Cheques to check out: what you need to know

Centrelink is about to introduce a change that may affect many Australians who use traditional banking methods. Foreign currency cheques and money orders will no longer be an accepted form of debt repayment, Services Australia has announced.

The change comes into effect on 19 December, which some might consider a rather inconvenient, if not cruel, date. Those most likely affected will probably be experiencing the stresses that many others do in the week leading into Christmas. A sudden, unexpected change such as this probably won’t help.

Regardless of the date, this is a change most would have expected to come sooner rather than later. The banking sector is no different to the rest of the world in terms of shifting towards a more online daily experience.

Cheques and our governments

Cheques must be considered  somewhat antiquated by bank employees these days. At least that’s what I thought until I had the need to bank one earlier this year.

The cheque had arrived in the mail some months earlier. The amount was small, so I was in no rush to bank it at my nearest Commonwealth Bank branch. It was the first cheque I’d received in some years, and I remarked to the teller that cheque deposits must be fairly rare these days. “Not at all,” he responded. “We still get heaps every day.”

Strangely, the cheque I was depositing was actually from a government agency, albeit a state government in this case. It was a cheque for a cancelled car registration, the refund payable only by cheque.

That seemed bizarre to me at the time. It seems more so now, given another government agency will soon refuse to accept some of them.

Prepare for December

It’s important to note that it is foreign currency cheques and money orders that will no longer be accepted from 19 December. You will still be able to pay a Centrelink debt with a standard Australian cheque – for now. From 2028 the government will no longer accept cheques under its current proposed transition program. 

Under that plan, the issuance of commercial and government cheques will cease at an earlier stage, from 2026. The federal government’s ultimate target is complete closure of Australia’s cheque system by the end of 2030. 

If you currently pay your Centrelink debts via foreign currency cheque or money order you’ll need to choose an alternative payment method. Those alternatives are listed in your debt letter, according to an October Australian Pension News release from Services Australia. 

If you are unsure of the process, you can call Centrelink’s debt recovery line on 1800 076 072. The Services Australia website also provides further information.

Consider ditching cheques now

Ultimately your choice will be limited to one of several electronic payment options or an Australian currency cheque. For some older Australians, the latter option might seem the more comfortable choice, but it is essentially delaying the inevitable. Any outstanding debts payable after 2028 will likely be payable only via electronic means. A change to an electronic method now means you won’t have to change again a few years from now.

Given the cut-off date of 19 December, putting your new payment method in place as soon as possible is recommended. Dealing with the matter now means you’ll be all sorted when foreign currency cheques check out.

Do you pay a Centrelink debt via cheque? Are you comfortable with moving to an electronic payment method? Let us know via the comments section below.

Also read: Cheques cancelled: insurers under pressure from banks

Disclaimer: All content on YourLifeChoices website is of a general nature and has been prepared without taking into account your objectives, financial situation or needs. It has been prepared with due care but no guarantees are provided for the ongoing accuracy or relevance. Before making a decision based on this information, you should consider its appropriateness in regard to your own circumstances. You should seek professional advice from a financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances.

Andrew Gigacz
Andrew Gigaczhttps://www.patreon.com/AndrewGigacz
Andrew has developed knowledge of the retirement landscape, including retirement income and government entitlements, as well as issues affecting older Australians moving into or living in retirement. He's an accomplished writer with a passion for health and human stories.

1 COMMENT

  1. What I will miss about cheques is instances where people turn 18, 21 get engaged or married and we can’t give them a cheque in a card. Just putting the money direct into their bank account seems soulless.

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