Would Centrelink changes affect you?

With government funds for bushfire relief putting the budget surplus in doubt, and the robo-debt scheme in disarray after being ruled unlawful in the Federal Court, changes to the way welfare recipients report income have been proposed to cut costs.

The anticipated effect is that the government would save $2.1 billion over four years, sources report.

Welfare recipients could soon be required to report their actual fortnightly earnings to Centrelink, rather than providing a calculation based on their wage and hours worked.

A Newstart recipient with no dependents can earn up to $104 a fortnight and receive the full allowance. Income over this amount, up to $1075 a fortnight, reduces the payment by between 50 to 60 cents per dollar earned.

The full pension is paid to an eligible single who earns up to $174 per fortnight. A couple combined can earn up to $308 per fortnight before their pension is reduced.

Draft legislation underpinning the changes will be released for consultation this week and the government hopes to introduce the proposed laws when Parliament resumes next week.

Social Services Minister Anne Ruston says income reporting for welfare recipients will no longer be “confusing”.

“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,” she says.

“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 for people getting a social security payment.”

By simplifying the reporting system, the coalition hopes Centrelink payments will become more accurate and prevent welfare recipients being owed money or having to repay the government for being paid too much.

As part of the proposal, online payroll data will be used so that welfare recipients have their employment and income details pre-filled, as in online tax returns. The pre-filled information can be changed online or on a mobile phone app.

YourLifeChoices’ Retirement Income Review Survey 2019 found that one in five Australians aged 60-plus (19.62 per cent) worked either full or part time.

Do you believe the proposed changes will lead to less confusion?

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Janelle Ward
Janelle Wardhttp://www.yourlifechoices.com.au/author/janellewa
Energetic and skilled editor and writer with expert knowledge of retirement, retirement income, superannuation and retirement planning.
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