1. On 14 May 2024, Miss Armitage lodged a claim for JSP, which was rejected by Centrelink.
2. Miss Armitage sought internal review of the decision to reject her claim. On 9 October 2024, a Centrelink authorised review officer (ARO) affirmed the rejection decision. The ARO found that JSP was not payable to Miss Armitage as a preclusion period applied until 3 July 2025, and there were no special circumstances that made it appropriate to disregard any part of her lump sum compensation.
3. On 30 December 2024, Miss Armitage applied to this Tribunal for further review of the decision.
4. A hearing was held on 14 March 2025. Miss Armitage participated in the hearing by telephone.
5. The Tribunal had regard to relevant documents produced by Centrelink, numbered as pages 1-417. Miss Armitage provided further documents to the Tribunal prior to hearing which were numbered by the Tribunal as pages A1-A13. Subsequent to the hearing, Miss Armitage provided further submissions to the Tribunal. Although such submissions were not requested, they were accepted by the Tribunal and numbered as pages A14-A24.

1. The issues which arise in this case are:
   • whether a compensation preclusion period applies; and if so, has it been calculated correctly?
   • whether there are special circumstances to treat part or all of the compensation as not having been made, such that the compensation preclusion period can be shortened; and
   • was the decision to reject Miss Armitage's claim for JSP correct?

1. The statutory provisions relevant to this review are contained in the Social Security Act 1991.
2. The compensation recovery provisions are found in Part 3.14 of the Act. The purpose of these provisions is to ensure that a person is not doubly compensated for lost earnings or loss of earning capacity: once by a liable party paying compensation, and secondly by the community through the social security system. When compensation has been received in a lump sum, the Act achieves this purpose by providing a prescribed formula to calculate a period during which the person is precluded from receiving social security payments.
3. Section 1169 of the Act provides that a "compensation affected payment" is not payable during a lump sum preclusion period.
4. Section 1170 of the Act provides that a lump sum preclusion period starts on the day following the last day on which a person receives periodic compensation payments. This section also provides a formula for calculating the number of weeks of the preclusion period, which requires dividing the "compensation part of lump sum" by the "income cut-out amount".
5. A "compensation affected payment" is defined in section 17 of the Act and includes JSP. Section 17 also defines the compensation part of a lump sum and provides a formula for calculating the income cut-out amount.
6. Section 1171 of the Act provides that multiple lump sum payments received in relation to the same compensable event are to be aggregated and are deemed to have been received on the day on which the last of such payments is received.
7. Section 1184K of the Act allows all or part of a compensation payment to be treated as not having been made if appropriate in the special circumstances of the case.
8. The Tribunal also had regard to the Social Security Guide (the Guide), in particular chapter 4.13. While the Tribunal is not bound by the government policy contained in the Guide, where such policy is not inconsistent with the law, it is a relevant factor for the Tribunal to take into account in reviewing a decision.

Issue 1: Does a compensation preclusion period apply and has it been correctly calculated?

1. The impairment payment of $47,933 paid to Miss Armitage on 17 November 2020 was a lump sum payment made in respect of the same workplace injuries for which Miss Armitage later received compensation of $250,000 under a deed of release signed on 30 November 2022. The legislation requires those amounts to be added together to reach the total amount of his lump sum compensation payment: section 1171 of the Act.
2. The compensation part of Miss Armitage's lump sum compensation payment is therefore 50% of $297,933 (being $148,966.50): paragraph 17(3)(a).
3. At the time that Miss Armitage received her lump sum settlement in November 2022, the income cut-out amount was $1,121.50. Applying the statutory formula gives a preclusion period of 132 whole weeks, commencing from 23 December 2022: section 1170 of the Act.
4. I find that Miss Armitage is subject to a lump sum preclusion period which has been correctly calculated by Centrelink as starting on 23 December 2022 and ending on 3 July 2025.

Issue 2: Are there special circumstances to treat part or all of the compensation as not having been made?

1. Section 1184K contains the following discretionary power:

(1) For the purposes of this Part, the Secretary may treat the whole or part of a compensation payment as:

if the Secretary thinks it is appropriate to do so in the special circumstances of the case.

1. The concept of "special circumstances" is not defined in the Act, but in Groth v Secretary, Department of Social Security [1995] FCA 1708; (1996) 40 ALD 541 at 545, the Federal Court noted that the term would require something to distinguish the particular case from others, to take it out of the run of usual or ordinary cases, noting that "it would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary".
2. It is clear from the authorities that financial hardship is not, of itself, a special circumstance. In Re Hajar and SDSS [1988] AATA 787; (1988) 16 ALD 716 at 719, the Administrative Appeals Tribunal said:

Financial hardship has been considered as a possible component of special circumstances in a number of decisions. It is clear, however, that standing by itself, it would not amount to a "special circumstance"...Furthermore, the financial circumstances must be more than straitened. They must be "exceptional"...

1. Any conclusion as to whether any unfairness or unjust outcome exists in Miss Armitage's case must be reached having regard to the context and intent of the legislation. The intention behind the compensation recovery provisions is that a person who receives compensation for loss of income in respect of a period should be expected to support themselves from their compensation money and not "double dip" by also receiving social security income support payments for the same period: see Secretary, Department of Family and Community Services v Allan [2001] FCA 1160.
2. Miss Armitage told the Tribunal that she ran out of money in May 2024. She currently receives Centrelink payments of $804 per fortnight (net) in family tax benefit (including rent assistance), carer allowance and mobility allowance. She has been relying on charities and friends to help her out.
3. Miss Armitage has a number of medical conditions, all of which existed prior to her receiving compensation. Miss Armitage was previously on disability support pension for depression. She developed PTSD as a result of workplace bullying, which was the injury she received compensation for. Miss Armitage has [medical condition 1] which cause her problems and a [medical condition 2] which causes her significant pain. She has had to cancel appointments with her specialists because she does not have money to pay for doctors.
4. Miss Armitage's son has been diagnosed with ADHD. He is on medication for this condition and receives NDIS funding which covers the costs of his various therapies. However, Miss Armitage said there is a lot of travelling required to attend appointments and these costs (such as petrol expenses) are not covered by the NDIS. Miss Armitage's submissions provided subsequent to hearing referred to her medical conditions and costs. Those submissions did not add greatly to Miss Armitage's oral evidence provided at hearing.
5. Miss Armitage's post-hearing submissions also noted she had recently been impacted by a storm and had lost power for 4 days. This resulted in her losing food from her fridge and freezer as well as medication.
6. Miss Armitage provided bank statements to the Tribunal, which showed that she received deposits from her solicitors of $159,354 on 23 March 2023 and a further $25,000 on 17 May 2023.
7. Miss Armitage provided a Statement of Financial Circumstances that stated she spent her compensation monies as follows:
   • $80,000 on legal fees (which was deducted prior to payment of the balance of the compensation monies to Miss Armitage)
   • $50,000 to pay debts
   • $30,000 for medical expenses
   • $100,000 for living expenses
   • $1,000 school
   • $3,000 fuel.
8. Miss Armitage told the Tribunal that the money she spent on "debts" was used to pay off $33,000 remaining on her car loan. She was not required to pay out the loan but wanted to clear it so she did not have to worry about paying it off in future. She also had [other specified] debts, which she was paying off.
9. Miss Armitage was unable to detail what the $30,000 for medical expenses was spent on, other than saying that she spent around $160 per month for scripts for herself and her son. This accounts for only a very small proportion of the $30,000 Miss Armitage says she has spent on medical costs. Miss Armitage said that she needed money to pay for surgery, however she has not yet had that surgery and has not therefore incurred any costs.
10. Miss Armitage said that her expenditure on living expenses was for groceries, fuel and electricity. If, as Miss Armitage suggested, she had exhausted her compensation monies by May 2024, this equates to expenditure of more than $3,500 per fortnight on living expenses, in addition to the amount of her Centrelink benefits.
11. The Tribunal closely examined the bank statements provided by Miss Armitage. These statements show that more than $100,000 was transferred to an account held with "[Financial Institution 1]". Miss Armitage said that this was her savings account, however she has redrawn and spent all of the money she transferred into that account. No bank statements were provided to the Tribunal for this account to confirm how those funds were expended or whether any funds remain.
12. A further $58,000 was transferred to an account ending in 28666. Miss Armitage said that this was a joint account with her ex-partner. She transferred money into this account to pay her rent and other utility bills. Miss Armitage confirmed that her rent was $400 per week. Over a period of 14 months, Miss Armitage's rent payments would total $22,400, leaving an improbable $35,600 that Miss Armitage suggests was spent on utility bills over the same period. Again, no bank statements were provided for this account to confirm how those funds were expended or whether any funds remain.
13. Miss Armitage also spent in excess of $58,000 purchasing items on [payment services]. She told the Tribunal that she used these services like a credit card and purchased clothing, bedding, furniture and groceries.
14. Miss Armitage's bank statements also show that over $17,000 was paid to [Business 1] in several transactions. Miss Armitage said that she paid these amounts to resurface her mother's pool. This was a gift for her mother, although Miss Armitage noted that she would inherit her mother's house in any event and would therefore benefit from this expenditure.
15. Miss Armitage stated that her only assets were her car and household furniture. She has debts of $850 owing to [one payment service] and $1,500 to [another]. She pays $50 per fortnight against each of these debts.
16. Miss Armitage has not provided a satisfactory explanation for the disbursal of her compensation monies over a relatively short period of time. She has spent her compensation money in a profligate manner, including large amounts on non-essential purchases, and made no attempt to budget her funds to ensure she could support herself for the duration of the preclusion period.
17. Miss Armitage acknowledged that she had been advised of the existence and duration of the preclusion period and the need to support herself until that preclusion period expired in July 2025. It is not the responsibility of the Australian taxpayer to compensate Miss Armitage for her own poor financial decisions and inability to budget her compensation payment.
18. While Miss Armitage and her son suffer from ongoing health issues, these conditions arose prior to her receiving compensation and the costs of managing those conditions were not an unforeseen expense. Miss Armitage receives funding from NDIS which ensures her son is able to access necessary treatment. She is not entirely without means of support, noting she currently receives Centrelink payments totalling $804 per fortnight.
19. I find that Miss Armitage's circumstances are not sufficiently special as to make it appropriate to disregard any part of her compensation to reduce the length of her preclusion period.

Issue 3: Was the decision to reject Miss Armitage's claim for JSP correct?

1. JSP is specified to be a compensation affected payment: section 17 of the Act. JSP was therefore not payable to Miss Armitage at the time she lodged her claim, and Centrelink was correct to reject her claim for JSP made on 14 May 2024.