Compensation Payments

Often paid as a result of difficult circumstances, compensation payments can seem like a godsend. But, as YourLifeChoices subscriber, Deborah, has realised, there can be penalties.

Q. Deborah
Three years ago I lost my Mum in a tragic accident. Because of the circumstances of the accident, I have received a payout from the Insurer. In “their wisdom”, they have decided that even though I have been on a Disability Support Pension for over 10 years, in the 3 years since Mum’s death I would have been capable of working for 9 1/2 weeks. This money has had to be repaid to Centrelink out of my settlement. This amounts to $6,600. My question is, am I not entitled to earn a minimal income over a certain period whilst I’m on the pension? If the amount I have repaid was broken down to the period since her death, surely it would not breach any rules of what I am allowed to earn.

A. Provided by Centrelink
You have highlighted an important point that other people in your situation should know about. Compensation payments may affect any Centrelink income support payments people receive.

Under social security law, Centrelink is required to apply a formula to determine how a compensation payment made for a personal injury, illness or disease will impact on a person’s Centrelink payment. In short, you cannot receive Centrelink payments for a certain period of time, known as the preclusion period, and any Centrelink payments already received during the preclusion period will need to be repaid.

Centrelink offers a free compensation advisory service that can explain how a compensation payment will affect any Centrelink benefits. We encourage people to contact this advisory service before they agree to accept a compensation payment.

As with all Centrelink decisions, you have the right to ask Centrelink to look at the decision again. The easiest way is to talk to the Centrelink Customer Service Adviser who made the decision. They can help explain the reasons for the decision, consider any new information and explain things you may not understand.

YourLifeChoices Writers
YourLifeChoices Writers
YourLifeChoices' team of writers specialise in content that helps Australian over-50s make better decisions about wealth, health, travel and life. It's all in the name. For 22 years, we've been helping older Australians live their best lives.
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