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Social Security Reporter |
Disability support pension: assets test; whether member of a couple; meaning of principal home
(2014/211)
Decided: 10th April 2014 by A.F. Cunningham
Jamieson was in receipt of disability sup-port pension (DSP) from 19 April 2004. At the time he applied for DSP, Jamieson was the registered owner of a property at Busselton in Western Australia (the Busselton property) and one at Innisfail in Queensland (the Innisfail property).
Centrelink decided to raise and recover a debt for the period 19 April 2004 to 28 May 2010. The debt was caused by the incorrect value of assets being taken into account when Centrelink calculated the rate of Jamieson’s DSP. On 5 May 2011 an Authorised Review Officer (ARO) affirmed the decision. The amount of the debt was adjusted to $38,766.65 prior to the decision of the Social Security Appeals Tribunal (SSAT). On 29 May 2013 the SSAT affirmed the decision.
Jamieson sought review by the Tribunal and contended that Centrelink had incorrectly decided that his principal residence was the Innisfail property and not the Busselton property. He contended that he was not living in a marriage-like relationship with Ms Finna during the relevant period so that the value of her assets should not have been included in the calculation of his rate of DSP.
The issues to be determined were:
1. Whether Jamieson was a member of a couple for all or part of the relevant period;
2. Which property was his principal home during the relevant period;
3. Whether he had been overpaid DSP; and
4. If so, whether the debt should be waived or written off for a period.
The relevant legislation is contained in the Social Security Act 1991 (the Act). Module G at Section 1064-G1 sets out a six step process to work out the effect of a person’s assets on the maximum rate of payment. Section 1064-G2 states that the value of the assets of a member of a couple is to be taken to be 50% of the value of the person’s assets and the value of the person’s partners assets.
The term ‘member of a couple’ is defined in subsection 4(2) of the Act and relevantly provides that a person is a member of a couple if:
1. The person has a relationship with another person (the partner):
2. The person is not legally married to the partner;
3. The relationship between the person and the partner is a de facto relationship;
4. Both the person and the partner are over the age of consent applicable to the state in which they live; and
5. The person and the partner are not within a prohibited relationship.
The criteria for forming an opinion about the nature of a couple’s relationship are contained in subsection 4(3) of the Act.
The Secretary contended that Jamieson was in a de facto relationship with Ms Finna between 26 March 2005 to 15 September 2005 and between 13 January 2006 to 25 January 2011. Jamieson conceded that he lived with Ms Finna during these periods but he did not agree that that their relationship was ‘marriage-like’.
The Tribunal considered the evidence under the headings in section 4(3) of the Act. It accepted much of Jamieson’s evidence about each of the 5 factors.
Financial aspects: Jamieson gave evidence that they operated separate bank accounts and had their own sources of income (Centrelink benefits). They generally ate out at his expense. He had paid for Ms Finna to accompany him on a number of trips including a trip to Romania. He paid her $30,000.00 by way of a property settlement following their separation.
The nature of the household: Jamieson and Ms Finna did not have children together but Ms Finna’s grandchildren often spent time with them. When Ms Finna first moved into his home they shared a bedroom together and had a sexual relationship. After a month or so Ms Finna moved into a separate bedroom and their sexual relationship ceased. They generally ate their meals together but mostly ate out. Ms Finna helped him when his back condition was particularly bad. Jamieson did most of the house work and Ms Finna washed their clothes.
Social aspects of the relationship: They ate out together on a regular basis and went on numerous holidays together. People in Innisfail probably viewed them as a couple.
Sexual relationship: Their sexual relationship ceased a short time after they commenced living together.
Nature of commitment to one another: Jamieson maintained that his relationship with Ms Finna could not be described as ‘marriage-like’ and that whilst he cared for her, he did not love her. He claimed that there was a period when she looked after him and acted as his carer. Jamieson told the Tribunal that Ms Finna ceased living with him around the time of Cyclone Yasi (31 January 2011).
The AAT noted that the existence or absence of any one factor was not conclusive and regard must be had to all of the circumstances of a relationship. It noted similarities between the relationship de-scribed in the decision of the Tribunal in Pala and Secretary, Department of Fam-ilies, Housing, Community Services and Indigenous Affairs [2010] AATA 1070 and this case. The AAT concluded that Jam-ieson and Ms Finna were in a marriage like relationship during the relevant period.
Part 3.12 of the Act contains the general provisions relating to the assets test.
‘Principal home’ is defined in section 11A. Subsection 11A(9) provides that a residence of the person is taken to continue to be the person’s principal home during any period not exceeding 12 months during which the person is temporarily absent from the residence.
The AAT noted that although nothing in the definition section of ‘principal home’ specified which of two properties owned and occupied by a person should be considered the person’s principal home, the term had been considered in a number of previous cases before the Tribunal.
In Matula and Secretary Department of Families Housing Community Services and Indigenous Affairs (2009) AATA 993 the Tribunal said at paragraph 35 that:
‘..The words “principal” and “home” are ordinary English words and should be given the ordinary meaning in the context in which they appear.’
In Samek and Department of Social Security (1988) 16 ALD 295 the AAT held that where a person had two or more properties in which they had a proprietary interest, the ‘principal home’ should generally be the one where they spent most of their time.
The only evidence before the AAT of periods Jamieson was in Busselton were his bank statements for the relevant period. Jamieson agreed that the recorded transactions in Busselton would suggest his presence in the area at the time of those transactions. These occurred during a total period of nine months. He spent the remainder of the time at the Innisfail property.
The AAT noted that Jamieson had nominated the Innisfail property as his postal address for Centrelink correspondence and arranged for all mail from Busselton to be redirected to this address.
In the Real Estate Declaration Form completed by him on 12 February 2009, Jamieson described the Busselton property as a two acre vacant block with an unlined tin shed comprising just one room. He estimated the current market value of the property including land and buildings was $300,000 and stated that the property was owned jointly with his partner in equal shares. He purchased it on 1 July 1993.
On 1 April 2009 and 1 May 2009 Jamieson advised Centrelink that a friend was staying at the Busselton property to keep an eye on it for him.
In his claim for DSP dated 19 April 2004, Mr Jamieson nominated Innisfail as his permanent home address but failed to answer question 14 which asked ‘do you own your own home but live somewhere else?’ He told the Tribunal that he understood the reference to real estate to not include a vacant block of land.
The Tribunal was satisfied that Jamieson’s main place of residence and principal home during the relevant period was the Innisfail property and so the Busselton property could not be disregarded as an asset under subsection 1118(1) of the Act.
The Innisfail property consisted of two units, one of which was occupied by Jamieson and the other by a tenant who paid rent to Jamieson. The Secretary submitted that in accordance with the Pension Rate Calculator A at the end of section 1064, where a person owns an investment property, the value of the property can be assessed under the assets test or rent received from the property can be assessed under the income test. Both the value and the rental income are recorded in the Department’s computer system and a periodic calculation is undertaken to determine which of the income and asset tests generates the lower amount of DSP payable which is the one that is applied.
The Secretary considered that the questions raised were whether it was appropriate to treat only one of the two units as Jamieson’s principal home; and if so, whether it was appropriate to simply halve the ATO value of the Innisfail property to ascertain the value of the investment unit. Reference was made to a number of authorities in which the Tribunal had found that only part of a property on a single title should be considered as a person’s principal home.
The Tribunal considered that it was appropriate to treat only the unit Jamieson occupied at the Innisfail property as his principal home for the purposes of the assets test.
The next question was what value should be ascribed to the second unit of the Innisfail property. The value ascribed to Jamieson’s principal home by the Secretary was one half of the AVO valuation of the duplex property.
Jamieson informed the Tribunal that he did not accept the valuation. The Tribunal considered that it was appropriate to dir-ect that the Secretary obtain a valuation from the AVO in relation to the historical value of the Innisfail investment unit.
The remaining issues were whether Jamieson had been overpaid DSP and if so whether the debt that arose should be waived or written off for a period. On the basis that the values ascribed to Jamieson’s assets excluding his principal home were in excess of the allowable asset limit, the AAT was satisfied that Jamieson was overpaid DSP for the relevant period and that pursuant to section 1223 of the Act the amount of the overpayment was a debt due to the Commonwealth. The AAT concluded that neither waiver provision applied as the debt arose either wholly or in part as a result of Jamieson’s failure to disclose his true asset position. The AAT concluded that write-off was not appropriate.
The decision was set aside and in substitution the matter was remitted to the Secretary for further consideration with the direction that the Secretary obtain a valuation from the AVO in relation to the historical values of the Innisfail investment unit.[C.E.]
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URL: http://www.austlii.edu.au/au/journals/SocSecRpr/2014/15.html