Here are the facts
The good news about Centrelink is that, as an agency of Services Australia, it is held accountable. The mechanism by which this occurs is through frequent Senate Estimates Committees which scrutinise Centrelink performance and its key indicators. This scrutiny is important as Services Australia receives $5.6 billion to manage the timely payment of support to many millions of Australians in need.
Here’s a brief snapshot of the magnitude of the task it faces, from its most recent annual report (for the financial year 2022-2023):
- $5.6 billion budget
- $140.3 billion in Centrelink payments made
- 9.5 million (Centrelink) customers
- 41.3 million calls received
- 10 million face-to-face interactions
So how is Centrelink doing?
By anyone’s standards, these numbers are huge. But for the purposes of this article, I’m concentrating on the Age Pension aspect of Centrelink as that is of most interest to retirees.
The following overview is not intended as criticism. Rather, it is a call for debate – asking some hard questions about this service delivery.
We can gain a clear understanding of Centrelink’s performance when we consider the most recent results shared in the Senate Hearing held in early June. The two major areas of concern remain the process times (backlog) and the call wait times.
The current claim time for an Age Pension (measured year-to-date to 31 March) is an average of 84 days, in comparison to 107 days for those seeking a Disability Support Pension and 58 days for Carer Payment claims. Only 43% of claims made to Centrelink were processed within four months. Whilst Centrelink has an ‘agreed timeliness standard’ it is difficult to unearth what this standard is.
Over the same period, the average time to answer the phone was 31 minutes and 55 seconds, an increase on the previous 12-month period of 21 minutes and 19 seconds.
On the improve
Services Australia has been hiring extra staff over the past few years with 100 staff hired specifically to handle Age Pensions and an extra 80 to be in place from July. The CEO, David Hazlehurst, notes that it takes time to train staff to deal with complex claims. The department has also responded to recommendations in the Robodebt Royal Commission findings and has widened its consultation framework to take more feedback onboard.
Does this affect you?
So what does this mean for the average citizen? As Jeremy noted last week, about 80% of older Australians will receive an Age Pension by the time they are in their 80s. Will they, too, have to join a long queue and wait nearly three months for their application to be processed? Will the phone wait time be any better? Or maybe there won’t be a phone service, simply a redirection to myGov online services. It is fairly standard practice for many businesses and most government departments to push people from phone calls to websites. But this only works if the functionality of the website is up to scratch. This wasn’t the case when I was trying to apply for a Commonwealth Seniors Health Card as the link between Centrelink and myGov simply wasn’t working at the time.
For those who do try to call and are forced to join the queue for Centrelink support, there does seem to be an onus on the caller to keep calling, after they are timed out with a somewhat annoying message to ‘go online’.
As Jeremy reported last week, of Retirement Essentials members, only 44% are applying for their Age Pension benefits on time (i.e. when they are eligible). This means that 56% are missing out on income, as no benefits are back paid if you failed to apply. That’s on you and can be an expensive exercise, with many people forgoing tens of thousands of dollars in missed benefits.
So the questions remains, is Centrelink worth the $5.6 billion that it costs taxpayers to fund it? As we posed last week, would a Universal Age Pension actually be more cost effective?
What Steve says
For those in the here and now who are suffering from delays in claim times and frustrating phone experiences, I asked Retirement Essentials’ Head of the Customer Services Team, Steven Sadler, whether there were ways to improve the experience.
‘Applications for the Age Pension and the Commonwealth Seniors Health Card
are sometimes complex, so it is understandable that there may be phone delays and processing backlogs. We cannot fast track or solve every issue that confronts members of Retirement Essentials in their dealings with Centrelink. We, too, often wait on hold when we are working on behalf of our clients. That said, we have become experts at asking the right questions and understanding exactly what Centrelink needs to know to cut through. For this reason we have many happy members who have had their applications or concerns resolved. That’s a huge part of the satisfaction in the work we do.’
How we help
Here are some of the specific ways that Retirement Essentials can support you in your dealings with Centrelink for an Age Pension application, a change of pension status and to apply for a Commonwealth Seniors Health Card (CSHC).
Do you or will you qualify?
First things first means a visit to the free Age Pension Entitlements Calculator to work out if you might qualify and if so, how to get started.
As they enter retirement about 35% of Australians will not qualify for an Age Pension as they will fail either the income or assets part of the means test (or both). However most of these so-called ‘self-funded retirees’ will still qualify for a CSHC. When you check entitlements on the Age Pension Eligibility Calculator mentioned above, you will automatically learn if you are eligible for this valuable concession card.
Want to maximise your entitlements?
Maybe you already receive an Age Pension but have a sneaking suspicion you could be entitled to more if you just knew the rules about super and Centrelink a little better. Things like younger spouse strategies, exempt assets and gifting. That’s where the adviser-led Maximise your entitlements consultation works really well.
What’s your point of view?
Do you think our social services department is doing a good job?
Or do you think the wait times for claims and phone calls is not up to scratch?
Wonderful experience with a young Centrelink woman at Cranbourne yesterday . She couldn’t be more helpful with the My Gov app problems I had . I waited less than 15 minutes even though I didn’t have an appointment. Well done
One problem with Services Australia is how can you easily discover the range of allowances. For example, despite having a CPAP machine for nearly 10 years, I only discovered by accident the other day that the government will pay a subsidy of $183 a year if I apply for it. That obviously more than covers the cost of depreciation and electricity. But how many of your clients who have apnoea would know about this? I thought I was a well-informed person until now.
Centrelink expects ordinary people to be up to date with their rulings and these people are penalised if they don’t follow them.
Centrelink also expects to be excused for their failings.
If it takes 80 days to process a claim for the aged pension should I apply 80 days before my 67th birthday?
Hi Chris you can apply for the Age Pension up to 13 weeks (91 days) prior to turning of age.
I have found the process simple if you follow the guidelines and have all the information .keep in mind that previous governments have slashed the public service and they just don’t have the manpower .this government has employed more staff but it takes months of training for each individual .keep in mind the number of applications that are being sought.
I would equate Centrelink employees with the all familiar road workers, Do as little work as possible yet expect a full weeks pay. We are being ripped off handsomely
I think this is a gross generalisation and insulting as well as hurtful to those that work at Centrelink as well as the road workers.
I have a defined benefit income stream from CAC (DFRDB) . I would like to know how Centrelink deeming rates are applied to the defined benefit income, Is the deeming rate applied to the balance that is added to your super balance or your income that you get every fortnight. I have done a lot of research into it but can’t get a defined answer. Hope you can give me with a answer. Thanking you, cheers Olly.
Hi Olly, deeming rates only apply to financial assets and defined benefits are assessed solely as income so there is no deeming applied. Centrelink assess the fortnightly amount you receive as income.
on the Thursday, 27 th July 2023, I wrote to CentreLink advising them that our mechanical services company had been voluntarily shut down. ASIC dragged their feet in issuing documentation, but the de-registration certificate and final accounts were eventually sent three months later. In spite of numerous letters requesting that they acknowledge the company owes us nothing [it had no money left to pay it anyway], CentreLink refuses to remove company related information from my file. This of course, is affecting my pension. Allegedly, their maximum action time is four months, but the saga drags on nearly twelve months later.
My value for money rating? Zero * out of five …
I have a similar experience Davo. My online access to update my assets and income through MyGov has been frozen since September 2023 while they “assess” a previous update. That update was a one off job that finished in December. Despite submitting documents that show the business has ended, ABN cancelled etc, my access is still frozen. Two conversations with Customer Service people, very pleasant and apologetic, both promising to get it fixed, but the problem remains. It seems that the Customer Service staff are helpful and knowledgeable, but the clerical staff behind the scenes are barely competent.
At present my wages are in the 6 figures. Can i apply for a pension card and not ask for any payments from centrelink.
Hi Bruce, you need to be under the applicable income and asset thresholds on the day you lodge your claim to Centrelink and you will then receive the card and whatever pension payment you are eligible for. If you are over either threshold then you are ineligible for either the card or the pension.
Applied for an Age Pension on the 12 January 2024, still waiting despite numerous phone calls most waiting around 75mins for an answer. Have submitted everything they have requested within hours of request, website says claim processed but still no payments. Also says no tasks. Am getting desperate now. 6months of waiting. Missing out on dr and chemist lower fees.
We keep getting told more staff have been employed to help with backlog with waiting for pensions, it’s certainly not helping as I have been waiting 7 months so far to receive mine.
My wife applied in April for her Aged Pension, approved 7 weeks later. Zero issues with the application and payment will be on time when she turns 67.
I feel that issues with the pension, as with taxation, arise because of the ridiculous complexities and opacities in the ‘system’. No news there, & that’s for another day.
As for the pension side of things, I think a lot of confusion & frustration (& time) could be reduced with some simple information/explanation sharing by the dept with its users. This could be achieved very simply & in an automated fashion (requiring no extra staff time) as part of the regular updates to clients (email, mail outs) regarding changes to payments.
For example, we (my wife & I) receive regular changes to our part payments pension. Most of the time we have no idea why, but have learnt to accept these without question as it is not worth the time/frustration/anger/etc to try & track down the causal event. One time we were even informed of an ‘over payment’ to us of several thousand dollars that would affect our payments until the amount had been repaid. What, when, why was not a part of the written communication we received, just a statement of the amount & the effect thereof. Fortunately, we could continue on in terms of our economic position & decided not to invest the next 6-12 months of our lives trying to get to the bottom of it all.
However, my suggestion is that on communications involving payment amounts/changes the dept could simply add to their template for such events the figures on which these decisions are made, drawn from the sheets on which they are sitting – no regular human intervention required, just a programming change. This could eliminate a large amount of confusion & subsequent phone calls, etc.
Cheers.
The queue on phone calls is appalling. It will take time to train people and fix it, but this is purely based on getting enough money to do so.
At the other end, the entire way pensions are calculated is far too complex and onerous.
NZ gives every one over the age a pension and this could work out much cheaper AND make people available for answering queries.
Our system requires fortnightly reporting, complex maths with many variables and made even worse if foreign pensions are involved.
Also, with all this complexity, every pension payment made should include a full statement of the calculatiosn involved.
Hi Martin, thanks for this comment – you quite rightly note the way NZ handles pensions is very different. Many Australians would support your question, asking if this might provide a better system. warmest Kaye
If you do the research Australia is one of the few English speaking countries that has a socialist based means tested age pension system. Canada, UK, NZ, USA all have universal age pension systems where everyone is entitled to an pensions in their old age if they are not already on a government pension of some form. The reasons vary from the moral hazard view, discrimination against thrift and being productive, the community distaste of having the government (public servants) delving into a persons private financial affairs particularly in their senior years or simply it is more cost and time effective and simple to have a universal non means test pension.
Well past time the government changed to the “universal pension” system, thus making things far less complicated and confusing. For those earning other income as well as pension, the normal income tax would apply.
Hi
I applied for pension on the 15 February this year I’m 68 . I went into Centrelink last month to ask if there was a problem and the answer was it takes 6 months to process applications . And the questions asked are very intrusive when house sharing.. only bureaucrats & politicians could come up with this rubbish.
I do not like the idea of a universal age pension, as its value is likely to drop, leaving those at the bottom of the pile in even worse financial distress. If those who are better off are taxed, the amount of tax they pay could easily outstrip any benefit gained.
The idea of a Universal age pension is that everyone regardless of income is paid an age pension. The recipient then has to treat the age pension as income so if they have other sources of income, they pay income tax. A universal pension system is designed to simplify the whole pension system. There would be less complexity, no fortnightly reports, etc. There would also be much less administration required, pension eligibility would not be necessary, etc. Another benefit is that aged people would be able to earn as much money as they wanted to – and then pay income tax on a total amount instead of having a pension that cuts in and out based on short term employment.
I totally agree with Gaye. Australia has a tightly controlled tax system. At the end of the financial year, it is possible for the government to work out how much extra income earned by a person on top of the pension payment and tax them accordingly. This will eliminate the current convoluted process that is confusing for all including some Centrlink staff.
Centrelink was never meant to pay its own way. It is social security.
In my view the staff at Centrelink do an amazing job in spite fo the systems efforts to derail this.
Call wait times are ridiculous and we have to pay. I called the other day and after 10 or so minutes my credit ran out and I had to go and add more credit. Called back and waited 27 minutes – after my call was answered and as we were finalising the call my credit ran out again – so over $30 wasted on one call.
Centrelink arbitrarily send requests for info without any justification and with no regards to timeliness. I received a request to provide an updated SA369 and was given just 2 weeks to complete this task. I only received one message to my InBox, no follow up, no reminders. Same happened when we changed Super from Suncopr to QSuper – Centrelink decided that we had just doubled out Super and reduced my pension the same paycycle. Took me over 6 months and untold calls to get this fixed. I had uploaded all required documents Centrelink had just not acted on that advice. After a writted complaint the matter was resolved within one week.
It is the system that is broken – the staff are stars.
How far in advance of one’s 67 birthday is a person allowed to submit an application for the age pension?
Hi Marian, you can apply up to 13 weeks prior to turning 67.
My idea is that the likes of your business and AFSL holders, should be able to become accredited Centrelink agents, similar to a tax agent. The information we input should be accepted as valid and correct and an immediate payment assessment confirmed where this is appropriate. It could then only be complex cases diverted to get the more thorough check performed (although, longer term agent’s should be able to sign these off as well). This would free up the queue and therefore reduce Centrelink response times (& costs). Centrelink could perform spot audits on these cases to confirm the details but checking every case would become redundant.
The system is already in place to enable this through the nominee arrangement process so I don’t think it should be a significant over hall to implement.
Centrelink is a disgrace I waited 55 minutes on the phone to make an appointment at their local office. My husband was told to get his claim for the pension in early and he is still waiting to hear from them 3 months later, meanwhile we are trying to manage without the pension that he is entitled too. They say that they have put extra staff on but we find that hard to believe considering the lack of service they provide.
Both myself and my husband are on the age pension. I work casual and when I go earn over the $300 fortnight half of the extra over that amount comes of my husbands pension and half of mine. With Centrelink everything we have half of it is accredited to my husband and half to me e.g. Bank Interest, cars and any other assets so why can’t I claim half of my husband work bonus. He is retired from the work force and has a good work bonus which he will never use. So my question is why are we halves in everything with centerlink except work bonus.
I turned up for my fourth visit to try to get my 85 year old husband a pension. I have been supporting him but at 81 years old myself I am not sure how long I can continue to support us both.
Each visit I was turned away and told either to get an appointment (how)- and the last time I was given an appointment for 1/7/24 in writing but when I took the time off work and kept that appointment I was seen by the same man who had turned me away the day before and had given me the appointment card. He handed me a sheaf of papers and told me to fill them out and send them in. He then escorted me out. Is this some sort of joke you all have at afternoon tea? Luckily I can continue working for a little longer- I work a 10 hour day 5 days a week and a half day on Sunday.I was hoping someone there would help me to lodge the claim that day.
It would be interesting to compare the cost of administering a universal pension scheme with the one we currently have. I think a universal scheme actually encourages people to save for retirement more so than what we have now.
My Brother had a stroke in January and has moved into an aged care facility. I mailed form allowing me access to administer his expenses with the asset and income assessment form. I received an email to notify me I can act on his behalf and I can see his account in my login but his asset and income is still showing nothing recorded. I have rung twice and uploaded the form again and still nothing apart from a letter saying if I don’t provide the details in 14 days he will be charged the maximum daily care fee !!. How about making them return to work and do something.
It took 9 months to process my wife and my pension claims, that was partly due to some complications with overseas payments. But. it did take just on 6 months before anything started to happen.
Wait times on the phone averaged about an hour, but when I got through to someone they were always very polite and helpful.
What I would say is that processes seem to be too complicated. I would recommend that a good Industrial Engineer be employed to sort out the processes and get the productivity up. Hiring more staff should never be the “go-to” solution.
Unfortunately, the last call I made, three days ago was taken by a person working from home (he admitted that). I could not hear him because of the poor quality of the connection and the background noise — a woman and children talking very loudly.
Overall I think Centrelink does a good job considering the bureaucracy they have to contend with.
New Zealand has a much better system of universal pension, and you can still work too.
No problems, no bother.
Australia age pension is a nightmare.