STOCKS And REPATRIATION COMMISSION
[2003] AATA 572
•19 May 2003
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2003] AATA 572
ADMINISTRATIVE APPEALS TRIBUNAL Nº V2002/1231
VETERANS' APPEALS DIVISION
Re: KEVIN STOCKS
Applicant
And: REPATRIATION COMMISSION
Respondent
DECISION
Tribunal: M.J. Carstairs, Member
Date: 19 May 2003
Place: Melbourne
Decision:For reasons given orally at the hearing, the Tribunal affirms the decision under review.
(sgd) M.J. Carstairs
Member
VETERANS' AFFAIRS ‑ rent assistance ‑ whether ineligible property owner
Veterans' Entitlements Act 1986 ss5L, 5N, 36N, Schedule 6
Transfer of Land Act 1958 s74
REASONS FOR DECISION
19 May 2003 M.J. Carstairs, Member
1. This is an application by Kevin John Stocks (the applicant) for review of a decision made by a senior delegate of the Repatriation Commission (the respondent) on 4 October 2002. That decision affirmed the decision made by the respondent on 30 July 2002 to refuse the applicant's claim for rent assistance on the basis that he was a property owner.
2. At the hearing the applicant represented himself. Mr G. Purcell, of counsel represented the respondent.
3. The Tribunal received into evidence the documents lodged under s37 of the Administrative Appeals Tribunal Act 1975 (T1 ‑ T8).
BACKGROUND
4. The applicant is a married service pensioner who lives with his wife, Dorothy Joyce Stocks in Blackburn South. Their house is mortgaged to the Bank of Melbourne.
5. On 19 July 2002 the applicant wrote to the respondent stating that as a mortgagor he considered he was penalised under the Veterans' Entitlements Act 1986 (the Act) compared with a person who paid rent. The respondent treated this as a claim for rent assistance. A decision was made on 30 July 2002 that the applicant could not be paid rent assistance and that he was not entitled to any other payments available under the Act that could compensate for the mortgage interest paid by him.
6. The applicant sought review of this decision and on 4 October 2002 a senior delegate affirmed the decision that the applicant was an ineligible property owner and therefore not entitled to rent assistance in accordance with the Act. The applicant then sought review with this Tribunal on 12 November 2002.
EVIDENCE
7. The applicant told the Tribunal that he and his wife moved to the residence at Blackburn South some four years ago. He said that his wife is the registered owner but the mortgage is in both names. The applicant said that he and his wife pay $220 per month in interest. He said that it is unfair that the calculation of his pension is not adjusted according to the consumer price index (CPI) and does not take into account interest on mortgage repayments.
8. The applicant stated that he had not applied for rent assistance. He said that he had sought to make the point that some payment or assistance should be available under the Act, as the payment of rent and the repayment of a home loan are analogous, in that they are both part of occupancy expenses.
CONSIDERATION OF THE ISSUES
9. No factual matters were in dispute between the parties.
10. Section 36N of the Act provides that the rate of pension is to be assessed in accordance with the Rate Calculator in Schedule 6 of the Act. Module C of Schedule 6 deals specifically with rent assistance. SCH6‑C2 allows rent assistance to be added to the maximum basic rate of service pension, provided that the person is eligible.
11. The criteria that must be satisfied in order to be eligible for rent assistance are provided in SCH6‑C3:
SCH6-C3 Rent assistance is to be added to a person’s maximum basic rate if:
…; and
(b) the person is not an ineligible property owner; and
(c) the person pays, or is liable to pay, rent (other than Government rent); and
…
Section 5N(1) of the Act defines ineligible property owner as a property owner ‑ other than named exceptions. Section 5L(4) of the Act then defines a property owner as:
5L(4) …
(a) a person who is not a member of a couple is a property owner if:
(i)the person has a right or interest in the person’s principal home; and
(ii)the person’s right or interest in the home gives the person reasonable security of tenure in the home; …
12. Reasonable security of tenure is defined in s5L as:
5L(8) If a person has a right or interest in the person’s principal home, the person is to be taken to have a right or interest that gives the person reasonable security of tenure in the home unless the Commission is satisfied that the right or interest does not give the person reasonable security of tenure in the home.
13. The applicant submitted that equity allowed relief for the unfairness of statute law. He submitted that due to the existence of a mortgage over the property the mortgagee was placed in the position of owner, and able to sell in the case of default on the mortgage. The applicant submitted therefore that interest paid on a mortgage and rent were similar in that each was paid in respect of occupancy expenses.
14. The applicant had earlier submitted that he was not applying for rent assistance (T1 p1 of documents). He submitted that given the similar nature of rent and home loans, the assistance offered to rent payers should also be offered to those with home loans.
15. The respondent submitted that the interest paid by the applicant on his line of credit is not payable as a condition of occupancy of the premises. The respondent submitted that it was more appropriately characterised as an amount paid for the use of the principal of the loan, regardless of what the loan was used to purchase. Mr Purcell submitted that under the Torrens system the mortgagor remained as legal owner: s74 of the Transfer of Land Act 1958. The instrument of mortgage takes effect as a security and does not operate as a transfer of the land charged: E.I Sykes and S. Walker, The Law of Securities, 5th edition, The Law Book Company Limited, 1993.
16. Mr Purcell said that in order to assess eligibility for rent assistance, a legislative sequence must be followed. Section 36N of the Act refers to the Rate Calculator in Schedule 6 of the Act. In Schedule 6 it is provided that rent is only payable if a person is not an ineligible property owner as defined in S5N of the Act. Another requirement of the Schedule is that the person pays rent: SCH6-C3(c). Mr Purcell submitted is a term defined in s5N(2) of the Act as being an amount paid as a condition of occupancy of the premises as the principal home.
17. The Tribunal reached it decision after considering the evidence and submissions made at the hearing, as well as the authorities to which the respondent referred. The Tribunal takes into account the applicant's acknowledgment that his earlier argument, that a mortgagee has an interest in the land subject to the mortgage, may have been based on general property law and he accepted that Mr Purcell correctly stated the position under the Torrens system.
18. The Tribunal makes the following findings. The applicant and his wife are property owners within the meaning of s5L of the Act. They satisfy the definition of a property owner in s5L(4) of the Act as they have rights or interests in their principal home as they hold the legal title to it, and they have reasonable security of tenure. They are not paying rent within the meaning of s5N(2) of the Act, as the amount that is paid as interest on the line of credit is not a condition of occupancy of the home. The definition of rent in the Act is found at s5N of the Act:
5N(2) Amounts are rent in relation to the person if:
(a) the amounts are payable by the person:
(i)as a condition of occupancy of premises, or of a part of premises…
19. The Tribunal accepts the submission of the respondent that the interest paid is a condition of securing the money advanced to them. On this basis they are not eligible for rent assistance in accordance with SCH6-C3(c) of the Act.
20. As to any other basis on which the applicant could receive assistance under the Act, the answer is clearly no. There is no basis under the Act for the interest paid in this situation to be taken into account when calculating the rate of pension. For purposes of assets testing, securities or charges on a person’s principal place of residence are excluded in accordance with ss52 and 52C of the Act. There is no provision that allows the outgoings of this kind to be set off, as they are personal and not business in nature.
DECISION
21. The Tribunal affirms the decision under review.
I certify that the twenty-one [21] preceding paragraphs are a true copy of the reasons for the decision herein of
M.J. Carstairs, Member
(sgd) Olympia Sarrinikolaou
Clerk
Date of Hearing: 19 May 2003
Date of Decision: 19 May 2003
Solicitor for the applicant: NIL – self‑represented
Counsel for the respondent: Mr G. Purcell, Department of Veterans’ Affairs
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