Radley and Secretary, Department of Social Services (Social services second review) - [2022] AATA 3893

Radley and Secretary, Department of Social Services (Social services second review) [2022] AATA 3893 (18 November 2022)
Division:GENERAL DIVISION
File Number(s): 2022/0266
Re:Roslynn Radley
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

Decision
Tribunal:Ms A E Burke AO, Member
Date: 18 November 2022
Place:Melbourne

The Tribunal affirms the decision under review.
...........................[sgd].............................................
Ms A E Burke AO Member
Catchwords
SOCIAL SECURITY – age pension – reduction of age pension – proceeds from sale of home assess as an asset – 24 month assets exemption applied – delays beyond control in building other residence – decision under review affirmed
Legislation
Administrative Appeals Tribunal Act 1975 (Cth)
Conveyancers Act 2006 (Vic)
Conveyancers (Professional Conduct and Trust Account and General) Regulations 2008 (Vic)
Social Security Act 1991 (Cth)
Social Security (Administration) Act 1999 (Cth)
Social Security and Veterans' Entitlements Legislation Amendment (Private Trusts and Private Companies - Integrity of Means Testings) Bill 2000
Cases
Berenguel v Minister for Immigration and Citizenship (2010) 84 ALJR 251
Blunn v Cleaver (1993) 47 FCR 111
Bornecrantz v Secretary, Department of Social Services [2017] FCA 1010
Forner and Secretary, Department of Social Services [2018] AATA 1512
IW v City of Perth (1997) 191 CLR 1
Rajski v Scitec Corporation Pty Ltd (NSW Court of Appeal, Full Court, 16 June 1986)
Stavrinidis and Secretary, Department of Social Services [2018] AATA 169
Secondary Materials
Guide to Social Security Law
REASONS FOR DECISION
Ms A E Burke AO Member
18 November 2022

Ms Radley (the Applicant) sought a second-tier review of the decision made by the Secretary of the Department of Social Services (the Respondent) to reduce the rate of her age pension.
On 29 October 2020, Centrelink reduced Ms Radley’s rate of age pension as the proceeds from her former home were assessed as an asset. On 16 February 2021 a Centrelink Authorised Review Officer (ARO) affirmed the decision. Ms Radley sought review of the decision of the ARO at the Social Services and Child Support Division of this Tribunal (AAT1), which affirmed the decision on 29 November 2021. Centrelink is the service provider for Services Australia.
As the dispute was limited to a strict legal interpretation as no factual issues were in dispute, the parties sought to have the matter determined on the papers. The matter was heard by consent on the papers on 4 October 2022. Ms Radley was self-represented, though she had a friend, Mr Alan Hall, assist her with the review process. Mr Tim Noonan, Lawyer in the Litigation Branch of Services Australia, represented the Respondent.
Background
The Applicant, Ms Roslynn Radley, is single and has been in receipt of the age pension since 1 July 2009.
On 20 March 2018, Ms Radley purchased a unit off the plan in Ringwood, for $518,000 with a 10% deposit payable within 14 days and the balance of $466,200 payable within 14 days of the later to occur of the vendor's written notification of the registration of the plan of subdivision or issue of an occupancy permit.
On 28 June 2018 Ms Radley signed a contract for the sale of her home in Vermont for $800,000. She received $719,748.05 in proceeds from the sale on 24 August 2018 and advised Centrelink of the sale on the same day.
On 2 September 2020, Ms Radley contacted Centrelink enquiring about the assets exemption:
Have removed assets exemption from 2 x term deposits as per review which matured 24.08.2020. Cus sold home in AUG 2018, 12 month assets exemption applied, then 12 month exemption extension applied in AUG 2019.
Customer has futher building delays due to covid and was requesting an extension to the exempt period as per OB:108-04070020.
After confirming with a TPS I advised the customer that there is no provision for an extension past the 2 years.
I advised she should place the funds into a trust account to be dispursed once the building is complete.
Customer will be taking the funds out of her term deposit and place the funds into a trust account.
Customer will be providing documentation to support that. I advised customer that once we recieve the documents we can adjust her bank account balances.
On 26 October 2020, Ms Radley paid $468,000 into a trust account of Key Conveyancing (Vic) Pty Ltd (Key Conveyancing).
On 29 October 2020, Ms Radley contacted Centrelink to enquire about her age pension:
NAB Term deposit of $300,000 closed as of 27.10.2020 (this ws taken out and placed into trust for the building of her home)
UBANK - Term deposit - 27.10.2020 - $200,000 (money taken out to add into trust for building of home)
Added money placed in trust for building of home (which was placed in trust with the conveyancing company)
Spoke with customer regarding funds in UBANK account and confirmed balance. Also soke with her regarding trust money as this will not be exempt. I did get confirmation from Level 2 Helpdesk stating it will be clasified as an asset.
If they are being held on behalf of the builder, as a payment made by the customer towards the build, then the amount would be added on to the asset value being assessed for the new property, step 8 in table 2 under process tab which deals with Txt: how the asset value of a partially contructed home is assessed if not exempt. Customer has had exemption fro 24 motnhs already and not entitled to another exemption.
Customer is not happy with this and advised she will be seeking customer compensation as she placed money into trust as directed by Services Australia member.
Money for Trust was added via SVDI for the amount of $468,000 as of 27.10.2020
On 29 October 2020, Centrelink assessed the proceeds from the sale of Ms Radley’s former home as an asset and reduced her rate of age pension.
On 16 February 2021 a departmental ARO affirmed the decision to reduce Ms Radley’s age pension as:
The rate of Age Pension is calculated under an income test and an assets test. The test that results in the lowest rate is the test that applies at any given time. While the proceeds from the sale of your former home were exempt, your rate of Age Pension was being calculated under the income test.
The proceeds of sale can be exempt for a maximum of 24 months. As that period of time has elapsed, no further exemption can be applied.
You have since placed the funds ($468,000) in a trust account held by the conveyancer. You said you did this on our advice to continue to have the funds exempt from the asset test, only to be told later that they would be assessed as a financial asset. When you record was updated to remove the exemption, your rate of Age Pension was being calculated under the asset test and reduced substantially.
I have reviewed your case and your circumstances. Money held in trust by a conveyancer, solicitor or similar is considered a financial asset. This means the decision to reduce your rate of Age Pension was correct.
On 29 November 2021, the AAT1 affirmed the ARO decision to reduce Ms Radley’s age pension, the Tribunal found:
Extensive submissions have been provided in this matter. In short, Ms Radley is in a bad situation as her pension does not cover her costs of living. She has sold her home and purchased another but in the meantime is renting. The new home is still under construction and the completion date is unknown. In the meantime, her conveyancer holds a large sum of funds in trust ($468,000) which is being applied in the assets test. This has resulted in a significant decrease in her age pension entitlements. In summary, Ms Radley seeks relief from the assets test as the completion of her new home has been delayed by COVID-19, in the meantime she is renting and claims she cannot access funds in the conveyancer's trust account.
The tribunal first explored the provisions found in subsection 1118(2B) of the Act. In short, this subsection allows for the sale proceeds from the principal home to be exempted from the assets test for a period of up to 24 months where there have been delays in finalising the purchase of the new home, among other things.
In this case, Ms Radley sold her principal home on 24 September 2018. This meant that Ms Radley's rate of age pension was not affected by those sale proceeds until 24 September 2020. Ms Radley asked for the exemption to be extended as delays in completion have arisen entirely as a result of the COVID-19 pandemic. She is a motivated purchaser, keen to move into her own home, but the construction has been significantly hampered by the effects of COVID-19, among other matters, all entirely beyond her control. Careful review of the provisions found in section 1118 reveal that there is no discretion to extend the exemption period. So the application for review fails on this ground.
The tribunal is most empathetic to Ms Radley's circumstances and so explored whether any other discretions exist that may assist, particularly given Ms Radley's claims she was given the wrong advice by Centrelink, that is, any monies held in the conveyancer's trust account would be exempt from the assets test indefinitely. Careful review of the Act confirmed there are no further discretions that would enable the quarantine of the monies currently held in trust.
On 10 January 2022, Ms Radley sought a review of the AAT1 decision by this division of the Tribunal, as she disagreed with the decision.
ISSUE IN CONTENTION
The Tribunal must determine whether Ms Radley’s age pension was correctly reduced.
RELEVANT LEGISLATION
Part 3.12 of the Social Security Act 1991 (the Act) sets out the general provisions relating to the assets test. Section 1118 provides that certain assets are to be disregarded in calculating the value of a person’s assets:
(1) In calculating the value of a person’s assets for the purposes of this Act (other than sections 198F to 198MA (inclusive), Division 1B of Part 3.10, Division 2 and sections 1133 and 1135A), disregard the following:
(a) if the person is not a member of a couple—the value of any right or interest of the person in the person’s principal home that is a right or interest that gives the person reasonable security of tenure in the home;
Section 1118(1B) provides for the application of sale of principal home:
(1B) Subsection (2) applies if:
(a) a person sells the person’s principal home; and
(b) either:
(i) the person does not have a right or interest in a principal home; or
(ii) the person has a right or interest in a principal home that the Secretary is satisfied does not give the person reasonable security of tenure in the home; and
(c) before the end of 12 months, or any longer period determined under subsection (2B), after the sale, one or more of the following applies:
(i) the person intends to apply the whole or a part of the proceeds of the sale to build, rebuild, repair or renovate another residence that is to be the person’s principal home;
(ii) the person applies the whole or a part of the proceeds of the sale to build, rebuild, repair or renovate another residence that is to be the person’s principal home;
(iii) the person intends to apply the whole or a part of the proceeds of the sale to purchase another residence that is to be the person’s principal home.
Section 1118(2B) provides for the purposes of subsection (1B), the Secretary may determine, in writing, a period of up to 24 months if:
(a) a person who has sold his or her principal home is making reasonable attempts to purchase, build, repair or renovate another residence; and
(b) the person has been making those attempts within a reasonable period after selling the principal home; and
(c) the person has experienced delays beyond his or her control in purchasing, building, repairing or renovating the other residence.
Section 1121 provides for the effect of charge or encumbrance on value of assets:
(1) If there is a charge or encumbrance over a particular asset of the person, the value of the asset, for the purposes of calculating the value of the person’s assets for the purposes of this Act (other than Division 1B of Part 3.10), is to be reduced by the value of that charge or encumbrance.
EVIDENCE BEFORE THE TRIBUNAL
The evidence before the Tribunal included documents provided by the Respondent pursuant to s 37 of the Administrative Appeals Tribunal Act 1975, referred to as the

“T documents” and “supplementary T documents”.
Contentions
Ms Radley’s written submissions
The Applicant submitted that the correct definition of her assets between 24 August 2018 and 24 August 2020 was personal property, a motor vehicle and cash in the bank.
In her written submissions, the Applicant referred the Tribunal to several cases:
(a)In the AAT case of Forner and Secretary, Department of Social Services [2018] AATA 1512 it was stated at [19]: ‘The legislation is tightly drafted and makes no provision for the exercise of discretion. The case law confirms that’.
(b)In the case of Stavrinidis and Secretary, Department of Social Services [2018] AATA 169, the Tribunal notes at [14]: ‘Reference is made to complex provisions of the Act…’
(c)In the matter of Blunn v Cleaver (1993) 47 FCR 111 at 126-8, the Federal Court discussed that the Act is complex and difficult to interpret.
(d)Samuels JA stated in Rajski v Scitec Corporation Pty Ltd (NSW Court of Appeal, Full Court, 16 June 1986) at 27:
In my view, the advice and assistance which a litigant in person ought to receive from the court should be limited to that which is necessary to diminish, so far as this is possible, the disadvantage which he or she will ordinarily suffer when faced by a lawyer, and to prevent destruction from the traps which our adversary procedure offers to the unwary and untutored.
(e)In the case of Berenguel v Minister for Immigration and Citizenship (2010) 84 ALJR 251 at [15] the Court stated that the headings of the Parts, Divisions and Subdivisions into which an Act is divided are deemed to be part of an Act. Further in that case it was stated at [26], ‘moreover, in this case, the construction [of conflicting clauses] for which the Minister contends leads to such plain unfairness and absurdity that it is not to be preferred.’
(f)A common statutory interpretation tool, as described in the case of IW v City of Perth (1997) 191 CLR 1 at 12, is the principle that legislation with a beneficial or remedial purpose will be construed according to that purpose, giving the legislation a ‘fair, large and liberal’ interpretation, rather than one which is ‘literal or technical’.
The Applicant contended that monies were held in bank accounts, conveyancing accounts and the like, for the purchase of the Ringwood property. The Respondent deemed that those funds met the criteria for exemption under section 1118 until 24 August 2020.The Applicant submits the correct definition of her assets between 24 August 2018 and 24 August 2020 was personal property, motor vehicle and cash in the bank.
The Applicant contended that a Centrelink Specialist Officer had actioned the Applicant’s records and must have accepted there was sufficient documents and evidence that the sale and purchase of property on terms had been provided, which therefore justified the application of section 1118 of the Act.
The Applicant expressed concern that the Respondent may have unintentionally omitted the inclusion of certain relevant words when quoting the definition of ‘asset’ in section 11(1) as property or money. The Applicant noted that the overarching and qualifying phrase which the Respondent omitted was, ‘unless the contrary intention appears’. The Applicant argued that this wording in section 11(1) is very specific and Parliament has seen fit as not to require the need to further define it.
The Applicant contended that where a contrary intention is expressed then certain definitions proscribed by section 11(1) may then become a nullity for the entire Act such as:
(a)disposes of assets,
(b)exempt assets,
(c)homeowner,
(d)income year,
(e)pension year,
(f)principal home,
(g)reasonable security of tenure,
(h)refundable deposit,
(i)refundable deposit balance,
(j)unrealisable asset,
(k)value of a charge or encumbrance on an asset,
(l)value of a liability, and
(m)value of a particular asset
The Applicant asserted that the primary definition of an asset as set out in section 11(1) for the Act has been amended in other parts of the Act. The implication of that is that certain assets must be redefined, for example, when applying module G of section 1064. They may be also restored, for example, when the provisions of section 1118(1((b) may have ceased to be applicable (the Applicant refers here to section 33 of the Acts Interpretations Act 1901).
Therefore, the Applicant contends that much of the sale proceeds which were committed to the Ringwood property purchase had brought about the redefining of asset in section 11(1) as a ‘contrary intention’ was applied by reason of section 1118.
(a)with effect on 24 August 2018, the Respondent was required to determine the Applicant’s assets for the purposes of section 1064-G by applying section 1118 (1)(b);
(b)the Respondent, each day for two years, was required to give effect to that;
(c)the Respondent determined on 24 August 2018 that monies set aside for the purchase of the Ringwood property were deemed to be an exempt assets for the purpose of section 1118(1)(b);
(d)with effect on 24 August 2020 the Respondent was then required to make an adjustment for section 1064-G because of the ceasing of entitlement under section 1118 (1)(b) for exempt assets; and
(e)with effect on 25 August 2020 the Respondent was required to determine the Applicant’s assets for the purposes of section 1064-G by taking into consideration section 1121.
On 26 October 2018, $468,000 was paid into a trust account of Key Conveyancing. Licensed conveyancers who receive trust money must establish and maintain a general trust account and, where appropriate, controlled money accounts. These accounts must comply with the Conveyancers Act 2006 (Vic) and the Conveyancers (Professional Conduct and Trust Account and General) Regulations 2008 (Vic). ‘Controlled money’ is when a conveyancer receives or holds money with a written direction to deposit it into an account (other than a general trust account) that the conveyancer has exclusive control over, and the amount is more than $50,000 or the transaction will not be settled within 60 days.
The Applicant stated that as of 18 September 2022, construction of the Ringwood property still has not been completed nor has any occupancy or like certificate been issued to the Applicant.
Respondent
The Respondent contended that Ms Radley’s age pension was correctly reduced on 29 October 2020 as the value of her assets ($701,741) was below the assets value cut off limit of $797,500 for a single non-homeowner to receive a part pension under Module G of the Act as:
(a)The value of Ms Radley’s assets must be applied to the assets test in Module G of section 1064 of the Act in order to determine the rate of her age pension.
(b)During the period of the exemption of the sale proceeds of the Vermont property (24 August 2018 - 24 August 2020) Ms Radley’s rate of age pension was assessed under the income test. Upon the expiry of that exemption, the sale proceeds were assessed as a ‘financial asset’ and the rate of pension was calculated under the asset test.
(c)The value of Ms Radley’s assets as at 29 October 2020 for assessment of age pension entitlement was $701,741 comprising:
(i)Financial Asset (or alternatively Attributed asset): $468,000
(ii)UBank term deposit **7661: $200,000
(iii)NAB account **1647: $ 23,300
(iv)NAB account **2069: $3,941
(v)Household contents $5,000
(vi)Toyota Camry: $1,599

The Respondent contended that the trust funds were a financial asset and a financial investment as defined in the Act on the basis that they were 'deposit money'. The evidence indicates that Ms Radley was the beneficial owner of the funds, and the funds were held on her behalf by Key Conveyancing with the National Australia Bank.
The Respondent submitted that if the Tribunal does not accept that the trust funds were the Applicant's financial asset (which is not conceded), the Secretary makes the alternative contention that the trust funds should be attributed to the Applicant under Part 3.18 of the Act.
The Respondent submitted Part 3.18 of the Act deals with the attribution to individuals, such as the Applicant, of income and assets which form part of a company or trust. In Bornecrantz v Secretary, Department of Social Services [2017] FCA 1010, Perry J observed, at [38], that ‘Part 3.18 was inserted…so as to ensure that social security customers who held their assets in private companies or private trusts received comparable treatment under the means test to those customers who held their assets directly’. Her Honour also referred to the Second Reading Speech to the Social Security and Veterans' Entitlements Legislation Amendment (Private Trusts and Private Companies - Integrity of Means Testings) Bill 2000 (which inserted Part 3.18), which explained:
Under current social security and veterans' affairs legislation, assets held in private trusts and private companies generally cannot be assessed under the social security means test. This means that individuals can use private trusts or private companies to hold and control assets outside the bounds of the current means test.
People who arrange their affairs this way are therefore often treated more favourably under the means test than a person holding similar levels of assets directly. Thus well-off or even quite wealthy people can receive income support payments.
This isn't how the community expects the income support system to operate. It is also at odds with the principle that people with similar levels of private resources should receive similar levels of payment. This measure is about providing a level playing field for all social security customers, no matter how they choose to hold their assets or income.
For an asset or income to be attributable to an individual, the following must be satisfied:
(a)The trust must be a designated private trust in accordance with section 1207P of the Act; and
(b)The trust must be a controlled private trust in relation to the individual in accordance with sections 1207V of the Act; and
(c)The individual must be an attributable stakeholder of the trust in accordance with section 1207X of the Act.
The Respondent submitted that the Key Conveyancing trust account is a designated private trust noting:
(a)It is not a fixed trust;
(b)The units in the trust are held by less than 50 persons;
(c)It is not a complying superannuation fund; and
(d)It is not an excluded trust.
The Respondent submitted that the Key Conveyancing trust account was a controlled private trust as the Applicant passes the control test set out in section 1207V(2) and she was the sole beneficiary of the trust funds.
The Respondent contended that the relevant circumstances do not provide a sufficient basis for a determination that the Applicant is not an attributable stakeholder or should be assigned an attribution percentage that would result in anything less than the full amount of the trust funds being attributed to the Applicant. The Secretary contends the relevant circumstances are as follows:
(a)The Applicant contributed $468,000 to the trust and was the beneficial owner of the funds;
(b)The Applicant stands to receive a future benefit from the trust funds noting Key Conveyancing has confirmed that the funds were held in preparation for the Applicant's purchase of the Ringwood property;
(c)The Applicant was the sole controller of the trust funds. As noted by the AAT1, if the Applicant was to withdraw from the purchase, she would have grounds to compel return of the funds subject to any penalty.
The Respondent contended that there is no basis for the Tribunal to determine, pursuant to s 1208E(2) of the Act, that the trust funds are an excluded asset. The application of s 1208E(1) would not result in an unintended or unfair outcome in the circumstances of this case: see Bornecrantz v Secretary, Department of Social Services at [37].
Therefore, the Respondent contended that in the event the Tribunal finds the trust funds were not the Applicant's financial asset as at 29 October 2020, the Secretary makes the alternative contention that the trust funds should be attributed to the Applicant and included in the value of the Applicant's assets in accordance with sections1207X and 1208E of the Act.
The Respondent contended that the decision to reduce the Applicant’s rate of age pension was relevantly based on the expiry of the two year statutory exemption of the sale proceeds on 24 August 2020 (section 1118(1B)(c)(ii) and section 1118(2B)] of the Vermont property ($468K). The sale proceeds were an assessable asset as a ‘financial asset’ from 25 August 2020. The liability to pay the balance of the purchase price of the Ringwood property did not affect/was not relevant to the reduction in the rate of age pension. As at 29 October 2020 (the date of the decision to reduce the Applicant’s age pension), the Ringwood property was not the Applicant’s asset because the contract for the purchase of that property was incomplete. The balance of the purchase price, namely $466,200, was still payable.
The Respondent contended that the liability to pay the balance of the purchase price of the Ringwood property did not affect/was not relevant to the reduction in the rate of age pension. The asset referenced in the age pension rate reduction decision and section 1121(1) is the (sale proceeds of the) Vermont property and not the Ringwood property. There was no charge or encumbrance over the Vermont property. Assuming there is a charge or encumbrance of $468K over the Ringwood property, since it is a disregarded asset under s 1118(1)(a), s 1121(1) does not apply due to the operation of s1121(3). That is, the value of the Ringwood property is not reduced by the value of the charge/encumbrance.
The Respondent contended there was no basis to find that the Applicant would suffer severe financial hardship, as she had more than $220,000 in bank deposits.
CONSIDERATION
The Tribunal is in fierce agreement with Ms Radley’s assertion that the Act is notoriously complex and difficult to interpret, and her contention that ‘The legislation is tightly drafted and makes no provision for the exercise of discretion. The case law confirms that’.
That is why the Tribunal has determined her application must fail as there is no discretion which can be exercised in considering the proceeds of sale of her Vermont home, after the expiry of the two-year exemption period, as anything but an asset.
The Tribunal finds that Ms Radley sold her principal place of residence to finance the construction of a property more suited to her needs and she has experienced delays beyond her control in the building of that property. This circumstance had been contemplated by Parliament when drafting the Act with the inclusion of section 1118(2B) and this exemption was applied correctly to the calculation of Ms Radley’s age pension. As outlined in the Guide at 4.6.3.80 Exempting the Principal Home - Sale Proceeds, the income test rules for sale proceeds held in a financial investment:
Principal home sale proceeds can include:
funds from the sale of the principal home that are held in a financial investment, which the income support recipient intends to be applied to purchase, build, rebuild, repair or renovate a new principal home, and
payments that have been applied to build, rebuild, repair or renovate a new principal home.
……..
Determining a time period for the extended exemption
An income support recipient can only gain a principal home sale proceeds exemption for up to 24 months from 1 July 2007. This includes the original 12 months and up to a further 12 months extended exemption.
The length of time that the extended exemption period will apply for should be determined. This time period should be in line with when the income support recipient anticipates, or the contract stipulates, the purchase, building, rebuilding, repair or renovation of the new home will be complete.
If an income support recipient's new home is still not complete the time period can be further extended provided the criteria continues to be met and the overall timeframe does not exceed the total allowable 24 month exemption period.
When the extended exemption ends
The extended principal home sale proceeds exemption ends when either:
the income support recipient ceases to have an intention to apply the proceeds to purchase, build, rebuild, repair or renovate a new principal home, or
a new principal home is purchased, or where the sale proceeds were intended to be used for building, rebuilding, repairing or renovating the new principal home, the build, repair or renovation of the new principal home is complete, or
the determined extended time period expires,
whichever occurs first.
Income test rules for sale proceeds held in a financial institution
The principal home sale proceeds that are held in a financial investment are subject to deeming.
The Tribunal does not find in any of the evidence lead by Ms Radley that there was any other interpretation of her circumstances contemplated under the provisions of the Act. The Tribunal finds that the monies Ms Radley placed into Key Conveyancing trust account were an asset as at 25 August 2020.
Whilst the Tribunal acknowledges that these monies were being held by the trust to pay the balance of the purchase price upon completion of the Ringwood property, they could not be exempt from the asset test as:
(a)They could not be considered as Ms Radley’s principal place of residency, as she did not own the property at the time;
(b)Section 1121(1) was not enlivened as there was no charge or encumbrance over the Vermont property and the value of the Ringwood property was not impacted by any charge/encumbrance;
(c)The words ‘unless a contrary intention appears’ in section 11(1) does not result in the asset being redefined, and
(d)The Key Conveyancing trust account was not an excluded trust under the Act, primarily because Ms Radley was the sole beneficiary of the monies held in it.
Whilst sympathetic to Ms Radley’s situation, the Tribunal does not consider that she was in severe financial hardship as a result of the reduction in her age pension because in addition to the monies held for the construction of the Ringwood property, she also had significant other monies at her disposal.
The Tribunal determines that Ms Radley’s age pension had been correctly reduced ss the funds held for the finalisation of the purchase of Ms Radley’s Ringwood home were a financial asset that must be taken into account in the calculation of the rate of her age pension, and there is no provision to extend the two-year exemption period for the principal home sale proceeds from the assets test.
RECOURSE FOR THE APPLICANT
Ms Radley asserted, and the Respondent conceded, that she had been given incorrect advice about the impact of the sale of her principal residence on her age pension.
Ms Radley asserted that on 22 September 2020, Centrelink advised her to ‘realise the balance of my builder's payment of $468,000 and place the amount in trust for this purpose only. This would allow Centrelink to exclude the amount from my asset test…’.
The Respondent advised that according to the audio recording of that telephone discussion, Centrelink advised Ms Radley to deposit in the conveyancer's trust account whatever amount of the balance of the Ringwood property purchase monies she could afford. Centrelink then informed Ms Radley that her bank account balance would reduce by that amount. It also advised that provided she could prove that the monies were to purchase the Ringwood property, placement of the funds in the trust account would ‘entitle back to pension as it was’. Centrelink also stated that the value of Ms Radley assets would then be reduced which would give her a higher rate of age pension.
The Tribunal finds that Ms Radley had been given incorrect advice by Centrelink which she then acted upon. However, this does not result in a finding that the reduction of her age pension was incorrect as there are no provision in the Act to exclude a financial asset from the assets test because of incorrect advice.
The Tribunal reiterates the advice already given by both the Respondent and the AAT1 that Ms Radley could pursue a claim for compensation under the Scheme for Compensation for Detriment caused by Defective Administration (CDDA) as an avenue to seek compensation for the incorrect information she was given. CDDA is an avenue of last resort when there is no other avenue of redress available. It is administered by the Department of Finance. Defective Administration is defined as:
a specific and unreasonable lapse in complying with existing administrative procedures; or
an unreasonable failure to institute appropriate administrative procedures; or
an unreasonable failure to give to (or for) an applicant, the proper advice that was within the officer's power and knowledge to give (or reasonably capable of being obtained by the officer to give); or
giving advice to (or for) an applicant that was, in all the circumstances, incorrect or ambiguous.
Applications under the CDDA Scheme are discretionary, they are assessed on their individual merits, and a finding that a mistake has been made by an official does not automatically mean compensation is payable. The Tribunal has no jurisdiction in respect of perceived defective administrative matters of the Department and had no jurisdiction over the administration of the CDDA scheme.
Whilst the Tribunal has no way of assessing if a CDDA application by Ms Radley might be successful, it nevertheless encourages her to lodge an application as it was accepted by all parties that she had been given incorrect advice.
DECISION
The decision under review is affirmed.

I certify that the preceding 57 (fifty-seven) paragraphs are a true copy of the written reasons for the decision of Ms Anna Burke, AO Member

............[sgd]......................
Associate
Dated: 18 November 2022

Date of hearing on papers: 4 October 2022

Applicant: Self-represented

Advocate for the Respondent:

Solicitors for the Respondent:

Mr Tim Noonan

Services Australia,
Litigation Branch