Did You Know Compensation Preclusion Periods can only be reduced by the Secretary in ‘unusual, unforeseen or exceptional circumstances’?

Maybe your client has been injured in a car accident and has been unable to work since; perhaps they’ve experienced a workplace accident. There are many reasons why someone might receive lump sum compensation and if they do, it’s important that they understand how this is going to impact their Centrelink payments.

It is quite common for us to receive phone calls from financial counsellors who are supporting clients who have had a compensation preclusion period (CPP) implemented after receiving a lump sum compensation payment. A CPP means that you are precluded from receiving Centrelink for a period of time into the future, due to the compensation for economic loss that you have received. Typically, this would be a lump sum compensation payment from WorkCover, the TAC or in some instances, income protection insurance.

If an individual has ‘unusual, unforeseen or exceptional circumstances’, they may be able to have the length of the CPP reduced. However, this is a high bar and it can be challenging to get a successful outcome.

SSRV sees many clients who are in very difficult circumstances and are seeking reduction of their CPP. Whilst SSRV has helped clients reduce their CPP, the issue of how the individual spent their compensation money will be carefully considered by Centrelink and the Tribunal. It cannot be relied upon that the CPP will be reduced once the money is spent. 

SSRV endeavours to will focus on this area over the coming months and to raise awareness about compensation payments and Centrelink preclusion periods. We believe it is crucially important that people who receive a compensation lump sum receive financial advice at the outset, to assist them to understand how to make their lump sum last for their preclusion period and make sound financial decisions. 

Below is an example of a matter that SSRV has run recently where a CPP was successfully reduced due to the ‘special circumstances’ that the individual experienced. This matter highlights and reiterates that to be successful in getting a CPP reduced the individual must be experiencing ‘unusual, unforeseen or exceptional circumstances.’

Fiona’s Story

Fiona had a workplace accident and received lump sum compensation from Work Cover. Centrelink then cut off her payments and raised a CPP. Fiona was married, and her spouse perpetrated severe family violence towards her. Her husband unexpectedly became very ill and required medical treatment. He coerced Fiona to spend a large amount of her compensation money towards his medical treatment, rent and living expenses by threatening to harm or kill her if she refused. 

Fiona quickly found her compensation money had run out entirely, and was unable to return to Centrelink payments due to the CPP. Fiona lived in government housing and fell into rental arrears as she had no money to pay rent, her housing provider issued a notice to vacate and she faced homelessness. SSRV assisted Fiona at the Administrative Appeals Tribunal to have her CPP reduced, and to return to payments.

Caption: SSRV staff Mark Morand and Aylin Yigit with staff from Hume Riverina Community Legal Service.

As a specialist community legal centre with a state-wide remit, part of SSRV’s role is to provide Community Legal Education (CLE) and professional development on social security legal issues to the public, lawyers, financial counsellors and other community professionals, including in collaboration with Victoria’s network of around 50 Community Legal Centres.

At SSRV we know that people living in disaster-affected areas of Victoria are experiencing social security legal issues caused or exacerbated by bushfires, floods, storms and the pandemic.

In the context of the increasing frequency and severity of climate-related disasters in Victoria, over the past few months, SSRV staff have visited three community legal centres in disaster-affected regional areas, to provide CLE/professional development that included a focus on disaster-related social security legal issues.

In February, SSRV community lawyers, Liz Divers and Aylin Yigit, travelled to Morwell to meet with and provide training to lawyers, financial counsellors and other professionals from the Gippsland Community Legal Service. Areas of Gippsland have been affected by both bushfires and floods over the past several years.

In March, Aylin and project worker Mark Morand travelled to Mildura to meet with and provide professional development to workers from the Mallee Family Care. In recent years Mildura has been impacted by flooding, including riverine flooding from the Murray River. Before delivering their presentation, they had the opportunity to be driven to sites where the river had breached its banks, which improved their understanding of the devastation that occurred.

Also in March, Mark and Aylin travelled to Wodonga to meet with and provide professional development to workers from the Hume Riverina Community Legal Service. From Wodonga, they travelled to Corryong and to Mount Beauty where there was the opportunity to provide CLE directly to the public. This area of Victoria has also been affected by both bushfires and floods in recent years – in fact, our previous planned visit to Wodonga was prevented by the devastating floods of October 2022.

The wonderful collaboration between SSRV and community legal centres is crucial to our ability to deliver support to communities impacted by disasters.

What we wanted workers to know

• SSRV receives project funding that supports it to prioritise providing legal assistance services to people living in disaster-affected areas who are experiencing social security/Centrelink problems.
• Both our legal needs analysis and our case work provide us with a deep understanding of the relationship between disasters and subsequent social security issues.
• The types of social security problems that may arise when people are affected by disasters, from things as simple as a change in living arrangements after a home is damaged or destroyed by disaster to more complex matters.
• Relevant legislation and initial legal advice and assistance that could be provided.
• The SSRV Worker Help Line is a great resource for workers who are assisting their client with a social security legal issue,  including when disaster has struck

What we wanted the public to know

• Their disaster-preparedness kit should include copies of identification documents, for Centrelink and other purposes
• It’s very important to update Centrelink if your home is affected by disaster – leaving your principal home, changes to your living arrangements and childcare arrangements, changes to your ability to meet mutual obligations can all impact your social security entitlements. Centrelink debts can be incurred if Centrelink is not updated about your circumstances.
• SSRV provides legal information, advice and assistance to people affected by disasters, including about appeal rights and processes

During our recent regional visits, SSRV workers also shared information about the recommendations for law reform that we have made directly to government that would make social security law and administration more attuned to the circumstances of disaster-affected people.

Our trauma informed approach

When raising the topic of disasters and social security in the course of our presentations, we were mindful that our audiences had potentially been directly impacted by disasters – which turned out to be the case. In discussing this important topic, we found that people were understanding of our broad finding – that social security law intersects poorly with the real-life consequences of disasters on people’s lives – and happy to hear that we have been able to raise this issue directly with senior departmental officers and relevant ministers in advocating for change.

During these visits, questions asked by lawyers and other community professionals centred on clarifying more complex aspects of the law, such as the treatment of debts, and the medical eligibility requirements for the Disability Support Pension.

The public, on the other hand, were more interested in asking about fundamental elements of eligibility for payments such as the Age Pension, and the complexities around Centrelink’s assets and income tests. 

The trips to regional Victoria were very worthwhile for everyone involved and we received very positive feedback about the value of the visits.

While we were there…

In Mildura we also took the opportunity to conduct a group interview with seven workers to support a research project by Economic Justice Australia (EJA) studying the barriers to social security experienced by women in regional, rural and remote areas. We gathered a large amount of information which we provided to EJA for their research. For us, of particular interest were the challenges faced by women experiencing family violence in relatively in small communities where a lack of anonymity, among other things, adds an extra dimension of difficulty to their experiences. We look forward to reading the results of the research project.

Main image: SSRV staff Mark Morand and Aylin Yigit with Allie Collyer from Mallee Family Care Community Legal Centre.

In the last few issues of SSRV News, we’ve introduced Social Security Debt Help, a new free resource to help you understand Centrelink debts. This month, we’re taking a look at how people are using this great online resource.

People with a Centrelink debt often find the situation daunting. They might not know why they have a debt, what’s gone wrong, or what their options are, just that Centrelink are asking them to repay thousands of dollars seemingly out of nowhere.

In many cases the issue is very simple. A person might have misreported their income, providing Centrelink with the “net” amount (the amount that actually goes into their bank account) rather than the “gross” amount, which includes tax that was taken out.

Social Security Debt Help is designed to help that person understand what might have gone wrong, what their options are, and where they can get help.

Using the Self Help Tool, they simply enter into the website some information about their situation, and in response are given a kit, which includes things to think about and questions to ask a lawyer, financial counsellor or someone else supporting them through the process.

It provides them with information that stands them in good stead should they decide to seek help.

In this instance, the person issued the debt would likely understand that they have probably have been overpaid. They would also know that as it was an honest mistake they may still be able to have the debt waived if their situation amounts to special circumstances.

For someone escaping family violence, being told they also now owe Centrelink money can be crushing. But there are options and help available. Understanding what they are can turn a cold referral for support into a well informed and effective referral, where SSRV or another specialist can help in a targeted and effective way.

Social Security Debt Help is aimed at those supporting other people with debts too, whether that be professionals such as lawyers or community workers, or friends and family. The website can help them understand the options the person has, and get them further support if they need it.

Social Security Debt Help is available right now, and we’d love for you to check it out if you or someone you know has a debt. We always encourage people to seek legal advice before appealing a debt. Social Security Debt Help can help you get more out of that advice, and make sure you’re asking the right questions and receiving correct information.

September 20, 2023 was a big day for many single parents, with the eligibility for Parenting Payment Single (PPS) being extended to until the youngest child turns 14. At the time, we explained how the transition onto PPS was expected to happen. Six months down the track, we’ve got an update.

The PPS eligibility increase followed a prolonged campaign from community groups, including SSRV, concerned that being moved onto the lower rate of JobSeeker Payment once the youngest child turned eight was contributing to families experiencing poverty. 

Many of our clients had reported that this drop in income has caused them financial stress and made it challenging to balance work and family responsibilities.

Single mother advocacy groups also argued that single mothers are not unemployed, they are performing unpaid work.

Transitioning from JobSeeker Payment to Parenting Payment Single

On 20 September 2023, eligibility for PPS was expanded to Centrelink clients whose youngest child is under 14 years. If you, or the person you are supporting, were on JobSeeker Payment but entitled to PPS on that date you should have automatically been transferred.

Even if you had been transferred from PPS to the JobSeeker Payment due to your youngest child turning eight years old before 20 September 2023, the transfer back to PPS should have occurred with no action required by you.

Six months on from the changes to PPS, it’s worth checking that this happened as it should have.

It’s important to note, if you were on the JobSeeker Payment on that date but suspended for any reason, you needed to address the issue causing the suspension and then lodge an application for PPS.

Find more detail here.

Our recommendation

Centrelink payments, eligibility, and the use of technology can be complicated. It is likely that some people expected the transfer to occur automatically, but this did not happen for them.

If you, or your client, expected an automatic transfer from the Jobseeker Payment to PPS in September 2023, we recommend checking your Centrelink payments and MyGov account to ensure the transfer did occur correctly, and pick up any issues that may have arisen.

If you experienced issues with the automatic transfer which have not yet resolved, we recommend you speak with a Centrelink officer to discuss what prevented the transfer and what is required to fix the issue.

SSRV can assist if you, or your client, experienced issues with the PPS transfer that you are unable to resolve quickly with Centrelink.

SSRV is an independent community legal centre; we don’t have access to Centrelink systems. We can, however, talk you through the processes available to resolve your dispute with Centrelink, and give you advice on your rights of review.

New data has revealed that almost half of people trying to access a social security payment designed to assist those escaping family violence are being rejected. This has led to concerns about what can be done to address this issue. 

The escaping violence payment (EVP) is a social security payment introduced in 2021 to offer financial assistance to help families set up a home free of violence. Under the scheme, survivors of family violence can access up to $1,500 in cash and up to $3,500 in goods and services, such as removalists, to help them leave a violent home.

Last month, though, the Guardian reported that data to Senate Estimates revealed that around half of people trying to access EVP are having their claims rejected. Between July and September 2023, 57,041 applications were made for the EVP, but only 29,437 were deemed eligible.

This data has raised concerns that applying for EVP is too difficult and the payment is not reaching the women who need it most.

“The most common reasons are because the eligibility criteria were not met, the service provider was unable to recontact the applicant or the applicant otherwise determined not to proceed with the application,” a spokesperson for the Department of Social Services said in a statement.

While “the applicant otherwise determined not to proceed with the application” sounds like a simple mind change, at SSRV, we know that there are many reasons why women fail to proceed with applications, and it’s rarely a change of mind.

Failure to proceed with an application is often a direct result of a difficult and complicated application process that many women, especially those dealing with the multiple and terrible issues arising from family violence, do not have the capacity to deal with.

According to the Guardian, a recent review into the process of applying for the EVP found there were difficulties in establishing eligibility for the payment because people did not have the right supporting documentation, such as a police or doctor’s report.

Some clients struggled to demonstrate financial hardship because they did not have a bank account in their name.

There are also concerns that the eligibility criteria for the EVP may be too limiting. It cannot be accessed by people experiencing other forms of family violence, such as elder abuse, visa holders and people who have left a violent relationship more than 12 weeks ago.

SSRV believe that, while there has been significant improvement in how social security law treats people escaping family violence, more needs to be done to ensure that the social security system is able to be accessed by people at the moment they need it the most.

Centrelink debts can be complex and are often confusing. Our clients frequently tell us they had no idea they were being overpaid or that a debt was being accrued. Often the first they hear about a debt is when they get a letter out of the blue, or worse, when their tax refund is taken and put towards a debt they didn’t even know they had.

Social Security Debt Help is SSRV’s new resource that aims to help people understand Centrelink debts, how they come about, and what they can do about them.

Understanding a debt is the first step to addressing it, and different options will be available depending on how the debt came about. For example, debts may be caused by income being reported incorrectly, or a coupled person being paid the single rate, or someone simply being ineligible for the payment they were receiving because they didn’t meet the requirements. Social Security Debt Help covers these and more.

Unfortunately, many Centrelink debts are valid. People do get overpaid for a variety of reasons, and Centrelink can ask them to pay that money back. Not all debts need to be paid back though, and all Centrelink debts can be reviewed. You can ask Centrelink to waive recovery of a debt in certain circumstances. Repayment plans may also be organised. Social Security Debt Help provides information on seeking a waiver, as well as other options that may make having a Centrelink debt less stressful and less impactful on your life. Check out the website here.

SSRV project worker Mark Morand talks about the risk of bushfires in 2024, the links between social security and bushfires, and what you should be doing right now to prepare.

SSRV’s Community Legal Education sessions (CLEs) are popular with workers supporting clients experiencing social security issues. Professional development in this area is important because social security is a complex area of law and one that is ever-changing. Centrelink problems often intersect with other issues that people are facing such as family law, family violence, debt, homelessness, health, disability and disasters.

SSRV’s CLEs are free, online, and explain in plain English social security law and how it might impact your clients. We tell you what to look out for, how to address issues when they arise, and about how Social Security Rights Victoria (SSRV) can assist.

Our CLEs cover a range of common social security issues, including eligibility criteria, what to if you disagree with a Centrelink Decision, and how to challenge a Centrelink Debt. In the coming months, SSRV will be hosting webinars on Centrelink debts, family violence, and when you are a member of a couple for Centrelink purposes.

Subscribe to SSRV News and you’ll be first to receive invitations when registrations open. Make sure you also let colleagues know how to sign up to our mailing list if they would like to receive more information about upcoming sessions.

Financial security is critical for people planning to escape family violence or rebuilding a life free from violence. So, how is it that a system designed to support us in times of need can be used by perpetrators to commit further acts of family violence?

Family Tax Benefit (FTB) is an example where this can occur. FTB is a two-part payment that helps with the cost of raising children. When parents are partnered, FTB is only payable to one person in the relationship. However, in assessing eligibility and the rate of payment, Centrelink requires income information of both the recipient and their partner.

To receive FTB in fortnightly instalments, the recipient must provide an income estimate for the financial year ahead. At the end of the financial year Centrelink check their income estimate against their actual income through data matching with the Australian Tax Office. If the estimate and actual income amounts differ, Centrelink recalculate their entitlement accordingly. This can result in an overpayment or top up payment. 

Recipients whose income has changed or fluctuated throughout the year are more likely to have an overpayment or top up payment. However, in family violence circumstances there are several complexities created by this process

No access to income information

Family violence often includes financial abuse, leaving a victim/survivor without access to accurate income information of the perpetrator. This includes circumstances where the perpetrator deliberately provides the victim/survivor with inaccurate information to report to Centrelink or where asking the perpetrator for income information has triggered violence and caused the victim/survivor to fear for their safety. 

This leaves the victim/survivor with the difficult task of trying to accurately estimate their partner’s income and increases the risk of Centrelink raising a debt against them if they make a mistake.

Overpayment for failure to lodge tax return

When a recipient and/or their partner fail to lodge their tax return (or advise Centrelink they aren’t required to lodge a tax return) within the time limit, then the full amount of FTB received for the relevant financial year is raised as an overpayment. These are called ‘non-lodger debts’.

When it comes to overpayments, Centrelink only seek repayment from the recipient, even if their partner is the one who hasn’t lodged a tax return. As a result, the recipient can be left with a debt through no fault of their own. In circumstances of family violence, this makes the victim/survivor responsible for the perpetrator’s actions and can limit their ability to develop financial freedom and independence.

Additionally, if Centrelink raises a non-lodger debt, the recipient can no longer receive FTB in fortnightly instalments. This generally remains in place until the outstanding tax return is lodged. However, in circumstances of family violence, a victim/survivor can ask Centrelink to delay this for up to six months. 

It is important to note, if someone is unable to receive FTB by fortnightly instalments due to non-lodgement of tax returns, they can still receive FTB as a lump sum at the end of financial year provided tax returns are lodged within relevant time limits.

If a couple separates, the recipient can recommence receiving FTB fortnightly and Centrelink will ‘write-off’ the non-lodger debt. This means they pause recovery of the debt until the ex-partner lodges the relevant tax return. If Centrelink doesn’t automatically write off a non-lodger debt upon separation, they can be asked to do this. 

Having Centrelink write off a non-lodger debt is helpful for victim/survivors as it places any debt recovery on hold until a determination is made as to whether there is in fact a debt. Without a write-off, the victim survivor again unfairly bears the consequences of the perpetrator’s actions.

Recovery of Overpayments

Despite using the family income to assess eligibility and rate of payment, and despite the payment being designed to assist with the cost of raising children, Centrelink only seeks to recover an overpayment from the recipient. This occurs irrespective of the circumstances resulting in the debt. 

Consequently, the process of raising and recovering FTB overpayments often makes the victim/survivor further responsible for the perpetrator’s abusive behaviour, and limits their ability to develop financial freedom and independence. Meanwhile, there is no accountability for the perpetrator.

Family violence is considered by Centrelink to be a relevant factor in considering debt waiver due to special circumstances. One of the challenges in this, however, is that often the presence of family violence is not deemed as ‘unusual’, as is required by the special circumstances debt waiver provisions. As a result, there will usually need to be additional circumstances of vulnerability and hardship to obtain waiver of debt.

Furthermore, debt waiver due to special circumstances is only available where neither the recipient nor a third party (including a perpetrator of family violence) have knowingly provided false information to Centrelink. This means where a perpetrator has purposely provided false information to Centrelink, a waiver cannot be obtained by the victim/survivor. It also makes it difficult to obtain a waiver in circumstances where a victim/survivor has guessed the perpetrator’s income, knowing it was a guess, but being unable to obtain the correct information due to perpetrator withholding their income information or due to victim/survivor prioritising their safety and not asking the perpetrator for the information.

All this means that current social security responses to family violence do not sufficiently emphasise recovery and restoration and may even impede it. 

Historically, social security law has been focussed on ensuring the immediate safety and security of victims of family violence. However, safety is only the start—the ultimate objective of the family violence response must be that victims, including children, can recover and thrive, and do so at the pace they require.

Financial security is a key part of recovery. Women who have lived with a violent partner are more likely than other women to experience financial difficulty, and many women experience poverty as a result of family violence. The associated abuse can be financial in nature (defined by law as economic abuse) or can be characterised by other forms of family violence that affect a victim’s financial wellbeing. 

A range of factors can exacerbate victims’ experience of financial insecurity—among them difficulty obtaining child support payments, tenancy problems, a lack of control over household finances, and credit, utility and car-related debt incurred by the perpetrator. 

SSRV believe that, while there has been significant improvement in how social security law treats people escaping family violence, more needs to be done to prevent family violence being further perpetrated through the social security system.

We’ve created a new resource for people with Centrelink debts and those supporting them. Social Security Debt Help has been created based on our experiences and learnings from our DSP Help website, and it’s now live and available to anyone in Australia.

Social Security Debt Help is a website that helps people better understand Centrelink debts, how they come about, and what they can do if they or someone they’re supporting has one. Centrelink debts are legal issues and it’s important to get legal advice about how to manage them. This self-help tool will assist people with debts to  understand their options before they get advice, so they know what to ask and what might apply to them.

We’ll be organising a launch event in the new year, so keep an eye out for details. We’ll also be organising some training/education about Centrelink debts which could be useful for you or your clients.

You’re welcome to start using the website right away. If you’d like to chat to us about the website or your clients, please call our Worker Help Line on 03 9481 0655.

Check out Social Security Debt Help here.

Social Security Debt Help is supported by funding from the Victorian Legal Services Board and Commissioner under the Victorian Legal Services Board Grants Program.