2. The basic facts of the matter are not in dispute. They are as follows. Mr Alver was injured on 27 June 1988. After operations and breaks in employment he eventually ceased work around 12 December 1990. On 17 December 1990 he accepted a lump sum payment of damages and workers' compensation of $30,000 plus $2,000 legal costs. After purchase of some items including a car and payment of debts, he had little money left to support himself, his wife and daughter. On 18 January 1991 he applied to the respondent for grant of either Special Benefit or Sickness Benefit. The respondent, taking into account s.152 and s.153 of the Act determined that benefits were not payable during the "preclusion period" between 17 December 1990 and 17 June 1991. An authorised review officer, on reviewing this decision on 7 February 1991, determined that there were no special circumstances under s.156 of the Act that warranted any reduction in that period. After affirmation by the SSAT, an application was lodged with this Tribunal on 27 March 1991. Subsequently, between that date and prior to the hearing of this matter, the respondent altered the decision under review to the extent of determining that Invalid Pension (as it then was) was payable from 25 May 1991.

3. At the hearing the applicant was represented by Mr S Walker, solicitor, and the respondent by Mr F Taylor, a departmental advocate. The Tribunal accepted into evidence the documents furnished to it under s.37 of the Administrative Appeals Tribunal Act 1975. In support of the application, Mr Alver and his wife, Mrs Elizabeth Alver, gave evidence, as did Mr P Anderson, an orthopaedic surgeon. No oral evidence was called by the respondent. The Tribunal also accepted into evidence various receipts tendered by the applicant (collectively exhibit 2), a statement of his current affairs (exhibit 3) and a letter dated 12 February 1992 from Coles Supermarkets giving details of wages and other payments made to the applicant (exhibit 4).

4. The evidence of Mr Alver was as follows. He is presently 30 years of age and has been married to Elizabeth Alver for about 7 years. They have one child presently 5 years of age. He suffered an accident on 27 June 1988 whilst working as a butcher for Coles. Prior to that he had worked with that company for about 2 years. His back injury was treated at the time by Mr Peter Anderson. He returned to part-time work with Coles about October 1988. He worked for about 2-3 hours increasing to 4 hours per day. In February 1988 he had surgery for his back condition.

5. From the time the accident happened, there was a delay for about 4-6 weeks in which the applicant received no payments of compensation or wages. He and his wife started to experience financial difficulties, were threatened with eviction for non-payment of rent and were receiving other threatening letters for not paying various bills and debts.

6. After his operation he returned to work with Coles, asking for work where he could avoid having to lift heavy stock. Over a period of time he built up to a full 38 hour working week. At the time he was living in Palmyra and had to travel about 45 minutes to work at the Coles store in North Perth. During that period he had been receiving, from time to time, payments of compensation. These are detailed in a Statement by Coles tendered by the respondent (exhibit 4).

7. By late 1990 the family's financial situation was deteriorating seriously. His back condition at this time was also getting worse and he stopped work in November 1990. At that time he owed his sister, Michelle Martin, close to $5,000 in respect of a debt owing on a vehicle which had been repossessed. He was also owing money for repayments on a Datsun 240K which had been repossessed but was paying off the debt by weekly payments. This was about $20-$25 per month. About 13 November 1990 he was declared unfit for work and ceased work at that time. He went to see a solicitor, Mr Stephen Ellis, of Dwyer Durack. He and his wife attended a pre-trial conference before the Workers' Compensation Board on 12 December 1990. After negotiations had continued between Mr Ellis and the representative of the employer's insurance company, an offer of a $30,000 lump sum payment plus $2,000 for legal costs was made. Mr Alver decided to accept that offer in full settlement of his injury claims. He and his wife returned to Mr Ellis' office where after further discussion he signed, at the bottom of the second page, the form appearing at T24, pp 51-52 of the T documents. At the bottom of the first page the following appears:

"I also acknowledge that his settlement may preclude me from

being entitled to sickness benefits or invalid pension or some

other Social Security benefits for a period of time."

"I further indemnify my solicitors, Messrs Dwyer Durack, its

Partners, its solicitors and employees against any claim, action

or proceeding for negligence or in contract arising out of the

settlement, or my claim and its management taken by me or on my

behalf, by way of subrogation or not, and this indemnity made be

pleaded as and be a complete bart to any such action, claim or

proceeding.

By my signature below I hereby acknowledge that the contents of

this document have been fully explained to me and I understand

the same and that I have also been advised that I may obtain

independent legal advice before signing this document."

8. According to Mr Alver, Mr Ellis explained to him that receipt of the money could affect his Social Security payment, stating:

"It works out roughly at about $1,000 per week. $30,000 would be

30 weeks, which is taken back from the date of the accident so

therefore you have no problems because your 30 weeks is up."

9. According to Mr Alver, he was presented with only the second page of document T24 so that when he signed it he did not read the statement on the first page. He understood signing of that page meant that he was happy with the services of Dwyer Durack and that he could not make any further legal claim on them. He conceded that he had not read the form in full.

10. Pursuant to the settlement agreement, a consent judgement was entered in the District Court and the applicant paid accordingly.

11. At that time Mr Alver thought that he had a chance of resuming work with Coles but when he inquired he was told that would not be the case. He then made inquiries about payment of Social Security benefits around 18 December 1990 and was told that there would be about a 26 week waiting period before he would receive any benefits i.e. not until 17 June 1991. By that time most of the $30,000 he had received had been paid out to cover the bills and debts that were then owing.

12. Besides the $2,000 for legal costs he paid a further $500 to Dwyer Durack so that the total amount he received was about $29,500. According to a list appearing at document T28, as summarised in the SSAT decision, he dispersed the money received as follows:

$5,000 used to repay a loan to Mr Alver's sister, Michelle Martin,

who lent money some time previous to the settlement to

pay out an amount owing on a repossessed vehicle.

$4,800 debt due to AGC.

$ 900 credit card debt to Custom Credit.

$ 850 overpayment due to DSS on unemployment benefit.

$1,500 Bank card debt.

$8,500 used to pay out the amount owing on the current motor vehicle

(Motor Magic).

$ 330 insurance for the vehicle.

$ 400 registration and change of name of the vehicle.

$ 100 SEC

$ 100 Telecom

$ 500 used to erect a shed in the backyard for his tools, some of

which had been stolen.

$ 900 used for a dining suite and vacuum cleaner.

$1,000 repayment of loan to Mrs Alver's brother.

$2,000 repayment of loan to mother-in-law.

$ 100 repayment of loan to Citizen Finance.

$ 800 arrears of rent.

$ 160 another private debt to a friend.

$ 500 outstanding costs to the solicitors.

13. He produced several receipts to verify some of the expenditure. Most of them were made before or just after Christmas 1990. The amounts included debts from Graham Holmes, his brother-in-law and June Gough, his wife's mother. The amount he had paid his sister was in respect of a debt owing when a vehicle had been repossessed prior to the accident. These related to debts when the Alvers borrowed money following the accident and had to live on food vouchers. The main reason they had to borrow at that time was because the insurance company concerned with compensation would not pay them at first and then did so belatedly. The debts just kept coming whilst they did not have an income. Questioned about the $2,000 repaid to his mother-in-law Mr Alver said that most of it was for money borrowed but some was for babysitting.

14. They have since borrowed a further $400 from Graham Holmes in a period from 3 February to 13 February 1991, that is during the preclusion period and another $400 from Mrs Gough to live on between February and May 1991.

15. Mr Alver explained that he had purchased the vehicle listed above from Motor Magic for $8,500 in order to travel between Parmelia and North Perth. At that time he still was under the impression that he could return to work and needed a comfortable car to drive that distance.

16. It was also necessary to take his wife to work and back. At the time she had casual work at Arnotts, Mills and Wares. His previous vehicle, which he had sold for $400, was extremely uncomfortable and dangerous. They also purchased a dining suite and vacuum cleaner for $900.

17. He filled out an application for special benefit and one for sickness benefit on 18 January 1991. At the time he was paying $95 per week rent. At the time he was told he would have to wait 26 weeks from the settlement date, they were trying to live on the bare necessities and relied on the monies borrowed from his mother-in-law and brother-in-law. He was at times feeling very depressed because of not having the money to do things and always struggling. His back was sometimes very bad. He tried to sell the motor vehicle and placed ads in the newspapers to that effect but the bottom had fallen out of the market. He had asked $5,300 for it but had only received offers for $3,000.

18. They had had to pawn various items several times during the preclusion period including his wife's engagement ring. At the time of the hearing they owed about $1,500 to a pawn broker and he was receiving disability support pension of $254.10 per fortnight while his wife was receiving $253.40 a fortnight. His rent was currently $110. They were being provided with a house by Homeswest and upon moving in would be responsible for a mortgage of $213 per fortnight. He owed Custom Credit about $1,000 on a credit card. Much of the debt owing to Custom Credit was for rent and food. The pawn brokers still held the engagement ring, golf clubs, tool boxes and two wedding rings. $400 was also owed to a dentist. These are detailed in a statement of the applicant's current position (exhibit 3).

19. According to a statement provided by Coles (exhibit 4) he had finished work on 22 November 1990.

20. In cross-examination Mr Alver conceded that the insurance company had eventually paid all the items listed in exhibit 4, starting from 23 June 1988 and finishing on 17 December 1990 and that his wife was also bringing in additional money at that time. He conceded that on 31 December 1990 he had received $360 for outstanding sick leave and on 3 January 1991 he had received a further $406.80 for holiday pay due. Altogether, the monies paid to him, inclusive of sick leave, holiday and termination pay, amounted to over $2,000.

21. The witness was fairly vague about these matters and said that honestly he could not remember receiving these amounts as this was a time when many bills were being paid. The Tribunal considers on these matters the witness was somewhat unimpressive. However, it prefers to rely on the other documentary evidence and the evidence of his wife which does bear out the seriousness of the position that the couple was encountering at the time.

22. The evidence of Mr Peter Anderson was to the following effect. He is an orthopaedic surgeon who specialises in rehabilitation medicine. For a period between 1976 and 1985 he had been a senior medical practitioner in the Department of Social Security, working at the Melville Rehabilitation Centre. He had started to act professionally for Mr Alver shortly after his accident on 22 June 1988. In February 1989 he had performed a discectomy operation and prescribed other rehabilitation procedures to try and get Mr Alver back into the workforce at Coles. In a report to the applicant's general practitioner dated 30 November 1990 he had concluded that Mr Alver

"had the chronic disability with his lumbar spine, and at the

present time he is totally unfit for work because of the

expectation of travelling...to North Perth to hold on to his job".

23. He had seen Mr Alver on 16 December 1990 after he had received his lump sum settlement. The applicant was particularly stressed emotionally and was having difficulties in relation to administering his income. Medically, between January and May of 1991 he was complaining of pain relating to his cervical spine and in his lumbar spine. He was suffering from emotional stress which varied from time to time. The stress seemed to be secondary to the accident and the problems that he was faced with at the end of the 1980's. It had been evident to Mr Anderson that in mid December 1990 Mr Alver was in a very serious predicament in terms of his circumstances. Having some familiarity with the Social Security system he had suggested that there may be grounds for payment of Special Benefit if the stress under which Mr Alver was suffering was properly understood. He had therefore advised Mr Alver to approach the Department again and had written to it on 22 January 1991 in support of a claim based on stress as a new disability.

24. The applicant's wife, Elizabeth, told the Tribunal she was 29 years of age. Between February 1988 and March 1992 she had worked part-time at Arnotts Mills and Ware. This had been casual employment. She had accompanied her husband at his appointments with Dwyer Durack to see Mr Ellis in respect of her husband's claim for compensation. She had been with him at the Workers' Compensation Board conference in December 1990. Mr Ellis had presented them with a form to sign after they had returned to the solicitor's office. Mr Alver had asked what the form was about. According to Mrs Alver, Mr Ellis had said that they would not have any worries with Social Security because it would date back to the date of accident. It was Mr Ellis who had raised the matter of Social Security. Mr Ellis had handed her husband a form to sign. She told the Tribunal that at the time of the discussion with Mr Ellis she understood that her husband thought that he was going to go back to work with Coles so had not really been considering the Social Security aspect.

25. Questioned about the $2,000 paid to her mother she said that it was for money that was owed to her and that they wanted to pay her for the babysitting that she had been doing. The amount actually owed was $1,500. The other $500 was in respect of an obligation that Mrs Alver thought she was under in respect of babysitting. The $1,500 had been borrowed from her mother in dribs and drabs in order to have something to live on. They had also borrowed from a friend and her brother. After they had received the $30,000, most of it had been spent in paying out bills and debts owing. She was receiving about $120 per week. In some weeks she only got one day's work which was $50. Out of this she had to pay for petrol to get to work. They were always behind in the rent. At that period the relationship between her and her husband as a consequence was "pretty rough". There was never enough money to buy food. In fact she and other members of the family had missed out on food at times. This was at least once a week. There were times when they had nothing for a meal or only something very small such as spaghetti or soup. She had not bought clothing in years not even shoes for her daughter. Between January and May 1991 things had been very tough and they had had to rely on food vouchers from St Vincent de Paul. She had suffered migraine headaches quite badly at the time. Asked what her daughter was wearing on that day Mrs Alver replied that it was a dress her cousin had given her which had belonged to her daughter. They relied on hand-me-downs from about five different people or from what they could obtain from a second-hand place.

26. She told the Tribunal that from time to time she had to pawn some of her possessions including her engagement ring and wedding rings. She had got $300 for pawning her wedding ring at Kwinana Pawn Brokers. In respect of medical bills they only had what Medicare paid to cover them. When she was working there were days when her husband could not get out of bed so that she would have to take her daughter to her mother's for babysitting. She confirmed that she had had to borrow at least $1,000 from her brother Graham on one occasion. That was needed just to live on and pay bills and they were far behind on their rent and payments.

27. Mr Stephen Ellis told the Tribunal that in late 1990 he had been a solicitor employed by the firm of Dwyer Durack, solicitors. He explained to the Tribunal that he did not have Mr Alver's file from that firm with him and had to rely on his memory. Mr Ellis gave his evidence with great care and was honest when he could not be certain of a fact.

28. In respect of the document at T24 he explained that he had drafted the form following a visit by an officer of the Department of Social Security. The Department had explained that problems were encountered from time to time in relation to compensation preclusion. The form was designed to bring those problems to the notice of recipients of lump sum settlements. He told the Tribunal that he normally stapled the two pages of the form together and there would be a pile of them in his office.

29. It was his view that it was absolutely essential to advise clients to contact the Department of Social Security or to be aware just how the settlement would effect their future entitlement. He could not recall the specific advice he had given in discussion with the applicant but generally he would have said that the Department would base the preclusion period on a figure of one week for every $1,000 of the settlement so that in the instant case the preclusion period would roughly have worked out at about 30 weeks. He would also generally advise that the preclusion period would depend on the person's circumstances and that in some instances it would be from the date of the accident and others from an alternative date. He insisted that he would have stressed to Mr Alver the need to contact the Department to ascertain the correct dates. He only vaguely remembered the circumstances of the discussion. He said that "it is part of the job of settlement to make sure that the client understands exactly what he is signing". He did not accept, however, that he would have said that the period in this instance would have started from the date of accident. He would not have given any specific date if he had not contacted the Department of Social Security.

30. He conceded in cross-examination that he was relying on his normal practice and that without looking at the file could not be absolutely sure what had passed.

31. The applicant does not dispute that his preclusion period was correctly calculated in accordance with ss.152 and 153 of the Act. There was some debate about whether the commencement date of the preclusion period, i.e. from 17 December 1990, was correctly determined but nothing that was put before the Tribunal causes me to doubt that that was the correct date. The only issue between the parties is whether there are special circumstances on the basis of which the length of the preclusion period should be reviewed and reduced under s.156 of the Act. The latter reads:

"The Secretary may, for the purposes of this Part, treat the

whole or a part of a payment by way of compensation that has

been, or that will be, made as not having been made or as not

likely to become liable to be made if the Secretary considers it

appropriate to do so in the special circumstances of the case."

Section 1184 of the Social Security Act 1991 is to like effect and on the view that I prefer, is probably the operative provision (see Re Beus and Secretary, Department of Social Security (Decision No. 8000; 4 June 1992). Since there is no material difference between the two provisions concerning the discretion of the respondent and the circumstances in which that discretion can be exercised, I have, for convenience, proceeded on the basis that s.156 of the 1947 Act is the applicable provision.

32. Shortly summarised, Mr Walker on behalf of the applicant submitted that there were two circumstances in particular which formed a basis for the Tribunal to find that there were in fact "special circumstances", opening the way to the exercise of the discretion to treat the whole of the lump sum compensation payment, or some part thereof, as never having been made. He relies first upon the general financial hardship, exacerbated by stress and pain, that ensued during the preclusion period. This was the result, so it was submitted, of the applicant's having devoted the greater part of the $30,000 which he received in discharging existing financial debts or purchasing necessities. In this regard he submitted that the Tribunal could also have regard to the present financial difficulties including the fact that Mr Alver was owing debts in excess of $3,500, these in a sense being a further consequence of the serious financial situation that arose during the preclusion period.

33. Secondly, the applicant submits that the dilemma in which he found himself was in part the product of misleading or inadequate legal advice. It is his contention that had he been properly advised about the likely impact of the Act in precluding him from benefit for a period of six months, he might have arranged his finances in a way which would have caused less hardship to him and his family.

34. For the respondent, Mr Taylor submitted that s.156 was a provision that should not be lightly invoked. The provisions of the Act relating to the imposition and calculation of the preclusion period, namely ss.152 and 153 of the Act, took into account the need for any lump sum payment to compensate someone who had suffered an injury at work in respect of such elements as pain and suffering and future needs. This was because only half of any lump sum payment was subject to the preclusion formula. To the extent that s.156 was called on to provide relief, the circumstances had to be truly exceptional. The test of "special circumstances" should be stringently applied.

35. So far as the applicant's circumstances were concerned, Mr Taylor submitted that in part they were due to his own unwise decisions such as that involving the purchase of the motor car for $8,500. Some of the debts he had repaid could have been repaid at different times. Some of them should be put in question, such as how much of the $2,000 paid to Mrs Alver's mother was truly in the nature of a debt. Also, up until the time he had stopped work, wages and compensation payments had continued to be made by or on behalf of Coles, his employer, and that upon settlement of his claim further payments were made in respect of holiday, sick and termination pay. Further the family also had access to the earnings of Mrs Alver so that altogether the applicant should not have been in the financial situation that he was.

36. Mr Taylor submitted that any misunderstanding by Mr Alver of the legal advice given to him by Mr Ellis was his own fault. On the evidence, so it was submitted, the Tribunal should conclude that Mr Ellis had provided accurate advice and made it clear that it was for Mr Alver to ascertain whether he might have problems with Social Security benefits.

37. There is no definition of "special circumstances" for the purpose of either s.156 of the 1947 Act or s.1184 of the 1991 Act. In Re Beadle and Director-General of Social Security (1984) 6 ALD 1 - a case concerning the payment of handicapped child's allowance under s.105R(1) and s.102(1) of the 1947 Act - the Tribunal said (at 3):

"An expression such as 'special circumstances' is by its very

nature incapable of precise or exhaustive definition. The

qualifying adjective looks to circumstances that are unusual,

uncommon or exceptional. Whether circumstances answer any of

these descriptions must depend upon the context in which they

occur. For it is the context which allows one to say that the

circumstances in one case are markedly different from the usual

run of cases. This is not to say that the circumstances must be

unique but they must have a particular quality of unusualness

that permits them to be described as special."

38. On appeal (Beadle v Director-General of Social Security [1984] AATA 176; (1985) 60 ALR 225) the Full Court of the Federal Court of Australia (at 230) indicated that it was in broad agreement with that statement though it would have placed less emphasis on one dictionary definition of "special". The Court added (at 228) that each case depended on its own particular circumstances and that it was impossible to lay down precise limits or rules. That view was emphasised by Hill J. in Trimboli v Secretary, Department of Social Security (1989) 86 ALR 64 (with whose reasoning Woodward and Beaumont JJ. agreed). His Honour said (at 73):

"It is neither appropriate nor proper here to attempt a

definition of what circumstances will be 'special'. The

occasions when circumstances are special will vary with the facts

of each particular case. Further, the decision as to when it

will be 'appropriate' to exercise the power under (s.1184 of the

1991 Act) involves the exercise of a discretion which is

extremely broad and which is not to be confined, save in

accordance with usual principles, namely, that it is to be

exercised bona fide and for the purposes for which the discretion

is conferred, such purposes being determined by reference to the

policy and purpose of the Social Security Act: of Giris Pty Ltd

v FCT [1969] HCA 5; (1969) 119 CLR 365 at 384."

39. It is clear, however, that the decision-maker, when considering the exercise of the discretion under s.156, is not free to make idiosyncratic and unreasonable decisions. It is essential, as the Tribunal emphasised in Re Ivovic and Director-General of Social Services [1981] AATA 57; (1981) 3 ALN N95 - when considering a predecessor to s.156 - to bear in mind that any recognition of "special circumstances" entails a frustration of the objects of the preclusion scheme which is designed to ensure that a certain portion of damages of compensation payments should be directed to the maintenance and living expenses of the recipient rather than the recipient falling back on the public purse by way of Social Security benefits. But as the Tribunal then said:

"Thus whilst keeping the dominant principle of s.115 in mind, he

must nevertheless be prepared to respond to the 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."

40. Commenting on those remarks, von Doussa J. in Secretary, Department of Social Security v Smith (1991) 23 ALD 277, after pointing out that the 50% rule prescribed by the preclusion scheme would often necessarily operate in an arbitrary way, a fact that would have been appreciated by the legislature, stated (at 283):

"By its terms the discretion given by s.156 may be exercised

where the Secretary (or a body standing in the place of the

Secretary on appeal) 'considers it appropriate to do so in the

special circumstances of the case'. These are wide words

intended, as the Tribunal in Ivovic, supra, pointed out, 'to

allow the decision-maker the fullest opportunity to consider the

particular circumstances of each case'."

41. In Re Krzywak and Secretary, Department of Social Security (1988) 15 ALD 690 the Tribunal (at 699) referred to a number of factors which, it said, appeared relevant to the exercise of the discretion under s.156 of the 1947 Act in that case. These factors were: "financial hardship, legislative changes, incorrect legal advice, ill health." But as the Tribunal said in Re Platel and Secretary, Department of Social Security (Decision No. 8250; 17 September 1992): "Although there has been a tendency in some recent decisions (see, for example, Re Secretary, Department of Social Security and Bolton (1989) 18 ALD 464) to regard these factors as 'useful guidelines for the exercise of this discretion', it must be remembered that they appeared to the Tribunal in Re Krzywak to be relevant factors in the particular circumstances of that case and were not intended to be exhaustive."

42. Regarding financial hardship, previous decisions of the Tribunal have taken the view that normally such hardship alone does not amount to special circumstances (Re Beadle [1984] AATA 176; (1985) 7 ALD 670, and for financial circumstances to be considered special, the hardship must be exceptional (see, for example, Re Colaiacolo v Secretary, Department of Social Security (Decision 2109; 24 April 1985)).

43. By way of a final preliminary comment on the way in which s.156 is to be interpreted, I would add that the Tribunal is required to proceed, as I understand it, by way of a two-stage evaluative process. It first must determine whether there are "special circumstances" and, if so, then consider whether it is "appropriate" in the light of those circumstances, to treat the whole or a part of the compensation payment as not having been made, with consequent reduction in the preclusion period. (Re Rodrigues and Secretary, Department of Social Security; (1991) 22 ALD 692). A finding of "special circumstances" does not of itself mandate such reduction.

44. Turning to the matter under review, it is open to me to infer that notwithstanding the submissions of Mr Taylor to the contrary, the respondent has in fact already recognised the existence of special circumstances in reducing the preclusion period, so that the only issue left is whether the circumstances warrant a further reduction. I take the view however that the decision before me is the original decision, as affirmed by the SSAT and that I am able to review it in its totality (Fitzmaurice v Repatriation Commission (1989) 19 ALD 297), though doubtless the respondent will not resile from the concession it has made and seek recovery of benefit already paid, if I decide the circumstances of the applicant were not relevantly "special".

45. As submitted by the applicant, there are basically two matters that are put forward constituting "special circumstances", namely:

(i) financial hardship compounded by the applicant's condition

of stress during the preclusion period; and

(ii) misleading or inadequate legal advice.

I intend to look at each of these in turn, though always keeping in mind that it is the totality of the applicant's circumstances that must be considered.

46. I first accept that in this matter I am not confined to considering only the circumstances that prevailed at the commencement of or during the preclusion period. They must be the principal focus of the Tribunal but the applicant's contemporary circumstances are also relevant in an indirect way, since they reflect an extension or extrapolation of the circumstances then prevailing. In other words, the fact that at the time of hearing there were continuing debts in the order of $4,000 provides secondary confirmation that the applicant and his family were in circumstances of considerable hardship at the relevant time.

47. Looking to the actual circumstances that prevailed at the time when Mr Alver accepted the settlement in December 1990, and having regard to what followed during the preclusion period, the Tribunal is satisfied that the financial hardship that he and his family then experienced was, in association with the stress, both personal and familial, sufficient to warrant a finding of special circumstances. It is apparent that for some time prior to the settlement the family was in circumstances of considerable difficulty. The borrowing from relatives and the accumulated debt as at December 1990 were of a high magnitude. To some extent it cannot be denied that this was in part a product of the applicant's mismanagement of his financial affairs and compounded by unwise decisions, particularly where motor vehicles were concerned. On the other hand I accept that a significant contribution was the applicant's medical condition together with the fact that Mr Alver's payments of compensation were late.

48. I am particularly persuaded in my assessment of the gravity of their circumstances by what I heard from Mrs Alver. From the manner in which she gave evidence I accept her as a truthful witness, though obviously in some matters her recollection was faulty. The symptoms of distress and difficulty were very clear from what she told the Tribunal. Having to clothe one's child in hand-me-downs, being driven by financial necessity to pawn wedding and engagement rings, going without meals and the like should not be regarded at least not yet as a normal and ordinary feature of Australian life. I take into account the fact that this Tribunal has constantly and consistently taken the view that financial necessity even of a severe kind, does not necessarily justify a conclusion of "special circumstances". Mr Taylor is correct in reminding me of previous decisions of this Tribunal which have established a fairly strict and stringent standard in that regard. Nevertheless, it is evident that in this case the distress has been of an extreme degree and was manifested by marital stress, and in the case of Mr Alver, as diagnosed by Mr Anderson, a high degree of secondary stress, over and above his back condition, brought on by his financial difficulties.

49. It is also relevant that I should look at the cause behind the applicant's financial difficulties. Previous decisions of the Tribunal (see Re Ivovic and Director-General of Social Services (above), Re Latour and Secretary, Department of Social Security (1988) 16 ALD 279; Re Secretary, Department of Social Security and Rodgers (Decision No. 7911; 23 April 1992) have tended to take a hard line where someone has, through extravagance or thoughtlessness, brought about their own dilemma. In this instance, however, with some exceptions which I shall mention, there has been no great binge or spending spree without a thought for tomorrow. Most of the $30,000 paid by way of settlement, when one analyses the list of payments set forth above, was used to discharge debts that had been accumulating over a period of time. The sum itself was not of any great magnitude given the applicant's incapacity and unlikely prospects of returning to work. The fact that the applicant was receiving, even if at times irregularly, compensation and wages in the period between his accident and the date of settlement, is no sufficient answer to the fact that the applicant found himself in extremely straitened circumstances, needing to maintain himself and his family through constant borrowing. On analysis, the $40,000 all up that he received from Coles was not a princely sum when one takes into account that it was paid over a period of two and a half years. It represents in fact a very basic level of average earnings.

50. I do consider, however, that some of the payments made by the applicant in December 1990 were unnecessary and perhaps extravagant. As such they could well have been saved and devoted to maintaining his family during the ensuing preclusion period. I include in this group three items. The first is the purchase of a motor car for $8,500. I have no doubt that the applicant needed a vehicle to convey himself that long distance to work, and in view of his back condition, that the vehicle needed to be safe and comfortable. One can only make an approximate judgment in this matter, but in my judgment, at the relevant time, the applicant should have been able to purchase an adequate vehicle for $3,000 less than he paid. Secondly, the payment of $2,000 to the applicant's mother-in-law was also in my view excessive insofar as it included a component of about $500 for baby-sitting. There is no doubt that whilst she was working, Mrs Alver had to secure the services of her mother for baby-sitting, and it is not surprising that she wanted to make recompense for the same, particularly given her mother's generosity in lending her the sums totalling $1,500. There was, however, no need for any immediate payment of baby-sitting fees. Finally, after the date of settlement the applicant received significant payments from Coles for leave and termination.

51. The other major factor relied on by the applicant is his assertion that the legal advice afforded to him by Mr Ellis lulled him into a situation where, in discharging past debts, and not being aware that if he had were to resort to Social Security benefits a preclusion period would be applied, he gave no thought to retaining a sufficient part of the lump sum.

52. On this aspect of the matter I would make the following observations and findings. I found Mr Ellis to be a careful and truthful witness though he was not able to speak with any certainty on certain matters. I consider also that, to the best of their recollection and understanding, the applicant and his wife also sought to give truthful evidence. As best I can, and relying on inferences, I think the most likely reconstruction of what took place in Mr Ellis' office is as follows. Mr Ellis undoubtedly mentioned that the sum of $30,000 would give rise to a preclusion period of about 30 weeks. He would have indicated that the 30 weeks might date from the original date of accident and that the applicant, in those circumstances, would not be subject to a further preclusion period. He would also probably have told the applicant this was something he should check with the Department of Social Security.

53. For their part, however, what Mr and Mrs Alver understood from his advice was not necessarily what he had told them. Between the reality and the perception falls the shadow. They were both lay people without any great appreciation of legal matters. The applicant was obviously not particularly concerned about the matter of Social Security as he was under the impression that he would soon be returning to work. He did not pay any great attention to the matter. In recollecting the matter, the figures mentioned by Mr Ellis as to the preclusion period must have come back to their minds but what they understood at the time is unclear. I am not prepared to make any finding that the advice of Mr Ellis was misleading. It may be that with the wisdom of hindsight, it would have been desirable for Mr Ellis to have taken further steps to check whether the applicant had clearly understood the Social Security implications of his situation. I put aside, in this respect, the matter of signing the form which included a caution about Social Security implications. I put no great store on it. Too much significance can be given to such a ritual. The applicant by his own admission did not pay too much heed to it. If it were crucial to do so I would find that it highly unlikely that Mr Ellis would have put a single, ie. the second, page before Mr Alver to sign. It might have been the case that the first page was folded behind the second so that Mr Alver was not aware of its contents and that as a matter of good practice the form should have contained provision for a signature at the foot of each page. But, as mentioned, at the end of the day, I do not consider the signing of the form amounts to much either way.

54. The position then, as I see it, was that Mr Ellis did not provide inaccurate or misleading advice, but that the applicant was left in a situation where he had an inadequate understanding of the Social Security implications and this was not entirely due to his own fault. That conclusion may provide an explanation and to a degree an excuse for Mr Alver not appreciating the dilemma he faced. It does not of itself constitute a special circumstance but diminishes the suggestion that he was the author of his own problems in failing to act on Mr Ellis' advice.

55. Looking then, at the matter in its totality, I am satisfied that there were special circumstances that bring the applicant within s.156. Turning then to whether I should exercise the discretion under that provision (or s.1184 of the 1991 Act), I am satisfied that it is appropriate, under the circumstances, to treat some portion, though not all, of the lump sum as if it had not been paid.

56. I have mentioned above, that the applicant need not have spent $4,000 in respect of his car and baby-sitting fees and that he also had, after the date of settlement, payments of $2,000 from Coles. Those items apart, the remainder of the settlement, which was not of a great order, would have been used for ordinary living expenses which would have been offset by the continuing drain of the applicant's endemic and continuous situation of debt. That situation in turn was likely to further exacerbate his and his family's situation, possibly leading in the long run to further problems.

57. It is impossible to apply any precise mathematical formula as to how much of the lump sum payment should be excluded from the operation of s.153 of the Act. As a fair approximation, I take the view that the applicant should have had available to him a sum of $5,500 in round figures to support himself and his family for a period of 10 weeks, during the preclusion period and that allowance should be made for it. The preclusion period should therefore be at least 10 weeks in the first place. Furthermore, so far as the remainder of the period is concerned, I do not consider it fair on the public revenue that so much of the lump sum should be taken out of account and treated as if it had not been paid as would expunge the other 16 weeks of the period, otherwise the Commonwealth would be put in a position where it would, in effect, be paying off most of the accumulated debts of the applicant. Having regard to that notional situation, I think the applicant although in severe financial straits should be expected to accept responsibility for a reasonable proportion of the debts that he had built up. I would therefore, when calculating the preclusion period, treat as not having been paid an amount of the lump sum settlement that would result in the preclusion period, as originally determined, being reduced to 16 weeks.

58. The decision under review is set aside and in its place I decide

(1) that there were special circumstances in the case of the

applicant that justify the application of the discretion under

s.156 of the Act, and

(2) that so much of the amount of $30,000 received by him as a

lump sum payment should be treated as not having been paid as

will reduce the preclusion period, originally determined in

accordance with s.152 and s.153 of the Act to apply between 18

December 1990 and 17 June 1991, to a total of 16 weeks.

59. I remit the matter to the respondent for further implementation.