The government says payment delays are happening because of new Centrelink rules that started in 2025. They added strict checks that found problems with many accounts and stopped payments. But many people say this is unfair to real Centrelink users who got no warning. The payment stops are very hard on single parents older people & disabled citizens. These groups often can’t pay rent or buy medicine when they miss even one payment. The new system has caused stress for thousands of people who depend on these benefits. Many families are struggling to get by until the situation is fixed.
A computer error in the government’s job search program wrongly stopped payments for many people on welfare. About 310000 people lost their Centrelink money between 2020 & 2024. This happened because the system didn’t give them enough time to contact their job provider after missing a required meeting. People who get welfare must do certain things to keep their payments.
They need to meet with job providers and look for work. The rules say that after getting five warnings they enter a danger zone. In this zone they can lose all their payments if they break more rules. The legal group Economic Justice Australia found that the system was cutting off payments too quickly and breaking its own rules.
Why Were Centrelink Payments Stopped?
The government stopped canceling welfare payments in July 2023. This happened because the Department of Employment found out they had wrongly cut off payments for 964 people.
But Kate Allingham from Economic Justice Australia says the real number is much bigger than that. Her team looked at public records and recent court cases about payment cancellations.
Government Response and Public Anger
They showed their findings to the government department. The department confirmed they were right about the higher numbers.
The automated system is breaking rules and not working properly. Many people are facing big problems because the computer system makes mistakes. Legal experts think about one in five affected people should get some money back.
They are thinking about taking legal action but haven’t decided yet. The rules say payments can’t be stopped until 28 days after someone misses their required activities.
Job agencies don’t need to find out why someone missed their appointments. But the system cut off payments for people on different benefits before the 28-day period ended. This affected people getting unemployment benefits youth support, parent payments and disability benefits.
Impact on Ordinary Australians
Jane started a business program in 2021 through the government’s help for unemployed people. The program was called NEIS & meant she didn’t need to go to job meetings anymore.
But her job provider Wise kept asking her to come to meetings. They called and texted her many times. When she missed a meeting they cut off her payments. Jane told the government office Centrelink about this problem lots of times. She asked us not to use her real name in this story.
Jane is 45 and lives in Melbourne public housing. She got written proof that she didn’t need to work with Wise because she was doing the NEIS program.
She kept telling Centrelink about this but Wise wouldn’t stop contacting her. At the end of 2020 they cut off her payments without waiting the full 28 days.
She only had $800 in savings to live on for the next few months. “I couldn’t pay any bills or rent because I just didn’t have enough money” she said. “I ate really basic food like bread and cereal. I also had some flour so I made muffins to get by.”
Jane had no money left, so she tried to get unemployment benefits. She wanted to challenge her case but stopped because it was too hard. “I tried to fight back and get help”
she told us. Kristin O’Connell from the Antipoverty Centre explained that many people face payment cuts & freezes.
These happen when job service providers make decisions. “Someone always makes the first call to stop payments, & that’s not legal,” she said.
Government numbers show that many people still lose their benefits each month. From January to April, over 157000 people had their payments stopped.
O’Connell believes the government needs to stop payment suspensions now until the ombudsman completes its review of the system’s legal status.
She thinks everyone affected by wrong decisions should get proper compensation right away. The impact goes beyond just missing payments as people faced serious stress and problems in their daily lives.
The employment department and Minister Amanda Rishworth didn’t answer questions about when they learned of the EJA report or if its findings were correct.
Rishworth only said in a statement that her department told her they stopped the problematic actions when they found them. She added that her government cares about making sure systems work properly especially when dealing with people in need.
