Overdrawn bank account

You can get help to manage your money if your bank account is overdrawn.

What's an overdrawn account

A bank account is overdrawn if your balance goes below zero.

This can happen if either:

  • it looks like you have money to take out but another transaction hasn’t gone through yet
  • you use direct debit to pay your bills.

This creates a debt to the bank. Your bank might also charge you a fee. Remember, you have to pay the debt and fee back to them.

Sometimes your bank will take money from your account to pay back the debt and fee. They can't take more than 10% of your Centrelink payment. This is to protect your payment.

Bank means a bank, building society or credit union where you have an account.

Protected payments

Under the Code of Operation, your bank can't take more than 10% of your payment if you get:

Also, if you get one of the payments above, your bank can't take more than 10% of your:

Banks can't take more than 10% of these Department of Veterans' Affairs payments:

  • Crisis payment
  • Defence Force Income Support Allowance
  • Education Entry Payment
  • Income Support Supplement
  • Periodic Payments of Wholly Dependent Partner's Pension
  • Service Pension - age, invalidity, or partner
  • War Widow(er)'s Pension.

You can repay more than 10% to your bank if you wish.

This agreement about how banks recover money from you does not cover all types of income. Speak to your bank about their fees and repayment policies.

Example of a protected payment

If you get a payment of $200, you can keep at least $180 (90%) of your payment. The bank can take up to $20 (10%) to repay the debt and fee.

Banks that agree to the protected payment

A list of banks, building societies and credit unions that agree to the Code are on these websites:

When the Code doesn't protect your payment

The Code doesn't protect you if either:

  • your account is overdrawn due to a dishonest or unlawful act
  • a third party gets money you owe them direct from your account due to a court order.

Help from your bank

Talk to your bank if you overdraw your account. They can help you manage your debt.

You need to respond to requests from your bank about your debt within 60 days. If you don’t they could either:

  • make a report to a credit reporting body which can affect your credit rating
  • take legal action to force you to repay your debt.

If you can't resolve disputes with your bank, you can contact the following:

Help from us

If you don’t have enough money to live on, we can help. We'll check if your bank has followed the Code. Call your regular payment number if you’d like us to help.

You can read:

If English isn't your first language, you can either:

Other support services

Find a financial counsellor in your area on the Financial Counselling Australia website.

Page last updated: 19 May 2021