6.4.4 Recovery Rules Specific to Periodic Payments

Summary

This section contains the following information:

• recoverable amounts in periodic payments period,
• recoverable amounts for arrears of periodic payments,
• recoverable amounts when a CAP is already reduced by periodic compensation,
• recoverable amounts - income test concession, and
• income test concession contraventions.

Recoverable amounts in periodic payments period

If a compensation recipient receives a CAP during the periodic payment period, CAPs can be recovered if they were paid to:

• a person, AND/OR
• their partner.

This provision also applies to arrears of periodic payments.

Recoverable amounts for arrears of periodic payments

The amount recoverable is the lesser of the:

• total amount of compensation payments paid for the period, OR
• difference between:
  • the CAPs paid for the period, AND
  • the amount of the CAPs that would have been paid had the periodic compensation been taken into account throughout the period.

For a partnered couple, the amount of the partner's CAPs is also included in the formula above.

Recoverable amounts when CAP is already reduced by periodic compensation

If a CAP is already reduced by periodic compensation payments and the rate of the periodic compensation is subsequently increased, any CAP overpaid in the periodic payments period before the CAP is reduced is recoverable. The same formula as above is applied.

Recoverable amounts - income test concession

If the income test concession applies to the compensation recipient and the compensation recipient receives a compensation arrears payment, the CAPs received during the periodic payments period can be recovered if they were paid to:

• a person, AND/OR
• their partner.

The amount recoverable is the amount by which the compensation recipient's, or their partner's, CAP would have been reduced had the arrears payment been assessed as income in the period it represents.

Income test concession contraventions

If the compensable event occurs while a compensation recipient is receiving a CAP, any periodic compensation paid in respect of that event is assessed under the ordinary income test for both the compensation recipient and their partner, rather than as a direct deduction. However, if it is later determined that a contravention of the SSAct or the SS(Admin)Act has occurred and the person was:

• not qualified for the CAP at the time of the compensable event (or the CAP was not payable), AND
• the relevant adverse determination provisions allow the determination to be backdated to before the compensable event,

THEN

• the person can be treated as if they were not receiving the CAP at the time of the compensable event.

This means that the periodic payments must be treated as a direct deduction for the compensation recipient rather than as ordinary income when determining the recoverable amount, as well as any ongoing payment rate. In these circumstances debts should be raised under SSAct section 1180.