Major Centrelink budgeting tool gets protective overhaul: What changes from November 3rd

For many Australian seniors managing on a Centrelink payment, keeping track of bills can feel like juggling water balloons.

One slip, and everything comes crashing down. That's where Centrepay has been a lifesaver—the government's free bill-paying service that automatically deducts money from your payment before it hits your bank account, sending it straight to essential expenses like rent and electricity.

Services Australia has been conducting a lengthy review into the free bill-paying resource for welfare recipients, examining which goods and services align with Centrepay’s original objectives.

But come November 3rd, Centrepay is getting its biggest shake-up in years, and the Australian Government is proposing a range of improvements to Centrepay, to ensure the free bill paying service helps Australians and reduces the risk of financial harm.

'As part of Centrepay reforms, we’re making changes to our service reasons to better protect you,' Services Australia said in a statement announcing the update.

What's actually changing?

Don't panic—your essential bills aren't going anywhere. You can still set up Centrepay deductions from most Centrelink payments, and utilities like electricity, gas, water, and phone bills remain fully supported.

However, eight services will be removed from Centrepay in 2025, including some that might affect your weekly routine:

• Food and groceries from stores (except in remote communities)
  
• Purchases from butchers
  
• Funeral expenses
  
• Car registration
  
• Self-storage, removalists, fuel and car repairs
  
• Basic household items
  
• Social and recreational commitments
  
• Employment expenses and savings accounts

Other items confirmed for removal include 'household goods lease and rental' and 'accounting and other services,' according to Services Australia.

Businesses will automatically move to new Terms of Use and Policy on November 3, 2025. Those that don’t want to continue using Centrepay have until October 31 to opt out of the program.

Why the changes matter

This isn't about making life harder—quite the opposite. The main goals are to protect vulnerable Australians from financial abuse. They want to empower customers to manage their money better. The reforms also aim to improve financial independence and strengthen safeguards.

Services Australia identified that some services either had very low usage or weren't aligning with Centrepay's core purpose of helping people manage essential living expenses. Think of it as decluttering your financial toolbox to focus on what really matters.

Centrepay is broken up into categories including accommodation, legal and professional services, travel and transport, utilities, household, finance services, social and recreational, education and employment, and health. Every category except utilities will see changes from November 3.

Understanding the transition period

If you're currently using Centrepay for any of the services being removed, you won't be cut off immediately. Your business will have a 12-month transition period to move off the program starting on 3 November 2025, giving you plenty of time to set up alternative payment arrangements.

For some remaining services, there's a new requirement coming: If you start a deduction after 3 November 2025, the deduction must include a target amount. This helps ensure you're not overpaying or getting locked into indefinite deductions.

Centrepay deductions are the last deductions Services Australia makes from a person’s payment before the remainder goes into their bank account. It’s designed to help people budget more easily and ensure priority bills are covered first.

What stays the same

The core of Centrepay remains unchanged. A voluntary bill paying service which is free for Centrelink customers. You can use Centrepay to arrange regular deductions from your Centrelink payment for:

• Accommodation costs (rent, board)
  
• Utilities (electricity, gas, water, phone)
  
• Legal and professional services
  
• Health services
  
• Education expenses
  
• Transport costs
  
• Council rates and local community services

Setting up alternatives

If you're affected by these changes, you have several options to maintain automatic payments:

Direct debit with your bank: Most banks offer free direct debit services for regular bills. You'll need to contact each business directly to set this up.

Automatic transfers: Set up regular transfers from your transaction account to cover bills as they come due.

BPay scheduling: Many banks allow you to schedule recurring BPay payments through internet or phone banking.

Contact the business: Many companies offer their own payment plan services or can work out alternative arrangements.

How the consultation process worked

This wasn't a decision made in isolation. Consultation with the community and experts has been critical at every step, and I want to thank every individual and organisation who worked with us. These contributions have been invaluable, and the outcomes are a testament to what genuine consultation between government, advocates, and the community, can look like.

Financial rights groups and the Australian Council of Social Service are happy with the government's approach. They say it's open and collaborative.

Services Australia said the reforms were guided by feedback from customers, advocates, and community groups to make the system 'simpler, safer, and more aligned with its original purpose.'

Getting help during the transition

If you're feeling overwhelmed by these changes, remember that support is available. You can learn more about how you can get financial help and information. If you're going through a hard time financially, you may want to get counselling, help and emotional support. Find out about our social worker services.

If you are a customer and having trouble working out a Centrepay issue with a business you can contact Centrepay complaints and feedback.

Looking ahead

The big changes officially take effect from November 3, 2025, when Centrepay will move to new Terms of Use and updated service categories.

Some deductions will need updating under the new rules. Any deduction that starts after November 3 must include a target amount, 'no more than the estimated amount payable,' Services Australia said. Deductions already in place before that date must have a target amount added by May 4, 2026.

The message is clear: these changes are about protection, not punishment. By focusing Centrepay on essential services and adding stronger safeguards, the system should work better for everyone who relies on it.

Have you been using Centrepay for any of the services being removed? How are you planning to manage your payments after November 3rd? Share your thoughts and tips with fellow members below.