WorkCover and Centrelink payments – what you need to know (Vic)

Workcover and centrelink payments

If you pursue a WorkCover claim in Victoria and you happen to be on Centrelink benefits – or have been on benefits, it’s a good idea to understand what impact your WorkCover claim could have on the payment of those benefits.

This article looks at the different claims you could pursue under a WorkCover claim and what impact they could have on the payment of Centrelink.

Medical expenses

Claiming medical expenses under WorkCover has no impact on the payment of Centrelink benefits.

Weekly payments

Generally speaking, you are not allowed to be in receipt of weekly payments and Centrelink benefits at the same time.

If you’ve been on weekly payments and they’ve been terminated by the WorkCover insurer, you’re able to challenge that decision. The first step in doing so is to go to conciliation. You can then, if the matter doesn’t resolve at conciliation, go to the medical panel or to the Magistrates’ court.

If you are successful in either having payments paid to you again on an ongoing basis, or if you settled the matter for a period of backpay (sometimes called arrears of weekly payments), then you may have to pay money back to Centrelink.

If you were getting paid Centrelink payments in the time that your payments had ceased (which could have been for a number of months), then you will usually be required to pay back Centrelink back dollar for dollar.

For example, if you were off WorkCover weekly payments for 6 months, and during that time you received 6 months of Centrelink benefits, you would be required to pay the full amount back to Centrelink. This money would be paid out of the WorkCover backpayment amount.

If this applies to you, the insurer will usually take care of any necessary repayment so you won’t need to worry too much about it.

Impairment benefit

If you were injured at work and you’ve suffered a permanent impairment, you may be entitled to pursue a claim for impairment benefits.

An impairment lump sum is considered to be compensation for pain and suffering.

As such, it will not impact the payment of Centrelink payments.

Receiving an impairment lump sum, regardless as to the amount, will not preclude you from receiving Centrelink benefits into the future.

You also will not be required to repay any money to Centrelink out of your impairment benefit lump sum, regardless as to the amount awarded.

One thing to keep in mind however is that some Centrelink payments are means/asset tested. It is possible that an impairment benefit payment could bump up your assets which could impact your Centrelink entitlement.

Common law lump sum (pain and suffering)

Some common law claims compensate people for pain and suffering alone, while others involve additional compensation for economic loss.

If your common law claim only involved compensation for pain and suffering, and did not include an economic loss component, then generally speaking this should not have any impact on the payment of Centrelink benefits.

You should not be precluded from receiving Centrelink benefits for a period of time, and you should not be required to pay any money back to Centrelink. This is the case notwithstanding the amount of compensation you receive.

Keep in mind however, as mentioned above in relation to impairment claims, some Centrelink payments are assets tested and some compensation payments can count towards assets. For this reason, you should contact Centrelink directly and discuss the matter with them to obtain some clarity prior to settling your matter.

A final thing to keep in mind: sometimes settlements for pain and suffering only are actually settlements for pain and suffering and economic loss. If the settlement amount does not match up to the injury and the circumstances of your injury (ie: if it really is one that involves economic loss that is dressed up as a pain and suffering only settlement), then Centrelink may enforce a preclusion period.

Common law lump sum (pain and suffering AND loss of earnings)

If you pursue a common law lump sum claim and you get compensated both pain and suffering AND loss of earnings, it is very likely that your entitlement to the payment of Centrelink benefits will be impacted.

You will not be required to pay money back to Centrelink, however you will likely be precluded from receiving Centrelink benefits for a period of time into the future.

How long you will be precluded for depends upon the settlement amount (the greater the settlement amount, then generally speaking, the longer the preclusion period will be), when you last received weekly payments from the WorkCover insurer, and when the settlement is.

Centrelink uses a formula to calculate how long a preclusion period will last.

Preclusion periods can sometimes last for a number of years.

For this reason, it is very important that you consider what preclusion period will apply to you (if any), prior to resolving a common law claim with a loss of earnings component, so you can make adequate plans regarding your finances.

Ensure you’re getting paid correctly

Make sure you’re not getting paid both by Centrelink and WorkCover, when you should only be getting paid by one of these bodies. 

If you’re not sure and want to get some advice, speak to Centrelink or WorkCover directly, or ask your lawyer if you have one.

If you have been getting paid by both bodies when you only had an entitled to TAC benefits, for example, then it is possible that Centrelink will ask that you repay any of the money that was paid to you.

Please keep in mind that the information contained on this page should not be considered legal advice and no content on this site should replace the need to obtain advice tailored to the specific facts of your case. The facts of a case can significantly alter the advice that can provided. This site only provides general advice. Read more here.

Sidebar graphic of WorkCover benefits guide

To contact Michael or Peter call 1800 746 442 or email [email protected]

Written by the Work Injury Site team