One of the many benefits of living in Australia is our country’s welfare system, Centrelink. Although it provides a financial safety net when you’re underemployed or unemployed, living purely on Centrelink income can be tough, but not impossible with careful budgeting. If all else fails in the short term, we do offer loans for those on Centrelink.

Join us as we look at the best tips for making Centrelink income work for you.

How does Centrelink income work?

The amount of Centrelink income you receive can vary depending on your individual situation. This figure is calculated according to a set of conditions set out by the Australian Government.

To apply for Centrelink, you’ll be required to provide the following information:

• Relationship Status – If you’re in a relationship, this may impact the amount of income you can receive.
• Living Situation – Are you living with your parents or family members?
• Personal Income and Assets – If you currently earn over $437 a fortnight, your benefits will start to reduce. Similarly, all investments (such as property, shares or inheritance) need to be declared.
• Dependents – Having any dependent children will impact your Centrelink income.

Using this information, Centrelink will perform a range of mandatory income and personal asset tests to determine the income you’ll receive. For example, if you’re single with no children, over 18 and live away from your parents, you’re entitled to $462.50 a fortnight.

Due to the global coronavirus pandemic, the Australian Government has introduced the Coronavirus Supplement. This tops up your regular Centrelink payment with an additional $250 a fortnight (if you meet the necessary conditions). This amount will be paid until the 31st of December 2020.

Budgeting tips

Once you’ve received your first round of Centrelink income, you’ll be in a perfect position to create a fortnightly budget using the following steps:

1. List your regular, fixed expenses like rent, food, bills, transportation, health insurance, monthly subscriptions and credit card repayments etc. When creating this list, it’s helpful to write down when each expense is paid so you can best allocate your funds.
2. Deduct these expenses from your fortnightly Centrelink income.
3. If there is anything left, save this money for a rainy day, or keep a percentage for discretionary spending on items and services that you want, rather than need.

Stretching your payments out

Creating (and sticking to) a budget is great for making the most of your Centrelink income, but did you know you can stretch these payments out to work in your favour?

Apart from rent, your grocery bill is likely the biggest expense in your budget. But there are ways to save money on groceries, such as leaving the kids at home or buying in bulk.

Even though they’re fixed expenses, your electricity, water and gas bills will fluctuate depending on usage. Starting with your electricity bill, you can help reduce this by doing things like switching to LED bulbs and air-drying your washing. Check out more ideas for reducing your electricity costs.

Cigno offers Centrelink loans for persons who have a low income and on Centrelink payments. You can also apply for bad credit loans if you need cash while on Centrelink.

Disclaimer: Please be aware that Cigno Loans’ articles do not replace advice from an accountant or financial advisor. All information provided is intended to be used as a guide only, as it does not take into account your personal financial situation or needs. If you require assistance, it is recommended that you consult a licensed financial or tax advisor.