Editors --- "Newstart allowance: disposal of an asset" [2010] SocSecRpr 46; (2010) 12(4) Social Security Reporter, Article 1

• Background
• The issue and the law
• The evidence
• Conclusion
• Formal decision

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Newstart allowance: disposal of an asset

TRAN and SECRETARY TO THE DEEWR (No. 2010/664)

(2010/664)

Decided: 12th August 2010 by M. J. Carstairs

Background

Tran was refused newstart allowance on the basis that he had gifted an amount of $250,000 without receiving consideration.The payment was part of a financial settlement of Tran’s previous de facto relationship.

This decision was affirmed by an authorised review officer and the SSAT.

The issue and the law

The relevant section of the Social Security Act 1991 (the Act) is section 1123 which states as follows:

1123 Disposal of assets

(1) For the purposes of this Act, a person disposes of assets of the person if:

(a) the person engages in a course of conduct that directly or indirectly:...

(ii) disposes of all or some of the person’s assets; or

(iii) diminishes the value of all or some of the person’s assets; and

(b) one of the following subparagraphs is satisfied:

(i) the person receives no consideration in money or money’s worth for the destruction, disposal or diminution;

(ii) the person receives inadequate consideration in money or money’s worth for the destruction, disposal or diminution;

There was no dispute that Tran disposed of some of his assets, the question was whether he received either inadequate or no consideration.

The evidence

Tran’s evidence was that he separated from his partner in 2006. After this, his ex-partner demanded payment by way of property settlement. An informal document between the parties was drafted by his son to record that Tran would give $50,000 to each of his five children for their investment in a new house. The document stated ‘From then on there will be no conflict between the two parties with respect to money’.

Tran indicated that the reason the money was gifted to his children was to avoid the funds being lost as a result of his ex-partner’s gambling habit.

The terms of separation were later attempted to be formalised by way of a separation agreement under the relevant Queensland legislation, however this did not eventuate because Tran’s ex-partner refused to sign the agreement.

Conclusion

The Tribunal found that Tran had obligations in relation to his past relationship and his children. This obligation was recognised by the informal agreement prepared by Tran’s son.

The Tribunal found that Tran obtained an advantage as a result of this process - the advantage being that his property matters were settled without the necessity of Family Court proceedings.

As a result he had not disposed of an asset without adequate or no consideration.

Formal decision

The AAT set aside the decision under review and directed the Department to reassess Tran’s application for newstart allowance on the basis that he did not dispose of an asset.

[R.P.]