Coding periodic compensation payments and raising debts 117-03010020

Periodic payments are paid as:

• ongoing payments (regular instalments over a period of time), or
• as an arrears payment for a period in the past

Compensation payers must use the Compensation advice of periodic payments (SS445) when advising the commencement or arrears of periodic compensation for a customer.

The Compensation Recovery Team (CRT) must set up arrears and new ongoing periodic payment details in CMS.

After the initial coding, all other staff can update periodic payments on an existing record.

CRT will decide if periodic payments are treated as a direct deduction or ordinary income for the compensation recipient.

CRT will record periodic payments for the compensation recipient and/or partner:

• for periods they were receiving a Compensation Affected Payment (CAP), or
• from the start date of a new claim when they reclaim a CAP, or
• when they have a Low Income Health Care Card (LIC)

Where the compensation recipient is receiving periodic payments, and it includes a dependency allowance for their partner:

• the total amount is assessed as compensation
• the total amount is assessed against the compensation recipient only

Retrospective rate increases occur when a compensation payer determines the recipient’s entitlement to periodic compensation for a past period has changed. This can result in the compensation payer making an arrears payment.

Only record periodic payments that meet the Social Security Law definition of compensation on the Periodic Payment Details screen. See The effect of compensation on Social Security payments.

Payments which are not for personal injury or do not contain economic loss are treated as being compensatory and are recorded on the Other Income (OIN) screen.

Some workers compensation and transport accident authorities can make payments to the surviving partner of a deceased worker, known as deceased dependant payments. This type of payment is not compensation and is treated as compensatory in nature. See Assessment of income for Centrelink payments.

When a preliminary notice:

• has been sent, compensation debts are raised to a compensation payer
• has not been sent, Compensation Recovery Team (CRT) must contact the compensation payer to determine if the funds have been released

Periodic compensation debts may result if a person and/or partner is or has been in receipt of a Compensation Affected Payment (CAP) and is paid either:

• arrears of periodic payments
• ongoing periodic payments

When a compensation recipient has a partner, and only the partner has received a CAP since the date of incident:

• do not raise a debt to the compensation payer. Raise a debt under s1223(1) of the Social Security Act

See Effect of periodic compensation on partner's income support payment.

If wages contain a component for periodic compensation, the compensation component must be recorded separately in CMS.

Do not use the Employment Income Details (EAN) screen to record periodic compensation when it is paid as part of a customer's wages. It is not employment income.

Compensation payments paid to an employee by an STP employer or insurance agency (for example, WorkCover) are reported as Paid Leave – Worker’s Compensation via STP channels.

Compensation income reported by a confirmed STP employer or insurance agency will pre-fill in a customer’s online or staff assisted report in Process Direct.

Where compensation income is recorded in CMS for the same employer and is an active claim, confirmed STP Paid Leave - Worker’s Compensation income is not assessed. See Single Touch Payroll (STP).

Service Officers must discuss the pre-filled STP Worker's Compensation income with the customer and check CMS for any compensation income already being assessed. If CMS shows:

• no compensation income being assessed, the customer will need to complete a Compensation and damages (MOD C). Customers reporting online will have an online task created to return a MOD C. See Completing the Compensation and damages via MOD C or verbal lodgement
• compensation income is recorded for an active claim, review the amount in CMS and the details reported via STP with customer. Where the amounts are:
• the same, continue with the reporting task
• different, staff must update CMS. See Process

If a customer and/or partner are claiming or renewing a LIC, record periodic payments on CMS. Income is assessed for the 8 week period ending on the calculated start date for Low Income Health Care Cards.