Advocacy groups expose abuse of welfare funds by ‘unscrupulous’ businesses

The government's Centrepay debit system was established to provide a secure and convenient way for welfare recipients to pay for necessities such as housing and healthcare.

However, an investigation has uncovered significant flaws in the system, prompting a major government review.



The Centrepay system, a service designed to help Australians manage their welfare payments by allowing direct deductions for essential services, has become a tool for exploitation in the hands of 'unscrupulous' businesses.

Advocacy groups have raised the alarm, claiming that these businesses have been siphoning welfare money from deceased individuals and vulnerable Indigenous women escaping domestic violence.


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Centrepay has become a tool for the exploitation of ‘unscrupulous’ businesses, according to reports. Credit: Services Australia


Economic Justice Australia (EJA) and the Financial Rights Legal Centre (FRLC) have submitted harrowing examples of abuse to the review.

In one case, a business continued to deduct payments from a deceased woman's welfare funds for months, ignoring the family's attempts to resolve the issue while they were still grieving and managing her estate.

‘When the legal service advocated on behalf of their client to end these Centrepay arrangements, the payee business refused to acknowledge they had received the money after the client’s relative’s death,’ the EJA said.

‘The legal service engaged in lengthy advocacy including letters of demand to the business. It was months until the business agreed to refund the overpayment.’

Another disturbing report from the EJA highlighted the plight of Indigenous women in remote communities who were trapped in indefinite Centrepay arrangements with a transport company, which they had initially used to escape family violence.

‘The clients couldn’t check, change or stop these arrangements—they didn’t have the phone, access to phone credit to call and wait on hold to check their Centrepay,’ the EJA said.

‘These arrangements led their clients to not having enough money to afford essentials.’



The misuse of Centrepay is not a new concern. Advocates have been warning the government for years, and the corporate regulator, ASIC, has also repeatedly highlighted the problem.

Despite these warnings, little action has been taken to address the predatory practices that continue to exploit the most vulnerable members of society.

The EJA has called for urgent reforms, including the prohibition of never-ending deductions, a mechanism to alert users of excessive deductions, and the protection of at least 25 per cent of a person's income from Centrepay deductions.

They also advocate for stronger enforcement, greater transparency, and more support for First Nations and culturally and linguistically diverse communities.



The FRLC has described the failings of Centrepay as a 'national shame' and an 'embarrassment’.

They have called for stricter enforcement of Centrepay rules and swift action against those who breach them.

‘Historically, the system has been used by some providers to extract millions of dollars in profits for poor value services that people could ill afford,’ the FRLC said.

‘This is a privilege that should not be given lightly. There must also be repercussions and mechanisms for enforcement when businesses breach these requirements and objectives, and the capacity to take quick and decisive action to prevent further harm and create a public deterrent.’

The advocacy groups are pushing for payday lenders and debt collectors to be excluded from the system and for utility companies to be prevented from selling high-cost products, such as top-range phones and solar panels, through Centrepay due to cases of systemic mis-selling.

‘In both cases (telecommunications devices and solar panels), we see egregious cases of systemic mis-selling,’ the FRLC said.
Key Takeaways
  • 'Unscrupulous' businesses have been accused of abusing Centrepay, a government debit system, to take welfare funds from deceased Australians and vulnerable groups.
  • Economic Justice Australia and the Financial Rights Legal Centre have reported instances where Centrepay was misused by companies without clients' ability to stop the deductions, leading to financial hardship.
  • Advocacy groups have called for stronger enforcement and changes to Centrepay, including setting limits on deductions, protecting a portion of a person's income, and providing more support for First Nations and diverse communities.
  • The Financial Rights Legal Centre criticised the exploitation of vulnerable communities through consumer leases and called for payday lenders and debt collectors to be excluded from Centrepay, along with tighter controls on certain high-cost products.
Have you or someone you know been affected by these issues? Share your thoughts with us in the comments below.
 
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My mother's dog had kidney failure and the vet bill was huge.
There is a group in Taree that help pay the vet bill but mum still had $1400 to pay.
The vet let her pay it of fortnightly through centrepay .

I didn't think anymore and two years ( 8 weeks ago) later mum had a call from the vet saying she over paid the vet bill by $1200 and they were refunding her.
Mum didn't realise it was paid back or just forgot it was coming out each fortnight.
My question was , why wasnt there an end date in place ? At least they were honest and refunded the money but how many are out there who don't.

Sadly after she received this call her dog passed away the next week. Mum said at least she had him for two more years
 
So many rorts, this, NDIS and many more. it seems the government cannot stop people collecting taxpayers money unscrupulously. Every time they set up a scheme, there are those that find loopholes.
 
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So many rorts, this, NDIS and many more. it seems the government cannot stop people collecting taxpayers money unscrupulously. Every time they set up a scheme, there are those that find loopholes.
It is not the NDIS who is the rort. It is the unscrupulous "service providers" who have no formal qualifications or experience in the provision of disability services. They are there for one purpose - to line their own pockets at the expense of the vulnerable.

A certain person of Indian origin operates a residential service in Dandenong, Victoria, through NDIS funding, providing supported accommodation for persons with a disability. It includes a 24 hour "nursing" service delivered by staff without ANY qualifications at all and meals cooked for the residents which wouldn't be fit for a rabid dog.

I previously lived at this residence for seven years when it was a boarding house. I know firsthand what rorts she exacted on the residents by not supplying rent receipts, cash only payments thereby rendering the money trail untraceable, treating urgent repairs as a total joke in contravention of the Residential Tenancies Act.

I alerted both the NDIS and ATO through their complaints and disputes facility and sincerely hope this ripoff slag has her stinking arse nailed to the floor.
 
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The move to privatisation of government-run services (including government science organisations and public transport) has everywhere been a disaster. Still we all voted for it, didn't we? Think of the income-tax cuts, the income-tax cuts!

As goes the American saying, never give a sucker an even break..
 
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Well Suzanne Rose, as unfortunate as yr mum's predicament was with her pet, it might have been a lot easier & eventually cheaper to have had the vet put her to sleep without any pain. My bro & wife had the same situation, a very dear op on their "Rosie", didn't make a satisfactory recovery & passed on after quite an expense.
 

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