9.11.4 - Centrelink benefits

Agents must comply with Centrelink notices

Agents must comply with notices issued by Centrelink. Centrelink may issue notices to agents to:

·         recover money from a worker

·         recover money from a worker who may in the future be entitled to receive compensation

·         prevent workers receiving Centrelink payments in addition to WorkSafe payment.

Recovering money from a worker

To recover money from a worker who is or may become indebted to the Commonwealth, Centrelink may issue a Recovery or Garnishee Notice. These notices advise the amount of money to be remitted to Centrelink by deductions to weekly payments or lump sums including pecuniary loss.

Types of Centrelink notices

To prevent workers receiving both WorkCover and Centrelink benefits, Centrelink may issue the following notices:

·         Preliminary Notice – served by Centrelink advising that the stated worker may be indebted to Centrelink. Receipt of this notice prevents any compensation payments being payable to the worker until any debt owed to Centrelink has been paid in full.

·         Recovery Notice – advises the amount that must be reimbursed to Centrelink prior to any weekly or lump sum payment being paid to the worker. These notices are usually but not always, issued after Centrelink has been informed by the agent that the worker has become entitled to retrospective weekly payments or a lump sum payment including pecuniary loss component.

·         Garnishee Notice – advises of a debt owed by the worker and details an amount to be withheld from a worker’s payments. Although usually only affecting weekly payments a Garnishee Notice can also be deducted from a lump sum, regardless of whether it has a pecuniary loss component.  It is not unheard of for a worker to have had both a Recovery and Garnishee Notice issued at the same time.

For advice on reimbursing Centrelink – see: 9.11.4.1 - Process for reimbursing Centrelink payments.

Agent obligations once Centrelink notice served

Once an agent has been served with a Centrelink notice, a worker must not be paid compensation until such time as the recovery amount has been paid in full or Centrelink has discharged the debt.

Advising Centrelink of compensation payments to be paid

Agents must advise Centrelink of compensation details in the following circumstances when a:

·         decision has been made to commence weekly payments

·         decision has been made to reinstate weekly payments

·         lump sum with pecuniary loss component is being awarded

·         decision to reject a claim has been overturned

·         decision to terminate a claim has been overturned.

See: b Agent prepares for payment

Disputing/querying a Centrelink Recovery Notice

Neither an agent nor WorkSafe are in a position to dispute the amount in a Recovery Notice. This is a matter between the worker and Centrelink.

The worker has appeal rights via internal review at Centrelink, the Social Security Appeals Tribunal and ultimately, to pursue at the Commonwealth AAT if the matter is not resolved to the workers satisfaction.

However, an agent can raise a query in regard to a recovery amount in circumstances where a recalculation may be required because:

·         an error was made in the information originally provided to Centrelink

or

·         the worker has not produced a certificate of capacity which entitles the worker to payments for a specified period.

Deductions are mostly from arrears of back paid weekly payments

In most instances the Centrelink Recovery Notice will apply to a specific payment period in which the agent has advised Centrelink the worker has an entitlement to a weekly payment although this is not always the case.

When the agent receives a Recovery Notice they are to deduct the amount specified to be refunded to Centrelink prior to any money being paid to the worker from:

·         weekly payments

or

·         lump sum payments with a pecuniary loss.

Weekly payments are not to be paid to a worker prior to the Centrelink debt being paid in full.

When may an Agent be liable?

An agent is liable for repayment of the Centrelink recovery amount if the agent has been issued with a Centrelink Notice prior to making affected payments to a worker and:

·         does not deduct the recovery amount before paying the worker

and

·         the worker does not have any further entitlements to compensation payments from which the recovery amount can be deducted.

Recovery Guidelines when Centrelink not deducted

If the agent makes a payment to a worker and has not deducted the entire Centrelink amount prior to paying the worker, the agent then becomes liable for the debt.

However, the agent can then recover the amount of the debt from the worker.

See: 9.11.4.3 - Guidelines for recovery of Centrelink payments

Note: If the agent becomes liable for the debt, they must pay the debt immediately to Centrelink. The agent must not wait until it has recovered payment from the worker before paying the debt to Centrelink.

Lump sums with pecuniary loss component

Lump sum payments with a pecuniary loss (loss of earnings) component are limited to:

·         common law settlements for damages

·         if the settlement has a component for past weekly payments and the deduction has been agreed to prior to settlement.

See:

13 - Entitlements - Common Law

14 - Entitlements - Settlements

Action when agent does not receive a Preliminary notice

Agents are under no obligation to deduct Centrelink payments if Centrelink has not issued a Preliminary Notice in regard to a worker.

However, the agent should contact Centrelink by phone or fax a Compensation interest check form where it appears likely that a worker may have received social security payments.

In circumstances where:

·         agents have not received a Preliminary Notice from Centrelink and

·         it has been verified by Centrelink that they have not issued any notices on a worker.

It is not necessary to wait for a letter from Centrelink advising there is no Centrelink interest before making payments to the worker.

Taxation on Centrelink payments

Agents are required to deduct taxation from a worker’s weekly payments when the worker is a Direct Payee.

When a Recovery Notice has been received from Centrelink and recovery amounts are being deducted from weekly payments, only the amounts actually being paid to the worker after the recovery amount has been deducted are to be taxed. The amount being paid to Centrelink should not be taxed.

For Example:

Example of calculating the average weekly Centrelink deduction amount. Scenario

Centrelink sends a Recovery Notice requesting a:

·         refund of:           $2,160

·         for the period:     3 August to 20 November = 16 weeks

The calculation is:    

Gross weekly amount – Centrelink deduction = balance to worker (if any) – tax on balance (if paid to a Direct Payee) = worker payment    

In our example this is:

Centrelink deals directly with agents

Centrelink deals directly with agents. Agents should correspond with Centrelink through the Compensation Recovery Team.

For information on verifying a verbal request from Centrelink – see: 9.11.4.4 - Verifying verbal requests for information

For information on timeframes for dealing with Centrelink - see appendix 9.17.12 - Centrelink / WorkSafe liaison timeframes

Section contents

9.11.4.1 - Process for reimbursing Centrelink payments
9.11.4.2 - Garnishee notices
9.11.4.3 - Guidelines for recovery of Centrelink payments
9.11.4.4 - Verifying verbal requests for information