Media Release: Urgent Payments reform to reduce financial stress and aggression

1 June 2017

The Hon Alan Tudge MP

Minister for Human Services

The Government is reforming the way it manages Urgent Payments to break the cycle of debt and better support welfare recipients who find themselves under financial stress. 

Urgent Payments are not additional payments. They bring forward part of a person’s regular welfare payment to meet an urgent expense, leaving less for regular expenses on the normal payment date.

Of the 81,000 people who requested more than one Urgent Payment in a year, almost two-thirds made the subsequent request within 30 days of the first.

This includes 38,000 people who requested a second Urgent Payment within 15 days of a previous request, and this happened 83,000 times, indicating the payments may actually be exacerbating the cycle of running short of money.

In addition, analysis of aggressive incidents at service centres shows a link between requests for Urgent Payments and antisocial behaviour which may be a danger to other recipients and staff.

Twenty-one per cent of these aggression incidents are linked to Urgent Payments.

To address these issues, from 1 June 2017 the Government will:

  • Streamline the application for Urgent Payments, making it much faster and easier to access up to two Urgent Payments per year;
  • Cap the number of times a person can receive an Urgent Payment, in most cases, at two per year; and
  • For people who request more than two Urgent Payments, facilitate their entry onto weekly rather than fortnightly payments, and set up Centrepay deductions to help them reduce financial stress and better manage their bills and expenses.

Social workers will also provide additional support and make referrals to other community organisations, accommodation assistance or financial counselling, where necessary.

Advance payments and crisis payments will also continue, to ensure those most in need don’t go without.

The new model aims to identify people experiencing ongoing financial difficulties and offer early intervention and help.

The reforms will help break this cycle of debt and help recipients improve their long-term financial literacy – benefitting both recipients and department staff.

 

 

Fact sheet – Urgent Payment reforms from 1 June 2017

Facts and figures:

In the year to January 2017, the Department of Human Services granted around 400,000 Urgent Payments to 210,000 individuals.

Analysis of aggression incidents showed 21 per cent are linked to Urgent Payments, with 80 per cent of these incidents occurring immediately after the rejection of an Urgent Payment claim.

Of the 81,000 people who requested more than one Urgent Payment in a year, almost two-thirds made the subsequent request within 30 days of the first.

This includes 38,000 people who requested a second Urgent Payment within 15 days of a previous request, and this happened 83,000 times.

Demographics:

Most Urgent Payments were requested by people aged 30–34 years.

90 per cent of Urgent Payment claimants are single and more than half (54 per cent) are male.

What are Urgent Payments?

An Urgent Payment is the early delivery of part of a Centrelink recipient’s payment, designed to assist people who are in severe financial hardship due to exceptional and unforeseen circumstances.

Urgent Payments are not an additional payment. They are more like a very short term loan, which falls due in full on the next regular payment date.

What is changing?

From 1 June 2017, the number of Urgent Payments Centrelink recipients can receive will, in most cases, be capped at two in a 12 month period.

Recipients will be offered more sustainable solutions to help them manage their money, including:

  • Receiving their payments weekly instead of fortnightly
  • Setting up Centrepay deductions to manage bills and expenses
  • Social worker assistance
  • Referrals to community organisations, accommodation assistance or financial counselling where necessary.

Advance and crisis payments remain available to ensure those most in need don’t go without.

Why is this happening?

Most people requesting multiple Urgent Payments have at least one vulnerability indicator. The more Urgent Payments they receive in a year, the more likely it is they have identified vulnerabilities.

The changes aim to reduce the need for people to request Urgent Payments as they can lead to a cycle of financial stress for some, manifesting in frustration and aggression towards department staff.

While most recipients only receive one Urgent Payment in a year, Urgent Payments can exacerbate financial hardship by reducing the amount of their next payment, leaving less for regular expenses, and creating the need for subsequent advances.

Frequent Urgent Payments can also undermine longer term financial management.

Twenty per cent of people who claimed four or more Urgent Payments in a year altered their Centrepay arrangements on the same day.