Reforms to Centrepay, the government-run bill-payment service used by millions of Centrelink recipients, are now officially underway, two months after consumer advocates welcomed the long-awaited changes in September.

The reforms, announced by Minister Katy Gallagher and supported by the Financial Rights Legal Centre, Mob Strong Debt Help, CHOICE, Anglicare NT, Economic Justice Australia and the Consumer Action Law Centre, aim to stop Centrepay being misused by high-risk businesses and restore the service to its original purpose: a voluntary, safe way for people to pay essential bills and expenses.

Advocates had warned for decades that Centrepay had become a vehicle for financial abuse, with some companies exploiting loopholes to sign vulnerable people up to never-ending deductions taken out before money even reached their bank account.

Julia Davis from the Financial Rights Legal Centre said at the time that consumer groups had been calling for the removal of predatory operators for decades.

“These announcements are a long time coming and have been the result of years of consistent advocacy and demonstrated harm,” she said.

Under the reforms, now in force, businesses must meet much higher standards before being approved to use Centrepay.

Stronger enforcement powers have also begun, allowing Services Australia to quickly remove operators who fail to follow the rules.

Complaints mechanisms have been strengthened, and all new deductions must now include a target amount or end date, putting an end to unlimited, open-ended withdrawals.

Bettina Cooper from Mob Strong Debt Help said the reform process involved genuine, long-term consultation with First Nations organisations and consumer advocates.

“All government departments can learn from their open and collaborative approach to achieve fair outcomes,” she said.

The next phase, now in transition, will see high-risk service reasons removed altogether. Funeral expenses, consumer leases, household goods and other previously allowed categories linked to financial harm will no longer be eligible.

Businesses in these categories now have until 1 November 2026 to stop using Centrepay.

Shelley Hartle from the Consumer Action Law Centre said the changes will finally close the loopholes that allowed “rogue businesses” to take advantage of vulnerable customers.

CHOICE’s Rosie Thomas welcomed the strengthened guardrails, saying the reforms ensure Centrepay can only be used by trustworthy and properly vetted businesses.

Anglicare also praised the changes, describing them as the result of years of perseverance from communities and advocates.

Purchasing household goods is one category deemed a high risk to financial harm and will be removed from Centrepay access.

With implementation now underway, consumers can expect protections to continue rolling out throughout 2026 as the system transitions fully to the new rules.

Key changes being implemented include removal of high-risk categories, including:

• • Funeral expenses, consumer leases, household goods, and other products linked to financial harm.

• • Stronger enforcement tools so Services Australia can act quickly against non-compliant businesses.

• • Mandatory conditions for deductions to prevent endless withdrawals.

• • Higher standards for businesses before they can access Centrepay.

• • Strengthened complaints pathways for users and advocates.

What’s changing and when

3 November 2025 – Reforms officially began

• All new Centrepay deductions must include an end date and/or a target amount.

• Stronger compliance and enforcement powers activated.

• Higher approval standards introduced for any new business applying to use Centrepay.

4 May 2026 – Update deadline for existing deductions

• Any deduction set up before 3 November 2025 must be updated to include a target amount or end date.

1 November 2026 – Final reform deadline

• All high-risk service reasons will be removed completely.

• All non-eligible businesses must exit Centrepay.

• Only essential, safe, properly vetted services will remain eligible.