How will getting a compensation payout affect my Centrelink payments?
The social security system prevents people from double dipping, ie: getting both income support from Centrelink as well as Compensation. The system is designed so that the party which has primary responsibility to provide the support, actually pays the support, for example: if your accident happened as work, then your income support should be paid by your employer through the workers’ compensation scheme, and not by Centrelink. For that reason Centrelink have an interest in any compensation paid which includes money for income support ie: lost earnings. That is regardless of whether your compensation is paid in a lump sum, or by way of periodic payments. Therefore if you are paid for lost income, Centrelink could affect you in 2 ways:
- The application of a preclusion period:
Centrelink will calculate a period of preclusion during which you cannot receive Centrelink benefits. The preclusion period will start from either the date on which your compensation payments (workers comp) stopped, or, the date on which you suffered your accident. The payments that could be affected might include:
- Advance Pharmaceutical Allowance
- Age Pension
- Carer Payment
- Community Development Employment Project Supplement
- Disability Support Pension (DSP)
- Education Entry Payment
- Fares Allowance
- Farm Household Allowance
- Newstart Allowance
- Parenting Payment (Partnered)
- Parenting Payment (Single)
- Partner Allowance
- Pensioner Education Supplement
- Rehabilitation Allowance (in place of DSP or Sickness Allowance)
- Sickness Allowance
- Special Benefit
- Telephone Allowance (other than a telephone allowance payable to the holder of a Commonwealth Seniors Health Card)
- Widow Allowance
- Youth Allowance.
- A recovery to be repaid to Centrelink:
If Centrelink paid any benefits to you during the preclusion period, then Centrelink may want those repaid to them. At the date of settlement the Insurance Company will usually get Centrelink Clearance before paying your settlement funds to you. That process can take several weeks. If a refund is payable, then the Insurance Company will deduct the refund from your settlement funds and pay the balance to you.
You can look at the Centrelink Compensation Estimator at http://www.servicesaustralia.gov.au to give you an idea as to whether your future Centrelink Benefits might be affected and whether a refund will be payable.