What Centrelink can do
And what it can’t
Recent reports on Centrelink surveillance of clients have rung alarm bells. It’s easy, as a recipient of government benefits, to feel powerless in the face of a large bureaucracy. You are not powerless. In fact, as the recent enquiry into Robo-debt revealed, ultimately Centrelink clients have rights and can exercise them. Today we explain the detail of what Centrelink can do – and what it cannot.
First up, let’s recap what has just been reported.
On 4 April, iTnews publication broke the story (gathered under freedom of information laws) that Services Australia had used password ‘crackers’ and metadata to check Centrelink users’ relationship status. It seems this was in order to determine if welfare recipients who claimed to be single were actually in a couple relationship.
Why does this matter, you may wonder?
As we discussed two weeks ago, your definition as a single or one half of a couple means you get a different payment. Two singles will receive more than a couple payment (combined). But it is against the law to falsely claim single status.
It seems that the Centrelink’s use of phone passwords to scrutinise messages to determine relationship status was directed toward those clients it believed to be making fraudulent claims, thus triggering a criminal investigation. Previously Services Australia was able to ask telcos for metadata. The right to do this was taken away in 2015 and has not been reinstated. Services Australia must now go to the Australian Federal Police for its data checking activities. There has been no suggestion that this use of password crackers and metadata has been employed in the case of Age Pensioners. But we also cannot definitively rule that out.
When questioned, Services Australia did not define when a ‘non-compliant’ claim became a fraudulent one, thus allowing the agency to seek help from the Australian Federal Police. It is therefore unclear how many people have been affected by this exercise.
Separately, at the weekend, Minister for Government Services, Bill Shorten, stated that debt collection agencies will no longer be used by Services Australia, as an early response to the findings of the Robo-debt Royal Commission.
We asked the Head of our Customer Service Team, the unflappable Steven Sadler, to share the main concerns that Retirement Essentials members have about what Centrelink might and might not do.
He nominated the following five assumptions about Centrelink and we have provided some detail on each one so you can understand what can legally occur.
Customers often assume that Centrelink:
- Accesses copies of their Australian Tax Office (ATO) records directly from the ATO
- Monitors their bank accounts in real time
- Knows all customers income and assets detail associated with private companies, trusts and SMSFs
- Delays applications in order to discourage applicants from persevering
- Can access your super fund balances
What really happens?
Your tax records
Centrelink does not access your records. It may request a copy of your Tax Return or Notice of Assessment from you in order to process a claim or application. What it also can do is match data with the ATO so that if you understate assets to Centrelink, which then don’t match the information you have provided to the ATO, then this is likely to be discovered and a ‘please explain’ sent to you. Centrelink will only do this if you have lodged a claim for them to assess.
Bank accounts
As mentioned previously, it is typically only in cases of suspected fraud that more detailed information will be sought, although Centrelink does from time to time randomly select people to provide additional information. Ordinarily your bank account information will only be available to Centrelink during the above-mentioned data matching process with ATO records. So a variance between your stated bank balance and your earned interest in your tax return is likely to be picked up. This is very different to accessing your bank account balance in real time.
Further income and asset detail
Again, because people assume that Centrelink receives copies of Tax Returns or Notices of Assessment, they think all their income and asset information has been provided. This assumption is common in the case of those who are self-employed, have an SMSF or a private company or trust, as they have submitted such information to the ATO. It has not been automatically passed across to Centrelink. Data matching with the ATO, again, may highlight any discrepancies.
‘Go-slows’ on applications
The process of checking information for an Age Pension or concession card can be very complicated. There is identity verification, residency status, earnings, assets and other aspects which all need to be checked and verified. Assuming this will take just a week or two – that the ‘machines’ will crunch the numbers – is wrong. Often applications need to be escalated as the detail is too complex for the frontline staff or call centre personnel. As with many things in life, this process is neither as quick nor as easy as it seems.
Super fund information
Super funds and life insurance companies are required to provide update information to Centrelink twice a year (usually at indexation time in March and September). This enables Centrelink to more accurately ‘deem’ earnings on balances and to understand when amounts are in decumulation, i.e. being drawn down in an income stream. Often super funds will need to provide a Centrelink schedule for applicants to share or funds can provide directly to the agency.
The fine print at Services Australia
The main sources information provided to Services Australia comes from:
- the Australian Taxation Office (ATO)
- the Department of Employment and Workplace Relations (DEWR)
- other sources to match income information reported by people who get a payment.
Here are some handy links to more information from Services Australia:
What about you?
Do you have any other concerns about the provision of information?
Or eligibility?
You might want to book one of our Entitlements Consultations. They are only $75 for a 30 minute consultation. Let us know what you need help with …
Don’t forget you can always check the Retirement Essentials Age Pension Eligibility Calculator for quick answers to hard questions. It’s free and 100% private.
You can check your entitlements here.
When one applies for the aged pension do they ask what you have been earning for the last 2 weeks…2 months etc? I am considering stopping 3 months prior to my 67th birthday so as not to complicate things..
Hi Vikki, great question! When applying for the Age Pension your income is assessed as of the day you lodge your claim therefore you do not have to stop work several months early. If you do stop work within a month of applying for the Age Pension we recommend you obtain a separation certificate from your employer so you can proactively address any potential concern Centrelink may have.
Hi
My dad is considering applying for the age pension.
I have heard he will need to provide the last 5 years of bank statements.
Is this the case? If so, what are they specifically looking for? Does Centrelink need to see his every spending habit?
Thanks.
Kate
Hi Kate, good on you for helping your Dad navigate his way through! Thankfully you have been misinformed, Centrelink do not require 5 years worth of bank statements. The key requirement is that the statement is no older then 4 weeks so that they know the balance is as close as possible to today’s date. It could be just a 1 month statement and that will be fine.
Cehtrelink does monitor realestate assets automatically.My pension was reduced as i hadpaid into my mortgage for the last year. and this increased my assets. Centrelink does monitor the loan and adjusts assets every year based on the amount of principal paid offf and thr increased valuation of the assett.
Is there data matching between credit cards by Centrelink?
I am a single on full age pension. I own my home a 4 bedroom and is my principal place of residence. I have no other assets or income..Can I rent out some part of my house to receive some additional income and remain under the 11700.00 annual income, so my pension is not decreased. Please advise
Hi Jagjeet, thank you for reaching out! Single pensioners can earn only earn $190 per fortnight/$4,940 per year before their pension payments will start to be reduced however you would also need to factor in how much of that allowance is used up by the deemed income from your financial assets. If you still wish to proceed with renting out part of your house I recommend booking a consultation HERE so we can explain how it works it more detail.
I belong to a seniors’ organisation and they seem to think that people will in future be allowed to rent out their spare bedrooms without the income counting towards the income test. I am against this idea because I believe it will lead to a Bedroom Tax and further attempts to force older Australians to downsize. It may also result in a further backsliding of Age Pension increases.
Centrelink suspended my age pension without even given an explanation.
Blocked to link this agency with MyGov application because living at overseas country not allowed to link.
Not response or given information regarding the arbitrary payment suspension after receiving age pension for more than 13 years.
Is this agency acting under the direction of Chinese model?
I think you are only allowed to go overseas for 6 weeks before your Age Pension is suspended.
Hello, The church I attend wants to help me get my car back on the road, if an amount is credited to my bank account for me to pay the necessary invoices is it counted as income? What if they gave me cash?
Hi Bruce, wonderful to hear your local church community lending a hand! In this scenario the funds you receive would not be considered “income” because it is a one off occurrence. You would need to be receiving regular payments for it to be counted as income. Unless they amount they give you is +$2,000 then there is no need to even tell Centrelink but if you do receive a larger amount it would be best to give Centrelink a copy of your bank statement showing the money coming in and then going out as well as the invoices showing where the money was paid to.
If you have nothing to hide it is not a problem.
The Robo debt issue was a classic instance of bureaucratic overreach and incompetence on the part of the public service coupled with a lack of ministerial oversight. The issue was then politically weaponized and in the process the media exaggerated the extent and unintended consequences quite successfully.
I am reliably informed that under reporting income and assets plus misreporting habitation status to increase payments or obtain concessions is surprisingly common and a major cost impost on the system.
The checks and balances should be maintained and improved. After all it is taxpayers money.
I am retired but do casual work,I used to report my income
Myself every fortnight,because sometimes I earn in excess of
$5000 I would not get any pension which is fair enough. Now
My income is automatically filled in by the ATO I was never told
It was going to happen it just did.Does this happen to everybody
Now?
Yes I am still working part time and my employer supplies my pay slip electronically to Centrelink.
First. I wanted to thank you for a few years sending me an emails.
I filled up the calculator of the eligibility, on the income side, I and my husband’s is eligible. But because of I sold my apartment, the money I used to build a family holiday house, the property is under my daughter’s name. I wanted to see you 2 years ago, but then I was told because I gave the money to my daughter I am not eligible for receiving the age pension.
I wanted discuss with your adviser, my situation is complex, because of my husband’s Mutual Will with the late-wife.
If you think I could have a chance, please email me to make a booking. Blessings Deannie
Hi Deannie, thank you for coming back to us! We have sent you an email with further information about our consultation services so you can decide which best suits your needs.
I don’t believe a single word coming from a government department or any of its employees or any politicians. They are keeping close tabs on all welfare recipients.
I am self-employed and receive payment in small periodic lump sums which I declare to Centrelink. After a lengthy telephone session with a Centrelink Financial Adviser, it became clear that the issue to understand is that when, in a fortnight payment period the income earned us over $300 Work Bonus credit, (accrued fortnightly) my income will be reduced by 50c in every dollar above the $300. Fortunately my payments cover a three month period of work paid in advance. So Centrelink staff spread the income across each of those pension fortnight payment periods. I only lose some pension income if the lump income exceeds the equivalent of all the $300 credits accrued during that period. However, I can see that a casual wage earners paid weekly or fortnightly would lose 50c in the dollar for every dollar earned over $300 in that fortnight. The Work Bonus system is great but I do think it would be more realistic if it was $15.000 per annum.
My partner and I made a decision to be financially independent only sharing costs/payments on common things such as gas electricity etc. Our mortgage is “tenants in common” in line with this but C/Link in an authorive manner say they don’t accept that.
Where to from here ?
Hi John, thank you for sharing your situation! When it comes to Centrelink assessing you as single/couple, the final decision is Centrelink’s and they may have a different opinion to that of other entities so you cannot necessarily be guided by how you are assessed elsewhere. CLICK HERE to read about the 5 aspects of your situation Centrelink take into account.
My understanding is that if the employer uses a Single Touch Payroll system (which I think is now compulsory) then the details get fed through to Centrelink and will be pre-populated when you report. You just need to confirm them.
When I last asked them about this a few months ago, they said the system was being progressively implemented. For my wages, it’s been done for a year or more.
I asked Centrelink for an application for Age Pension in a letter dated 8 February 2023, as I wished to switch from DSP. It is my belief that Centrelink wants to help the ATO collect more tax by NOT sending me the application I asked for. Instead I was harassed to the point that I contacted my federal MP for help to end the harassment. They also send forms to fill out that are somewhat stupid in their content. I am also sick of receiving letters that threaten to stop my payment. This is still a criminal organisation. I do know what I am talking about, as I used to be employed in social security.
I receive my age pension from Canada. Provided my total income is under $120000 PA l receive my full pension plus Canada Pension. l file my tax return annually and that’s where they claw money back. If we did that here almost all the bureaucracy would disappear
I am applying for the age pension but for some reason I have to prove that I have lived in my house for 20+ consecutive years. Why do I need to do this, and how?? Also, I have not lived in my house all that time, I travel around and stay in different places regularly, but my house is my home. Is that a problem?
Hi Jock, thanks for your question! Centrelink request proof you have lived in your house for more than 20 years as this is one of the factors used to determine whether your property will be assessed as an asset or not. So it is important that you make every effort to prove this to avoid having your pension reduced. In terms of how to prove it, Centrelink are reasonably flexible and so long as you can provide any document that proves you were the owner +20 years ago they will be happy. For example if you have a copy of the settlement certificate, an old council rates notice or utility bill, invoices for work done at the property that are addressed to you/your partner (if applicable).
I believe you can remit your Age Pension overseas – I have a few friends who receive whilst overseas – please advise
Hi Ham, thank you for your query! You are able to receive the Age Pension if you move overseas but as with most things relating to Centrelink, there are a few Ts&Cs to be mindful of. We’ve actually written about this topic separately, CLICK HERE to learn more.
My husband is almost 70 and could have applied for the AP 2 years ago but he has some oustanding tax return lodgments. This is due to waiting on boss from some years ago to lodge necessary ATO info. Since then he has worked as a PAYG worker and may be owed tax refund from that period. Question is – can hubby apply for AP or does he need to get all the ATO returns in first? He’s never earned much and was sporadic payments until the PAYG job.
I was made redundant and 64, so too young for AP and neither has had income for past 4 years hubby and 2 years me. I’ve been drawing on my super to live.
Hi Kerri, thank you for sharing your story! Thankfully Centrelink assess income for Age Pension claims based on the day the claim is lodged, not what was earned previously. Therefore if your husband is either no longer working or able to verify his income earnt via pay slips then you can apply for the Age Pension now and be considered eligible.
Hi. I am 66, my partner is 58. We both have a little super, $213k and $352k respectively. We have a mortgage which we can pay out using my super. Will I have to wait until he is 67 to be eligible for a pension? Seems so unfair as I have worked all my life since leaving school.
Hi Debbie, thank you for asking a question! The good news is that you are able to apply for the Age Pension when you turn 67 without having to wait for your partner. Please be aware though that your partner’s income and assets will still be assessed to determine how much Age Pension you receive until they turn of age.