Editors --- "Assets test: meaning of 'principal home'" [2012] SocSecRpr 7; (2012) 14(1) Social Security Reporter, Article 7

• MACNAMARA and SECRETARY TO THE DEEWR
• Background
• Legislation
• Discussion
• Decision

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Assets test: meaning of 'principal home'

MACNAMARA and SECRETARY TO THE DEEWR

(2012/40)

Decided: 27th January 2012 by R. J. Groom

Background

MacNamara began receiving parenting payment single (PPS) on 12 November 2004. Her principal home was recorded by Centrelink as a house she owned at St Helens (the St Helens property) from 1 July 2005. On 6 February 2010 MacNamara and her two daughters moved to rented premises in Launceston, so that her daughters could attend a private school which had awarded them scholarships. She and her daughters returned to live in the St Helens property on a full time basis from 16 April 2011.

MacNamara’s evidence was that the only reason she moved to Launceston was because of her daughters’ education. She also gave evidence that she took some of her furniture to Launceston, but many of her belongings, such as her bed, remained in St Helens, as did a car she owned. No one else lived in the St Helens property while MacNamara and her daughters were renting accommodation in Launceston. MacNamara and her daughters also returned to the St Helens property frequently during the period 6 February 2010 and 16 April 2011 (the relevant period), on weekends and during school holidays. MacNamara’s evidence was she and her daughters returned to the St Helens property approximately 35 times in the relevant period.

MacNamara placed the St Helens property on the market before moving to Launceston. She gave evidence that she intended to sell the St Helens property and use the proceeds to build a house in Launceston.

MacNamara informed Centrelink on 16 February 2010 that she had started to rent a property in Launceston. Centrelink’s records stated that MacNamara had ‘temporarily vacated property... moved to Launceston... is renting a house because her kids are attending school in Launceston’ and that the St Helens house ‘is on the market.... she will move back into the house if it doesn’t sell in the next 12 months’.

MacNamara was unable to sell the St Helens property, and was unable to afford to continue to rent premises in Launceston as well as maintaining the St Helens property. She moved back into the St Helens property on 16 April 2011, and her daughters left their school in Launceston. Her evidence was that she considered the St Helens property to be her home throughout the relevant period.

Centrelink made a decision that MacNamara was not entitled to continue to receive PPS, because her assets exceeded the allowable limit. This was because Centrelink determined that the St Helens property ceased to be MacNamara’s ‘principal home’, and could no longer continue to be an exempt asset. MacNamara appealed to the Social Security Appeals Tribunal, which affirmed Centrelink’s decision on 3 May 2011. MacNamara then appealed to the Tribunal.

Legislation

Section 1118 of theSocial Security Act 1991 (the Act) relevantly provides:

1118 Certain assets to be disregarded in calculating the value of a person’s assets

(1) In calculating the value of a person’s assets for the purposes of this Act (other than sections 198F to 198MA (inclusive), Division 1B of Part 3.10, Division 2 and sections 1133 and 1135A), disregard the following:

(a) if the person is not a member of a couple-the value of any right or interest of the person in the person’s principal home that is a right or interest that gives the person reasonable security of tenure in the home...

Section 11A of the Act provides definitions relevant to how assets are assessed. It relevantly provides:

11A Principal home definition for the purpose of the assets test

...

9) A residence of a person is to be taken to continue to be the person’s principal home during: ...

(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...

Discussion

It was not in dispute that MacNamara did not move back to live full-time in the St

Helens property until 15 April 2011, and that she had lived there full-time since that date. The Secretary also conceded that MacNamara’s move to Launceston was a temporary absence from the St Helen’s property and that s.11A(9)(a) applied to her until 5 February 2011, being 12 months after the start of the absence.

The Tribunal noted part 4.6.3.60 of the Guide to Social Security Law which states:

‘Unless an income support recipient states a definite intention NOT to return to their principal home, an absence should generally be regarded as temporary.’

The Department’s contentions were that the 12 month exemption period applied to MacNamara up to 5 February 2011, after which the St Helens property could not be considered her principal home. Due to the home being considered an assessable asset from 6 February 2011 her total assets exceeded the permitted assets limit for PPS, and her PPS was cancelled as of 2 March 2011.

The Tribunal noted that the term ‘principal home’ is not defined in the Act, although s.11A provides some related definitions. The Tribunal discussed authorities on related but different terms in the Act, such as ‘residence’ and ‘ordinary residence’, as they provided useful guidance. The Tribunal referred to key decisions about a person’s country of ‘residence’ for the purpose of eligibility for social security entitlements, and cited the decision of Wilcox J inHafza v Director-General of Social Security [1985] FCA 164; (1985) 60 ALR 674 (at p. 680):

Once a person has established a home in a particular place... a person does not necessarily cease to be resident because he or she is physically absent. The test is whether the person has retained a continuity of association with the place... together with an intention to return to that place and an attitude that that place remains ‘home’.

The Tribunal stated that the term ‘principal home’ implies that a person may reside for part of their lives in a home other than the principal home, and gave examples such as a person living away from home for the purposes of their occupation. On the other hand, s.1118(1) makes it clear that mere ownership of a place is not sufficient for it to be a person’s ‘principal home’. According to the Tribunal, the general purpose of the relevant provisions of the Act was to exempt the value of the person’s interest in the home if there was a ‘sufficient ongoing continuity of association with the home to enable it to be properly described within the context of the Act as that person’s principal home’ (Reasons, para.33). The decision about whether a person’s property continued to be that person’s principal home was therefore a question of fact, to be decided after having regard to all of the relevant circumstances of the case.

The Tribunal found that the material before it strongly supported the view that the St Helens property continued to be MacNamara’s principal home throughout the relevant period. The Tribunal placed weight on several factors, including that:

- MacNamara continued to own the home throughout the relevant period;

- MacNamara retained the right to occupy the home throughout the relevant period, and did not lease it out;

- Most of MacNamara’s furniture remained at St Helens;

- MacNamara maintained a strong emotional attachment to the St Helens property;

- MacNamara travelled to the St Helens property approximately 35 times during the relevant period;

- The move to Launceston was for a particular purpose only, that is, her daughters’ education; and

- MacNamara continued to pay the expenses of ownership and maintenance of the St Helens property during that entire period.

The Tribunal found that MacNamara’s move to Launceston was a temporary absence interrupted by frequent returns to the home at St Helens. The Tribunal further found that MacNamara did not make these returns to St Helens for the purposes of extending the exemption period. When MacNamara was at the St Helens property on her frequent visits, she was not ‘absent’ within the meaning of s.11A(9)(a). The Tribunal found that the St Helens property remained MacNamara’s principal home during the relevant period, and continued to be her principal home, despite her periods of absence whilst residing in rented premises in Launceston.

Decision

The Tribunal set aside the decision under review and in substitution decided that:

1. MacNamara’s St Helens property remained her ‘principal home’ for the whole of the period on and from 6 February 2010 until 16 April 2011 and continues to be her ‘principal home’; and

2. the matter was to be remitted to the Secretary to assess MacNamara’s entitlement to parenting payment single in accordance with the Tribunal’s decision.

[D.A.]