Peterson and Secretary, Department of Health and Aged Care (Social security... [2025] ARTA 337 | Case summary

Peterson and Secretary, Department of Health and Aged Care (Social security... [2025] ARTA 337 | Case summary | Zoe

Mr Peterson was born on 15 January 1937 and is 88 years old. Since 12 June 2023, he has been in residential aged care in Atherton, Queensland (Atherton) at Carinya Home for the Aged (Carinya).[1] There is no medical evidence before the Tribunal that Mr Peterson lacks capacity. Mr Peterson has a poor recollection of the relevant events in this matter and did not give evidence at the hearing.
On 20 July 2021, settlement took place in the sale of Mr Peterson and his ex-wife's home in Atherton, and Mr Peterson had $210,879.96 from the proceeds of sale transferred to his account at Commonwealth Bank of Australia (Applicant's CBA Account).[2]
Between 14 September 2021 and 15 June 2023, transfers totalling $203,824.66 were made from the Applicant's CBA Account to Mr Peterson's granddaughter, Jessica (Jessica).[3]
On 4 November 2023, Services Australia completed an assessment of Mr Peterson's income and assets for Aged Care purposes. His assets were determined as of his entry date at Carinya (12 June 2023) as $226,428.[4] The breakdown of this figure included $19,928 in bank accounts, $2,500 in household contents, $14,000 for motor vehicles and $190,000 described as gifts.[5]
On 12 December 2023, Mr Peterson submitted a claim for financial hardship assistance for Aged Care.[6] At that time, the assets limit for eligibility for financial hardship assistance was $42,771.30.[7]
On 27 March 2024, Services Australia rejected Mr Peterson's claim for financial hardship assistance for Aged Care (hardship supplement). The rejection was made on the basis that Mr Peterson had gifted more than $30,000 in the previous five years, which meant that any excess amount for gifts was included in Mr Peterson's assessable financial assets, which put them above the assets threshold of $42,771.30.[8]
On 2 April 2024, Mr Peterson's nominee, Raelene McDonald (Ms McDonald), requested a review of the two Services Australia decisions, being the assets assessment for Aged Care purposes and the rejection of the claim for financial hardship assistance for Aged Care purposes.
On 5 April 2024, an Authorised Review Officer affirmed the two Services Australia decisions.[9]
On 8 May 2024, Mr Peterson, with the assistance of Mr Davison from Basic Rights Queensland, lodged an application for review with the Administrative Review Tribunal (Application for Review).[10]

[15]

Re: Your Enduring Power of Attorney > > "We refer to your attendance at this office on the 2nd instant. > > We note that your attendance arose as a consequence of actions taken by your bank in relation to their refusal to transfer certain monies from your bank account, on instructions of persons other than yourself. > > As advised, it is clear from the circumstances that were relayed to the writer, that the bank has undertaken this action in order to protect your interests. > > As indicated to you during your attendance, it is not possible for your Attorneys (Mr and Mrs Sumich) to transfer monies from your account into either: - > > * Their account; > > * Their children's accounts; > > * Any business associates or other close relatives' bank accounts; > > * Or into their superannuation accounts. > > Transactions of that nature by your Attorneys are prohibited by law as they constitute a conflict transaction as defined in the relevant legislation. > > We confirm that you have indicated to the writer that you nonetheless wish to gift certain monies to your granddaughter Jessica together with other grandchildren. > > We note that the sums you intended to gift, effectively represented almost your total financial worth. > > We confirm our advices to you that your bank may be concerned in relation to any transaction which would have the effect of removing from your control almost all of your money. Having said that, however, it is in fact your money and you are entitled to do with it as you wish. > > We re-iterate our recommendation that you do not divest yourself of all of your funds but rather you retain a sufficient sum to guard against unexpected circumstances. Once you have given all your money away, should circumstances arise which require additional funds, you would not be in an enviable position. > > Noting your wish to proceed with the gifts as indicated to the writer, we confirm that we have suggested to you the following course of action: - > > 1. You obtain from your Doctor, correspondence confirming that in his opinion you have sufficient cognitive capacity to manage your own financial affairs; > > 2. That you arm yourself with an appropriate level of documentation to establish your identity (we confirm that we have provided to you a copy of the verification of identity standard document which provides guidance as to the level of documentation required); > > 3. Armed with the documents referred to in paragraphs 1 and 2 above, you then attend at the bank personally and provide the necessary instructions to your bank in relation to the provision of the proposed monies. We re-iterate our advice that you do not request the monies be transferred by way of direct transfer but rather purchase bank cheques made payable to the proposed recipients of the gifts. This will provide a paper trail in relation to the transactions which may assist in allaying any concerns the bank may have regarding same. > > 4. Once you have obtained the bank cheques you may either deliver them directly to your granddaughters or deposit them into their bank accounts. Please note that a bank cheque can only be deposited into an account at which the named recipient is in fact an account holder. > > We confirm that we have raised with you actions that should be undertaken for your safety regarding the verification of your granddaughters bank account details, before banking any cheques into those accounts. We confirm our recommendation that you do not accept bank account details from your granddaughters by way of e-mail unless you have personally verified them by actually speaking to the relevant granddaughter and having them read back the bank details to you in order to confirm the accuracy of same. > > Should the bank still not agree to release your monies, having followed the steps detailed above, please do not hesitate to contact this office for further assistance... > > Yours etc"[15]

[24]

Mr Peterson further contends that, even if he is found to have engaged in a course of conduct by which he has disposed of assets under s.1123(1) of the Social Security Act and s. 44-26A(4)(b) of the Aged Care Act, he should be found to be in financial hardship under s. 44-31 of the Aged Care Act and Subsidy Principles. That outcome is reached if the Transfers are "unrealisable" and Mr Peterson is therefore considered not to have gifted more than $30,000 in the previous 5 years, meeting the requirements of ss. 4, 60(2) and 60(3) of the Subsidy Principles and ss. 11(12) and 11(13) of the Social Security Act.[27]
Mr Peterson supports the submission that the Transfers should be treated as "unrealisable" assets by reference to the fact that although the CCLC email identified that an avenue for issuing legal proceedings against Jessica existed, for practical reasons it was not reasonable to expect him to adopt that course. Those reasons included his inability to provide the necessary instructions to sustain the litigation, that he lacked the financial means to prosecute the proceedings and the likelihood that Jessica would not be able to repay the money even if the proceedings were successful.[28]
Reference was made to the Secretary's own website, which stated that an asset may be considered unrealisable in circumstances "where the decision to gift was made by a Power of Attorney or when the person was incapacitated."[29]
Mr Peterson's submission is that the decision to "gift" the Transfers was made by his then EPOA, Kerin, and otherwise that he should be considered to have been acting at the time of the Transfers under the undue influence of Kerin or Jessica. The doctrine of undue influence is said to be applicable either by the operation of the statutory presumption of undue influence to be found in s. 87 of the Powers of Attorney Act 1998 (Qld) (POA Act), or under the common law principles established by the High Court in Johnson v Buttress[30] and the cases which follow it.
Section 87 of the POA Act states:

[34]

The Secretary noted in the Respondent's SFIC that "it does not appear that the Agency was originally provided with information to determine that the decision to transfer funds was made by a Power of Attorney, or that the Applicant was incapacitated or that his Power of Attorney had exerted undue influence."[52] The Tribunal's task, absent any legislative indication otherwise, is to make the correct or preferable decision based on the circumstances as they exist and are before the Tribunal at the time of its decision.[53] Material was before the Tribunal at the hearing of the review application concerning the position of the Power of Attorney, Mr Peterson's capacity and addressing the issue of whether undue influence had been exerted on Mr Peterson.
The Tribunal agrees with the submission made by Mr Peterson's advocate that the facts of this case bear the hallmarks of an elder abuse claim. The hallmark facts which tend to indicate that Mr Peterson has been the victim of elder abuse and set out in paragraphs [22] - [26] above. The Tribunal is satisfied that the transfers made by or on behalf of Jessica in the period between 14 September 2021 and 15 June 2023 totalling $203,824.66 were made without the knowledge and consent of Mr Peterson.
BSJ,[54] concerned an application to the Queensland Civil and Administrative Tribunal (QCAT) by BSJ's adult son for a declaration as to the capacity of BSJ to transfer real property to ML, who was BSJ's attorney and adult daughter. BSJ relevantly considered the rebuttable presumption of capacity and the rebuttable presumption of undue influence.
As to the presumption of capacity, the Tribunal said the starting point is that the transferor of the property is presumed to have capacity to do so, which presumption is rebuttable. The onus of proving an incapacity to transfer the property rests with the party seeking to set aside the transaction.[55]
Capacity is defined in Schedule 4 of the GAA (set out in paragraph [41] above). In considering the scope of the limbs of that definition, the test of capacity will depend on whether the gift is minor and without serious ramifications, or major with serious ramifications for the estate of the donor or transferor. As the Tribunal explained: "In the case of a gift which comprises the bulk of a donor's estate and which pre-empts the terms of the donor's will, the test of capacity is that required to make a will or other testamentary disposition."[56]
The Tribunal then referred[57] to what was said by Holland J in Crago v McIntyre[58], about the requisite mental capacity to make a voluntary transfer of property inter vivos:

[44]

(a) the client's instructions recorded in the opening paragraphs of the LGL Legal Advice (the bank's refusal to transfer funds, possible prohibited transactions by EPOA, sums to be gifted being almost Mr Peterson's entire wealth) are all red flags to the solicitor that elder abuse might be taking place. > > (b) The presence of red flags underscores the solicitor's duty (described in Powell) to protect Mr Peterson from himself and from the personal influence of the EPOA and/or Jessica. > > (c) The solicitor could do this by satisfying himself that the nature and extent of the proposed gifting by Mr Peterson was "right and proper" in all the circumstances, and, if he was not satisfied that it was, to advise Mr Peterson that he should not proceed with the proposed gifts. > > (d) Rather than telling Mr Peterson in plain words that he should not proceed with the proposed gifts, the LGL Legal Advice suggested a course of conduct by Mr Peterson to effect the gifts, which involved the provision to the bank of a doctor's letter as to his capacity to make the gifts and the drawing of bank cheques rather than direct transfer of funds. > > (e) In the event, the advice in (d) was not followed anyway, but the advice falls short of the solicitor's duty (described in Powell) "to advise his client not to go on with the transaction." The LGL Legal Advice seems to be more directed to working around the bank's refusal to transfer funds than it is to protecting Mr Peterson from making an improvident transaction or transactions. > > (f) The LGL Legal Advice recommended to Mr Peterson in general terms that he not divest himself of all of his funds and that he retains sufficient assets "to guard against unexpected circumstances." However, the LGL Legal Advice does not evidence, and there was no other evidence before the Tribunal, that the detailed discussions which the court in Stivactas envisaged taking place between solicitor and client about the extent of Mr Peterson's property, what his future care and maintenance would entail and the downside risk of divesting himself of all of funds while still alive, had taken place.

Peterson and Secretary, Department of Health and Aged Care (Social security second review) [2025] ARTA 337 (8 April 2025)

At a glance

Court

Decision date

Source

Judgment (113 paragraphs)

Legislation Cited (4)

Cases Cited (10)

Peterson and Secretary, Department of Health and Aged Care (Social security second review) [2025] ARTA 337 (8 April 2025)