Medicare & Centrelink in medical negligence claims
Medical Negligence
2 February 2026
min read
Key Takeaways
At settlement in medical negligence claims, you must refund the Federal Government for Medicare services and Centrelink benefits received. Insurers manage these deductions from settlement funds.
• Medicare deducts amounts from 10% of settlement; you tick relevant consultations on the Statement of Past Benefits
• Insurers will not pay settlement funds until you provide Medicare’s Notice of Past Benefits document specifying refund amounts
• If Medicare paperwork is incomplete at settlement, the insurer deducts 10% of settlement as a bond while you complete documentation
• Centrelink applies a preclusion period preventing certain benefits based on your lump sum compensation amount; outstanding Centrelink debt is deducted from future loss settlements
If money is owed to Medicare, then Medicare will deduct the amount from the 10% and refund the remainder.
Medicare will send you a document called a “Statement of Past Benefits” which contains a history of all Medicare services rendered to you by medical practitioners. It runs from the date of your accident to date. You will be required to only tick the box for the consultations that relate to your injury.
Any such deduction is a medical expense and is recoverable from the insurer.
Does a medical negligence settlement affect my medical or Centrelink benefits?
Yes, at the successful conclusion of your claim you are required to refund the Federal Government the following;
- Any treatment expenses for your injury that have been paid for by Medicare, and;
- Any benefits received from Centrelink due to your inability to work.
How do I pay back Medicare?
You will need to sign a declaration and send the forms back to Medicare. This form will be used to calculate the amount to be repaid to Medicare when your matter settles.
Medicare will then send you a “Notice of Past benefits” which specifies the amount that you must repay for the Medicare benefits you have received. This document will be sent to you and to the insurer. The insurer will not pay any settlement money until they have received this notice.
If this document is not completed before settlement, then 10% of the settlement money will be deducted by the insurer and sent to Medicare as a bond while you complete the Medicare paperwork. If you have not put any treatment on Medicare, then Medicare will return the 10% direct to you.
How do I pay back Centrelink?
If as a result of your injury you are unable to work injury and have had to claim benefits from Centrelink in the form of a disability pension and you later receive compensation for the injury preventing you from working you will need to pay Centrelink back.
Should you obtain a lump sum amount to represent your future loss of income (whether you have previously received Centrelink benefits) then Centrelink will prevent you from claiming certain benefits for a period determined by Centrelink based on the amount of compensation you receive. This is called a preclusion period.
If you have any outstanding debt owed to Centrelink (of any kind) this debt may be deducted from any resolution of you claim which involves a lump sum payment for future loss of income.
If you have received a Centrelink pension or benefit, or have debt owed to Centrelink you should advise your lawyer at the earliest opportunity.
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Disclaimer
The information contained on this article is of a general nature only and is not intended to be legal advice. The law may have changed since the information was published. There is no intention to create a lawyer-client relationship and you should always seek legal advice about your own personal circumstances.