Compliance with mutual obligations requirements
Some allowances and payments are conditional on recipients complying with job search obligations (‘mutual obligations’). These payments are known as ‘participation payments’ and generally include the JobSeeker Payment, but also Youth Allowance, the Parenting Payment, and the Special Benefit. A failure to comply with those mutual obligations can have consequences under the Targeted Compliance Framework, which applies to most recipients of participation payments. Different consequences will be imposed on recipients who are participating in Community Development Programs (‘declared program participants’).
The Social Security Guide provides further detail on mutual obligations: www.guides.dss.gov.au/social-security-guide/3/11.
Mutual obligations include things such as:
agreeing to a Job Plan or Participation Plan;
meeting the requirements of the plan;
completing and reporting on job searches;
attending appointments with employment service providers if recipients have one;
attending job interviews as arranged;
accepting any offer of suitable paid work; and
not leaving a job, training course or program without a valid reason.
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The consequences for failing to comply with mutual obligations requirements are set out in division 3AA of Part 3 of the SSA Act (s 42AA). These provisions apply to all recipients of participation payments who are required to enter Employment Pathway Plans and are not declared program recipients.
The consequences depend on the type of failure. There are three types:
‘mutual obligation’ failures (SSA Act s 42AC);
‘work refusal’ failures (SSA Act s 42AD); and
‘unemployment’ failures (SSA Act s 42AE).
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A person commits a mutual obligation failure if they, without a reasonable excuse:
fail to do something that they were notified about in writing by Centrelink (e.g. attending an appointment with Centrelink, providing information, responding to a questionnaire, or attending a medical examination);
fail to enter an Employment Pathway Plan;
fail to attend an appointment or be punctual for an appointment;
fail to comply with the terms of the Employment Pathway Plan, including attending and participating in activities specified, and undertaking adequate job search efforts;
behave in an inappropriate manner during an appointment or while participating in an activity required by Centrelink or specified in the Employment Pathway Plan;
intentionally behave in a manner that is reasonably foreseeable to result in an offer of paid work not being made;
fail to attend a job interview or to act on a job opportunity.
A mutual obligation failure may result in the suspension of the participation payment for a period, or the payment made at a reduced rate. A reconnection requirement may be imposed; this allows the person to fix the failure. Payments may be cancelled if there are persistent mutual obligation failures or if the person does not comply with the reconnection requirement within four weeks of being notified of it.
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A person commits a work refusal failure if they refuse or fail to accept suitable paid work without a reasonable excuse. A principal carer of at least one child, or a person with partial capacity to work, who refuses work that is more than 15 hours per week does not commit a work refusal failure. A person has partial capacity to work if they are unable to work 30 hours per week independently of a program of support (SS Act s 16B).
A work refusal failure may result in the suspension of the participation payment and a reconnection requirement may be imposed. The payment may be cancelled if the person does not comply with the reconnection requirement within four weeks of being notified of the requirement.
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A person commits an unemployment failure if they become unemployed as a result of their voluntary act or misconduct during employment.
A participation payment may be cancelled because of the unemployment failure.
A person who is not receiving a participation payment and is in the process of making a claim can commit an unemployment failure and may be precluded from receiving the payment for four weeks, or six weeks if in the previous six months relocation assistance was paid to the person.
If a person’s participation payment is cancelled for any of the failures described above, a post-cancellation non-payment period of four or six weeks will be imposed; this means that if a new claim is paid, the payments will not be made for at least four weeks.
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Breaches in allowance and payment terms are called ‘participation failures’ and are set out in division 3A of Part 3 the SSA Act (s 42A). The regime applies to payments with activity test requirements (generally the JobSeeker Payment, but also Youth Allowance, the Parenting Payment and the Special Benefit) are set out in division 3A of Part 3 of the SSA Act (s 42A). The regime applies to payments with activity test requirements (generally the JobSeeker Payment, but also Youth Allowance, the Parenting Payment, and the Special Benefit).
The consequences depend on the type of failure. There are four types:
‘no show, no pay’ failures (SSA Act ss 42C–42D);
connection failures (SSA Act ss 42E–42L);
reconnection failures (SSA Act ss 42E–42L); and
serious failures (SSA Act ss 42M–42R).
Centrelink can impose a financial penalty for all failures except connection failures. The penalty is determined based on the type and frequency of the failure(s).
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A person commits a ‘no show, no pay’ failure if they:
fail to participate in a compulsory activity required by a job plan; or
fail to comply with a serious failure requirement; or
engage in misconduct during an activity; or
fail to attend a job interview; or
during a job interview, deliberately behave in a way that results in them not receiving a job offer.
It is only possible to commit one ‘no show, no pay’ failure per day. The penalty for a failure is the loss of one-tenth of the person’s fortnightly payment. A failure only applies if the person has no reasonable excuse (unless the person commits misconduct), although rules as to what constitutes a ‘reasonable excuse’ have been tightened (SSA Act s 42UA).
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A person commits a connection failure if they (without a reasonable excuse):
fail to attend a compulsory Centrelink or Employment Pathway Plan appointment; or
fail to enter into an Employment Pathway Plan; o
fail to meet a job search requirement or comply with an Employment Pathway Plan requirement; or
fail to keep or return a job seeker diary.
Two or more connection failures can be committed in a single day. If a connection failure is committed, the person may be required to comply with a reconnection requirement (essentially an opportunity to fix the failure). There is no financial penalty for a connection failure.
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A person commits a reconnection failure if they fail to comply with a reconnection requirement without a reasonable excuse. The penalty for a reconnection failure is the loss of one-tenth of the person’s fortnightly payment for each business day until the failure is fixed. Further reconnection requirements may be imposed even if the person had a reasonable excuse for committing an earlier reconnection failure.
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A serious failure is committed if a person, without a reasonable excuse, persistently fails to comply with their obligations in relation to a participation payment or refuses to accept an offer of suitable paid work. An eight-week non-payment period applies if a serious failure is committed. Centrelink may require a person who has committed a serious failure to comply with a serious failure requirement. If the person begins to comply, Centrelink may end the non-payment period. If Centrelink determines that a person would be in severe financial hardship if required to serve the eight-week non-payment period, the non-payment period can be ended early. If a person requests a review of a decision to impose a non-payment period because of a serious failure, payment pending a review is available.
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Before deciding that a person has committed a serious failure due to persistent non-compliance, Centrelink must conduct a Comprehensive Compliance Assessment (CCA). The CCA aims to ascertain:
why the person has committed failures or failed to meet Centrelink requirements;
whether the person has employment barriers; and
whether the participation requirements are appropriate (SSA Act s 42NA).
Three failures in any six-month period automatically trigger a CCA. At a CCA, a Centrelink officer considers, among other things, whether the person would benefit from additional assistance. Failure to attend a CCA may result in a connection failure.
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If a person is unemployed due to misconduct, or an unreasonable voluntary act, generally an eight-week non-payment period applies. A 12-week non-payment period will be imposed if relocation assistance was provided to the person six months prior to becoming unemployed. This can be ended early if the person is in severe financial hardship and is in a specified class of persons (e.g. has an impairment, is homeless or has a dependent child). If a person requests a review of an unemployment non-payment period, payment pending a review is available.
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Centrelink may impose a deferment period on a seasonal worker who is ‘between jobs’ (SS Act s 633). The length of the period depends on how long the person worked and how much they earned (see SA Act s 16A).
A deferment of 26 weeks may be imposed if a person reduces their own employment prospects by moving to an area with higher unemployment rates without a sufficient reason. Sufficient reasons include:
the person moved to join a family member;
the person moved to treat or alleviate a physical disease or illness suffered by the person or by a family member;
the person moved due to an ‘extreme circumstance’ (e.g. domestic violence) (SA Act s 634(3)).
Compliance with mutual obligations requirements
Chapter: 5.1: Dealing with social security
Contributors all from Victorian Legal Aid: James Hogan, Deputy Managing Lawyer; Julie Riva, Associate Public Defender (Civil Justice); Kate Brown, Lawyer; Patrick Noyelle, Senior Lawyer; and Tom Durkin, Lawyer
Current as of: 14 October 2024
Law Handbook Page: 284
Next Section: Supplementary payments
