Senator the Hon Katy Gallagher

The Albanese Labor Government is reforming Centrepay to better protect Australians and deliver fairer outcomes.

Centrepay is a free service that assists people receiving welfare to manage their money so they can easily pay important expenses like bills and medications. It is often used in remote and very remote First Nations communities.

However, loopholes in the current system have been exploited by a small number of businesses to take payments from Centrepay customers, even when it is not in the customers’ interests.

For example, a small number of businesses have continued to take deductions from a Centrepay customer’s pay each fortnight, even if that customer has not shopped at the business for months or even years.

The new reforms which come into effect from 3 November 2025 will protect customers, crack down on high-risk goods and services, and introduce important safeguards to ensure businesses do not abuse the system, and reduce the risk of financial harm.

Following extensive consultation and co-design process with customers, advocates, and businesses, the Government will implement changes, including:

• Removing around 250 businesses from the scheme that currently provide high-risk goods and services, ensuring customers don’t hand over money for products they don’t need
• Mandating end dates for deductions on most services, ensuring customers do not continue paying for services longer than they need to
• Mandating that businesses set target amounts, so that customers do not accrue large credit accounts with businesses that they may never spend

Businesses being removed from Centrepay will start a 12-month transition period. During that transition period, Centrepay customers who already have arrangements in place with these businesses can keep paying through Centrepay, but no new deductions can begin, and existing deductions can’t be increased.

These changes will be supported by several other improvements, including stricter approval processes for businesses requesting to use Centrepay, improving the complaints process to assist customers, and establishing stronger actions against businesses that try to game the system.

Centrepay customers will still be able to buy goods and services from businesses that have their Centrepay eligibility revoked through normal payment methods. 

Services Australia will communicate with customers and businesses in the lead up to these changes coming into effect to ensure a smooth transition.

We expect businesses to familiarise themselves with the changes before they begin, and to support their customers to understand what the changes mean for them.

For more information, go to servicesaustralia.gov.au/centrepayreform

Quotes attributable to the Minister for Government Services Katy Gallagher:

“Centrepay is an important tool to help Australians manage their household budgets each fortnight, and we are taking steps to ensure it stays that way.

“The feedback we’ve heard from customers, businesses, and advocates is clear – we need the right safeguards in place to ensure people aren’t being ripped off and can make more informed decisions about their finances.

“These reforms will deliver a safer social security system and deliver better and fairer outcomes for Australians.”

Quotes attributable to Julia Davis, Senior Policy and Communications Officer, Financial Rights:

“Unfortunately, financial counsellors and consumer advocates have seen many examples of Centrepay being used as a vehicle for exploitation and financial abuse of vulnerable Australians. We commend the government’s reforms and believe these changes will go a long way to supporting the financial resilience of social security recipients.

“Services Australia have shown a genuine willingness to listen to advocates and take decisive action to make Centrepay a safer payments platform for consumers. 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 consumers.”

Quotes attributable to Bettina Cooper, Senior Financial Counselling and Strategy Lead at Mob Strong Debt Help:

“Centrepay is an invaluable service for social security recipients to help people manage their monies, but Centrepay had lost its way and become a vehicle for financial abuse, with decades of misuse by some businesses. After taking a detailed look at the Centrepay use data, it was clear that First Nations consumers were being disproportionately harmed. This finding did not surprise Mob Strong Dept Help Financial Counsellors.

“After being let down by successive administrations, Consumer advocates now applaud the current government, the Centrepay Reform team and Services Australia CEO for backing these reforms. Services Australia has engaged in extensive consultation, including with First Nations advocates and have demonstrated a willingness to codesign this reform process over the last 18 months. The Centrepay reform team have set the new government standard for genuine and inclusive consultation, and we look forward to other government departments engaging in the same way.

“Centrepay is now fit for purpose for recipients to manage their monies with the risk of financial harm proactively addressed.”

Quote attributable to Carolyn Cartwright, Managing Director, MoneyMob Talkabout:

“As a service working in the remote space with First Nations people, we have far too often over more than a decade witnessed how easily the Centrepay system has been used as a tool to line the pockets of predatory businesses, rather than support people doing it tough. These reforms are long overdue and welcome.”