Government passes new Centrelink laws that will affect 550,000 Australians

Changes are expected to save the federal budget $2.1 billion over four years.

As of July, welfare recipients will need to report their income as it appears on their payslip, rather than having to estimate a figure based on hours worked over a fortnight, after legislation passed the Senate on Thursday.

The changes to Centrelink reporting are expected to save the federal budget $2.1 billion over four years.

Gone are the days of people reporting income to Centrelink by estimating pay amounts based on how many hours worked in a fortnight and rate of pay, taking into account penalty rates.

Under the new system, welfare recipients will be able to enter details on their payslips and their employment and income data can be pre-filled online, the same as occurs with tax returns.

The new system will also be the beginning of single-touch payroll for welfare recipients, where income data from the Australian Taxation Office will be automatically uploaded to the government system so bureaucrats can double check figures.

In theory, this will prevent incorrect debts being issued as occurred with the government’s robo-debt scandal, as payments should become more accurate, preventing people being owed money or paying too much.

After one year, there will be a review of the new system and it will return to the lower house for final approval.

Centrelink will set up an online portal to help people with the change, which is expected to affect about 550,000 Australians.

What do you think of this new system?

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    COMMENTS

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    Peter H
    2nd Mar 2020
    10:31am
    The new system should be easier for many people. I do some self employment that I invoice weekly. There is no way of knowing what day, week or month I will get paid. In fact I have an amount of $2,500 invoiced that I do not expect to ever receive. The company involved has now gone into liquidation. The new system will certainly assist if this happens again.
    fearlessfly
    2nd Mar 2020
    10:32am
    Is there a remote chance that this might actually HELP some people instead of SCREWING them ?
    Hoohoo
    4th Mar 2020
    11:50am
    At least there won't be another Robodebt catastrophe, that had desperately low income people (who had at least made the effort to secure part-time or casual work), presented with huge debts from Centrelink and then threatened with debt-collectors at their door as enforcers.

    I daresay this might be the first bit of good legislation passed by this otherwise useless government in this department. How good is a government with its back to the wall? Better, it would appear. Now they have to lift the minimum wage and increase NewStart to stimulate our flopping economy.
    leek
    2nd Mar 2020
    10:35am
    I changed myself to reporting this way a year ago or more. So not a problem with me. I always thought that the date thing was stupid especially for casual workers like myself.
    ozrog
    2nd Mar 2020
    10:40am
    So if yiu report whats on your payslip that means you need one and that doesn't happen untill you have worked so this means you will be a fortnight behind. As you can't guess what you will earn as thats whats happening now.
    KSS
    2nd Mar 2020
    12:09pm
    If you haven't worked you don't report earnings! If you only work intermittently then you would be accustomed to your income varying.

    Far better to be 'a fortnight behind' and accurate than guess and risk being wrong!

    I don't see what the problem is.
    ozrog
    2nd Mar 2020
    12:59pm
    Centrelink might see it as a problem as earnings aren't up to date
    Karen
    2nd Mar 2020
    1:07pm
    Not quite right, KSS - you report zero earnings, but in Centrelinkspeak that is the fortnight's earnings... go figure.

    ozrog - obviously many cases will not be up to date.. without going through the details it would appear that Centrelink is either expecting to keep things current from the time a person gets a full-timer, or will recover any over-payment out of a future tax return or maybe a voluntary repayment of overpayment ... after careful calculation and full notification.....

    No More RobberDebt!
    Hoohoo
    4th Mar 2020
    11:58am
    KSS, the problem might be that you are desperate for some income, so waiting another fortnight is out of the question for people behind in their rent or with overdue utility bills.

    This is why so many people made inaccurate gestimations in the first place - they REALLY needed some income to tide them over. Without the actual payslip in their hand, they were expected to estimate their pay when it might have involved multiple complicated penalty rates straddling one shift, or having to judge/guess whether they would or wouldn't be paid for the overtime they were put on the spot to perform.
    Cashcow
    2nd Mar 2020
    10:45am
    Great idea. I have been travelling Australia for the past 4 years & working when I felt like it. I am about to start a job which pays a daily rate with pay day being the last day of the month. Some weeks can be 5, 6 or 7 days working. The new system will make it so much easier to report correctly.
    Karen
    2nd Mar 2020
    1:09pm
    So that means you will receive probably zero Centrelink payment one pay out of two (fortnightly) - but full payment the other pay out of the two.

    They might find that a bit tricky. This is the kind of thing that makes any system difficult to operate - a basic system cannot cover all possibilities and thus 'discretion' creeps in - and 'discretion' is a two way sword.
    Cashcow
    2nd Mar 2020
    1:18pm
    Karen, what I will be earning will wipe out any credits I have in a month so getting nil pension will not be a problem. Hopefully they cross check with the ATO to keep everyone's payments accurate.
    Karen
    2nd Mar 2020
    8:00pm
    No sure how they'll work that one.. got to take a new divorcee down to Centrelink tomorrow - might ask if I get the chance.

    Should be simple to keep payments straight through the ATO without any need to report at all, black market cash money aside, of course.
    Hoohoo
    4th Mar 2020
    12:05pm
    Newstart reporting is very different to OAP reporting of income, from what I understand. I know it's all administered at Centrelink, but people are treated very differently depending on whether their status is welfare or pension.
    sainter
    2nd Mar 2020
    10:58am
    It was stupidity from the start to expect people in casual work to report something they may or may not earn,report what you have earn't,not something that is in future that hasn't happened yet.
    sainter
    2nd Mar 2020
    10:58am
    It was stupidity from the start to expect people in casual work to report something they may or may not earn,report what you have earn't,not something that is in future that hasn't happened yet.
    Teacher
    2nd Mar 2020
    11:00am
    I can't see how this is going to work because a payslip represents money already worked and paid for and it may very from fortnight to fortnight if it is casual or part-time. I assume Centrelink has always been paying out based on a predetermined amount so unless they deduct any earnings from the next pay you receive you are going to be confused as to how much you will get from Centrelink each fortnight.
    Also, there might be quite a few people who cannot enter the info on line. This would then require a visit to a Centrelink office which means a long wait just to report something. It's going to be very inconvenient for some people and confusing for others.
    The public never wins. It will always be to suit the government.
    KSS
    2nd Mar 2020
    12:15pm
    "I can't see how this is going to work because a payslip represents money already worked and paid for and it may very from fortnight to fortnight if it is casual or part-time."

    That iss exactly why it would work. You no longer have to guess your income but report what you actually earned. Less room for error and potential over or under payments if you take the guesswork out of the equation.
    Greg
    2nd Mar 2020
    5:10pm
    In the past people have had to guess how much they will earn for the year ahead and they get paid based on that. At the end of the year if they hard earned more they have to pay back their over payment from Centrelink. With this new system they report their pay for the fortnight, so each fortnight they are telling Centrelink their actual pay and get a payment from them based on their actual pay, there will be no over/underpayments are year end.

    Also to advise Centrelink they can call them, don't need to go into the office.
    Teacher
    2nd Mar 2020
    11:00am
    I can't see how this is going to work because a payslip represents money already worked and paid for and it may very from fortnight to fortnight if it is casual or part-time. I assume Centrelink has always been paying out based on a predetermined amount so unless they deduct any earnings from the next pay you receive you are going to be confused as to how much you will get from Centrelink each fortnight.
    Also, there might be quite a few people who cannot enter the info on line. This would then require a visit to a Centrelink office which means a long wait just to report something. It's going to be very inconvenient for some people and confusing for others.
    The public never wins. It will always be to suit the government.
    Cashcow
    2nd Mar 2020
    1:11pm
    I can't see how this is going to work because a payslip represents money already worked and paid for

    This is exactly what you have to report.
    Hoohoo
    4th Mar 2020
    12:09pm
    What if you are paid monthly? Do you have to wait over a month to receive any payment?
    Mariner
    2nd Mar 2020
    11:10am
    Give the people over 65 a pension and let the ATO work it out by us filling yearly tax returns with group certificates supplied. Let C/L look after job seekers under 60 years of age for a start; we oldies only work to keep up with the cost of living and money we earn does not go into property, it is spent round the neighborhood (in my case anyway).
    Billv
    2nd Mar 2020
    11:19am
    Agree it's the same here.
    It sounds simple but will confuse the hell out of a lot of people. If the waiting time on phones was long till now it will surely be longer now.
    KSS
    2nd Mar 2020
    12:17pm
    We don't get group certificates anymore. Your tax return comes pre-filed with information directly from the tax office.
    older&wiser
    2nd Mar 2020
    12:55pm
    KSS - they are not group certificates. They are Payment Summaries. And by law, if you have earned money from any employer, they have to give you one.
    KSS
    2nd Mar 2020
    1:04pm
    Older & Wiser, you are obviuosly no longer in the workforce. for the financial year ended 30 June 2019, the employer no longer has to provide group certificates/payment summaries for the preceding year. The information that would have been on it is now populated on the your on-line tax return (whether you do it yourself or use a tax agent) by the ATO. This is the simgle touch payrole system introduced back in 2018.

    You do still get the 'pay slip' every week/fortnight/month depending on how you are paid. You just don't get the annual summary any more.

    See here for information:
    https://atotaxrates.info/other-tax-topics/group-certificate/
    Greg
    2nd Mar 2020
    5:15pm
    older&wiser - say thank you to KSS for teaching you something today.
    Hoohoo
    4th Mar 2020
    12:13pm
    Still not very helpful for older people who aren't computer savvy.
    Funkee
    2nd Mar 2020
    12:03pm
    I suppose it could be seen as a step in the right direction, but all it really amounts to is more tinkering around the edges of a broken system. They estimate saving $2.1 billion over for years. Just imagine how much they would save by introducing a Universal Pension. No asset test, no means test, everyone qualifies for the pension regardless of their financial position. Further to this old age pensioners must be allowed to continue to work without facing the penalty of a pro rata reduction of pension. One of those income streams would be taxed at the higher rate no doubt, but this system would still be an incentive for those who are able and need to, to keep working. So apart from saving billions $$$ on administering the present convoluted system, it would inject more tax money back in to Govt. coffers, provide employers with access to the knowledge and experience us oldies have, not to mention we are generally more likely to turn up for work when required, but we can also act as mentors and trainers in many instances. This is a real win win for everyone concerned and is the only fair and equitable way to mover forward.
    Eddy
    2nd Mar 2020
    12:19pm
    I agree Funkee, a universal pension would be a great idea with everyone paying income tax on their total income, including pensioners. Unfortunately there are those people in power who are wedded to the idea of having an income and assets tests to ensure the over 67s do not get extra income without the government getting their share, which is greatly in excess of what income tax would be payable.
    Rae
    2nd Mar 2020
    1:58pm
    I'm wondering if this is yet another $2.1 billion out of the real economy. There was $2.1 billion from the asset test changes and around the same from penalty rate cuts. Just giving higher income earners tax cuts while taking from lower paid and welfare and retirees doesn't seem terribly fair. Am I missing something?
    Karen
    2nd Mar 2020
    8:03pm
    I was wondering how they calculated that $2.1Bn - apparently they are still saying that Robberdebt showed so many discrepancies that simple easy reporting would raise the income - doesn't really make sense since Centrelink only had to check and then adjust or 'raise a debt' to recover any overpayments.

    I smell propaganda at work here.
    Hoohoo
    4th Mar 2020
    12:18pm
    Hmmm...and would wealthier pensioners invest the extra income in shares, so they could continue to claim franking credit refunds?

    It SO looks like tax evasion, doesn't it?
    OLD TAX PAYER
    2nd Mar 2020
    12:40pm
    Save the heartache & headaches lets have a universal pension like our poor cousins across the ditch
    Hoohoo
    4th Mar 2020
    12:19pm
    Oh yes please.
    Karen
    2nd Mar 2020
    1:04pm
    a. Good to see that Leon has cottoned on the the use of the terms legislation, law and Law - and perhaps is on the verge of understanding the very real differences.

    On the issue of Centrelink reporting rules - this is a positive step, and will undoubtedly cut down on the number of unnecessary reporting 'errors' that are part and parcel of a system that demands reporting before actually being paid. Long overdue and simple enough to process.

    Should also cut down on the number of FALSE accusations of DELIBERATE rorting by people forced into error. The former system - to give a parallel - was like road workers putting a detour sign via a certain street while one was blocked, and then the police charging people diverted with going against a one way sign.
    Tarabelle
    2nd Mar 2020
    1:34pm
    Hard to see how anyone, doing the right thing, could object to this.
    Harley
    2nd Mar 2020
    1:36pm
    I think the government is doing the best thing, the new system could save the government money and make sure that part Pensioners such as myself get the correct fortnightly amount. that would be good for everyone.
    Harley
    2nd Mar 2020
    1:36pm
    I think the government is doing the best thing, the new system could save the government money and make sure that part Pensioners such as myself get the correct fortnightly amount. that would be good for everyone.
    Rae
    2nd Mar 2020
    1:51pm
    Should be good is the system is designed well and is compatible with apple macs as well as microsoft systems.
    Horace Cope
    2nd Mar 2020
    4:40pm
    Well, this seems like a good idea and will fix the ridiculous robo-debt debacle. Those who are honest won't have any worries and those who are trying to cheat the system may not have any flawed system to blame.
    Karen
    2nd Mar 2020
    8:05pm
    Sounds right to me, Horace. Nothing to hide - nothing to worry once the system is made easy for everyone.
    Steff
    2nd Mar 2020
    6:34pm
    I worked a day last week and get my pay advice on Wednesday.My reporting day is Monday so i can report accurate income data.However if i had of worked this week i wouldnt get my pay advice until 2 days after my reporting day.
    Does that mean i have to wait until my next reporting day to report my income.Effectively over 2 weeks late.
    Karen
    2nd Mar 2020
    8:06pm
    Depends on whether the pay period falls within your reporting day or not.

    If you have to report Mondays and your pay ends Wednesdays, that goes into the next pay period and not the last one.
    Karen
    2nd Mar 2020
    8:07pm
    Sorry - that was the other way around - tired.. been a long week or so. Depends on where your reporting date falls within pay periods... more like it.
    Hoohoo
    4th Mar 2020
    12:25pm
    But aren't you supposed to be reporting your income for the previous fortnight? How can you if you haven't been paid by your employer for that fortnight yet?

    The only thing you can accurately report is the hours you worked during that fortnight, but not the income you received (because you haven't received it yet).
    Florgan
    2nd Mar 2020
    9:06pm
    Now- instead of reporting once a year you have to report every 2 weeks... how’s that going to work ?
    Centrelink will have to work out your payment every fortnight . Will that not bog the system down a hundred fold.
    Much better to create a universal pension for all
    Fair Dinkum
    4th Mar 2020
    9:52am
    There are a lot of people that don't have access to computers and some that don't know our to navigate the difficult online web that is written by academics in anything other than plain English . What do these people do.
    Hoohoo
    4th Mar 2020
    12:26pm
    These people are expected to go away or suck it up. The government and Centrelink are counting on it!
    Gra
    7th Mar 2020
    11:44pm
    Didn't know it had ever been any different. When I was receiving the DSP I was working 15 hours a week part time and every reporting period I was reporting the actual dollar figure on my pay slip and did that until I reached retirement age in 2013.


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