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Medicare and Centrelink Benefits – How They Affect Your Claim

Do Medicare & Centrelink affect my medical negligence claim?

YES, past Medicare and Centrelink benefits do have an impact on medical negligence claims.

Compensation received in medical negligence claims may also affect the injured persons ongoing rights and entitlement to Centrelink.

IMPORTANT: -

  • Past Medicare charges relating to a medical negligence injury will need to be paid back to Medicare if the claim is resolved
  • Future Medicare entitlements may be affected by a medical negligence settlement if part of the claim relates to future medical expenses
  • Past Centrelink benefits may need to be paid back to Centrelink if the medical negligence claim settles and a portion of the settlement was for past economic loss
  • Future Centrelink benefits may be affected by a medical negligence settlement if part of the claim relates to economic loss

Do past Medicare charges have an impact on medical negligence claims?

Yes, if treatment and other Medicare benefits such as nursing and home care benefits have been obtained for injuries sustained as a result of medical negligence these expenses will form part of the medical negligence claim as a head of damage called “past medical expense”.

Do I have to pay back Medicare at the end of my medical negligence claim?

Yes, while expenses paid by Medicare are claimable as a head of damage in medical negligence, the compensation received at settlement for past medical expenses cannot be kept by the injured party as this would constitute a double up of compensation.

Therefore, the money claimed for past Medicare must go back to Medicare and/or the private health fund.

How to calculate a Medicare refund?

Upon request, Medicare will issue a Medicare History Statement from the date of injury to date of request. This statement will detail every expense paid by Medicare over that period.

The injured party will need to tick the box next to treatment that relates to any injuries sustained as a result of the medical negligence. This form is then returned to Medicare.

Following which, Medicare will issue a Medicare Notice of Charge which provides a total figure to be paid back to Medicare when the matter settles.

If a Medicare Notice of Charge is not available or has expired at the time of settlement then 10% of the settlement money will be deducted by the Insurer and sent to Medicare.

Medicare will then send a Medicare History Statement to the injured party, upon receipt of the Medicare History Statement, Medicare will determine the charge and withdraw the charge amount and return the balance of the 10% to the injured party.

If there is no Medicare Charge the full 10% will be returned to the injured party.

Does my past Centrelink benefits have an impact on my medical negligence claim?

Yes, if as a result of medical negligence the injured party is unable to work and has obtained a Centrelink benefit the injured party may need to reimburse Centrelink at the end of the medical negligence claim.

If an injured party is unable to work, their past economic loss will form part of the medical negligence claim as a head of damage called “past economic loss”.

If the injured party is compensated for their past loss of income they will not be able to keep that compensation and the Centrelink benefit for the same period as this would constitute a double up of compensation.

How to reimburse Centrelink?

If a portion of the settlement money relates to past economic loss, Centrelink will be notified and will issue a clearance or charge.

The clearance will advise of any amounts owing to Centrelink for any benefits that are compensation affected.

It is important to note, if the injured party has unpaid Centrelink debts (e.g. garnishee or unpaid child support) those debts may be payable from the medical negligence compensation.

If there is an amount to be reimbursed to Centrelink, the Insurer will deduct the amount owed to Centrelink form your settlement money.

An insurer is unable to pay out any settlement money until a Centrelink clearance or charge is received. Generally this process takes between four 4-12 weeks.

If no Centrelink benefits have been claimed over the relevant period Centrelink will issue a Clearance stating there is no charge and no money will be deducted by the Insurer for reimbursement.

Does my medical negligence settlement affect my ongoing rights to Centrelink? 

YES, in some circumstances.

If a portion of the settlement money represents loss of income an injured worker may be precluded from obtaining Centrelink benefits into the future.

A preclusion period applies irrespective of whether the injured party has previously received Centrelink.

It is important to note, preclusion period may affect entitlements to Pensions and other age benefits.  

The injured party will be advised of any Medicare and/or Centrelink reimbursements as well as any Centrelink preclusion periods prior to the resolution of their medical negligence claim.

However, it is important to be open and frank about past Medicare and Centrelink benefits and debts to ensure the claim runs smoothly and the right amount of compensation is obtained at the resolution of the medical negligence claim.

To read more about medical negligence damages see our recent blog post: 4 MOST COMMON DAMAGED CLAIMED IN MEDICAL NEGLIGENCE MATTERS”.

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