Generally, Total and Permanent Disability (TPD) payouts won’t impact your centrelink payments, particularly if that payout is held within super. However a TPD payout is a form of income and you should always report any changes in circumstances to centrelink.
Let’s have a look at 2 scenarios
If you are under the age of pension
Good news, if you are under the pension age and receive a lump sum TPD payout, then it will NOT impact your Centrelink payments at all. You can take your TPD Payment and use it in any manner you choose and regardless of the amount you receive, it will not be used to calculate your Centrelink eligibility.
If you are a pension recipient
When you reach the age of pension, a TPD payment can potentially impact your Centrelink ‘means test.’ This is because superannuation withdrawals are treated as income after you reach the age of pension (65.5 to 67).
However, it depends on the type of Centrelink benefit being sought.
Don’t stress! Not all Centrelink benefits will be impacted.
With most Centrelink pensions and allowances such as Newstart, Disability payments or Carer Payments, the withdrawal of TPD or Superannuation amounts does NOT impact Centrelink ‘means testing.’ What impacts the eligibility is what the person uses the funds to do.
If a person uses their withdrawn TPD or superannuation amount to pay their mortgage, debts or legal fees, there will be no impact on Centrelink payments.
However, any lump sum that is kept in the person’s bank account will be included as a ‘financial asset’ and Centrelink will include this amount as part of the eligibility testing.
To find out more about Centrelink eligibility criteria, you can visit www.centrelink.gov.au. If you need further assistance Call Us on: 02 9854 5552.
Are you worried that lodging a TPD claim will reduce your income?
If you’ve been through an injury or serious illness that has impacted your daily living, you should consider whether you can make a TPD claim. A pay-out could give you back the financial freedom your injury has cost you. Speak to a trusted lawyer, preferably one that specialises in personal injury claims.
Shaheen Legal specialises in TPD Personal injury and can provide you with a FREE, no obligation consultation to help you decide whether you should proceed with your claim.
If you go through the process of lodging your claim, you shouldn’t worry that a successful claim will put you in a more difficult financial position. Your lump sum payment should help you ease your financial burden caused by your injury or illness.
Speak to a Personal Injury Lawyer today
If you are still unsure about whether your TPD lump sum payment will reduce your regular income from Centrelink payments, speak to one of the friendly lawyers at Shaheen Legal today on 02 9854 5552.
