Quarmby and Secretary, Department of Family and Community Service S

[2000] AATA 293

DECISION AND REASONS FOR DECISION [2000] AATA 293

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No  T1999/145

GENERAL ADMINISTRATIVE  DIVISION       )          
           Re      BARBARA JEAN QUARMBY    
  Applicant
           And    SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES        
  Respondent

DECISION

Tribunal       Mr C P Webster (Senior Member)           

Date14 April 2000

PlaceHobart

Decision      The decision under review is affirmed. 

[Sgd C P Webster]
  Senior Member
CATCHWORDS
Social Security – application of financial hardship rules.
Social Security 1991 – s.1130(11),(12),(13)

REASONS FOR DECISION

14 April 2000           Mr C P Webster (Senior Member)   

ISSUES

1. The applicant, Barbara Jean Quarmby ("the applicant") seeks a review of the decision of the Social Security Appeals Tribunal (SSAT) of 3 August 1999 which varied a decision made by an authorised review officer of 22 February 1999 which set aside a decision of a Commonwealth Service Delivery Agency (Centrelink) on behalf of the Secretary of the Department of Family and Community Services of 30 November 1998 to refuse the applicant access to the financial hardship rules.

2. At  the hearing of the review before the Tribunal, the parties agreed that the applicant was entitled to have her pension assessed according to the financial hardship rules.   The parties also agreed that the only issue in dispute was whether the SSAT hard correctly categorised the $18,435 deposit in the applicant's bank account as being an unrealisable asset.   The applicant arguing that such sum was an unrealisable asset.
   The Evidence

3. Both parties agreed that the SSAT had correctly stated the facts applicable to this matter.    The Tribunal therefore finds the following facts namely:

(a)the applicant was receiving a disability support pension during the relevant period;

(b)the applicant and her spouse owned extensive properties upon which apples were grown;

(c)the applicant and her spouse owned a block of land in addition to these properties value at $10,000;

(d)the applicant and her spouse had the sum of $18,435 in a normal bank account.  This money was used as working capital for the running of the orchards;

(e)one thousand dollars had been given by the applicant's sister to the applicant to use for her son's orthodental work and was not to be used otherwise;

(f)the applicant satisfied the requirement of s.1129 of the Act and was entitled to have her pension assessed using the provisions of s.1130 of the Act.

The Law

1. The hardship rules to be applied to the applicant are contained in s.1130 of the Act.   Section 1130 states:-

   "(1) [Calculation of pension rate]  If section 1129 applies to a person, the value of:
   (a)       any unrealisable asset of the person; and
   (b)       any unrealisable asset of the person's partner;
   is to be disregarded in working out the person's social security pension rate.
   …
   (3) [Calculation]  A person's adjusted annual rate of ordinary income is an amount per year equal to the sum of:
   (a)       the person's annual rate of ordinary income (other than income from assets);       and

   (b)the person's annual rate of ordinary income from assets that are not assets tested; and

   (c)       either:

   (i)the person's annual rate of ordinary income from unrealisable assets; or

   (ii)the person's notional annual rate of ordinary income from unrealisable assets;

   whichever is the greater; and

   (d)an amount per year equal to $19.50 for each $250 of the value of the person's assets (other than disregarded assets)."

1. The effect of s.1130(1) is to provide that "unrealisable"  assets are to be disregarded in calculating a person's social security pension rate.

1. The effect of s.1130(3)(d) provides for the adjustment of the pension by virtue of a notional income calculation by virtue of assets which are not disregarded assets.

2. As s.1130(1) provides that unrealisable assets are to be disregarded.   S.1130(3)(d) must be a reference to a case where the assets are realisable and is an alternative to s.1130(1)(c) which deals with a case where the assets are unrealisable.

3. The issue in this review is whether the sum of $18,435 is an "unrealisable" or
   "realisable" asset.   If the former, the applicant's pension is calculated in accordance with s.1130(3)(c).  If the latter, it is calculated in accordance with s.1130(3)(d).

1. The definition of an unrealisable asset is set out in s.11(12) and s.11(13) of the Act, which states:-

   "(12) [Circumstances where asset is unrealisable]   An asset of a person is an unrealisable asset if:
   (a)       the person cannot sell or realise the asset; and
   (b)       the person cannot use the asset as a security for borrowing.

   (13)  [Additional circumstances where asset is unrealisable]  For the purposes of the application of this Act to a social security pension (other than a person PP (single)), an asset of a person is also an unrealisable asset if:
   (a)       the person could not reasonably be expected to sell or realise the asset; and

   (b)the person could not reasonably be expected to use the asset as a security for borrowing."

1. The purpose of this section is to prevent hardship to a pensioner by the inclusion of an asset in the assessment of their pension when the asset cannot be readily converted to cash, or it would create hardship to convert such an asset.

2. In this context the Tribunal considers that the word "realise" simply means to sell or to convert to cash.

3. The Tribunal considers that the cash in the sum of $18,435 is a realisable asset.   The applicant can readily access this money.   She can and does use it to pay debts.   There is no prohibition whatsoever placed upon the applicant's use of that money, although parts of that money have been earmarked by the applicant for certain purposes.

4. It is difficulty to envisage a more realisable asset (other than cash) than money in a normal current bank account.

5. The Tribunal finds that the sum of $18,435 is a "realisable asset".
   Decision

6. The decision under review is affirmed.

I certify that the 22 preceding paragraphs are a true copy of the reasons for the decision herein of Mr C P Webster (Senior Member)

Signed:         .....................................................................................
  Personal Assistant

Date/s of Hearing  7 March 2000
Date of Decision  14 April 2000
Representative for the applicant   Mr. Quarmby
Solicitor for the Respondent         Ms L Miller for the Department