Stojanovski and Secretary, Department of Social Services (Social services second review)

This matter concerned an appeal by the Applicants against the cancellation of their age pension by the Secretary of the Department of Social Services. The dispute centred on whether the value of an investment property owned by the Applicants should be reduced for the purposes of the assets test, due to a guarantee they had provided. The Administrative Appeals Tribunal was required to determine if this guarantee constituted a charge or encumbrance over the property that would reduce its assessable value.

The Tribunal considered whether the guarantee given by the Applicants in relation to the investment property was a charge or encumbrance for the purposes of the assets test. It also had to determine if, even if it were considered an encumbrance, it would preclude the property's full value from being counted towards the assets limit. The Tribunal's reasoning was guided by the principles established in a previous decision, *Smith*, concerning similar circumstances.

The Tribunal found that the guarantee provided by the Applicants was not a charge or encumbrance over the property. Furthermore, it held that even if it were considered an encumbrance, it was provided only as collateral security, which would prevent it from being offset against the property's value under section 1121(2)(a) of the relevant legislation. The Tribunal also noted that the borrowing for which the guarantee was given was for the benefit of third parties, not the Applicants themselves, further supporting the conclusion that the property's value should not be reduced. Consequently, the Tribunal affirmed the decision under review.