Frequently asked questions for the Centrepay Businesses transition

This information is to provide answers to questions you may have about the transition.

Changes to Centrepay

On 1 July 2015, we transitioned to a new policy and legal framework for providing Centrepay to Businesses.

We no longer provide Centrepay under the existing Centrepay Policy and contract formed by the Department of Human Services Business Terms and Conditions, Centrepay Schedule 1 and any agreed Special Conditions.

We replaced them with an administrative framework including the new Centrepay Policy and Terms and Centrepay Procedural Guide for Businesses.

Businesses who apply to use Centrepay after 1 July 2015 will need to do so in accordance with the new Centrepay Policy and Terms.

Documents you need to read

Please make sure you and your employees, agents or contractors who are involved with Centrepay, read and understand the new:

You should act consistently with these documents in relation to Centrepay.

Reasons for the change

The changes respond to the Report of the 2013 Independent Review of Centrepay.

The transition of Centrepay to a new policy and legal framework is a major milestone in achieving the recommended outcomes of the review. Read more about our response to the 2013 Independent Review of Centrepay.

Date the policy took effect

The updated policy was published on our website on 29 June 2015.

For new Businesses it took effect on 1 July 2015.

For Businesses with existing Centrepay contracts, your existing contract was terminated with effect from the end of 31 August 2015. There was a notice period and your new Centrepay Policy and Terms automatically took effect on 1 September 2015.

Interpretation of the new contract

We cannot interpret the contract for you. For interpretation of the contract we recommend you seek independent legal advice.

Special conditions in your existing contract

All special conditions under previous Centrepay contracts have been incorporated into the new Centrepay Policy and Terms with the exception of those detailed in your transition letter, which continue to apply if applicable. These do not require any other documentation.

Transaction fees

Any transaction fee that you were being charged remains unchanged.

Your details

All your details such as your CRN and user access remain the same.

Complaints about the changes

You can make a complaint or give us feedback.

Consumer leasing and Centrepay

Changes occurring to consumer leasing under Centrepay

As part of the new Centrepay Policy and Terms, only leases that are regulated under the National Consumer Credit Protection Act 2009 are allowed.

Payments for indefinite leases - that are ongoing and do not have an end date - and short term leases which are less than 4 months are excluded from Centrepay.

We will not approve new applications for unregulated indefinite and short term consumer leases.

Existing Centrepay deductions for unregulated - indefinite and short term - consumer leases

Businesses can continue to use Centrepay under the new Centrepay Policy and Terms for those existing payment arrangements until no later than 30 June 2016 if they:

  • had pre-existing Centrepay deductions prior to 1 July 2015, and
  • were approved to transition

In accordance with the Centrepay terms, no Business can start any new payment arrangements, increase deductions for existing leases, or to add new leases to existing customers. By 30 June 2016, the Business must ensure it receives no Centrepay payments from any customer for unregulated leases.

Between 1 September 2015 and 30 June 2016, Centrepay can be used as a payment option for:

  • an existing customer paying an existing amount (authorised before 1 July 2015) for an unregulated consumer lease
  • an existing customer who has temporarily suspended a payment for an unregulated consumer lease and is restarting that payment including any arrears accrued. Suspensions can be set up for a maximum period of 13 weeks and will then automatically restart with the original deduction amount. Cancelling the deduction will require a different payment method if it is restarted in the future
  • an existing customer who has temporarily decreased a payment amount for an existing unregulated consumer lease and where the payment is increased in the future back to the original amount including any arrears accrued
  • an existing customer who was paying an amount on an unregulated consumer lease and has had that lease taken over by another provider, for example transfer of business

Centrepay cannot be used for:

  • any new customer entering into a new unregulated consumer lease
  • an existing customer entering into a new unregulated consumer lease
  • increasing the payment amount for an existing customer’s unregulated consumer lease other than for arrears in the limited circumstances specified above
  • re-establishing a consumer lease deduction if the Centrepay payment has been cancelled after 1 July 2015 for any reason

Any business approved for household goods, which has not acquired an Australian credit license (ACL) by 1 July 2016, or is not an authorised Credit Representative of an ACL holder who is approved to use Centrepay, will have:

  • their approval for household goods terminated at that time, and
  • their Centrepay agreement terminated, if that was their only Centrepay approval

After 30 June 2016, any Business found to be receiving Centrepay payments for excluded consumer leases will be in breach of the Centrepay Policy and Terms, and will have its approval to use Centrepay withdrawn.

Any customers who have a Centrepay payment for an unregulated consumer lease still in place on 30 June 2016 will have those deductions automatically cancelled at that time.

Types of consumer leases

If you have any queries about consumer leases, we recommend you seek independent legal advice or contact the Australian Securities and Investments Commission.

Funeral insurance and Centrepay

Changes to funeral insurance under Centrepay

As part of the new Centrepay Policy and Terms, funeral insurance products, where benefits require payments to continue until the death of a nominated person, are excluded from Centrepay.

Scheduled repayment of funeral expenses and prepaid funeral plans continue to be allowed under Centrepay.

Existing funeral insurance payments deducted under Centrepay

We have removed funeral insurance from Centrepay, with grandfathering of existing deductions for up to 12 months.

This means that existing deductions can continue up to 30 June 2016. During this period, you will need to contact your customers to arrange for alternative payment methods or renegotiate terms of your contracts.

Page last updated: 23 March 2016

This information was printed Monday 5 December 2016 from humanservices.gov.au/business/enablers/frequently-asked-questions-centrepay-businesses-transition It may not include all of the relevant information on this topic. Please consider any relevant site notices at humanservices.gov.au/siteinformation when using this material.