Centrepay Changes: Key Questions Answered

The changes are the result of 18 months of community consultation and co-design with customers, advocates and advisory groups, business, and across government.

The changes will start coming into effect from 3 November 2025.

What is Centrepay?

Centrepay is a free bill paying service offered by Services Australia.

Our customers can choose to have amounts deducted from their regular Centrelink payment to pay for certain expenses.

People use it as a budgeting tool, to help them stay on top of important bills. Almost 82 per cent of Centrepay deductions go towards accommodation expenses, like rent, and utilities.

Centrepay is a voluntary service. Businesses can choose to apply to use Centrepay and, if eligible, they can offer it as a payment option to their customers. Similarly, our customers have the option of using Centrepay when it's offered, but they don't have to use it, and businesses can't require them to pay through Centrepay.

Why is Centrepay changing?

Centrepay is a popular service used by around 600,000 Australians, but we had feedback that it wasn't always working as intended for some of our customers.

For example, there have been situations where deductions continued being paid to businesses, even when a customer hadn't shopped with that business for months. We also heard of situations where people were being signed up for things they didn't want or need, or they couldn't afford.

So, over the past 18 months we've been consulting across Australia to understand what is good about Centrepay, and what could be improved.

Feedback from the community was clear. Changes were needed to better protect people and reduce financial risk.

We're making changes based on those findings.

What is changing?

We're taking Centrepay back to basics as a service for paying bills, with better safeguards in place to reduce the risk of financial harm.

We've looked at what types of products and services are suited to regular, ongoing, deductions for paying bills. Some services are suitable, others are not.

We're removing goods and services that don't align with the purpose of Centrepay. This includes consumer leases and basic household items - such as clothing, footwear, whitegoods, furniture, and electrical appliances. These are categories where there has been harm in the past.

Some of the services being removed are not currently being offered by any business using Centrepay.

There is a complete list of services being removed from Centrepay on our website, as well as a list of the goods and services Centrepay can be used for.

While some businesses will no longer be able to offer Centrepay as a payment option, these changes do not stop customers from purchasing goods and services using other payment methods.

Services Australia is also introducing additional safeguards such as mandatory target amounts and end dates for deductions across most services. Some services will also have a maximum deduction limit per fortnight. These measures should help protect against incorrect payments occurring.

The target amount is the maximum amount a person will pay to a business through a Centrepay deduction. An end date is the final date a deduction will be made to a business. A deduction will stop when either the target amount or end date is reached.

There will be a new application and approval process for businesses that want to offer Centrepay as a payment option. There will also be complaints and compliance specialists within Services Australia, who will help resolve complaints and make sure businesses are accountable for how they use Centrepay.

How will the 12-month transition work?

The 12-month transition will begin on 3 November 2025.

It is intended to give businesses who will no longer be able to offer Centrepay as a payment option for their goods and services, and their customers, time to adapt to the changes. This includes setting up alternative payment arrangements, if that is the customer's preference.

During the transition, people can keep paying the existing deductions they have in place with businesses that will be removed from Centrepay at the end of the transition. But these businesses, and their customers, will not be able to start new deductions or increase existing deductions.

For businesses that remain eligible to offer Centrepay, any new deductions they put in place from 3 November will need to adhere to the new Terms of Use. This will include mandatory end dates or target amounts for deductions across most services. They will also have until 4 May 2026 to add target amounts to any deductions they had in place prior to 3 November 2025.

We're trying to make this transition as smooth as possible, but we acknowledge that with any change, there's always an adjustment period for everybody. Services Australia will continue working throughout the transition to assist both customers and businesses adapt to these changes.

Who was consulted?

Community consultation has been the foundation of the Centrepay reform process. We've sought views and feedback from as many customers, advocates, advisory groups, businesses and organisations as possible over the past 18 months.

Services Australia established a Centrepay Reform Peak Advisory Reference Group, inviting organisations across the country to join. Throughout the reform process we met regularly with stakeholders including Anglicare, Catholic Care, Mob Strong Debt Help, Financial Rights Legal Centre, the Australian Council of Social Service and Economic Justice Australia.

We held two public consultation rounds where the community was invited to share their views and experiences with Centrepay. The first round occurred between May and July 2024, when the public was invited to respond to a discussion paper seeking views on safeguards and ensuring the right products and services were available through Centrepay. The responses we received were published.

The second round was held between 31 March and 21 April 2025, seeking feedback on the proposed reforms the Australian Government announced in December 2024. Services Australia reviewed and considered the responses we received, and they've helped inform the finalised changes.

We wrote to businesses using Centrepay throughout the reform process, keeping them updated and inviting them to provide feedback.

We also conducted face-to-face consultation in regional and remote locations across Australia where Centrepay usage is high, to hear firsthand how Centrepay can support and empower those who use it.

We received a wide range of feedback and perspectives. Those insights have helped identify changes that will make Centrepay a better service for our customers.

Can people still buy food through Centrepay?

People can still use Centrepay to pay for food in remote and very remote areas, but only at places such as supermarkets and grocery stores.

Centrepay will not be a payment option for food outside of these remote areas.

For the purpose of Centrepay, a remote or very remote area is an area identified by the Australia Bureau of Statistics as being in remote or very remote Australia, and having a population of less than 10,000 people at the most recent census. The ABS use the Accessibility/Remoteness Index of Australia (ARIA+) to classify remoteness.

Balancing food security with appropriate customer protections has been carefully considered throughout the reform process. We recognise there is often limited accessibility or alternative options in remote areas. In trying to find the right balance, we've worked with the National Indigenous Australians Agency (NIAA) to align our approach with the National Strategy for Food Security in Remote First Nations Communities.

What about butchers?

Businesses that primarily sell meat or meat products, like butchers, will no longer be able to offer Centrepay as a payment option.

During the 12-month transition people can keep paying any existing Centrepay deductions they have in place with butchers. But butchers, and their customers, will not be able to start new deductions or increase existing deductions.

We've considered food security when making this decision. Stores like supermarkets and grocery stores offer a wider range of food, drinks, and groceries, than a butcher.

We've also considered previous cases of financial harm. There have been cases where butchers have continued taking deductions from customers, even when they haven't shopped there in a while, resulting in the butcher holding thousands of dollars as store credit. We're also aware of situations where businesses have told customers they can only purchase certain meat packages through Centrepay.

Can vets still offer Centrepay?

Vets will still be able to offer Centrepay as a payment option.

There will be a new limit of $50 per fortnight for Centrepay deductions made toward veterinary services. This is a safeguard measure to protect against possible incorrect payments and the potential harm that may occur as a result of ongoing high value deductions.

Feedback during the consultation process revealed there had been cases of our customers not being aware their Centrepay arrangements were putting them at risk of financial vulnerability. If a person has Centrepay set up to cover critical expenses like their rent, utilities, and childcare, adding another significant deduction on top of this may not leave them with much left over to cover their day-to-day expenses.

Measures like this $50 per fortnight limit for veterinary services are a safeguard aimed at protecting against this. Other services eligible for Centrepay will also be subject to mandatory target amounts for the same reason.

Throughout the reform process we've tried to find the right balance is between empowering our customers to manage their money the way they want, and ensuring the right safeguards are in place.

While there will be a $50 per fortnight limit on payments made for veterinary services through Centrepay, people can still make additional payments outside of Centrepay if they choose. We encourage people to discuss possible payment arrangements with their veterinary service provider.

Our customers also have other options available to them if they have a large or unexpected expense. For example, they can request an advance payment from Services Australia. Another option is the No Interest Loans Scheme, which can provide safe and affordable credit.

Will these changes address overpayments to energy companies?

The issue of incorrect payments has been a key focus throughout the Centrepay reform process.

The introduction of mandatory target amounts and end dates across most services should help mitigate against incorrect payments occurring.

However, it's important to acknowledge that essential services like accommodation and utilities will not be subject to mandatory target amounts or end dates. This is to protect against the harm that could occur if these payments ended prematurely or without the customer realising. For example, utilities unexpectedly being turned off because a person doesn't realise their Centrepay deduction for that service had ended.

We're aware there have been issues in the past with incorrect payments, particularly with energy companies. We're implementing new monitoring practices to proactively identify possible incorrect payments. In addition, the new Centrepay Terms of Use more clearly defines what an incorrect payment is, and the responsibility a business has to identify and fix these situations quickly.

What do Centrepay users need to do?

Our customers don't need to do anything now, though they may want to get to know the changes.

We've written to all customers who have a deduction in place for goods and services that are being removed, explaining the changes. The Services Australia website also has information explaining what the changes are, and what they mean for people who use Centrepay.

During the 12-month transition people can keep paying any existing deductions they have in place with businesses that will be removed from Centrepay. If customers want to continue making purchases with a business that is being removed, we encourage them to discuss possible alternative payment arrangements with the business.

We're also encouraging people to consider adding a target amount or end date to any existing deductions they have in place. Our customers can add these themselves or ask the business to add it for them.