Yes, receiving a personal injury compensation claim can affect your Centrelink entitlements. Centrelink has rules in place to assess compensation payments and their impact on benefits. How it affects you depends on the type and amount of compensation you receive.
Here are some key points to consider:
1. Compensation Payments
- Lump Sum Payments: If you receive a lump sum compensation payment for personal injury, it may reduce or suspend your Centrelink benefits. This is because Centrelink may apply a “compensation preclusion period,” during which you’re not eligible for payments. The length of this period depends on the amount of compensation you receive.
- Periodic Payments: If you receive ongoing payments (e.g., weekly workers compensation or income protection payments), Centrelink will generally reduce your benefit amount and offset the amount of the other payment against the amount Centrelink is paying. These periodic payments are considered income, and Centrelink will adjust your benefits accordingly.
2. Compensation Preclusion Period
- Centrelink may apply a period during which you are not entitled to payments, based on the compensation you receive. The preclusion period depends on factors like the size of your settlement and the period during which you received payments from Centrelink after the accident.
3. Compensation Recovery
- Centrelink may recover some or all payments made to you in the past if they overlap with the period covered by your compensation. This is called the “compensation recovery” process.
It is always a good idea to seek legal advice to understand how your specific claim might affect your benefits before a settlement of your personal injury claim.
