Executor of the Estate of the late Seth Taulaga and Secretary Department of Social Services (Social services second review)

The parties to this matter were the Executor of the Estate of the late Seth Taulaga (the applicant) and the Secretary of the Department of Social Services (the respondent). The dispute concerned the calculation of a compensation preclusion period under the *Social Security Act 1991* (Cth) following a lump sum compensation payment received by the late Mr Taulaga. The matter was heard by the Administrative Appeals Tribunal.

The legal issues before the Tribunal were whether the compensation preclusion period should be reflective of the economic loss component of Mr Taulaga’s compensation claim, and whether the discretion under section 1184K of the *Social Security Act 1991* (Cth) should be exercised to treat the lump sum compensation payment as not having been made, on the grounds of special circumstances.

The Tribunal considered the decision in *Secretary, Department of Family and Community Services v Chamberlain* [2002] FCA 67, which held that section 1184K of the Act does not require a decision-maker to consider contentions about what part of a lump sum compensation payment represents economic loss, as the statutory purpose is to avoid such determinations for administrative simplicity. However, the Tribunal also noted that a person's financial circumstances and hardships suffered by the applicant and his family during the preclusion period are relevant to the exercise of discretion. The Tribunal found that the circumstances of Mr Taulaga's case, including the significant disparity between the compensation received and the economic loss claimed, constituted special circumstances.

The Tribunal decided to set aside the reviewable decision and replaced it with a decision that, pursuant to section 1184K(1) of the *Social Security Act 1991*, it was appropriate in the special circumstances of the case to treat the whole of the compensation payment as not having been made, resulting in the compensation preclusion period being reduced to nil.