The Centrepay scheme has grown significantly since it was first conceived in 1998, today it is a $2 billion a year operation. There is very strong support for it from people who use Centrepay, community services and welfare agencies and also from a broad range of service providers. In 2011-12 around three quarters of all revenues passing through Centrepay were for housing and utility service reasons. Welfare Rights Review looks deeper into how Centrepay operates.
Who uses Centrepay?
There are currently over 640,000 people accessing Centrepay. Women were more likely to use Centrepay, who make up 62 per cent of those using the service. Single parents are more likely than any other group to access Centrepay, a free bill paying services that is operated by the Department of Human Services. Almost 97,000 Parenting Payment recipients access Centrepay, from a total of 260,000 single parents receiving Parenting Payment Single.
In terms of sheer numbers, there are more Disability Support Pensioners signed up with Centrepay, with over 185,000 using Centrepay at the end of October last year.
With nearly 99,000 Indigenous people on the Centrepay books, they account for 15 per cent of the total number of income support recipients using Centrepay. Looking at the profile of Indigenous people on Centrepay, the highest numbers are on Newstart Allowance, with nearly 27,500 out of around 62,000 Newstart recipients using the free bill-paying service. There are nearly 21,000 Indigenous people on Parenting Payment Single who are also with Centrepay, from a total of around 33,000 Indigenous single parents.
The take-up of Centrepay among Age Pension cohorts is very low, with just 85,000 out of an estimated 2.4 million Age Pensioners regularly using the scheme.
Making complaints about Centrepay
From November 2013 to October 2015, a total of 57 complaints about Centrepay’s operations were made to the Department of Human Services. This is an increase in complaint numbers on previous years, when just a handful of complaints had been made. Centrelink is trying to make it easier for people to make complaints about the service if there are problems.
A total of 18 businesses had their Centrelink contracts cancelled in the 12 months to October 2014. Currently, there are over 13,600 third-party organisations (business, government and non-government entities) that offer one or more Centrepay deductions.
There have been some long-standing problems about the behaviour of a small number of businesses problems for Indigenous people from remote and very remote areas who were preying on Indigenous communities who signed up to leasing/rental arrangement. The Australian Securities and Investments Commission has been looking into unscrupulous operators that appear to be taking advantage of some Indigenous communities from remote locations. A quarter of Centrelink’s Indigenous Centrepay users – over 24,000 in remote or very remote – and some are at risk of what can kindly be described as “sharp” consumer practices.
The Minister for Human Services, Marise Payne, is investigating regulatory reforms to the industry, but does not support a ban on consumer lending, indicating that her Department plans to provide “useful consumer protections for some of our most vulnerable customers.”
Labor’s Human Services spokesperson, Senator Doug Cameron has indicated that he also not interested in stopping people from having choices about the type of goods and services that they purchase, however, he told ABC Radio that “companies that charges people exorbitant prices to rent whitegoods and electronic equipment…should be removed from the system.”
The National Welfare Rights Network (NWRN) urges the Government to pursue regulatory reforms that would provide protection for all Centrepay users, particularly for vulnerable consumers. Reforms should ensure that people can exercise choices about the goods and services that consume. The Government should also accept the recommendations of the Independent Centrepay Review from 2013, and establish a Centrepay Consumer Advisory Panel which would include welfare organisations and financial counsellors.
New Centrepay Deduction Statement
A Deduction Statement can assist people to keep track of and check their Centrepay deductions. On the Deduction Statement, people can view their next regular payments, any money being deducted from their payments and the money they will have remaining (going into their bank account) in any given fortnight.
The statement can include some or all of the following:
- weekly payments (for customers receiving their payments weekly);
- Centrepay deductions;
- participation penalty amounts and non-payment periods;
- urgent payment details;
- advance payment details;
- debt repayments;
- child support payment deductions;
- tax deductions;
- amounts directed to their Income Management account; and
- government housing rent deductions as part of the Rent Deduction Scheme.
For more information on how to access deduction statements visit humanservices.gov.au: