The Morrison Government is seeking to overhaul the way welfare recipients report employment income to make the process simpler and to ensure payments are correct.
Under the changes more than 1.2 million welfare recipients who earn an income each year will be able to report their fortnightly earnings to Centrelink as it appears on their payslip.
Currently recipients must undertake a calculation to report their or their partner's earnings based on the number of shifts they have worked and the hourly rate rather than the amount they were actually paid.
Minister for Families and Social Services Anne Ruston said the reform was delivering on the Government's commitment to simplify the payments system.
"We want to make sure that Australians who need financial support are able to get the support that they are eligible for - no less and no more," Minister Ruston said.
"The current system of calculating earnings can be confusing and lead to misreporting especially when accounting for overtime or penalty rates.
"These changes will make accurate reporting much easier for people getting a social security payment."
This change will also facilitate the use of Single Touch Payroll data over the 12 months to July 2021, which will mean welfare recipients can have their employment and income details pre-filled similar to online tax returns.
Draft legislation will be released for consultation this week to enable the Government to introduce the Bill when Parliament resumes.
People who receive Newstart, Youth Allowance and other social security payments will still need to report their income every fortnight either online, via the mobile app, over the phone or by visiting a Centrelink service centre.
The simplified requirements are expected to improve payment accuracy, delivering savings of $2.1 billion over the forward estimates.
