Russell and Secretary, Department of Social Services (Social services second review) - [2018] AATA 2664

Russell and Secretary, Department of Social Services (Social services second review) [2018] AATA 2664 (25 July 2018)
Division:GENERAL DIVISION
File Numbers: 2017/6280 and 2018/0709
Re:Dayna Russell and Bourke McCarron
APPLICANTS

AndSecretary, Department of Social Services
RESPONDENT

DECISION
Tribunal:Member D K Grigg
Date:25 July 2018
Place:Brisbane

The Tribunal sets aside the decision under review and substitutes it with a decision that the insurance money received by the Applicants on 16 May 2017 is to be disregarded in calculating the value of the Applicants’ liquid assets in section 598 of the Social Security Act 1991. The Tribunal remits the matter to the Respondent for reconsideration in accordance with this decision.
............................[sgd]....................................
Member D K Grigg
CATCHWORDS
SOCIAL SECURITY – Newstart Allowance – meaning of “liquid assets” - statutory construction – whether section 1118 of the Social Security Act 1991 applies to “liquid assets” waiting period in section 14A – decision under review set aside and remitted for reconsideration and calculation
LEGISLATION
Social Security Act 1991
Social Security (Administration) Act 1999
CASES
Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409
Otter Gold Mines Ltd v Australian Securities Commission (1997) 26 AAR 99
SECONDARY MATERIALS
Guide to Social Security Law (2016, Cth)
REASONS FOR DECISION
Member D K Grigg
28 July 2018
INTRODUCTION AND CLAIM HISTORY

The facts in this matter are not in dispute.
The Applicants were unfortunate victims of Tropical Cyclone Debbie which swept through Queensland in March 2017. As a result of the cyclone, the Applicants lost their home (a boat called SV Lady Alice) and became unemployed due to workplace closures.[1]
[1] Exhibit 2, T8, pages 46 – 51, Newstart allowance online claim form completed by Ms Russell dated 11 July 2017.
Shortly after the cyclone, the Applicants claimed on their insurance. Mr McCarron was the insured for the damaged boat under their insurance policy. Mr McCarron ultimately settled with his insurer who agreed to “purchase” the boat for $46,500, in full release and discharge of any further claims.[2]
[2] Exhibit 2, T Documents, T 20, pages 177 – 182, Email from the claims manager, Pantaenius insurance and release discharge and sale of boat in settlement of their own insurance claim.
Mr McCarron received $46,500 from the insurer[3] on 16 May 2017[4] and then spent approximately $12,000 on the purchase of another boat to live in. The new boat needed extensive repairs. The Applicants intended to use the balance of the insurance payment received to pay for the repairs which were necessary to make the boat habitable.[5]
[3]          Exhibit 2, T Documents, T 20, pages 177 – 182, Email from the claims manager, Pantaenius insurance and release discharge and sale of boat in settlement of their own insurance claim.
[4]          Exhibit 2, T Documents, T 24, page 203, Email from Ms Russell dated 2 October 2017.
[5]          Exhibit 2, T Documents, T 18, page 170, Invoice for the sale of the boat for $12,000 undated.
On 11 July 2017 Mr McCarron and Ms Russell applied for the Newstart Allowance (“NSA”).[6]
[6] Exhibit 2, T Documents, T5, pages 35 – 40, Newstart Allowance online claim form completed by Mr McCarron dated 11 July 2017; Exhibit 2, T Documents, T8, pages 46 – 51, Newstart allowance online claim form completed by Ms Russell dated 11 July 2017.
In their application, Mr McCarron and Ms Russell advised the Department of Human Services (“ Centrelink”) that:[7]
(a)as a result of the Cyclone, they had lost their home and had been living in hotels and their van since that time;
(b)they had purchased a new boat to live in but that it needed considerable work in order to be habitable;
(c)Mr McCarron would be working on the new boat for three months;
(d)they were currently visiting elderly parents until mid-August 2017 for a break after the stress of the Cyclone;
(e)they have household and personal effects valued at $2,000;
(f)Mr McCarron owns a car valued at $5,000;
(g)Ms Russell has $707 in a savings account; and
(h)Mr McCarron has $27,712 in a savings account (which comprised the remaining balance of the insurance payment).
[7] Exhibit 2, T Documents, T5, pages 35 – 40, Newstart Allowance online claim form completed by Mr McCarron dated 11 July 2017; Exhibit 2, T Documents, T8, pages 46 – 51, Newstart allowance online claim form completed by Ms Russell dated 11 July 2017.
With their NSA claims, Mr McCarron and Ms Russell also provided:[8]
(a)a labour tax invoice;
(b)a National Australia Bank balance screen capture showing that Mr McCarron has $27,712 in a savings account;
(c)a business details form of Mr McCarron indicating that he was self-employed as a mechanic but was not earning any income;
(d)a pay slip for Ms Russell dated 13 June 2017;
(e)an ANZ bank statement for an account in Ms Russell’s name indicating that as at 3 March 2017 she owed $1,000.72;
(f)an access advantage account balance showing Ms Russell had $707.05 in available funds.
[8] Exhibit 2, T Documents, T6, pages 41-44, Labour tax invoice and bank account balance dated 11 July 2017; T7, pages 44-49, Business details form dated 17 July 2017, T 15, pages 160-161, CBC Staff selection payslip for Ms Dayna Russell; T16, pages 162 – 167, ANZ Personal Loan Statement for 5 September 2016-3 March 2017.
This material confirmed the bank balance in Mr McCarron’s savings account and also that he is self-employed as a mechanic but was not generating any income.[9] Mr McCarron completed an income and assets form and submitted an income tax return estimate for the 2016 financial year which provided that:[10]
(a)the estimated value of his home and contents was $0.00;
(b)he had 100% ownership of a car valued at $5,000;
(c)the balance of his savings account was $27,476; and
(d)his taxable income for the 2016 financial year was $35,917.
[9] Exhibit 2, T Documents, T6, pages 41 – 43, Tax invoice and NAB provided to Centrelink on 11 July 2017; T7, pages 44 – 49, business details form completed by Mr McCarron dated 17 July 2017.
[10] Exhibit 2, T Documents, T8, pages 50 – 72, Income and assets form completed by Mr McCarron dated 17 July 2017.
On 17 July 2017 a Centrelink officer recorded that Mr McCarron was in financial hardship as a result of the impact of Cyclone Debbie.[11]
[11] Exhibit 2, T Documents, T14, page 137, Centrelink record.
On 25 July 2017 Centrelink decided to grant Mr McCarron and Ms Russell NSA with a start date of 28 September 2017.[12] Centrelink determined that the start date for the payments should be 28 September 2017 and not an earlier date because of the amount of liquid funds, namely cash-at-bank, they had available, and that therefore a “liquid asset test waiting period” applied.[13] In addition to the liquid asset test waiting period, the standard one week waiting period also applied.
[12] Exhibit 2, T Documents, T14, page 138, Centrelink record.
[13] Exhibit 2, T Documents, T14, page 138, Centrelink record; Exhibit 2, T Documents, T 15, page 82, Letter from Centrelink to Ms Russell dated 25 July 2017.
On 26 July 2017 Ms Russell sought a review of Centrelink’s decision by an Authorised Review Officer (“ARO”).[14] Ms Russell told a Centrelink officer that the money in their savings account was from the insurance payout for the loss of their home, and that the money was to be used to repair the new boat which was to be their principal home.[15] Ms Russell uploaded documents on 9 August 2017 verifying that she and Mr McCarron received $46,500 from their insurer[16] on 16 May 2017[17] and then spent $12,000 on the purchase of the new boat.[18]
[14]         Exhibit 2, T Documents, T14, page 150, Centrelink record.
[15]         Exhibit 2, T Documents, T14, page 150, Centrelink record.
[16]         Exhibit 2, T Documents, T 20, pages 177 – 182, Email from the claims manager, Pantaenius insurance and release discharge and sale of boat in settlement of their own insurance claim.
[17]         Exhibit 2, T Documents, T 24, page 203, Email from Ms Russell dated 2 October 2017.
[18]         Exhibit 2, T Documents, T 18, page 170, Invoice for the sale of the boat for $12,000 undated.
Ms Russell moved into the boat in August 2017. Mr McCarron was already living there as he was working full-time repairing the boat. Ms Russell told the Tribunal they only had running water on the boat from September 2017.
Ms Russel told the Tribunal she recommenced temporary employment on 31 August 2017 and then went straight into another employment contract with DHS.
On 7 September 2017 Mr McCarron sought a review of Centrelink’s decision by an Authorised Review Officer (“ARO”).[19]
[19] Exhibit 2, T Documents, T14, page 144, Centrelink record.
Ms Russell’s appeal to the ARO was unsuccessful on the basis that she was not in severe financial hardship and therefore the “liquid asset test waiting period” and “ordinary waiting period” were applicable and were correctly calculated.[20]
[20] Exhibit 2, T Documents, 23, pages 191 – 199, Authorised Review Officer’s Decisions and Notes dated 14 September 2017.
On 16 October 2017 Mr McCarron contacted Centrelink and advised that his savings account balance was only $3,565.[21] Mc McCarron advised Centrelink office on 18 October 2017 that the boat was now his principal place of residence and that his savings had significantly decreased as he had used the money to repair it.[22]
[21] Exhibit 2, T Documents, T14, page 140, Centrelink record.
[22] Exhibit 2, T Documents, T14, page 141, Centrelink record.
Ms Russell then lodged an application for review with the Social Services and Child Support Division (“SSCSD”) of this Tribunal.[23] The SSCSD affirmed the ARO’s decision on 10 October 2017.[24]
[23] Exhibit 2, T Documents, T 20, pages 105 – 106, Request for statement dated 14 September 2017.
[24] Exhibit 2, T Documents, T2, pages seven – 12, SSCSD’s Decision and Reasons for Decision dated 10 October 2017.
On 19 October 2017, Ms Russell sought a review of the SSCSD’s decision by the General Division of the Tribunal on the grounds that her application should be exempt from the “liquid asset waiting period”.[25]
[25] Exhibit 2, T Documents, T1, pages 1 – 6, Application for Review dated 19 October 2017.
Mr McCarron’s appeal to the ARO was also unsuccessful on the basis that a “liquid asset test waiting period” and an “ordinary waiting period” applied on the grounds that the insurance payout received for the loss of their home was a “liquid asset,” and that Mr McCarron was not in severe financial hardship to warrant a reduction or waiver of the waiting periods[26]
[26] Exhibit 2, T Documents, T10, pages 82 – 88, Authorised Review Officer’s Decisions and Notes dated 18 January 2018.
Mr McCarron then lodged an application for review with the Social Services and Child Support Division (“SSCSD”) of this Tribunal.[27] The SSCSD affirmed the ARO’s decision on 30 January 2018.[28]
[27] Exhibit 2, T Documents, T 11, pages 89 – 90, Request a statement dated 18 January 2018.
[28] Exhibit 2, T Documents, T2, pages 3 – 9, SSCSD’s Decision and Reasons for Decision dated 30 January 2018.
The Applicants have sought a review of the SSCSD’s decisions by the General Division of the Tribunal on the grounds that their NSA applications should be exempt from the liquid asset waiting period.[29]
[29] Exhibit 2, T Documents, T1, pages 1 – 2, Application for Review dated 5 February 2018.
ISSUES FOR DETERMINATION
The following issues have to be determined:
(a)whether a liquid assets test waiting period applies to Mr McCarron’s and Ms Russell’s NSA;
(b)whether an ordinary waiting period applies to Mr McCarron’s and Ms Russell’s NSA;
(c)whether Mr McCarron and Ms Russell are in severe financial hardship which arose from unavoidable or reasonable expenditure; and
(d)whether all or part of the waiting periods should be waived.
DOES A LIQUID ASSET TEST WAITING PERIOD APPLY?
Pursuant to section 598 of the Act, if the value of a person’s assets exceeds the person’s “maximum reserve” on the day on which the person ceased work or claims NSA, the person will not be qualified for the NSA for a period unless the person has served the “liquid assets test waiting period” in relation to the claim before the beginning of that period.
The “liquid assets test waiting period” is worked out pursuant to subsections (2A), (2B) and (2C) of section 598 of the Act as follows:
(2A) Work out the number of formula weeks (disregarding any fractions of a week) in relation to the claim using the formula:
(Liquid assets – Maximum reserve amount) / Divisor
where:
"liquid assets " means the person's liquid assets.
"maximum reserve amount " means the maximum reserve in relation to the person under subsection 14A(1).
"divisor " means, in relation to a person:
(a) if the person is not a member of a couple and does not have a dependent child--$500; or
(b) otherwise--$1,000.
(2B) If the number of formula weeks is equal to or greater than 13 weeks, the liquid assets test waiting period in relation to the claim is 13 weeks.
(2C) If subsection (2B) does not apply, the liquid assets test waiting period in relation to the claim is the number of weeks equal to the number of formula weeks.
“Liquid assets” is further defined in section 14A(1) of the Act as including “the person’s cash and readily realisable assets” and is also taken to include the liquid assets of a person’s partner: s 14A(2).
The “maximum reserve” in relation to a person who is a member of a couple is $10,000: section 14A(1).
The Respondent submits that:[30]
[30] Exhibit 3, Respondent’s Statements of Facts, Issues and Contentions dated 19 March 2018, paras 20-29.
(a)on the day the Applicants applied for the NSA they had $27,712 in savings in the bank, which was a “liquid asset”;
(b)the value of the Applicants’ liquid assets exceeded the maximum reserve of $10,000;
(c)applying the formula in section 598(2A) of the Act the liquid asset test waiting period resulted in 17 ‘formula’ weeks:
$27,712 - $10,000/$1,000 = 17.712 weeks
(d)pursuant to section 598(2B) of the Act, the liquid asset test waiting period becomes 13 weeks;
(e)the liquid asset test waiting period commences on the day they ceased work, which in this instance was 20 June 2017: section 598(3) of the Act; and
(f)the 13 week period would, if it applied, end on 20 September 2017.
The Applicants contend:[31]
(a)Section 1118 of the Act applies and that the insurance monies are therefore exempt assets and not to be taken into account as liquid assets; or, alternatively
(b)Section 14A(4) of the Act applies and that so much of the insurance monies that they were likely to apply in acquiring or repairing their residence was to be disregarded for the purposes of determining the amount of their liquid assets.
[31] Exhibit 5, Applicant’s submissions in reply dated 3 April 2017, page 1.
DOES SECTION 1118 APPPLY TO LIQUID ASSETS?
If section 1118 of the Act applies, it is not in dispute that the value of the Applicants’ liquid assets would not have exceeded the maximum reserve and a liquid asset test waiting period would not have applied.
It is not in dispute that an ordinary waiting period applies.
Section 1118 of the Act provides that certain assets are to be disregarded in calculating the value of a person’s “assets”. Those assets include if the person is a member of a couple--the value of any right or interest of the person in one residence that is the principal home of the person, of the person's partner or of both of them that is a right or interest that gives the person or the person's partner reasonable security of tenure in the home: s 1118(1)(b).
32.Section 1118 also provides relevantly as follows (emphasis added): Part 3.12—General provisions relating to the assets test
Division 1—Value of person’s assets
1118 Certain assets 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:
…
(b) if the person is a member of a couple—the value of any right or interest of the person in one residence that is the principal home of the person, of the person’s partner or of both of them that is a right or interest that gives the person or the person’s partner reasonable security of tenure in the home;
…
(r) if the person has sold a residence that was the principal home of the person on terms and has purchased, also on terms, another residence that is the principal home of the person—so much of the balance due to the person in respect of the sale as will be applied by the person in respect of the purchase of the other residence;
(s) the amount of any insurance or compensation payments received by the person because of the loss of or damage to buildings, plant or personal effects within the immediately preceding 12 months or such longer period as the Secretary determines for any special reason for a particular payment;
(sa) if subsection (1AB) applies (application of insurance etc. payments to rebuilding etc.)—the amount worked out under that subsection, during the period mentioned in subsection (1AC);
…
Application of insurance etc. payments to rebuilding etc.
(1AA) Subsection (1AB) applies if:
(a) a person receives any insurance or compensation payments because of loss of or damage to a building (including the person’s principal home) or plant; and
(b) either:
(i) if the building or plant was lost—the person applies the whole or a part of those payments to build another building or plant to replace the building or plant that was lost; or
(ii) if the building or plant was damaged—the person applies the whole or a part of those payments to rebuild, repair or renovate the building or plant.
(1AB) For the purposes of paragraph (1)(sa), the amount that may be disregarded is:
(a) the value of the building or plant that is being built, rebuilt, repaired or renovated, to the extent that those payments are so applied; and
(b) if a building whose value is being disregarded under paragraph (a) of this subsection is to be the person’s principal home:
(i) the value of the land on which the building is being built, rebuilt, repaired or renovated to the extent that, once the building becomes the person’s principal home, the land will, under section 11A, be included in a reference to the principal home; and
(ii) the value of any other structure, on that land, that is to be the person’s principal home to the extent that the structure was built before the person began applying the payments.
…
Definitions
(1A) In this section:
native title rights and interests means:
(a) native title rights and interests within the meaning of section 223 of the Native Title Act 1993;
(b) any rights and interests of a similar nature under any law of a State, a Territory or a foreign country (whether or not the rights and interests relate to land or waters outside Australia);
but, to avoid any doubt, does not include any right or interest in a lease or licence, or in a freehold estate.
partially asset‑test exempt income stream means:
(a) an asset‑test exempt income stream that:
(i) is an income stream (other than a defined benefit income stream) covered by subsection 9A(1) or (1A), 9B(1) or 9BA(1); and
(ii) has a commencement day during the period from 20 September 2004 to 19 September 2007 (both dates inclusive); and
(iii) is not covered by principles (if any) determined for the purposes of this subparagraph, by legislative instrument, by the Secretary; or
(b) an income stream that:
(i) has a commencement day happening on or after 20 September 2007; and
(ii) is covered by principles determined for the purposes of this subparagraph, by legislative instrument, by the Secretary.
Application of proceeds 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.
(2) For the purposes of this Act (other than Division 1B of Part 3.10):
(a) if subparagraph (1B)(c)(i) applies—disregard the proceeds, to the extent that the person intends to apply those proceeds to build, rebuild, repair or renovate the other residence, until the earlier of the following times:
(i) the period mentioned in paragraph (1B)(c) ends;
(ii) the Secretary becomes satisfied that the person has ceased to have that intention; or
(b) if subparagraph (1B)(c)(ii) applies—disregard the value of the following, until the end of the period mentioned in paragraph (1B)(c), to the extent that the person applies those proceeds to build, rebuild, repair or renovate that other residence:
(i) the value of the other residence;
(ii) the value of the land on which the other residence is being built, rebuilt, repaired or renovated to the extent that, once the building becomes the person’s principal home, the land will, under section 11A, be included in a reference to the principal home;
(iii) the value of any other structure, on that land, that is to be the person’s principal home to the extent that the structure was built before the person began applying those proceeds; or
(c) if subparagraph (1B)(c)(iii) applies—disregard the proceeds, to the extent that the person intends to apply those proceeds to purchase the other residence, until the earlier of the following times:
(i) the period mentioned in paragraph (1B)(c) ends;
(ii) the Secretary becomes satisfied that the person has ceased to have that intention.
(2A) Subsection (2) does not apply to the calculation of the value of a person’s assets for the purposes of sections 198F to 198MA or 1123 to 1128 (disposal of assets).
…

In summary, if section 1118 of the Act applies, the amount of the insurance payment received by the Applicants should be disregarded in the calculation of the Applicants’ assets.
The Applicant’s argued that the proceeds of the insurance payout were used to rebuild and repair another residence which was to become their principal home and would therefore be exempt under section 1118.
The Respondent however, asserts that section 1118 relates to a different type of asset test and does not apply to “liquid assets,” which are considered solely under section 14A of the Act.
The Respondent contends that:[32]
(a)section 1118 relates to the rate of payment and payability in accordance with the general asset test and that liquid assets and associated waiting periods are specifically defined in the Act and any amounts to be disregarded are specifically listed in section 14A of the Act only;
(b)section 14A(4) deals with the situation where the proceeds of sale can be disregarded if they are to be used to acquire another residence and therefore there is no need to look to section 1118;[33] and
(c)the remaining funds cannot be considered to be proceeds of the sale that were used, or likely to be used, to acquire another residence because they were not used to acquire a residence but to improve one. The Secretary contends that only the initial $12,250 can be disregarded in accordance with subsection 14A(4) of the Act.
[32] Exhibit 4, Respondent’s Statement of Facts, Issues and Contentions dated19 March 2018, paras 32- 35.
[33] Goldfinch and Department of Family and Community Services [2000) AATA 837, at [22].
The Applicants prepared a spreadsheet setting out all the expenses they had incurred to date on repairing the boat.[34] The Secretary conceded at the hearing that the Applicants had spent the sums claimed in the spreadsheet on the repair and renovation of their new home. There is no dispute that the boat was to be the Applicants’ principal home and falls within the definition of “principal home” in section 11A of the Act.[35]
[34] Exhibit 6, Schedule of renovation expenditure received 3 April 2018.
[35] Wharton and Secretary, Department of Families, Housing, Community Services [2010] AATA 162.
Interpreting Section 1118
Statutes are construed firstly by considering the text of the legislation, and simultaneously its context and purpose.[36] The High Court explained in SZTAL v Minister for Immigration and Border Protection (2017) 91 ALJR 936; [2017] HCA 34:
[14] The starting point for the ascertainment of the meaning of a statutory provision is the text of the statute whilst, at the same time, regard is had to its context and purpose. Context should be regarded at this first stage and not at some later stage and it should be regarded in its widest sense. This is not to deny the importance of the natural and ordinary meaning of a word, namely how it is ordinarily understood in discourse, to the process of construction. Considerations of context and purpose simply recognise that, understood in its statutory, historical or other context, some other meaning of a word may be suggested, and so too, if its ordinary meaning is not consistent with the statutory purpose, that meaning must be rejected." [Footnotes omitted].
[36] Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355at 381–382 [69]–[71]; [1998] HCA
28; Alcan (NT) Alumina Pty Ltd v Cmr of Territory Revenue (2009) 239 CLR 27at 46–47 [47]; [2009] HCA 41.
In interpreting a section of an Act, the High Court has said that “[t]he words of the statute, not non-statutory words seeking to explain them, have paramount significance”: Nominal Defendant v GLG Australia Pty Ltd (2006) 228 CLR 529 at [22].
The High Court discussed the primary objective of statutory construction in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [69]-[71] (per McHugh, Gummow, Kirby and Hayne JJ):
[69] The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined “by reference to the language of the instrument viewed as a whole.” In Commissioner for Railways (NSW) v Agalianos, Dixon CJ pointed out that “the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed”. Thus, the process of construction must always begin by examining the context of the provision that is being construed.
[70] A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals…
[71] Furthermore, a court construing a statutory provision must strive to give meaning to every word of the provision…
In Comcare v Drinkwater [2018] FCAFC 62, the Full Federal Court said, at [45]:
It may be accepted that the task of statutory construction begins and ends with considering the text of the provision to be construed; and that the search for textual meaning may involve a consideration of the purpose and context of the provision.[37]
[37] Citing Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT) [2009] HCA 41; 239 CLR 27 at [47];
Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at [69]; Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55; 250 CLR 503 at [39]; Thiess v Collector of Customs [2014] HCA 12; 250 CLR 664 at [22]-[23]; North Australian Aboriginal Justice Agency Ltd v Northern Territory [2015] HCA 41; 256 CLR 569 at [11]; Military Rehabilitation and Compensation Commission v May [2016] HCA 19; 257 CLR 468 at [10]; and, most recently, Australian Securities and Investments Commission v Whitebox Trading Pty Ltd [2017] FCAFC 100; 251 FCR 448 at [25]-[26].
To interpret a text’s meaning, the context of the provision may be relevant.
Section 1118 is contained in Part 3.12 which is headed “General provisions relating to the assets test”. Part 3.12 is contained in Chapter 3 of the Act which is headed “General provisions relating to payability and rates”. Headings of chapters and parts of Acts are considered part of the Act.[38]
[38] Section 13(2), Acts Interpretation Act 1901 (Cth).
Section 1118 begins with the following words “for the purpose of this Act”. It then goes on to specifically identify certain sections to which it does not apply. Section 598 is not one of those sections. If the legislature wanted this section not to apply to assets which may also be liquid assets and relevant under section 598, it could have expressly identified the section, as it has done with some other sections. Further, it could have said that this section only applies in relation to the calculation of the eligibility to receive a payment or the rate of that payment. It does neither of these things.
The Applicants rely on Secretary, Department of Social Security and Gelders (1993) 29 ALD 812 (“Gelders”) which they say demonstrates that section 1118 is relevant to the assessment of “liquid assets” and that therefore the money received from insurance for the purposes of repairing their home is exempt.
In Gelders the Tribunal held that:
[17] The Act should be construed as a whole having regard to the fundamental principles of statutory interpretation such as the principles that statutory provisions are to be given meaning and effect and that words are to be construed in accordance with legislative intentions. The Tribunal is also persuaded that Section 519 must be subject to subsection 1118(2) by reason of the absurd and unjust results which would otherwise be reached.
The Respondent contends that Gelders was wrongly decided and is not binding. The Respondent pointed out that Gelders was decided in 1993, before section 14A(4) had been inserted into the Act.
In 1994, after Gelders was decided, amendments were made to the Act and section 14A(4) was inserted to provide for an exemption in relation to liquid assets. The Respondent argues that there would have been no need for this insertion to have been made if section 1118 applied to the calculation of a liquid asset waiting period.
As in Gelders, the Respondent is asking the Tribunal to read section 1118 as if it contains the words "excluding Section 519.”
The Tribunal believes that the plain and ordinary interpretation of section 1118 leads to a conclusion that it applies to all assets under the Act, liquid or not.
This Tribunal agrees with the comments in Gelders, at [20] that:
This amendment is contrary to the Act construed as a whole and contrary to the principles of statutory construction generally. The words of application in subsection 1118(2), "for purposes of this Act", are expressed in the widest possible terms and qualified only in respect of Sections 1123 to 1128. The exclusion of Section 519 from the ambit of subsection 1118(2) cannot be inferred. This is so particularly in light of subsection 1118(1) also being expressed to apply "for the purposes of this Act" but where exclusions have been expressly identified.
Black CJ said in Secretary, Department of Social Security v SRA (1993) 43 FCR 299, at 303:
[14] Although the Social Security Act is concerned with social policy, and being remedial legislation should not receive a narrow or pedantic construction (see Rose v Secretary, Department of Social Security (1990) 21 FCR 241 at 244), the settled rules of construction apply and ordinary words used in the Act should receive their ordinary and natural meaning, unless, in accordance with the accepted rules of statutory construction, there is good reason to prefer some other meaning.
In Anstis and Secretary, Department of Family and Community Services [1999] AATA 760 (“Anstis”) , which was decided after section 14A(4) had been inserted into the Act, Deputy President Forgie considered the operation of section 1118(2) and whether it was limited to the application of the assets test or if it extended to another test under the Act. Deputy President Forgie determined, having thoroughly gone through the layout of the Act and the part in which section 1118 was located, that the “heart” of the issue was the words “for the purposes of this Act”. Deputy President Forgie found that:
(a)the heading of Part 3.12 was not determinative and that the heading for section 1118 made no reference to the assets test;
(b)some of the sections to which section 1118 is said not to apply have no relationship to an assets test, and therefore a conclusion can be drawn from this that section 1118 was not intended to be limited to an assets test alone; and
(c)section 1118 is limited to situations where a person’s assets (Section 11(1) of the Act defines an “asset” as “property or money”)[39] need to be calculated.
[39] Exempt assets (s 11) are defined in the Act as those assets described in s 1118.
This Tribunal adopts and agrees with the reasoning in Anstis.
The Tribunal considers that the decision of the Federal Court in Secretary, Department of Family & Community Services v Draper [2003] FCA 1409 (“Draper”), also supports a finding that section 1118 is of a more general application and not qualified in the manner contended by the Respondent. In Draper, the Court considered whether section 1121, which was also found in Part 3.12, had anything to do with an income test contained in a different part of the Act. The Court found that “ultimately…the starting point for determining the application of section 1121(1) must be the words of the section itself”.[40] Section 1121 also contains the words “for the purposes of this Act” and set out specific sections to which it has no application. The Court found that “the section does not limit the assets to which it might apply and, similarly, the reference to the purposes of the Act is unqualified and not restricted to Pt 3.12 or to the application of the assets test”.[41]
[40] [2003] FCA 1409, at [17].
[41] [2003] FCA 1409, at [17].
For the reasons outlined above, the Tribunal finds that section 1118 of the Act applies to the calculation of the Applicants’ liquid assets and that the insurance money received and expended on the purchase and repair of their home are therefore to be disregarded for the calculation of the liquid assets.
There is no need to consider the Applicants’ alternative contention regarding section 14A of the Act.
DECISION
The Tribunal sets aside the decision under review and substitutes it with a decision that the insurance money received by the Applicants on 16 May 2017 is to be disregarded in calculating the value of the Applicants’ liquid assets in section 598 of the Social Security Act 1991. The Tribunal remits the matter to the Respondent for reconsideration in accordance with this decision.

I certify that the preceding 58 (fifty-eight) paragraphs are a true copy of the reasons for the decision herein of Member D K Grigg

.......................[sgd]................................
Associate
Dated: 25 July 2018

Date of hearing:
Applicants:

25 June 2018

Dayna Russell and Bourke McCarron
(In Person)

Advocate for the Respondent: Rick McQuinlan, Principal Government Lawyer

Solicitors for the Respondent: Department of Human Services