Smith and Secretary, Department of Family and Community Services
[2004] AATA 9
•9 January 2004
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2004] AATA 9
ADMINISTRATIVE APPEALS TRIBUNAL )
) No Q2003/763
GENERAL ADMINISTRATIVE DIVISION ) Re DAVID SMITH Applicant
And
SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
Respondent
DECISION
Tribunal Mr R G Kenny, Member Date9 January 2004
PlaceBrisbane
Decision The Tribunal affirms the decision under review. ...................(Sgd).....................
R G Kenny
Member
CATCHWORDS
SOCIAL SECURITY – benefits and entitlements – newstart allowance – suspension of payments - eligibility – assets – applicant a shareholder and director of a company – level of income and assets of the company to be attributed to the applicant – no basis for the exercise of the discretion to attribute a percentage other than 50% of the income and assets of the company to the applicant – decision to suspend properly made - decision affirmed
Social Security Act 1991 ss 631, 1207, 1207N, 1207Q, 1207X, 1208E, 1209E, 1123
Social Security (Administration) Act 1999 ss 80, 196REASONS FOR DECISION
9 January 2004 Mr R G Kenny, Member Background
1. David Smith (the applicant) was in receipt of newstart allowance, which is payable in accordance with the terms of the Social Security Act 1991 (the Act), from 28 April 1998. On 22 April 2003, his payment was cancelled on the basis that the level of his assets was such as to preclude payment. Subsequently, it was determined that payments would be restored but, on 23 May 2003, a delegate of the Secretary, Department of Family and Community Services (the respondent) determined that his newstart allowance was to be suspended following his failure to supply requested documentation concerning P S Property Holdings Pty Ltd (the company) of which he was a shareholder and director. The decision was affirmed by an authorised review officer on 27 June 2003 and, in turn on 1 August 2003, by the Social Security Appeals Tribunal (the SSAT). On 5 September 2003, the applicant sought review of that decision by the Administrative Appeals Tribunal (the AAT).
Appearances
2. At the hearing, the applicant was not represented. The respondent was represented by Ms H Wallis-Dunn of the respondent's Service and Recovery Team.
3. The following material was taken into evidence:
§Exhibit 1 - documents prepared in accordance with section 37 of the Administrative Appeals Tribunal Act 1975 (the T documents: T1 – T56);
§Exhibit 2 - an assessment notice, dated 28 May 2003, from the Office of State Revenue;
§Exhibit 3 - a Westpac bank statement, dated 20 March 2003;
§Exhibit 4 - a Westpac bank statement, dated 22 December 2003;
§Exhibit 5 - a Commonwealth bank statement, dated 15 March 2003;
§Exhibit 6 - a Commonwealth bank statement, dated 16 October 2003;
§Exhibit 7 - a Child Support Statement, for September 2003, dated 17 October 2003;
§Exhibit 8 - a Westpac bank statement, dated January 2003;
§Exhibit 9 - Capital Finance deposit books;
§Exhibit 10 - a Centrelink payment summary for 2003; and
§Exhibit 11 - a Centrelink address summary, dated 16 December 2003.
Issues and Legislation
4. Ms Wallis-Dunn outlined the respondent's case in this matter in the following way.
5. The applicant became a director and shareholder in the company on 27 November 2001. He and his son, Paul Smith, were requested by Centrelink to provide financial information regarding this company so that the applicant's correct entitlement to newstart allowance could be assessed. The applicant told Centrelink that his son refused to provide him with this information and had advised him that the income tax returns for the company for the financial year ended 30 June 2002 had not been lodged. She noted the applicant's contention that the applicant’s shareholding in the company was one dollar but, nevertheless, submitted that, by operation of the principles in the Social Security Act 1991 (the Act), he was a controller of the company and, therefore, was to be attributed with 50% of the income and assets of the company which comprised several real estate properties. She submitted that this level of assets was sufficient to prevent him from being paid the newstart allowance.
6. Ms Wallis-Dunn submitted that the applicant had been sent notices pursuant to the terms of the Social Security (Administration) Act 1999 (the Administration Act) which required him to provide information about the financial circumstances of the company. She also submitted that the failure of the applicant to respond to these requests meant that newstart allowance could no longer be paid to him in accordance with the terms of the Act as it was not possible to calculate the appropriate level of entitlements.
7. In this matter, the Tribunal must determine the nature and extent to which the applicant was involved in the company and whether he had a reasonable excuse for not providing requested financial documentation to Centrelink relating to the company. Relevant to the determination of those issues are the following provisions of the Act and the Administration Act:
The Administration Act:
“Cancellation or suspension determination
80(1) If the Secretary is satisfied that a social security payment is being, or has been, paid to a person:
(a) who is not, or was not, qualified for the payment; or
(b) to whom the payment is not, or was not, payable;
the Secretary is to determine that the payment is to be cancelled or suspended.
80(2) Subsection (1) does not authorise the Secretary to make a determination if:
(a) the payment of a social security payment to a person has been cancelled or suspended by the operation of another provision of the social security law; and
(b) the determination would take effect at or after the time at which the cancellation or suspension referred to in paragraph (a) would take effect.
…
General power to obtain information
192. The Secretary may require a person to give information, or produce a document that is in the person's custody or under the person's control, to the Department if the Secretary considers that the information or document may be relevant to one or more of the following:
(a) the question whether a person who has made a claim for a social security payment is or was qualified for the payment;
(b) the question whether a social security payment is payable to a person who is receiving the payment;
(c) the question whether a social security payment was payable to a person who has received the payment;
(d) the rate of social security payment that is or was applicable to a person;
(da) the question whether a person who has made a claim under the Social Security (Fares Allowance) Rules 1998 was eligible for fares allowance;
(e) the administration of an agreement between Australia and a foreign country on social security matters;
(f) the question whether a person who has been granted a concession card is or was qualified for the card;
(g) the question whether a person who has applied for financial supplement is eligible for the supplement;
(h) the question whether a person who has obtained a financial supplement is or was eligible for the supplement;
(i) the determination of the maximum amount of financial supplement that a person is eligible for.
…
Written notice of requirement
196(1) A requirement under this Division must be made by written notice given to the person of whom the requirement is made.
196(2) The notice:
(a) may be given personally or by post or in any other manner approved by the Secretary; and
(b) must specify:
(i) how the person is to give the information or produce the document to which the requirement relates; and
(ii) the period within which the person is to give the information or produce the document to the Department; and
(iii) the officer (if any) to whom the information is to be given or the document is to be produced; and
(iv) that the notice is given under this section.
196(3) The period specified under subparagraph (2)(b)(ii) must not end earlier than 14 days after the notice is given.
196(4) The notice may require the person to give the information by appearing before a specified officer to answer questions.
196(5) If the notice requires the person to appear before an officer, the notice must specify a time and place at which the person is to appear. The time must be at least 14 days after the notice is given.”
The Act:
“Administrative breach rate reduction period to apply to persons who fail to comply with notification requirements
631. If a person refuses or fails, without reasonable excuse, to comply with a requirement made of the person under section 64, 67, 68, 75 or 192 of the Administration Act:
(a) a newstart allowance is not payable to the person; and
(b) if, at a later time, a newstart allowance becomes payable to the person-an administrative breach rate reduction period applies to the person.
…
Part 3.18-Means test treatment of private companies and private trusts
Division 1-IntroductionSimplified outline
1207. The following is a simplified outline of this Part:
§This Part sets up a system for the attribution to individuals of the assets and income of private companies and private trusts (sections 1207Y and 1208E).
§Attribution starts on 1 January 2002.
§For an asset or income to be attributed to an individual:
(a) the company must be a designated private company or the trust must be a designated private trust (sections 1207N and 1207P); and
(b) the company must be a controlled private company in relation to the individual or the trust must be a controlled private trust in relation to the individual (sections 1207Q and 1207V); and
(c) the individual must be an attributable stakeholder of the company or trust (section 1207X).
§A company or trust will be a controlled private trust or a controlled private company if the individual passes a control test or a source test.
§An individual will not be an attributable stakeholder of a trust if the trust is a concessional primary production trust in relation to the individual.
§The asset deprivation rules and the income deprivation rules are modified if attribution happens.
…
Designated private companies
1207N(1) For the purposes of this Part, a company is a designated private company at a particular time if:
(a) the company satisfies at least 2 of the following conditions in relation to the last financial year that ended before that time:
(i) the consolidated gross operating revenue for the financial year of the company and its subsidiaries is less than $10 million;
(ii) the value of the consolidated gross assets at the end of the financial year of the company and its subsidiaries is less than $5 million;
(iii) the company and its subsidiaries have fewer than 50 employees at the end of the financial year; or
(b) the company came into existence after the end of the last financial year that ended before that time; or
(c) the company is a declared private company (see subsection (2));
and the company is not an excluded company (see subsection (5)).
Declared private company
1207N(2) The Secretary may, by writing, determine that each company included in a specified class of companies is a declared private company for the purposes of this section.
1207N(3) A determination under subsection (2) has effect accordingly.
1207N(4) A determination under subsection (2) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901.
Excluded companies
1207N(5) The Secretary may, by writing, declare that each company included in a specified class of companies is an excluded company for the purposes of this section.
1207N(6) A declaration under subsection (5) has effect accordingly.
1207N(7) An instrument under subsection (5) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901.
Definitions
1207N(8) In this section:
consolidated gross operating revenue has the same meaning as in section 45A of the Corporations Law.
financial year, in relation to a company, means:
(a) a period of 12 months beginning on 1 July; or
(b) if some other period is the company's tax year-that other period.
…
Controlled private companies
1207Q(1) For the purposes of this Part, a company is a controlled private company in relation to an individual if the company is a designated private company and:
(a) the individual passes the control test set out in subsection (2); or
(b) the individual passes the source test set out in subsection (3).
Control test
1207Q(2) For the purposes of this section, an individual passes the control test in relation to a company if:
(a) the aggregate of:
(i) the direct voting interests in the company that the individual holds; and
(ii) the direct voting interests in the company held by associates of the individual;
is 50% or more; or
(b) the aggregate of:
(i) the direct control interests in the company that the individual holds; and
(ii) the direct control interests in the company held by associates of the individual;
is 15% or more; or
(c) the company is sufficiently influenced by:
(i) the individual; or
(ii) an associate of the individual; or
(iii) 2 or more entities covered by the preceding subparagraphs; or
(d) the individual (either alone or together with associates) is in a position to exercise control over the company.
Source test
1207Q(3) For the purposes of this section, an individual passes the source test in relation to a company if:
(a) the individual has transferred property or services to the company after 7.30 pm, by standard time in the Australian Capital Territory, on 9 May 2000; and
(b) the underlying transfer was made for no consideration or for a consideration less than the arm's length amount in relation to the underlying transfer.
No double counting
1207Q(4) In calculating the aggregate referred to in paragraph (2)(a), a direct voting interest held because of subsection 1207R(2) is not to be counted under subparagraph (2)(a)(i) to the extent to which it is calculated by reference to a direct voting interest in the company that is taken into account under subparagraph (2)(a)(ii).
1207Q(5) In calculating the aggregate referred to in paragraph (2)(b), a direct control interest held because of subsection 1207T(4) is not to be counted under subparagraph (2)(b)(i) to the extent to which it is calculated by reference to a direct control interest in the company that is taken into account under subparagraph (2)(b)(ii).
Company
1207X(1) For the purposes of this Part, if a company is a controlled private company in relation to an individual:
(a) the individual is an attributable stakeholder of the company unless the Secretary otherwise determines; and
(b) if the individual is an attributable stakeholder of the company-the individual's asset attribution percentage in relation to the company is:
(i) 100%; or
(ii) if the Secretary determines a lower percentage in relation to the individual and the company-that lower percentage; and
(c) if the individual is an attributable stakeholder of the company-the individual's income attribution percentage in relation to the company is:
(i) 100%; or
(ii) if the Secretary determines a lower percentage in relation to the individual and the company-that lower percentage.
…
Determinations
1207X(3) A determination under this section is to be in writing.
1207X(4) A determination under this section has effect accordingly.
1207X(5) In making a determination under this section, the Secretary must comply with any relevant decision-making principles.
…
Attribution of assets
1208E(1) For the purposes of this Act, if:
(a) an individual is an attributable stakeholder of a company or trust at a particular time on or after 1 January 2002; and
(b) at that time, the company or trust owns a particular asset (whether alone or jointly or in common with another entity or entities); and
(c) if, at that time, that asset had been owned by the individual instead of by the company or trust, the value of the asset would not be required to be disregarded by any express provision of this Act; and
(d) at that time, the asset is not an excluded asset (see subsection (2));
there is to be included in the value of the individual's assets an amount equal to the individual's asset attribution percentage of the value of the asset referred to in paragraph (b).
Excluded assets
1208E(2) The Secretary may, by writing, determine that, for the purposes of the application of subsection (1) to a specified individual and a particular company or trust, a specified asset is an excluded asset.
1208E(3) A determination under subsection (2) has effect accordingly.
1208E(4) In making a determination under subsection (2), the Secretary must comply with any relevant decision-making principles.
…
Decision-making principles
1209E(1) The Secretary may, by writing, formulate principles (decision-making principles) to be complied with by him or her in making decisions under:
(a) section 1207X; or
(b) subsection 1207Y(2); or
(c) section 1207Z, 1208C or 1208D; or
(d) subsection 1208E(2); or
(e) subsection 1208G(6) or 1208H(1); or
(f) section 1208K; or
(g) subsection 1208L(3), 1208N(1) or 1208P(1); or
(h) section 1208Q; or
(i) subsection 1208R(3), 1208S(1) or 1208T(1); or
(j) paragraph 1208U(1)(f); or
(k) section 1208W; or
(l) subsection 1208Y(2); or
(m) section 1208Z or 1209.
1209E(2) Decision-making principles are disallowable instruments for the purposes of section 46A of the Acts Interpretation Act 1901.
…
Disposal of assets
1123(1) For the purposes of this Act, a person disposes of assets of the person if:
(a) the person engages in a course of conduct that directly or indirectly:
(i) destroys all or some of the person's assets; or
(ii) disposes of all or some of the person's assets; or
(iii) diminishes the value of all or some of the person's assets; and
(b) one of the following subparagraphs is satisfied:
(i) the person receives no consideration in money or money's worth for the destruction, disposal or diminution;
(ii) the person receives inadequate consideration in money or money's worth for the destruction, disposal or diminution;
(iii) the Secretary is satisfied that the person's purpose, or the dominant purpose, in engaging in that course of conduct was to obtain a social security advantage.
1123(2) For the purposes of subsection (1), a person has a purpose of obtaining a social security advantage if the person has a purpose of:
(a) obtaining a social security pension, a social security benefit, a parenting allowance, a service pension or an income support supplement or enabling the person's partner or someone else of whom the person is a family member to obtain such a pension, benefit, allowance or supplement, or a youth training allowance; or
(b) obtaining a social security pension, a social security benefit, a parenting allowance, a service pension or an income support supplement, or enabling the person's partner to obtain such a pension, benefit, allowance or supplement, or a youth training allowance, at a higher rate than would have otherwise been payable; or
(c) ensuring that the person or the person's partner would be qualified for fringe benefits for the purposes of this Act or the Veterans' Entitlements Act.
1123(3) For the purposes of subsection (1), the value of a person's granny flat interest is to be taken not to be consideration received by the person if the interest was acquired or retained before 22 August 1990.
1123(4) If, under subsection 1147(1A), the value of a granny flat interest is less than the amount paid, or agreed to be paid, for the interest, then, for the purposes of this section, so much of the amount paid, or agreed to be paid, as exceeds the value of the interest is not consideration for the interest.”
The Applicant's Evidence
8. The applicant said that his son, Paul Smith, approached him in November 2001 and told him that he was setting up a company for the purposes of ensuring that he would not have to pay child support payments to his wife in relation to their child and also to assist him in minimising his taxation obligations. The applicant said that he did not want to be part of the arrangement but signed the relevant documentation under duress. He said that he had no understanding of company structures or about the nature of shareholding and believed that, because his shareholding was valued at only one dollar, this was the full extent of his interest in the company. He said that he understood that his son had not lodged taxation returns for some seven years and had not completed any company taxation documentation for the 2001/2 financial year. He said that, at the time he signed the documents, he had enjoyed a good relationship with his son but that, since Centrelink had begun to request information from him about the company, this relationship had broken down.
9. The applicant said he believed that the company would hold assets, would provide taxation benefits to his son and protect his son from being sued and that he understood the company owned various pieces of real estate including a workshop where his son carried out work as a mechanic, a unit at Miami and two houses. He said he had no role in the operations of the company and that these were carried out entirely by his son. He said that he was not aware that he had any responsibility in relation to the company and that he was unaware of how many shares there were in the company but that he was told by his son that assets would be “offloaded” to him. Nevertheless, he maintained that he had always believed the total of his interest was one dollar.
10. The applicant said that, since he became involved in the company, he had taken legal advice on several occasions and now understood that the arrangements he had entered into were illegal because it was not legal to avoid child support or to reduce taxation obligations. He also said that the legal advice had extended to his role in the company. He said that, although he agreed to take up a shareholding with a one dollar value, he had not paid the one dollar to his son and his legal advice was that, because he had not paid the one dollar, the obligation was not binding on him and he was, therefore, not a shareholder. The applicant also said that he had seen a solicitor on 27 November 2001 and had been given advice about his shareholding. He referred the Tribunal to a letter bearing that date which was signed by himself as a director and which indicated that he was holding the share as nominee for his son, Paul Smith (see T38). He said that the legal advice that he had was oral rather than written and was from sources such as community legal centres.
11. The applicant said that he had made Centrelink aware of his involvement in the company and that this was followed up by Centrelink getting in contact with the Australian Securities and Investment Commission (ASIC) which provided Centrelink with information about his interest in the company. In cross-examination, he conceded that the concern by Centrelink in his company dealings had been precipitated by information that he had provided Centrelink about a change in his address and consequential request for rent assistance.
12. The applicant was referred to various ASIC documents in which he is described as a fully paid shareholder but he said that these documents were incorrect in that he had not paid the one dollar to his son (T15). He was referred to company documentation which also recorded him as having one of the two fully paid beneficial shares but, again, he said that this was not an accurate record. The applicant also referred to a document entitled a “MOD PC” which relates to information about a private company as required by Centrelink. The applicant agreed that it declared that he and his son were the directors of the company and that each of them had one of the two shares in it. However, the applicant said that he was unaware of who had completed the document and said that he had not signed it.
13. The applicant said that he owned his own home which was located at 15 Chesterfield Avenue, Bonogin. He also said that he owned the land on which the house was built and that his son had assumed financial responsibility for the building of the house on the land. He said that, in late 2002, he had moved to the unit owned by the company in Miami where his son lived and he did this because his son had been injured in an accident and needed care. He said that, whilst he was there, he paid rent in the amount of $120 per week and paid this to Geoff Hillman. The applicant was referred to a Rent Assistance Questionnaire (T6), and to the certification provided in the name Geoff Hillman. He said that Geoff Hillman was a friend of his son rather than a real estate agent and would pass the money on to his son. He said that, whilst he was living with his son, there was a tenant in the house at Bonogin who paid rent in the amount of $140 per week. He said that this was paid to his son because he had built the house.
14. The applicant was referred to a document (T10) which purported to be a receipt, in the amount of $120 per week, in relation to the rent that he paid when living at Miami. He said that he had given this to Centrelink when he was requested to provide details concerning his rental arrangements. He said that he and Paul had drawn up the document because each of them was a director of the company. He said that he did not get regular receipts and that this was only prepared because of the Centrelink request.
15. The applicant said that he had used a PO Box number for his address and that this had also been used by Geoff Hillman, by his daughter, by his son and by the company. He said that he and his daughter continued to use it but that the mail of his son and the company now go to his son’s workshop. He said that, since May 2003, he was no longer a director of the company and that, since then, the company mail was no longer placed in the PO Box. He said that, prior to this, he had the responsibility of collecting both his mail and that of the company.
16. The applicant was referred to a document dated 1 August 2002 (T16) which advised that, because of termite damage to the house at 15 Chesterfield Avenue, Bonogin, the company was to carry out repairs and then lease the house for $140 per week in order to recover some of the repair costs. The document also indicated that the applicant was to rent the Miami property for $120 dollars per week. He said that, because he was aware of all of the expenses that his son had incurred in building and maintaining the house on the property, he would always make sure that his son was reimbursed in the event that the property was sold. He said that he understood that this was the effect of the document that was signed by him and his son on 1 August 2002.
Evidence of Julianne Smith
17. Julianne Smith is the applicant's daughter. She said that she understood that her father had not paid the one dollar relating to the cost of shareholding in the company and she also said that she understood that this meant that the arrangement with the company was null and void. She said that this had been explained to her by her father and brother. She also said that she understood that the assets in the company’s name were actually owned by her brother and that the company arrangement was entered into in order for him to minimise the cost of child-support and to minimise taxation obligations. She said that her brother had advised her that he would be setting up the company and that he had virtually forced his father to sign the documents concerning his shareholding and directorship. She said that her father was not competent with paperwork or with the handling of financial responsibilities.
Consideration
18. It is not disputed in this case that, on 22 November 2001, the applicant and his son, Paul Smith, signed documentation in relation to each of them becoming one of two shareholders and one of two directors of P S Property Holdings Pty Ltd (the company). The applicant's status as a beneficial owner of one fully paid share in the company was confirmed by documents provided by ASIC (T15). It is also not disputed that the applicant's role as a director was terminated in May 2003 and, again, that is confirmed by ASIC documents, dated 30 June 2003 (T51). That document also confirmed that the applicant remained a fully paid up beneficial shareholder of 1 of the 2 shares in the company, that his son retained the other share and that his son was the sole director. Also, it is not disputed that the company is the owner of property including a home unit at Miami, a workshop at Nerang and other residential properties in Nerang (see T23-25).
19. Despite the applicant's initial assertion that he had volunteered information to Centrelink concerning his interest in the company, I am satisfied that Centrelink became aware of this after it initiated an inquiry in relation to the circumstances in which the applicant was living and for which he had sought rent assistance. In cross-examination, this was conceded by the applicant. However, this was but one of various inconsistencies which were revealed in the applicant's evidence and which, when considered as a whole, leaves me satisfied that his evidence was unreliable. The applicant said that he had no understanding of matters relating to shares and directorship in companies and, yet, he referred the Tribunal to documents which purported to indicate that he had taken legal advice on 27 November 2001, the day on which he signed the company documents. In a letter dated 4 June 2003 (T38), he wrote:
“Enclosed is a copy of a letter dated 27/11/01 which shows that I held a $1.00 share in the company as Nominee for my son Paul Smith.
Legal advice from a barrister on the 27/11/01 requested myself to do the above so I would have no financial banking the company whatsoever.”
20. I do not accept the applicant's evidence that he had legal advice at that time and I am also satisfied that he was well aware of his son’s motivation in establishing the company, namely, to minimise his obligations in relation to child-support payments and taxation payments. Further, I do not accept the applicant's evidence that he was, in some way, compelled to sign the company documents. In his evidence, he referred to duress but was unable to point to any influences which could amount to any form of compulsion. His evidence was that he was on good terms with his son at that time and that this continued until Centrelink’s involvement this year. I have noted his contention that he did not make payment of the one dollar in relation to the shareholding but, because of the overall unreliability of his evidence, I do not accept that this payment was not made. It might well be the case that the applicant did not have a full understanding of the extent to which his financial circumstances changed on his becoming a shareholder and a director of the company. Nevertheless, I am satisfied that he entered into the arrangement voluntarily for the purpose of helping his son. The evidence of Julianne Smith was corroborative of the applicant's evidence. However, I am satisfied that her evidence comprised information that was provided to her by her father and that, therefore, it is also unreliable.
21. The cancellation of the applicant's newstart allowance by the respondent related to the value of his assets which included a proportion of those held by the company. With effect from 1 January 2002, a legislative scheme was instituted for the attribution to individuals of assets and income of certain private companies and this is set out in Part 3.18 of the Act. The relevant provisions as set out above and these include a simplified outline in section 1207 of the Act. For the assets and income of a private company to be attributed to an individual, the following requirements must be met:
§the company must be a designated company in accordance with section 1207N of the Act; and
§the company must be a controlled company in relation to the individual pursuant to section 1207Q of the Act, and
§the individual must be an attributable stakeholder of the company pursuant to section 1207X of the Act.
22. The evidence is that the company meets the description of a designated private company as provided for in section 1207N of the Act and set out above. I am also satisfied that the 50% shareholding that the applicant has and the joint directorship that he had until May 2003 meant that he meets the requirements for being a controller of the company for the purposes of section 1207Q of the Act.
23. To assist in the application of section 1207X of the Act, the Secretary has published, pursuant to section 1209E of the Act, the Social Security (Attributable Stakeholders and Attribution Percentages) Principles 2000. Part 2 of those Principles sets out the matters to be considered in determining whether a person should not be an attributable stakeholder and Part 3 of those Principles sets out the matters to be considered in determining what attribution percentage less than 100% may be adopted for an individual. I have had regard to those matters in this case. Whilst the applicant has maintained that he has had no involvement in the operation of the company, his evidence demonstrates that he has had some role to play in some of its activities. Certainly, he has signed documentation as a director and examples of these were included in evidence at T16 and T38. He served as a collector of mail for the company and, although the evidence is not entirely clear because of its inherent unreliability, it would also seem that he has had the benefit of living in premises at Miami that are owned by the company and at 15 Chesterfield Avenue Bonogin where the circumstances of ownership are less clear. Reference was made above to a receipt that was prepared in respect of rent for the Miami premises. The applicant said that this was the only such receipt that had been generated and he also indicated that the rent was paid to a person by the name of Geoff Hillman who had the same PO Box address as the company. I have also noted that, in file references relating to the rental circumstances of the applicant, he is described as stating that he contacted his landlord by paying him from time to time when he saw him “down the pub” (T9). Indeed, these uncertainties in relation to asset usage and ownership form part of the difficult situation facing the respondent in its attempts to determine what the financial circumstances of the applicant are. I am satisfied that any discretion to attribute a percentage other than 50% of the income and assets of the company should not be exercised in the applicant's favour.
24. In the decision under review, the respondent has determined that the applicant's newstart allowance is suspended because of his failure to provide relevant information about the financial circumstances of his involvement in the company. Section 192 of the Administration Act enables the respondent to require the applicant to provide information concerning a range of matters including whether a social security payment, which includes newstart allowance, is payable to him. That provision is set out above. That information may be sought by giving notice to the person and I am satisfied that this was done in accordance with section 196 of the Administration Act in letters dated 22 April 2003 (T20) and 9 May 2003 (T27). I am also satisfied that the applicant has not provided that information.
25. Section 631 of the Act provides that newstart allowance is not payable to a person if that person refuses or fails, without reasonable excuse, to comply with a requirement to provide information in accordance with section 192 of the Administration Act. The applicant submitted that his allowance should not be terminated under that provision as it was not applicable to his circumstances because it was his son who has failed to comply with the request for information and because it is his son who has that information available to him. At the time when the letters were sent to him, the applicant retained his position as a director of the company and he remains a shareholder of the company. There is no evidence before the Tribunal to indicate that he has endeavoured to obtain the information requested by Centrelink. Rather, his response was to advise Centrelink that he had resigned his role as director (T30) and to indicate that any information that was required was to be obtained from his son (T44). I am satisfied that the applicant's conduct and his unwillingness to provide or obtain information cannot be described as constituting a reasonable excuse in accordance with the terms of section 631 of the Act.
26. Section 80 of the Administration Act enables newstart allowance to be suspended and I am satisfied that, because the respondent is not a position to determine whether the allowance is payable to him due to its lack of information concerning his financial circumstances, the suspension of his newstart allowance is the correct and preferable decision in this matter.
Decision
27. The Tribunal affirms the decision under review.
I certify that the 27 preceding paragraphs are a true copy of the reasons for the decision herein of Mr R G Kenny, Member
Signed: Sarah Oliver
AssociateDate of Hearing 16 December 2003
Date of Decision 9 January 2004
The Applicant appeared in person
For the Respondent Ms Wallis-Dunn, Departmental Advocate
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