Editors --- "Age pension: asset test; principal residence; effect of cumulative years of minimal residence on entitlement to retain home as principal residence" [2008] SocSecRpr 36; (2008) 10(4) Social Security Reporter, Article 2

• SPARKES and SECRETARY TO THE DFHCSIA
• Background
• Legislation
• Consideration
• Decision

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Age pension: asset test; principal residence; effect of cumulative years of minimal residence on entitlement to retain home as principal residence

SPARKES and SECRETARY TO THE DFHCSIA

(2008/476)

Decided: 6th June 2008 by K.S. Levy

Background

Since her marriage in 1959, Sparkes had owned the one suburban Brisbane house. In 1991,Sparkes and her late husband bought a modest home in Wallaville for her son to facilitate access to his daughter. In 1993, the son fathered another child to a different mother, following which event, a series of complicated child-raising arrangements involving Sparkes sprang up. At all relevant times, Sparkes’ son was engaged full-time in the role of child-raising.

In 1998, Court orders made Sparkes, in conjunction with her son, responsible for the day to day-care of the younger child. Initially this occurred in Brisbane. However, the mother relocated to Wallaville near Bundaberg, Queensland and Sparkes and her husband attended at Wallaville to facilitate the child’s orientation to a local school, for which they made temporary arrangements for clothing and sleeping, using a second hand bed purchased for the purpose.

In 1999, Sparkes and her husband returned to Brisbane when he became ill and later died. By year’s end Sparkes had returned to Wallaville. When Sparkes required medical attention, she returned to Brisbane. When there were family issues, she attended at Wallaville and at Brisbane or on the Sunshine Coast as required. At all relevant times the house in Brisbane (Everton Park) was vacant, not rented out and contained the majority of Sparkes ’possessions. In 2004, Sparkes was admitted to the local GinGin hospital diagnosed with Meniere’s disease, causing problems with balance and consciousness.

In 2004, the younger grand-daughter was not returned by her mother following a period of contact. There were also allegations made against Sparkes’ son and Sparkes remained to support him in the ensuing family court action. The son appeared at this time to have increased his alcohol consumption and, in 2005 and 2006, he became verbally and physically violent towards Sparkes, who then suffered further health problems and was again admitted to the local hospital. The son’s poor behaviour toward Sparkes continued into 2006,culminating in an incident that required police intervention and a Domestic Violence Order.

Following a Centrelink decision in August 2006 to treat the Wallaville residence as her principal place of residence, Sparkes returned to Brisbane. Sparkes had become entitled to age pension in 1995. The effect of the decision to locate her principal place of residence at Wallaville was to create a debt against age pension entitlements, as the Brisbane residence was the more valuable property.

Legislation

The Social Security Act 1991 (the Act) in s.11A defines entitling absences from a principal place of residence as:

(a) any period (not exceeding 12 months or any longer period determined under subsection (9A)) during which the person is temporarily absent from the residence;...

Section 1118 (1) provides that the value of the principal home is to be ignored in calculating entitlement.

In this case, the application of the assets test to the greatly different valuations of Sparkes’ Brisbane and Wallaville residences meant the difference between entitlement to age pension at full or partial rate.

Consideration

The question the Tribunal posed for itself was whether the principal home of Sparkes had changed.

The Tribunal found, considering the various barriers to Sparkes returning to Everton Park, including her son’s and her own health, her limited means of transport, as well as the difficult living conditions at Wallaville, that ‘(h)er continuity of association with Everton Park and her attitude that that would remain her principal home’ were determinative factors in this instance. (Reasons, para.31)

Decision

The decision under review was set aside, the Tribunal finding that Sparkes had in each of the relevant twelve month periods satisfied the requirements of s.11 of the Act such that Everton Park remained her principal home. The Tribunal went on to say that, as this was a most unusual case, if the principal residence had been found to have changed, the Tribunal would have waived any related debt on the basis of special circumstances.

[J.S.]