Cheadle and Secretary, Department of Social Services (Social services second review) - [2021] AATA 3319

Cheadle and Secretary, Department of Social Services (Social services second review) [2021] AATA 3319 (16 September 2021)
Division:GENERAL DIVISION
File Number(s): 2020/6758
Re:Colin Cheadle
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

DECISION
Tribunal:Chris Puplick AM, Senior Member
Date:16 September 2021
Place:Sydney

The decision under review is affirmed.
.....................................[sgd]...................................
Chris Puplick AM, Senior Member
CATCHWORDS
SOCIAL SECURITY – Disability Support Pension refused due to Compensation Preclusion Period – whether Compensation Preclusion Period was correctly calculated – whether expenditures of compensation money where special circumstances exist – medical expenses – family loans – vehicle purchase – gambling – financial hardship – decision affirmed
LEGISLATION
Social Security Act 1991 (Cth) ss 17, 1169-1171, 1184 and 1184K
Workers Compensation Act 1987 (NSW) s 87F
CASES
Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25
Beadle and Director-General of Social Security (1984) 6 ALD 1
Colaiacolo and Secretary, Department of Social Security [1985] AATA 91
Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114
Director-General of Social Security v Hales (1983) 78 FLR 373
Dranichnikov v Centrelink [2003] FCAFC 133
Gartside and Secretary, Department of Social Services (Social services second review) [2017] AATA 45
Groom and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2008] AATA 339
Hajar and Secretary, Department of Social Security [1988] 16 ALD 716
Hogan v Secretary, Department of Employment, Education and Workplace Relations [2011] AATA 162
In the Marriage of Phillippe [1997] 4 Fam LR 153 per Kay J
Jess v Scott and Ors (1986) 70 ALR 185
Krzywak and Secretary To the Department of Social Security (1988) 15 ALD 690
QHBN and Secretary, Department of Social Services [2015] AATA 614
Sams and Secretary, Department of Social Services [2016] AATA 654
Skinner and Secretary, Department of Social Services (Social services second review) [2015] AATA 569
Secretary, Department of Education, Employment and Workplace Relations and Morrison (2008) 105 ALD 635
Secretary, Department of Social Security v Hales (1998) 82 FCR 154
Secretary, Department of Social Security v Smith [1991] FCA 280
Stavrakis and Secretary, department of Family and Community Services [2003] AATA 212
Tallon and Secretary, Department of Social Security (1988) 15 ALD 6
Thomas and Secretary, Department of Family and Community Services [2003] AATA 842
SECONDARY MATERIALS
Commonwealth, Parliamentary Debates, House of Representatives, 19 June 1995 at 1768 (Janice Crosio, Parliamentary Secretary to the Minister for Social Security)
Diagnostic and Statistical Manual of Mental Disorders Fifth Edition (DSM-5) (American Psychiatric Association, Washington, 2013)
REASONS FOR DECISION
Chris Puplick AM, Senior Member
16 September 2021
THE APPLICATION

Mr Colin Cheadle (the Applicant) is seeking to have reviewed a decision of the Social Services and Child Support Division of this Tribunal (AAT1) which, on 23 October 2020 affirmed a decision not to grant the Applicant’s application for the Jobseeker Payment (JSP) due to the imposition of a compensation preclusion period.
The Applicant applied for JSP on 15 June 2020, but that application was refused by the Secretary, Department of Social Services (the Respondent) on that same day. The Applicant sought a review of that decision and it was subsequently confirmed by an Authorised Review Officer (ARO) of the Department on 14 August 2020. It is that decision which was affirmed by the AAT1.
The matter was heard by this Tribunal on 3 September 2021 using the Microsoft Teams platform and in accordance with the Tribunal’s COVID-19 protocols.
The Tribunal notes that the Applicant made a further claim for JSP after the expiry of the preclusion period (on 5 February 2021) and this application was granted on 1 March 2021 (effective 22 January 2021 at approximately $700.00 per fortnight).
THE BASIS FOR THE SECRETARY’S DECISION
The basis for the Respondent’s refusal of the JSP application was that the Applicant was subject to a “preclusion period” in which he was not eligible to receive JSP or indeed any other form of social security payment.
Various provisions of the Social Security Act 1991 (Cth) (the Act) provide that where a person receives certain defined compensation payments they are excluded from receiving certain other social welfare payments for a period of time[1] worked out in accordance with a formula set out in the Act.[2] This is called the “preclusion period”.
[1] Social Security Act 1991 (Cth) (Act) ss 17, 1169-1171 and 1184.
[2] Act s 1170.
The public policy supporting this arrangement was stated by the government to be:
“The compensation recovery provisions of the [A]ct protect the social security system from ‘double dippers’ – that is, those people who might receive social security payments, as well as compensation, for the same period.”[3]
[3] Second Reading Speech for the Social Security Legislation Amendment Bill (No 1) 1995, Commonwealth, Parliamentary Debates, House of Representatives, 19 June 1995 at 1768 (Janice Crosio, Parliamentary Secretary to the Minister for Social Security); see also Secretary, Department of Education, Employment and Workplace Relations and Morrison (2008) 105 ALD 635 at [24].
The Applicant suffered a workplace injury in January 1999 and received periodic compensation payments as a result up until 26 December 2019.
On 13 December 2019 a change was made in these arrangements and the NSW Workers Compensation Commission commuted these periodic payments into a lump sum payment of $115,000.00.[4]
[4] Determination made under section 87F Workers Compensation Act 1987 (NSW).
The Respondent (through Services Australia) wrote to the Applicant on 17 January 2020 to advise him that, as a result of his receipt of a lump sum payment he was “precluded” from receipt of any other social security benefits from 27 December 2019 to 21 January 2021. The letter stated:
“We are writing to let you know about the effect your lump sum compensation payment has had on your eligibility for future income support payments from us.
We have been advised that you are entitled to receive a lump sum compensation payment of $115,000.00. As a result, we have calculated that you have a preclusion period that starts on 27 December 2019 and ends on 21 January 2021. During this period you are not able to receive income support from us.”[5]
[5] Tribunal documents (T-documents) at 62.
CALCULATION OF THE PRECLUSION PERIOD
The calculation commences by working out what is called the “compensation part of the lump sum” in question. Subsection 17(1) of the Act provides a list of social security payments which are included in the definition of “compensation affected payment”. Among the income support payments referenced in this section is JSP.
It also provides the definition of what is called the “income cut-out amount”:
“income cut‑out amount”, in relation to a person who has received a compensation payment, means the amount worked out using the formula in subsection (8), as in force at the time when the compensation was received.
Subsection 17(8) then provides:[6]
2 x (Maximum basic rate + Pension supplement component + Energy supplement component) + Ordinary free area limit
52
[6] Each of the terms used in this formula are defined in the section and vary in their quantum over time. The Tribunal is in no position other than to accept that these elements have been correctly calculated by the Respondent.
This means, of course that the “income cut-out amount” will vary from time to time depending on the value of the various components used in its calculation.
Subsection 17(2) then provides:
(2) Subject to subsection (2B), for the purposes of this Act, compensation means:
(a) a payment of damages; or
(b) a payment under a scheme of insurance or compensation under a Commonwealth, State or Territory law, including a payment under a contract entered into under such a scheme; or
(c) a payment (with or without admission of liability) in settlement of a claim for damages or a claim under such an insurance scheme; or
(d) any other compensation or damages payment;
(whether the payment is in the form of a lump sum or in the form of a series of periodic payments and whether it is made within or outside Australia) that is made wholly or partly in respect of lost earnings or lost capacity to earn resulting from personal injury.
Subsection 17(3) establishes the method for the calculation of the “compensation part of the lump sum compensation payment” as follows:
(3) Subject to subsection (4), for the purposes of this Act, the compensation part of a lump sum compensation payment is:
(a) 50% of the payment if the following circumstances apply:
(i) the payment is made (either with or without admission of liability) in settlement of a claim that is, in whole or in part, related to a disease, injury or condition; and
(ii) the claim was settled, either by consent judgment being entered in respect of the settlement or otherwise; or
(ab) 50% of the payment if the following circumstances apply:
(i) the payment represents that part of a person’s entitlement to periodic compensation payments that the person has chosen to receive in the form of a lump sum; and
(ii) the entitlement to periodic compensation payments arose from the settlement (either with or without admission of liability) of a claim that is, in whole or in part, related to a disease, injury or condition; and
(iii) the claim was settled, either by consent judgment being entered in respect of the settlement or otherwise; or
(b) if those circumstances do not apply—so much of the payment as is, in the Secretary’s opinion, in respect of lost earnings or lost capacity to earn, or both.
Thus sections 17(2), 17(3) and 17(8) establish the meanings of “income cut-out amount”, “compensation payment” and “compensation part of the lump sum payment” which are then to be used further in the calculation of the preclusion period.
This calculation is outlined in section 1170 of the Act:
Lump sum preclusion period
(1) Subject to subsection (2), if a person receives both periodic compensation payments and a lump sum compensation payment, the lump sum preclusion period is the period that:
(a) begins on the day following the last day of the periodic payments period or, where there is more than one periodic payments period, the day following the last day of the last periodic payments period; and
(b) ends at the end of the number of weeks worked out under subsections (4) and (5).
(2) If a person chooses to receive part of an entitlement to periodic compensation payments in the form of a lump sum, the lump sum preclusion period is the period that:
(a) begins on the first day on which the person’s periodic compensation payment is a reduced payment because of that choice; and
(b) ends at the end of the number of weeks worked out under subsections (4) and (5).
(3) If neither of subsections (1) and (2) applies, the lump sum preclusion period is the period that:
(a) begins on the day on which the loss of earnings or loss of capacity to earn began; and
(b) ends at the end of the number of weeks worked out under subsections (4) and (5).
(4) The number of weeks in the lump sum preclusion period in relation to a person is the number worked out using the formula:
Compensation part of lump sum (divided by) Income cut-out amount
(5) If the number worked out under subsection (4) is not a whole number, the number is to be rounded down to the nearest whole number.
However, there is a further slight complication in the calculation process to get to the final preclusion period. This arises from the fact that the payment made to the Applicant was by way of a commutation of his previous periodic payments.
Section 1164 of the Act provides that certain lump sums are to be treated as though they were received as periodic compensation payments, but only where the lump sum (the commuted amount) “was calculated by reference to a period” (subsection 1164(c)). The documentation before the Tribunal from the NSW Workers Compensation Commission makes no reference to any such “period”[7] and, as a result the whole of the compensation payment ($115,000.00) is brought into the calculations of the preclusion period.
[7] T-documents at 54-57.
It is now possible to establish the preclusion period as follows:
(a)Establish the gross sum of the compensation payment = $115,000.00.
(b)Apply the 50% discount = $57,500.00.
(c)Divide by the income cut out amount at that time = $1,020.40.
(d)This gives a result of 56.35 which is then rounded[8] and expressed in weeks = 56.
(e)Add 56 weeks to the date when the periodic compensation payments ceased[9] (27 December 2019).
[8] Act s 1170(5).
[9] Act s 1170(1).
This results in a preclusion period commencing 27 December 2019 and concluding on 21 January 2021.
The Tribunal agrees with the Respondent that this is the correct calculation.
FORESHORTENING OF THE PRECLUSION PERIOD
The only way in which this preclusion period can be foreshortened is if the lump sum with which the calculations started is reduced. This can be done under subsection 1184K(1) of the Act which gives a discretion to the Secretary to discount or disregard certain payments made out of the initial lump sum for the purposes of calculating the preclusion period
Secretary may disregard some payments
(1) For the purposes of this Part, the Secretary may treat the whole or part of a compensation payment as:
(a) not having been made; or
(b) not liable to be made;
if the Secretary thinks it is appropriate to do so in the special circumstances of the case.
(2) If:
(a) a person or a person’s partner receives or claims a compensation affected payment; and
(b) the person receives compensation; and
(c) the set of circumstances that gave rise to the claim for compensation is not related to the set of circumstances that gave rise to the person’s or the person’s partner’s receipt of, or claim for, the compensation affected payment;
the fact that those 2 sets of circumstances are unrelated does not alone constitute special circumstances for the purposes of subsection (1).
The Applicant’s expenditure of compensation money was canvassed before the AAT1 which outlined the evidence before it as follows:
·“The compensation money was fully expended by Mr Cheadle about six to eight weeks before the hearing
·He did not know about the compensation preclusion period and Mr Cheadle said his solicitor did not give any advice about the matter
·A car was purchased for $28,000
·About $20,000 was used to repay debts owed by Mr Cheadle to his children and friends
·Mr Cheadle considers himself unable to work due to his medical conditions and he has ongoing medical expenses
·Medical conditions other than those for which compensation was received also affect Mr Cheadle, such as cataracts
·About $30,000 was spent by Mr Cheadle on a daily gambling spree at a time when he was feeling depressed
·The balance of the compensation money was used for rent and general living expenses
·Mr Cheadle is living with his former wife in a shared two-bedroom unit where they support each other (Ms Cheadle suffers medical problems and requires assistance from Mr Cheadle).”[10]
[10] AAT1 decision paragraph [14], T-documents at 6.
The Tribunal notes the first of these points, namely that the compensation payment lasted the Applicant until very shortly before his preclusion period expired. Had he been eligible for JSP at that earlier date, the sum in question might not have been particularly large. However, in an email to this Tribunal the Applicant also stated:
“I concur that 3 months is not a long time and yes at the moment I have a roof over my head but how long can my ex continue to support me when after rent she has approximately $120 left to feed us and living expenses per fortnight. This situation has brought me to almost breaking point several times, my gambling was exacerbated by the COVID lock down
So how can you say there were no special circumstances, that lockdown was unprecedented In Australia. I would ask you to reconsider this verdict to include these extraordinary circumstances that that we are currently living in.”[11]
[11] Applicant’s email to the Tribunal dated 30 October 2020.
To consider whether or not to exclude certain costs from the lump sum calculation requires both a balancing of the need for a fair assessment of the particular circumstances of the individual concerned with the public policy requirement to avoid double dipping which has the effect of lessening the overall amount of the social security budget for the rest of the community.[12]
[12] See Secretary, Department of Social Security v Smith [1991] FCA 280 at [17].
As with so many key concepts in the Act, the term “special circumstances” is not given any precise definition. Without going into extensive detail, it can be said that the courts have identified a number of factors which go to establishing whether or not “special circumstances” exist. They must be:
·something more than ordinary or usual;[13]
·markedly different from the usual run of cases – not necessarily unique but having a particular quality of unusualness;[14]
·somehow distinguishing from usual cases of an analogous nature;[15]
·attuned to the individual circumstances of each case;[16]
·not so rigidly applied as to risk harsh or unreasonable outcomes;[17]
·involving ‘facts peculiar to the particular case which set it apart from other cases’; or[18]
·supportive of the overall integrity of the social security system and recognising the public interest in ensuring that public moneys are recovered where they can and should be.[19]
[13] Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25; Jess v Scott and Ors (1986) 70 ALR 185.
[14] Beadle and Director-General of Social Security (1984) 6 ALD 1 at 3.
[15] Dranichnikov v Centrelink [2003] FCAFC 133.
[16] Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114.
[17] Secretary, Department of Social Security v Hales (1998) 82 FCR 154.
[18] In the Marriage of Phillippe [1997] 4 Fam LR 153 per Kay J.
[19] Skinner and Secretary, Department of Social Services (Social services second review) [2015] AATA 569; Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114, Secretary, Department of Social Security v Hales (1998) 82 FCR 154.
Additionally, the Tribunal is invested with “a broad discretion to respond to a variety of circumstances”[20] but should note that special circumstances “are not merely directed to the person's own circumstances. Rather, they are directed to those that are ‘special circumstances ... that make it desirable to waive’”.[21]
[20] Hogan v Secretary, Department of Employment, Education and Workplace Relations [2011] AATA 162 at [82].
[21] Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114 at [80].
Many applicants pleading special circumstances will find themselves in circumstances of financial hardship. However, in Gartside[22] the Tribunal made it clear:
I do not understand the many Federal Court and Tribunal decisions on ‘special circumstances’ to require the Tribunal to find that special circumstances exist simply because the Applicant is in straitened financial circumstances. My understanding of the law is that it is open for the Tribunal to find special circumstances in such a circumstance, but a Tribunal Member is not obliged to do so. In exercising the discretion vested in the Tribunal, a Member is required to consider all of the matters the evidence admitted produces and straitened financial circumstances is one factor, albeit a very important one, but not the sole one. As Sheppard J said in Director General of Social Services v Hales [1983] FCA 81; (1983) 47 ALR 281 at 321:
The legislation provides for the payment of a variety of benefits to different classes of people who will usually have one thing in common; they will be impecunious and in straitened circumstances. Very often their stories will be quite tragic.
[22] Gartside and Secretary, Department of Social Services (Social services second review) [2017] AATA 45 at [57].

There is also clear authority as to the burden of personal responsibility borne by individuals where they are required to manage compensation payments.
In Groom the Tribunal found that the applicant’s “circumstances are entirely of his own making and occurred despite him having received legal advice of the preclusion period and its consequences”.[23]
[23] Groom and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2008] AATA 339 at [62].
In Sams, Deputy President Constance noted that should the applicant have “been more careful in managing her finances then Mrs Sams’ present financial hardship could have been prevented”.[24]
[24] Sams and Secretary, Department of Social Services [2016] AATA 654 at [40].
In assessing special circumstances, it is proper for the Tribunal to consider how those circumstances arose. As the Tribunal stated in Krzywak:
In my view the circumstances out of which hardship arose and the degree of hardship, are both relevant in deciding whether and how the discretion under s.156 should be exercised.[25]
[25] Krzywak and Secretary To the Department of Social Security (1988) 15 ALD 690 at [39].
The Tribunal notes that the Applicant himself told the ARO that “he acknowledges that he was not very cautious with his spending.”[26]
[26] T-documents at 106.
On the other hand, the Tribunal also recognises that “hardship is hardship even if it is self-inflicted”[27] and that “[e]ven the foolish and profligate must be protected in appropriate circumstances through the exercise of the discretion embodied in s 1184”.[28]
[27] Tallon and Secretary, Department of Social Security (1988) 15 ALD 6 at 8.
[28] Thomas and Secretary, Department of Family and Community Services [2003] AATA 842 at [16].
In assessing this Applicant’s position, the starting point must be the extent to which he was aware that the compensation payment he had received was expected to last him until the end of the preclusion period. The Applicant told the AAT1 he had not been advised about the preclusion period by his solicitor who handled matters on his behalf,[29] nor (as he said in oral evidence) of the impact of moving from periodic compensation payment to a commuted lump sum.
[29] AAT1 decision at [15], T-documents at 6.
However, the ARO’s record states:
“Mr Cheadle advised that he did receive the notice from Services Australia, informing him of the preclusion period. He advised that he did not really believe that he would not receive any support, in spite of this advice.”[30]
[30] T-documents at 106.
In any event, he was sent formal notification by the Respondent with details of the preclusion period and its meaning and operation and he is deemed to have received it.
It is important to establish the timeline in this matter as follows:
·On 13 December 2019 a Commutation Agreement was registered between GIO and the Applicant.[31]
·On 19 December 2019 Centrelink documents record a gross sum settlement amount of $120,000.00 to be paid to the Applicant by the compensation payer (GIO Workers Insurance).[32]
·On 17 January 2020 Centrelink sent a Compensation Release Notice to GIO in which it advised (inter alia) that “you may now make payment of Colin W Cheadle of any amount for which you are liable…”[33]
·On the same date (17 January 2020) Centrelink wrote to the Applicant (see above) advising him of the details of his preclusion period.[34]
·On 10 March 2020 the Applicant completed a Compensation and Damages from for Centrelink in which he advised receipt of a compensation payment of $115,000.00 paid to him on 29 January 2020.[35]
[31] Ibid at 58.
[32] Ibid at 46-48 and revised version at 50-52.
[33] Ibid at 60.
[34] Ibid at 62.
[35] Ibid at 66.
What this establishes is simply that, regardless of any advice (or lack thereof) from the Applicant’s solicitor, the Applicant was in receipt of Centrelink’s advice about his preclusion period either before, or at the very worst, at the same time he received his compensation payment.
The truth of the matter, as far as this Tribunal can ascertain is that the Applicant knew about the preclusion period at the time that the payment was first in his hands and failed to arrange his financial affairs in a way which comported with those preclusion period arrangements.
Nevertheless, it must consider if any of the expenditures which the Applicant has detailed should be allowed as deductions from the lump sum.
In evidence before the Tribunal at hearing, the Applicant agreed with the submission of the Respondent that his pattern of expenditure was such that he had spent all of the compensation monies by “mid-August to early September 2020.”[36]
[36] Respondent’s Statement of Facts, Issues and Contentions (SFIC) at [44].
RELEVANT EXPENDITURE
The Tribunal accepts that the Applicant suffers from a number of health conditions which affect his ability to work and impact upon his general state of wellbeing. It is not necessary to detail these as they are set out in detail in the report of Professor Vale.[37]
[37] T-documents at 87-89.
The ARO report states:
“Mr Cheadle advised that he has serious medical conditions. He has a heart condition and requires regular specialist appointments which can be costly. He is expected to pay $1050 for an upcoming appointment and another $400 to see a vascular surgeon/specialist in the next week”.[38]
[38] Ibid at 106-107.
There is no doubt that the Applicant has incurred serious medical expenses, and that he no longer can afford private health insurance. However, some of his conditions were injuries (especially to his knees) for which he received compensation[39] and for the others, there is no evidence before the Tribunal as to their actual costs. In the absence of such information, it is not possible for the Tribunal to discount any medical expenses.
[39] Ibid at 56.
In relation to the repayment of loans to family members, this is a common factor presenting before the Tribunal in terms of how recipients use their compensation payments. The Tribunal accepts the Applicant’s evidence that this involved a sum in the order of $20,000.00 and was paid in January or February 2020, although there is no documentary evidence before the Tribunal. There is no doubt about family pressures for loans to be repaid and the Tribunal understands that the principal repayment was to the Applicant’s eldest son, who himself has his own family and family responsibilities. However, unless there is a compelling necessity or legal obligation for repayments of loans to be made immediately and in full, it should be expected that such arrangements should be entered into in the full understanding that compensation payments are expected to last for the duration of the preclusion period and should be expended in a manner which accords with that.
The Applicant purchased a replacement motor vehicle. On 18 March 2020 he completed an Income and Assets form for Centrelink in which he declared himself to be the owner of a 2012 “dualcab ute” valued at $2,000.00.[40] The replacement vehicle purchased was a “second hand” Chrysler sedan valued at $28,000.00. When asked why he purchased such a vehicle he explained that he needed a vehicle which he considered “safe” in order to be able to transport his four grandchildren between Canberra (their residence) and Wollongong (where he was then living).[41]
[40] Ibid at 75.
[41] He has since relocated to live in Gulgong.
While this is a reasonable explanation for the purchase, it does not put the Applicant in any different position from other people who need a motor vehicle for family purposes and does not constitute any special circumstance in terms of the legislation. It remains an asset for his current and potential use or liquidation.
There is then the matter of the Applicant’s losses by gambling. While there is no direct evidence that the sum in question amount to the $30,000.00 claimed by the Applicant, the bank statements attached to the Respondent’s SFIC (at Annexure B) indicate an ongoing payment to Sportsbet on a regular basis.
In the matter of QHBN,[42] Senior Member Dr James Popple provided a detailed analysis of how expenditures (losses) by way of gambling have been treated by this Tribunal in assessing “special circumstances” under section 1184K of the Act.
[42] QHBN and Secretary, Department of Social Services [2015] AATA 614.
In some instances, gambling may be an addiction and recognised as such, consonant with the definitions of gambling disorders recognised in the Diagnostic and Statistical Manual of Mental Disorders.[43] Where that is the case, consideration can be given to classifying gambling behaviour and losses as “special circumstances.”
[43] Diagnostic and Statistical Manual of Mental Disorders Fifth Edition (DSM-5) (American Psychiatric Association, Washington, 2013) at 585-589.
In Stavrakis the Tribunal said:
Whereas a person who has been diagnosed as being an alcoholic and/or a compulsive gambler may be able to demonstrate special circumstance, (see eg Re SRL and Secretary, Department of Social Security (unreported Tribunal decision 12288 of 14 October 1997) the addiction must be such that it can truly be said that the person is subject to a state where his mind is overborne by the addiction.[44]
[44] Stavrakis and Secretary, department of Family and Community Services [2003] AATA 212 at [19].
There is no indication in relation to this Applicant that his gambling has a pathological quality to it. The Tribunal accepts that the Applicant has suffered with depression for many years and that his state of depression may have contributed to his gambling activities. However, he has not been a life-long gambler and he told the Tribunal he no longer gambles.
The Tribunal adopts the formula set out in QHBN to the effect that “a gambling addiction can amount to special circumstances; gambling by choice cannot.”[45]
[45] QHBN and Secretary, Department of Social Services [2015} AATA 614 at [25].
Any monies squandered by gambling cannot be discounted from the lump sum in these circumstances.
None of the expenditures under consideration qualify to be deducted from the lump sum for the purposes of calculating the preclusion period.
FINANCIAL HARDSHIP CONSIDERATIONS
There is no doubt that the Applicant has been through a period of considerable financial and emotional stress. It appears that he is now in receipt of JSP and may now also be receiving financial support from other members of his family.[46] The Applicant may be eligible for the Disability Support Pension and advised the Tribunal that he was awaiting consideration of a current application. The Applicant has recently relocated from Wollongong to Gulgong to reduce his living expenses.
[46] Bank statement at Annexure A to Respondent’s SFIC.
By all accounts, the Applicant has been a productive member of the workforce for many years, establishing a series of his own businesses staring in 1999. Through no fault of his own, working in the milk-hauling business, he was caught up in the notorious collapse of the Parmalat Corporation which was forced into bankruptcy between 2002 and2005. Problems with his knees and other medical conditions gradually impaired his capacity to work full-time. He has always had a strong work ethic and desire to be productive.
At the same time, he apparently failed to apply any realistic degree of restraint or rigour to his spending after receipt of the compensation payment. The payment itself was the equivalent of some 4.6 years of DSP payments. It was supposed to last for 56 weeks, which is not a long time. It was the Applicant’s lack of careful husbandry of his finances which have produced his current situation.
Consideration of what constitutes financial hardship must take into account that many (if not most) people in receipt of social security benefits are suffering some degree of financial hardship[47] and so for this to be a factor in determining whether special circumstances exist or not, that financial hardship has to be more than run-of-the-mill. It has to have some unusual or exceptional quality about it.[48] It is not, in and of itself, sufficient to establish special circumstances.[49]
[47] Director-General of Social Security v Hales (1983) 78 FLR 373.
[48] Colaiacolo and Secretary, Department of Social Security [1985] AATA 91 at [20].
[49] Hajar and Secretary, Department of Social Security [1988] 16 ALD 716 at 719.
Because there is nothing exceptional or unusual about the Applicant’s current position, the Tribunal cannot find that there are any special circumstances which would cause the proper operation of the preclusion period to be altered.
DECISION
The decision under review is affirmed.

I certify that the preceding 64 (sixty -four) paragraphs are a true copy of the reasons for the decision herein of Chris Puplick AM, Senior Member

....................................[sgd]....................................
Associate
Dated: 16 September 2021

Date(s) of hearing: 3 September 2021

Applicant: In person

Solicitors for the Respondent: Ms B Dzang, Services Australia

Date(s) of hearing:	3 September 2021
Applicant:	In person
Solicitors for the Respondent:	Ms B Dzang, Services Australia