The Guides to Social Policy Law is a collection of publications designed to assist decision makers administering social policy law. The information contained in this publication is intended only as a guide to relevant legislation/policy. The information is accurate as at the date listed at the bottom of the page, but may be subject to change. To discuss individual circumstances please contact Services Australia.

6.4.1 Compensation recovery in specific circumstances

Summary

This section contains general information on the following aspects of compensation recovery:

  • compensation settled where the compensation claimant has died
  • recovery where couples separate
  • compensation paid overseas, and
  • recovery of disability support and special needs disability WP.

Compensation settled where the compensation claimant has died

Compensation notices can only be served on living persons or insurers of compensation payers who are liable to pay people, not estates. However if a valid notice has been issued prior to the death of a compensation claimant the compensation recovery provisions DO apply for either a settlement of a lump sum or periodic payment.

Example 1: The person had a motor vehicle accident on 17/02/15 and died on 4/07/15. The insurer contacted Centrelink on 6/07/15 and a preliminary notice was issued on 17/07/15. The death was notified on 28/08/15. The preliminary notice is void as it was issued after the person had died and therefore no Part 3.14 recovery is possible. If any compensation is paid, debt recovery may proceed against the deceased's estate under SSAct Chapter 5.

Example 2: The person was injured at work on 7/07/15 and died 16/08/15. A preliminary notice was issued on 11/07/15. A lump sum settlement was made on 17/08/15. Recovery action can be taken against the insurance company under sections 1184D and section 1184H as the notice was issued before the person died.

Where the compensation provisions do not apply, debt recovery may proceed against the deceased's estate under Chapter 5 of the SSAct.

Act reference: SSAct Part 3.14 Compensation recovery, Chapter 5 Overpayments and debt recovery

Policy reference: SS Guide 4.13.1.25 Treatment of specific compensatory type payments, 6.7 Debt provisions under SSAct from 1/7/2001

Recovery where couples separate

Where a couple separate, the impact of the compensation provisions is to be assessed on the couple status of the compensation recipient at the time the compensation is received.

Note: There may be an effect on partners for lump sum payments made before 20 March 1997, as prior to this date partners were subject to preclusion periods.

Policy reference: SS Guide 6.4.3 Recovery Rules Specific to Lump Sums

Compensation paid overseas

Debts are recoverable from the compensation claimant IF they:

  • arise as a result of compensation payments awarded or settled overseas, OR
  • are made from an overseas source.

In these situations recovery must be made from the compensation claimant. This is because recovery notices can only be served on insurers and compensation payers in Australia.

Act reference: SSAct section 17(2) Compensation, Part 3.14 Compensation Recovery

Recovery of disability support & special needs disability support WP

Disability support wife pension and special needs disability support wife pension are CAPs and are subject to the rules for direct deductions and compensation lump sum preclusion periods. However, the compensation recovery provisions of Division 4 of Part 3.14 DO NOT ALWAYS apply to these 2 groups. The following table explains how the CAP is affected for the pension recipient and their partner.

If … then the CAP …
the PARTNER of the wife pensioner is the compensation recipient is recoverable if
  • the pension is granted on or after 1 July 1987, AND
  • the pensioner's partner was granted DSP or special needs DSP on or after 1 July 1987, AND
  • the partner received
    • arrears of periodic compensation at any time after grant, OR
    • lump sum compensation during the period 1 July 1987 to 19 March 1997.
the WIFE PENSIONER is the compensation recipient

is not recoverable if

  • the pension is claimed ON OR AFTER 1 May 1987 but before 1 January 1994, AND
  • the claimant/recipient received the compensation ON OR AFTER 1 May 1987 but before 1 January 1994.

This means that although DSP, WP and special needs disability support wife pension may be a CAP, compensation recovery is subject to the qualifications above.

Note: Wife (Age) pension and BVA (closed to new entrants on 20 March 2020) are EXEMPT from the provisions of Part 3.14 altogether.

Note: WP ceased on 20 March 2020.

Act reference: SSAct section 17(1)-'Compensation affected payment', section 1161(7) Application of Part

Last reviewed: