"SRCCC" & "SRDDD" and Department of Family and Community Services

DECISION AND REASONS FOR DECISION [2001] AATA 954

ADMINISTRATIVE APPEALS TRIBUNAL )

) No N2000/1638,

GENERAL ADMINISTRATIVE DIVISION          )               N2000/1639
           Re      "SRCCC"
  First Applicant
  "SRDDD"

Second Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
Respondent
DECISION

Tribunal Dr J D Campbell, Member

Date20 November 2001
PlaceSydney

Decision The Tribunal determines that the decision under review be affirmed.

[sgd] Dr J D Campbell
Member
CATCHWORDS
Social Security - Pension Assessment - Whether living as members of a couple - Whether Applicants should not be regarded as members of a couple - Special Reason

Social Security Act 1991 - sections 4, 24

Staunton - Smith v Secretary, Department of Social Security (1991) 25 ALD 27
Re Quick; Beer and Secretary, Department of Family and Community Service [2000] AATA 759
Boscolo v Secretary, Department of Social Security (1999) 53 ALD 277
Re Galewski and Secretary, Department of Social Security (1998) 54 ALD 569
Re Secretary, Department of Social Security and Begum (1998) 51 ALD 187
Re Secretary, Department of Social Security and Porter (1997) 48 ALD 343

REASONS FOR DECISION

Dr J D Campbell, Member

In these matter the first Applicant ("SRCCC") and his wife, the second Applicant ("SRDDD"), are seeking a review of the decisions of the Social Security Appeals Tribunal ("SSAT") dated 5 October 2000 which affirmed the decisions dated 10 April 2000 made by a Centrelink delegate of the Secretary, Department of Family and Community Services ("the Respondent") to treat the two Applicants as a member of a couple. The decisions were reviewed by an Authorised Review Officer on 12 July 2000 (SRCCC) and 16 May 2000 (SRDDD).
A hearing was held before the Tribunal on 22 July 2001 with both matters being heard concurrently. Both Applicants were represented by Ms Koller, a solicitor from the Welfare Rights Centre. The Respondent was represented by Mr Slattery, an advocate from the Advocacy and Administrative Law Section at Centrelink. Both Applicants presented oral evidence before the Tribunal.
The following material was placed into evidence before the Tribunal: Documents prepared pursuant to section 37 of the Administrative Appeals Tribunal Act 1975:
Exhibit No     Description    Date
T1-17 PP1-43 Documents prepared pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 in relation to Matter No N2000/1638
T1-21, PP11-70 Documents prepared pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 in relation to in relation to Matter No N2000/1639
A1      Applicant's Statement of Facts and Contentions          20 March 2001
R1      Respondent's Statement of Facts and Contentions     12 June 2001

issues

The relevant issues in these two matters are:
(i) whether either Applicant is a member of a couple; and
(ii) whether, in the event that each Applicant is a member of a couple, whether a special reason exists and whether discretion under section 24 of the Social Security Act 1991 ought to be exercised.

legislation

The relevant legislation in this matter is the Social Security Act 1991 ("the Act") and in particular sections 4 and 24.
background
The two Applicants are aged 84 and 83 at the time of the hearing, and have been married for sixty years. They currently live at Roselands and have two sons aged 57 and 54. They both left school at 15 years of age.
SRDDD trained as a tailor at David Jones and worked there until her marriage to SRCCC. After the two boys went to school, SRDDD worked for 11 years for Coles at Lakemba, then full time and part time at Roselands for nine years, until retiring in 1965 to assist her husband who had retired shortly before reaching the age of 65.
SRCCC worked as an offsider for a pastry cook business in Surry Hills, prior to commencing work as a boiler room attendant at Royal Prince Hospital, where he remained for 37 years. He retired because of diminishing vision of his remaining good eye, having lost his sight in the other eye when working as a pastry cook.
The family home is at Roselands with a main house and a detached flat, which was built by SRCCC, and is self-contained. The flat has a bedroom, kitchen, dining area, shower and toilet and was renovated some years ago so that a grand daughter could live there. It has never been let. The property's registered owner is SRCCC.
SRCCC also purchased many years ago, a property at Maianbar. A few years ago the weekender burned down and has not been replaced. The property remains registered in SRCCC as sole owner. There has been dispute between SRCCC and the Respondent over the value of this property, with the Respondent currently valuing the property at $155,000.
The revaluation of the property at Maianbar in 1999 had no impact on the pension paid to SRCCC as he receives the age pension pursuant to the blind provisions within the Act. However, the revaluation drastically reduced SRDDD age pension.
On 7 December 1999 Centrelink decided to reduce the rate of Mrs "SRDDD's" age pension. Following a review by an Authorised Review Officer, this decision was affirmed on 17 January 2000 (T11-T12 – N2000/1629).
On 20 March 2000 SRDDD completed an "Assessment of Living Arrangements Separated under one roof form", because she requested to be considered as a single person for the purposes of payment of her age pension (T13 – N2000/1639). SRCCC did not complete such a form, as he is blind, with the Respondent accepting that his wife would complete the form on his behalf.
In the form referred to, SRDDD stated that it was their intention to live separately in these different houses on the same block, with one occupying the front house and the other the back house. She described them as continuing to share household goods and furniture; that she would not be paying rent; that she would continue to drive SRCCC's car for shopping and general mobility for them both, with SRCCC meeting the car expenses; that they would continue to have a joint bank account as SRCCC requires her assistance to operate such an account, that a Will was drafted in the previous fortnight and that she would be a beneficiary of the main property; that the bills for utilities are paid, by her, from the joint pension account; that she does perform all the household tasks; that when they go out, which is very seldom, SRDDD takes SRCCC; that they are invited out as an elderly couple, and that when they go to the doctor, she refers to herself as his wife; that the separation occurred when the pension of SRDDD was reduced because of her husband's property; that they have not filed for dissolution of marriage because they are too old, and that SRDDD would care for him in times of illness and personal crisis (T13 – N2000/1639).
In further communication with the Respondent on 5 May 2000, SRDDD made the following points (T17 – N2000/1639):

neither of the Applicants have a credit card;
SRCCC has been totally blind for 16 years, SRDDD receives a carer's pension, and has responsibilities as a carer to undertake particular activities; and
The Applicants had been going their separate ways for a couple of years now, with SRDDD being in the main house and SRCCC being in the granny flat for a few months, and SRDDD undertaking the cleaning and most of the cooking.

In a printed statement of "Savings and Loan Financial Investments" dated 5 January 2000 (T17 – N2000/1639), the following details relate to SRDDD:
Deposit Accounts:
Commonwealth Bank Security Account
St George Bank Protection Account
Other Accounts:
Advance Term Deposit – Nil
AGC Debenture – Nil
ANZ Cash V2 Fund
Shares and Managed Funds:
TAB
Lyndall Funds Management
In a printed statement of "Savings and Loan Financial Investments" dated 5 January 2000, the following details relate to SRCCC (T4 – N2000/1638):
Deposit Accounts:
Commonwealth Bank Pensioner Security Account
St George Bank Protection Account
Other Accounts:
Advance Term Deposits – Nil
AGC Debenture
ANZ Cash V2 Fund
Shares and Managed Funds:
TAB
Coles Myer
Managed Investments
Lyndall Funds Management
In a letter dated 13 July 2000 a caseworker from Welfare Rights Centre detailed the following (T20 – N2000/1639):

the two Applicants maintain separate bank accounts to which their pensions are respectively paid. SRDDD has an authority to access SRCCC's Commonwealth account to pay bills, expenses and to withdraw money for SRCCC;
that the house at Roselands and land at Maianbar are in SRCCC's name only;
neither Applicants have a formal Will;
they share expenses, but in view of SRDDD reduced pension, SRCCC is assisting with her costs;
SRDDD does most of the shopping, housework and cooking and assists SRCCC with other tasks;
the Applicants consider themselves separated, but remain friends, with SRCCC considering their current relationship to be similar to that of any person providing care for another; and
there is no sexual relationship between the Applicants.

SRDDD - evidence

SRDDD told the Tribunal that there had been increasing difficulties within the household, on account of her blind husband becoming increasingly deaf and playing his audio tapes at an increasingly loud volume for hours at a time of the day or night. She found that it was difficult for her to watch television and she had to constantly yell at him. She felt her health was suffering, with her asthma made worse by the situation that existed prior to her husband moving to the self contained flat some 15 – 18 months ago.
SRDDD confirmed that pensions were paid into separate bank accounts and that she was able to draw from the joint account and that SRCCC pays all the bills, while she drives her husband everywhere. He owns the car and he has not driven since before their marriage. SRDDD says that there has been no change in methods and practices of bill paying, although she would like to replace a number of things in the house. SRDDD stated that her husband, because of his blindness, moves around and does things at all times of the day and night, and, again because of his blindness, has difficulty in appreciating the worn status of many household items.
SRDDD stated that she did receive the carer's pension and as her husband essentially only prepared his own breakfast and did some washing, the remainder of her husband's daily living requirements were met by her in her caring responsibilities. These included cooking, cleaning, general household maintenance, major washing, driving, shopping, banking, bill paying, opening and reading of letters to her husband.
SRDDD stated that she started paying $40 each week, early in 2001, towards her share of expenses. SRDDD stated that the two residences were not metered separately, nor does there appear to have been an increase in general households bills. She further stated that there was no sexual relationship between the Applicants, nor did they intend to divorce, nor had they made any Wills, and that her husband had moved to the flat, when her age pension was reduced in early 1999.
SRCCC - evidence
SRCCC confirmed much of what SRDDD had said and reiterated that she was very cross when her pension was reduced, because it was his property which was causing the reduction in her pension. He indicated that he had not considered selling the property at this stage.
SRCCC stated that the main reason for his move to the flat was his making of tapes and playing his talking books at loud volume, and his occupation of the dining room for this activity. He stated that his wife became more argumentative and less tolerant of his activities and that since he has moved to the flat, their relationship has been far more harmonious.
submissions
applicants
On behalf of the Applicants it was submitted that older and disabled persons are likely to take a different approach to relationships than those taken in the majority of cases which relate to younger people with dependent children. It would not be advisable to apply the factors in a manner that fails to recognise the issues affecting older and disabled persons so that such persons could not practically meet the separation requirements.
It was submitted that by virtue of their age and disability and their particular circumstances of having two discrete residences on the one site that the Applicants would seek to resolve their difficulties by minimalist separation. In the Applicant's submission, despite long years of marriage, the age of the Applicants and their mutual friendship and activities, there is objective evidence that the disabilities of SRCCC and in particular his blindness and increasing deafness have led to a deterioration in the relationship. As such both parties have a desire to lead, as far as possible, separate and discrete lives. Essentially, the Applicants argue that their relationship has resolved from one in which confidences, companionship and activities would be shared to a carer/caree relationship where there are divergent interests.
In stressing the clear objective evidence of breakdown in the relationship, which has been acted upon, and in relying upon Staunton–Smith v Secretary, Department of Social Security (1991) 25 ALD 27 (in which the Federal Court emphasised that a "breakdown" in the relationship is sufficient, and that even with a "breakdown" some co-reliance including household duties remains), the Applicants contended that the requirements are met. Further, the Applicants contended that the difference between a carer relationship and a marriage like relationship is the "spark" as discussed in Re Quick; Beer and Security, Department of Family and CommunityServices (2000) AATA 759.
Alternatively, the Applicant contended that special reasons exist (SRCCC's disabilities) so that the discretion ought to be exercised under section 24 of the Act as if they were not members of a couple.
respondent
The Respondent contended that in this matter, when the facts as in section 4(3) are taken into account, it is clear that the Applicants relationship is still very much a marriage, with the evidence not supporting a conclusion that the relationship has broken down to the point that the Applicants are living separately and apart.
In considering whether a "special reason" exists, the Respondent contended that the word "special" highlights that the discretion under section 24 of the Act should not be exercised lightly, and relied upon the matter of Boscolo v SecretaryDepartment of Social Security (1999) 53 ALD 277 at 281. The Respondent also nominates examples of where special reasons have been found to exist. They include:
(i) Re Galewski and Secretary, Department of Social Security (1998) 54 ALD 569 – an overseas partner, who was been unable to earn a living;
(ii) Re Security, Department of Social Security and Begum (1998) 51 ALD 187 – an overseas partner who refused to support his family in Australia; and
(iii) Re Secretary, Department of Social Security and Porter (1997) 48 ALD 343 – a nursing home person with severe ill health would not be able to meet necessary medical expenses if the partner's income were included.

considerations and findings

In this matter the factual circumstances are not in dispute between the parties. After consideration of all the evidence the Tribunal makes the following findings of fact:

(a) The Applicants are aged 84 and 83 and have been married for 60 years and lived for many years at the family home in Roselands. The family home has a main home and a detached self-contained flat. The Applicants have two sons aged 57 and 54 and some elderly close family and friends.

(b) The Applicants have always had, that is since retirement, their own bank accounts and their own investment accounts. There is one joint account, which the wife operates on behalf of the husband.

(c) The family home, the block of land at Maianbar and the car are assets solely owned by SRCCC. Neither party has made a Will, nor are there any joint investments.

(d) SRCCC is blind and increasingly deaf. He is articulate and has not driven a car since before his marriage. He is relatively mobile for his age. He receives an age pension as a blind person.

(e) SRDDD is articulate, drives a car, receives a means tested age pension and also a carers pension/allowance.

(f) The Applicants rearranged their residential and domestic circumstances in March 2000 as a consequence of increasing domestic stress arising from:

(i) the revaluation of the Maianbar property, which caused a significant reduction in SRDDD's means tested age pension; and
(ii) on an account of the husband's blindness and increasing deafness. SRCCC made tapes and listened to book tapes at high volume on the dining room table at various times during the day or night. Such activities caused stress for the wife and her health deteriorated, with increasing asthma attacks.
(h) Under the new residential arrangements the husband now resides in the self-contained flat and makes and plays tapes, makes his breakfast, hand washes his clothes and does whatever cleaning he is able to do.
(i) Under the new residential arrangements, the wife remains in the main house and continues to carry through her caring responsibilities namely:
(i) general supervision for both residences, with necessary cleaning, housekeeping, shopping, banking, bill paying and cooking for both Applicants. Major laundry was also done, as is the reading of any mail;
(ii) driving the husband to the doctor, on other outings and to see family and remaining relations; and
(iii) continues to manage her own investments.

(j) Under the new domiciliary arrangements, the two Applicants indicated that they had told close relatives that they had separated. However, they continued to hold themselves out to the doctor as married couple, and further had no intention of getting divorced or making a Will. They have no sexual relationship and they sometimes share meals prepared by SRDDD.
(k) Further, under the new arrangements, it was the intention of each Applicant to pay half of the general household expenses, but this could not happen until the wife's age pension was higher. In the meantime SRDDD is contributing $40 per week and her husband is continuing to meet all the general expenses.

statutory framework

The following sections of the Act, namely sections 4 and 24, define the statutory framework with which this matter is concerned:
"Member of a couple - general
4.(2) Subject to subsection (3), a person is a member of a couple for the purposes of this Act if:
(a) the person is legally married to another person and is not, in the Secretary's opinion (formed as mentioned in subsection (3)), living separately and apart from the other person on a permanent or indefinite basis; or
(b) all of the following conditions are met:
(i) the person has a relationship with a person of the opposite sex (in this paragraph called the "partner");
(ii) the person is not legally married to the partner;
(iii) the relationship between the person and the partner is, in the Secretary's opinion (formed as mentioned in subsections (3) and (3A)), a marriage-like relationship;
(iv) both the person and the partner are over the age of consent applicable in the State or Territory in which they live;
(v) the person and the partner are not within a prohibited relationship for the purposes of section 23B of the Marriage Act 1961.

Member of a couple – criteria forming opinion about relationship
4. (3) In forming an opinion about the relationship between 2 people for the purposes of paragraph (2)(a) or subparagraph (2)(b)(iii), the Secretary is to have regard to all the circumstances of the relationship including, in particular, the following matters:
(a) the financial aspects of the relationship, including:
(i) any joint ownership of real estate or other major assets and any joint liabilities; and
(ii) any significant pooling of financial resources especially in relation to major financial commitments; and

(iii) any legal obligations owed by one person in respect of the other person; and
(iv) the basis of any sharing of day-to-day household expenses;

(b) the nature of the household, including:
(i) any joint responsibility for providing care or support of children; and
(ii) the living arrangements of the people; and
(iii) the basis on which responsibility for housework is distributed;

(c) the social aspects of the relationship, including;
(i) whether the people hold themselves out as married to each other; and
(ii) the assessment of friends and regular associates of the people about the nature of their relationship; and
(iii) the basis on which the people make plans for, or engage in, joint social
activities;

(d) any sexual relationship between the people;
(e) the nature of the people's commitment to each other, including:
(i) the length of the relationship; and
(ii) the nature of any companionship and emotional support that the people provide to each other; and
(iii) whether the people consider that the relationship is likely to continue indefinitely; and
(iv) whether the people see their relationship as a marriage-like relationship.

…
4 Person may be treated as not being a member of a couple (subsection 4(2))
24(1) where:
(a) a person is legally married to another person; and
(b) the person is not living separately and apart from the other person on a permanent or indefinite basis; and
(c) the Secretary is satisfied that the person should, for a special reason in the particular case, not be treated as a member of a couple;
the Secretary may determine, in writing, that the person is not to be treated as a member of a couple for the purposes of the Act."

In this matter the two Applicants are married, have been married for nigh on 60 years and have no intention of seeking to dissolve their marriage. They are 84 and 83 years of age and have resided at their current residence for many years. The Tribunal must therefore have regard to all the circumstances of the relationship, including the particular matters nominated within section 4(3) of the Act.
The Tribunal in moving to examine all the circumstances, notes the age of the two Applicants, the length of their marriage and the long standing blindness and increasing deafness of SRCCC. The Tribunal also acknowledges that SRDDD has been a carer for her husband for many years and does in fact receive a carer's pension for that activity. The Tribunal also notes that the rearrangement of domestic accommodation arose as a consequence of increasing friction between the two Applicants arising from the circumstances where the husband, because of his blindness and increasing deafness, made and played book tapes at loud volumes for many hours, while occupying the dining room table. The Tribunal also observes that issues surrounding the decrease in the wife's age pension, as a consequence of the revaluation of the husband's solely owned block of land at Maianbar, would appear to have been the catalyst which led to the husband moving to live in the self contained flat at the rear of the main residence.
In examining the financial aspects of the relationship, the Tribunal notes that all major capital assets have been and continue to be, owned solely by the husband and that there is no intention by either party to alter such arrangements, with the wife content to accept that if her husband predeceases her, she will receive the house, irrespective of a will not being in existence. This would seem to infer, in the Tribunal's view, the continuance of a relationship which has been formed, nurtured and moulded over many decades, or perhaps more deliberately stated a mutual intention not to disturb what common understandings exist between the two Applicants.
Similarly, the Tribunal draws similar inferences from other aspects of the financial affairs of the two Applicants. It is evident to the Tribunal that each Applicant has, since their respective retirement and probably before, managed their own earnings, pensions and investments separately, with understandings accepted between the Applicants as to who is to pay for the weekly outgoings and general maintenance. The fact that there was a joint account simply reflects, in the Tribunal's view, the necessity to have one in view of the husband's blindness. The Tribunal accepts there is a current desire by both Applicants to pay their way, but SRDDD is unable to do so by virtue of her age pension reduction (apart from her $40 a week contribution since early 2001). There remains in the Tribunal's view a long history of the Applicants maintaining financial independence and a construction of their individual and common assets, including property, in a particular fashion, and again the Tribunal observes no real variation in such arrangements altering as a consequence of their changed accommodation. Similarly, the Tribunal, while noting that apart from the $40 weekly contribution by SRDDD since early 2001 towards living expenses, there have been no other changes in legal obligations to each other, nor has there been a significant change in the sharing of day-to-day expenses, car and house maintenance costs and general utility expenses, despite SRDDD's access to a carer's pension and her own funds.
In addressing issues of the nature of the household, the significant change is the relocation of the husband to the self contained flat, where he indeed can carry on a relatively independent existence under the supervision of a carer. Nevertheless, the Tribunal concludes that apart from his independent sleeping, the ability to undertake his tape activities and the ability to live independently as far as his disabilities will permit, the remainder of the household arrangements remain unaltered with the wife as carer continuing to undertake a mixture of caring and "concerned" activities for her husband.
In analysing the social aspects of the relationships, the Applicants state that they have told their two sons and some close friends about the change in their relationship, and particularly that SRCCC is residing in the flat. However, it is obvious to the Tribunal, having listened to their evidence, that they still enjoy the friendship and companionship of each other and that much of the difficulties earlier experienced have dissipated with the change in domestic arrangements and that they continue to hold themselves out as a married couple in particular circumstances (the local doctor etc). Further, on the evidence of the Applicants, there appears to be no significant change in which the two Applicants together join in social activities, albeit less by virtue of age.
The Tribunal has already alluded to the context in which this matter is to be addressed. When the Applicants have had a relationship extending over sixty years, this relationship, for its survival, will have adapted to tensions, to difficulties and experiences. Its continuance is a measure of the adaptations successfully undertaken and throughout, the Applicants have continued to enjoy a mutual appreciation of each other's personal characteristics. Companionship and friendship are elements of this continuing relationship between the Applicants. This relationship has been exposed to the difficulties of age and increasing disability, and again adaptations by the two Applicants have been made. However, essentially, in the Tribunal's view, the basics of the relationship remain unaltered and the Applicants, despite their separate residences, maintain a relationship where care and caring for each other remains absolute. They have no intention of disturbing that relationship, nor would it appear that they have worked through the situation where one is not available to be carer or companion for the other.
As a consequence of the considerations detailed in this decision, the Tribunal concludes that the Applicants are members of a couple, in that, while they have separate living accommodation, which is permissive of both relative independence and particular space to undertake personal activities, they wish to continue to enjoy a relationship of caring companionship and friendship for as long as they are able and in circumstances which assist in allowing such to occur. In essence, the Tribunal concludes that, apart from the separate accommodation, there has been little change in the underlying circumstances of the relationship. In noting that the relevant distance between the two separate accommodations is a matter of some few metres, the Tribunal finds that the two Applicants are not living separately and apart from each other on a permanent or indefinite basis.
In addressing section 24(1) of the Act, the Tribunal has already noted that SRCCC is blind and has increasing deafness. It is clear to the Tribunal that behavioural characteristic of SRCCC led to circumstances whereby he occupied the diningroom at various times of the day and nights playing and recording book tapes at loud volumes which caused particular stress and tension to SRDDD. The Tribunal has no difficulty in accepting that the change in accommodation for SRCCC to the self contained flat was a necessary change if SRDDD health was not to deteriorate. Certainly there is significant evidence to suggest that each Applicant required some independence of space if SRDDD's health was to improve, and if a relationship of longstanding, strained by such activities, was not to deteriorate further.
In considering all the circumstances in this matter, including the age of the Applicants, and in particular the nature of SRCCC's disabilities, including blindness and increasing deafness, the Tribunal does conclude that there is a valid reason for the two Applicant's to live in separate accommodation, and albeit continue in a relationship that has been nurtured over 60 years. That they are living in separate accommodation, albeit on the same block of land, does, in the Tribunal's view, create some added costs. However, these costs are marginal, for in essence, most of SRCCC's activities are transferred activities from the main house and as such costs associated with these activities will also be transferred. Similarly, activities associated with SRDDD's role as a carer, and for which she receives a carer's pension, will remain of a similar magnitude. The Tribunal, as a consequence, is unable to discern any significant financial detriment arising, and, as such, cannot find evidence of unfairness, if both Applicants are assessed as members of a couple for pension purposes.
The Tribunal, following a review of the consideration outlined, considers that the circumstances in this matter do not constitute a special reason which would allow the Applicants not to be treated as members of a couple for the purposes of the Act.
determination
The Tribunal determines that the decision under review be affirmed.
I certify that the 44 preceding paragraphs are a true copy of the reasons for the decision herein of Dr J D Campbell, Member
Signed: R Quinn     .....................................................................................
  Associate
Date/s of Hearing  23 July 2001
Date of Decision  20 November 2001
Solicitor for the Applicant         Ms S Koller
Solicitor for the Respondent    Mr B Slattery

[2001] AATA 954

20 November 2001

Key Legal Topics

Areas of Law

Social Security Law

Legal Concepts

Contract Formation

Unconscionable Conduct

Pension Assessment

Living Arrangements

Special Reason