Appendix 2: Practice guidance - recovery of Centrelink benefits from lump sum payments


Under Commonwealth legislation, insurers are required to notify Centrelink before lump sum payments are made, and pay any amounts owing to the Commonwealth. Prompt action by insurers is required to ensure a worker’s entitlements are paid without delay.

Insurers are also required to notify Centrelink as soon as they become aware that a preclusion period from access to Centrelink payments may apply.

Lump sums for arrears of weekly payments

Lump sums for arrears (debts) of weekly payments may be made in the following circumstances:

  1. When a decision made to issue a reasonable excuse or dispute a claim is reconsidered, and liability (including provisional) is accepted.
  2. When determining a claim for an injury that has been contracted by gradual process.
  3. A retrospective entitlement to weekly compensation (or economic loss) is likely.

To ensure there is no reimbursement owing from a worker’s weekly compensation payments, insurers are expected to provide appropriate documentation to Centrelink.

If the worker has identified that they are or have been in receipt of Centrelink payments, the insurer should provide appropriate documentation to Centrelink before payment of weekly compensation to the worker.

Insurers are to:

  1. Obtain a signed Authority to release personal information (Form si039) from the worker.
  2. Send the signed form to Centrelink along with Compensation advice for periodic payments(Form ss445), including the gross amount per week the worker will receive and the period for which it will be paid.
  3. Obtain in writing from Centrelink which payments (if any) are repayable.
  4. Use the information supplied by Centrelink to calculate the amount to be paid to Centrelink and the worker, and make the respective payments.

If the worker is unwilling to provide the signed Authority to release personal information form, the insurer should advise the worker to discuss the matter with Centrelink. Centrelink and the worker will then resolve that requirement via Centrelink procedures.

An insurer proposing to disclose a worker’s personal information to Centrelink (or any other agency) should ensure compliance with Commonwealth and State privacy requirements.

The insurer should make a note in the claims file, and send a letter to the worker acknowledging the outcome and requesting that they complete the Centrelink Compensation and damages form (Form Mod C).

Arrears and Workers Compensation Commission matters

Where a dispute about liability is determined by the Workers Compensation Commission (the Commission), and a determination is made that an amount for weekly compensation is payable to the worker, the insurer is to:

  1. Complete the Compensation advice of lump sum payments form (Form ss446) and forward it to Centrelink along with the Commission’s Certificate of Determination. Once received, Centrelink will calculate the amount (if any) that is repayable and advise the insurer.
  2. Pay the repayable amount to Centrelink, and the remaining amount for weekly compensation payments to the worker.

Insurers should maintain appropriate records on the claim file.

Lump sum payments and preclusion periods

Lump sum payments (including payments to cover the lost capacity to earn) will preclude a worker from access to most Centrelink payments for a period of time. An insurer is required to advise Centrelink of any lump sum payment of this type.

This is relevant to lump sums paid for work injury damages and commutations.

Once the lump sum has been paid, the insurer should notify Centrelink by completing the Compensation advice of lump sum payments form (Form ss446) and forwarding to Centrelink along with the signed settlement documents.

Centrelink will determine the preclusion period and advise the worker and their legal representative of the worker’s date of eligibility for Commonwealth social security benefits. If the lump sum also includes an amount for arrears of weekly payments, then the insurer should ensure Centrelink are paid any amounts owing before the worker is paid the lump sum.

Further information can be found on the Centrelink website.