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

[2017] AATA 1552

Vunisa and Secretary, Department of Social Services (Social services second review) [2017] AATA 1552 (31 August 2017)

Division:GENERAL DIVISION

File Number(s):      2016/7049

Re:Nelson Vunisa

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

DECISION

Tribunal:Senior Member A Poljak

Date:31 August 2017

Place:Sydney

The decision under review is affirmed.

.................[sgd] .......................................................

Senior Member A Poljak

Catchwords

SOCIAL SECURITY – Newstart allowance - liquid assets waiting period - ordinary waiting period – term deposit – partner’s assets – waiver and exemption – severe financial hardship – decision affirmed

Legislation

Social Security Act 1991 (Cth) ss 14A, 19C, 598, 620, 621

Secondary Materials

Guide to Social Security Law

REASONS FOR DECISION

Senior Member A Poljak

31 August 2017

1. Nelson Vunisa, the applicant, seeks review of a decision of the Social Services and Child Support Division of the Administrative Appeals Tribunal (“SSCSD”) made on 29 November 2016. In its decision, SSCSD affirmed a decision of the Department of Human Services (“the Department”) to apply a liquid assets waiting period (“LAWP”) from 28 February 2016 to 28 May 2016, and an ordinary waiting period (“OWP”) from 29 May 2016 to 4 June 2016 on payment of the applicants New start Allowance (“NSA”).

2. The issues to be determined in these proceedings are whether the applicant’s claim for NSA is subject to:

   (a)LAWP  from 28 February 2016 to 28 May 2016; and

   (b)An OWP from 29 May 2016 to 9 June 2016.

   Background

3. On 29 November 2016, the applicant contacted the Department about claiming NSA as he had broken his foot and was unable to work. He had been self-employed.

4. The Department incorrectly advised the applicant to claim sickness allowance instead of NSA and on 6 April 2016 the applicant correctly lodged a claim for NSA. Due to the error of the department it was decided that the applicant’s claim for NSA was to be assessed from 29 February 2016.

5. The claim form dated 6 April 2016, states that the applicant last worked on 27 February 2016 and that the combined balance of his liquid assets was $39,833 (“liquid assets”).

   Relevant Legislative Provisions

6. Section 598(1) of the Social Security Act 1991 (Cth) (“the Act”) provides:

   (1)  Subject to subsections (4A), (5), (6), (7) and (8), if:

   (a)  the value of a person’s liquid assets exceeds the person’s maximum reserve on:

   (i)  the day following the day on which the person ceased work or ceased to be enrolled in a full time course of education or of vocational training; or
   (ii)  the day on which the person claims a newstart allowance; and

   (b)  the person is not a transferee to a newstart allowance;

   the person is not qualified for a newstart allowance for a period unless the person has served the liquid assets test waiting period in relation to the claim before the beginning of that period.

7. The term “liquid assets” is defined by section 14A of the Act as a person’s cash and readily realisable assets, and includes “amounts deposited with, or lent to, a bank or other financial institution by the person (whether or not the amount can be withdrawn or repaid immediately)”; s14A(1)(b).

8. The term “maximum reserve” is also defined by section 14A, which provides that for a person who is not a member of a couple and does not have a dependent child, then the amount is $5000; or in any other case, $10,000.

9. Subsection 14A(2) of the Act provides that for the purposes of Part 2.12 (which is the relevant part in these proceedings) a person’s liquid assets are to be taken to include liquid assets of the person’s partner; and liquid assets of the person and the person’s partner.

10. The liquid assets test waiting period in relation to the claim is to be worked out under subsections 598(2A), (2B) and (2C); pursuant to s 598(2).

11. Subsection 598(2A) sets out the formula for calculating the number of formula weeks. Subsection 598(2B) provides that “if the number of formula weeks is equal to or greater than 13 weeks, the liquid assets test waiting period in relation to the claim is 13 weeks.”

    Consideration

12. The applicant submits that the money in the account was not his, but belonged to his wife. It is alleged that the money was his wife’s superannuation, which was released to her in 2010 due to disability. The money was placed into a term deposit as her “superannuation retirement fund for the future”. At hearing, it was confirmed that the money could be released from this account with one months’ notice, however, certain penalty rates could apply.

13. In the claim form for NSA submitted 6 April 2016, the applicant identifies the account as Greater Building Society/Term deposit with a balance of $39,810. In regards to his share, the applicant records 50%.

14. Instruction 1.1.L.50 of the Guide to Social Security Law (“the Guide”) provides a definition of “liquid assets” that applies to NSA. It states that a liquid asset includes, inter alia, “shares and debentures, term deposits”.

15. Having considered the Act and the Guide, I am satisfied that the funds contained in the Greater Building Society/Term deposit meet the definition of liquid asset. They do not meet any of the exemptions contained in the Guide and the funds are available, albeit on one months’ notice, with penalty. Accordingly, it is to be taken into account when calculating the applicant’s liquid assets for the purposes of his claim for NSA.

16. At the time of applying for NSA, the applicant’s combined liquid assets totalled $39,833. As this exceeded the maximum reserve of $10,000, a LAWP was applicable.

17. Using the formula set out in subsection 598(2A), that is, the amount of the applicant’s liquid assets minus the maximum reserve of $10,000, divided by $1000, the LAWP applicable is 29 weeks. However, subsection 598(2B) provides a maximum of 13 weeks. Accordingly, a LAWP was applied from 28 February 2016 until 13 weeks from that date, ending on 28 May 2016.

18. Pursuant to sections 620 and 621 of the Act, in addition to the LAWP, an OWP of one week is applied to claimants of NSA. The OWP commences the day after the LAWP ends; s621(3). Accordingly, it was applied in this case from 29 May 2016 to 4 June 2016.

    Waiver and exemptions

19. The LAWP is to be waived in full or in part if the recipient is in severe financial hardship. Section 598(5) provides:

    If the Secretary is satisfied that the person is in severe financial hardship because the person has incurred unavoidable reasonable expenditure while serving a liquid assets test waiting period, the Secretary may determine that the person does not have to serve the whole, or any part, of the waiting period.

20. For a member of a couple who makes a claim for NSA, severe financial hardship is defined in subsection 19C(3) of the Act which provides that the person:

    is in severe financial hardship if the value of the couple’s liquid assets (within the meaning of subsections 14A(1) and (2)) is less than twice the fortnightly amount at the maximum payment rate of the payment, benefits, pension or allowance that would be payable to the person.

21. The twice fortnightly amount, at the maximum payment rate of the NSA, that would have been payable at the relevant time, is $974.80. As the applicant’s combined liquid assets were $39,833 the applicant was not in severe financial hardship. It follows that no part of the LAWP can be waived.

22. Instruction 3.1.2.70 of the Guide summarises various circumstances in which a person may be exempted from a LAWP. The only circumstance relevant to the applicant in these proceedings is whether or not he was suffering severe financial hardship. This has already been dealt with above.

    Decision

23. For all of the above reasons, I am satisfied that the LAWP and OWP were correctly applied to the applicant’s NSA.

24. The decision under review is affirmed.

25.     I certify that the preceding 24 paragraphs are a true copy of the reasons for the decision herein of Senior Member A Poljak

........................[sgd]................................................

Associate

Dated: 31 August 2017

Date(s) of hearing:	13 July 2017
Applicant:	in person
Solicitors for the Respondent:	Dr S Thompson, Department of Human Services