Centrelink compensation information for lawyers and compensation payers

You need to tell us if you’re handling a compensation case for someone who receives a Centrelink payment.

There are situations where you need to tell us about a compensation case you’re handling. You need to do this if you’re a lawyer, an insurance company or someone paying compensation.

You need to tell us if your client or their partner has received a payment affected by compensation from us, since the date of injury.

If your client or their partner received a payment from us that’s affected by compensation, we may recover some or all of it. We may recover it from your client’s lump sum compensation. We may also recover it from arrears of periodic payments which contain money for lost earnings or lost capacity to earn.

We must do this under Part 3.14 of the Social Security Act 1991.

Which payments are affected by compensation

The following payments are 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
  • Pensioner Education Supplement, when paid with an income support payment.

Read the full list of payments affected by compensation on the Department of Social Services website.

If your client or their partner has a Low Income Health Care Card, they’ll need to tell us once they’ve been paid their compensation.

What you need to tell us

There’s information you need to tell us about compensation cases.

You need to tell us if it’s wholly or partly in respect of lost earnings or lost capacity to earn resulting from personal injury. This includes a disease or condition.

You need to tell us about all of the following types of payments:

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

Examples of other compensation or damages we need to know about include any of the following. Payments made:

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

Our customers need to tell us within 7 days after the day on which they become aware that they have received, or will receive, a compensation payment.

Our customers are required to notify us of any other changes to their circumstances, including their income and assets, within 14 days.

What you don’t need to tell us

We do not consider any of the following payments as compensation for social security purposes:

  • statutory criminal injury compensation payments
  • disability payments made from a superannuation fund
  • unlawful dismissal payments
  • anti-discrimination payments
  • payments someone receives if they’re affected by a natural disaster.

You don’t need to tell us about these payments. However, we may assess them under the income and assets test if your client receives a payment from us.

When we send Centrelink compensation notices

A compensation payer may be given a notice under section 1182 or 1184 of the Social Security Act 1991 in relation to their liability to pay compensation. If they do, they cannot pay that compensation without written approval from us.

Preliminary Notice

If a person claims compensation and they’ve also claimed a Centrelink payment affected by compensation, we may send a Preliminary Notice. A Preliminary Notice is sent to the compensation payer indicating that there is potential agency interest. If they’ve received a Preliminary Notice, the payer cannot release the compensation funds without first seeking approval from us. Read more about your responsibilities when we issue a Preliminary Notice.

Recovery Notice

There are situations where we’ll recover some or all of a compensation payment. If this happens, we’ll give written notice to the compensation payer by sending a Recovery Notice. We may send this if a person received a Centrelink payment that’s affected by compensation either:

  • during their lump sum preclusion period
  • while receiving periodic compensation payments.

If a compensation payer has asked for written permission to pay the claimant, and we won’t recover money from the payer, we’ll send a nil-recovery advice. Read more about your responsibilities when we issue a Recovery Notice.

When to tell us

If a compensation payer has received a Preliminary Notice related to a claim that they’re holding funds for, they need to seek our approval.

If a payer hasn’t received a Preliminary Notice, there’s no obligation under the Social Security Act 1991 to seek approval from us. However, you may be advised that the claimant has received a Centrelink payment affected by compensation. In this case, it’s in the claimant’s best interest for you to seek approval from us.

To talk to us about compensation claims and payments, call our Centrelink compensation recovery line.

How to tell us

Compensation payers, insurers or legal representatives can provide details of the claim by completing one of these forms:

If the Customer Reference Number (CRN) is known for the client, you can provide this on the form to help us upload the documents onto their record.

How to request customer information

To request customer information for the purposes of a compensation claim, submit your request to our Information Release Team.

Class Action Cases

If you’re the administrator of a class action, call our Centrelink compensation recovery line prior to settlement or judgement. You can request a call back from a Compensation Recovery Engagement Officer to discuss our processes.

What legislation applies

There’s legislation about compensation for people who receive certain payments from us. The legislation that applies is:

Page last updated: 17 March 2026.
QC 36231