"These changes will make accurate reporting much easier for people getting a social security payment."

Welfare recipients to report actual wages

INCOME reporting for welfare recipients will no longer be "confusing" under proposed changes the federal government hopes will save more than $2 billion.

Welfare recipients could soon be required to report their actual fortnightly earnings to Centrelink, rather than providing a calculation based on their wage and hours worked.

"The current system of calculating earnings can be confusing and lead to misreporting especially when accounting for overtime or penalty rates," Social Services Minister Anne Ruston said on Tuesday.

"These changes will make accurate reporting much easier for people getting a social security payment."

Draft legislation underpinning the changes will be released for consultation this week.

The government hopes to introduce the proposed laws when parliament resumes next week.

By simplifying the reporting system the coalition hopes Centrelink payments will become more accurate, and prevent welfare recipients being owed money or having to repay the government for being paid too much.

The changes would also allow welfare recipients' employment and income data to be pre-filled online, as occurs with online tax returns.

The proposal comes months after the government's welfare payment recovery system, known as robo-debt, was ruled unlawful after a legal challenge in the Federal Court.

The government has wound back the scheme, which is also facing a potential class action lawsuit.


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