When it comes to the world of Centrelink payments, it can be hard to know what the best practice is for ensuring you’re still on track to achieving financial success while making sure you’re meeting all of your obligations.
That’s why, to help you understand when and what you should be keeping Centrelink updated about in your financial world, we’ve created this list of simple dos and don’ts to help you get started.
Do: Ensure The Information You’re Being Assessed On Is Accurate
Contrary to popular belief, Centrelink does not in fact have access to your bank account and doesn’t monitor it when working out your payment rate. Instead, the rate of payment you receive from Centrelink is based on the assets and any work income you specified the last time you gave them your financial information.
This means that if your bank account balance has recently been reduced – either due to increased spending or unexpected emergency costs that have come up – then Centrelink won’t know about it until you notify them of the changes. However, the reverse is also true and if you recently received a sudden influx of wealth, such as through an inheritance or a lottery win, then your bank account balance will increase and register as a “change in circumstances” according to Centrelink’s guidelines.
If you’re receiving payments from Centrelink, it’s incredibly important that you ensure the information that they are using to work out your payment rate is as accurate as possible. This is because, depending on the financial information they have, you may receive either an increase in payments (and who would want to delay that!) or you may be obligated to pay the government back for money you had been receiving when you weren’t eligible to.
Do: Keep Them Updated With Big Changes To Your Financial World
Another thing that is essential to ensuring you’re fulfilling your obligations to Centrelink and making the most of your payments is to ensure that you’re keeping them up to date on any big changes to your financial world.
We mentioned it before, but any sudden increase or decrease in wealth you may experience is classified as a “change in circumstances” by Centrelink and may affect the rate of payment you receive. Typically, Centrelink will send you a letter every six months or so with their understanding of your assets and income clearly listed. If your current financial reality doesn’t match Centrelink’s understanding of it, it’s your responsibility to correct your details.
Of course there are a few different ways to do this, including in-person or over the phone with Centrelink’s customer service team. We’d recommend utilising the MyGov website to update your assets as this method allows you to do so whenever and wherever you need to, ensuring you’re always receiving the correct rate of payment.
Don’t: Deliberately Not Tell Centrelink About Changes In Your Circumstances
While it’s true that Centrelink doesn’t have direct access to your bank account information, there are consequences for deliberately not telling Centrelink about changes in your circumstances.
If you’re found to have been overpaid by Centrelink, the payments you are receiving may be immediately stopped or reduced and you could potentially be given a debt to pay back to the government. Similarly, if you update your assets and Centrelink determines you are being underpaid, you won’t be paid retroactively for the amount you may have missed out on. This is exactly why keeping Centrelink up-to-date with any major changes in your financial world is so important, so you can rest easy knowing you are receiving the payment and rate-of-pay that you should be.
And while it may be tempting to keep Centrelink in the dark until you absolutely have to let them know, it’s important to remember that the truth will always be revealed eventually. Why would you want to live with that uncertainty and the potential negative consequences?
Don’t: Be Afraid To Ask For Help
Just like any other aspect of your financial world, knowing which events are classified as a “change in circumstances” by Centrelink and thus when you should update your financial information can feel overwhelming.
But you don’t have to figure it all out on your own. Your financial advisor can help you to understand what your particular obligations to Centrelink are and how you can go about ensuring that you’re meeting them.
In fact, here are just a few events that you may be obligated to inform Centrelink about:
- Spending on a holiday which has reduced your bank balance
- Selling a car with the proceeds going into the bank
- Purchasing a car, thus reducing your bank balance
- Closing a managed investment or selling a direct shareholding
- Selling a house with the left-over proceeds going into your bank account
- Receiving an inheritance
- Being gifted a once-off amount of money
And that’s just the beginning.
Still unsure of whether you should let Centrelink know about a change in your particular financial circumstances?
Reach out to your financial advisor today for personalized information and recommendations on how you can ensure you’re meeting all of your Centrelink obligations.