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Tribunal: Member Colin Edwardes

The applicant applied to the Department of Health for financial hardship assistance to support her residential aged care. The Department determined that the applicant qualified for financial hardship assistance from 26 May 2015 to 28 April 2017. In her application, she claimed a property in Fremantle as an unrealisable asset, which would exclude the property from being part of the Department’s consideration of the social security. Near the end of the approved term, the applicant applied for the assistance to be continued and the Department rejected the application stating the applicant was not in financial hardship because the Fremantle property was a realisable asset.

A person in this circumstance does not qualify for assistance if they are not in financial hardship. A person is not in financial hardship if they own an asset more than 1.5 times the sum of the annual basic age pension amount, which was $34,643.70 at the time of the application.[1] This may make such an asset “realisable” in that the person could use it for financial support. The applicant’s Fremantle home was greater than this amount, worth approximately $900,000. An asset can be exempt from this requirement if it is “unrealisable”. One way an asset can be found to be “unrealisable” is if the owner cannot reasonably be expected to sell the asset or use it as security for borrowing.[2]

The applicant claimed it was not reasonable to expect her to sell the property because her daughter’s family lived in the house and had been for more than 10 years.[3]

Both parties accepted that it could not be reasonably accepted that the applicant should sell the Fremantle property for this purpose.

The Department claimed that the applicant did not qualify for financial hardship assistance because it would be reasonable for her to use the house as security for borrowing.

The AAT carefully considered all the evidence and concluded that the Fremantle property was not an unrealisable asset. The AAT found that there would be an expectation by the public that there should be the contribution of private funds towards aged care, if such funds are available. The AAT agreed with the claim made by the Department that it was reasonable for the property to be sold or a loan secured against the property for the age care requirements of the applicant’s. The AAT said there was no evidence before it to suggest such an approach was considered by the applicant.

The AAT affirmed the Department’s decision.

Read the full written decision on AustLII.


[1] Subsection 38(2) of the Fees and Payments Principles 2014

[2] Subsection 11(13) of the Social Security Act 1991

[3] See Instruction of the Guide to Social Security Law