Stewart and Secretary, Department of Education, Employment and Workplace Relations

[2011] AATA 635

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2011] AATA 635

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2011/1997

GENERAL ADMINISTRATIVE  DIVISION		)
Re		MAIJA STEWART

Applicant

And SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal Dr P McDermott, RFD, Senior Member

Date9 September 2011

PlaceBrisbane

Decision The Tribunal affirms the decision under review.

................[Sgd].................

Senior Member

CATCHWORDS

SOCIAL SECURITY – Newstart allowance – Assets test – Principal home – Residence of applicant and husband not principal home for purposes of the Act – Value of residence included in asset calculation – Assets exceed asset value limit – Applicant not entitled to payment of newstart allowance – Decision under review affirmed

Social Security Act 1991 (Cth) s 11, 11A, 611, 1118

Social Security (Administration) Act 1999 (Cth) s 13

REASONS FOR DECISION

9 September 2011 Dr P McDermott, RFD, Senior Member  

INTRODUCTION

1.      I have to decide whether Mrs Maija Stewart (“the applicant”) is entitled to newstart allowance. She has an interest in a property in Brisbane and I have to decide whether her interest in that property is an assessable asset for the purposes of newstart allowance.

BACKGROUND

2.      The applicant and her husband own a property in Brisbane, which she has valued at $350,000. The property is not encumbered. Since June 2005 the couple have lived in a property at Bargara, which is owned by their son. There is material which suggests that their son lives in the Brisbane property and the property has not been rented.

3.      The applicant and her husband have additional assets. These include money in bank accounts and a term deposit which, at 29 November 2010, totalled $239,339.89. Their assets also include a motor vehicle and household contents valued at $11,000.

4.      The applicant’s husband does not receive a social security payment.

5.      On 29 November 2010 the applicant contacted Centrelink to advise them of her intention to claim newstart allowance. She lodged a completed claim form for newstart allowance on 10 December 2010.

PRIOR DECISIONS

6.      On 10 December 2010, Centrelink made a decision to reject the claim on the ground that her assets exceeded the asset value limit at which the newstart allowance ceases to be payable. The applicant sought internal review of the decision. On 14 February 2011 the decision was affirmed by an authorised review officer.

7.      On 22 February 2011 the applicant lodged an application with the Social Security Appeals Tribunal (“the SSAT”) for review of the decision. On 29 April 2011, the SSAT affirmed the decision.

8.      On 24 May 2011 the applicant lodged an application to this Tribunal for review of the decision.

ISSUES

9.      The issues for me to determine are as follows:

·     Whether the applicant’s property in Brisbane is an assessable asset for the purposes of newstart allowance; and

·     Whether the combined assessable assets of the applicant and her husband exceed the newstart allowance assets test limit.

RELEVANT LEGISLATION

10.     In determining this application, the relevant legislation to be considered is the Social Security Act 1991 (Cth) (“the Act”).

11. Section 611 of the Act provides as follows:

611Assets test--allowance not payable if assets value limit exceeded [see Appendix for CPI adjusted figures]

(1)A newstart allowance is not payable to a person if the value of the person's assets is more than the person's assets value limit.

(2)A person's assets value limit is worked out using the following table: work out which family situation applies to the person; the assets value limit is the corresponding amount in the assets value limit column.

Assets value limit table
Column 1	Column 2	Column 3 Assets value limit
Item	Person's family situation	Column 3A Either person or partner homeowner	Column 3B Neither person nor partner homeowner
2.	Partnered partner getting neither pension nor allowance)	$157,500	$237,000

12. Essentially, s 611(1) of the Act provides that once a person’s assets exceed the asset value limit, newstart allowance is not payable. The person’s asset value limit is provided for by the assets value limit table in s 611(2) of the Act. This table provides that the asset value limit of a partnered person who is not regarded as a “homeowner” is $237,000; however, this amount is indexed. As at 29 November 2010[1] the asset value limit for a partnered person who is not regarded as a “homeowner” is $389,500.

[1] Social Security (Administration) Act 1999 (Cth) s 13.

13. An assessable asset, for the purposes of social security law, is defined in s 11 of the Act, which provides:

11       Assets test definitions 

…

"asset" means property or money (including property or money outside Australia);

…

"principal home" has the meaning given by section 11A.

14. A definition of “principal home” is contained in s 11A of the Act, which provides:

11A     Principal home definition for the purpose of the assets test

…

(9)A residence of a person is to be taken to continue to be the person's principal home during:

(a)any period (not exceeding 12 months or any longer period determined under subsection (9A)) during which the person is temporarily absent from the residence; and       

…

(9A)For the purposes of paragraph (9)(a), the Secretary may determine, in writing, a period of up to 24 months if:

(a)a person's principal home is lost or damaged (including, for example, by a natural disaster); and

(b)       the loss or damage was not wilfully caused by the person; and

(c)the person is making reasonable attempts, as a result of the loss or damage, to:

(i)        rebuild or repair the principal home; or

(ii)sell the principal home in order to purchase or build another residence that is to be the person's principal home; or

(iii)purchase or build another residence that is to be the person's principal home; and

(d)the person has made those attempts within a reasonable period after the loss or damage; and

(e)       the person has experienced delays beyond his or her control in:

(i)        rebuilding, repairing or selling the principal home; or

(ii)       purchasing or building the other residence.

…

15. A person’s principal home is not normally considered an assessable asset pursuant to s 1118(1) of the Act.

1118Certain assets to be disregarded in calculating the value of a person's assets

(1)In calculating the value of a person's assets for the purposes of this Act (other than sections 198F to 198MA (inclusive), Division 1B of Part 3.10, Division 2 and sections 1133 and 1135A), disregard the following:

(a)if the person is not a member of a couple--the value of any right or interest of the person in the person's principal home that is a right or interest that gives the person reasonable security of tenure in the home;

(b)if the person is a member of a couple--the value of any right or interest of the person in one residence that is the principal home of the person, of the person's partner or of both of them that is a right or interest that gives the person or the person's partner reasonable security of tenure in the home.

…

16. For the sake of completeness, it should be pointed out that s 1118(1)(f) of the Act also provides that certain additional assets can be disregarded for the purposes of the assets test. That section, in part, provides:

1118Certain assets to be disregarded in calculating the value of a person's assets

(1)In calculating the value of a person’s assets for the purposes of this Act (other than sections 198F to 198MA (inclusive), Division 1B of Part 3.10, Division 2 and sections 1133 and 1135A), disregard the following:

…

(f)       the value of the person's investment in:

(i)a superannuation fund; or

(ii)an approved deposit fund; or

(iii)a deferred annuity; or

(iv)an ATO small superannuation account;

until the person:

(v)reaches pension age; or

(vi)starts to receive a pension or annuity out of the fund;

…

CONSIDERATION

17. The first issue that I have to determine is whether the property of the applicant in Brisbane can be regarded as a “principal home” under s 11A of the Act, in order to determine whether it is an assessable asset. In these reasons, which are a matter of public record, it is not necessary for me to disclose the location of the property.

18.     In her statement that was tendered at the hearing, the applicant remarked that she and her husband had lived at the Brisbane residence for the majority of their married life (from 1972 – 2005) and have raised their family in that dwelling. The couple do not own any other real estate.

19.     In June 2005, the applicant accepted an employment opportunity in Bundaberg, and she and her husband moved into their son’s unoccupied house in Bargara. Between June 2005 and April 2008 the applicant and her husband travelled to Brisbane every fortnight, for stays of up to three days, to attend to the needs of her mother. During those stays in Brisbane, they resided in their Brisbane residence with their son. The applicant and her husband also spent regular periods of time at the Brisbane residence for the purposes of maintaining and cleaning the property.

20.     In April 2008, it was necessary for the applicant’s mother to move to the Bargara residence until she was placed in full-time residential care in the Hervey Bay area, where she still lives.

21.     Since then, the applicant and her husband have lived in the Brisbane residence only on occasions when her husband has needed to attend Brisbane for medical treatment, or for maintenance of the property.

22.     In giving evidence, the applicant stated she wanted to be part of the local community and became a member of the local chamber of commerce. After one election she registered on the electoral roll as being a resident of Bargara. While there is no evidence before me as to when she was registered on the electoral roll, at the time of her application for newstart allowance she would have been registered on the electoral roll under the Bargara address for some years.

23.     In considering whether the Brisbane home is her “principal home,” I have examined the applicant’s customer declaration form that she completed as part of her application for newstart allowance. In that form she listed the Bargara property as being her home.[2]

[2] T-Document 6, Folio 41.

24. In these circumstances I rely upon the applicant’s statement in the customer declaration form, as well as the fact that she has listed her Bargara address on the electoral roll, to find that the Bargara property is the applicant’s home. Also, the applicant’s circumstances do not fall within the ambit of ss 11A(9) and (9A) of the Act. As such, I find the Brisbane property is not the principal home of the applicant.

25.     I accept the valuation of the Brisbane property at $350 000, which is the value placed on the home by the applicant. I accept her estimate of value as being one which she has honestly given. I further accept the applicant’s evidence that the property may have recently decreased in value, but I am required to value the Brisbane property as at the date of her application for newstart allowance.

26. Apart from the home in Brisbane, the applicant has other assets. It is not in issue that these assets (being a motor vehicle, household contents and other investments) are also assessable assets pursuant to s 1118 of the Act. I find that these assets are valued at $250,339.89. This is the value which has been advised by the applicant. I should also add that these assets are not exempt assets under s 1118(1)(f) of the Act.

27. I find that the value of the total assessable assets of the applicant as at 29 November 2010 amounted to some $600,339.89. This value is greatly in excess of the allowable threshold of $389,500 for newstart allowance to be payable pursuant to s 611(1) of the Act. In the circumstances the applicant is not entitled to newstart allowance.

28.     I wish to record that the applicant has made full disclosure of all of her assets to Centrelink.

DECISION

29.     I affirm the decision under review.

I certify that the 29 preceding paragraphs are a true copy of the reasons for the decision herein of Dr P McDermott, RFD, Senior Member

Signed: .......................[Sgd].............................................
                             Research Associate

Date/s of Hearing  24 August 2011
Date of Decision  9 September 2011
Applicant was self-represented
Solicitor for the Respondent     Rick McQuinlan