SOCIAL SECURITY - Carer Payment - compensation preclusion period - home purchase - special needs of the children - permanent disability - special circumstances - realisable assets - 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. This application concerns a review of a decision of Services Australia to reject a claim for carer payment on the basis of the imposition of a compensation preclusion period.
2. On 4 May 2024, Mr Garside lodged a claim for carer payment in respect of care provided to his child. On 2 July 2024, an employee of Centrelink made a decision to reject Mr Garside's claim for carer payment because, as a result of being subject to a compensation preclusion period, he could not be paid until 9 September 2032.
3. Mr Garside sought an internal review of that decision and on 21 January 2025, an authorised review officer affirmed the decision to reject the claim for carer payment due to a compensation preclusion period.
4. On 3 February 2025, Mr Garside brought an application to the Administrative Review Tribunal (the Tribunal) for independent review of the authorised review officer's decision.
5. A hearing was conducted on 14 May 2025, and Mr Garside participated in the hearing via MS Teams audio conference and gave affirmed evidence.
6. The Tribunal had regard to the oral evidence given and submissions made by Mr Garside, the documents produced by Centrelink pursuant to section 23 of the Administrative Review Appeals Tribunal Act 2024 numbered as pages 1 to 175 (the hearing papers), and the materials filed by Mr Garside prior to the hearing marked A1 to A122. At the hearing Mr Garside confirmed that he had received the hearing papers.

1. The statutory provisions relevant to this application for review are contained in the Social Security Act 1991 (the Act).
2. The Social Security Guide (the Guide) contains governmental guidelines and policy to assist Centrelink officers in their application of the social security law. The Tribunal had regard to the Guide where relevant. The Tribunal acknowledges that, whilst it may be guided by policy and it is not bound to follow it, it should consider the relevant government policy which is consistent with the provisions or objects of the Act.[1] The Tribunal had regard to the Guide where relevant.
3. The issues to be determined in this application for review are:

(a) Whether Mr Garside's claim for carer payment was correctly rejected as he is the subject of a preclusion period because of a lump sum compensation payment he received; And, if so,

(b) Whether there is a basis to reduce the preclusion period by disregarding all or part of the compensation payment on the grounds of special circumstances.

Issue 1: Whether Mr Garside's claim for carer payment was correctly rejected as he is the subject of a preclusion period because of a lump sum compensation payment he received

1. It was not in dispute and the Tribunal finds, that on 30 March 2023, Mr Garside was awarded a gross lump sum compensation payment of $1,572,427.63 in respect of a personal injury sustained in a workplace accident [in] November 2018. Part of the settlement included $668,868.55 in lost earnings or lost capacity to earn. Mr Garside was also required to pay a charge of $31,318 to Centrelink as recovery for social security payments made to him prior to the compensation settlement. Mr Garside confirmed in evidence that the nett amount he received was $1,061,439.24.
2. The Tribunal is satisfied that Mr Garside was made aware of the length of the compensation preclusion period by letter from Centrelink dated 13 April 2024.
3. The provisions relating to compensation are set out in Part 3.14 of the Act. Subsection 1169(1) of the Act provides that where an individual receives or claims a compensation affected payment, and they receive a lump sum compensation payment, the compensation affected payment is not payable to the individual during the lump sum preclusion period.
4. The term 'compensation' as defined by the Act includes 'a payment that is made, wholly or partly, in respect of lost earnings or lost capacity to earn resulting from personal injury'.[2]
5. The Tribunal finds that carer payment is a compensation affected payment.[3]
6. The length of a lump sum preclusion period is calculated according to the formula in subsection 1170(4) of the Act. The Tribunal is satisfied that the divisor amount at the date of the compensation settlement was $1,159. The Tribunal has been satisfied, and therefore finds, that pursuant to sections 17, 1169 and 1170 of the Act, the length of Mr Garside's preclusion period was 577 weeks.[4] As Mr Garside was paid periodic compensation payments up until 19 August 2021, the Tribunal finds that the preclusion period commenced on 20 August 2021 and runs until 9 September 2032.
7. It follows that no compensation affected payment, including carer payment, is payable to Mr Garside during the period from 20 August 2021 to 9 September 2032.

Issue 2: Is there a basis to reduce the preclusion period by disregarding all or part of the compensation payment on the grounds of special circumstances?

1. In certain limited circumstances the compensation preclusion period can effectively be reduced by disregarding the whole or part of a compensation payment if the decision-maker is satisfied that it is appropriate to do so in the special circumstances of the case.[5]
2. The term "special circumstances" is not defined in the legislation. The term has, however, been the subject of interpretation by both the courts and the Tribunal. In Green v SDSS, the Tribunal summarised a number of factors to be considered in the exercise of the special circumstances in respect of the predecessor to section 1184K:
   • the use of the word "special" is intended to allow the decision maker the fullest opportunity to consider the particular circumstances of each case;
   • hardship is a relevant consideration but regard must be had to the way in which the hardship arose;
   • there must exist factors which justify the making of an exception in whole or in part to the principle of liability which the Act otherwise establishes;
   • the decision maker must have regard to whether, by exercising the discretion in a particular case, he/she will be achieving or frustrating ends or objects which are conformable with the scope and purpose of the Act; and
   • the decision maker must be prepared to respond to special circumstances of any particular case by reason of which strict enforcement of the liability created by the section would be unjust, unreasonable, or otherwise inappropriate.[6]
3. In Re Groth and SDSS, Deputy President S Forgie of the then Administrative Appeals Tribunal remarked:

Therefore, there will be special circumstances if the circumstances are such that it is unreasonable, unjust or inappropriate not to treat whole or part of a compensation payment as not having been made bearing in mind that the provisions are intended to ensure that a person is not paid from two sources in respect of the same period of time_._[7]

1. In considering the provision, the Tribunal had regard to the purposes of the social security system and is mindful of whether the exercise of the discretion in a particular case frustrates or achieves the objectives of the Act.
2. The Tribunal has also had regard to topics 4.13.4.10 and 4.13.4.20 of the Guide in identifying special circumstances. The discretion to disregard part of a compensation payment should only be applied in unusual, unforeseen, or exceptional circumstances. The Guide provides that as a general rule, special circumstances would not be applied where the person acquired realisable assets after the person was advised of the preclusion period and there is no impediment to the realisation of those assets or where a person has sufficient liquid assets to support themselves for the duration of the preclusion period.
3. Where an individual's financial circumstances are raised, the Guide indicates that relevant matters include whether the individual has deliberately deprived themselves of their means of support or recklessly or inappropriately spent their lump sum, whether they had sought financial advice of the consequences of a particular course of action, and whether they have realisable assets that could be used to solve their current financial dilemma.
4. The Tribunal accepted Mr Garside's evidence that after he received his compensation payment he separated from his spouse (on 18 August 2023). The property settlement with his former partner did not include the property he purchased post separation. Mr Garside assumed full-time care responsibilities for his 3 children except for one night per fortnight, and he purchased a house as he believed he might alternatively be on the streets with 3 children with special needs. Mr Garside told the Tribunal that his former partner contributes 'very little' in child support for the care of the children. He stated that he has received $500 cash and had spoken with Child Support on the date before the hearing.
5. Each of his children, aged [respective ages] years, have been diagnosed with autism spectrum disorder and his [age] year old child additionally has been diagnosed with generalised anxiety disorder. Two of the children are participants in the National Disability Insurance Scheme. Documentary evidence was before the Tribunal to confirm the conditions of his 2 younger children. Mr Garside stated, and the Tribunal accepted, that his eldest child also has autism spectrum disorder though no documents confirming the diagnosis were available at the date of hearing.
6. Mr Garside told the Tribunal that he bought a house and property to set himself up and have security following his marital separation and injury. He contended that the compensation monies were not wasted. He told the Tribunal his former partner retained all of the marital property and household items and he purchased new household goods. Mr Garside told the Tribunal that he repaid some loans. By November 2024, he had run out of money and that he has none of the compensation payment monies remaining. His current financial support comes from family tax benefit and carer allowance payments of $1,079 each fortnight. Mr Garside told the Tribunal that he did not wish to sell the house as he would have to move while having a spinal injury and may have to establish new schools and support providers for his children.
7. Documentary evidence provided to the Tribunal by Mr Garside confirmed that on 3 March 2024, Mr Garside purchased a home for $790,000. On 28 February 2024, he purchased a trailer to aid his relocation and a motor vehicle for a total purchase price of $46,240. In April and May 2024, Mr Garside purchased a number of household objects from Amazon including a stainless steel cookware set worth $863.53, and cutlery and kitchenware for $458.48. On 3 July 2024, Mr Garside purchased a solar system for his home at the cost of $8,080 and on 31 July 2024, a generator for $3,092.11 and a PlayStation 5 for $888. On 20 November 2024, Mr Garside spent $1,100 in filing fees to bring an application for divorce.
8. In a written submission to the Tribunal Mr Garside estimated that since he has had care of his children, he has spent $19,095 on groceries and $3,078 on takeaway meals. In oral evidence, Mr Garside estimated that he has spent closer to $35,000 on food and clothing and stated that he had purchased a second car for his former partner valued at $18,000 so that she could attend work. Mr Garside also described purchasing new beds and bedding for himself and his children, a couch, a new vacuum, fridge and washing machine. He stated that he 'wanted to get new stuff and have a fresh start for the kids and myself, didn't really want to drag all that bad energy around with me'. Mr Garside told the Tribunal that he made decisions based on making provisions for the care of his children.
9. Mr Garside contended that he should be granted carer payment to care for his child with special needs and that he is struggling financially at present. He has a permanent disability as a result of the spinal injury he sustained in the workplace. Mr Garside told the Tribunal that he requires further surgery. He stated that he cannot perform paid work because he would need to re-skill and he has carer responsibilities.
10. The Tribunal considered Mr Garside's circumstances and whether they were 'special' for the purposes of section 1184K of the Act. The Tribunal also had regard to the manner in which that hardship has arisen and that there are approximately 7 years left to run on the preclusion period.
11. While it is accepted that Mr Garside is experiencing financial stress due to his reduced income and living expenses, the Tribunal considers that Mr Garside has not spent his compensation payment reasonably in the circumstances. The entirety of his compensation payment was spent within approximately 20 months of the award of compensation. Mr Garside was made aware of the duration of the compensation preclusion period within a fortnight of receiving the compensation payment. Mr Garside exhausted the compensation payment with knowledge of his own and his children's special needs.
12. The Tribunal is sympathetic to Mr Garside's concerns of housing instability and his desire to provide a supportive environment for his children, however he spent a significant proportion of the compensation monies to establish a new home and household items, to relocate, and enhancements to the home rather than engage a long-term financial management strategy to ensure his future support needs were met while he was subject to a lengthy compensation preclusion period. There is nothing unforeseen or unusual about Mr Garside's current circumstances. He has realisable assets that could be used to resolve his current financial challenges, access to some social security assistance and, potentially, to child support payments. There is no impediment to the realisation of his assets. The Tribunal has not been satisfied that special circumstances have been established to justify treating part or all of the compensation payment as not having been made.
13. After careful consideration, the Tribunal finds that Mr Garside's circumstances do not establish special circumstances such to make it unjust, unreasonable, or otherwise inappropriate to enforce the liability that the compensation preclusion period creates.
14. The Tribunal therefore finds that the decision to reject the claim for carer payment due to the compensation preclusion period from 20 August 2021 to 9 September 2032 is legally correct and the decision is therefore affirmed.

[1] Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634.

[3] Subsections 17(1) and 23(1) of the Act.

[4] Applying the equation in subsection 1170(4) and rounding in subsection 1170(5) of the Act.

[6] [1990] AATA 550.

[7] [1995] AATA 62, [41].