Sambell and Secretary, Department of Social Services (Social services second review)

This matter concerned an appeal by Mr Sambell regarding the assessment of his age pension rate, which had been significantly reduced following his gifting of a 10 per cent interest in an investment property to his daughter. The Department of Social Services had determined that this gift, made on 13 July 2016, was a deprivation of an asset that rendered him ineligible for the hardship provisions of the assets test. Mr Sambell contended that his financial hardship was a result of changes to the assets test effective from 1 January 2017, not the gift itself, and that the circumstances surrounding the gift were special and unusual. The Administrative Appeals Tribunal was required to determine whether the gift should be disregarded under the hardship provisions of the Social Security Act 1991 and whether the discretion to disregard the asset was enlivened.

The Tribunal considered the legal principles governing the disregard of gifted assets under the hardship provisions. Section 1129 of the Social Security Act 1991 allows for an asset to be disregarded if the recipient is unable to sell or borrow against it, or if it would be unreasonable to do so, and if severe financial hardship would result from the asset not being disregarded. Crucially, the hardship must not be a direct result of the gift, and the individual would have been eligible for the pension under the hardship provisions had the gift not occurred. The Tribunal also had regard to the interpretation of "special circumstances" in cases such as *Groth v Secretary, Department of Social Security*, which requires something to distinguish the case from the usual or ordinary.

In its reasoning, the Tribunal found that Mr Sambell, a retired accountant, was aware of the deprivation rules when he made the gift. His stated reasons for the gift, including improving cash flow and providing developmental benefits for his daughter, were considered to be decisions within his control and not the result of external compulsion. The Tribunal noted that Mr Sambell and his wife did not wish to sell the property, and that he received approximately $18,000 per year in rent from it. The Tribunal concluded that the decisions regarding the property ownership were voluntary and not indicative of "special and unusual circumstances" that would warrant disregarding the gift.

Consequently, the Tribunal affirmed the Department's decision. It found that Mr Sambell's combined assets were correctly assessed at $810,097 as at 1 January 2017, and that his pension rate was therefore correctly calculated on that basis. The Tribunal further determined that the discretion to disregard the asset under section 1129 of the Act was not enlivened.