Actioning a compensation clearance 117-01040020

The purpose of a compensation clearance is to determine the customer's payability for an income support payment.

Compensation recipients must take reasonable action to claim or obtain any compensation they are potentially able to receive.

The Compensation Recovery Team (CRT) will follow up with the customer where further information is needed.

Following assessment, the CRT will:

• record a compensation clearance decision in a Fast Note on the customer's record
• check if the clearance has been requested as part of a new claim activity. If so, the CRT will take the claim off hold. This will result in the new claim being allocated for assessment, based on the previous established priorities
• check the customer's record for any compensation activities created because of the assessment and action where appropriate, including activities:
• CLE 'clear to pay' or 'not clear to pay'
• CLR 'Compensation Management System/Clerical Review'
• REA 'Review net amount received for assets and investment income'
• cancel activities where they are not needed

When the clearance assessment is completed, the Service Officer must check the clearance decision DOC for any actions they must complete. Clearances requested as part of a new claim activity may result in an automatic rejection of the claim due to compensation.

This is a legal notice served to a compensation payer or insurer by Services Australia (the agency). The Preliminary Notice advises the compensation payer:

• to notify when liability is accepted
• not to release a compensation payment until a clearance had been sought from the agency

A preliminary notice prevents the compensation payer or insurer from making any payment to the customer until the agency has determined if a recovery is applicable. Payment of the compensation must not be made until:

• the preliminary notice has been revoked by the agency, or
• the amount under the recovery notice has been paid, or
• the CEO has given the compensation payer or insurer permission to pay an amount

A compensation payer or insurer commits an offence if they do not comply with the preliminary notice.

Legislation allows the agency to request information from:

• a claimant: a person who has lodged a claim where the claim had been:
• received but it is not yet determined, or
• granted and is not yet payable
• current customers and/or partners
• an ex-recipient: a person who has previously been in receipt of a social security payment or holder of a concession card
• third parties

Where a request for information notice has been issued, the customer has a legal obligation to comply with the request. If the customer fails to comply with this obligation, the customer's payments may be suspended, or new claim rejected.

An adverse decision for not responding to a request for information can only be made to the individual that was issued the request. It cannot be applied to their partner unless they were also issued a request for information and failed to respond.

Note: compensation information may be requested from a third party when a customer is in financial hardship and has difficulty obtaining information or documents. Requests for documents from third parties can be made verbally but must also be made in writing.

A customer may need to provide documents that support the information declared in their Compensation and damages form (MOD C).

Documents identified during completion of a new claim must be provided with the claim, whether submitted:

• online or via upload documents service
• at a service centre, or
• by post or fax

The determining officer (delegate) who is actioning the compensation clearance must:

• decide if supporting documents/evidence provided is acceptable and/or if more information should be requested. See the Resources page for a guide in making this determination
• include full details in the compensation clearance decision DOC when supporting documents/evidence supplied needs further explanation as to why it was accepted (or not requested/provided)