Serbanescu and Secretary, Department of Family and Community Services

[2004] AATA 1361

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 1361

ADMINISTRATIVE APPEALS TRIBUNAL        Nº V2004/956

GENERAL ADMINISTRATIVE  DIVISION

Re:         NICULAE DAN SERBANESCU

Applicant

And:       SECRETARY,
  DEPARTMENT OF FAMILY AND

COMMUNITY SERVICES

Respondent

DECISION

Tribunal:       Regina Perton, Member

Date:             20 December 2004

Place:            Melbourne

Decision:The Tribunal affirms the decision under review. 

(sgd) Regina Perton

Member

SOCIAL SECURITY – Newstart allowance – payments deferred – liquid assets waiting period – lack of discretion – hardship provisions – rate of payment – impact of interest – decision affirmed.

Social Security Act 1991 ss 14A, 19C, 598, 1076

REASONS FOR DECISION

20 December 2004  Regina Perton, Member

1.      This is an application by Niculae Dan Serbanescu (the applicant) for review of a decision of the Social Security Appeals Tribunal (SSAT) dated 8 July 2004.  The SSAT affirmed a decision of a delegate of the Secretary to the Department of Family and Community Services (the respondent) dated 2 April 2004 that the applicant was ineligible for Newstart Allowance (NSA) for 13 weeks from the date of claim.

2.      At the hearing on 4 November 2004, the applicant represented himself.  Ms Kayren Paul, a Centrelink advocate, represented the respondent. 

3. The Tribunal received into evidence the documents lodged under s 37 of the Administrative Appeals Tribunal Act 1975 (T1‑T15).

BACKGROUND

4.      The applicant, who was born in Romania on 1 January 1947 and is 57 years old, was retrenched from his job on 15 March 2004.  On 23 March 2004, he lodged a claim for Newstart Allowance (NSA).  As is required of all NSA claimants, the applicant gave Centrelink details of his assets.  At the time of claim, the applicant had a cheque account and term deposits with the ANZ Bank with a balance totalling $131,964.  He owned a car worth around $8,000, but did not own any property.

5.      On 2 April 2004, Centrelink wrote to the applicant advising him that he would not be paid NSA until 22 June 2004 because of the amount of funds he had available.  On contacting Centrelink, the applicant was advised that he was subject to the Liquid Assets Waiting Period (LAWP), whereby payment of NSA is deferred for up to 13 weeks for a person who is deemed to have sufficient money available to support himself in the short term.  The applicant was also advised of an additional one week Ordinary Waiting Period (OWP) that is imposed on all claimants of NSA.

6.      On 13 April 2004, the applicant sought review of the decision, stating that the application of the test was unfair in his case.  He stated that a person who owned a house and new car and whose total assets were greater than his would not be subject to the LAWP, but that he, as a person saving to buy his first home, was penalised on the basis of his savings.  He also stated that the interest deemed to be earned on his savings should not impact on the level of payment of NSA he subsequently received.  On 24 May 2004, an Authorised Review Officer (ARO) affirmed the decision made on 2 April 2004.

7.      On 9 June 2004, the applicant sought review by the SSAT.  The SSAT affirmed the decision on 8 July 2004.  On 16 August 2004, the applicant lodged an application with the Tribunal for review of the SSAT decision.

8.      The issues before the Tribunal are whether the applicant is subject to an LAWP of 13 weeks and whether the interest on his savings should impact on his rate of NSA.

EVIDENCE

9.      At the hearing, the applicant told the Tribunal that he had been working for a software company for about eight years and was made redundant because of a downturn in work.  He said that he had migrated to Australia from Romania in 1991 on the basis of his professional qualifications in computing.  He said that the savings he had accumulated since his arrival in Australia were to buy his first house.  The applicant, who is single, is presently renting accommodation.  Since losing his job, he has applied for many positions around Australia and in New Zealand, without success.

10.     The applicant said that the application of the LAWP to persons in his situation was unfair when compared to persons who held assets in other forms.  He pointed out that a homeowner with an expensive car and other assets valued at hundreds of thousands of dollars, far more that the amount he had saved, would not be subject to the LAWP.  However, he, as a relatively recent migrant who had yet to buy his first house, had been penalised because the asset was in liquid form.  He said that he had been planning to buy a home soon.  He did not anticipate being made redundant.  He said that unless he obtained another position soon, he would be unable to achieve his goal of home ownership.

11.     The applicant said that he was receiving NSA, albeit at a reduced rate, due to the interest on the money invested on term deposits.

CONSIDERATION OF THE ISSUES

12. Section 598 of the Social Security Act 1991 (the Act) provides that a person’s liquid assets affect the commencement date for various types of social security payments, including NSA.  Subsection 598(1) states:

598.(1)  Subject to subsections (4A), (5), (6), (7) and (8), if:

(a)the value of a person's liquid assets exceeds the person's maximum reserve on:

(i)the day following the day on which the person ceased work or ceased to be enrolled in a full time course of education or of vocational training; or

(ii)       the day on which the person claims a newstart allowance; and

(b)      the person is not a transferee to a newstart allowance;

the person is not qualified for a newstart allowance 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.

13.     Section 14A of the Act sets out the definitions of liquid assets and maximum reserve as follows:

14A(1)…

"liquid assets", in relation to a person, means the person's cash and readily realisable assets, and includes:

(a)the person's shares and debentures in a public company within the meaning of the Corporations Law; and

(b)amounts deposited with, or lent to, a bank or other financial institution by the person (whether or not the amount can be withdrawn or repaid immediately); and

(c)amounts due, and able to be paid, to the person by, or on behalf of, a former employer of the person;

but does not include:

(d)an amount that is a qualifying eligible termination payment for the purposes of Subdivision AA of Division 2 of Part III of the Income Tax Assessment Act; or

…

"maximum reserve", in relation to a person, means:

(a)if the person is not a member of a couple and does not have a dependent child—$2,500; or

(b)in any other case—$5,000.

14.     Subsections 598(2A), (2B) and (2C) of the Act provide the formula for working out the LAWP in individual cases, taking into account liquid assets and maximum reserve, and provide for a maximum LAWP of 13 weeks.  The Tribunal finds that the applicant’s liquid assets at the time of claiming NSA were such that the maximum LAWP of 13 weeks is applicable.

15.     Subsection 598(5) of the Act allows for waiver of whole or part of the LAWP if a person is in severe financial hardship because the person has incurred unavoidable or reasonable expenditure during that period.  The applicant did not claim to be in that situation.  Subsections 598(6) to (8) allow for waiver if a person has transferred from another type of social security payment to NSA, or was studying.  The applicant was working prior to applying for NSA. Therefore, these waiver provisions are not applicable to him. 

16.     The Act treats liquid assets differently to other assets, such as ownership of property, in relation to the LAWP.  There is no general discretion in the Act to waive the LAWP on the basis of a particular person’s lack of assets other than liquid assets.  Therefore, the Tribunal has no discretion to waive or reduce the LAWP of 13 weeks.

17.     Section 1076 of the Act provides that an NSA recipient is deemed to receive income on liquid assets that he holds and states as follows: 

1076.(1)  This section applies to a person who is not a member of a couple.

1076.(2)  A person who has financial assets is taken, for the purposes of this Act, to receive ordinary income on those assets in accordance with this section.

1076.(3)  If the total value of the person’s financial assets is equal to or less than the person’s deeming threshold, the ordinary income the person is taken to receive per year on the financial assets is the amount worked out by multiplying the value of those assets by the below threshold rate.

18.     Subsections 1076(3A) and (4) of the Act provide for the calculation of ordinary income and deemed income and allow for the apportionment of the total interest deemed to have been earned on liquid assets over 52 weeks. 

19.     The Tribunal finds that the applicant’s income from the moneys deposited in the ANZ Bank may be taken into account in determining his rate of payment of NSA.

20.     The Tribunal is satisfied that the decisions by the delegate of the respondent and by those undertaking earlier reviews of this matter were correct.

DECISION

21.     The Tribunal affirms the decision under review.

I certify that the twenty-one [21] preceding paragraphs are a true copy of the reasons for the decision of:

Regina Perton, Member

(sgd)       Olympia Sarrinikolaou

Clerk

Date of hearing:  4 November 2004
Date of decision:  20 December 2004
Advocate for applicant:                Self‑represented
Advocate for respondent:            Ms K. Paul, Centrelink