Assessing compensation payments from personal injury insurance schemes 117-22092101

If the payments are being made through:

• a superannuation fund, go to step 6
• another personal sickness or income protection policy, go to step 2

If the payments are in respect of a medical trauma or event, this is not compensation. For both lump sum and periodic payments see Exempt lump sums

Otherwise, go to step 3

Review the policy documents and/or Compensation Personal Sickness and Accident claim (SS485) form.

Check if the customer has funded the policy. This includes if the customer funds the policy through salary packaging or payroll deductions.

Has the customer made payments towards the policy?

• Yes, go to step 4
• No, go to step 5

Check if there is an offset clause contained in the policy or contract and if it has been invoked.

For example:

“If you receive other disability income while unable to work, your income protection payments will be reduced. Other disability income includes WorkCover, Accident compensation or any other similar State or Federal legislation.”

Does the policy include an offset clause against Centrelink income support payments?

• Yes, go to step 5
• Yes, but it has not been invoked, go to step 6
• No, go to step 6

These payments are compensation for the purpose of section 17 of the Social Security Act 1991.

See Coding and raising debts for periodic compensation payments.

These payments are exempt from compensation provisions and are subject to the income and assets tests.

See Income from personal injury insurance schemes and disability benefits.