Swaminatha and Anor and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs
[2008] AATA 712
•14 August 2008
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2008] AATA 712
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2007/4250
No 2007/4248
GENERAL ADMINISTRATIVE DIVISION ) Re BANGARUSWAMY SWAMINATHA First Applicant
Re PATTAMMAL SWAMINATHAN BANGARUSWAMY Second Applicant
And
SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES & INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal Ms Robin Hunt, Senior Member Date14 August 2008
Place Sydney
Decision The decision under review is affirmed. ...................[Sgd]....................
Ms Robin Hunt
Senior Member
CATCHWORDS
SOCIAL SECURITY – claim for special benefit – discretion for grant of special benefit – no social security pension or other benefit payable – application of policy – long term available funds test – non liquid assets could reasonably be realised – decision under review affirmed.
Social Security Act 1991 (Cth) ss 11(1), 11A(9), 729(1) and (2)
Guide to Social Security Law paras 3.7.1.10, 3.7.1.30, 3.7.1.70
Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634
Re Jatan and Secretary, Department of Families, Community Services and Indigenous Affairs [2006] AATA 229
Re Myddleton and Secretary, Department of Family and Community Services [2001] AATA 2
Secretary, Department of Social Security v Secara (1998) 89 FCR 151
REASONS FOR DECISION
14 August 2008 Ms Robin Hunt, Senior Member summary
1. Mr Swaminatha and his wife, Mrs Bangaruswamy, applied for payment of special benefit. The background facts were not in dispute, only whether the applicants should be paid special benefit. The applicants came from India to live in Australia in 1999 and were granted permanent residence visas in 2004. Mr Swaminatha is aged 72 and Mrs Bangaruswamy is aged 69. Mr Swaminatha worked in India as a scientist until the late 1980s, and receives an Indian pension which is less than the Australian age pension and insufficient for the couple to be able to live on independently in Australia. Mr Swaminatha told the tribunal that he has tried to find work in Australia but has been unsuccessful. The couple has four adult children, three of whom live in Australia. One daughter, her husband and their children continue to live in Chennai, India, in a house owned by Mr Swaminatha.
2. The applicants were living with one of their daughters in Australia during the two years they were subject to an assurance of support. After the expiration of two years, Mr Swaminatha and Mrs Bangaruswamy received payment of special benefit in Australia for a time until Centrelink cancelled payments. Centrelink cancelled payments after the applicants provided information about real estate properties Mr Swaminatha owns in India. The Social Security Appeals Tribunal (‘the SSAT’) affirmed the decisions of authorised review officers that Centrelink acted correctly in cancelling special benefit to the applicants and in refusing to backdate their special benefits
decision
3. After hearing the applicants’ evidence and considering whether discretion should be exercised in their favour, I have affirmed the decisions that neither applicant qualifies for payment of special benefit and that it should not be paid. This further means no such payments should be backdated. My reasons are set out below.
issue
4. The main issue before me is whether I should exercise the legislative discretion to grant special benefit to Mr Swaminatha and Mrs Bangaruswamy pursuant to section 729 of the Social Security Act 1991 (‘the Act’).
consideration
5. The applicants immigrated to Australia on 24 June 1999 and were granted permanent residency visas on 1 September 2004. Initially, they were subject to an assurance of support for two years, which ended on 31 August 2006. They were also subject to a newly arrived residents’ waiting period of 104 weeks, which ended on 27 October 2006.
6. The respondent’s records show the applicants contacted Centrelink on several occasions. The applicants made contact with Centrelink on 28 August 2006 to investigate claiming an appropriate social security payment. Again, on 18 January 2007, the applicants contacted Centrelink to enquire about claiming special benefit. They made further contact on 9 February 2007 and, on 23 February 2007, lodged a special benefit claim form together with an income and investments form with some information which they supplied in that form. On 23 February 2007 the applicants were granted special benefit and were paid from 9 February 2007. On 17 April 2007, the applicants requested a review of the decision to grant special benefit from 9 February 2007, requesting backdating to 1 September 2006. This question involves establishing the correct start date but I note that the correct date will only become relevant if I decide to exercise discretion in favour of the applicants.
7. Qualification for special benefit tests are set out in section 729 of the Act. In addition, paragraph 3.7.1.70 of the Guide to Social Security Law (‘the Guide’) provides that there is a “long-term available funds test” for the special benefit. This is the test which has become a point of contention between the parties.
8. Subsection 729(1) simply provides that a person is qualified if the Secretary so decides in accordance with subsection (2). Subsection (2) states that the Secretary may determine that a special benefit should be granted to a person for a period if no social security pension and no other social security benefit is payable to the person for the period. Other subparagraphs provide a list of some possible circumstances, which the parties agree have no application in the present case. Subsection 729(2) paragraph (e) has some bearing as it requires the Secretary to be satisfied that the person is unable to earn a sufficient livelihood. However, the main area of contention is the application of the long-term available funds test.
9. Although the tribunal is not bound to apply departmental policy inflexibly, it generally does make decisions reflecting policy unless there are cogent reasons not to do so. In Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634, Brendan J, sitting on the tribunal, held “….if the Tribunal applies ministerial policy, it is because of the assistance which the policy can furnish in arriving at the preferable decision in the circumstances of the case as they appear to the Tribunal”.
10. Both applicants satisfy the threshold or gateway requirement in subsection 729(2) in that they qualify for no other social security benefit or pension at the time of the reviewable decision and at present. The applicants further say that they are in need and that the special benefit is designed for people in their circumstances. They have furnished bank statements for accounts in India and in Australia and these indicate that the slender funds previously in those accounts are steadily dwindling. I accept that they do not presently have sufficient funds available to support themselves without some form of assistance. I also accept that the applicants are unable to work. Mr Swaminatha has sought work unsuccessfully and Mrs Bangaruswamy gave evidence that she had never worked. It would be unreasonable for me to find that they could earn a living through personal exertion.
11. The stumbling block to their qualifying for special benefit is that Mr Swaminatha owns real estate in India. Mr Swaminatha has openly declared that he owns property. He says he owns a derelict house and land, an ancestral house, in a rural part of India and a three bedroom house in Chennai. Mr Swaminatha estimates that his “ancestral house” and land may be worth $15,000 but he and his wife say that he cannot realise the property as it is ancestral and that means their son has an interest in the property. They also say it is not a desirable property and I accept that it may be difficult to sell as it is in a remote location and the roof has fallen down.
12. The Chennai house is a different proposition. Mr Swaminatha said it is a 3 bedroom house. Both applicants told the tribunal that they regarded the Chennai house as their home although they are living in Australia and seeking an Australian benefit. They also gave evidence that their daughter lives in the house rent free with her husband and two teenage children who are still studying. In addition, Mr Swaminatha gave evidence that the funds in his Indian bank accounts were needed for maintenance of the Chennai house and to pay associated expenses such as rates and utility accounts. Their daughter is a joint holder of one of the Indian bank accounts and has access to the applicants’ funds in other accounts.
13. When asked why he did not seek some contribution from his daughter to the maintenance of the house and for payment for related expenses, Mr Swaminatha gave evidence to the effect that this was unthinkable due to custom as well as being his responsibility because it was his house. He and his wife added that they stayed in this house when they visited India. Mrs Bangaruswamy also told the tribunal that they could not ask their daughter to contribute to the expense of keeping the house or to pay rent. Both applicants rejected this approach..
14. The applicants say that they are indebted to their son with whom they live in Australia and that their debt to him is growing as they have no income. When it was put to Mr Swaminatha that he was taking a different view about his obligation to his son with whom he was living in Australia, from the arrangement with his daughter in India, Mr Swaminatha said that things were different in Australia and that his son needed financial assistance. Mr Swaminatha also gave evidence that he and his wife had been living with one of their Australian daughters until they decided to move in with their son once their new migrant waiting period had expired. Mr Swaminatha and Mrs Bangaruswamy gave further oral evidence that the arrangement with their son was no different from the previous arrangement with their daughter, although neither applicant suggested they had a debt to this Australian daughter.
15. I accept the evidence of the applicants that the son with whom they presently live is not in a financial position to provide the applicants with their financial needs. On balance, I do not make a finding that the applicants owe the debt to their son, which they claim, as their living arrangement with him is not one demonstrated by any formality but is more in the nature of a family or social arrangement. This does not detract, however, from the applicants’ argument that they require financial assistance to be able to continue to live in this arrangement.
16. In order to decide whether to exercise discretion as the applicants’ request, I have had regard to all the circumstances. The policy guidelines assist and I see no good reason not to apply them in this case. The long-term available funds tests mentioned above are primarily about liquid funds but are still pertinent to the applicants’ situation. Where a person has more than $5,000, the Guide at paragraph 3.7.1.70 says the benefit is not payable regardless of the number of dependents. The applicants’ liquid funds currently fall below this amount and may already have done so at the date of application and at the date to which they seek backdating, 1 September 2006. Bank statements furnished do not date back to September 2006. However, even if liquid assets fell below $5,000 in September 2006, the guidelines do not say that the benefit is automatically payable to a holder of funds below this threshold. The guidelines go on to read:
When applying the long-term available funds test, the value of non-liquid assets that could reasonably be realised should be included in the customer’s available funds.
17. In the example given below this line in the Guide, it notes that a person whose available funds have been reduced when presenting a new claim, must not have deliberately placed himself in hardship. I also note that the last sentence of paragraph 3.7.1.10 explains, in the context of persons who persevere with an unprofitable venture or the like, that these persons are considered to have control over their circumstances, and therefore should not be granted the benefit. In my opinion, Mr Swaminatha has placed himself in a similar situation by continuing to bear all the expenses of his house in Chennai while it is occupied by his adult daughter, her husband and their children. He has chosen not to share the expense of keeping the house while providing a generous benefit to his daughter and her family.
18. Mr Swaminatha gave evidence that his son-in-law has a government job but that he could not ask the family for any contribution to the upkeep and running of the house in which they have been living for the last 13 years. Not only this, but Mr Swaminatha has allowed his Indian bank accounts to be used to fund his daughter’s living expenses so far as utilities and the like are provided to the household.
19. Subsection 11(1) of the Act defines both “asset” and “unrealisable asset”. For the purposes of the Act, an asset may be unrealisable if the person could not reasonably be expected to sell or realise the asset. The Chennai house is an asset belonging to Mr Swaminatha and he argues that it is unrealisable. Mr Swaminatha says it is worth $175,000. Counsel for the applicants argued that it was unreasonable to require Mr Swaminatha to sell the house as his daughter had been living there for 13 years. Mr Swaminatha further gave evidence that he could not sell it as it was his home and the home of his daughter and her family.
20. I accept that his daughter and her family may well have an expectation that they can continue to live in this way indefinitely. Mr Swaminatha also said he could not borrow against this asset as he had no income. I accept that this may well be correct although some lenders agree to defer repayments and there is no evidence before me to substantiate the applicants’ claims that they cannot borrow against the Chennai house. I also note that the applicants argued before the SSAT that the house was their principal home and that they should not be required to sell it for this reason. As to this last contention, I agree with the SSAT that the house cannot be considered their principal residence in accordance with subsection 11A(9) of the Act as they have lived in Australia since 1999 and paid only a visit to the Chennai house since that time. According to the material before me, a visit to India occurred in 2004/5. If the applicants consider the Chennai house their home and want it to be available to them when they are in India, this wish is perfectly reasonable but the house is nevertheless an asset which must be taken into account when deciding if the applicants are entitled to special benefit payments.
21. In order to pay for living expenses in Australia, another option available to the applicants might be to place the house on the rental market. However, this should not be necessary if the present occupants agree to assist with the expenses of maintaining and utilising services attached to the house.
22. As the Guide points out in paragraph 3.7.1.30, where a person claiming special benefit has an insufficient livelihood, he or she must demonstrate they are unable to obtain such a livelihood. The explanation in the guidelines points out that some people who cannot attract wages may still attract sufficient income from other sources. In my view, realisation of the asset which is the Chennai house could take the form of requesting some contribution to the costs of maintaining and running the house. From the evidence of Mr Swaminatha, I am satisfied that this would not be an undue financial burden on the daughter and her husband, who has a job and who, Mr Swaminatha said, looks after his family. This means that the applicants are not completely unable to find a means of funding their living expenses when living in Australia. As a result, they should not be paid special benefit. This finding in my opinion is consistent with the view that special benefit is a discretionary payment of last resort where other means of support are not available: Re Jatan and Secretary, Department of Families, Community Services and Indigenous Affairs [2006] AATA 229; Re Myddleton and Secretary, Department of Family and Community Services [2001] AATA 2; Secretary, Department of Social Security v Secara (1998) 89 FCR 151.
23. It was put to me that Mrs Bangaruswamy was in a different situation from her husband as she owns neither of his houses and has no assets. It was further suggested that she has no means of support. In my view, while Mrs Bangaruswamy has no independent means of support and no assets, she is a member of a couple and there is no suggestion she has not been supported by her husband at all times until recently when he became short of funds. Mrs Bangaruswamy gave evidence that the Chennai house was her home even though she had no title to the property. In my view, if her husband is able to realise one of his assets, it is reasonable to expect that Mrs Bangaruswamy will benefit from the realisation as his wife.
24. I further note that the period of disadvantage for the couple may improve once they have satisfied residency tests and waiting periods for some other form of social security assistance, bearing in mind they told the tribunal they have been living in Australia since 1999 and were granted permanent residence visas in 2004. It may be that they qualify for some other payment in the not too distant future.
conclusion
25. I am satisfied from the evidence that the circumstances of Mr Swaminatha and Mrs Bangaruswamy do not meet the policy tests for exercise of discretion to grant them special benefit pursuant to section 729 of the Act. The decision under review must be affirmed.
decision
26. The decision under review is affirmed.
I certify that the 26 preceding paragraphs are a true copy of the reasons for the decision herein of Ms Robin Hunt, Senior Member
Signed: ..........................[Sgd]...........................
Jennifer Wong, AssociateDate/s of Hearing 24 July 2008
Date of Decision 14 August 2008
Counsel for the Applicants Ms K Sant
Solicitor for the Applicants LAC Lawyers Pty Ltd
Counsel for the Respondent Mr G Kennett
Solicitor for the Respondent Australian Government Solicitor
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