YFFS and Secretary, Department of Health

This matter concerned an appeal by an applicant, an 86-year-old disability pensioner with multiple medical conditions, regarding the assessment of his residential aged care fees. The applicant had permanently entered residential aged care in October 2018. A key point of contention was whether a lump sum payment received by the applicant from the National Redress Scheme in October 2020 should be considered an assessable asset for the purposes of calculating his daily accommodation contribution (DAC). The Administrative Appeals Tribunal (AAT) affirmed the original decision.

The central legal issue before the Tribunal was whether the lump sum payment received from the National Redress Scheme, once deposited into the applicant's bank account, constituted an asset for the purposes of the Social Security Act 1991 (Cth) and the Aged Care Act 1997 (Cth), thereby impacting his means-tested residential aged care fees. The Tribunal was required to determine if this specific type of payment was exempt from asset testing under the relevant legislation.

The Tribunal reasoned that while the National Redress Scheme payments are generally non-taxable and protected from Commonwealth debt recovery, any ongoing income generated by the lump sum or any asset produced from it are assessable under social security income and assets tests. Applying this principle, the Tribunal found that the applicant's lump sum redress payment, upon being deposited into his bank account, became an asset as defined by section 11 of the Social Security Act and was therefore assessable for the calculation of his DAC. Despite acknowledging that this outcome felt "cruel and unjust" given the nature of the redress payment, the Tribunal concluded that the relevant legislation made no distinction as to the source of funds when assessing assets, and the drafters of the Redress Scheme had not provided for its exclusion from asset assessments.

Consequently, the Tribunal affirmed the decision under review. However, it directed the Respondent to recalculate the applicant's daily accommodation contribution fees to ensure that the correct amounts had been applied.