Nick Bruining: Centrelink backlog for new age pension applications tops more than 30,000, source says

Crucial medical tests are being delayed and retirement savings are being run down as Centrelink payment recipients are forced to wait weeks for benefit applications and renewals to be processed.

Staff shortages are contributing to a big bottleneck in welfare claims, with some new age pension applications dating back to June.

A source at Services Australia, the department responsible for agencies including Centrelink and Medicare, has told Your Money that the backlog for new age pension claims stood at more than 30,000 late last month, with some applications dubbed “clean skins” dating back to early June.

“That’s a big number, even by our standards,” the source, who asked not to be named, said.

A “clean skin” refers to an application that has no complicated arrangements — such as family trusts or private companies — and all supporting documentation like bank statements and superannuation fund statements have already been provided.

Northam retiree Claire Horsfield lodged a claim for a Centrelink-issued concession card several weeks ago. The card was issued last week after Your Money made enquiries to Services Australia.

Mrs Horsfield needed the card to access a range of important medical tests.

“Like many Australians, I sit in the middle with my finances,” she said.

“Not enough to just pay for the tests and not poor enough that they’re fully subsidised. A concessions card, in my case, will add up to savings of thousands of dollars. I need that money to live on.”

Mrs Horsfield had to defer the tests while her card was being processed and said: “It shouldn’t require the intervention of the media to get things moving.”

Her name was provided to Services Australia, along with the names of 15 other individuals who had lodged new or renewal applications with Centrelink in the past few months, some dating back to July.

Financial planner David McGregor said he had noticed the delays, which meant retirees were being forced to run down their savings.

“If the pension is granted, it will be backdated and the first payment might be a big one, but that doesn’t help with immediate cash-flow issues,” Mr McGregor said.

“They can also back-claim the extra cost of prescription medicines, but that involves another form sent to Centrelink.

“Historically, the age pension age was set at life expectancy. Today, the waiting times appear to be set to life expectancy.”

Services Australia general manager Hank Jongen apologised for the delays and said anyone facing financial hardship should contact Centrelink because their claim could be prioritised.

“The Australian Government is boosting Services Australia staff by 3000 in coming months to help improve the customer experience and already 1000 people have accepted permanent positions,” Mr Jongen said.

“Most of these will be working on processing claims and answering calls.”

Nick Bruining is an independent financial adviser and a member of the Certified Independent Financial Advisers Association