Centrelink compensation information for lawyers and compensation payers

You need to tell us if you’re handling a compensation case for someone that gets a Centrelink payment from us.

Who it applies to

You need to tell us about a compensation case you’re handling for someone getting an income support payment or concession that is affected by compensation. If you’re not sure if they get a compensation affected payment or concession, or intend to claim one, you should ask them. If you can’t get this information from your client, contact us and ask for an interest check.

This applies to you if you’re:

  • a lawyer
  • a compensation payer.

What payments are affected by compensation

All of the following income support payments and concession cards will be affected by compensation:

  • Age Pension
  • Austudy
  • Carer Payment
  • Disability Support Pension
  • Farm Household Allowance
  • JobSeeker Payment
  • Parenting Payment
  • Special Benefit
  • Youth Allowance
  • Low Income Health Care Card.

Why you need to tell us

We may recover some or all of the income support payments your client or their partner received from their lump sum or arrears of periodic compensation.

We’re required to do this under part 3.14 of the Social Security Act 1991.

What to tell us

You need to tell us if the compensation case is wholly or partly in respect of lost earnings or lost capacity to earn resulting from personal injury. This includes a disease or condition.

The notification period is 7 days after the day your client becomes aware they have, or will receive, any of the following:

  • lump sum or periodic compensation payments from within Australia or overseas
  • damages
  • a claim or payment under a scheme of insurance of compensation under Commonwealth, state or territory law
  • a payment under a contract entered into under a scheme of insurance
  • settlement of a claim for damages or a claim under such an insurance scheme, with or without admission of liability
  • any other compensation or damages.

Examples include payments made under any of the following:

  • a workers’ compensation scheme
  • a motor vehicle third party scheme
  • a personal accident or insurance policy or income replacement insurance policy
  • a professional negligence claim that includes a component for lost earnings or earning capacity
  • other personal injury compensation schemes.

You don’t need to tell us if the compensation case is for any of the following:

  • statutory criminal injury compensation payments
  • payments to dependants for the death of a person
  • unlawful dismissal payments
  • anti-discrimination payments
  • claims or payments for a natural disaster.

Our customers need to tell us about any other changes to their income and assets within 14 days. Find out how to change your circumstances with Centrelink.

How to tell us

Lawyers and compensation payers can provide details of a claim for lump sum compensation payments by downloading and completing the Compensation advice of lump sum compensation payments form.

You can provide details of a claim for periodic compensation by downloading and completing the Compensation advice of periodic payments form.

If you know your client’s Customer Reference Number (CRN), please provide it on the form. This will help us to identify your client and improve processing efficiency.

You can return the forms to Centrelink Compensation Recovery by fax.

Preliminary notice and recovery notice

A preliminary notice issued under section 1182 of the Social Security Act 1991 requires a compensation payer to tell us before releasing compensation.

A preliminary notice is in effect until the compensation payer’s full liability is discharged. You’ll need to tell us about any further compensation payments containing an economic loss component.

Compensation payers who haven’t been served a preliminary notice under section 1182 (1), or 1182 (2) don’t need to tell us about periodic or lump sum compensation payments. This includes common law settlements with economic loss.

A recovery notice issued under section 1184 of the Social Security Act 1991 requires your client to refund the full amount stated in the notice to us.

A recovery notice may still be served if the compensation has not been released to your client. If the notice is received after the release of the payments, the compensation payer has not breached their requirements under the act.

What legislation applies

Compensation recovery definitions are explained in Chapter 1, Part 1.2, section 17 of the Social Security Act 1991.

Applicable compensation recovery legislation is in Volume 3, Chapter 3, Part 3.14 of the Social Security Act 1991.

You can read the Social Security Act 1991 on the Federal Register of Legislation website.

The Social Security Guide assists decision makers administering social policy law. You can find information about compensation on the Social Security Guide website.

Page last updated: 28 March 2024.
QC 36231