Sleeman and Secretary, Department of Social Services (Social security)

[2025] ARTA 2034

Sleeman and Secretary, Department of Social Services (Social security) [2025] ARTA 2034 (8 April 2025)

Applicant:  Mr Sleeman

Respondent:  Secretary, Department of Social Services

Chief Executive Centrelink    

Tribunal Number:   2024/B192464 

Tribunal:  General Member N Foster

Place:Brisbane

Date:8 April 2025

Decision:The Tribunal sets aside the decision under review and remits the matter for reconsideration in accordance with the order that Mr Sleeman’s eligibility for age pension as at 14 July 2022 is to be reconsidered on the basis that he was not a member of a couple in accordance with subsection 24(1) of the Social Security Act 1991.

CATCHWORDS

SOCIAL SECURITY – Age Pension – asset hardship provisions – precluded from access to spouse’s assets – member of an illness separated couple – inability of a couple to pool resources – not a member of a couple – Centrelink to reconsider pension eligibility – decision under review set aside and remitted

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been omitted from this decision and replaced with generic information pursuant to subsection 201(1A) of the Social Security (Administration) Act 1999.

Statement of Reasons

BACKGROUND

1. This review is about whether Mr Sleeman’s age pension should have been cancelled in 2022.

2. Mr Sleeman, who is [age] years old, married [Mrs A] [in] March 2018.  On 14 July 2021 [Mrs A], who had Alzheimer’s disease and dementia, went into residential care.

3. On 10 September 2021 Mr Sleeman claimed age pension.  On 6 December 2021 Services Australia (Centrelink) rejected this claim on the basis that the value of Mr Sleeman’s and [Mrs A’s] assets precluded any age pension being paid.

4. On 4 January 2022 Mr Sleeman applied to be paid age pension under the asset hardship provisions.  In making this application, Mr Sleeman advised Centrelink that he was precluded by orders of the Queensland Civil and Administrative Tribunal (QCAT) from using [Mrs A’s] funds for his own purposes.  On 24 January 2022 Centrelink granted age pension to Mr Sleeman under the asset hardship provisions from 10 September 2021.

5. In August 2022 Mr Sleeman responded to a questionnaire from Centrelink seeking updated information about his financial circumstances.  As Mr Sleeman advised that he had more than $80,000 in his bank account, Centrelink determined that he should no longer be assessed under the asset hardship provisions.  On 23 August 2022 Centrelink cancelled Mr Sleeman’s age pension from 14 July 2022 on the basis that the value of his and [Mrs A’s] assets precluded any age pension being paid. 

6. Shortly afterwards, Mr Sleeman requested a review of Centrelink’s decision on the basis that he should not be regarded as a member of a couple and that the value of [Mrs A’s] assets should be disregarded.  Despite further contacts from Mr Sleeman, the cancellation of his age pension and the assessment of his relationship status was not formally reviewed by the time of [Mrs A’s] death on 9 October 2024.

7. On 10 October 2024 an authorised review officer affirmed Centrelink’s decision to cancel Mr Sleeman’s age pension in 2022.  In doing so, the authorised review officer found that Mr Sleeman had been correctly assessed as being a member of an illness separated couple and that he could no longer be assessed under the asset hardship provisions because of the amount of money that he had in his bank account. 

8. Mr Sleeman applied to the Tribunal on 11 December 2024.  The application was heard on 4 April 2025, with Mr Sleeman and his son, [Son A], appearing by telephone.

CONSIDERATION

What are the relevant law and issues?

1. Under section 1064 of the Social Security Act 1991 (the SS Act), the rate of a person’s age pension depends on whether they are a member or a couple or not. Where a person is a member of a couple, their rate of age pension may be reduced by the value of their and their partner’s assets. Under section 44 of the SS Act, age pension is not payable if a person’s rate would be nil.

2. Where a person or their partner have unrealisable assets, a person can seek to have these assets disregarded by making an application under the asset hardship provisions in Division 3 of Part 3.12 of the SS Act. However, these provisions only apply if a person is in severe financial hardship.

3. As defined in section 4 of the SS Act, a member of a couple includes someone who is legally married to another person and who is not living separately and apart from that person on a permanent or indefinite basis – see paragraph 4(2)(a). Where a person is a member of a couple but is unable to live with their partner indefinitely due to illness or infirmity, the person is to be regarded as a member of an illness separated couple under subsection 4(7) of the SS Act. Although the rate of age pension for a member of an illness separated couple is calculated differently to that of a member of a couple, their partner’s assets must still be taken into account under the assets test.

4. Even if a person is a member of a couple under section 4, they may still not be regarded as a member of a couple if a determination is in force under section 24 of the SS Act – see subsection 4(6). In particular, subsection 24(1) allows a decision-maker to treat a married person as not a member of a couple if satisfied there is a special reason in the particular case to not treat them as a member of a couple.

5. In contesting the cancellation of his age pension due to assets, Mr Sleeman has disputed Centrelink’s assessment of him as being a member of an illness separated couple and has instead contended that he should be assessed as single.  Accordingly, the Tribunal must first consider the question of whether Mr Sleeman was a member of a couple as at 14 July 2022, the date from which his age pension was cancelled.  The Tribunal will then consider whether the value of Mr Sleeman’s assets – and, if he was a member of a couple, the assets of [Mrs A] – precluded payment of age pension at that date.

Was Mr Sleeman a member of a couple for age pension purposes?

1. Mr Sleeman confirmed at the hearing that he was disputing Centrelink’s assessment that he should be treated as a member of a couple and that his late wife’s assets should affect his entitlement to age pension.  He explained that he and [Mrs A] became a couple in 2010 and were married in 2018.  As [Mrs A] had progressive dementia, he was given power of attorney over her financial affairs at some point but he was not legally allowed to use her money or assets after she went into residential care.  QCAT made orders in that regard in 2020 and 2021 and he has always complied with them.  The money that was in his bank account when Centrelink cancelled his age pension in 2022 was from a reverse mortgage.  Although he requested a review in 2022, Centrelink did not look at his case for two years.  He is now entitled to 40% of his late wife’s estate but the will is still in probate and may be challenged by one of her [children].

2. By way of background, [Son A] explained to the Tribunal that QCAT had made its decisions after one of [Mrs A’s] adult [children] became concerned about Mr Sleeman’s involvement in her mother’s financial affairs.  Mr Sleeman had previously been paying for his and [Mrs A’s] living expenses from drawings from his business, however he became financially reliant on [Mrs A] after the business was liquidated in 2016.  The effect of the QCAT decisions was that Mr Sleeman could no longer use [Mrs A’s] funds for his own purposes after she moved into residential care in July 2021.  As a consequence, Mr Sleeman took out a reverse mortgage on his home, which he used to pay out his existing mortgage and to fund his ongoing living expenses.

3. When asked by the Tribunal why he should be treated as single, Mr Sleeman said that he was separated by distance from his wife because she was in residential care.  In addition, he was separated financially from her because of the QCAT orders that meant that he had no access to her assets in the three years prior to her death.   

4. As previously outlined, a person may be regarded as not being a member of a couple under subsection 24(1) of the SS Act if there is a special reason in their particular case. Although the term “special reason” is not defined in the SS Act, the Federal Court of Australia observed in Boscolo v Secretary, DSS (1999) 90 FCR 531 that the use of the word “special” suggests that the discretion should not be lightly enlivened and that it requires something unusual or different about a person’s case that takes it out of the ordinary course.

5. As indicated by the case law, the inability of a couple to pool financial resources may be a special reason for the purpose of section 24. In Kazmierczak v Secretary, DFHCSIA [2010] FCA 1084, the Federal Court of Australia noted the authorities highlighting the general nature of the discretion in section 24 and commented as follows:

   It stands to reason that if for some legal or other practical reason the partner member of the couple cannot be treated as sharing income and assets then there is a ground for exercising the discretion under s 24 so as not to treat the holder of the pension as a member of a couple who are capable of sharing resources.

6. Policy guidelines in the Social Security Guide (the Guide) likewise state, at 2.2.5.40, that the inability of a couple to pool resources may be grounds to exercise the discretion in section 24 of the SS Act. However, the Guide also states that section 24 would not be applicable where a person is receiving a single rate of payment as an illness separated couple. Even so, the Tribunal notes that the discretion in section 24 of the SS Act was exercised in those very circumstances in Secretary, DSS and Porter [1997] AATA 137.

7. In determining whether there is a special reason for the purpose of section 24 in Mr Sleeman’s particular case, the Tribunal is satisfied that, as a person appointed to administer [Mrs A’s] financial affairs, he was legally barred from using her assets for his own purposes or benefit. In this regard, subsection 37(1) of the Guardianship and Administration Act 2000 (Qld) provides that an administrator for an adult may enter into a so-called conflict transaction only if QCAT has authorised the transaction.  As set out in the hearing papers, QCAT made decisions [in] April 2020 and [April] 2021 that authorised conflict transactions up to a certain annual amount while Mr Sleeman and [Mrs A] were residing together, with this authorisation ceasing once [Mrs A] moved out.  [Mrs A] subsequently moved into residential care on 14 July 2021 and stayed there until her death in October 2024.

8. In granting age pension to Mr Sleeman under the asset hardship provisions in 2022, Centrelink accepted that [Mrs A’s] assets should be disregarded given that there was a legal bar on him accessing them now that she was in residential care.  While Centrelink later revisited Mr Sleeman’s eligibility for age pension under the asset hardship provisions due to the funds he had obtained via a reverse mortgage, there is no suggestion that he was able to use [Mrs A’s] assets as his own after 14 July 2021.  In the view of the Tribunal, this makes Mr Sleeman’s situation materially different to that of a typical illness separated couple where the partner who is not in residential care is still able to benefit from their partner’s assets while living separately from them.  Given that Mr Sleeman was not living with his wife and could not legally share or utilise her financial resources, the Tribunal considers it to be unfair and unreasonable that he be assessed as a member of a couple and thus be ineligible for age pension because of his wife’s assets.

9. Accordingly, the Tribunal finds that there is a special reason in Mr Sleeman’s case for him not to be treated as a member of a couple as at 14 July 2022. In accordance with the discretion under subsection 24(1) of the SS Act, the Tribunal concludes that Mr Sleeman was not a member of a couple at that date and should instead be treated as single.

Should Mr Sleeman’s age pension have been cancelled?

1. As Mr Sleeman was not a member of a couple as at 14 July 2022, his entitlement to age pension under the assets test must be calculated only on the basis of his own assets.  As it is common ground that the level of Mr Sleeman’s assets did not preclude age pension from being paid, the Tribunal finds that Centrelink’s decision to cancel his age pension on the basis of the assets test was incorrect. 

2. The Tribunal will therefore set aside the decision under review and direct that Centrelink reconsider Mr Sleeman’s eligibility for age pension as at 14 July 2022 on the basis that he was not a member of a couple.  As the hearing papers indicate that Mr Sleeman requested a review of the cancellation of his age pension within 13 weeks, it is likely that he will be entitled to receive arrears of age pension from the date that payment is reinstated.

DECISION

The Tribunal sets aside the decision under review and remits the matter for reconsideration in accordance with the order that Mr Sleeman’s eligibility for age pension as at 14 July 2022 is to be reconsidered on the basis that he was not a member of a couple in accordance with subsection 24(1) of the Social Security Act 1991.

Date of hearing: Friday, 4 April 2025