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

This matter concerned an appeal by an applicant against the Secretary of the Department of Social Services regarding the imposition of a compensation preclusion period. The applicant had received a significant lump sum settlement in a medical negligence claim arising from contracting meningitis, which resulted in blindness and hearing loss. This settlement was awarded via a consent judgment. The Department had calculated that the applicant was subject to a compensation preclusion period, during which he was ineligible for income support, and that benefits totalling $82,946.64 received after the commencement of this period were recoverable. The applicant's Disability Support Pension (DSP) and pensioner concession card were cancelled as a consequence.

The Tribunal was required to determine two primary issues: first, whether the applicant was subject to a compensation preclusion period, and second, if so, whether special circumstances existed that would warrant disregarding the preclusion period, in whole or in part. The applicant contended that the judgment sum was not compensation but rather a payment for malpractice and future care, not for lost income. The Secretary maintained that the payment constituted compensation, triggering the application of a compensation preclusion period.

The Tribunal found that the judgment sum, being a payment of damages made partly in respect of lost earnings or capacity to earn from personal injury, fell within the expansive definition of 'compensation' under the *Social Security Act 1991* (Cth). Applying section 17(3) of the Act, the Secretary had determined that 50 percent of the judgment sum, amounting to $4,937,500, was the compensation component. This led to the calculation of a compensation preclusion period of 4,838 weeks, commencing from 23 October 2016. The Tribunal was satisfied that the Secretary had correctly applied the relevant legislative provisions to the judgment sum and the calculated preclusion period. Furthermore, the Tribunal affirmed that section 1178 of the Act permitted the Secretary to recover compensation affected payments made during the preclusion period, and the amount of $82,946.64 had been correctly raised and recovered.

The Tribunal affirmed the reviewable decision of the Secretary dated 11 February 2021.