Centrelink changes on the way

New reporting rules will affect more than half a million Australians depending on government support such as the Age Pension, JobSeeker, Disability Support Pensions and similar benefits.

The new income reporting rules start on 7 December.

Under the new rules, low-income earners who receive government support will need to declare the gross income they’ve been paid – or what is recorded on their pay slip before tax and other deductions – instead of the amount they’ve earned.

The changes aim to improve reporting accuracy by having recipients report actual payments rather than manually calculating their earnings based on an hourly rate and the number of hours worked.

It should also mean fewer robo-debt ‘mishaps’ and will save the government $2.1 billion over the next four years.

“We want to make sure that Australians who need financial support are able to get the support that they are eligible for – no less and no more,” said Social Services Minister Anne Ruston when the changes were first announced.

“The current system of calculating earnings can be confusing and lead to misreporting, especially when accounting for overtime or penalty rates. These changes will make accurate reporting much easier.”

While the changes aim to make reporting simpler, some recipients may still need to make a final one-off calculation prior to the new system kicking in.

Anyone earning income during a period before 7 December 2020 but paid after 7 December can use Centrelink’s online calculator to make this one-off calculation.

However, anyone who reports using the Centrelink online account through myGov or the Express Plus Centrelink mobile app won’t need to use this calculator to make the final report.

Pension recipients and their partners will need to report the gross income paid in any reporting period. Employees can find the gross pay amount on their payslip.

If you do not receive a payslip, you will need to ask your employer to tell you the gross income. By law however, employers should provide a payslip to employees.

The reporting rule changes were meant to start on 1 July, but were postponed due to the pandemic.

They are part of the new Single Touch Payroll system in which employers are required to report their payroll data to the Australian Tax Office (ATO).

Prime Minister Scott Morrison, social services minister when robo-debt was conceived, has denied any responsibility for the welfare debacle which has resulted in a $1.2 billion class action settlement, reports InDaily.

Under the Labor model, the automated debt collection system involved human oversight to cross check data between the ATO and Centrelink. The Coalition’s robo-debt scheme removed human checks in 2016 and completely automated the process. It also reversed the onus of proof by making welfare recipients prove they didn’t owe money to the government.

Thousands of debt notices were issued based on false information.

Mr Morrison says the use of income averaging was responsible for robo-debt’s failure, not the full automation of the scheme.

“It’s actually not about the computer, it’s about the assumption made that a debt is raised by averaging people’s incomes,” he told 2GB on Friday.

“Income averaging was found not to be a valid means of raising a debt, that’s what it’s about. This is just the Labor Party trying to throw some mud.

“We’ve got on with fixing it, that’s what we’ve got on with doing, Labor wants to just keep kicking it along for their own political reasons.”

The onus of proof is still on the recipient.

“The Australian government is improving and simplifying the way that employment income is reported and assessed for social security purposes,” reads a federal government statement.

“These changes will make reporting easier for payment recipients, meaning people will receive the right amount of income support and be less likely to incur a debt.”

Economic Justice Australia welcomes the simplification of reporting and hopes it will reduce the number of robo-debt ‘miscalculations’.

“We broadly support the measure and the passing of the bill as we welcome any changes which simplify the income reporting requirements for people receiving Centrelink payments and reduce the number of social security overpayments resulting from misreported employment income,” says the advocacy group.

“We believe that the sharing of income data between the Australian Taxation Office (ATO) and Services Australia has the strong potential to achieve these aims but must be implemented in a way that heeds the lessons from robo-debt.

“The idea behind providing this information from the ATO is to help you check that the employment income you report is the correct amount.

“However, it is important to note that you will still be responsible for reporting your income to Centrelink and ensuring the amount you report is correct.”

Do you welcome the changes? Will they affect you? Do you believe this is a positive step towards legitimising the robo-debt scheme?

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