December Centrelink changes to affect half a million

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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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Centrelink general manager Hank Jogen explains what to do if you get a debt notice.

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Government admits the program was unlawful but refuses to apologise for it.

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Written by Leon Della Bosca

Leon Della Bosca is a voracious reader who loves words. You'll often find him spending time in galleries, writing, designing, painting, drawing, or photographing and documenting street art. He has a publishing and graphic design background and loves movies and music, but then, who doesn’t?



Total Comments: 28
  1. 0

    Morrison is doing his usual in deflecting blame for his own mistakes. Robo Dept was identified as being wrong well before they did anything about it as evidenced by the magnitude of the payout back to victims announced recently.

    • 1

      True, but income averaging for purpose of welfare payments goes back 20-30 years. 30 years ago under Labor. 20 years ago under NLP. It’s the Abbott, Turnbull and Morrison administration that took it to the criminal level.

    • 0

      20 years ago was Howard, in the interim was Rudd giving us an extra 2 years wait time for age pension. I was better off under the system 20 years ago than now.

  2. 0

    This new system is no good before it even starts anyway as peoples fortnights will never tie in with centrelinks expectations
    This morning Frydenburg announced the economy has improved as people have all returned to work this morning. I think the pair of them should be either selling used cars or lying in a beach somewhere.
    Has anyone seen Morrisons Jack russel lately i’m suprised she is not out on the streets of Melbourne snapping at peoples ankles getting them back to work

    • 0

      Have you seen the roads lately or the shopping centre car parks? Cars everywhere on the roads now, car parks back to full capacity now that retail has all reopened and l agree most are back at work now.

    • 0

      almost a grey hair, Mr Frydenburg did NOT say everyone had returned to work at all!

      What he actually reported was that the number of workers whose wages were being subsidised by the program dropped from 3.6 million in September to 1.5 million in October.

      And you do have to drill down into these numbers which whilst good (and ahead of predictions). Businesses could apply for jobkeeper payments for staff IF the business could show a 30% reduction in turnover compared to before the pandemic. So what this 1.5m drop shows is that a significant number of businesses no longer need the support as turnover is now above the qualifying threshold. Now many of those employees whose wage was subsidised may well have worked all through lockdowns and continue to work. Or, they did not work, but were still being paid by their employer with the government subsidy and therefore not technically ‘unemployed’.

      And in fact, Victoria which has only just returned to work (office workers from today) would have pulled these figures down. Other states are doing much better. It remains to be seen how the November/December figures will affect continued Job keeper subsidies which in any case are due to be lowered again in the new year.

  3. 0

    As soon as any govt department says it wants to ‘streamline and make it more efficient’ – I laugh. In other words, they want another way to screw you and find a way to pay you as little as possible.

  4. 0

    The problem has always been that the issue date of the pay slip does not match the required reporting date by centrelink.

    • 1

      Why should they match up anyway? I just report every second Friday any income paid to me in the fortnight prior, regardless of exactly when I received it during the fortnight. SImple!

  5. 1

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

    I can’t see any way that this change is trying to legitimise the RoboDebt scheme. When RoboDebt was introduced, legal opinion at the time declared the system legitimate and the day that a conflicting opinion was received stating that RoboDebt was illegal, RoboDebt ceased. RoboDebt will not be reintroduced.

    The new system starting 7/12 standardises reporting and should remove all ambiguity. Those receiving welfare/pensions will be able to be checked to ensure that the system is not rorted and any saving of money should be remembered that it is a saving of taxpayers money.

  6. 0

    All those people who suicided at the implementation of his plan….he should be charged with manslaughter at the least.

  7. 0

    My husband has always had to put what he earns before tax, which isn’t much, $1560 a fortnight, to get the Low income health care card so why shouldn’t everyone have to do that?

  8. 0

    “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 payslip before tax and other deductions – instead of the amount they’ve earned.”

    Perhaps someone will correct me (in fact no doubt they will!) but isn’t the amount you earn the same as the gross amount on your payslip before deducations? What you receive is the sum of what you earned minus any deductions such as tax, super, HECS etc i.e. the net amount!

    E.g. If you earn $100 and have deductions of $40, you receive $60. You earned $100 but you receive $60!

    • 0

      Apparently under the old system you were supposed to declare what you had EARNED, even if you had not yet been paid for it. For example, if your reporting date was 6 days after the date you got your pay from work, you were supposed to calculate your income for those 6 days and include it in your declaration. Minus, of course, the 6 days you got paid for in the previous pay fortnight, but which weren’t included in the previous reporting fortnight.
      Very confusing, the new system is much simpler, just look at your pay slips for the current fortnight and declare those amounts. Simple!
      The ATO has been assessing on amounts PAID, not amounts EARNED, for years. Glad that Centrelink has finally caught up.

  9. 0

    Pity the government doesn’t use the same iron fist on their own money rorts.

    “Official reports into the alleged misuse of office resources by two senior
    Liberal MPs will remain secret after the Department of Finance said it is
    not in the public interest for the documents to be published”.

    • 1

      Now THAT would makes sense Triss!
      There is clear reasoning why the saying..’Snouts in the trough’ often applies to politicians. Why else are they there – for the good of the people? Aaah-ha-ha-ha-ha-ha….. Yeah maybe – right after they’ve done feathering their own nest!

    • 0

      Yep, snouts in the trough is right, there are many examples of that from the pollies,
      – just one example morrison etc going to murdochs xmas party in govt jets,
      – mathias cormann going to job interviews overseas costing over $4000 per hour again in govt jet,
      etc etc, the list is long and it goes on and on

  10. 0

    Why the system can’t be so simple, if you are a pensioner you received your pension, if you work, your employer take your income tax, why you need to declare when you already paid taxes and the ATO knows, then, you report your earnings to Centrelink and they tax you again, double whamming for the government and less money for you because you have to go to work and expenses is involved, less taxes you end with just a little money almost the same without working.

    • 0

      Centrelink don’t apply tax to any payments. If you report your GROSS earnings, then they can check with the ATO to confirm what you Grossed for the pay period.

      Being an ‘old’ payroll officer, I do know what the difference between Gross & Net pay is.

      If you’re talking about Centrelink taking funds out of your payment, that’s not ‘tax’ as some assume it is, it’s what they ‘deem’ as not being due to you. After your $1000 is used, there’s a minimum that you keep – currently $178 a fortnight, and then from there, you lose 50c in the $1 above that. Eg if you earn $378 in a fortnight, the first $178 is ignored, leaving you with $200, Centrelink will withhold $100 (half of $200) from your next payment – easy.

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