Help With Debt

You Owe Centrelink Money: Now What?

The Australian Government offers help to unemployed and low-income families through the Centrelink Program. The agency links with other government agencies and local organizations to help provide financial resources and education for those in need. Additionally, families may qualify for family tax benefits, concession cards and rent assistance.

Although the program helps those in need, you may find yourself owing the agency money. When you owe money to Centrelink, you should attempt to pay back the money as quickly as possible to avoid interest or possible litigation for nonpayment. You may end up owing the agency money several ways:

Advance Payment Options
The advance payment option allows you to receive your payments from Centrelink before they are due. In order to qualify for this type of advance payment you have to already be receiving payments from an approved program including ABSTUDY, Age Pension, Austudy, Carer Payment, Disability Support, Newstart Allowance, Widow Allowance and Youth Allowance.

Most programs only allow you to qualify for one advance payment within a 12-month period. If you opt to take an advance payment against your Family Tax Benefit, you can only take up to 7.5 percent of your annual rate and has a maximum of just over $1000 for the year.

You may take out advance payments on Age Pension, Disability, Support and Carer Payment once every 6 months. You must take at least $405.85 and a maximum of $1,217.55. If you need an advance payment through ABSTUDY, Austudy, Newstart Allowance or Youth Allowance, you must take a payment of at least $250 with a maximum of $500 and you can only apply for an advance payment once per year.

You may qualify for an advance payment through the Special Employment program. The maximum advance is $500 12-month period. To qualify for an advance you have to have a job that will last at least six weeks with reasonable expectation that income form the job will reduce the money you owe to Centrelink.

You must repay your advance payments within a certain period to ensure that you continue to qualify for additional support. You can lose your assistance if you refuse to pay money you owe.

Pension Loans Schemes
The Pension Loan Scheme is a loan from Centrelink. You may qualify for up to the maximum of the Age Pension Rate. For individuals the maximum amount eligible is $860.20 per fortnight. Couples may qualify for up to $1,296.80 per fortnight.

To qualify for this type of loan you or your partner must be at least 65 years old (pension age), have equity you can use as security for the loan and provide and application and/or assets test. You may not qualify for this loan if you receive currently receive the maximum pension rate. The current loan repayments take into account a compounded 5.25 percent interest rate. In addition, you will be responsible for legal and solicitor costs. We can factor in these additional costs to your loan repayment plan to simplify the process. Interest will continue to add up on the amount you borrowed until you pay the loan back in its entirety

There are several repayment plans for this type of loan. You can repay the loan in payments or in full at any time. There is no penalty for repaying the loan early. In addition, you cannot sell property used as security on your loan without contacting Centrelink if you still owe a balance on your loan.

If you do owe the agency money there are several options to help reduce the money you owe to Centrelink. Typical repayment options include:

Human Error
Occasionally you may end up owing money due to human error. Centrelink may accidentally pay you more than you qualify for or you may have forgotten to inform Centrelink of changes that affect the amount for which you qualify.  Changes in jobs, expenses or the acquisition of property or a large sum of money may influence how much money you for which you qualify.

If you receive extra money due to error on your part or on part of Centrelink, you will be required to repay the difference. Centrelink will notify you by mail when you owe money. This letter will inform you how much money you owe them and payment options. Additionally, this letter should tell you why you owe them money.

Reduced payments: One of the simplest ways to repay any money owed is to have your payments reduced by about 15 percent. You may opt to have more payment set aside for repayments in you wish. Additionally, if you have other incomes (employment or investments) the payment rate may also be set higher. If you fail to make payments towards your debt, Centrelink can automatically reduce the money they pay you until you repay money you owe.

Monthly payments: You can also make monthly payments via automatic withdraw from your bank account, at a Centrelink office, via phone or via the website. You can also send a payment via check. If you fail to pay your debts to Centrelink, the agency can garnish your wages or send you to a collection agency. You may be able to negotiate bi-monthly payments of payments by fortnight.

Depending on the type of debt, you owe to Centrelink, repayment plans take into account different factors. For example, The Pension Loans Schemes bases the repayment amount on your age, equity you in property secured against the loan. Advance payments reflect your income and length of repayment term.  Paying off the debt as quickly as possible will reduce the amount of interest you owe. Get a few other ideas on how to handle Centrelink debt here.

If you do not think you can make payments, you should contact Centrelink as soon as possible to avoid court proceedings or the loss of future money. You always have the option of filing a dispute if you think the debt owed is an error. Contact Centrelink as soon as possible so you can reach a favorable repayment plan.

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