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

The Administrative Appeals Tribunal considered a dispute between Ms Li and the Secretary of the Department of Social Services concerning a lump sum preclusion period applied to Ms Li's parenting payment (single) and income support bonus payments. The core of the dispute involved whether certain payments made to legal firms in relation to Ms Li's worker's compensation claim should be treated as compensation received by her for the purposes of social security legislation.

The Tribunal was required to determine whether Ms Li was subject to a lump sum preclusion period due to a compensation payment, and if so, whether she owed a recoverable amount to the Commonwealth. Specifically, the Tribunal had to consider if there were special circumstances that would allow all or part of the compensation payment to be treated as if it had not been made to Ms Li. This involved examining payments made to two separate legal firms acting on her behalf.

The Tribunal reasoned that the purpose of compensation preclusion periods is to prevent individuals from receiving both social security benefits and compensation payments concurrently, thereby avoiding "double-dipping." However, the Tribunal found that two specific payments made to legal firms should be disregarded. The first payment, made directly to a legal firm under section 106(4) of the *Workers Rehabilitation and Compensation Act 1986* (SA), was considered never to have been made to Ms Li as it was a discretionary award of costs in favour of the legal representative. The second payment, representing costs awarded to Ms Li for her legal representation, was also to be disregarded due to protracted legal proceedings that were not initiated by Ms Li and did not directly benefit her. The Tribunal concluded that these circumstances were special and meant that Ms Li had not received beneficial funds to the extent that the preclusion period was calculated.

Consequently, the Tribunal set aside the previous decision and substituted a new decision. The compensation preclusion period for Ms Li was to be recalculated on the basis that the total amount paid to the two legal firms, $359,240.41, be disregarded under section 1184K of the *Social Security Act 1991* (Cth) as not having been made to her.