Compensation impacts

Future preclusion period

If your client is paid compensation, they’ll be expected to support themselves for a period of time before becoming eligible for income support payments and concessions from us.

This time period is called a lump sum preclusion period. We use information provided by you, the compensation payer or lawyer representing the customer, to calculate the preclusion period.

If your client isn’t eligible for an income support payment or concession because of a preclusion period, they can apply for other assistance. You can find out what payments are affected by compensation. They may be eligible for a payment that is not on the list.

If your client is not eligible for a payment from us during the preclusion period, their partner may be, if they have one.

During their preclusion period, your client can apply for a Low Income Health Care Card. It’s a concession card to get cheaper health care and some medicines.

Your client may also want to use the Financial Information Service. It’s a free service to inform and educate about financial matters.

Compensation charge

We’ll raise a compensation charge if your client receives a compensation affected income support payment and they get either:

• a lump sum of compensation
• an arrears of periodic compensation for the same period.

This is to recover the overpayment amount of their income support payment. We’ll try to recover it from you, the lawyer or compensation payer, in the first instance.

When you or your client advise us of the compensation lump sum payment claim, we’ll issue you with a preliminary notice. We’ll then recover the compensation charge from the lump sum before it’s paid to your client.

We’ll recover the charge or overpayment amount from the customer if either of the following apply:

• neither you or your client advised us of their compensation claim and we didn’t issue you a preliminary notice
• your client did not report any periodic compensation to us.

Nil charge advice

We’ll issue you advice of a nil charge if we have no interest in the compensation payment you told us about. For example, we have no interest in a lump sum with no economic loss or part thereof of an arrears of periodic payment. A new charge notice may be issued if there is new information about the compensation payment. This includes a new lump sum or periodic payment, or a payment for a different time period.

Garnishee notices

We may recover funds from a third party for overpayments that are unrelated to the compensation charge. This is known as a garnishee notice and is different from a charge notice.

We’ll try to contact your client to negotiate repaying overpayments before applying a garnishee.

Enquiries about charges or preclusion periods

If you or your client have an enquiry about a charge or preclusion period, call us on the Centrelink compensation recovery line.

We’ll explain charges and preclusion periods and how we calculated them.

If you still disagree, your client can ask for a formal review. Read more about explanations and formal reviews of a Centrelink decision.