Does my Centrelink benefit affect my compensation claim?

Published 01 Nov 2017

If you are claiming compensation as a result of a motor vehicle accident or someone else’s negligence, it is possible that your Centrelink benefit will be affected.

Depending on whether you are claiming a loss of wages or not, the effect to your Centrelink benefit will vary. If you are claiming wage loss and you also receive a Centrelink benefit, you are likely to have a “payback” to pay to Centrelink

Even if you are not claiming wage loss in your compensation claim, your Centrelink benefit may be affected by a “preclusion period”. Each of these items will be discussed in detail below.

Preclusion period

Centrelink is often paid to people who are in financial difficulty as they are either not working (due to disability or unemployment) or are elderly and do not have the assets to support themselves financially.

The amount of your Centrelink benefit is dependent on an assets means test and what assets you have at the time the benefit is paid.

If you are receiving a Centrelink benefit and you receive a significant compensation payment, your Centrelink benefit may be “precluded” for a period of time. This means that your Centrelink benefit may be stopped for a while.

The amount of time your Centrelink benefit will be stopped is dependent on a number of factors: the amount of time that has passed since the accident date, the amount of compensation payable, and the value of any assets you have at the time of the accident.

Upon moving towards a settlement in each and every matter, the solicitors at Gerard Malouf & Partners will always check with you whether or not you are, or have been in receipt of a Centrelink benefit and if so, we will advise you whether or not a preclusion period will apply in your case.

We will also be able to provide you with an estimate of how long the preclusion period will be (if any).

If you have any questions regarding a potential Centrelink preclusion period in your case, feel free to contact us.

Centrelink Payback

If you are claiming any amount for wage loss in your compensation claim, and you are also receiving a Centrelink benefit, it is likely that you will need to payback Centrelink at the conclusion of your claim.

This is because Centrelink automatically estimates that a portion of your compensation claim is for wage loss which has already been paid by Centrelink via the benefit you receive.

Centrelink believes that a client in receipt of a compensation lump sum should not be able to “double dip” by receiving compensation from a negligent party whilst also receiving a benefit from Centrelink.

Upon moving towards a settlement in each and every matter, the solicitors at Gerard Malouf & Partners will always check with you whether or not you are, or have been in receipt of a Centrelink benefit and if so, they will advise you whether or not a payback to Centrelink will apply.

The solicitors at Gerard Malouf & Partners will review and advise whether or not it is worth while making a claim for wage loss in your case if our calculations indicate to us that the Centrelink payback will be greater than the your likelihood of achieving compensation for wage loss. If you then decide not to claim wage loss then there will not be any payback owing to Centrelink. Please note: a Centrelink debt is treated differently than a Centrelink payback. A Centrelink debt may still need to be repaid.

Prior to settlement we will be able to provide you with an estimate of what the payback will be (if any).

If you have any questions regarding a potential Centrelink payback in your case, feel free to contact us.