CENTRELINK has issued letters demanding 60,000 single parents cut up their pension cards as the federal government switches them to Newstart dole payments, in changes aimed at saving more than $700 million.

Single parents already reeling from cuts in payments of up to $130 a fortnight from the switch are warned in the letter they will be subjected to ''electronic checks'' if they continue to use their card to receive discounts for vital services including power bills, car registrations and medicines.

You got mail ... 60,000 single parents have received letters from Centrelink demanding they cut up their pension cards.

And while the federal government has insisted pension concessions will survive the change from the Single Parenting Payment to Newstart, the letter gives single parents no guidance about how they will regain the valuable discount card.

In signs of a wide-reaching bureaucratic bungle, The Sun-Herald has learnt of examples in which single parents have gone to Centrelink to be told their card should be handed over, and they are no longer eligible for power company discounts.