Centrelink Overhauls Centrepay System, Cuts Dozens of Deductible Services

Centrelink is implementing a major overhaul of its Centrepay system. The changes will remove dozens of services from the automatic deduction program. This takes effect from November 3, 2025.

The reforms aim to refocus Centrepay on its core purpose. Officials state the goal is to protect vulnerable welfare recipients. Services Australia confirmed the planned adjustments.

Specific Services Removed from Centrepay Deductions

Many common expenses will no longer be payable through Centrepay. The list includes funeral expenses and basic household items. Food and grocery payments are also cut, except for people in remote areas.

Other removed services involve motor vehicle registration and social commitments. Employment-related costs and savings plans are also excluded. Butchers, self-storage, and car repair services will lose Centrepay access too.

This significantly narrows the scope of the decades-old system. It is a direct effort to prevent misuse. According to Reuters, the government wants to ensure deductions are for true essentials only.

New Rules and Transition Period for Users

New mandatory conditions will apply for deductions starting November 3. All new payment arrangements must have a target amount. They must also include a specific end date.

Businesses using the system must agree to updated Terms of Use. This strengthens accountability for providers. It aims to create a safer environment for users.

Existing deductions for the soon-to-be-removed services can continue for a time. They are permitted until November 1, 2026. This provides a one-year transition period for affected individuals to find alternative payment methods.

Essential utilities will remain on the system. This includes electricity, gas, water, and phone bills. Council rates and some local services also stay.

These Centrepay changes represent the most significant update to the system in years. The reforms are designed to modernize the service and enhance user protection for all welfare recipients.

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What is the main reason for these Centrepay changes?

The government states the changes are to protect vulnerable users. They aim to refocus the system on its original goal of paying for essential utilities and housing costs, preventing deductions for non-essential services.

Which common payments are being removed?

Funeral expenses, basic household items, and most food and grocery payments are being cut. Motor vehicle registration, social club fees, and car repairs are also being removed from the system.

Can I still use Centrepay for my rent and electricity?

Yes. Essential services like rent, electricity, gas, water, and telecommunications bills are unaffected. These core utilities will remain payable through the Centrepay system.

What is the deadline for the changes?

The new rules officially start on November 3, 2025. However, existing deductions for removed services have a grace period and can continue until November 1, 2026.

What should I do if I currently pay for a removed service?

You should contact the service provider to arrange an alternative payment method. You can also speak with Centrelink or a financial counsellor for support and guidance during this transition.

Trusted Sources

Services Australia, Reuters, Australian Government Department of Social Services.