Centrepay is again in the news, and not for good reasons
Apr 9, 2024 7:02:49 GMT 7
Banjo, Denis-NFA, and 1 more like this
Post by bear on Apr 9, 2024 7:02:49 GMT 7
A scheme meant to help people avoid debt is now causing it – Centrepay needs urgent repair
A system meant to help people on Centrelink pay for essentials has crashed wildly off course, becoming a vehicle for economic abuse and predatory businesses
This week the Guardian uncovered new examples of the government system being used as a vehicle of financial abuse – Centrepay was diverting money away from people receiving Centrelink payments to energy giants, years after they stopped being power customers.
To be clear, we’re talking about a government-run budgeting tool taking money from people in survival mode in a cost-of-living crisis and giving it to big business for services not received. Sometimes thousands of dollars taken from people trying to make ends meet in a social security system that pushes them below the poverty line. As a financial counsellor remarked recently, you won’t find a better budgeter than a person living on Centrelink. If you don’t budget on Centrelink payments, you don’t eat. Schemes like Centrepay, which has crashed wildly off course, aren’t helping.
Centrepay was set up for people on Centrelink to pay for essentials, not to enable vulnerable people to be preyed upon. Thankfully the federal government appears serious about fixing the deep problems and refocusing the program back to customers and away from business. We’re working with Services Australia and other advocates to get this done.
Energy giant wrongly received thousands from welfare payments of former customers under Centrelink scheme
Read more
Some quick history. The Howard government introduced Centrepay in the late 1990s so people could pay rent and other essential bills automatically from their Centrelink payments. The scheme was initially described as a way for people to request deductions paid direct to “landlords and utility companies” for “ongoing expenses such as rent and electricity”. “It will give Centrelink customers greater choice to help them manage their finances and avoid debt situations,” the then federal minister for community services, Warren Truss, said.
Fast forward 25 years, and more than 620,000 Australians use the scheme. The typical person using Centrepay is a First Nations woman living in remote Australia trying to meet her family’s basic needs, or someone out of work struggling to afford rent.
The scheme has exploded beyond the original intent to include 15,000 providers offering a dizzying range of goods and services, from butchers and veterinarians to mobile phones, tablets, fridges and washing machines – some at triple the retail price.
Last year there were 23.7 million Centrepay transactions worth $2.7bn. It has become a vehicle for economic abuse, leaving people without enough money for food. The corporate regulator, Asic, has recently taken action against some of these businesses but the problems are ongoing.
‘I just kept paying’: Indigenous people are being exploited by businesses using Centrepay debit scheme
Read more
These companies often target First Nations people in remote Australia. Now it’s time for Centrepay to take the next step andremove businesses that don’t behave.
During a recent trip to the Kimberley, service providers told Economic Justice Australia that they regularly saw mothers losing a third of their Centrelink payment to Centrepay, making them unable to afford the basics, or care for their children.
People could not check, adjust or cancel their payments because they did not have a mobile phone, internet, digital skills or transport to get to a Centrelink office.
We need urgent reform to prevent further financial exploitation and community harm. There should be a higher standard of careAccess to Centrepay should be subject to clear regulations, with a transparent application and assessment process, as well as proactive investigation and suspension when businesses don’t comply.
A scheme meant to help people avoid debt is now causing debt. We must fix this and fast.
www.theguardian.com/commentisfree/2024/apr/04/centrepay-debt-scheme-centrelink-payments
Kate Allingham is CEO of Economic Justice Australia, the peak organisation for community legal centres providing specialist advice to people on their social security issues and rights
www.ejaustralia.org.au/
Note:- The website has it's 2024 budget submission available on the homepage, available in .pdf format. The submission is a weighty 29 pages containing 51 major recommendations. Cheers 🐻
A system meant to help people on Centrelink pay for essentials has crashed wildly off course, becoming a vehicle for economic abuse and predatory businesses
This week the Guardian uncovered new examples of the government system being used as a vehicle of financial abuse – Centrepay was diverting money away from people receiving Centrelink payments to energy giants, years after they stopped being power customers.
To be clear, we’re talking about a government-run budgeting tool taking money from people in survival mode in a cost-of-living crisis and giving it to big business for services not received. Sometimes thousands of dollars taken from people trying to make ends meet in a social security system that pushes them below the poverty line. As a financial counsellor remarked recently, you won’t find a better budgeter than a person living on Centrelink. If you don’t budget on Centrelink payments, you don’t eat. Schemes like Centrepay, which has crashed wildly off course, aren’t helping.
Centrepay was set up for people on Centrelink to pay for essentials, not to enable vulnerable people to be preyed upon. Thankfully the federal government appears serious about fixing the deep problems and refocusing the program back to customers and away from business. We’re working with Services Australia and other advocates to get this done.
Energy giant wrongly received thousands from welfare payments of former customers under Centrelink scheme
Read more
Some quick history. The Howard government introduced Centrepay in the late 1990s so people could pay rent and other essential bills automatically from their Centrelink payments. The scheme was initially described as a way for people to request deductions paid direct to “landlords and utility companies” for “ongoing expenses such as rent and electricity”. “It will give Centrelink customers greater choice to help them manage their finances and avoid debt situations,” the then federal minister for community services, Warren Truss, said.
Fast forward 25 years, and more than 620,000 Australians use the scheme. The typical person using Centrepay is a First Nations woman living in remote Australia trying to meet her family’s basic needs, or someone out of work struggling to afford rent.
The scheme has exploded beyond the original intent to include 15,000 providers offering a dizzying range of goods and services, from butchers and veterinarians to mobile phones, tablets, fridges and washing machines – some at triple the retail price.
Last year there were 23.7 million Centrepay transactions worth $2.7bn. It has become a vehicle for economic abuse, leaving people without enough money for food. The corporate regulator, Asic, has recently taken action against some of these businesses but the problems are ongoing.
‘I just kept paying’: Indigenous people are being exploited by businesses using Centrepay debit scheme
Read more
These companies often target First Nations people in remote Australia. Now it’s time for Centrepay to take the next step andremove businesses that don’t behave.
During a recent trip to the Kimberley, service providers told Economic Justice Australia that they regularly saw mothers losing a third of their Centrelink payment to Centrepay, making them unable to afford the basics, or care for their children.
People could not check, adjust or cancel their payments because they did not have a mobile phone, internet, digital skills or transport to get to a Centrelink office.
We need urgent reform to prevent further financial exploitation and community harm. There should be a higher standard of careAccess to Centrepay should be subject to clear regulations, with a transparent application and assessment process, as well as proactive investigation and suspension when businesses don’t comply.
A scheme meant to help people avoid debt is now causing debt. We must fix this and fast.
www.theguardian.com/commentisfree/2024/apr/04/centrepay-debt-scheme-centrelink-payments
Kate Allingham is CEO of Economic Justice Australia, the peak organisation for community legal centres providing specialist advice to people on their social security issues and rights
www.ejaustralia.org.au/
Note:- The website has it's 2024 budget submission available on the homepage, available in .pdf format. The submission is a weighty 29 pages containing 51 major recommendations. Cheers 🐻
