Cheque
Individuals affected by this change will be required to switch to electronic payment methods to send foreign currency. Pixabay

The Centrelink payment system is set to undergo a massive overhaul this week, following which Australians living overseas will be barred from making payments using foreign currency cheques or international money orders.

Starting Dec.19, the change is part of a broader move to phase out cheques over the next five years. Individuals affected by this change will be required to switch to electronic payment methods to send foreign currency.

Services Australia, in its October Newsletter recommended exploring alternative payment methods to ensure seamless transactions.

Why are foreign cheques being phased out?

The wipeout of foreign cheques is part of a bigger scheme of things -- transitioning the Australian payment ecosystem to a completely digital mode. The government is planning to make the cheques redundant by 2030, having seen a 90% decrease in usage over the previous ten years.

Given internet or mobile banking can handle 100% of institutional and commercial cheques and 98% of personal cheques, this transition is motivated by the desire for quicker, safer, and more affordable payment solutions, The Guardian had reported last year.

"From 19 December 2024, Services Australia will no longer accept Centrelink debt repayments made by foreign currency cheques or money orders," it said in the newsletter. "If you need to repay a Centrelink debt you will now need to use a different repayment method, outlined in your debt letter. There are no changes to how your Centrelink payment is paid to you."

Pensioners still have the option of receiving their Centrelink benefits via cheques, although this option may be less dependable and slower than direct deposit. Recipients of cheque payments may have to wait longer, since postal delivery times can change and be postponed due to unanticipated events.

To phase out the use of cheques, the Australian government has established a precise time frame. cheques will cease to be issued on June 30, 2028, and they will cease to be accepted on Sept. 30, 2029.

The move comes as more Australians turn to digital payment options, and the use of cheques has significantly decreased over the last ten years -- by 90%.