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

The Administrative Appeals Tribunal considered the dispute between Spark and the Secretary, Department of Social Services, concerning the calculation of a compensation preclusion period for social security payments. The core of the disagreement revolved around whether a settlement sum constituted a lump sum compensation payment and, if so, whether any special circumstances warranted treating it differently for the purposes of social security legislation.

The Tribunal was required to determine three key issues: first, whether the settlement sum received by the applicant was a lump sum compensation payment within the meaning of the *Social Security Act 1991* (Cth); second, if it was, whether a preclusion period applied to the applicant's social security payments; and third, if a preclusion period applied, whether any special circumstances existed that would justify not applying the lump sum compensation payment for the purpose of calculating that period.

The Tribunal's reasoning focused on the definition of "compensation" under section 17(2) of the Act, which includes payments made in settlement of a claim for damages or under an insurance scheme, wholly or partly in respect of lost earnings or lost capacity to earn resulting from personal injury. The Tribunal applied section 1170 of the Act, which outlines how a lump sum preclusion period is calculated, particularly in circumstances where a person receives a lump sum compensation payment. The Tribunal found that the settlement sum was indeed a lump sum compensation payment and that, in the absence of any special circumstances, a preclusion period applied. The Tribunal varied the decision under review.