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

This matter concerned an appeal by Mr Zielke against a decision by the Secretary of the Department of Social Services (the Respondent) that he had been overpaid Age Pension due to the disposal of assets. Mr Zielke had been in receipt of an Age Pension since 2003 and resided in the Philippines. In 2011, he transferred his jointly owned interest in a property in Western Australia to his former wife and daughter for a stated consideration of $121,000. The Respondent determined that this transfer constituted a disposal of assets under section 1123 of the *Social Security Act 1991* (Cth), which reduced the rate of Age Pension Mr Zielke was entitled to, resulting in an overpayment.

The primary legal issues before the Tribunal were whether Mr Zielke had disposed of assets for the purposes of the Act, and if so, whether this resulted in an overpayment of Age Pension and the quantum of any such debt. Mr Zielke did not dispute the transfer of his interest in the property but contended that it did not trigger the disposal of assets provisions. The Tribunal was required to consider the nature of the arrangement between Mr Zielke and his daughter, including whether it was a genuine disposal for consideration or an informal family arrangement.

The Tribunal considered evidence regarding the transfer of the property, including the transfer document and an email from a taxation agent confirming the consideration of $121,000. Mr Zielke stated he had an informal agreement with his daughter where he transferred his interest in exchange for $100,000, further financial support as needed, and a right to live in the property for life. His daughter provided evidence of payments totalling $161,000 made to him after the transfer, and stated she would continue to provide financial support if requested. The Tribunal found that this was an informal family arrangement based on trust and mutual understanding, not intended to have legal consequences between the parties, and therefore constituted a disposal of assets. The Tribunal also determined, based on expert valuation evidence, that the market value of Mr Zielke's half interest in the property at the time of transfer was $255,000, which was significantly higher than the amount he received. The Tribunal noted an apparent error in the Respondent's determination regarding the date of disposal of the asset.