Zilwa and Department of Family and Community Services

[2001] AATA 444

DECISION AND REASONS FOR DECISION [2001] AATA 444

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q2000/866

GENERAL ADMINISTRATIVE  DIVISION       )          
           Re      GERARD DE ZILWA        
  Applicant
           And    SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES        
  Respondent

DECISION

Tribunal       Mr. D.W. Muller, Senior Member

Date9 April 2001

PlaceBrisbane

..............(Signed)................................
  D.W. MULLER
  SENIOR MEMBER

CATCHWORDS
SOCIAL SECURITY – Newstart – conducting a business
Social Security Act 1991: s 593

REQUEST FOR WRITTEN REASONS FOR DECISION

Mr. D.W. Muller, Senior Member             

1. This is an application to review a decision to cancel the applicant's newstart allowance.

2. The applicant was paid newstart allowance from 18 March 1998 to 21 November 1999.  On 22 November 1999, the respondent cancelled the applicant's newstart allowance on the basis that his assets were above the allowable limit of $127,750.

3. On 15 May 2000, the decision to cancel the applicant's newstart allowance was affirmed by an authorised review officer of the respondent, but on the basis that the income and expenses relating to the applicant's rental properties could not be substantiated.  It was discovered that each of the rental properties were the subject of mortgages.

4. On 28 August 2000, the Social Security Appeals Tribunal (SSAT) affirmed the cancellation of the applicant's newstart allowance on the same basis.  The SSAT found that the applicant was not a credible witness and that his evidence about his income and expenditure was unreliable.  The SSAT found that the applicant's rate of newstart allowance could not be calculated and that therefore newstart allowance was not payable to Mr. De Zilwa.

5. At the relevant time the applicant owned four rental properties plus his own residence.  Mr. De Zilwa told the Tribunal that the following properties were let under the following arrangements:

   (i)18 Rialto Street:  Let to two men who pay a total of $150 per week.

   (ii)111 Old Cleveland Road:  Let to five people who pay a total of between $150 to $200 per week.

   (iii)90 Carrara Street:  Let to between six to ten people from time to time who pay a total of between $100 to $500 per week.

   (iv)98 Nicholson Street:  Let to between four to eight people for an average total of about $400 per week.

1. Mr. De Zilwa's tax returns show a gross rental income for the 1998/99 tax year of $56,700 and for the 1999/00 tax year of $56,983.

2. Centrelink's records reveal that there are tenants claiming rent assistance in respect of their occupancy of Mr. De Zilwa's properties, who have not had their rent payments recorded by Mr. De Zilwa.  That is, the occupancy rate is higher than that disclosed by Mr. De Zilwa, or alternatively, there are a lot of people who are making false claims on Centrelink that they are paying rent to Mr. DeZilwa when they are not.

3. Mr. DeZilwa claimed to have had total expenses of $60,763 during the financial year 1998/99.  There were numerous discrepancies in the material put before the Tribunal.  For example, in the rental property schedule for Carrara Street prepared by the applicant's tax agent, there are various items claimed as expenses for 1998/99 (T101), but in an exhibit tendered by the applicant at the hearing (exhibit 4) the same items are claimed for a different amount.

   Tax Agent                 Exhibit 4

   Advertising for tenants                   $1,544  $2,080
   Maintenance, cleaning etc            $1,620  $1,040
   Gardening, equipment hire           $1,800  $1,000
   Electricity  $   960  $1,716
   Gas  $   564  $   900
   Agents' fees/commission               $1,820  $   Nil

Mr. De Zilwa explained that he did not actually employ an agent to collect the rent.  He said that he gave free board to a tenant at each of the boarding house residences to collect the rent and keep an eye on the houses.  Mr. De Zilwa's evidence about the expenses associated with cleaning, maintenance, mowing and equipment hire was vague and unimpressive.  The Tribunal was left with the impression that Mr. De Zilwa did most of the work himself but claimed it as an expense.

1. The figures put before the Tribunal were so unreliable and Mr. DeZilwa was so unimpressive as a witness, that it was impossible to accurately ascertain his income and expenditure relating to the four rental properties.  The SSAT decision is affirmed on this ground alone.

2. The Tribunal also finds that Mr. De Zilwa is heavily involved in the day to day running of the properties.  He advertises for tenants every week in local newspapers.  He has a large turnover of tenants and he supervises the coming and going of tenants.  He is involved in maintenance, repairs, gardening, changing locks and general supervision.  He is running a business which occupies a significant amount of his time.  It is more than just a sideline or a hobby.

3. The Tribunal finds that Mr. De Zilwa is not "unemployed" within the meaning of that term in section 593 of the Social Security Act 1991.

4. The decision to cancel Mr. De Zilwa's newstart allowance is affirmed.

   I certify that the 12 preceding paragraphs are a true copy of the reasons for the decision herein of Mr. D.W. Muller, Senior Member.

   Signed:         .....................................................................................

   R. Hayes, Associate

   Date/s of Hearing  9 April 2001
   Date of Decision  9 April 2001
   Request for written reasons     23 May 2001
   Applicant  Mr. De Zilwa, himself
   Respondent  Mr. N. Foster, departmental advocate