Effect of the special circumstances provisions
The special circumstances provisions apply to treat the whole or part of a compensation payment as not having been made or not liable to be made for the purposes of Part IIIC. Generally, the provisions are applied to a lump sum compensation payment with the result that all, or part, of a preclusion period is reduced. All or part of a periodic compensation payment can also be disregarded. This may also reduce, or negate altogether, any associated pension overpayment.
When a specific amount cannot be determined
The decision to apply the special circumstances provisions may be made in terms of a reduction in the actual duration of the preclusion period. This would be relevant where there are a number of mitigating factors in the decision and it is not possible to determine any specific amount to be disregarded.
Disregarding part of a compensation lump sum
The special circumstances provisions can also be applied to treat a specific amount of the compensation payment as having not been made. This would be relevant where it is reasonable to disregard part of a compensation lump sum, but not all of it. In this case, the amount specified is deducted from the original compensation lump sum and the 50% rule applied to the amended amount to give the new compensation part of the lump sum.
Applying special circumstances to reduce a periodic payment
The special circumstances provisions may also be applied to reduce all or part of a periodic payment of compensation.
When to apply special circumstances
The decision to apply the special circumstances provisions should be based on a holistic view of an individual's circumstances, ie the decision would not usually be based on just one factor but a combination of factors. The special circumstances provisions should only be applied in unusual, unforeseen and exceptional circumstances. This means in situations where the compensation provisions could lead, or have led to extreme hardship or created an inequitable, unjust or unreasonable situation.
When special circumstances should generally not be applied
Each case must be examined on its own merits but as a general rule, special circumstances would not usually be applied where:
- the person has sufficient liquid assets to support themselves, and their family if applicable, for the duration of the preclusion period, or
- the person acquired realisable assets after the person was advised of the preclusion period, and there is no impediment to the realisation of those assets, or
- the person's periodic compensation payments are reduced due to the effects of taxation laws, and this is the only grounds for consideration.
When special circumstances should never be applied
Special circumstances should never be applied in the following situation if the:
- delegate does not agree with the legislation. This is contrary to the intention of Parliament and is illegal, or
- sole factor is that the person or their partner's reason for receiving a compensation affected pension was different to the reason the compensation was paid.