On Friday the 22nd of May 2015, Minister for Human Services Senator the Hon Marise Payne announced new consumer protection measures for customers utilising Centrepay. After advocating for changes to Centrepay over the past 10 years, ICAN was particularly pleased to hear that Funeral Insurances are to be excluded from the welfare recipient payment system.
On October 08, 2007, ICAN condemned Centrelink in The Australian after a funeral insurance company with a history of adverse court judgments was granted approval to access Aboriginal’ welfare payments. At the time, the Aboriginal Community Benefit Fund and associated companies had more than 30,000 policyholders, and about 12,000 of those paid their premiums directly through Centrepay.
ICAN CEO, Aaron Davis said, “Not much has changed in the 8 years preceding, the benefit fund still systematically targets ‘Australia’s most vulnerable consumers’ and preys on the cultural importance of funerals to Indigenous people and the low financial literacy of its members.”
“ICAN hopes the exclusion of funeral insurances from Centrepay will disrupt their unfettered access to welfare payments intended to cover life’s essentials. I stand by what I said back in 2007, it is a perverse situation when babies are signed up to funeral funds, having a whole life to live,” Mr Davis said.
The Abbott government also announced it will restrict the type of consumer leases customers can pay for using Centrepay to increase protection for vulnerable Centrelink customers. The new criteria for consumer leases will mean those 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.
“These leases provide better protection for vulnerable customers as businesses must comply with the responsible lending obligations overseen by the Australian Securities and Investments Commission (ASIC),” Minister Payne said. “While customers may still use Centrepay for regulated consumer leases, I would encourage people to carefully read the fine print and consider all of their options.”
“ICAN’s financial counselling team will be monitoring consumer lease companies remaining on the Centrepay system to ensure that they are meeting affordability assessment requirements under the National Consumer Credit Protection Act 2009 and report all non-compliance issues to ASIC,” said Mr. Davis.