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Consumer advocates welcome reforms to Government payment service

The Financial Rights Legal Centre, Mob Strong Debt Help, Consumer Action Law Centre, CHOICE, Anglicare NT and Economic Justice Australia welcome the finalised reforms to Centrepay announced by Minister Katy Gallagher this morning. These reforms include important consumer protections that consumer advocates across the country have been calling for.

Centrepay is an invaluable service for social security recipients, but consumer advocates have been raising concerns about its misuse for decades. We applaud Minister Gallagher and Services Australia CEO David Hazelhurst for their willingness to take up the bat for people who have been let down by successive governments which failed to act on the reported misuse of Centrepay.

The reforms announced today will restore Centrepay’s original purpose – that is, it should only be used to make voluntary regular payments for essential bills and expenses. The reforms focus on improving customer protections and reducing the risk of financial harm to people receiving Centrelink income.

Some of the most important reforms that will be phased in this year include:

• Removing high-risk service reasons like funeral expenses, consumer leases and household goods.
• New businesses signing up to Centrepay will be held to a higher standard before being able to access people’s Centrelink income.
• Centrepay now has much stronger enforcement and compliance tools to hold businesses accountable for following the rules.
• It will be much easier for Centrepay users and consumer advocates to make complaints about unscrupulous businesses.
• Businesses will no longer be able to sign people up for never-ending deductions with no target amounts or end dates.

Julia Davis, Senior Policy & Communications Officer at the Financia Rights Legal Centre says “Consumer groups have been calling on successive governments to remove consumer lease companies and funeral expenses providers from Centrepay for decades. These announcements are a long-time coming and have been the result of years of consistent advocacy and demonstrated harm.”

“Centrepay payments are deducted before money goes into a consumer’s bank account. It guarantees payment to Centrepay businesses from a person’s Centrelink income before they can buy necessities like food. It is critical that only trustworthy and vetted businesses have access to this payment system.”

Bettina Cooper, Mob Strong Debt Help Senior Financial Counselling and Strategy Lead adds “We commend the Centrepay reform team’s engagement with First Nations and other consumer advocates over the last 2 years. This has been a true consultation. All government departments can learn from their open and collaborative approach to achieve fair outcomes.”

“Services Australia’s Centrepay reform team is a good example for how government departments can do effective consultation with consumer groups, especially First Nations advocates to improve outcomes for vulnerable consumers”

Shelley Hartle, First Nations Policy and Project Manager at the Consumer Action Law Centre said, “These reforms have been developed in genuine consultation with First Nations and consumer advocates, off the back of many years of fighting for a strengthening of Services Australia’s oversight and regulatory power over Centrepay.”

“The changes will ensure rogue businesses are no longer able to take advantage of previous loopholes to exploit vulnerable customers. I am pleased to see this critical service is being returned to its original purpose.”

Kate Allingham, CEO of Economic Justice Australia says “Centrepay has long been used as a vehicle for economic abuse by dodgy operators, without much recourse to justice for those who were victims of this abuse. The introduction of these critical safeguards within the Centrepay system, as well as enforceable compliance for businesses, represent genuine protections for those using Centrepay. We thank the Government for the genuine consultation they undertook throughout the reform process, and we look forward to continuing to work with them as these reforms are implemented.”

Rosie Thomas, Director of Campaigns and Communications at CHOICE says, “CHOICE welcomes these important reforms to Centrepay to protect some of the most vulnerable people from predatory and exploitative business practices. This will help to ensure that Centrepay helps people pay for the things they need with appropriate consumer protections in place.”

Anglicare NT “welcomes these reforms that have been a long time coming and are a result of persistence and perseverance by all involved. The consultation process demonstrates what can be achieved when the sector and Government work together to ensure consumer voices are heard”.

ENDS

Media contact: Mark Pearce  mark@consumeraction.org.au  Tel: 0413 299 567