Centrelink $1.01

[Brenda Irwin]

I have just gotten a letter from my pm and I am not sure what to do. The tenant is paying their rent via Centrepay deductions scheme. Centrepay transfers an amount nominated by the tenant into the pm's realestate trust account before the remainder is released to them. However, Centrelink deduct a fee of $1.01 from the amount nominated by the tenant prior to forwarding the funds to the pm.

The pm has been informed by Centrelink that they are not able to recoup the fee from the tenant. Do I forego the $1.01 each time the tenant utilizes the scheme or does the pm advise that the method of payment is no longer acceptable.

Should I just raise the rent? The ip is in Ipswich close to Hungry Jacks, for those who know Ipswich. The rent has been $185pw for almost 6mths and the tenant is on a periodic lease.
Cheers Brenda.

 

[Cheeks]

I had the same issue a few years ago but in WA they deduct $5 from the rent. Unfortunately the tenant was paying weekly so I lost $5 per week.
I found it very annoying as the lease states the rent so why would they be paying less

My PM at the time wouldn't do anything about it, so I eventual changed PM and I didn't renew the lease for the tenant.

I am now very careful about looking for this issue with new tenants.

I'd be making the PM advise them that the rent is $185/w not $183.99/w as per the lease.

Now I know it's not a lot of money but it p@#$!* me off that I get charged rates and taxes and I have to pay them or else and then the government goes and decides they are going to charge me a fee for them paying the rent

I don’t go to a shop and buy an item minus the fee the bank charged me to get the money from the ATM

 

[HotRod]

I have just gotten a letter from my pm and I am not sure what to do. The tenant is paying their rent via Centrepay deductions scheme. Centrepay transfers an amount nominated by the tenant into the pm's realestate trust account before the remainder is released to them. However, Centrelink deduct a fee of $1.01 from the amount nominated by the tenant prior to forwarding the funds to the pm.

The pm has been informed by Centrelink that they are not able to recoup the fee from the tenant. Do I forego the $1.01 each time the tenant utilizes the scheme or does the pm advise that the method of payment is no longer acceptable.

Should I just raise the rent? The ip is in Ipswich close to Hungry Jacks, for those who know Ipswich. The rent has been $185pw for almost 6mths and the tenant is on a periodic lease.
Cheers Brenda.

If you are getting $185pw that would equate to about $750pcm. A $1.01 is a real pittance compared to what rent you get every month. Your managing agent probably charges five times that in petties.

I would not bother.

Later...........

 

[Jamie]

Its 25 cents a week. I'd gladly pay this for every property if it meant that the rent was always in there on time and paid in full.

I see it as a necessary evil of having welfare recipients as tenants. I know I'd much prefer the peace of mind knowing the rent will always be paid by Centrelink, rather than leaving it up to most tenants to pay the rent themselves

Jamie.

 

[geoffw]

I'm with Jamie.

I've had my troubles with tenants not paying. I've ended up losing heaps more than that just because of one Recalcitrant tenant.

(though I guess, if this had been in place, I would have still had thattenant, and would not have been able to renovate and furnish the unit, and upgrade the tenant).

 

[DavidMc]

If you are getting $185pw that would equate to about $750pcm. A $1.01 is a real pittance compared to what rent you get every month. Your managing agent probably charges five times that in petties.

I would not bother.

I agree. I'd let it slide. If it facilitates smooth rental cashflow then it's a good thing.

I can share your frustration though, Centrelink passing their own costs onto private individuals. Can you bill them for providing this method of payment to one of their 'customers' (that's what they call them nowadays, right?).

 

[Ricardo29]

aside from main issues, the thing i find most annoying about this is:

why the 0.01 cent? what is wrong with $1.00 clear?
0.01 isnt even a cash unit anymore, and aside from total lunacy, do people not realise the massive amount of work that goes into accounting for 0.01 ?
how can one justify this $0.01c, what does it do, why is it needed on top of the $1.00 ?

 

[Brenda Irwin]

I rang the pm and we are going to put the tenant on a proper 6mth lease, not the periodic the tenant prefers. The rent will rise by $5pw as per the usual 6mth increase.
I told the pm if they can keep asking the tenant to make up the shortfall every 6mths or so. If not, doesn't really matter.
What I really did was lecture the pm on putting unemployed tenants into one of my best IP's in Ipswich. How much wear and tear is my IP sustaining with tenants at home 24 hours a day, 7 days a week! What was my pm thinking in the first place?

 

[chrispy]

Brenda

I have this in place on a block of 4 and have found it wonderful to know that the rent will turn up on time, every time.

My PM rang me and asked if I would accept it when the initial Lease was being signed, I agreed that getting the rent direct from Centrelink was a bonus and agreed to losing the fee, although when it became 3 out of the 4, I was wondering if it was such a good idea

We have now put the rent up on all 4 and I took the fee into account when putting up the rent.

Chris

 

[michaelg]

Brenda,

You can always (tongue firmly in cheek) bill Centerlink for the loss of income + interest.

Regards
Michael

 

[lizzie]

i would write it down to experience and next time just put the rent up an exta $5 above market to cover this loss. the tenant won't care as they're not paying it and goodness knows we pay enough in tax other ways without having to feel guilty about "ripping off centrelink".

get the last laugh ... success is the best revenge.

 

[plumtree]

I rang the pm and we are going to put the tenant on a proper 6mth lease, not the periodic the tenant prefers. The rent will rise by $5pw as per the usual 6mth increase.
I told the pm if they can keep asking the tenant to make up the shortfall every 6mths or so. If not, doesn't really matter.
What I really did was lecture the pm on putting unemployed tenants into one of my best IP's in Ipswich. How much wear and tear is my IP sustaining with tenants at home 24 hours a day, 7 days a week! What was my pm thinking in the first place?

You are just joking?????

 

[kissfan]

aside from main issues, the thing i find most annoying about this is:

why the 0.01 cent? what is wrong with $1.00 clear?
0.01 isnt even a cash unit anymore, and aside from total lunacy, do people not realise the massive amount of work that goes into accounting for 0.01 ?
how can one justify this $0.01c, what does it do, why is it needed on top of the $1.00 ?

All those $0.01c add up, just think, 100 of them make a dollar and so on and so on.

Because it is such a minute amount, a lot of places (in this case Centrlink) will add it on knowing that people will just pay it.

 

[crest133]

Centrelink have contracts with REAs which state that $1 will be deducted for an admin fee and the balance paid as rent to the REA. The contract also states that the REA may not charge the tenant the $1. This causes problems with some but not all PM software , receipts and rent records. This is because when a PM records receiving $199 rent for a $200 p.w.rent payment, the software leaves the "date rent paid to" unchanged, and records a "$199 part payment". Then when the software generates the weekly list of arrears, the tenant is listed as being in arrears because the "date rent paid to" has passed. Manual inspection of this arrears list picks up the problem, but with some automated systems, the tenant receives an arrears letter, when he really has paid full rent to Centrelink for onforwarding to the REA. The problem compounds by $1 per week. So the PM adjusts the software to say rent is $199 per week. Then the software $199 figure and the rent record disagrees with the lease document.
One option is to insert an additional terms clause to the lease that both parties will accept that the full rent is deemed paid if it is received each week or fortnight $1 short through Centrelink.
cheers
crest133