Centrelink Compensation Recovery

If you receive a compensation payment it may affect your Centrelink payments.

About compensation

Under social security law, compensation is defined as any payment for personal injury, illness, or disease that replaces lost income or earning capacity. This includes payments from within Australia or from overseas and applies to periodical payments as well as to lump sums.

Compensation can be paid for:

  • a work related illness
  • injuries from a car accident
  • injuries caused by slips and trips
  • any other injury that is due to the negligence or fault of another person
  • payments under a sickness or accident policy that are reduced because you received payments from us

Effect on your Centrelink payments

Most Centrelink payments are affected by compensation because they are calculated on your income. If you or your partner are receiving Centrelink payments a compensation claim could affect the amount you or your partner are entitled to receive.

This includes a range of other payments made to people getting income support. Depending on your circumstances, past payments may also need to be repaid.

Compensation estimator

If you have an injury or illness that is the subject of a compensation claim, payments and benefits you receive from Centrelink may be affected. To work out how a proposed lump sum or continuing compensation payment may affect your payments, you or your legal adviser should access the online compensation estimator.

Compensation Recovery Team

If you have further questions after using the online compensation estimator, you can contact the Compensation Recovery Team by:

  • calling 1800 777 653 or
  • faxing 1300 788 118

They can answer questions about:

  • how a proposed lump sum or continuing compensation payment may affect your Centrelink payments
  • whether you need to repay money to us as a result of overpayment after receiving a compensation payment
  • whether your compensation payment will stop you from receiving future Centrelink payments and, if so, the period in which this applies


If you claim or are receiving a Centrelink payment and you have a compensation claim you may be asked to download and complete the Compensation and damages form (MOD C) to calculate your rate of payment and review your entitlement.

Supporting documentation

We may ask you for some extra documents to support your claim such as:

  • correspondence from insurers or compensation payers, for example settlement documentation
  • copies of income protection or sickness policies

Submit your form

You can submit your completed form and supporting documents:

Compensation review and appeal rights

If you think a decision we made is wrong, you have the right to ask us to look at it again. This will not cost you anything and is easy to do.

Read more about reviews and appeals.

Information for solicitors and insurers

Solicitors and insurers can get more information on compensation, including forms, publications and legislation links.

Read more about information for solicitors and insurers.

Manage your money

Getting control of your money can be hard, but we’ve got some great advice and tools to help. Read more about budgeting, borrowing and credit, and managing debt, to help manage your money.

Page last updated: 24 May 2017