Media Release by Senator the Hon Kay Patterson

Extra Centrelink Funding To Deal With Private Trusts

Centrelink will get an extra $7.8 million to assist it to deal with customers who have private trusts and companies claiming social security benefits.

The Minister for Family and Community Services, Senator Kay Patterson, said Centrelink would receive the extra funding to help it process a larger number of customers who have assets in private trusts and companies.

The additional funding of $7.8 million will enable Centrelink to process 38,000 claims in 2003-04 – 33,000 more than the original estimate.

Senator Patterson said the extra funding would provide more support for the Government’s Budget initiative to maintain the fairness of the means test for support payments.

The Government acted to ensure the fairness and integrity of the means test with the introduction of the new rules on January 1, 2002. The rules are designed to ensure that the assets and income of private trusts and companies are assessed against the person who controls the assets.

“The new rules ensure that income support payments continue to be targeted to those most in need,” she said.

“It is only fair that customers who control significant income and assets in private trusts and companies should use those resources to support themselves before calling on the community for income support.

“Prior to the implementation of the new tougher rules, which took effect from 1 January 2002, customers could arrange their financial affairs using private trusts and companies to avoid the application of the means test.

“The new rules maintain the fairness of the means test by treating customers according to the level of income and assets they control, not according to the way they hold their income and assets.

“These measures are part of the Howard Government’s continuing efforts to ensure that people in similar circumstances are treated the same.”

Senator Patterson said the measures to enhance the integrity of the means test had saved taxpayers $100 million a year.