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.
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 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.
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.
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