in charge of his own financial affairs, he stated this amount was used for the purpose of purchase a residence on his son’s property.
The Tribunal notes the document at page 7 of Exhibit R4, dated 16 February 2012. Under the heading “Client issues raised in the meeting” the document reads: “Following previous discussions, John & Teresa advised that their father’s house in Albany has now been sold. John and Teresa used around $100k of their own funds in building a new house for John’s father at rear of their property…”
The Tribunal further notes page 115 of Exhibit R4, dated 23 September 2014, which states the following recommendations – “Investing the funds to come from John’s father, Stanley as reimbursement of the costs of building his home at the rear of your… property. We have assumed $100k of additional funds) (sic) in the most efficient way to earn a higher rate of return”.
The Tribunal notes that the Applicant finalised the sale of his residence in Midvale for $259,653.10 on 21 February 2012 (T7, page 66).
The Tribunal notes that in response to the question “In the last 5 years have you (and/or your partner) given away, sold for less than their market value, or surrendered a right to, any cash, assets, property or income?”, the Applicant stated (on 8 December 2014) on an Income and Assets update “Money savings (advanced early inheritance due to part senility” (T16, page 128). The Tribunal notes the Applicant’s son and daughter-in-law assisted the Applicant fill in the form.
The Tribunal notes that to a similar question, at T20, page 164 (on 14 November 2016) the Applicant’s son stated – “$190,000 Repayment of old debt to son for house purchase in 1985 and advance of inheritance”. The Tribunal accepts the Applicant’s son chose to correct this at Exhibits A1(3) and A2(1).
The Tribunal notes the Applicant’s son claims that the description of the $200,000 in such terms was on the advice of his financial adviser (T23, page 177).
The statutory declaration of the Applicant’s son is confusing (T24, page 179). It gives the impression that no monies were paid for the loan of the earlier house, but was in fact funds for the purpose of the granny flat. This could quite easily lead the Tribunal to conclude in agreement with the contentions of the Respondent: that the $200,000 was, in fact, a gift.
The Tribunal notes the advice of the financial planner confirming a non-concessional contribution of $200,000 made into the Applicant’s daughter-in-law’s Superannuation Plan on 2 October 2014 (T26, page 189). The phrase – “it is our understanding that the origin of these funds was from the sale of your father Stanley Pettitt’s home… and represented the reimbursement to you of the costs incurred by you in the construction of his current home at the rear of your property in… (Albany)”; implies this information was merely on the say so of the Applicant’s son, not supported by any independent evidence. The Tribunal notes there is a risk that this evidence and may well have been produced after the fact for the purpose of favourably reconstructing events. While the Tribunal is cognisant of this risk, it is persuaded by the Applicant’s submissions and the evidence of the Applicant’s son, and finds that this evidence is likely to have been produced in good faith.
The Tribunal notes the report of the Complex Assessment Officer at (T27, page 234-239). This assessment enabled Centrelink to conclude the withdrawal of $110,000 in 2012 by the Applicant was paid to his son was for the purpose of purchasing a granny flat on his son’s property in Albany. Secondly, Centrelink concluded that a later payment to the Applicant’s son in November 2014 of $200,000 was a gift.
The Tribunal notes Centrelink further concluded there was a lack of written documentation “supporting the 2012 withdrawals Stanley Pettitt’s account was used to purchase a holiday and pay off debts of family members” (T27, page 237).
The Tribunal notes as at 18 November 2016, the financial adviser stated under the heading “Client issues raised in the meeting” – “The complicating factor is that some 2 years ago, John & Teresa’ received a sum of $200k from Stan after he sold his house and moved into the Granny Flat attached to John & Teresa’s residence. These funds were in effect the return of money to John which he outlaid when he came to Australia in the early 80’s and used his funds to purchase a home for his mother and father who also moved to Perth” (R4, page 125).
The Tribunal accepts that parties within families can, and do, enter into loan agreements on the basis of trust and a handshake, without involving legal practitioners or recording the agreement in formal documentation. In this case, the agreement was alleged to have been made orally between the Applicant and his son, the only child of the Applicant and his wife (deceased). The Tribunal takes the view that informal loan agreements, even involving significant sums of money, are not uncommon between members of a family. As such, the Tribunal gives the Applicant the benefit of the doubt and finds that it is likely that an amount of approximately $100,000 was loaned (by way of informal, oral agreement) by the Applicant’s son to the Applicant in the early 1980s.
The Tribunal found the Applicant’s son to be a truthful witness and advocate.

The Tribunal accepts the Applicant’s son’s submissions that, during the time when the Applicant was in charge of his own financial affairs, the November 2014 description of the amount of $110,000 being used to purchase the granny flat was truthful and correct. Based on the discussions between the Applicant’s son, the Applicant’s daughter-in-law and their financial adviser in February 2012 and September 2014, the Tribunal concludes that this amount of money was used for the purpose of purchasing the Applicant’s residence, being the granny flat.
The Tribunal concludes on the available evidence before it that the amount of $200,000 comprises of two elements. It comprises of $110,000 as payment for the granny flat, initially funded by the Applicant’s son, and $90,000 as an early inheritance.
DECISION
For the reasons above, the Tribunal sets aside the decision of AAT1, and determines that the amount of $200,000 consists of $110,000 as payment to the Applicant’s son for the construction of the granny flat and $90,000 as an early inheritance payment.

I certify that the preceding 75 (seventy -five) paragraphs are a true copy of the reasons for the decision herein of Member C Edwardes

..........................[sgd]..............................................
Associate
Dated: 21 December 2018

Date of hearing: 2 November 2018

Date final submissions received: 28 November 2018

Applicant: In person

Counsel for the Respondent: Ms Daphne Jones-Bolla

Solicitors for the Respondent: Sparke Helmore Lawyers

Date of hearing:	2 November 2018
Date final submissions received:	28 November 2018
Applicant:	In person
Counsel for the Respondent:	Ms Daphne Jones-Bolla
Solicitors for the Respondent:	Sparke Helmore Lawyers