Retirees who lost their life savings in a property scheme that collapsed, leaving some facing eviction, have been told they were “overpaid” rental assistance by Centrelink.
Sterling First operated in Western Australia, Victoria and Queensland, and spruiked itself as pairing up “smart property investors that are looking to get a better rental return with retirees that are looking to sign a long term lease”.
The group’s 12 entities went into administration in March, with Ferrier Hodgson giving the preliminary view they become insolvent around January.
More than 100 investors were left high and dry, with 80-year-old victim Margaret Kennedy recently telling The West Australian she had paid for 40 years’ rent, which was now gone.
“And now I have to pay even more rent for the house I thought I had for 40 years,” she said.
The Department of Human Services would not be drawn on specifics when asked on Thursday about reports some of the victims were paid rental assistance then deemed ineligible after reassessment.
“We have made an offer to look into individual circumstances and will work with these people on a case by case basis,” general manager Hank Jongen said in a statement.
“These are complex financial affairs and so any assessments are also made on a case by case basis.
“If people have been overpaid, we will work closely with them to ensure any repayment arrangements are manageable.”
Government Services Minister Stuart Robert was sought for comment.
In WA, the state’s attorney-general and housing minister are trying to help the victims, according to Premier Mark McGowan.
“We’re doing everything we can to support those people – they’re obviously in a very distressed state,” Mr McGowan recently said.
“Clearly there are victims in this case, elderly people predominantly, who have lost a lot.”
State regulators were aware of red flags surrounding the scheme in 2016, as was the Australian Securities and Investments Commission in early 2017, but it did not take action until about one year later.
Assistant treasurer Michael Sukkar recently told 6PR radio he hoped an internal investigation would determine whether the corporate watchdog did everything it could to ensure people were not duped into “pretty crazy products”.
Underlying reasons the group failed included its complex structure, which resulted in high operating costs and “dysfunctionality”, and its reliance on capital raising to keep going, Ferrier Hodgson says.