SOCIAL SECURITY - Jobseeker Payment - prior compensation claim - rejected due to preclusion period - exhausted his liquid assets - unsuccessful derivative trading - mental health difficulties and alcohol dependence impacted judgment - significant factor in losses - motorcycle accident - special circumstances - treatment resistance - retains a realisable asset - income protection payments - accommodation provided by family - preclusion period correctly calculated - decision under review affirmed

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been omitted from this decision and replaced with generic information pursuant to subsection 201(1A) of the Social Security (Administration) Act 1999.

1. Mr Cunningham is [an age]-year-old man who witnessed a workplace accident (causing fatality) while working as [an Occupation 1] in April 2018. He settled a compensation claim in respect of post-traumatic stress disorder (PTSD) he developed as a result of this experience. Centrelink applied a preclusion period from 26 July 2020 to 16 December 2029 in respect of his lump sum compensation payment.
2. On 3 February 2025, Mr Cunningham claimed jobseeker payment (JSP). Centrelink rejected his claim on the grounds that JSP was not payable to him while he was serving a preclusion period. This decision was affirmed by a Centrelink authorised review officer (ARO) on 2 April 2025.
3. On 15 September 2025, Mr Cunningham applied to this Tribunal for external review of Centrelink's decision to reject his claim for JSP.

1. The statutory provisions relevant to this review are set out in the Social Security Act 1991 (the Act) and the Social Security (Administration) Act 1999 (the Admin Act).
2. Pursuant to subsection 37(1) of the Admin Act, a social security payment can only be granted if Centrelink is satisfied that the person is qualified for the payment and the payment is payable to the person.
3. When a person receives a lump sum compensation payment, they may be subject to a preclusion period. A preclusion period applies to any lump sum compensation payment that includes a provision for loss of earnings or that is settled between the parties. Section 1169 of the Act states that a compensation affected payment is not payable during a lump sum preclusion period. The meaning of compensation affected payment is set out in section 17 of the Act. Section 17 specifies that JSP is a compensation affected payment.
4. The duration of a lump sum preclusion period is determined in accordance with the combined effect of sections 17 and 1170 of the Act. In summary, subsection 17(3) states that, when the compensation lump sum derives from a settlement between the parties, the compensation part is half of the total settlement sum. Subsection 1170(4) of the Act requires that the duration of the preclusion period be determined by dividing the compensation part of the lump sum by the income cut-out amount for the relevant payment. This yields the number of weeks during which the person is precluded from receiving the payment. The method for calculating the income cut-out amount is set out in subsection 17(8) of the Act. The rules for determining the start date of the preclusion period are set out in subsections 1170(1) to 1170(3). In summary, if a person had been receiving periodic compensation payments prior to the settlement, the start date is the date when these periodic payments ceased. If no periodic payments were received, the start date is the date of the event that gave rise to the lump sum compensation payment.
5. Pursuant to section 1171 of the Act, when a person receives 2 or more separate lump sum compensation payments in relation to the same event and at least one of the payments is wholly or partly in respect of lost earnings, the payments are taken to constitute a single payment.
6. Pursuant to section 1178 of the Act, compensation affected payments paid to a person during a compensation lump sum preclusion period are recoverable from the person.
7. Pursuant to section 1184K of the Act, the whole or part of a compensation payment can be treated as not having been made, if it is appropriate to do so, in the special circumstances of the case. The term special circumstances is found in various areas of social security and family assistance law and has been the subject of considerable case law. This case law has established that each case must be considered on its merits but that, to be special, circumstances must be unusual, typically beyond the control of the person affected.
8. The issue that arises in this case is whether Mr Cunningham's claim for JSP on 3 February 2025 was properly and lawfully rejected by Centrelink. When determining this issue, I must consider:
   • whether Mr Cunningham's compensation preclusion period was correctly calculated; and
   • whether there are special circumstances that make it appropriate to treat part or all of Mr Cunningham's lump sum compensation payment as not having been made.

(i) documents submitted by Centrelink (the hearing papers) as being relevant to the original decision and the internal review of that decision;

(ii) sworn evidence provided by Mr Cunningham during a telephone hearing on 1 December 2025; and,

(iii) additional documentary evidence (including a Statement of Financial Circumstances) provided by Mr Cunningham.

1. Centrelink's position is set out in the ARO's decision statement. The ARO found that Mr Cunningham's preclusion period of 490 weeks from 27 July 2020 (when his periodic compensation payments ceased) had been correctly calculated when he settled a compensation claim. The ARO was not satisfied that Mr Cunningham had provided evidence of circumstances that were sufficiently special to make it appropriate to apply section 1184K of the Act to treat part or all of his compensation payment as not having been made. This meant that JSP was not payable to Mr Cunningham when he claimed on 3 February 2025 and his claim had been properly and lawfully rejected.
2. Mr Cunningham told me that, because of his mental health difficulties and alcohol dependence, he had exhausted his liquid assets, mainly due to unsuccessful derivative trading. He said that he had sold the apartment he purchased from the proceeds of the compensation settlement but had lost all that he received from the sale during the course of further derivative trading. Mr Cunningham said that he is now living with his parents and his only residual asset is a [motor vehicle] with a value of approximately $30,000. He said that his only income is approximately $2,100 per month that he receives from his superannuation provider in income protection insurance payments.
3. Mr Cunningham told me that he has a finance degree and started working as a rigger because he was unable to find suitable work in finance. He said that he does not feel that he can return to work as a rigger and that he had commenced an engineering degree but did not believe he was suited to that kind of work. He has recently enrolled in a law degree.
4. Mr Cunningham submitted that his expenditures were beyond his control as they were the consequence of his mental health difficulties and alcohol use, both of which had arisen because of his workplace experience. He said that while some of his PTSD symptoms, such as flashbacks, had reduced in response to extensive treatment, he retains ongoing symptoms, including depressed mood and poor decision-making.
5. In a written submission, Mr Cunningham advised that his difficulties had been compounded by a motorcycle accident in 2024, when he damaged an anterior cruciate ligament.

Was Mr Cunningham's preclusion period correctly calculated?

1. The preclusion period is based on findings that Mr Cunningham settled a compensation claim for $1,100,000. In accordance with subsection 17(3) of the Act, 50% of this sum was the compensation part.
2. Pursuant to subsection 1170(4) of the Act, the duration of the preclusion period was determined by dividing the compensation part of the lump sum by the income cut-out amount for the relevant payment. This yielded 490 weeks during which Mr Cunningham was precluded from receiving compensation affected payments such as JSP.
3. Pursuant to subsections 1170(1) to 1170(3) of the Act, the start date for the preclusion period was the date Mr Cunningham ceased receiving periodic compensation payments, which was 27 July 2020. JSP was not payable to Mr Cunningham from that date.
4. The calculations are set out in the ARO's decision statement and were not disputed by Mr Cunningham. His submissions and evidence pertained to his special circumstances.
5. I am satisfied that Centrelink correctly determined both the duration of Mr Cunningham's preclusion period and its start date. This means that his preclusion period can only be changed if there are special circumstances that make it appropriate to treat part or all of his compensation payment as not having been made, pursuant to section 1184K of the Act.

Are there special circumstances that make it appropriate to treat part or all of Mr Cunningham's compensation payments as not having been made?

1. I accept Mr Cunningham's evidence that he has substantially exhausted his compensation lump sum, primarily during the course of derivative trading. I accept that it is likely that his mental health difficulties and alcohol use have impacted on his judgment and are a significant factor in his losses.
2. I am satisfied that Mr Cunningham's circumstances are unusual and to some extent beyond his control. I note that both the hearing papers and the additional evidence provided by Mr Cunningham includes a copy of letter from his GP (Dr [A]), dated 24 March 2025. In this letter, Dr [A] advised that Mr Cunningham was affected by a mental health condition termed complex PTSD. Mr Cunningham provided information about complex PTSD to the effect that risk taking, impulsivity, poor emotional regulation and self-destructive behaviour are characteristic of complex PTSD. I am of the view that Mr Cunningham's mental health difficulties meet the requirements for special circumstances. However special circumstances alone do not provide a basis for treating part or all of a compensation payment as not having been made. It must also be appropriate to, in effect, reduce or eliminate the preclusion period.
3. In this case, I am not satisfied that it is appropriate to reduce the preclusion period. There are several reasons for this.
4. The first is that Mr Cunningham has already been compensated for his mental health difficulties. A reduction in the preclusion period should not be applied to effectively increase a compensation amount that the person has agreed to accept. It is possible that Mr Cunningham's mental health has deteriorated since the settlement of his claim or that he is affected by mental health conditions that were not considered when the claim was settled. However, there is no specialist evidence that this is the case.
5. The second is that Dr [A] advised that Mr Cunningham has undertaken minimal recent treatment for his mental health difficulties. Dr [A] stated that he has only seen Mr Cunningham on three occasions during the past two years and that he has been reluctant to engage in counselling or take prescribed medication, preferring to self-medicate with alcohol. I accept that treatment resistance may be at least in part a consequence of Mr Cunningham's mental health condition. However, the public has a reasonable expectation that a person seeking public support will engage in reasonable treatment for a health condition that is preventing them from self-supporting. A person claiming disability support pension, for example, cannot be assigned an impairment rating until the condition or conditions reducing their work capacity have been diagnosed, reasonably treated and stabilised.
6. Thirdly, Mr Cunningham retains a realisable asset in the form of a motor vehicle that he says has a market value of approximately $30,000. While he may need access to some form of transport, I am of the view that he could realise this asset and live on the proceeds for a period, even if he used some of the proceeds to purchase a less expensive vehicle. There may be no benefit in this while he remains susceptible to high-risk financial activity such as derivative trading. However, he has some income from income protection payments and the benefit of accommodation provided by his family. There is no obvious barrier to him re-engaging in treatment for his mental health difficulties and holding off selling his car until he has better control over his impulse to engage in derivative trading.
7. Finally, there would appear to be at least some prospect that, with appropriate treatment, Mr Cunningham could acquire sufficient work capacity to support himself.
8. In such circumstances, I do not consider it to be appropriate to treat part or all of Mr Cunningham's lump sum compensation payment as not having been made, so as to shorten his preclusion period and enable him to access social security payments. This means that the remaining issue is whether Centrelink properly and lawfully rejected Mr Cunningham's claim for JSP.

Did Centrelink properly and lawfully reject Mr Cunningham's claim for JSP?

1. I have not changed the duration of Mr Cunningham's preclusion period. This means that when Mr Cunningham claimed JSP on 3 February 2025, he was serving a preclusion period and JSP was not payable to him, pursuant to section 1169 of the Act.
2. Pursuant to subsection 37(1) of the Admin Act, a social security payment cannot be granted to a person when it is not payable. As JSP was not payable to Mr Cunningham at the time of his claim, Centrelink properly and lawfully rejected his claim.
3. This means that I must affirm the application before me.