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

Trevillien and Secretary, Department of Social Services (Social services second review) [2018] AATA 2279 (18 July 2018)
Division:GENERAL DIVISION
File Number: 2017/2730
Re:Secretary, Department of Social Services
APPLICANT

AndPhillip Trevillien
RESPONDENT

DECISION
Tribunal:Mrs J C Kelly, Senior Member
Date:18 July 2018
Place:Sydney

The Tribunal sets aside the decision under review and substitutes a decision that:
(a) Mr Trevillien’s application for Newstart Allowance was correctly rejected on 28 October 2016 because his assets exceeded the allowable limit; and
(b) Mr Trevillien’s financial hardship claim was correctly rejected as he had access to funds at the relevant time which precluded him from satisfying the criteria for financial hardship under the Social Security Act 1991 (Cth).
.............................[sgd]...........................................
Mrs J C Kelly, Senior Member
CATCHWORDS
SOCIAL SECURITY – Newstart Allowance application rejected – assets test – realisable assets – whether financial hardship – principal home – subsequent granting of Newstart Allowance – frozen assets – decision under review set aside and substituted
LEGISLATION
Social Security Act 1991 (Cth) ss – 11(4), 11A, 11A(9), 11A(9A), 611(2), 1118(1)(a), 1118(1)(f)(i)
CASES
Dickeson and Secretary, Department of Social Security (1989) 18 ALD 58
MacNamara and Secretary, Department of Education, Employment and Workplace Relations [2012] AATA 40
Matula and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2009] AATA 993
REASONS FOR DECISION
Mrs J C Kelly, Senior Member
18 July 2018
BACKGROUND

This decision is about whether Mr Trevillien qualified for Newstart Allowance (NSA) on 13 October 2016. He was subsequently granted NSA on 16 December 2016. This decision is therefore relevant to whether or not Mr Trevillien was eligible for NSA for a period of about two months.
To decide whether Mr Trevillien qualified for NSA on 13 October 2016, the Tribunal has to decide two questions:
(a)Whether he satisfied the assets test for NSA on 13 October 2016; and
(b)If not, did he satisfy the financial hardship criteria for NSA?
The main asset in question is the property near Newcastle (the property) which Mr Trevillien purchased on 17 July 2000, around the time of his marriage. He has been the sole registered proprietor of the property from the date of purchase.
Mr Trevillien left the property on 20 December 2014 to go on holidays. He had taken leave and long service leave until 6 July 2015. On about 15 January 2015, he returned to find that he was locked out. He was served with court documents and attended court on 21 January 2015. His and his wife’s assets were frozen, with an amount being released to each for living purposes. Mr Trevillien says in his statement attached to his NSA application that the assets were frozen because he was accused of planning to leave the country with the proceeds from the sale of another property which was also in his name only (the Weston property). He says he was advised by his solicitor not to return to the property. There was no court order preventing him from doing so, although he told the Tribunal he believed that his wife would seek an apprehended violence order if he did return.
On 7 July 2015, Mr Trevillien became unemployed or “retired” as he stated in his handwritten statement that accompanied his NSA application.
Mr Trevillien and his wife were divorced on 17 March 2016.
On 11 October 2016, the Federal Circuit Court made consent orders concerning the matrimonial property of Mr Trevillien and his former wife. They included orders that:
·The wife vacate the property within three calendar months of 11 October 2016 and within that time withdraw the caveat on the property;
·$450,000 of the monies held by the wife’s solicitor be paid to the wife and the balance to Mr Trevillien;
·Superannuation entitlements were deemed to be in the possession of the person in whose name the account was held;
·The wife was to provide to Mr Trevillien all documents in relation to the Weston property.
On 13 October 2016, Mr Trevillien applied for NSA. He described his “Accommodation circumstances” as “No fixed address couch surfing” and provided as his home address, “NO FIXED ADDRESS, MAYFIELD, NSW, 2304 [sic]” and 15 January 2015 as the date he started living there.
In response to the question “Other reasons for being unable to work, look for work or study”, Mr Trevillien responded “Locked out of my home currently couch surfing”.
On 28 October 2016, Mr Trevillien’s NSA application was rejected “because the value of your assets are above the allowable limit”, which is relevantly $286,500.
On 3 November 2016, Mr Trevillien applied to Centrelink under the financial hardship rules requesting that the property be disregarded for the purposes of the assets test for NSA. He claimed in the application that “I was locked out of my home on 15/1/2015 and cannot regain access until 11/1/2017 due to court order 11/10/2016…”. He also claimed in that application form to have been homeless “due to court proceedings bought [sic] about by my wife … on 22/1/2015”. On 8 November 2016, the decision-maker found that he had more than $13,975 readily available funds because he was over 55 years of age and could access his superannuation.
Mr Trevillien applied for internal review of decisions refusing his NSA application and his application under the financial hardship rules. The Authorised Review Officer affirmed the decisions on 16 November 2016.
On 9 December 2016, Mr Trevillien’s former wife vacated the property and he moved in.
Mr Trevillien was granted NSA on 16 December 2016.
On 13 April 2017, the Social Services & Child Support Division of this Tribunal (AAT1) decided that Mr Trevillien did not satisfy the assets test when he applied for NSA on 13 October 2016 but did satisfy the financial hardship rules for NSA.
AAT1’s reasons for the latter finding were that the following assets were unrealisable assets for the purpose of the financial hardship rules:
·The property;
·Money held in a solicitor’s trust account in relation to the matrimonial proceedings; and
·Mr Trevillien’s two superannuation accounts
Mr Trevillien’s assets and liabilities
When Mr Trevillien applied for NSA on 13 October 2016, the following were his assets as referred to in the Court order dated 11 October 2016:
·The property worth $615,000 solely owned by Mr Trevillien but subject to a caveat lodged by his former wife;
·The balance of the frozen funds held by his former wife’s solicitor, after deducting her share of $450,000. Mr Trevillien claimed that the total of the frozen funds was $529,981. An undated bank statement which the Tribunal infers Mr Trevillien provided with his NSA application, shows a balance of $529,881.21. Therefore, the Tribunal finds that the balance due to him was approximately $80,000.
·$5,000 or less, being the balance of a different bank account to be paid to Mr Trevillien when it was closed;
·His share of household items listed in a document attached to the court order;
·Superannuation funds in his name.
For the purpose of the property court proceedings, an accountant assessed that Mr Trevillien had a capital gains tax debt of $475,340.64 resulting from the sale of the Weston property. Mr Trevillien told the Tribunal that he sold that property that he alone owned in December 2014 for $2.1 million and he had to account to the court for the proceeds of that sale.
One of Mr Trevillien’s superannuation accounts showed a balance of $546,201.49 as at 11 October 2016. His other superannuation account showed a balance of $57,004.19 on 13 October 2016.
A Commonwealth Bank statement showed account balances of $200.60 on 12 October 2016. A Westpac statement printed on 13 October 2016 showed a credit card debt of $6,719.18 and an account balance of $15.48.
Consideration
Investments in superannuation are to be disregarded for the purpose of calculating assets in relation to an NSA application.[1]
[1] s 1118(1)(f)(i) of the Social Security Act 1991 (Cth) (the Act).
The principal home of a person is exempt from the assets test.[2] The property was valued at $615,000 and Mr Trevillien was the sole owner. However, he had not lived there since 15 January 2015, that is, for about one year and nine months when he applied for NSA in October 2016.
[2] s 1118(1)(a) of the Act.
The Tribunal accepts that Mr Trevillien did not live at the property because of his marital dispute. It accepts that when he applied for NSA it was clear that he would be able to access the property within three months. In fact, Mr Trevillien returned to live there within two months of making the application. However, from January 2015 until the court order was made on 11 October 2016, it was not clear that Mr Trevillien would only be temporarily absent from the property. The court order may have required sale of the property.
“Homeowner” is defined in s 11(4) of the Act and “principal home” is defined in s 11A of the Act.
Section 11A(9) of the Act provides:
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.
Section 11A(9) goes on to provide for periods of absence of up to two years where a person has entered into a care situation or has been caring for someone else in another place. Section 11A(9A) allows the Secretary to determine in writing a longer period where the principal home has been lost or damaged, to allow for rebuilding or repair or repurchase of another property. On its face, the Tribunal does not consider that the legislation includes an exception for Mr Trevillien’s unfortunate circumstances.
The Applicant referred the Tribunal to a number of cases that have considered different factual circumstances when deciding whether a place was a principal home.
The Tribunal considers that the discussion of what is a home in Dickeson and Secretary, Department of Social Security (1989) 18 ALD 58 per SM Handley is useful:
In assessing the criteria of what constitutes a “home” a substantial degree of occupation is persuasive… whereas conversely occupation by occasional visiting is not… and living away from the family home in other premises causes the family home to no longer be the principal home… A “home” is likely to be a place where persons ordinarily eat, morning and night, and where they sleep, and in the case of adults have the characteristics of permanency… It is a concept of nature and “it is the place where the centre of gravity of one’s domestic life is to be found”… Where one chooses to live is relevant… and a reference to a “home” requires an affinity to its location and usage by the occupier… A home need not be a structure of four walls and a roof, but may be constituted by a caravan… or a campervan… or a yacht.
The Applicant referred to two cases where the Tribunal held that a particular property remained the person’s principal home despite absences.
Matula and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2009] AATA 993 provides a useful discussion about whether a home remains a “principal home” when residence in the home is disrupted by periods of absence. Mr Matula lived in a house on a rural property in Western New South Wales named “Rainville”. In June 1995 the Family Court ordered Mr Matula to vacate the property until further order. He returned to live at Rainville in May 1997. Notably, Mr Matula returned to Rainville on the following occasions: for over a week in November 1995 to work on the harvest; in December 1995 for a few days to meet with his wife and her solicitor for settlement discussions; and in September 1996 for about a week to vote in local government elections, inspect the property, and attend to various matters. When he did return to the property on those occasions, he stayed in his old room and had the run of the property.
The Tribunal also took into account that his move from Rainville was temporary and for an indeterminate period. It was always his intent to return there, although contingent on the outcome of the court proceedings. Mr Matula had a strong emotional attachment to the property, he maintained an association with the local community and he contributed 50% of all the expenses for Rainville. Mr Matula’s proprietary interest in the house was unchanged.
In MacNamara and Secretary, Department of Education, Employment and Workplace Relations [2012] AATA 40, Ms MacNamara moved to rented premises in Launceston from her home at St Helens (her home) to enable her daughters to attend a private school. She did not lease her home, retained much of the furniture and personal belongings there, paid the outgoings, and visited it approximately 35 times between 6 February 2010 and 16 April 2011 when she and her daughters returned to live there. They had returned to the St Helens home on most weekends and during school holidays during that period.
The Applicant argued that in those two cases the 12 month period specified in s 11A(9A) had been “reset” by the visits to the property and that those visits were not for the purpose of extending the exemption period under that section.
Mr Trevillien told the Tribunal that he collected mail occasionally from the letter box at the front of the property. His former wife would advise him there was mail there and he would tell her when he would collect it because he did not want to run into her. He looked at the property to see that it was maintained and went down both sides of the property when she was not there to check the condition of the property. He paid the insurance, rates and electricity until July 2015. He also said that his former wife paid rates for a little while and sometimes he paid the rates. She refused to pay the water rates and so he did. All his furniture and the majority of his personal effects were in the house. He had taken some personal effects and important papers before he went on holidays and put them in storage. Mr Trevillien said that it never occurred to him that he would not be able to go back to the property after he was locked out.
The Tribunal has taken into account Mr Trevillien’s emphasis on the fact that he was only absent from the property for two months, from 13 October 2016 to 9 December 2016, before he reoccupied it. He argued that was the relevant period under s 11A(9)(a) and that anything before his application date should be deemed to be irrelevant because Centrelink will only backdate any benefits from the date of the first application. He argued that Centrelink cannot pick and choose a date, and if they can, he sought to have his NSA payment backdated to 6 July 2015 when he finished work.
When he applied for NSA, it was clear from the court order that Mr Trevillien might reoccupy the property when his wife left within three months of the order, that is, before 11 January 2017. But when he applied, he had not lived at the property for 21 months.
As of the date of application, it might be concluded that Mr Trevillien had been temporarily absent from the property for 21 months but would be able to move back within three months.
The Tribunal considers that s 11A(9)(a) of the Act must give rise to a finding that when Mr Trevillien applied for NSA on 13 October 2016, the property was not his principal home because he had been absent from it for more than 12 months. As explained above, the longer period available under s 11(9A) is not relevant to Mr Trevillien’s circumstances.
The property was therefore properly taken into account as an asset and Mr Trevillien failed the assets test.
The financial hardship provisions
AAT1 was under the misapprehension that Mr Trevillien’s superannuation accounts were frozen pursuant to a court order when he applied for NSA on 13 October 2016. As set out above, the 11 October 2016 order made it clear that they were not frozen. He accepted during the hearing that he could have accessed those funds and therefore could not satisfy the financial hardship provisions.
The Tribunal notes Mr Trevillien’s capital gains debt calculated by the accountant and that there were potentially penalties the Australian Tax Office might impose. However, he had not lodged his taxation return for the relevant period when he applied for NSA. At the time of making the NSA application, no tax debt had been raised nor associated penalties imposed.
Mr Trevillien did not satisfy the financial hardship criteria.
DECISION
The Tribunal sets aside the decision under review, and substitutes the decision that:
(a)Mr Trevillien’s application for NSA was correctly rejected on 28 October 2016 because his assets exceeded the allowable limit; and
(b)Mr Trevillien’s financial hardship claim was correctly rejected on 8 November 2016 because he had access to funds at the relevant time which precluded him from satisfying the criteria for financial hardship under the Act.

I certify that the preceding 43 (forty-three) paragraphs are a true copy of the reasons for the decision herein of Mrs J C Kelly, Senior Member

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Associate
Dated: 18 July 2018

Date of hearing:

Date final submissions received:

1 December 2017

14 December 2017

Advocate for the Applicant:

Dr S Thompson, Department of Human Services

Respondent:

By telephone

[2018] AATA 2279

18 July 2018

Key Legal Topics

Areas of Law

Administrative Law

Statutory Interpretation

Legal Concepts

Judicial Review

Statutory Construction

Jurisdiction

Appeal

Procedural Fairness