Vincenza Tripodi and Secretary, Department of Health and Ageing
[2013] AATA 65
[2013] AATA 65
Division GENERAL ADMINISTRATIVE DIVISION File Number
2012/2008
Re
Vincenza Tripodi
APPLICANT
And
Secretary, Department of Health and Ageing
RESPONDENT
DECISION
Tribunal Senior Member R W Dunne
Date 11 February 2013 Place Adelaide The Tribunal affirms the decision under review.
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Senior Member R W Dunne
CATCHWORDS
AGED CARE - "supported resident" - how to work out value of person's assets - net value of person's property - whether value of home can be disregarded - decision under review affirmed.
LEGISLATION
Aged Care Act 1997 (Cth) ss 44-5B, 44-10, 44-11
Residential Care Subsidy Principles 1997 ss 21.15(2), 21.15(3) and 21.15(4)
CASES
Murphy and Secretary, Department of Families, Community Services and Indigenous Affairs [2007] AATA 1947
REASONS FOR DECISION
Senior Member R W Dunne
11 February 2013
INTRODUCTION
Ms Vincenza Tripodi (“applicant”) is currently in residential aged care. She is the sole owner of the property situated at 16 Devonshire Avenue, Fulham Gardens, South Australia (“Former Home”). On 14 April 2011, a delegate of the respondent determined that the Former Home should be included in her assets for the assessment of her accommodation charges under the Aged Care Act 1997 (“AC Act”). Ms Tripodi’s daughter (Ms Daloisio) requested a review of the determination and on 30 March 2012 and again on 1 May 2012 the determination was affirmed. Ms Daloisio has requested a review of the determination by this Tribunal.
At the hearing, Ms Daloisio represented her mother and Mr C Visser (from the Department of Human Services Program Litigation and Review Branch) represented the respondent. I received into evidence the T documents lodged pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 (Exhibit R1).
ISSUE FOR THE TRIBUNAL
The issue for the Tribunal is whether, under the AC Act, the Former Home should be included as an assessable asset of the applicant or whether it can be disregarded.
LEGISLATION
The legislation relevant to this matter can be found in the AC Act and the Residential Care Subsidy Principles 1997 (“Principles”).
A person is a “supported resident” if they enter a residential care service as a permanent resident for the first time on or after 20 March 2008 and their assets at the time of entry are valued at or below a certain threshold ($102,544 as at 1 July 2011): s 44-5B of the AC Act.
Section 44-10(1) of the AC Act requires the value of a person’s assets to be worked out in accordance with the Principles. Part 6 of the Principles relevantly provides:
“21.15 Assets
…
(2)The value of a person’s assets is the net value of all of the person’s property, including property outside Australia.
(3)Property includes, but is not limited to:
(a)accounts, including interest-free accounts, with:
(i) banks;
(ii) building societies;
(iii) credit unions;
(b)interest-bearing deposits;
(c)fixed deposits;
(d) bonds;
(e)debentures;
(f)shares;
(g)investments in:
(i) property trusts;
(ii) friendly societies;
(iii) equity trusts;
(iv) mortgage trusts;
(v) bond trusts;
(h)superannuation assets from which lump sum amounts can be withdrawn;
(i)real estate;
(j)businesses;
(k)farms;
(l)loans, including interest-free loans;
(m)motor vehicles, boats and caravans;
(n)surrender value of life insurance policies;
(o)investment collections, including investment collections of coins or stamps;
(p)household contents and personal effects.
(4)The net value of a property is its gross value less debts, charges and encumbrances on the property.
(5)The value of household contents and personal effects is taken to be $5,000 if there is no evidence of another value.
…”
The applicant’s assets were assessed as at 13 April 2011 as $507,915. Included in this amount was $500,000 representing the value of the Former Home.
Section 44-10(2) reads:
“(2) In working out the value at a particular time of the assets of a person who is or was a homeowner then, disregard the value of a home that, at the time, was occupied by:
(a) the partner or a dependent child of the person; or
(b) a carer of the person who:
(i) had occupied the home for the past 2 years; and
(ii) was eligible to receive an income support payment at the time; or
(c) a close relation of the person who:
(i) had occupied the home for the past 5 years; and
(ii) was eligible to receive an income support payment at the time.”
BACKGROUND
The material facts in this case are not in dispute. By way of background, a person entering residential care must be assessed by an Aged Care Assessment Team to determine the kind of care that would best meet their needs. As part of such an assessment a person can seek an assets assessment from the Department of Human Services. The assets assessment determines the level of government assistance available to the person and thus affects the accommodation charges or accommodation bond which may be payable by the person.
Ms Tripodi requested a Residential Aged Care assets assessment on 12 April 2011. She indicated that she owned 50% of the Former Home. Ms Daloisio has since confirmed that the title has never been changed and that Ms Tripodi and her late husband were the sole owners of the Former Home. On 14 April 2011, the Former Home was occupied by Ms Tripodi’s son (Mr Gino Tripodi), who had lived at the Former Home for the whole of his life and had cared for his mother there for many years. At the relevant time of the assessment or when his mother entered permanent aged care (3 June 2011), Mr Tripodi was above the age of 25 years. He was not eligible to receive income support payments or Carer Payment because his income was above the allowable level for these payments or benefits.
Over the years, Mr Tripodi has expended in excess of $200,000 on extensions and significant upgrading of the Former Home. However, there is no mortgage, loan agreement or other legally binding documentation between Ms Tripodi and her son in relation to the extensions and upgrading. It appears there is an understanding between Ms Tripodi and her son that ownership of the Former Home will eventually be transferred to him.
Ms Daloisio said that when her mother was placed in a high care nursing home, she applied to the Department of Health and Ageing for hardship, but her application was declined. It appears that part of the Former Home has now been rented to third parties to compensate for the shortfall in the accommodation fees that are payable.
CONSIDERATION
Under the Aged Care Act 1997 and the Residential Care Subsidy Principles 1997 should the Former Home be included as an assessable asset of the applicant or can it be disregarded?
Pursuant to s 44-10(1) of the AC Act when read with the Principles, the value of a person’s assets is the net value of all the person’s property, including property outside Australia. The net value of property is its gross value less debts, charges and encumbrances on the property. In Ms Tripodi’s case, the gross value of her property at the time of her assets assessment and/or when she entered permanent residential care (the “Relevant Time”) is $507,915. Her son, Mr Gino Tripodi, has expended more than $200,000 on extensions and upgrading of the Former Home. However, there is no mortgage, encumbrance, loan agreement or other legally binding documentation between Ms Tripodi and her son in relation to the extensions and upgrading. In these circumstances, the cost or value of the extensions and upgrading is not able to be considered to be a debt of Ms Tripodi and cannot, therefore, be taken into account in arriving at the net value of the Former Home.
At the Relevant Time the value of Ms Tripodi’s gross assets (comprising mainly the value of the Former Home) was above the threshold of $102,544. Even if the extensions and upgrading by Mr Tripodi could be taken into account, which on the evidence they cannot be, the net value of Ms Tripodi’s assets would still be above the threshold. Thus, on the evidence before me, having regard to the gross value of her assets and subject to what I say below, Ms Tripodi is not and is unable to be treated as a “supported resident” under s 44-5B of the AC Act.
In working out the value of Ms Tripodi’s gross assets at the Relevant Time, it may be possible under s 44-10(2) of the AC Act to disregard the value of the Former Home if at that Relevant Time it was occupied by any of the following persons:
(a)A dependent of Ms Tripodi.
Even though Mr Tripodi may have been occupying the Former Home at the Relevant Time, he was above 25 years of age and cannot be considered a dependent child.
(b)A carer of Ms Tripodi who:
(i)had occupied the Former Home for the past 2 years; and
(ii)was eligible to receive an income support payment at the Relevant Time.
I accept that Mr Tripodi has occupied the Former Home for the past 2 years and provided care to his mother (Ms Tripodi) during this period. However, he was not in receipt of any income support payments (such as any social security benefit, allowance, pension or income support supplement) at the Relevant Time. Moreover, there is no evidence that he was qualified to receive any of these income support payments at the Relevant Time. It is (and was) not, therefore, possible to disregard the value of the Former Home at the Relevant Time under this provision in s 44-10(2).
(c)A close relation of Ms Tripodi who:
(i)had occupied the Former Home for the past 5 years; and
(ii)was eligible to receive an income support payment at the Relevant Time.
Again, I accept that Mr Tripodi has occupied the Former Home for the past 5 years. However, once again he was not in receipt of any income support payments at the Relevant Time. Moreover, there is no evidence that he was qualified to receive any of these income support payments at the Relevant Time. It is (and was) not, therefore, possible to disregard the value of the Former Home at the Relevant Time under this provision in s 44-10(2) of the AC Act.
Ms Daloisio has referred me to Chapter 4.6.7.50 of the Guide to Social Security Law (“Guide”) which is headed “Unrealisable Assets – Unable or Unreasonable to Sell or Borrow Against”. This Chapter relates to provisions of the Social Security Act 1991 (“SS Act”) and to the affairs of pensioners under the SS Act, such as: (1) assets of pensioners, and (2) examples of situations where it would be unreasonable for pensioners to sell an asset. In relation to this second point, Ms Daloisio has referred to the following assets mentioned in Chapter 4.6.7.50 under the heading “Unreasonable to sell an asset”:
“…the asset is a house occupied by a near relative AND the near relative has lived in the house for at least 10 years OR the near relative has previously provided care for the pensioner in the house (which was formerly the pensioner’s home)…”
In my view, it is clear from its wording that Chapter 4.6.7.50 of the Guide relates to assets and provisions affecting those assets that appear in the SS Act. The objects of the AC Act, among other things, are to provide aged care services and to provide for funding of aged care that takes account of various outcomes for recipients. Chapter 4.6.7.50 does not relate to provisions affecting the treatment of assets under the AC Act and the Principles. The examples in Chapter 4.6.7.50 of the Guide under the heading “Unreasonable to sell an asset” do not apply to the AC Act. The examples apply to the assets of pensioners and how they are, or are to be, treated under the SS Act. The situations that can (or might) apply to the treatment of a home under the AC Act are largely contained in s 44-10(2) of the AC Act as I have outlined in paragraphs 8 and 15 of these reasons.
Ms Daloisio argues that her brother, Mr Tripodi, would have an equitable interest in the Former Home. I do not agree. As a matter of law and on the evidence available, the extensions and upgrades that he has undertaken do not give rise or entitle him to an equitable interest in the Former Home.
Ms Daloisio has also referred me to the decision of Senior Member Sweidan of the Tribunal in Murphy and Secretary, Department of Families, Community Services and Indigenous Affairs [2007] AATA 1947. In this case, the issue was whether certain land owned by Mrs Murphy was an unrealisable asset under s 11(12) of the SS Act. The Tribunal found that the land was not an unrealisable asset. In doing so, the Tribunal referred to Chapter 4.6.7.50 of the Guide. As the case related to provisions of the SS Act, the Tribunal accepted that the Chapter was relevant but, on the particular facts, found that it was not of assistance. As I have found that Chapter 4.6.7.50 does not apply to the AC Act, the decision in Murphy is not relevant and is not applicable in Ms Tripodi’s case.
For the reasons outlined above, I find that the Former Home should be included as an assessable asset of Ms Tripodi under the AC Act and the Principles and cannot be disregarded under s 44-10(2) of the AC Act.
Ms Daloisio said that her family had “been doing everything honestly and should not be penalised by not being considered for exemption of the family home”. She said Mr Tripodi “could have been eligible for Carer Payment had he worked less hours.” I am satisfied that Ms Daloisio and her family have at all times acted honestly, but the issue before me must be dealt with on the facts that existed at the Relevant Time and there can be no suggestion that Ms Tripodi’s been penalised. Ms Daloisio has asked for compassion and understanding in relation to her mother’s case. I understand that she feels the decision is unfair. However, I must deal with the law as it applied at the Relevant Time and I have no discretion to act otherwise.
DECISION
The Tribunal affirms the decision under review.
I certify that the preceding 22 (twenty -two) paragraphs are a true copy of the reasons for the decision herein of ..........................[Sgd]..............................................
Administrative Assistant
Dated 11 February 2013
Date(s) of hearing 17 January 2013 Advocate for the Applicant Ms M Daloisio
Advocate for the Respondent Mr C Visser Solicitors for the Respondent Program Litigation and Review Branch
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