A significant change to Centrelink payment methods is set to take effect this week, bringing a shift in how Australians living overseas can make payments. From December 19, 2024, Australians abroad will no longer be able to use foreign currency cheques or international money orders to make Centrelink payments.
Why Is This Change Happening?
The change comes as part of a broader initiative to modernize Australia’s payment systems. Services Australia, the government agency overseeing Centrelink, has stated that due to updates in the Australian payment system, foreign currency cheques and international money orders will no longer be accepted after December 19. This change is part of a wider trend toward phasing out cheques over the next five years.
This move could significantly affect individuals overseas who use these traditional methods to pay for services such as child support, spousal maintenance, or to repay Centrelink debts.
What Does This Mean for You?
If you are an Australian living abroad and have been using cheques or money orders to make your payments to Centrelink, you will need to transition to electronic payment methods. Services Australia has advised that electronic payments are now required for sending foreign currency payments. You’ll still be able to make payments, but only via digital methods, ensuring faster and more efficient processing.
However, it’s important to note that these changes will not affect how your Centrelink payments are delivered to you. If you are receiving Centrelink payments, they will still be issued through your usual payment method, though recipients should expect that payments made by cheque will take longer to reach their bank accounts compared to direct deposits.
The End of Cheques in Australia: What You Need to Know
The decision to phase out cheques is part of a broader move across the country to modernize payment systems. Treasurer Jim Chalmers confirmed that cheques will no longer be issued after June 30, 2028, and they will stop being accepted entirely by September 30, 2029. This shift comes as cheque usage has significantly declined, dropping by 90% over the last decade.
Many major financial institutions, including ANZ, Commonwealth Bank, and NAB, have already stopped issuing cheque books for new customers, while Westpac is the only major bank still offering them.
What About Foreign Cheques?
Unlike domestic cheques, foreign cheques will not be included in the transition plan. This is because foreign cheques are processed differently and are subject to distinct rules. While some smaller financial institutions still accept and process foreign cheques, they will not be affected by the planned phase-out of cheques by 2029.
Why Is This Happening?
The phase-out of cheques aligns with the growing trend toward digital payment methods, as Australians increasingly turn to electronic systems like direct deposit and online transfers. Digital payment methods are not only more secure and efficient, but they also allow for quicker processing and reduce the environmental impact associated with paper-based systems.
According to Treasurer Jim Chalmers, “Cheque usage has declined by 90% in the last ten years, and many banks and financial institutions are ending cheque issuance for new customers.” To ensure customers and businesses can smoothly transition to other payment methods, the government is providing the necessary support and certainty.
What Should You Do Next?
If you are currently making payments to Centrelink from overseas using cheques or international money orders, now is the time to switch to electronic payment methods. To make this transition easier, Services Australia has provided instructions on how to use electronic payment systems to transfer foreign currency. Simply visit the Centrelink website or contact Services Australia for guidance on the available options.
For those who rely on cheques for receiving Centrelink payments, there’s no immediate need to worry, but it’s worth noting that cheque-based payments may take longer to process than digital payments.
Conclusion
As Australia moves away from traditional paper-based payments, the shift to electronic systems will improve speed and security for both Centrelink payments and other financial transactions. If you’re living abroad and need to make a payment to Centrelink, make sure to transition to an electronic payment method before December 19. Keep an eye on Services Australia’s website for further updates and support on how to navigate these changes.
By staying informed and adapting to these changes, you can continue to manage your payments with ease and without disruption.
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