1. In Secretary, Department of Social Security v Hales [1998] FCA 210, when discussing special circumstances in the context of the wavier provision in paragraph 1237AAD(b) of the Act, it was found that financial hardship is not a mandatory requirement for there to be special circumstances. As French J (as he then was) noted:

The concept of special circumstances is broad. A constellation of factors, including financial circumstances, may fall within it. The express exclusion of financial hardship alone as a special circumstance is an indicator that it would otherwise be included. This gives some measure of the range of circumstances which will qualify as special. But as a matter of grammar and ordinary logic, the exclusion of financial hardship alone as a special circumstance does not mandate its inclusion in the range of matters constituting such circumstances for the purpose of enlivening the Secretary's discretion.

1. While Hales was discussing special circumstances in the context of waiver of debts under the Act, the considerations are analogous in the context of a preclusion period. Where an application concerns a preclusion period, it should also be considered in light of how the Applicant's hardship has arisen. The law on this point was summarised by the AAT in Brodley and Secretary, Department of Social Security [1991] AATA 669:

In Re Colaiacolo and Secretary, Department of Social Security (Decision No 2109, 24 April 1985), it was stated that the factor of financial hardship alone is not sufficient to amount to special circumstances unless it is 'exceptional'. Such exceptional circumstances were seen to exist in Re Krzywak (supra) where the applicant had no income or savings and had used all her award in repayment of debts incurred prior to settlement.[23]

1. As submitted by the Respondent, the decisions of Re Secretary, Department of Social Security and John Rodgers [1992] AATA 131 and Ivovic and Director-General of Social Services [1981] AATA 57 also consider the manner in which the hardship arose.
2. In this application, I have considered the manner in which Ms LKTM's financial hardship has occurred. I am not satisfied that Ms LKTM's financial circumstances justify a reduction in the preclusion period. Firstly, I am not satisfied, based on the evidence before me, that Ms LKTM's lump sum compensation has been expended in the manner stated. While there are considerable lump sum withdrawals from her account, it is unclear whether all these funds have been used for gambling and alcohol, and I am not satisfied that all the funds were used in this manner. There is clear evidence from the bank accounts before me that funds were also used for discretionary spending, such as overseas travel and cosmetic surgery. I find that the surgery was discretionary spending, as no evidence which indicates the need for this surgery has been provided to the Agency or in this application. It is also unclear whether any funds remain.
3. In addition, Ms LKTM has also shown a capacity to work. Currently, Ms LKTM is in receipt of weekly periodic compensation due to a motor vehicle accident on 1 August 2025 and these payments are continuing. While no evidence has been provided, Ms LKTM has indicated that she has a claim in relation to this accident. Given these circumstances, I am not satisfied that Ms LKTM is presently experiencing financial hardship.
4. I also note that while Ms LKTM has indicated that she was not aware of the preclusion period, Ms LKTM was notified of the imposition of the preclusion period in writing by the Agency on 31 July 2024, a day before her claim for jobseeker payment. At the time of her claim, Ms LKTM had $50,898 in her CBA account.[24] While Ms LKTM has stated that she felt pressure to settle her claim, in signing the Deed of Release[25] of 3 June 2024 Ms LKTM acknowledged that it was entered into voluntarily.
5. I also acknowledge that Ms LKTM has a range of medical conditions. However, nothing before me indicates that Ms LKTM's medical conditions are more severe than other cases involving preclusion period considerations. While the consideration of ill health is a factor that can be considered under section 1184K of the Act, as the AAT stated in Massoud and Secretary, Department of Social Services (Social services second review) [2017] AATA 1366:

...The fact that an applicant has been injured and received a compensation payout usually results in that person being in ill health during the preclusion period or immediately thereafter. The various Tribunal determinations focus on the consequences of that ill health in making a determination as to special circumstances. In short ill health is the starting point of the exercise, not the determining factor. Further, it is usually the case when determining that ill health is a special circumstance, the ill health being experienced by an applicant is more severe than the majority of DSP recipients.[26]

1. I have taken into account the above considerations, together with Ms LKTM's circumstances and medical conditions. I am not satisfied that Ms LKTM's circumstances are such that it is appropriate to reduce any of the preclusion period. As stated above, financial circumstances must be more than straitened, they need to be exceptional and Ms LKTM's circumstances are not presently exceptional and indeed were not such at the date of her claim for jobseeker payment. I am not satisfied that the above combination of factors are such that completing the preclusion period would be unreasonable and inappropriate at present. Accordingly, I have determined that the evidence does not support the exercise of the discretion under section 1184K of the Act and therefore Ms LKTM's preclusion period should not be reduced.
2. As I have not exercised the discretion under section 1184K of the Act and Ms LKTM has lodged a claim for jobseeker payment while subject to a preclusion period, I am satisfied that it was correct for the Agency to reject the claim for jobseeker payment.

[1] Exhibits T1 (103 pages); S1-S6 (438 pages); A1 -A12.

[2] Social security benefit is defined in section 23 of the Act.

[11] [1984] AATA 176 at [12].

[12] [1995] AATA 62 at [41].

[13] Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634; G v Minister for Immigration and Border Protection [2018] FCA 1229.

[21] [2019] AATA 5246 at [34].

[22] Groom and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2008] AATA 339; also Re Secretary, Department of Social Security and John Rodgers [1992] AATA 131 and Re Domenico Colaiacolo and Secretary, Department of Social Security [1985] AATA 91.

[23] [1991] AATA 669 at [16] referring to the decision of SM Dwyer in Re Krzywak and Secretary, Department of Social Security (1988) 15 ALD 690.

[26] [2017] AATA 1366 at [70].