The Commonwealth Government has announced it will restrict the type of consumer leases Centrelink clients can pay for using Centrepay. Centrepay is a direct debit scheme which allows Centrelink payments to pay bills and meet ongoing expenses.

Under the new criteria, consumer leases that run for an indefinite period, or have a duration of four months or less, will be excluded from Centrepay and only those which are regulated under the National Consumer Credit Protection Act 2009 will be allowed.

Funeral insurance will also be excluded from Centrepay, because of the particular risks funeral insurance raises for vulnerable customers. Centrepay will still be available for scheduled repayments of funeral expenses and pre-paid funeral plans.

Centrepay services will be expanded to allow for Centrepay deductions for low interest loans, savings plans and layby.

Consumer advocates are concerned that Centrepay deductions may leave Centrelink clients without sufficient income for living expenses.