(1) How does Centrelink calculate preclusion periods for people in receipt of lump sum compensation payments for workplace or other injuries.

(2) Is he aware of the concerns of some compensation recipients that the method of calculating their preclusion periods does not take into account subsequent increases in the `income cut out amount' used to determine the length of their preclusion periods.

(3) Does the method of calculating preclusion periods disproportionately disadvantage clients with larger payments; if not why not.

(4) Will the Government consider amending the method of calculating compensation preclusion periods to take into account increases in the income cut out amounts occurring after the award of a lump sum compensation payment; if not, why not.

(1) A preclusion period is calculated using one of the following methods:

(2) Yes, this matter has been considered. However, it has been the view of successive Commonwealth governments that the primary responsibility for the support of people who are injured because of a compensable injury lies with the relevant State or Territory compensation scheme, and not with taxpayer funded social security programs. As such, it is the responsibility of compensation schemes to ensure that compensation recipients are adequately compensated for increases in the cost of living.

It should also be noted that the divisor applying as at 30 June 2001 assumes that a person affected by a preclusion period would be able to support themselves on around $29 000 per annum. This is approximately three times the amount a person in receipt of Newstart Allowance would be entitled to.

(3) No, the formula used by Centrelink to calculate the preclusion period takes into account the compensation recipient's economic loss and so proportionally, all lump sum compensation payments are treated equally.

It should also be noted that the vast majority of compensation recipients serve relatively short preclusion periods. 80 per cent of the lump sum compensation recipients who commenced a social security payment in May 2001 served a preclusion period of less than two years (50 per cent less than one year).

(4) No, refer (2) above.

If people receiving compensation are in financial hardship, the Social Security Act provides for some or all of a compensation payment to be disregarded. This means that preclusion periods can be reduced or negated where special circumstances exist.