1. The Tribunal accepted that, contrary to the indication in the written age pension claim form, the Applicants were involved in both a private company and private trust, and that the trust was the trading entity and operated through the company name.
2. The Applicant did not dispute, in his evidence at the hearing, the attribution of income and assets from the trust. He did, however, dispute that an increased rate was not payable to him prior to 31 March 2023. Given this, the Tribunal considered that the issues before it in this matter are:

(i) Whether the Applicants were correctly attributed with income and assets of the trust prior to any resignation having occurred; > > (ii) Whether there were genuine resignations from the trust by the Applicants and if so on what date; and > > (iii) The impact of any resignation on the rate of age pension and the date from which any higher rate of age pension is payable to the Applicants.

3. At the time it proceeded to make its decision in this matter, the Tribunal and the parties to the application had the following evidence before them:

(iv) Main bundle of documents provided by the Respondent ("T" documents); > > (v) Supplementary bundles of documents (both numbered S1 to S2, 10 pages each); > > (vi) Further supplementary documents (FS1 to FS8); > > (vii) Statement prepared by the Applicants dated 1 May 2024; > > (viii) Submissions from the Respondent dated 11 June 2024; > > (ix) Statement of Facts, Issues and Contentions and an Amended Statement of Facts, Issues and Contentions dated 24 January 2025; > > (x) Secretary's written submissions post-hearing, with attachments (These were provided to the Applicants, with time for comment. Nothing further was provided by the Applicant's in response to the submissions). > > Attribution of income and assets of the trust

4. The Tribunal accepted that the relevant background to this matter is that the trust's ABN was registered in July 2008. The Tribunal accepted the Applicant's evidence, given at the hearing, that the deed establishing the trust named the Applicant as a trustee, appointor and beneficiary of the trust.
5. The trust distributed amounts to various beneficiaries during the 2020/21 financial year, being $82,672 to the Applicant, $82,672 to the second Applicant, $80,005 to their son whom the Tribunal accepted was also involved in running the business, and $21,334 to their daughter. In the following financial year, the 2021/22 financial year, the trust distributed amounts only to the Applicants' son ($61,374) and daughter ($18,333). The Applicant did not dispute the figures in the financial statements, although asserted that the Applicants had never received profits by way of a lump sum.
6. At the time the combined age pension claim was lodged, on 6 June 2022, the Applicants stated in the claim form that they were both involved in the business, that both had roles involving personal exertion, that each of their share of the business was 25% and their son and daughter also had 25% each share of the business, and that the Applicant was working 28 hours per fortnight in the business on a part-time basis and earning $200 per week. Payslips for both Applicants were contained in the papers provided to the Tribunal and the Tribunal noted from these that the Applicant was earning $200 per week from May 2022 through to December 2022, with the last pay date reflected as 11 December 2022. The second Applicant's payroll advice indicated she earned between $100 and $200 per week between June and July 2022. The Applicant did not dispute at the hearing that he and the second Applicant had been drawing a wage from the trust during the 2022 calendar year.
7. The Tribunal noted that the Applicants had not disputed the attribution of income from the trust at the first review hearing and, similarly, the Applicant did not dispute this aspect of the Respondent's decision at the second review hearing.
8. For completeness' sake, the Tribunal notes that attribution of income and assets of private trusts and companies is guided by Part 3.18 of the Social Security Act 1991 (Cth) (the Social Security Act). Where an individual is involved in a private trust (as it is the trading entity in this matter), for income and assets of the trust to be attributed to the individual:

(a) The trust must be a designated private trust as defined in section 1207P of the Social Security Act; > > (b) The trust must be a controlled private trust in relation to the individual, as defined in section 1207V of the Social Security Act; and > > (c) The individual must be an attributable stakeholder of the trust, as defined in section 1207X of the Social Security Act.

9. Subsection 1207P(1) of the Social Security Act provides that a trust is a designated private trust unless all of the conditions in 1207P(1)(a) are satisfied. These include that the units in the trust are held by 50 or more persons. The Tribunal is satisfied that this does not apply to the Applicant's trust and the trust is therefore a designated private trust within the meaning of section 1207P of the Social Security Act.
10. Section 1207V of the Social Security Act provides that, for a trust to be a controlled private trust, it must be a designated private trust and the individual must pass the control test set out in 1207V(2) or the source test set out in 1207V(3). As the Applicant gave evidence of having been a trustee of the trust, he met the control test and the trust is a controlled private trust within the meaning of section 1207V of the Social Security Act.
11. Subsection 1207X(2) of the Social Security Act provides that if a trust is a controlled private trust and is not a concessional primary production trust, the individual is an attributable stakeholder of the trust unless the Secretary determines otherwise and their income and asset attribution percentage is 100% unless a lower percentage is determined. The Respondent made detailed submissions to the Tribunal, which were not disputed by the Applicants, that the Applicant should be assigned an attribution percentage of 50%. The primary assertions for this were that the Applicant was a joint trustee, appointor and beneficiary of the trust; he derived income and wages from the trust; and he was a director and shareholder of the related company. Taking into account the submissions made by the Respondent, the arrangements for the trust and company as described by the Applicant at hearing, and the financial information available in respect of the trust, the Tribunal accepted the submissions of the Respondent on this issue. The Tribunal accepted that the trust tax return for the 2021/22 financial year reflected business income of $80,312 and that half of that amount, $40,156, was attributable income to the Applicant.
12. The Tribunal accepted that the income from the trust was reflected in the grant letters sent to both Applicants, by notice dated 17 January 2023. Each notice advised that a decision had been made to pay the Applicants age pension from 6 June 2022 and advised of an immediate payment, and then an ongoing regular payment rate from payment date 31 January 2023. Each Applicant was advised in their respective letter that the information being used for calculating their regular payment was combined annual income of $40,351.54. The Tribunal accepted from the notices sent to the Applicants that the trust income was used to calculated the Applicants' rates of age pension from the date of grant.

1. The Social Security Act provides the circumstances in which the income and assets of a private trust and company are attributed, but is silent as to the circumstances in which such attributions cease. The Social Security Guide sets out the policy as to when the attribution of income and assets from a company or trust will cease, due to a genuine resignation from the trust or company structure on or after 1 January 2002. At Point 4.12.9.10, the Guide states that:

A genuine resignation will be accepted as having occurred where both the attributable stakeholder and their partner:

• relinquish ALL formal roles and control in respect of the entity
• if applicable, relinquish their shares and directorships
• relinquish all beneficial interest, that is they cannot be income or asset beneficiaries of the entity. This could be evidenced by an alteration to the trust deed stipulating that they could not be an income or asset beneficiary or by creating a separate deed to renounce the beneficial interest of the person and their partner in the trust, and
• make a written declaration that they will not exert any control over, or benefit in any way from, the entity.

This requirement can be satisfied in one of 2 ways:

• by amending the trust deed to remove the person and their partner as beneficiaries of the trust, or
• by creating a separate deed to renounce the beneficial interest of the person and their partner in the trust. (A separate deed for each person is required.)

Acceptable wording for a deed to relinquish beneficial interest is as follows:

'I (name of beneficiary) renounce my interest in the (name of trust) and my entitlement to any further benefits from the (name of trust), whether those benefits be income or capital or of any other nature. I request that the trustee of the (name of trust) recognise my request that I receive no further benefits from the (name of trust) and furthermore recognise this renunciation of my beneficial interest in the (name of trust) as irrevocable.'

Note: Taxation Determination TD 2001/26, which was published in the Government Gazette on 31 October 2001, indicates that where the latter method of relinquishing all beneficial interest is adopted, that is, by renouncing the beneficial interest of the person and their partner, there may not be Capital Gains Tax consequences. It is very important that the income support recipient seeks independent advice about the possible taxation implications of relinquishing control of a trust.

Exception: The resigning attributable stakeholder/s will also be able to retain a life interest in their principal residence if the residence is part of the assets of the trust or company.

Note: If new attributable stakeholders are associates, the associate rule will NOT apply.

1. The Tribunal is not bound by the above policy, but will generally have regard to policy that is not inconsistent with the provisions or objects of the Act (Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60). The Tribunal accepted that the policy, as set out above, is consistent with the objects of Part 3.18 of the Social Security Act, which is intended to reflect that persons holding income and assets through other entities are expected to access those income and assets before turning to the public purse. The Tribunal accepted that the policy provides appropriate guidance as to when such circumstances cease, for social security purposes.
   1. The Tribunal accepted that, on the date of grant on 17 January 2023, a file record was made on the Applicant's file, noting that he was paid $200 gross weekly and the second Applicant was also drawing a wage. The file record noted that the customer service officer had spoken to the Applicants on that date and the second Applicant's wage had reduced from May 2022; this had been accepted verbally "due to the time taken to process claims". The Tribunal found from this evidence that, commensurate with the date of grant, the Applicants were receiving income from the trust.
   2. The Tribunal accepted that a further file note was made on the Applicant's file on 27 January 2023, reflecting that the Applicant had advised he was receiving less pension than he should have been receiving. The records reflect that: "Customer is advised to provide Relinquishing beneficial interest in a private trust...".
   3. The Applicant contacted Centrelink on 30 January 2023 by telephone, requesting a reassessment of his pension "as stated pension rate is wrong due to trust". The record of contact states that:

Advised we could accept the resigning/relinquishing from 31/3/23 when the documents were signed. CUS was hoping it could go back further but unable to do this as he had not resigned etc from the trust roles. I also said that the prior trust income hadn't been coded for the Work Bonus and I would be able to backdate this to 6/6/22.

1. On the same date, 30 January 2023, the Applicant lodged a deed to relinquish beneficial interest in the trust, dated 27 January 2023. The document was signed by the Applicant and his son, was witnessed by a third party, and read as follows:

Deed to relinquish beneficial interest in the [family trust]

I, [the Applicant], renounce my entitlement to any further benefits from the [family trust] as of June 30 2022, whether those benefits be income or capital of any nature.

I request that the Trustee of the [family trust] recognise my request that I receive no further benefits from the [family trust] and furthermore recognise this renunciation of my beneficial interest in the [family trust] as irrevocable.

1. On 21 March 2023, a notice was sent to the Applicant, setting out the following information in relevant part:

This letter is to ask for information to help us make the right decision about your Age Pension.

Further information is required about your relinquishing control of the [family trust] so that a genuine resignation can be accepted.

You need to complete the attached page, and return it to us within 14 days of receiving this letter or your Age Pension may be stopped.

This request is an information notice given under section 63 of the Social Security (Administration) Act 1999.

1. The Tribunal accepted that the Applicant provided further documents to Centrelink on 5 April 2023. This included "Item 1" dated 31 March 2023, which was signed by the Applicant and witnessed by a third party, and read as follows:

ITEM 1: Resignation a appointer and as a trustee in the [family trust]

I, [the Applicant] resign as an appointer and as a trustee of the [family trust]

1. "Item 2" was signed by the Applicants and their son and witnessed by a third party and read as follows:

ITEM : 2 Deed to Relinquish Beneficial Interest in the [family trust]

I, [the second Applicant] renounce my entitlement to any further benefits from the [family trust] as of June 30 2022, whether these benefits be income or capital of any nature.

I request that the Trustee of the [family trust] recognise my request that I receive no further benefits from the [family trust] and furthermore recognise this renunciation of my beneficial interest in the [family trust] as irrevocable.

1. "Item 3 & 4" was signed by the Applicants and witnessed by a third party and read as follows:

ITEM: - 3 & 4 Declaration re not excerting [sic] any control over or benefit directly or indirectly in any way from [the family trust]

We [the Applicants] hereby declare that we have and will not exert any control over or benefit directly or indirectly in any way from the [family trust] since relinquishing control.

1. The Tribunal found from the above documents that the Applicant relinquished his beneficial interest in the trust in January 2023 and the second Applicant relinquished her beneficial interest in March 2023. The Applicants had renounced all formal roles and control and make written declarations that they would not exert any control over, or benefit from the trust, as of 31 March 2023. The Tribunal found that a genuine resignation from the trust occurred on 31 March 2023, in line with the requirements set out in the Social Security Guide.

1. The Tribunal accepted that, as a result of a genuine resignation from the trust, any income and assets of the trust were no longer attributable to the Applicants through Part 3.18 of the Social Security Act.
2. Subsection 110(1) of the Administration Act states that (subject to other subsections in section 110 which are not relevant to this matter), if a favourable determination is made following a person having informed the Department of the occurrence of an event or change of circumstances, the determination takes effect:

(a) on the day on which the person so informed the Department; or

(b) on the day on which the event or change occurred;

1. For the reasons set out above, the Tribunal has found that there was a genuine resignation from the trust on 31 March 2023. This information was provided to the Department on 5 April 2023 and this is the date on which the Applicant informed the Department of the change of circumstances. Subsection 110(1) provides that the favourable determination - being the higher rate of age pension payable to the Applicants as a result of their resignation from the trust - takes effect on the later of these dates, being 5 April 2023.
2. The Tribunal also considered whether section 109 of the Administration Act otherwise assists the Applicants in this matter to have a higher rate of age pension paid to them on any date earlier than 5 April 2023.
3. Subsection 109(1) of the Administration Act states that

(a) a decision (the original decision) is made in relation to a person's social security payment; and

(b) a notice is given to the person informing the person of the original decision; and

(c) within 13 weeks after the notice is given, the person applies to the Secretary, under section 129, for review of the original decision; and

(d) the favourable determination is made as a result of the application for review;

the favourable determination takes effect on the day on which the determination embodying the original decision took effect.

1. Where a person has not sought a review of an original decision within 13 weeks, subsection 109(2) of the Administration Act states that:

(a) a decision (the original decision) is made in relation to a person's social security payment; and

(b) a notice is given to the person informing the person of the original decision; and

(c) more than 13 weeks after the notice is given, the person applies to the Secretary, under section 129, for review of the original decision; and

(d) the favourable determination is made as a result of the application for review;

the favourable determination takes effect on the day on which the application for review was made.

1. Section 108 of the Administration Act provides that a favourable determination means a determination made under section 78, 85, 85AA or 85A of the Administration Act.[1]
2. Subsection 78(1) of the Administration Act is the relevant provision, as it provides that if the Secretary is satisfied that the rate at which a social security payment is being, or has been, paid is less than the rate provided for by the social security law, the Secretary must:

(a) determine that the rate is to be increased to the rate provided for by the social security law; and

(b) specify the last mentioned rate in the determination.

1. The Tribunal finds that the rate paid was less than the rate provided for by the social security law from 31 March 2023, being the date of the genuine resignation from the trust. Section 78 does not provide that a higher rate was payable from either 30 June 2022, referred to in the documents provided by the Applicants, or 17 January 2023 when the grant of age pension was notified to the Applicants.
2. While the provision of information to Centrelink on 5 April 2023 is capable of constituting a request for review of the Applicants' rates of age pension, and occurred within 13 weeks of the Applicants' notices dated 17 January 2023, no favourable determination is able to take effect on the day on which the determination embodying the original determination took effect, due to the limitations imposed by subsection 78(1). Subsection 109(1) of the Administration Act does not assist the Applicants in the circumstances of this particular case.
3. As subsection 109(2) of the Administration Act only assists with an increased rate from the date an application for review was made, this provision would only assist the Applicants to be paid an increased rate from 5 April 2023, in line with similar findings made when subsection 110(1) is applied.
4. There are no other provisions in the Administration Act that would allow a higher rate of age pension to be paid to the Applicants on any date prior to 5 April 2023. The Tribunal notes that it has reached a less favourable decision than that reached by the Tribunal at first review. The Applicant was warned about this possible outcome at the Tribunal hearing and stated he understood this risk and sought to proceed with the applications.
5. The Tribunal finds that the correct decision in this matter is that a higher rate of age pension is only payable to the Applicants from the date the relevant information was given to Centrelink, being 5 April 2023. Given this finding, the Tribunal sets aside the decision under review under paragraph 105(c) of the Administrative Review Tribunal Act 2024 (Cth) and makes a decision in substitution to reflect the rate of age pension increasing from 5 April 2023 and not from an earlier date.

The Tribunal sets aside the reviewable decisions and makes a decision in substitution that an increased rate of age pension was payable to the Applicants from 5 April 2023.

[1] Sections 85 and 85AA relate to a resumption of payment after cancellation or suspension; section 85A relates to circumstances where there has been non-compliance with a rent assistance notice; none of the provisions are relevant to the circumstances of this matter.