Compensation Recovery Teams (CLK) 117-01020000

Letter

Terms

A-K

See also: L-Z

Centrelink Compensation Recovery

Claimant

Compensable event

Compensation affected payment

Compensation assessed as direct deduction

Compensation assessed as income

Compensation clearance

Compensation divisor

Compensation management system

Compensation payer

Compensation part

Compensation recovery charge

Deed of release

Defendant

Direct deduction

Economic loss

Ex-gratia payment

Global settlement

Gradual return to work

Gratuitous care

Gross lump sum settlement amount

Income text concession

Injured person

Incident/Injury

Implied authority

Judgement

Term

Description

Centrelink Compensation Recovery

A program delivered by Services Australia on behalf of the government, to recover Centrelink income support payments paid to an injured person in relation to an injury/illness where they have been awarded compensation.

It is a principle of the social security system that people who are unable to work because of a compensable injury should not receive income support from both the social security system and compensation systems for the same period.

Claimant

The person seeking compensation (plaintiff).

Compensable event

The date of the compensable event is the later of the:

• date of incident
• date of diagnosis
• date the loss of earnings or wages started

Compensation affected payment

A social security payment that can be affected by the receipt of, a lump sum compensation payment and/or periodic compensation payments.

Compensation affects most Centrelink income support payments.

Compensation assessed as direct deduction

Applies where the compensation recipient was not receiving income support at the date of the compensable event, compensation is assessed as direct deduction.

Compensation assessed as income

An income test concession applies where the compensation recipient was receiving income support at the time of the compensable event, compensation is treated as income.

Compensation clearance

The CRT will investigate the customer’s compensation claim and determine if any action is to be taken, and tell Service Officers of the payability of a customer’s CAP.

Compensation divisor

The compensation part is divided by the income cut-out amount for a single rate of pension applying at the date of the settlement.

Compensation management system

The database system used by the agency to manage Centrelink compensation recovery cases, including to register a case, enter details of relevant parties and action periodic and lump sum payments.

Compensation payer

The person who is liable to make a payment of compensation

Compensation part

In ALL cases where:

• the lump sum payment is received as SETTLEMENT of a claim, including as a consent judgement, as an interim payment, or a redemption of periodic payments, AND
• all or part of the payment is for:
  • lost earnings, OR
  • lost capacity to earn

then 50% or half the lump sum payment is deemed the compensation part

In ALL cases where a compensation claim finalised after a contested hearing by a court, tribunal or arbitrator, can be known as a judgment, the specific amounts awarded for economic loss, including the arrears or advance of the periodic compensation payments, are taken to be the compensation part of the lump sum payment and the 50% rule does not apply.

Compensation recovery charge

A compensation recovery charge is the legally recoverable amount (debt) raised to the compensation payer or to the customer, when a customer receives a lump sum payment or periodic arrears of compensation payments, for the same period income support payments have been paid to a customer and/or partner.

Deed of release

Deed of release provides the terms of settlement, the amount and any other payment components, or deductions from the settlement. The deed of release must have at least one signature either physical or electronic from the Defendant Solicitor or compensation payer and Plaintiff Solicitor or customer.

Defendant

The compensation payer or liable party.

Direct deduction

Periodic compensation is assessed as a dollar for dollar rate reduction against the CAP rate otherwise payable.

Economic loss

The portion (or component) of a compensation settlement for the claimant's loss of earnings or lost capacity to earn.

Ex-gratia payment

A payment that is made without the liability being established or admitted and treated as other compensatory in nature lump sums.

Global settlement

Means lump sum settlement.

Gradual return to work

When the customer is on a gradual return to work and is getting both earned income (wages) and partial compensation payments.

Gratuitous care

If someone provides care for a person who has a compensation claim, this can be added to that claim (settlement).

Gross lump sum settlement amount

To calculate the gross lump sum settlement amount, add ALL these payments together:

• the lump sum settlement amount
• total amount of previously paid weekly compensation payments including GST and Tax
• all medical, hospital and rehabilitation costs
• legal costs (known at the time of settlement)
• advance payments
• impairment payments
• pain and suffering payment

The only allowable deduction before applying the 50% rule is the gross weekly compensation that has been paid.

Income text concession

Applies where the compensation recipient was receiving income support at the time of the compensable event, compensation is treated as income.

Injured person

The individual who has suffered an injury or illness.

Incident/Injury

Injury, illness, or disease about a compensation claim.

Implied authority

Solicitor acting on behalf of the injured worker.

Judgement

A ruling or judgement by a judge or tribunal after a contested hearing in finalisation of a compensation claim.

Letter

Terms

L-Z

See also: A-K

Medical costs

Memorandum of Agreement

Non-economic loss

Periodic compensation payment

Periodic compensation payment period

Permanent impairment

Plaintiff

Preclusion period

Redemption Lump Sum

Redemptions and Other Costs Lump Sum

Repaid periodic compensation payments

Saved compensation affect payments

Settlement

Settlement date

Settlement document

Social Security payment

Solicitor Defendant

Solicitor Plaintiff

Special circumstances provision

Supplementary payments

Term

Description

Medical costs

Medical costs include rehabilitation, hospital, and travel.

Memorandum of Agreement

The purpose of the Memorandum of Agreement is to have a formal understanding of the agreement between parties and is legally binding.

Non-economic loss

Non-economic loss compensation refers to personal injury compensation that is NOT made in respect of lost earnings or lost capacity to earn.

Non-economic loss compensation can include pain and suffering and impairment payments, which can be paid under workers' compensation, motor vehicle accident, public liability, and criminal compensation schemes.

Periodic compensation payment

Periodic Payments are made on a regular basis, for example weekly or fortnightly,

Periodic payments are deemed to be received from the date they become payable. These payments affect social security income support payments on a dollar for dollar rate reduction basis (most compensation recipients), or as ordinary income depending on the circumstances (some compensation recipients and all partners of compensation recipients). For partners of compensation recipients, the excess periodic compensation is treated as other ordinary income.

Periodic compensation payment period

A series of payments made on a regular basis:

• The period to which a periodic compensation payment, or a series or periodic compensation payments, relates; or
• In the case of a payment of arrears of periodic compensation payments, the period to which those payments would have related if they had not been made by way of arrears payment.

Permanent impairment

A permanent impairment payment is a non-economic loss compensation payment for personal injury that is NOT made in respect of lost earnings or lost capacity to earn.

Plaintiff

The plaintiff is the injured person claiming compensation, also known as the compensation recipient.

Preclusion period

A compensation preclusion period is a calculated period of self-support during which a lump sum compensation recipient cannot be paid a compensation affected payment and must repay previously received social security payments if part or all of the lump sum preclusion period falls in the past.

Redemptions and Other Costs Lump Sum

Arrears or advances of periodic payments may be included in a lump sum settlement with other compensation components such as, pain and suffering, medical costs, interest. Do not separate the periodic payment components to calculate their individual effects under the Social Security Act. Assess the entire settlement as a lump sum. The only exception is arrears of periodic payments with interest only. Assess this as periodic payments in the period they are paid.

Redemption Lump Sum

A redemption is where the injured person and compensation payer agree to a single lump sum payment instead of paying ongoing weekly compensation payments for a specified fixed or non-fixed period.

Repaid periodic compensation payments

Repaid periodic compensation payment (RPCP) is equal to the periodic compensation payments received.

Payback between two insurers, has no bearing on the amount the compensation recipient received for lost earning (wages).

Saved compensation affect payments

A saved compensation affected payment (SCAP) is a social security pension, benefit, or allowance, which was granted before that payment type became a compensation affected payment.

Settlement

If an agreement has been reached either by a consent judgement or other in finalisation of a compensation claim.

Settlement date

For Consent Judgements the date the Deed of Release is signed by the Defendant Solicitor or compensation payer and the Plaintiff Solicitor or customer (the earlier of the two dates).

Settlement document

For Judgements, the date the arbitrator or the court has sanctioned or ratified the decision

Settlement Documents include deed of release and must have at least one signature either physical or electronic from the Defendant Solicitor or compensation payer and Plaintiff Solicitor or customer. The signature legally binds an individual to the information in the document.

Social Security payment

One of the following types of payments paid under the Social Security Act 1991:

• A social security pension
• A social security benefit
• An allowance

Solicitor Defendant

Appointed by the compensation payer or liable party to act on their behalf. Defendant Solicitor provides documents and other correspondence about the compensation case.

Solicitor Plaintiff

Appointed by the injured person or claimant to act on their behalf. Plaintiff’s Solicitor provides documents and other correspondence about the compensation case.

Special circumstances provision

In situations where the compensation provisions could lead or have led to extreme hardship or created an inequitable, unjust, or unreasonable situation.

Due to the unforeseen, exceptional, or extreme situations, special circumstances provisions can be applied to treat the whole or part of a compensation payment as not having been made or not liable to be made.

Generally, the provisions are applied to a lump sum compensation payment with the result that all, or part, of a preclusion period is reduced. This may also reduce, or negate altogether, any associated compensation debt.

Supplementary payments

Supplementary payments or add-on payments are included in the calculation of a periodic or lump sum charge where the underlying payment is a CAP.