Coding Compensation and damages (MOD C) to request a clearance 117-01040010

Compensation is defined under Section 17(2) if the Social Security Act 1991 as a payment that is made wholly or partly in respect of lost earnings or lost capacity to earn resulting from personal injury (this includes a disease or condition), whether paid as a lump sum or periodic payments (either within or outside Australia), including payments:

• of damages
• under a scheme of insurance of compensation under a Commonwealth, state or territory law, including a payment under a contract entered into under such a scheme
• in settlement (with or without admission of liability) of a claim for damages or a claim under such an insurance scheme, or
• for any other compensation or damages

Some payments may be treated as a compensation payment, or assessed as ordinary unearned income depending on the terms of the policy, made under:

• an income replacement policy
• sickness and accident policy or
• for sporting injuries

Clearances are required for criminal injury compensation claims. The Compensation Recovery Team (CRT) will determine how to treat the compensation payment.

Payments not treated as compensation should not be recorded on the Compensation Management System (CMS). Many payments commonly called compensation do not meet the definition of compensation under Social Security Law. These include:

• income protection policies attached to superannuation policies
• payments made for criminal injuries by victims compensation schemes see Compensatory payments on the Resources page of Exempt lump sums
• Thalidomide Class Action payments
• National Redress Scheme

When a customer or their partner has, or may have, suffered lost income (economic loss) because of personal injury, a Compensation Affect Payment (CAP) may not be payable if they:

• have a potential or actual compensation entitlement, and
• do not take reasonable action to obtain that compensation, or
• have received compensation, and
• they are serving a preclusion period

Generally, a person who is unable to work because of a compensable injury cannot receive for the same period of time:

• compensation payments from a compensation payer, and
• a CAP from Services Australia

This ensures that those with primary responsibility, will provide compensation payments to the injured person (for example, weekly compensation payments paid to a person who was injured at work also referred to as workers compensation).

When a customer or their partner have a compensable injury it is a requirement to pursue and obtain compensation they are eligible to receive.

Get this information:

• verbally during the customer contact
• on a Module C (MOD C) form

The MOD C can be:

• downloaded online
• issued manually
• submitted online along with any supporting documents within 14 days

The customer will need to complete a separate MOD C for each compensation injury or claim.

This information is recorded in the Compensation Management Summary.

A customer who is receiving a compensation affected payment (CAP) may continue to receive their CAP pending an assessment from the Compensation Recovery Team (CRT).

A new claim for a CAP cannot be finalised until a clearance is received from the CRT.

Different rules apply to:

• ABSTUDY for the treatment of compensation
• ABSTUDY Pension Education Supplement (PES) and when it is assessed as a CAP