does Centrelink pay

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

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?