Social Security Act 1991 - Ss 5, 7A, 8, 40, 55, 198D, 198J, 198L, 501E, 501F, 1064, 1072, 1076, 1118, 1118(2A), 1124, 1124A, 1125, 1125A, 1126, Chapters 1, 2 and 3, 1133, 1135, 1182,

Re Thomas and Secretary, Department of Family and Community Services (unreported, Decision No 4232, 17 November 1998, Mr McLean, Member)

Re Aconley and Secretary, Department of Social Security (unreported, Decision No. 3530, 27 June, 1996, Senior Member Bayne)

DECISION AND REASONS FOR DECISION [1999] AATA 760

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Decision The Tribunal affirms the decision of the Social Security Appeals Tribunal dated 23 February, 1999.

On 30 March, 1999, the applicant, Mrs Beryl Anstis, applied for review of a decision of the Social Security Appeals Tribunal ("SSAT") dated 23 February, 1999. The SSAT had affirmed a decision made by a delegate of the respondent, the Secretary of the Department of the Family and Community Services ("Secretary"), dated 25 November, 1998 and affirmed by a decision of the Authorised Review Officer dated 16 December, 1998. The delegate's decision had been to treat the proceeds from the sale of Mrs Anstis' home as subject to the extended deeming rules under the income test.

2. At the hearing, Mrs Anstis was represented by her son, Mr Tony Anstis while the Secretary was represented by Mrs Guthrie, who is an advocate with Centrelink. The documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 ("T documents") were taken into account together with the written submissions of the applicant lodged with the Tribunal on 23 April, 1999; 30 June, 1999 and of the respondent lodged with the Tribunal on 21 May, 1999; 16 June, 1999 and 10 August, 1999.

3. The issue in this case centres upon the interpretation of sub-section 1118(2) of the Social Security Act 1991 ("Act"). That sub-section provides that the proceeds which Mrs Anstis received from the sale of her principal home and which she intended to apply in the following twelve months acquiring another residence that was to be her principal home were "to be disregarded during that period for the purposes of this Act". Are those purposes limited to the application of the assets test or do they extend to the application of the income test?

4. On the basis of the evidence of the parties and of the T documents, I find that Mrs Anstis was in receipt of age pension in November, 1998. At that time, she owned a house in Victoria and it was her principal place of residence. One of Mrs Anstis's sons is Mr Michael Anstis who is a consultant with the Pensioners Network. On 29 October, 1998 he wrote to Centrelink stating:

"I have been advised that it is the policy of Centrelink that if a person sells their principal home and intends to re-buy within 12 months, the asset value, but not the deemed income, are disregarded for 12 months.

I note that S1118(2) of the Act says the proceeds of the sale are to be disregarded. If the proceeds are deemed I fail to see how this is disregarding them. ..." (T documents, page 53)

5. Centrelink responded on 30 October, 1998 by attaching a copy of the guidelines and stating:

"... Proceeds will be exempt under the assets test (the person is still classified as a homeowner under the assets test). However the proceeds if placed at a bank etc. will be a financial investment as (sic) so subject to the extended deeming rules under the income test.

Please note that S1118(2) only relates to the assets test." (T documents, page 54)

6. On 13 November, 1998, Mrs Anstis sold her home and received $101,425.95. Of that sum, she gave $10,000.00 to her son, Michael Anstis, and deposited the remainder in a bank account in Victoria. Mrs Anstis had earlier moved to Queensland on 6 November, 1998. She lived with her daughter, Valerie Patricia Anstis, to whom she paid rent of $100.00 each week.

7. A little later, in a letter dated 16 November, 1998, she advised Centrelink that she intended to purchase a new home within the following twelve months for an amount similar to that she had received on the sale of her home in Victoria. Mrs Anstis then referred to Centrelink's policy of disregarding the proceeds of the sale of a principal place of residence for the purposes of the assets test but not disregarding income deemed to have been received from those proceeds. If that policy was to be applied in her case, she continued, she wished to appeal against it and set out her reasons. (T documents, pages 62-64)

8. On 25 November, 1998, a delegate of the Secretary assessed the rate of Mrs Anstis' age pension and, in doing so, took into account deemed income from the proceeds of the sale of her principal place of residence (T documents, pages 66 to 68). The delegate's decision was reviewed and affirmed by an Authorised Review Officer on 16 December, 1998. Her reasons for affirming the decision are encapsulated in the following passage:

"If the principal place of residence has been sold and the intention is to buy another home within twelve months, the proceeds from the sale of the house are exempt under the assets tests. This is because the person is still deemed to be a home owner under the assets test.

However the proceeds if placed in a bank, or other financial institution, are now considered to be a financial investment and as such are subject to the extended deeming rules under the income test.

This is why I have agreed with the decision that has been made regarding the proceeds from the sale of your Mother's home. Once a new home is purchased or even if she were to build a new residence and made part payments, once she has advised of the change in circumstances, her record will be adjusted to reflect this." (T documents, page 71)

9. On 18 March, 1999, Mrs Anstis purchased a new home for $88,000.00.

10. Mr Tony Anstis made both oral and written submissions. The essence of those submissions, some of which addressed specific passages in the SSAT's reasons, is set out in the following two passages:

"1/S1118(2) says the proceeds are disregarded for the purposes of the Act. The natural meaning of this is that the proceeds are disregarded for deeming as deeming is a purpose of the Act and is a process which is applied to the proceeds

2/This natural meaning does not produce any anomaly and should thus be followed. In fact it is the SSAT version which produces a clear anomaly as under their system if a person who is asset tested and not income tested prior to selling their home sells their home their rate of pension will not be affected because deeming does not affect the rat eof pension of someone who is asset tested. The SSAT contention thus discriminates against those who, apart from their principal home, hold assets with less value. This is clearly unjust in the case of welfare legislation and no reason has been put forward to justify the discrimination.

3/If it was the intention of Parliament to disregard the proceeds for the purposes of both the asset test and deeming how could they be any clearer? Were they supposed to say that the proceeds are disregarded for the purposes of the Act and deeming or and (sic) the assets test? If they wanted it just to be disregarded for the assets test why not say so? S1127A uses the phrase 'does not apply for the purposes of the assets test' Why didn't they use similar words in S1118(2)

4/The legislation is beneficial so ambiguity should be construed in favour of the applicant". (Outline of Argument of Applicant)

"1) As from the date the applicant signed the contract for the purchase of her principal home she obtained an interest in the home that gave her reasonable security of tenure. It was on this date that she became the equitable owner of the house and the vendor became the equitable owner of the purchase money - see (Lysaght v Edwards (1876) 2 Ch D 499). Therefore the moneys should be exempted under S1118(1) rather than S1118(2) from that date on; or alternatively the purchase moneys are exempted because they are owned in equity by the vendor and not the purchaser and assets owned in equity are not assessed against the legal owner for pension purposes as is evidenced by the fact that when a person holds property on trust for another the trustee is not treated as holding assets for pension purposes." (Additional Outline of Argument of Applicant)

"... I felt it important to give you a worked example of the effect of the sale

ofa (sic) house worth $100,000.00 on someone who is asset tested with total assets pre sale of $190,000.00 of which $170,000.00 is in say a bank. The net result is that pre sale their pension would be $88.00 per week and post sale their rate would still be $88.00 per week because $270,000 deemed has a smaller pension reduction than $190,000.00 asset tested. Pensioners who are income tested pre sale on the other hand always have their pension reduced." (Portfolio Memoranda)

11. On behalf of the Secretary, Mrs Guthrie submitted that sub-section 1118(2) means that the proceeds of the sale of Mrs Anstis' home shall be disregarded for the purposes of the assets test. It does not operate to exclude the proceeds of the sale held in Mrs Anstis' bank account from the deeming rules under the income test. The reasoning of the SSAT was adopted. The SSAT carefully explored the history of the provision, the structure of the Act and the legislative scheme as well as previous authorities in the Tribunal.

"4.2 The applicant argues that if the intention of parliament was to exclude the proceeds of sale from the application of the assets test only Parliament could have specifically stated that intention. The applicant points to s.1127A as an example of parliament using the words 'does not apply for the purposes of the assets test' to reinforce her argument.

Section 1127A states: This Division does not apply for the purposes of the assets test set out in Subdivision A of Division 1 of Part 2.5 (care receiver assets test).

Section 1127A refers to a specific assets test not just to the assets test in general. The respondent therefore contends that this example does not support the applicant's contention as to parliament's intention with respect to the drafting of s.1118(2).

4.3 As to the applicant's contention that the Social Security Act is not compartmentalized in the way the SSAT suggests, the Respondent contends that the SSAT has utilised appropriate means to interpret s.1118(2) and further contends that the Act is compartmentalized. The applicant states that Part 3.12 is not concerned solely with the assets tests referring in particular to the appearance of s.1129 in Part 3.12. However, s.1129 is directly related to the assets test in that it provides for access to Hardship rules were (sic) a social security pension is not payable because of the application of an assets test.

The applicant further states that s.1110 appears in Part 3.10 which deals with the Ordinary Income test yet is concerned with the assets test. Section 1110 is headed 'Treatment of Transactions that constitute both a disposal of ordinary income and a disposal of Assets' and ultimately the section addresses what amount is to be included in the person's ordinary income. It is thus appropriately placed in Part 3.10.

Sections 118(2A) is a sub-section of s.1118 which deals with disregarding of certain assets for the purposes of the assets test and s.1126 appears in a separate division and relates to disposal of assets.

4.4 As to the applicant's argument in relation to paragraphs 7.15-7.16 of the SSAT decision, the fact that the value of an asset is disregarded for the purposes of the application of the assets test does not mean that the asset no longer has a value. The proceeds of sale held in the bank account is a financial asset which is subject to the deeming provisions. The deemed income must be considered in calculating a person's ordinary income for the purposes of the application of the income test.

4.5 The applicant contends that the case of Re Aconley can be distinguished on the basis that it was concerned with interest. The respondent contends that the reasoning in Re Aconley as to the interpretation of s.1118(2) is of assistance in this matter. The respondent does not accept the applicant's contention that interest which was being considered in Re Aconley exists independently of the deposit money. The Respondent relies in particular on paragraphs 11 and 12 of the Tribunal's Reasons for decision in Re Aconley_._

The Respondent would also rely on the reasoning in the case of Re Thomas.

The Respondent contends that the decision of Re Gelders can be distinguished on the basis that it dealt with the treatment of proceeds of sale as a liquid asset. Re Gelders did not consider the issue now before the Tribunal. It simply extended the operation of s.1118(2) to another section of the Act that related to assets."

13. The Act is divided into eight chapters. Chapter 1 is headed "Introductory" and, in general terms, is concerned with formal matters such as the name of the Act and its commencement, definitions of various terms and determinations having an interpretative effect. Chapter 2 sets out the pensions, benefits and allowances provided for in the Act. There are thirty one pensions, benefits or allowances provided for in thirty one separate parts of that chapter. Except in relation to a pension bonus, each part in the chapter specifies those entitled to the payment, how the claim is made, the date from which it will be granted, the rate of payment, how the payment will be made and when it will commence, how payments are protected, what the recipient of the payment needs to do, the circumstances in which the payment and its rate may be reviewed, bereavement payments and concessions made to persons who receive that particular payment (section 40).

14. As Mrs Anstis is receiving an Age Pension, I will use that as an example. That is the subject of Part 2.2 of Chapter 2. The rate of Age Pension is worked out in accordance with section 55. In the case of a person who is not permanently blind (and so who is in Mrs Anstis' position) the rate is calculated by using Pension Rate Calculator A at the end of section 1064 (paragraph 55(a)). That rate calculator, together with rate calculators relevant to other pensions, payments and allowances, is found in Chapter 3. That chapter is headed "General Provisions Relating to Payability and Rates".

15. In broad terms, Pension Rate Calculator provides that a person's maximum payment rate is calculated after working out the maximum basic rate using Module B, the pharmaceutical allowance using Module C and rent assistance in accordance with Module D set out in Pension Rate Calculator A. The amount of income reduction is then calculated using Module E. Module E is headed "Ordinary Income Test". The amount of income reduction is taken away from the person's maximum rate of payment and the result is called the income reduced rate. Module G is then used to work out the reduction for assets. Module G is headed "Assets Test". The reduction for assets is taken away from the maximum payment rate and the result is called the assets reduced rate. The income reduced rate and the assets reduced rate are compared. The lesser of the two rates (or the income reduced rate if the two are the same) is the provisional payment rate. The rate of pension payable is any amount payable by way of remote area allowance, which is calculated in accordance with Module H, together with the difference between the provisional payment rate and any advance payment deduction.

16. Module E, which sets out the Ordinary Income Test, has at its foundation a person's ordinary income on a yearly basis. The Method Statement in point 1064-E1 sets out how to work out the effect of a person's ordinary income on his or her maximum payment rate for, in Mrs Anstis' situation, Age Pension. Note 2 to point 1064-E1 provides that:

"the application of the ordinary income test is affected by provisions concerning:

the general concept of ordinary income (sections 1072 and 1073);

deemed income from financial assets (sections 1076 to 1084);

income from income streams (sections 1095 and 1099D);

17. "Ordinary income" is defined to mean "... income that is not maintenance income or an exempt lump sum." (sub-section 8(1)). "Income" in relation to a person means:

"(a) an income amount earned, derived or received by the person for the person's own use or benefit; or

(b) a periodical payment by way of gift or allowance; or

(c) a periodical benefit by way of gift or allowance;

but does not include an amount that is excluded under subsection (4),(5),(7A) or (8).

Note 1: See also sections 1074 and 1075 (business income), sections 1076-1084 (deemed income from financial assets) and sections 1095-1099D (income from income streams).

Note 2: where a person or a person's partner has disposed of income, the person's income may be taken to include the amount which has been disposed of - see sections 1106-1112.

Note 3: income is equivalent to ordinary income plus maintenance

(whether of a capital nature or not)." (sub-section 8(1))

The expression "earned, derived or received" used in the definition of "income" is itself defined in sub-section 8(2) to mean:

"(a) an income amount earned, derived or received by any means; and

(b) an income amount earned, derived or received from any source (whether within or outside Australia)."

19. The remaining provisions of section 8 of the Act set out definitions relevant to the income test and those in section 10 set out definitions relevant to "maintenance income". Certain amounts are specifically excluded by sub-sections 8(4), (5), (7A) and (8).

20. While Module E sets out the income test, regard must also be had to Part 3.10 of Chapter 3. That sets out the general provisions relating to the ordinary income test. Regard must be bad to Part 3.10 in order to determine a person's ordinary income which is then used in the application of the Ordinary Income Test. Section 1072 provides that a person's ordinary income is a reference to a person's gross ordinary income without any reduction other than that under Division 1A.

21. A person who has financial assets is taken, for the purposes of the Act, to receive ordinary income on those assets in accordance with the provisions of Division 1B of Part 3.10. That Division sets out the circumstances in which a person is deemed to have received income from financial assets. As Mrs Anstis is not a member of a couple, I have had regard to section 1076. Sub-section 1076(2) provides that "A person who has financial assets is taken, for the purposes of this Act, to receive ordinary income on those assets in accordance with this section."

22. The practical effect of sub-sections 1076(3) and (4) is that the "total value of the person's financial assets" must be calculated. If it is equal to or less than the person's "deeming threshold", sub-section 1076(3) provides that:

"... the ordinary income the person is taken to receive per year on the financial assets is the amount worked out by multiplying the value of those assets by the below threshold rate."

If the "... total value of the person's financial assets exceeds the person's deeming threshold, the ordinary income that the person is taken to receive is worked out ..." in accordance with the Method Statement set out in sub-section 1076(3A).

23. A "financial asset" is defined in sub-section 9(1) to mean:

Other provisions in section 9 expand upon this definition. Of importance in this case are the definitions of a "financial investment" and a "deprived asset":

(h) an asset-tested income stream (short term)." (sub-section 9(1))

"For the purposes of this Act, an asset is a deprived asset if:

(b) the value of the asset is included in the value of the person's assets by section 1124A, 1125, 1125A or 1126." (sub-section 9(4))

24. Nowhere in Division 1B of Part 3.10 of Chapter 3 or in section 9 is there any provision for the manner in which the value of a person's financial assets is to be calculated.

25. I will return now to the Assets Test referred to in the Pension Rate Calculator A. As I have said, that test is set out in Module G which is found in section 1064 of the Act. That module has at its foundation a person's assets and sets out how to work out their effect on his or her maximum rate of payment of, in this case, Age Pension. The Method Statement in point 1064-G1 specifies that the first step is to "Work out the value of the person's assets." The person's "assets value limit", which is determined in accordance with point 1064-G3, must then be determined and that is used to determine whether or not his or her assets exceeds that limit. If it does not, his or her "assets excess" is nil. If it exceeds, his or her assets excess is the value of his or her assets less the assets value limit. The person's assets excess is used to work out his or her reduction for assets using points 1064-G4 to 1064-G7. An "asset" is defined to mean "... property (including property outside Australia)" (sub-section 11(1)). No reference is made in Module G to the manner in which the value of a person's assets is to be determined.

26. Part 3.12 of the Act is headed "General Provisions Relating to the Assets Test". Division 1 of that Part is headed "Value of person's assets". Division 2, which is headed "Disposal of Assets", makes provision for the value of a person's assets to include assets of which he or she has disposed of in certain circumstances. Other Divisions are concerned with financial hardship (Division 3), pension loans scheme (Division 4) and special residences and special residents (Division 5). Section 1118 is headed "Certain assets to be disregarded in calculating the value of a person's assets". Sub-section 1118(1) provides that:

"In calculating the value of a person's assets for the purposes of this Act (other than section 198J and 198L, subparagraph 501E(1)(d)(iv) and sections 1125, 1126, 1133 and 1135A), disregard the following: ..."

nineteen assets which are set out in paragraphs (a) to (t).

27. Sub-section 1118(2), which is at the heart of this case, provides that:

(a) a person sells the person's principal home; and

(b) the person is likely, within 12 months, to apply the whole or a part of the proceeds of the sale in acquiring another residence that is to be the person's principal home;

so much of the proceeds of the sale as the person is likely to apply in acquiring the other residence is to be disregarded during that period for the purposes of this Act."

28. Sub-section 1118(2A) qualifies sub-section 1118(2) in providing that:

"Subsection (2) does not apply to the calculation of the value of a person's assets for the purposes of sections 198F to 198M or 1123 to 1128 (disposal of assets)."

29. At the heart of this case are the words "for the purposes of the Act". Are they limited to those purposes concerned with the application of assets tests under the Act or do they extend to other purposes? Adopting the SSAT's approach, I have had regard to the Act as a whole. As provided by sub-section 13(1) of the Acts Interpretation Act 1901, the headings of the Parts, Divisions and Subdivisions into which the Act is divided are deemed to be part of the Act.

30. If the heading of Part 3.12 were determinative of the matter, there would be no question that the purposes of the Act were limited to the application of the assets test. The heading to section 1118 does not limit its application to the assets test. It refers to the "... assets to be disregarded in calculating the value of a person's assets" (emphasis added). It makes no reference to the assets test. That it does not is consistent with the specific omissions made in sub-section 1118(1). Certainly, two sections are clearly concerned with the application of an assets test. They are sections 198J and 198L both of which are part of the legislative framework used to work out the value of assets for the Assets Test set out in section 198D. That Assets Test must, in some circumstances, be passed by a care receiver before a person is qualified to receive a carer payment (section 198).

31. By way of contrast, subparagraph 501E(1)(d)(iv) is not concerned with the application of an Assets Test under the Act. That paragraph forms part of the provisions relating to Parenting Payment. Section 501E authorises the Secretary to give a notice requiring a claimant to give certain information about the claimant's relationship with another person if certain circumstances prevail. Among those circumstances are that:

(iv) have joint assets with a total value of more than $4,000.00; ..."

32. If the claimant for the Parenting Payment purports to give the Secretary the information sought in a notice under section 501E, the Secretary must form an opinion whether the claimant has a marriage-like relationship with the other person (section 501F). If the claimant does not respond to the notice, his or her claim for a Parenting Payment is taken not to have been lodged. The information is required not for any application of an assets test but as part of the patchwork of information required to determine the nature of the claimant's relationship.

33. I have also had regard to sections 1125 and 1126 which fall within Division 2 of Part 3.12 and are specifically excluded from the operation of sub-section 1118(1). They are concerned with the disposal of assets and the circumstances in which they are regarded as part of a person's assets. Both sections make provision "for the purposes of the Act". Neither confines their operation to the application of the assets test even though Part 3.12 is concerned with, and headed, "General Provisions relating to the assets test". Indeed, where a person has disposed of assets and the value of assets is included in a person's assets by virtue of these sections (as well as sections 1124A and 1125A) they are deprived assets by virtue of sub-section 9(4) and so are financial assets within the meaning of sub-section 9(1). Financial assets are relevant in applying income tests and not in applying assets tests. It follows that the "purposes of the Act" to which sections 1125 and 1126 refer extend beyond those concerned with the assets test to those concerned with the income test.

34. Sections 1133 and 1135, which are also excluded from the operation of sub-section 1118(1), are concerned with the Pensions Loans scheme. In particular, they are concerned with determining whether or not a person owes a debt to the Commonwealth by virtue of a person's having been paid a pension or allowance under that scheme.

35. Looking only to sub-sections 1118(1), then, it is apparent that it is not intended to be limited in its application to the assets tests specified in the Act. It is intended to be limited to those situations in which there is a need to calculate the value of a person's assets. As is apparent from the exclusion of sub-paragraph 501E(1)(d)(iv) and, more indirectly, of sections 1125 and 1126, those situations are not limited to those in which the assets test is being applied.

36. Sub-section 1118(2) again makes provision "for the purposes of this Act" without specifying that it is limited to the application of the assets tests. The qualifications expressed in sub-section 1118(2A) specifically exclude the operation of sub-section 1118(2) in "the calculation of the value of a person's assets for the purposes of", among others, sections 198F to 198M. Those sections are part of the legislative framework used to work out the value of assets for the Assets Test set out in section 198D. The other sections excluded are sections 1123 to 1128 which are concerned with the disposal of assets. As explained above, their exclusion has an impact upon the determination of the value of a person's assets when certain assets have been disposed of. They also have a bearing upon the application of the income case (see paragraph 33 above).

37. Looking then to the Act as a whole, it is apparent that the value of a person's assets may be relevant in enabling the Secretary to determine the nature of a claimant's relationship, in determining the value of a person's assets for the application of the assets tests specified under the Act and in determining the value of a person's assets for the application of the income tests. Despite being placed in a part of the Act whose heading states that it is setting out provisions relating to the assets test, it is clear from the face of sub-section 118(1) and from the provisions excluded from its ambit that it is not limited in its application to the assets tests. These aspects of the Act, together with the heading to Division 1 of Part 3.12 ("Value of person's assets") in which sub-section 1118(1) is placed, outweigh any suggestion conveyed by the heading to Part 3.12 itself. They lead to the conclusion that the purposes of the Act referred to in sub-section 1118(1) are those purposes requiring the value of a person's assets to be assessed. Valuation may be required in applying the assets test or the income test or in determining whether a notice should be issued under section 501E.

38. Unlike sub-section 1118(1), sub-section 1118(2) does not precede the words "for the purposes of this Act" with the words "In calculating the value of a person's assets". That omission does not, in my view lead to the conclusion that sub-section 1118(2) should be read any more widely than sub-section 1118(1). Its application is limited to the calculation of the value of a person's assets for the purposes of the Act. The remaining provisions of section 1118 (of which sub-section 1118(1)) is an example) are clearly concerned with the valuation of assets. The context of sub-section 1118(2), together with the heading to the Division also point to the conclusion I have reached.

39. It follows that the effect of sub-section 1118(2) is to exclude the proceeds of the sale of a person's principal home in calculating the value of his or her assets for the purposes of the Act. In assessing the deemed income from financial assets, section 1076 requires regard to be had to the total value of a person's financial assets. The proceeds were deposited in a bank account and so were a financial investment and, in turn, a financial asset.

40. Must regard be had to sub-section 1118(2)? It is, as I have said, concerned with the calculation of the value of a person's assets. Section 1076, however, is concerned with the total value of a person's financial assets. Is there a difference between "assets" and "financial assets"? No such distinction was drawn in Re Secretary, Department of Social Security and Gelders [1993] AATA 115; (1993) 17 AAR 235 (Deputy President Breen, Mr Horrigan and Dr Christie, Members) between assets and liquid assets. The Tribunal decided that the liquid assets test specified in section 519 was only one of the assets tests to which Part 3.12 of the Act applies. It followed that sub-section 1118(2) was to be taken into account in determining the value of a person's assets which were liquid assets. This does not assist me in this case for the concept of financial assets does not arise in the context of an assets test under the Act but in the context of an income test.

41. In view of that, I have returned to the definitions of the words "asset" and "financial asset" themselves. An asset means property (see paragraph 25 above) and a financial asset means a financial investment or a deprived asset (see paragraph 23 above). A financial investment is both a person's asset as it is his or her property and a financial asset as it comes within the definition of that term. A deprived asset, however, is not a person's asset in the sense it is used in the Act for it is not a person's property. It cannot be for the person has disposed of the property and it only becomes a financial asset by virtue of the Act's stating that is so. It should also be noted that an asset which has been disposed of is not deemed to be a person's asset for the purposes of the Act. All that the Act does is to provide that, for the purposes of the Act, "there is to be included in the value of the person's assets" a certain amount determined by the Act for a certain period determined also by the Act.

42. It follows that the concepts of "asset" and "financial asset" are two different matters. References to assets and the financial asset are not interchangeable and it cannot be said that financial assets are simply one particular category of assets. The consequence of this is that the words "assets" and "financial assets" must be read as separate entities. Therefore, when sub-section 1118(2) speaks of "assets" it is not referring to "financial assets". While the proceeds of the sale of a person's principal home is to be disregarded for the purposes of the Act in the calculation of the value of his or her assets in the circumstances set out in sub-section 1118(2), it does not mean that they are to be disregarded when assessing a person's financial assets.

43. Returning to the facts of this case, Mrs Anstis deposited the proceeds of the sale less the sum of $10,000.00 which she had given to one of her sons. She did so on or about 13 November, 1998 and purchased her new principal home on 18 March, 1999. The conclusion I have reached means that the proceeds of the sale less the sum of $10,000.00 was a financial asset as it was a financial investment. Mrs Anstis was deemed to receive ordinary income on those proceeds and they are excluded by virtue of the operation of sub-section 1118(2).

44. Should I be incorrect in that view, I would note that the actual income earned on the proceeds would have to be taken into account. That follows from the fact that any interest which she earned on the sum while it was deposited in the bank account is ordinary income for the purposes of the Act and must be taken into account in applying the income test in assessing the amount of Age Pension payable to Mrs Anstis. It is money which has been earned, derived or received by any means for Mrs Anstis' own use or benefit. It is not excluded from the notion of income by any of the specific exclusions found in sub-sections 8(4), (5), (7A) and (8). Sub-section 1118(2) has no relevance for it excludes the proceeds of the sale of the principal home in calculating the value of assets for the purposes of the Act but does not exclude money earned, derived or received from those proceeds from being regarded as income.

45. Although my reasons are different, this conclusion is consistent with that of the Tribunal in Re Thomas and Secretary, Department of Family and Community Services (unreported, Decision No. 4232, 17 November, 1988, Mr McLean, Member) and with the earlier decision of the Tribunal in Re Aconley and Secretary, Department of Social Security (unreported, Decision No. 3530, 27 June, 1996, Senior Member Bayne).

46. For the reasons I have given, I affirm the decision of the Social Security Appeals Tribunal dated 23 February, 1999.

I certify that the forty six preceding paragraphs are a true copy of the reasons for the decision herein of Miss S A Forgie (Deputy President)