Wendy Luca and Secretary, Department of Social Services
[2014] AATA 14
[2014] AATA 14
Division GENERAL ADMINISTRATIVE DIVISION File Number(s)
2013/1679
Re
Wendy Luca
APPLICANT
And
Secretary, Department of Social Services
RESPONDENT
DECISION
Tribunal Ms K Hogan, Member
Date 8 January 2014 Place Perth The decision under review is set aside and the matter is remitted to the respondent for reconsideration in accordance with the findings of the Tribunal.
--(Sgd) Ms K Hogan----------
Ms K Hogan, Member
CATCHWORDS
Social Security – Disability Support Pension – Whether to Increase Applicant’s Rate of Disability Support Pension – Circumstances of Financial Hardship – Whether Certain Assets were Unrealisable
LEGISLATION
Social Security Act 1991 (Cth)
Social Security (Administration) Act 1999 (Cth)
CASES
Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634
Re Niola Nominees Pty Ltd and Minister for Health [1986] AATA 84Re Thomas Henderson and Secretary Department of Families, Housing, Community Services and Indigenous Affairs [2008] AATA 468
REASONS FOR DECISION
Ms K Hogan, Member
8 January 2014
BACKGROUND
On 12 October 2012, a Centrelink officer decided to increase the applicant’s rate of Disability Support Pension (DSP) to $484.93 per fortnight with effect from 20 September 2012 (Original Decision).
On 31 December 2012, the applicant requested an internal review of the Original Decision. On 16 January 2013, a Centrelink Authorised Review Officer (ARO) decided to vary the Original Decision by finding that the applicant should have been paid DSP at an increased rate from 22 August 2012 and that arrears were payable.
On 23 January 2013, the applicant applied to the Social Security Appeals Tribunal (SSAT) for a review of the ARO’s decision. On 27 March 2013, the SSAT affirmed the ARO’s decision.
On 16 April 2013, the applicant applied for a review of the SSAT to this Tribunal. The applicant seeks a finding that her rate of DSP should have been increased to the maximum rate from 22 August 2012.
LEGISLATIVE FRAMEWORK
The legislation relevant to this application is contain in the Social Security Act 1991 (Cth) (Act) and the Social Security (Administration) Act 1999 (Cth) (Administration Act).
Section 1130 of the Act applies to calculating the rate of pension payable to a person who is under financial hardship and provides relevantly as follows:
1130 Application of financial hardship rules—pensions
Value of unrealisable asset to be disregarded
(1) If section 1129 applies to a person, the value of:
(a) any unrealisable asset of the person; and
(b) any unrealisable asset of the person’s partner;
is to be disregarded in working out the person’s social security pension rate.
Deduction from social security pension maximum payment rate
(2) If section 1129 applies to a person, there is to be deducted from the person’s social security pension maximum payment rate an amount equal to the person’s adjusted annual rate of ordinary income.
Adjusted annual rate of ordinary income
(3) A person’s adjusted annual rate of ordinary income is an amount per year equal to the sum of:
(a) the person’s annual rate of ordinary income (other than income from assets); and
(b) the person’s annual rate of ordinary income from assets that are not assets tested; and
(c) either:
(i)the person’s annual rate of ordinary income from unrealisable assets; or
(ii) the person’s notional annual rate of ordinary income from unrealisable assets;
whichever is the greater; and
(d) an amount per year equal to $9.75 for each $250 of the value of the person’s assets (other than disregarded assets); and
(e) any amounts that are not income of the person because of paragraph 8(8)(zp).
Assets tested asset
(4) For the purposes of subsection (3), an asset is not assets tested if the value of the asset is to be disregarded under subsection 1118(1).
Notional annual rate of ordinary income from unrealisable assets
(5) A person’s notional annual rate of ordinary income from unrealisable assets is:
(a) the amount per year equal to 2.5% of the value of the person’s and the person’s partner’s unrealisable assets; or
(b) the amount per year that could reasonably be expected to be obtained from a purely commercial application of the person’s and the person’s partner’s unrealisable assets;
whichever is the less.
…
Unrealisable Assets are defined in s 11 of the Act which provides relevantly as follows:
…
Unrealisable asset
(12) An asset of a person is an unrealisable asset if:
(a) the person cannot sell or realise the asset; and
(b) the person cannot use the asset as a security for borrowing.
(13) For the purposes of the application of this Act to a social security pension (other than a pension PP (single)), an asset of a person is also an unrealisable asset if:
(a) the person could not reasonably be expected to sell or realise the asset; and
(b) the person could not reasonably be expected to use the asset as a security for borrowing.
Section 109(2) of the Administration Act provides that the date of a favourable determination will take effect on the day on which the application for review was made.
ISSUES
The issues for consideration of this Tribunal are:
(a)The correct date at which the applicant’s rate of DSP should be assessed; and
(b)The appropriate rate of DSP payable to the applicant from that date under the financial hardship rules.
EVIDENCE
The written evidence in front of the Tribunal consisted of:
(a)Section 37 Documents provided by the respondent;
(b)Written submissions provided by the applicant and respondent, filed before and after the hearing; and
(c)Written evidence provided by the applicant, filed after the hearing.
The Tribunal heard oral submissions on behalf of both the parties.
FACTS
It was not in contention at the hearing before this Tribunal that the applicant had a number of assets which would affect the calculation of her DSP entitlements including:
(a)Her principal residence at 6 Contour Rd Roleystone and a property at 22 Moondyne Rd Mokine;
(b)A property owned jointly with her ex-partner at 50 Alexander Rd Hovea, valued at $800,000.00;
(c)Bank balances, shares, a car and a trailer.
The Mokine and Hovea properties were subject to Family Court proceedings.
The Public Trustee took over the affairs of the applicant in 2011 following a hearing at the State Administrative Tribunal (SAT).
RESPONDENT
The respondent did not dispute that the applicant qualifies for DSP and did not dispute that the applicant is under financial hardship.
The respondent submitted that in relation to the Mokine and Hovea properties, both assets are unrealisable and should hence be assigned a notional income under the financial hardship provisions. The respondent submitted that the applicant’s non-real assets should be treated as realisable assets and should be attributed their full value in calculating the applicant’s rate of DSP.
The respondent submitted that the relevant time to assess the applicant’s rate of DSP is 22 August 2012.
The respondent submitted that in calculating the applicant’s rate of DSP the Hovea property should be assigned a notional value of nil owing to the fact that the applicant’s ex-partner was living on the property and refused to pay rent.
The respondent submitted that in relation to the Mokine property the property should be assigned a notional value $6,875.00 (2.5% of the property’s value), as that figure is lower than the commercial lease value of $10,400.00 as determined by the AVO.
On 15 October 2013, the respondent filed submissions relating to the characterisation of the applicant’s non-real assets.
The respondent submitted that the word ‘person’ contained in sections 11(12) and 11(13) of the Act can mean a person acting in their own capacity or through the acts of a legally appointed representative. The respondent submitted that it is immaterial that the applicant did not have control of her assets at the relevant time, as the Public Trustee (her legally appointed guardian) could have disposed of the applicant’s non-real assets. The respondent relied on Re Thomas Henderson and Secretary Department of Families, Housing, Community Services and Indigenous Affairs [2008] AATA 468, which provides as follows:
75. When looking at Mr Henderson’s entitlement to DSP, I have had regard to whether it could be argued that he has unrealisable assets within the meaning of ss 11(12) or (13) of the SS Act. ... A finding that an asset is unrealisable depends on the person’s not being able to sell it or dispose of it or use it to raise money. Sections 11(12) and (13) are framed in terms of the “person’s” not being able to do so but there is no suggestion in those provisions that they are limited to the individual’s own personal action as opposed to the actions of those lawfully appointed to act on his or her behalf. That must be so when regard is had to the fact that a person in the position of an administrator is appointed to act on the person’s behalf and in the person’s best interests. As s 48(3) of the [Guardianship and Administration Act 1986 (Vic)]provides:
“Where a decision is made, action taken, consent given or thing done by an administrator under an order made by the Tribunal the decision, action, consent or thing has effect as if it had been made, taken, given or done by the represented person and the represented person had the legal capacity to do so.”
The respondent submitted that the sections 69 and 70 of the Guardianship and Administration Act 1990 (WA) have a similar effect to the provisions cited by Deputy President Forgie in Re Thomas Henderson.
On 6 November 2013, the respondent filed further submissions on the Tribunal and the applicant. The respondent submitted that the documents filed by the applicant on 23 October 2013 have no relevance to the characterisation of the Mokine and Hovea properties and that any possible mismanagement of the applicant’s estate by the Public Trustee can have no impact on whether the applicant’s non-real assets are unrealisable.
APPLICANT
At the hearing of this matter, the applicant gave evidence that the Public Trustee took over her affairs in 2011 following a hearing at the State Administrative Tribunal (SAT).
The applicant gave evidence that while the Public Trustee was in control of her affairs the only money she had at her disposal was the money that she was paid by Centrelink. The applicant stated that she did not have any meetings with the Public Trustee and in fact had no contact whatsoever for the first 8 months.
The applicant gave evidence that she was forced to pay her land rates herself, despite the Public Trustee being in control of her affairs. The applicant felt that her affairs were poorly managed by the Public Trustee.
On 23 October 2013, the applicant filed documents at the Tribunal that relate, in part, to the handling of the applicant’s affairs by the Public Trustee.
ANALYSIS
The Tribunal finds that the date at which the applicant’s rate of DSP is to be assessed is 22 August 2012 (Relevant Date).
Hovea Property
The Tribunal finds that in relation to the Hovea property at the Relevant Date the applicant was unable to sell, realise or use the property for security for borrowing as the property was subject to Family Court proceedings. The Tribunal finds that the Hovea property is an unrealisable asset and its full value can hence not be considered when calculating the applicant’s rate of DSP under the financial hardship provisions.
The Tribunal finds that the Hovea property is valued at $800,000.00 and finds that the applicant’s share in this property is worth $400,000.00 The Tribunal accepts that the applicant’s ex-partner is living in this property and is unwilling to pay rent or move out. In light of this, the Tribunal finds that the applicant could not be expected to commercially lease this property and that the property should be assigned a notional value of nil in assessing the applicant’s rate of DSP.
Mokine Property
The Tribunal finds that in relation to the Mokine property at the Relevant Date the applicant was unable to sell, realise or use the property for security for borrowing as the property was subject to Family Court proceedings, as such the Mokine property is an unrealisable asset within the meaning of the definitions contained in s 11 of the Act.
The Tribunal finds that the Mokine property’s value is $275,000.00 The Australian Valuation Office assigned a commercial lease value of $10,400 per annum to the Mokine Property. The Tribunal accepts this valuation as it is the only professional valuation before it. The Tribunal finds that 2.5% of the value of the Mokine property is $6,875.00.
Section 1130(3)(c) of the Act provides that the lesser of the commercial lease value and 2.5% of the assets value should be used in applying a notional rate of income to a property. The Tribunal finds that the amount of $6,875.00 must be taken into account when calculating the applicant’s rate of DSP.
Non-real Assets
The Tribunal finds that, at the Relevant Date, the applicant’s non-real assets consisted of, and were valued at:
·Bank Accounts totalling $10,201.00
·Shares in Commonwealth Bank worth $5,467.00
·A car worth $1,000.00
·A trailer worth $200.00
The total value of these non-real assets to be considered is $16,868.00.
The Tribunal has considered all the evidence before it and notes in particular the following documents:
(1) The applicant's treating psychiatrist Dr Divinigracia wrote to Centrelink on 24 July 2012 expressing his concern regarding the amount of her pension and requesting an increase (T: 24);
(2) Dr Divinigracia telephoned Centrelink on 15 October 2012 expressing that the applicant is disadvantaged by the rate of payment ( T:26);
(3) The Statement of Transactions of the Public Trustee 29/12/11 to 19/10/2012 (T:29) contains transactions relating to realty matters, for example title searches, Landgate caveat, with no recorded payments made to the applicant for any expenses.
There is evidence that the Public Trustee received monies on behalf of the applicant ( for example, $3,000.00 27 September 20012) in addition to the non-real assets already held on her behalf at the commencement of its control of her affairs.
At a time when the treating psychiatrist was expressing significant concern regarding the well-being of the applicant there is no evidence before this Tribunal that the Public Trustee was taking any active steps to assist the applicant to receive an increase in her benefits or providing her with any supplementary income from the shares or property held on her behalf.
The Tribunal accepts the evidence of the applicant that she had to borrow money from her father and notes that Dr Divinigracia paid her taxi fare to and from the surgery "due to your financial problems" (Applicant's supplementary submission: Letter Dr Divinigracia dated 21 September 2012).
Whilst the need for consistency of decisions should be considered when contemplating whether to depart from a previous decision of the Tribunal (Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 at 639), the Tribunal is not bound by previous decisions of members of the Tribunal (Re Niola Nominees Pty Ltd and Minister for Health [1986] AATA 84). It follows that the Tribunal is not bound to follow the decision of Deputy President Forgie discussed above.
On the evidence before the Tribunal, regardless of the Public Trustee being in control of the applicant’s affairs, the Tribunal finds that the applicant could not have sold any of her non-real assets nor used them for security for borrowing.
The Tribunal finds that at the Relevant Date the non-real assets referred to in paragraph 34 above were subject to the control of the Public Trustee and the applicant could not have realised these assets at this time. The Tribunal finds that these assets were unrealisable assets and should hence be assigned a notional value of nil under the financial hardship provisions.
DECISION
The decision under review is set aside and the matter is remitted to the respondent for reconsideration in accordance with the findings of the Tribunal.
I certify that the preceding 43 (forty-three) paragraphs are a true copy of the reasons for the decision herein of Ms K Hogan, Member.
....(Sgd) T Freeman........
Associate
Dated 8 January 2014
Date of hearing 15 October 2013 Applicant In Person
Representative for the Respondent Ms Ladhams
Australian Government Solicitor
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