DLKP and Secretary, Department of Social Services (Social services second review)

This matter concerned an application for social security entitlements where the applicant's substantial workers' compensation lump sum payment was largely stolen. The dispute before the Administrative Appeals Tribunal (AAT) was whether the discretion under section 1184K of the *Social Security Act 1999* (Cth) should be exercised to treat a portion of the stolen lump sum as not having been made for the purpose of calculating the "lump sum preclusion period".

The Tribunal was required to determine if "special circumstances" existed that warranted the exercise of this discretion. Specifically, the Tribunal had to consider the applicant's serious mental health conditions, his lack of other income or assets, his remote prospects of employment, and the factors contributing to the loss of the funds, including a burglary by a third party and the applicant's own contribution to the loss. The central legal issue was whether, and to what extent, the lump sum payment should be disregarded for the purpose of calculating the preclusion period.

The Tribunal reasoned that the applicant's mental health conditions, including depression and anxiety, likely impacted his decision-making processes, contributing to the loss of funds. It also acknowledged the role of the burglary, which was beyond the applicant's control. Balancing these factors against the applicant's own contribution to the loss, which the Tribunal assessed at approximately 25 per cent, it concluded that special circumstances existed. Accordingly, the Tribunal set aside the previous decision and remitted the matter for reconsideration, directing that 75 per cent of the stolen portion of the workers' compensation lump sum payment be treated as not having been made for the purpose of calculating the lump sum preclusion period.