Rostom and Secretary, Department of Health (Social services)

Rostom and Secretary, Department of Health (Social services) [2018] AATA 337 (25 January 2018)
Division:GENERAL DIVISION
File Number: 2017/1532
Re:Raouf Rostom
APPLICANT

AndSecretary, Department of Health
RESPONDENT

DECISION
Tribunal:L M Gallagher, Member
Date:25 January 2018
Place:Perth

The decision under review is affirmed.
........(Sgd).................................................
L M Gallagher, Member
CATCHWORDS
SOCIAL SECURITY – residential aged care – basic daily fee – other supplements – whether eligible for hardship supplement – subsidy principles – whether care recipient has access to financial assistance from any other source – other relevant matters – assurance of support – whether change in assurer’s financial circumstances – evidence supports assurer has capacity to provide financial support – determination of hardship not made – decision under review affirmed
LEGISLATION
Aged Care Act 1997 (Cth) – s 41-3 – s 44-1 – s 44-2 – s 44-27 – s 44-30 – s 44-31 – s 85-1 – s85-8 – s 96-1
Migration Act 1958 (Cth)
Social Security Act 1991 (Cth) – s 1061ZZGA
SECONDARY MATERIALS
The Guide to Social Security Law – Part 1.1.A.310
Subsidy Principles 2014 (Cth) – s 60
CASES
Drake and Minister for Immigration and Ethnic Affairs [1979] AATA 179
REASONS FOR DECISION
L M Gallagher, Member
25 January 2018
INTRODUCTION

On 19 November 2010, Professor Raouf Rostom (the applicant, ‘Professor Rostom’) was granted a subclass 143 visa (T16, page 153) (‘the visa’).
As a condition of the visa, Professor Rostom’s son, Mr John Rostom (the ‘assurer’):
(a)gave an assurance of support to the Department of Human Services (the ‘Department’) (R2, Attachment A, page 11), dated 19 October 2010 (the ‘Assurance of Support’); and
(b)provided a ‘Bank Guarantee, Assurance of Support Contributory Parent Visa’ of $14,000.00, dated 22 October 2010 (R2, Attachment A, page 22).
On the Assurance of Support document, Professor Rostom’s son, as the assurer, indicated (by way of signature) his understanding that, relevantly (R2, Attachment A, page 11):
“...I am required to provide sufficient direct or indirect financial assistance to the person(s)…to ensure that they will not rely on Centrelink payments.
…
[t]he Assurance of Support remains in force for a period of 2 years for all visa subclasses, except subclasses 143 and 864, for which the period is 10 years. This period begins on the day the person(s) for whom I have given the Assurance of Support arrive(s) in Australia or is granted the visa for which the Assurance of Support was required, whichever happens later.
[o]nce the person(s) for whom I have given an Assurance of Support is/are granted the visa to which the Assurance of Support applies, the Assurance of Support cannot be withdrawn, and that my responsibilities as an Assurer will remain in place for the full period of the Assurance of Support, regardless of any changes in circumstances, financial hardship, or a breakdown in the relationship between myself and any person(s) for whom I have given an Assurance of Support.
[a] bank guarantee cannot be cancelled, and the related security deposit cannot be released, until the Assurance of Support period has ended for all people covered by the Assurance of Support.”
[Emphasis Added]
On 22 December 2013, Professor Rostom arrived in Australia (R1, T16, page 154), the Assurance of Support commencing on the same day (being the later of the date Professor Rostom arrived in Australia and the date the visa was granted, refer to extract from paragraph 3 above and to R2, Attachment A, page 23).
On 27 March 2014, the Department wrote to the assurer advising that, among other things (R2, Attachment A, page 23):
“We have been informed that Raouf Rostom has been issued with the visa to which the Assurance of Support applies and has arrived in Australia. This means that your responsibility as an Assurer has started. You are now responsible for ensuring that Raouf Rostom has sufficient direct or indirect financial support so that they do not need to receive support from us.
[Emphasis Added]
On 26 June 2014, Professor Rostom was admitted to Concorde Nursing Home (R1, T16, page 155).
On 4 October 2014, Professor Rostom was granted a hardship supplement under section 44-31 of the Aged Care Act 1997 (Cth) (the ‘Aged Care Act’) for the period 26 June 2014 to 26 February 2016 (R1, T13, page 136).
On 24 July 2015, Professor Rostom was discharged from Concorde Nursing Home (R1, T16, page 155) and departed from Australia on that same day (R1, T16, page 154). Professor Rostom arrived back in Australia on 26 October 2015 (R1, T16, page 154).
On 17 December 2015, Professor Rostom was admitted to Brightwater Nursing Home (R1, T16, page 155).
A note recorded by the Department on 18 February 2016 states that “Brightwater are asking customer to pay fees for this admission [referred to at paragraph 9 above] unless hardship is granted for this facility” (R1, T17, page 175).
On 25 February 2016, the Department advised Professor Rostom that “[c]are recipients living in permanent aged care can be asked to pay a basic daily fee. The amount is currently $47.86 per day” (R1, T1, page 6).
Professor Rostom then lodged a signed hardship application dated 26 November 2015 (R1, T6), which a Service Officer of the Department rejected on 10 May 2016, pursuant to section 44-31 of the Aged Care Act. (R1, T11, page 127).
On 21 May 2016, Professor Rostom requested an internal review of the Department’s determination dated 10 May 2016 (R1, T12, pages 129-130).
On 13 February 2017, an Authorised Review Officer (‘ARO’) of the Department confirmed the Department’s decision dated 10 May 2016 (R1, T2, page 17) (refer to subsection 85-5(a) of the Aged Care Act) on the basis that (R1, T2, page 19):
(a)Professor Rostom continued to have access to financial assistance from his son (the assurer) who is residing in Australia and who committed to meeting his need for financial support; and
(b)there is no evidence to indicate that since 2013, Professor Rostom’s assurer had experienced a significant change in circumstances that affects his ability to provide financial support to Professor Rostom.
On 12 March 2017, Professor Rostom applied to the Administrative Appeals Tribunal’s General Division (‘Tribunal’) for a review of the ARO decision dated 13 February 2017 (R1, T1) (refer to section 85-1, Item 48 of the Aged Care Act and to section 85-8 of the Aged Care Act). In his application for review to the Tribunal, Professor Rostom claimed that the ARO’s decision was wrong as follows:
“…I believe both decisions [dated 10 May 2016 and 13 February 2017] were incorrect, unfair and inconsistent with previous decision made by the Dept [sic] in 2014 for an identical application. My grounds for appeal are as follows:
1)    When I resided at Concorde Nursing Home in 2014/15, an initial application for financial hardship in residential care was successful as per the letter dated 04 Oct 2014.
2)    The recent review outcome letter does not mention anything regarding this successful application in 2014.
3)    An Assurance of Support (required as a prerequisite for my PR visa) was already in place back in 2014 when my application for financial hardship was successfully granted, as it continues to remain in effect.
4)    The AOS issue was never mentioned in the Dept’s [sic] letters dated 25 Feb 2016 and 12 April 2016, while the Dept [sic] assessed my application.
5)    Even though my son’s position as my assurer of support remains in effect, he cannot provide the assurance to the same degree as he could back in 2010, when it was applied for. This is due to the fact that his personal and financial circumstances have significantly changed since then.
6)    I’m unemployed and do not receive any pension or social welfare support. My financial situation has worsened since 2014. Given that I was successful with my application back in 2014, it was assumed that my recent application would also succeed. So I remained in residential care at Brightwater with the hope that I wouldn’t incur any costs.
7)    When my request for review was sent to the Dept [sic] in May 2016, it took the Dept [sic] 6 months to send back an update stating that a review was going to be undertaken. And even then, the Dept [sic] mistakenly referred to an unsuccessful application for Special Benefit, instead of the unsuccessful application for financial hardship…” (R1, T1, page 1).
RELEVANT LEGISLATION AND PRINCIPLES
Eligibility for the hardship supplement
The statutory provisions relevant to a person’s eligibility for the hardship supplement are contained in the Aged Care Act and the Social Security Act 1991 (Cth) (‘the Social Security Act’). The Subsidy Principles 2014 (Cth) (‘the Principles’), made by the Minister under section 96-1 of the Aged Care Act, contain a number of matters to which the Secretary must have regard when determining, relevantly, a care recipient’s eligibility for a hardship supplement under the Aged Care Act.
The method for calculating the amount of residential care subsidy payable to an approved provider is set out in subsection 44-2(2) of the Aged Care Act. The amount in respect of a residential care service (residential care being defined in section 41-3 of the Aged Care Act) is determined by adding together amounts worked out, using the residential care subsidy calculator in section 44‑2, in respect of individual care recipients in the service (refer to section 44-1 of the Aged Care Act). Subsection 44-2(2) relevantly provides:
“Step 4. Add the amounts of any other supplements worked out using Subdivision 44‑F.”
Section 44-27 of the Aged Care Act contains subsection 44-27(1)(b) of the Act, which provides in relation to subsection 44-2(2) of the Aged Care Act :
(1) The other supplements for the care recipient under step 4 of the residential care subsidy calculator in section 44-2 are such of the following supplements as apply to the care recipient in respect of the payment period:
…
(b) the hardship supplement (see section 44-30);
…
[Emphasis Added]
Section 44-30 of the Aged Care Act provides for the hardship supplement referred to in subsection 44-27(1)(b) of the Aged Care Act. Subsection 44-30(3) relevantly provides that the care recipient is also eligible for a hardship supplement on a particular day if a determination is in force under section 44-31 in relation to the care recipient.
In deciding whether to make a determination under section 44-31 of the Act, subsection 44-31(2) of the Aged Care Act requires the Secretary to have regard to the matters (if any) specified in the Principles, relevantly at section 60 of the Principles, which states, in part:
(4)In deciding whether to determine that a care recipient is eligible for a hardship supplement, the Secretary must have regard to the following matters:
(f)        whether the care recipient has access to financial assistance:
(iii)      from any other source;
…
(j)        any other matters the Secretary considers relevant.
[Emphasis Added]
Assurance of support
The statutory provisions relevant to assurances of support are contained in Chapter 2C of the Social Security Act. The Guide to Social Security Law (the ‘Guide’) provides assistance to those who administer the Social Security Act. The Tribunal, whilst not bound to apply policy guidelines will usually do so unless there are cogent reasons in a particular case for not doing so (Refer to Drake and Minister for Immigration and Ethnic Affairs [1979] AATA 179).
Section 1061ZZGA(a)(ii) of the Social Security Act defines an assurance of support as an undertaking by a person under Chapter 2C of the Social Security Act that the person will pay the Commonwealth an amount equal to the amount of social security payments that are received in respect of a period by another person who becomes the holder under the Migration Act 1958 of a visa granted in connection with the undertaking (whether or not the person continues to hold the visa throughout the period).
Part 1.1.A.310 of the Guide makes it apparent that while the Social Security Act refers to an assurer’s obligation to repay recoverable “social security payments”, this is in the context of a broader and more general undertaking to provide financial support:
“An AoS is a commitment by one or more Australian residents (as defined by (SSAct section 7(2)) (the assurer) to provide financial support to a new resident (the assuree) during the AoS period. It is also a legal commitment to repay the Commonwealth certain social security payments, if such payments are made to the new resident while the AoS is in force.”
The Tribunal notes Part 1.1.A.310 of the Guide as extracted at paragraph 23 above is in effect reiterated in a publication of the Department of Home Affairs (previously, the Department of Immigration and Protection) entitled “Fact Sheet – Assurance of Support (AoS)”.[1]
[1] FOR DETERMINATION
The issue for review is whether Professor Rostom is eligible for a hardship supplement under section 44-31 of the Aged Care Act. Given the matters addressed at paragraphs 3, 5, 20, 23 and 24 (inclusive) above, the Tribunal considers that this issue in turn, requires consideration of the assurer’s capacity to provide financial support to Professor Rostom.
EVIDENCE
The matter was heard in Perth on 28 November 2017. Professor Rostom appeared in person with the assurer, his advocate, who also gave evidence before the Tribunal. The Secretary was represented by Mr Christopher Bishop from Mills Oakley Lawyers.
The Tribunal received the following evidence:
·Submission by John Rostom dated 23 August 2017 (including statement of financial circumstances as at 23 August 2017) (A1);
·Submission by Raouf Rostom dated 23 August 2017 (A2);
·A 176 page set of T-Documents (T1 – T17) (R1);
·Secretary’s Statement of Facts, Issues and Contentions dated 17 July 2017 including annexures (R2); and
·Secretary’s representation of John Rostom’s statement of financial circumstances as at 23 August 2017 (undated) (R3).
The Tribunal noted and the parties were agreeable that earlier written submissions by the assurer and Professor Rostom dated 11 June 2017 and 22 June 2017 respectively and a Statement of Financial Circumstances of John Rostom dated 22 June 2017 all formed part of the attachments to the Secretary’s Statement of Facts, Issues and Contentions (R1) and hence were not tendered and exhibited separately.
The Tribunal has reviewed all of the material before it. The Tribunal 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.
Professor Rostom gave the following oral evidence at hearing, including during cross-examination by Mr Bishop:
(a)From 1976, when he first took a job at the University of Kenya, right up until he was forced to retire in November 2013 after an accident involving him falling from a chair and injuring his back, he was engaged by the university on a two-year contract basis.
(b)Following the accident in 2013, he was treated in hospital in Kenya. Professor Rostom’s son (in Kenya, and not the assurer) had concerns regarding his father’s treatment, namely his father’s reaction to an anaesthesia drug, which had caused him memory loss and loss of consciousness, and told the assurer about this.
(c)The assurer consulted with Professor Rostom’s doctor and was advised to admit Professor Rostom into hospital in Nairobi for medical treatment, where Professor Rostom then spent three weeks and his sons’ concerns continued for the same reason.
(d)By the time the assurer flew to Nairobi in December 2013 to assist his father’s travel to Australia, Professor Rostom had recovered some of his memory, but unfortunately he never recovered physically, his back had suffered injuries and he could not undergo surgery.
(e)The cost of his airfares to Australia in 2013 and the visa application fees for himself and his wife in 2009 were paid for out of his own savings. The airfares took most of his savings and he was ineligible for pension as he had worked at the university on a contract basis.
(f)Professor Rostom came to Australia with about $5,000.00 in savings. He had expected to receive an additional $4,000.00 from the university to go towards his “tickets, medicines, everything” but he never received it.
(g)His wife has savings separate to his, however, these are “very insignificant” as she worked only casually in Kenya and spent her income on personal effects.
(h)His “survival plan” once in Australia was to find part-time teaching work at an Australian university. During a previous trip to Australia to attend his son’s engagement, he had given lectures at Curtin and Murdoch universities and had hoped he would find a job at either of these universities when he returned.
(i)If part-time work at an Australian university did not eventuate he “didn’t know what the plan was” and it “was in the hands of God.”
(j)He was aware that his son had provided an assurance of support with regard to his visa application and that he was ineligible for (social security) assistance in Australia.
The assurer gave the following oral evidence at hearing, including during cross-examination by Mr Bishop:
(a)The assurance of support is “just one aspect of what is being considered here.” The assurance of support was set up so that his father could obtain a residency visa in 2010.
(b)He (the assurer) was the only one (in the family) in the position to provide an assurance.
(c)It “wasn’t expected” that his father’s health would deteriorate and that his father would “forcibly retire.”
(d)His situation as an assurer has been compromised by his redundancies from work and his family commitments and he understands that he needs to show proof that his personal circumstances have changed.
(e)His father exhausted his (own) life savings when he paid $25,000.00 for six fares, to be transferred by plane on a stretcher to Australia “to be catered for medically,” which “did save his life.”
(f)He couldn’t cater for his father at his own home; his father has to be under specialist care in an aged care facility.
(g)When they “put him into Concorde,” and were granted the hardship supplement it was a “godsend” as his father’s daily fees were reduced to zero.
(h)The “grant” expired in February 2016 and he had an expectation that it would be granted again as his circumstances had not changed. If anything, his circumstances had deteriorated.
(i)It was surprising to him that the second application for hardship (the subject of the present matter) was rejected. At the time of the second application the Department had requested additional evidence and they had provided it, which “still resulted in a rejection.”
(j)The fact that the Department had asked for additional evidence had given them hope (that their second application would succeed).
(k)His father was in the aged facility for the eleven months that it took for the Department to review his father’s application, which “cost them time and money.” His father’s fees for aged care are presently in arrears of $18,000.00 (approximately).
(l)The “lack of consistency” (by the Department, in granting his father’s first hardship application but refusing to grant the second application) is “unfair.”
Mr Bishop then directed the assurer and the Tribunal to the various statements made by the assurer in the Assurance of Support document (R2, Attachment A, page 11 and refer to paragraph 3 above), in particular the statement that “the Assurance of Support cannot be withdrawn.” The assurer said that while he understood the nature of the assurance that he was giving, this understanding was tied to his expectation that his father “would not need to use it” as his father’s intention was to work.

The assurer agreed with Mr Bishop that it was “pretty clear on the form” that the assurance was for a 10 year period and said that at the time, his “hands were tied” for two reasons, namely:
(a)his father would not have obtained his visa without the assurance having been provided; and
(b)he (the assurer) was the only person in the family with permanent residency (in Australia) and hence only he could provide the assurance for his father.
The assurer gave the assurance in full knowledge that circumstances may require him to follow through with the assurance.
The assurer’s two children were born in 2014 and 2017 respectively, after his father’s arrival in Australia in 2013. He made a conscious decision to have children in full knowledge that he had provided the Assurance of Support in 2010 and in full knowledge that there would be costs associated with raising children.
“The gamble” (of providing the assurance) wasn’t made “with a clear picture of having to actually provide it.”
As at 23 August 2017, his wife was working part-time as a consultant pharmacist, conducting home medication reviews for the elderly once per week on average. His wife would receive approximately $200.00 per review from Medicare.[2]
[2] The Tribunal notes that the assurer’s statement of financial circumstances as at 23 August 2017 (A1) states that his partner’s income is $200.00 per fortnight (rather than $200.00 per week as stated by the assurer in his oral evidence at paragraph 37 above).
These deposits from Medicare (referred to at paragraph 37 above) are not seen in the bank information provided by the assurer (refer to R2, Attachment B) because the money goes into her business account, which she then transfers into their joint account.
Mr Bishop then put it to the assurer that his statement of financial circumstances as at 23 August 2017 represents his total annual expenses as $127,775.00 and his net income as $85,090.46 (refer to R3) and that the Secretary considered that shortfall of approximately $40,000.00 to be significant.[3]
[3] The Tribunal notes that the Secretary’s representation of the assurer’s financial circumstances as at 23 August 2017 (R3) does not include the assurer’s payments to Brightwater aged care facility hence the $40,000.000 shortfall referred to in paragraph 39 above is exclusive of this expense.
When asked by Mr Bishop as to whether the assurer continues to maintain that he has those expenses (referred to in paragraph 39 above), the assurer said that in around February 2017, he paid several thousand dollars to the aged care facility as he was being “pestered” by them to “satisfy the invoices.” The assurer said that following this payment Brightwater, the aged care facility, learned of his father’s application being on foot and “stopped calling.” As to whether there was anything on his statement of financial circumstances as at 23 August 2017 that he would want to adjust at all, the assurer said that he “thinks it is realistic.”
Mr Bishop then drew the assurer and the Tribunal to home loan information regarding the assurer and his wife, to the effect that they had a redraw facility on their home loan in the amount of $44,387.00 (R2, Attachment B, page 35), an investment property valued at between $450,000.00 and $480,000.00,[4] a mortgage balance of $185,905.02 (R2, Attachment B, page 35) and have equity in his home of approximately $290,000.00. Mr Bishop also noted that the assurer’s bank statement demonstrated that his income exceeded his expenses for a six month period (R2, Attachment B, page 34).
[4] The Tribunal notes that the assurer’s financial circumstance as at 23 August 2017 valued the investment property as worth $480,000.00 (A1). However, in his submissions at Item 38 of A1, the assurer refers to the value of the property as $450,000.00.
When, on that background (set out in paragraph 41 above), Mr Bishop suggested to the assurer that his financial situation was not reflective of the $40,000.00 annual shortfall depicted in the Secretary’s representation (R3) and did not meet the definition of hardship, the assurer disagreed because the bank statement was “only for a period.” When Mr Bishop further put to the assurer that the bank statement regarding the six month period did not show a loss of $20,000.00 (i.e. consistent with R3), the assurer said that he has joint accounts with his father and mother,[5] as well as with his wife and this had not been captured in the Secretary’s representation (in R3).
[5] The Tribunal notes that financial information regarding bank accounts held jointly between the assurer and his father, and the assurer and his mother, was not provided to the Tribunal.
Mr Bishop took the assurer and the Tribunal to the following extract from the assurer’s written submission dated 23 August 2017 in reply to the Secretary’s statement of facts, issues and contentions (R2), (A1, page 4):
“Item 31:[6] Although the Respondent claims that the births of my children, my wife’s voluntary cessation of employment and financial obligations towards my mother should not release me from my obligations as an assurer, I believe it is only fair to acknowledge that these events do indeed represent a change in circumstance (as requested in the Department’s letter dated 13 February 2017. These circumstances have severely compromised my ability to provide that assurance, compared to 7 years ago when the assurance of support was drawn up, at a time when it was not envisaged that these circumstances and events would be manifested.
The Respondent should also factor in the reality that if my wife was not to voluntarily cease her employment almost 4 years ago before our first child was born, there would be the added expense of child care which would come into the equation and be claimed as part of our increasing expenses.”
[Emphasis Added]
[6] Item 31 refers to paragraph 31 of the Secretary’s Statement of Facts, Issues and Contentions (R2), which states “The Secretary notes that the assurer’s marriage was prior to his undertaking to enter into an assurance of support on 20 October 2010 (Attachment A, p11). The births of his children and his wife’s voluntary cessation of employment should not be accepted as releasing him from his obligations as an assurer. Nor should the assurer’s obligations in respect of his mother under the same assurance of support.”
On the background of the extract at paragraph 43 above, when asked by Mr Bishop as to whether, in 2010 when he gave the Assurance of Support he and his wife had planned on having children, he said “he may have, yes.”
When asked by Mr Bishop with regard to Professor Rostom’s health, as someone of advancing age, was it not envisaged that he would come to require care, the assurer said that his father had planned to support himself and it was not envisaged that any care he would go on to require was going to be significant.
When Mr Bishop put it to the assurer that to have equity in one’s home in the order of nearly $300,000.00, a re-draw facility of more than $44,000.00 and a savings account where income exceeds expenses over a six month period did not represent a situation of hardship, the assurer disagreed and said that he was currently experiencing hardship.
Mr Bishop then took the assurer and the Tribunal to the following extract from the assurer’s written submission dated 23 August 2017 in reply to the Secretary’s statement of facts, issues and contentions (R2), (A1, pages 6 and 7):
“Item 38:[7] …The savings amount in our bank account is always fluctuating as it is where my salary is deposited and it is where our expenses are withdrawn, including our fortnightly loan repayments. Paying off our mortgage is our main priority at the moment, as opposed to paying off the outstanding care fees, which were subsidised in the past as they should be now…
…The redraw amount in our loan facility is a result of us making loan repayments above the minimum requirements over the last 7 years or so. This is money that we still owe the bank. It is only there for us to make use of in dire emergency circumstances only. And if we were to do that, then it directly increases the home loan debt we already have…
…The investment property valued at $450,000.00 was solely financed by my brother who lives overseas, and any net income from this asset is utilized [sic] by him to service his overseas loan for his property. It is only listed under my name for legal purposes as my brother is not a permanent resident of Australia. This has been clarified with the ATO and accepted as a fact for tax purposes…”
[Emphasis Added]
[7]Item 38 refers to paragraph 38 of the Secretary’s Statement of Facts, Issues and Contentions (R2), which states “Evidence has been provided that $10,321.85 of care fees were due and payable as at 30 June 2017 (Attachment B, p 22). However, the assurer states that he and his wife hold $10 thousand in a savings account (Attachment B, p 26). Further, a mortgage statement provided by the assurer indicates that, as at 22 June 2017, he and his wife could redraw $44,387 from the loan facility (Attachment B, p 35). Additionally, departmental records indicate that they have an investment property valued at $450 thousand (Attachment C, pp 3-6).”
On the background of the matters raised in paragraph 47 above, Mr Bishop asked the assurer whether: (1) making mortgage repayments in excess of the minimum rate as opposed to meeting his commitments under the Assurance of Support; and (2) not “tapping into” their redraw facility to meet his father’s care expenses represented a choice not to meet the commitments of the Assurance of Support rather than actually not being in a financial position to do so, the assurer said [emphasis added]:
(a)while he had envisaged providing “a certain level” of assurance (not a “full assurance”) in the order of minor expenses such as transportation, medicines and groceries, which he would still be prepared to do, he had not envisaged meeting an ongoing fee of (approximately) $50.00 per day; and
(b)the reason he thought he would be meeting minor expenses only was because he thought his father would support his own aged care costs when the time came.
When asked by Mr Bishop, the assurer said that there was nothing in the Assurance of Support document that led him to believe that he could “pick and choose” which of his father’s expenses he would meet or anything else having the effect of qualifying the extent of the assurance given.
The assurer believes that the Secretary has been “selective” regarding the financial aspects of its assessment, in saying that his income exceeds his expenses (which would not have been the case if he had been meeting the daily care fee) and that its position regarding the $40,000.00 shortfall (in R3) is inaccurate.
CONSIDERATION
The issue for review by the Tribunal is whether Professor Rostom is eligible for a hardship supplement under section 44-31 of the Aged Care Act. For the reasons set out at paragraph 25 above and 53 below, the Tribunal considers that this issue in turn, requires consideration of the assurer’s capacity to provide financial support to Professor Rostom.
Professor Rostom has resided at Brightwater Nursing Home since 17 December 2015. Since 27 February 2016, his fee at Brightwater Nursing Home has no longer been subsidised and continues to be incurred at a daily rate. The assurer essentially contends on behalf of his father that:
(a)He (the assurer) is, due to his “significantly compromised” financial position, unable to meet his father’s care expenses although he provided an assurance to do so for a ten year period commencing on 22 December 2013, the date his father arrived in Australia.
(b)His father ought to be deemed eligible for a hardship supplement given that he can no longer provide financial support to him in accordance with the commitment made under the Assurance of Support and in turn have his care costs fully subsidised.
The Secretary, however, takes the view that the assurer’s circumstances do not constitute financial hardship for the purposes of the Aged Care Act, the Assurance of Support being a factor relevant to eligibility as a source of financial assistance under subsection 60(4)(f)(iii) of the Principles. The Secretary therefore contends that a determination of hardship should not be made as the assurer has the capacity to provide financial support to Professor Rostom (R2, paragraph 20 and paragraph 31 onwards).
For completeness, the Tribunal also notes at the outset that it is not in dispute between the parties and it is satisfied on the evidence before it that:
(a)Professor Rostom is not in receipt of an income support payment and that deposits made into his bank account by friends and family are not a reliable source of income.
(b)Professor Rostom has negligible assets within Australia.
The assurer’s financial circumstances and his capacity to provide financial support
The assurer has advanced the following contentions on behalf of Professor Rostom regarding the assurer’s financial circumstances and his “severely compromised” capacity to provide financial support:
(a)The costs associated with raising his family, a family that he had and his wife had entertained at the time the Assurance of Support was provided (refer to paragraph 44 above), although he concedes he had provided the Assurance of Support in 2010 in full knowledge that there would be costs associated with raising children (refer to paragraph 35 above and R2, Attachment B, page 17, paragraph 9).
(b)His wife voluntarily ceasing her employment as a pharmacist following the birth of their first child (although she now works on a consultant basis), which he says “forced” him to become the sole income earner in the household (refer to paragraph 37 above and R2, Attachment B, page 16, paragraph 4).
(c)He has had “several months of unemployment” resulting from three redundancies from work over a four year period (R2, Attachment B, page 17, paragraph 10).
(d)The costs (in the order of $25,000.00) associated with his father’s medical evacuation from Kenya in December 2013, although this cost was met by his father (refer to subparagraphs 30(e), 31(e) R2, Attachment B, page 16, paragraph 2).
(e)His own fortnightly gross income is $4,706.71 (R2, Attachment B, page 24 as at 22 June 2017 and A1, as at 23 August 2017).
(f)His family fortnightly net income as at 22 June 2017 was $4,416.71 [sic - $4,416.91] (Attachment B, page 24 to 25, which the Tribunal notes that as at 23 August 2017 was $3,272.71 (A1)).
In response to the assurer’s contentions at paragraph 55 above, the Secretary submitted that:
(a)The assurer’s marriage was prior to his undertaking to enter into an assurance of support on 20 October 2010 (R2, paragraph 31).
(b)The births of the assurer’s children should not be accepted as releasing him from his obligations as an assurer (R2, paragraph 31), noting that the assurer and his wife had entertained the notion of having children at the time the Assurance of Support was provided (refer to paragraph 44 above).
(c)While there is evidence that the assurer was made redundant from work on 6 June 2013, 13 January 2014 and 16 September 2015 and it accepts that these events would have been stressful for him and his family, the assurer has not provided evidence of the length of the periods of unemployment and there is no Departmental record of him ever having tested his eligibility for Newstart allowance, despite receiving advice to do so (R2, paragraph 32 and R2, Attachment C, pages 1 and 2 and T17, page 174, Attachment C).
(d)While the costs associated with Professor Rostom’s return to Australia were significant and unanticipated, the available medical evidence[8] does not corroborate that medical treatment was required in Australia [emphasis added]. Rather, it states that treatment was available locally but not performed due to the planned travel (R23, paragraph 33).
(e)The assurer’s fortnightly income of $4,706.71 (as at 22 June 2017 and 23 August 2017, refer to subparagraph 55(e) above) has actually increased from when he undertook to provide the Assurance of Support, when his fortnightly income was $4,263.30 (R2, paragraph 34 and R2, Attachment A, page 19).
(f)Subtracting fortnightly mortgage repayments of $1,011.00 and daily care fees of $686.98, as at 22 June 2017 from the assurer’s net family income after tax which is $4,416.91 (see paragraph 55(f) above), leaves $2,719.71 [sic - $2,718.93] per fortnight for all other expenses as at 22 June 2017 (R2, paragraph 35 and R2, Attachment B, pages 24 and 25).[9]
(g)The annual expenditure listed by the assurer (as at 22 June 2017) of $11,000.00 on “clothing,” $5,000.00 on “clothing/shoes,” $4,000.00 on “entertainment,” a combined $9,000.00 on “other” and $5,000.00 on flights” represent an unrealistic amount of discretionary spending (R2, paragraph 36 and R2, Attachment B, page 25).[10]
(h)Excluding the amounts referred to at subparagraph 56(g) above, the household expenditure listed by the assurer not already accounted for results in $1,829.00 per fortnight, noting that this figure includes private school fees (of $1,200.00 per term[11]). (R2, paragraph 37 and R2, Attachment B, page 25). This results in a surplus of $890 per fortnight for all other expenditure, including medical and pharmaceutical costs (of which evidence has not been provided) and discretionary expenditure.
(i)$10,321.85 in care fees were due and payable as at 30 June 2017 (R2, Attachment B, page 22). However, the assurer states that he and his wife hold (approximately) $10,000.00[12] in a savings account (as at 22 June 2017, R2, Attachment B, page 26). Further, a mortgage statement provided by the assurer indicates that as at 22 June 2017, he and his wife could redraw $44,387.00 from the loan facility (R2, Attachment B, page 35). Departmental records also indicate that the couple has an investment property valued at $450,000.00 (R2, Attachment C, pages 3 to 6) (R2, paragraph 38).
(j)The assurer does not indicate that he and his wife have any debt other than the mortgage over their principal home and outstanding care fee owed to Brightwater nursing home (R2, paragraph 38).
[8] Namely, the report from Mr Johnson L Murila, Orthopaedic Surgeon, dated 20 December 2013 (R2, Attachment B, pages 9 and 10).
[9] The Tribunal notes that as at 23 August 2017, subtracting fortnightly mortgage and rent repayments of $1,511 per fortnight and daily care fees of $686.98) leaves $1,074.73 for all other expenses (A1).
[10] The Tribunal notes that as at 23 August 2017, the expenditure for clothing, shoes, entertainment and flights were somewhat reduced, however expenditure for “other”, which is stated to include “gifts,” “church donations,” “toys,” “house” and “maintenance” totalled $7,000 and “*Pregnancy costs (2013 – 2017)” were listed as $9,000.00 (A1).
[11] The Tribunal notes that as at 23 August 2017, the assurer maintains that school fees have been reduced to $560.00 per term. The Tribunal notes that no evidence was provided by either party in written submission or at hearing regarding any change in the assurer’s children’s schooling, if any, and the reasons for such a change, if any.
[12] The Tribunal notes that as at 23 August 2017, the assurer still maintains that he and his wife hold (approximately) $10,000 (A1).
The Tribunal has considered the parties’ respective submissions at paragraphs 55 and 56 above and the available evidence and finds that on either financial picture,[13] the assurer’s financial circumstances are such that at all times relevant to the present application, he has had and continues to have capacity to provide financial support to Professor Rostom. The Tribunal’s finding is based on the following:
(a)The expenses incurred in transporting his father to Australia were met by his father [emphasis added], not him personally (refer to subparagraphs 30(e), 31(e) and 56(d) above and R2, Attachment B, page 16, paragraph 2).
(b)The $40,000.00 annual shortfall in the Secretary’s representation of the assurer’s financial circumstances as at 23 August 2017 (refer to paragraphs 39 to 42 above) is not borne out of or corroborated by any documentary evidence before the Tribunal.
(c)The assurer has a redraw facility available to him, however he elects, i.e. as a matter of conscious choice, not to use it (refer to paragraphs 41, 47 and 48 above).
(d)The assurer has equity in his home in the order of approximately $300,000.00 (refer to paragraphs 41 and 46 above),
(e)Over a 6 month period, the assurer’s income exceeded his expenses (refer to paragraphs 41, 42 and 46 above).
(f)The evidence available supports the Secretary’s contention at subparagraph 56(g) above and the Tribunal considers further that no (reasonable or other) explanation has been provided, or event attempted, by the assurer to explain the expenditure and/or the changes in financial circumstances between June 2017 and August 2017 (refer to subparagraphs 56(g), 56(h) and 56(i) above).
(g)Irrespective of the assurer’s financial circumstances, specified at subparagraph 57(b), 57(c), 57(d) and 57(e) above, he believes he is currently in situation of financial hardship. The Tribunal disagrees and considers his financial situation is such that he remains in a position to meet his father’s aged care costs in accordance with the assurance he gave under the Assurance of Support.
[13] That is, the assurer’s statement of financial circumstances and other financial information as at 22 June 2017 and as at 23 August 2017.

The Tribunal finds it then follows from paragraph 57 above that Professor Rostom has access to financial assistance from “any other source” (in his case, that “other source” being the assurer under the Assurance of Support) in accordance with section 60(4)(f)(iii) of the Principles).
Whether a determination of hardship should be made in respect of Professor Rostom
As to whether a determination of hardship should be made in respect of Professor Rostom under section 44-31 of the Aged Care Act, the Tribunal, standing in the shoes of the Secretary, is also required to consider any other matters it considers relevant (section 60(4)(j) of the Principles. In this regard, the Tribunal notes that the following matters lend support to its finding (at paragraph 58 above) that the assurer has the capacity to continue to provide financial support under the Assurance and in turn that a determination of hardship should not be made:
(a)The assurer gave the assurance freely, in the full knowledge of the commitments and assurances that it imposed, that he may be called upon in the future to meet those commitments and that the Assurance of Support could not be withdrawn (refer to paragraph 34 above).
(b)The Tribunal considers that given Professor Rostom’s age and medical history, his circumstances, in requiring medical care in an aged care facility cannot be said to be unforeseen and unexpected (refer to subparagraph 30(d) and paragraphs 36 and 45 above).
(c)The Tribunal considers it somewhat contradictory that the assurer on the one hand gave evidence that he fully understood the nature of the commitments and assurances under the Assurance of Support however he holds the view that he gave the Assurance of Support with the expectation he would never be required to meet those commitments in any significant way (refer to paragraphs 34, 36, 45, 48 and 49 above).
(d)By the assurer’s own evidence, he and his wife voluntarily chose to pay off their mortgage at a rate above the minimum repayment rate over the last seven years (paragraph 47 above) as their main priority, as opposed to paying Professor Rostom’s care costs [emphasis added]. For the assurer (and his wife) to be in a financial position to do so, does not, in the Tribunal’s view, of itself, or in the totality of the assurer’s financial circumstances, render him a person in a (using the assurer’s own words) “severely compromised” financial position or in any event, in a position where he cannot meet his commitments under the Assurance of Support.
(e)The assurer believes his income would not have exceeded his expenses if he had, until now, been meeting his father’s daily care costs (refer to paragraph 50 above). The Tribunal considers that whether or not this was the case is not conclusive regarding whether or not a hardship determination ought to be made as the assurers financial circumstances go beyond his monthly (or six monthly) bank statement and include other matters such as equity in real property and his redraw facility and the fact that he consciously chooses to make mortgage repayment at a rate above the minimum rate.
At various times during the hearing, Mr Bishop for the Secretary made the point that it was of the view that the earlier grant of the hardship supplement in 2014 was overly generous and ought not to have been made. In turn, the assurer at various times voiced his expectation that because the grant had been made in 2014, he had the expectation that it would be made again as his financial circumstances were the same, or even, worse. The Tribunal considers that “[t]he recent review outcome letter does not mention anything regarding this successful application in 2014” (refer to Professor Rostom’s application for review extracted at paragraph 15 above) because it was not required to [emphasis added]. The Tribunal is not required to make any findings regarding Professor Rostom’s successful 2014 grant of the hardship supplement as only the 2016 hardship application is before it. In any event, the Tribunal is not in possession of the entirety of the evidence before the Department at the time the hardship supplement was granted in 2014 and could not draw a conclusion in this regard even if it was minded to.
CONCLUSION
For the reasons given above, the Tribunal finds that a determination of hardship should not be made under section 44-31 of the Aged Care Act, Professor Rostom is ineligible for hardship supplement under section 44-30 of the Aged Care Act and there are no “other supplements” available to Professor Rostom under section 44-27 of the Act that could be applied to a calculation performed under subsection 44-2(2) of the Aged Care Act.
DECISION
The decision of the ARO of the Department dated 13 February 2017, which confirmed the decision by a Service Officer of the Department dated 10 May 2016 that Professor Rostom is not eligible for a hardship supplement under section 44-31 of the Aged Care Act, on the basis that he is under an Assurance of Support Scheme, is affirmed.

I certify that the preceding 62 (sixty two) paragraphs are a true copy of the reasons for the decision herein of L M Gallagher, Member

.....(Sgd)............................................
Associate
Dated: 25 January 2018

Date(s) of hearing: 28 November 2017

Representative for the Applicant: Mr J Rostom

Representative for the Respondent: Mr C Bishop

Solicitors for the Respondent: Mills Oakley Lawyers

[2018] AATA 337

25 January 2018

Key Legal Topics

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Administrative Law

Immigration

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Natural Justice

Procedural Fairness

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Date(s) of hearing:	28 November 2017
Representative for the Applicant:	Mr J Rostom
Representative for the Respondent:	Mr C Bishop
Solicitors for the Respondent:	Mills Oakley Lawyers