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An overdrawn bank account is when your account balance goes below zero.
This can happen if:
- 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.
If your Centrelink payment goes into an overdrawn bank account, your bank may:
- reduce how much of your payment you can access
- charge you a fee.
You have to pay the amount owed and the fee back to them.
Many banks, building societies and credits unions have agreed to protect your Centrelink payment. You can ask them to take no more than 10% of your Centrelink payment each pay period.
You can have this arrangement until you’ve paid the debt.
Under the Code of Operation, your bank may have agreed to protect your Centrelink payment. The Code applies if you get any of the following payments:
- Age Pension
- Carer Payment
- Disability Support Pension
- Farm Household Allowance
- JobSeeker Payment
- Parenting Payment
- Special Benefit
- Youth Allowance
- ABSTUDY Living Allowance.
Under the Code, your bank may have agreed to protect your Department of Veterans’ Affairs payment. This applies if you get any of these:
- Crisis payment
- Education Entry Payment
- Income Support Supplement
- Periodic Payments of Wholly Dependent Partner’s Pension
- Service Pension - age, invalidity, or partner
- Veteran Payment
- War Widow(er)’s Pension.
You should contact your bank to arrange a plan to repay the amount you owe. You can also talk to them to make sure you can access the rest of your payment. You can choose to pay more than 10% of your payment to your bank if you wish.
Speak to your bank about their fees and repayment policies for customers getting any of these payments.
Example of a protected payment
If you have an overdrawn bank account and you get a payment of $200. The bank can take up to $20. They use this to repay the amount you owe. They can let you access the remaining $180, or 90%, of your payment.
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:
- Australia Banking Association members
- Australian Finance Industry Association members
- Customer Owned Banking Association (COBA) members who have signed the COBA Code of Practice.
When the Code doesn’t protect your payment
The Code doesn’t protect you if any of these apply:
- you have an overdrawn bank account due to a dishonest or unlawful act
- a third party gets money you owe them direct from your account due to a court order
- the overdrawn account is not the account you have nominated to get your Services Australia income support payment.
Help from your bank
Talk to your bank if you overdraw your account. They can help you manage your debt.
If you can’t resolve disputes with your bank, you can contact The Australian Financial Complaints Authority through their website.
Help from us
If you don’t have enough money to live on, we may be able to help. We’ll check if your bank has followed the Code. Phone us on your regular payment number if you’d like us to help.
You can read:
If English isn’t your first language, you can:
- read information in your language
- call our Multilingual Phone Service to speak with a skilled bilingual service officer about Centrelink payments and services
- ask for an interpreter at a service centre.
Other support services
You can find a financial counsellor in your area on the National Debt Helpline website.
Information in Aboriginal and Torres Strait Islander languages
We have information to help you learn about the Code of Operation in these Aboriginal and Torres Strait Islander languages: