Compensation affected payments (CAP) 117-01010010

A compensation affected payment (CAP) is a social security payment that:

• can be affected by the receipt of a compensation lump sum and/or periodic payment
• may be recovered, reduced and/or precluded if a customer or their partner receives compensation

Preclusion refers to a period during which a CAP is not payable due to compensation.

Most social security payments are CAPs including:

• Age Pension
• Disability Support Pension (including blind)
• JobSeeker Payment
• Youth Allowance
• Carer Payment
• Parenting Payment
• Farm Household Allowance (FHA)

The References page contains links to the relevant policy.

Payments made with a CAP are also compensation affected. These include:

• Rent Assistance
• Energy Supplement
• Telephone Allowance
• Fares Allowance
• Bereavement Payment
• Pension Supplement
• Pharmaceutical Allowance
• Education Entry Payment
• Pension Education Supplement (PES)

Compensation payments are included in the income test for Low Income Health Care Cards (LIC).

Different rules apply to ABSTUDY for the treatment of compensation payments.

Where ABSTUDY Pension Education Supplement (PES) is paid with a:

• CAP, the PES is assessed as a CAP
• payment that is not a CAP (such as ABSTUDY), the PES is not considered a CAP

Payments not assessed as a CAP include:

• Carer Allowance
• Bereavement Allowance (BVA)
• Mobility Allowance
• Home Equity Access Scheme payments
• Income Support Bonus (ISB)
• PaTH Internship Incentive payment (closed 1 October 2022)
• Clean Energy Advance (CEA)

Family assistance payments such as Family Tax Benefit (FTB) are not affected under the usual compensation rules. The taxable parts of compensation payments may be counted as part of the customer's annual income.

Check if the customer needs to revise their current family assistance income estimate and payment choice. This will reduce the risk of overpayment.

A customer must take reasonable action to claim compensation. If reasonable action is not taken, a CAP may not be paid, even if all other eligibility criteria have been met.

A saved compensation affected payment (SCAP) is a social security payment granted before it became affected by compensation.

Customers receiving a SCAP are not subject to:

• compensation recovery
• preclusion periods, or
• the requirement to pursue a claim for compensation