In a revelation that has sent shockwaves through the community, The Guardian reported that energy giant AGL wrongly received welfare payments from their former customers.

In their recent update, the newspaper exposed that another energy retailer accepted payments from vulnerable and low-income Australians.



It has come to light that Origin Energy, one of Australia's largest energy providers, erroneously received funds from the welfare payments of individuals who were no longer their customers.

This scandal, involving the government-run Centrepay debit system, raised serious concerns about the safeguarding of welfare funds intended to support society's most vulnerable members.



Centrepay is a service that allows welfare recipients to allocate a portion of their payments directly to approved businesses for essential services, such as rent and energy before the money reaches their bank accounts.

The intention behind this system is to ensure that individuals have sufficient funds to cover their basic needs.

However, The Guardian’s investigation uncovered that the system is fraught with issues, leading to misuse and overpayments.



Origin Energy is not the first to be implicated in such a scandal; it follows in the footsteps of other energy retailers, including AGL, which was found to have continued deducting welfare money from over 500 former customers, resulting in a staggering $700,000 in overpayments.

AGL has since returned the funds, but the problem appears to be systemic.

The misuse of Centrepay also extended beyond energy companies.

In some instances, the system has been exploited by organisations with questionable practices, such as a Christian rehabilitation centre involved in gay conversion therapy and forced baptisms and rent-to-buy appliance retailers overcharging Indigenous community members.

Origin Energy, which had 32,894 residential customers using Centrepay last financial year, acknowledged the issue and is actively working with Services Australia to refund the affected individuals.

The company has also pledged to strengthen its processes regarding Centrepay payments.

However, the exact number of customers impacted and the total amount of welfare funds wrongly received remain undisclosed.



An Origin spokesperson said: ‘We proactively reported these issues to Services Australia, have been attempting to contact impacted customers and are working with Services Australia to process refunds to customers.’

‘We have also strengthened our processes in relation to Centrepay payments,’ they added.

In response to a question on notice by a Greens senator, the government confirmed that it was working to return overpayments made through Centrepay by three utilities companies and three ‘household services’ companies.

Services Australia declined to disclose the names of the companies involved.



A spokesperson from Services Australia, Hank Jongen, explained that overpayments often occur when customers fail to ‘update or end a deduction’.

‘For example, a customer may set up a regular deduction for their energy provider and forget to update their Centrepay deduction when they move house,’ he said.

‘There is also a responsibility for the company to make sure their records are up to date. This means keeping up to date with information provided to them from Services Australia,’ he added.



Jongen also noted that overpayments are more frequent in industries that use ‘bill smoothing’, a cost-spreading method commonly employed by utility companies to prevent bill shock.

‘Centrepay registered businesses have obligations under the Centrepay policy and terms to notify the agency where overpayments have occurred and to actively seek to return moneys to customers as quickly as possible,’ he sait.

The situation has sparked a call for stronger regulation and transparency.

Advocates like Kate Allingham, CEO of Economic Justice Australia, have been demanding reforms since 2013, including a cap on Centrepay deductions, better information for welfare recipients about their payments, and an easier process for altering or cancelling deductions.

The need for an enhanced accreditation and auditing process for businesses using Centrepay has been highlighted as well.

‘Here we are, 10 years later, with ongoing reports of people overpaying for services and products,’ Allingham stated.



‘People on Centrepay are suffering as a result, unable to pay for essentials because they are locked into payment deductions through unscrupulous business practices, with systemic issues within Services Australia preventing or delaying people from being able to stop unreasonable deductions,’ she added.

Meanwhile, Greens Senator Penny Allman-Payne urged the government to be transparent about the companies involved and the number of welfare recipients affected.

She stated: ‘Labor needs to be transparent with Australians about precisely which companies are under investigation for this egregious practice, and how many people have been so horribly exploited.’

‘And Services Australia must expedite its review of Centrepay to determine how these companies were able to abuse the system, and ensure it never happens again,’ Allman-Payne added.



The Financial Rights Legal Centre has also expressed concern, emphasising that no one should have significant overpayments sitting idle with a service provider while struggling to afford other essentials.

‘Our sector colleagues report seeing clients who had no idea they had thousands of dollars from overpayments made through Centrepay just sitting idle in an account, leaving them with little funds to pay for essentials,’ Julia Davis, Senior Policy and Communications Officer from the centre, said.

‘While there are legitimate reasons someone might want a buffer in their account in case of unexpectedly high bills, customers using Centrepay should be notified when they have overpaid and their accounts have gone into credit,’ she continued.

Services Australia has acknowledged the need for improvements to Centrepay and is treating the reform as a priority.

‘We’re committed to seeing this process through and won’t be providing further comment on individual businesses regarding Centrepay policy or compliance while it’s under way,’ Jongen said.
What are your thoughts on this, members? What are your experiences with Centrepay? Share them in the comments below!