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Centrelink and Compensation Payments


If you have filed a claim for weekly compensation due to a physical or psychological injury sustained at work or if you have made a common law claim, it is important to understand how Centrelink may be involved in your case.


If you are currently receiving, or have previously received, income support payments from Centrelink and you receive a lump sum or arrears of periodic compensation payments that include a component for lost earnings or loss of earning capacity then Centrelink may require you to repay amounts you have received from them after you were injured.


Compensation settlements can impact various income support payments and concession cards, including:

  • Age Pension

  • Austudy

  • Carer Payment

  • Disability Support Pension

  • Farm Household Allowance

  • JobSeeker Payment

  • Parenting Payment

  • Special Benefit

  • Youth Allowance

  • Low Income Health Care Card


Payments such as Carer Allowance, Mobility Allowance, Family Tax Benefit, and other family assistance payments are not affected, so you can continue receiving these benefits if eligible.


If you receive a lump sum compensation payment and it includes a component for lost earnings or loss of earning capacity, Centrelink may impose a preclusion period and a charge. The insurer cannot release the settlement amount to you until they receive a Centrelink Clearance regarding any required repayment. This process can take a few months, so the settlement money may not be paid immediately.


A periodic compensation payment is usually paid as a weekly benefit or payment from the insurer for lost earnings. If you receive a lump sum payment for periodic compensation in arrears (e.g., from a successful claim for back pay of weekly benefits), you may be required to repay some or all of the income support payments you received from Centrelink for that period. Typically, the repayment is determined as a dollar-for-dollar reduction to your income support payment.


A Centrelink Clearance is a notice that outlines the period during which you are ineligible to receive income support payments from Centrelink, as well as any amount you need to repay out of your settlement.


If a Centrelink charge applies, the insurer will not release your settlement funds until Centrelink issues a Clearance and specifies any applicable preclusion period. This process can take several months, though it can sometimes be expedited in cases of financial hardship. However, faster processing is not guaranteed, and you may need to contact Centrelink directly.

 

Our Personal Injury team can assist you and answer any questions you may in relation to this. Contact them to find out more https://www.nlgsolicitors.com.au/services/injury-compensation

 

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