Payment deductions 103-06000000

Centrepay is a voluntary bill-paying service that is free for Centrelink customers. Customers can authorise Services Australia to deduct regular amounts from their Centrelink payments to pay their bills to an approved business. Deductions are made before any balance of the Centrelink payment is deposited in the customer’s nominated bank account. Centrepay deductions can only be made from an eligible Centrelink administered payment.

The preferred methods for customers to manage their Centrepay deductions is via the Services Australia self-service options such as their Centrelink online account or Express Plus Centrelink mobile app account. If a customer makes a request to start a Centrepay deduction over the phone or in person at a service centre, Service Officers should process the request via the Centrepay Guided Procedure or Centrepay workflow.

A customer must provide consent to start, or increase a Centrepay deduction.

If there is a change in circumstances that will affect a customer's ability to pay for their Centrepay deduction, it is important to tell the customer they must make other arrangements to avoid going into arrears or debt.

Certain payments made by Centrelink are taxable and require Payment Summaries to be issued to customers. Customers in receipt of an income support payment may elect to have tax deductions made from their payments each fortnight.

Customers can request or cease tax deductions from taxable payments by self-service online, phone or in writing.

Tax deductions from Parental Leave Pay (PPL) is set at 15% by default, but customers can nominate a different tax rate between 0-50% using Online Services or by contacting by phone or in person. Note: this does not include customers receiving PPL from their employer; these customers must contact their employer to discuss their tax rate.

The Rent Deduction Scheme (RDS) allows Centrelink customers to have their government housing payments such as government rent, arrears repayments, loan repayments and other housing payments deducted from their payment from Centrelink each fortnight and sent directly to the appropriate Housing Authority (HA).

The RDS operates under a formal contract between the agency and the HAs.

Customers in receipt of payments from which RDS deductions can be made may participate in the scheme. Participation in the RDS is entirely voluntary.

If there is a change in circumstances that will affect a customer's ability to pay rent, it is important to tell the customer they must make other arrangements to avoid going into arrears or being evicted. Customers should be encouraged to discuss their arrangements and proposed actions with the relevant HA although it is not compulsory to do so.

While the RDS has similarities with Centrepay, and both schemes operate on the Direct Deduction facility, they are two entirely different businesses. RDS can only be used for government housing payments. Centrepay cannot be used for government housing payments.

From 1 July 2008, Child Support is able to recover up to 3 times the minimum child support liability amount from a customer's income support payments. Child Support may instruct Centrelink to apply the deduction in relation to the customer's current child support liability, child support arrears, or both.

Prior to 1 July 2008, only the minimum child support liability amount (not arrears) could be deducted from a payer's fortnightly income support payments.

If a customer does not agree with the amount deducted for child support or the payments child support is deducted from, they must discuss or appeal this decision with Child Support.

Customers can access their online accounts to view or update deductions.

Eligible customers can view these deductions:

• Centrepay
• Australian Taxation Office (ATO)
• RDS Note: all customer enquiries relating to housing authority deductions must be referred to the relevant Housing Authority
• Child Support Note: all customer enquiries relating to these deductions must be referred to Child Support
• Income managed customers will also be able to view a list of the regular expense allocations that have been set up from their Income Management account
• Customers wishing to change these expenses must contact the Income Management line
• Customers are not able to add, vary or cease a regular Income Management expense using this service
• Income managed customers, subject to eligibility can:
• make a one off transfer from their available income managed funds to their BasicsCard using Transfer of funds between Income Management Account and BasicsCard online
• make a one off payment from their available income managed funds to a contracted Third Party Organisation

The Deduction Statement is a document detailing the deductions being made from a customer's regular allowance/s or benefit payment. The Deduction Statement helps a customer manage their own finances by providing comprehensive information which shows the customer's next regular payment they are due to receive, the amounts being deducted from the payment and the balance remaining.

Customers should be encouraged to request and check their statement regularly to track their deductions and ensure their financial arrangements are correct.

Customers can also view and update some deductions via their Centrelink online account.