(1) The department may, within its discretion, use adaptations of the financial need standard where the situation of a client is one of special circumstances which are subject to objective definition by documentation. These objectively defined circumstances include: variations in need due to special needs accompanying designated types of disabilities; variations in need based on the nature of living requirements in different localities; variations in need based on the nature of living requirements caused by particular rehabilitative services to be provided; and variations in need due to short periods of medical care for acute physical and mental conditions arising during the course of vocational rehabilitation. The department will direct the exercise of this discretion and determine the circumstances in which it may be utilized.