Statement from Simon Duggan PSM, Secretary of the Department of Employment and Workplace Relations.
In June, I committed that an update would be provided at this time on resumption of paused elements of the Targeted Compliance Framework; the process to compensate people who have experienced detriment as a result of unlawful payment cancellation decisions; and the upcoming consultations on the establishment of a Digital Protections Framework.
The department continues to implement changes arising from reviews of the administration of the Targeted Compliance Framework that apply to participants in Workforce Australia, Inclusive Employment Australia, and Transition to Work who have mutual obligation requirements. This work supports participants to connect to job opportunities and the integrity and fairness of employment services.
Returning the Targeted Compliance Framework to full operation will be undertaken in stages throughout 2026 and early 2027. Paused provisions will only resume once I am satisfied that decision-making processes and IT systems will operate as intended and in line with the law.
Intention to resume paused elements of the Targeted Compliance Framework
I am providing early notice that we intend for decision-making under sections 42AM (decisions to cancel people’s social security participation payments due to not meeting a ‘reconnection requirement’ within 4 weeks) and 42AG(1)(a) (decisions to suspend a person’s social security participation payment due to refusing or failing to accept an offer of suitable employment, including accepting but not commencing a job) of the Social Security (Administration) Act 1999 (Administration Act) to resume on 26 October 2026.
Resuming these decisions on 26 October 2026 is contingent on successful completion of assurance activity and system testing to ensure the necessary IT changes, improved guidance for decision-makers and additional safeguards to ensure decision-making under these provisions align with the law.
The department has a responsibility to ensure the systems we administer are operating within the law as enacted by the Australian Parliament, and this is an important step in returning the TCF system to lawful operation.
Once these provisions resume, people who refuse or fail to accept or commence an offer of suitable employment and do not re-engage within the resolution timeframe may have their payment suspended under section 42AG(1)(a) of the Administration Act. They will be notified of their requirement to reconnect with employment services to avoid payment cancellation under section 42AM of the Administration Act.
People who have their payment suspended for a mutual obligation failure and do not meet their reconnection requirement or supply a valid reason within 4 weeks after being notified of their reconnection requirement, may also have their payment cancelled under section 42AM of the Administration Act.
The department has prepared a participant fact sheet with more information. I will make a further statement confirming the resumption of these provisions in October.
Enhanced human decision making
The remaining provisions that reduce or cancel people’s payments for failures under the Targeted Compliance Framework will remain paused until the necessary safeguards have been put in place. This includes section 42AF(2) (relating to persistent mutual obligation failures), cancellations under section 42AG(1)(b) (relating to work refusal failures), and section 42AH (relating to unemployment failures).
As part of 2025-26 Mid-Year Economic and Fiscal Outlook ‘Assuring the Integrity of Employment Services System’ measure, the Government committed to ensuring human involvement in key parts of the decision-making process, and that discretion is appropriately applied, where required by law.
At this stage we expect these provisions to resume in the first quarter of 2027. I will provide an update on the progress of this work before the end of this year.
Approach to compensation
Also as part of the 2025-26 Mid-Year Economic and Fiscal Outlook ‘Assuring the Integrity of Employment Services System’ measure, the Government announced funding for compensation under the Scheme for Compensation for Detriment caused by Defective Administration (CDDA) for people who experienced detriment as a result of unlawful payment cancellations.
The department is working closely with Services Australia to identify those people who may have been adversely impacted by an incorrect payment cancellation decision.
Once this work is complete, the department will begin inviting people affected by potentially incorrect payment cancellation decisions to submit a claim for compensation. These invitations will be extended progressively over the coming months. This means that not everyone will receive an invitation to claim at the same time.
In developing this compensation process, the department has considered recommendations from the Commonwealth Ombudsman, feedback from stakeholders and lessons learned through the broader work to restore the lawful administration of the Targeted Compliance Framework.
Further information on the upcoming compensation process is available on our compensation page.
Digital Protections Framework
The department expects to shortly release a draft Digital Protections Framework for public consideration.
The draft framework sets out safeguards for the use of technological processes in decision making and service delivery across all Commonwealth employment services programs.
Alongside the Framework, a draft instrument made under Section 40Y of the Social Security (Administration) Act 1999 will also be released. It aims to help people comply with mutual obligations requirements by making it easier to understand their rights and responsibilities under social security law for actively seeking suitable work, complying with their Employment Pathway Plan, and identifying when work may be unsuitable due to health or safety risks.
The draft Digital Protections Framework and Section 40Y Guidelines will be available on our Consultation Hub in August for a period of 4 weeks. Stakeholders are encouraged to provide submissions via the website.
Progress against the Commonwealth Ombudsman’s recommendations
The Commonwealth Ombudsman made several recommendations across two reports examining the Targeted Compliance Framework. The department has been working closely with Services Australia to address the recommendations, including:
- co-developing and implementing a cross-agency protocol with Services Australia which outlines the roles and responsibilities of each entity in the legislative development process, and relevant consultation required
- testing and mapping processes that may affect a person’s social security payment
- maintaining mandatory annual training for all departmental staff on Making Good Decisions—A guide to administrative decision-making. This training includes content about good decision-making under legislation (including delegations), the exercise of discretion, decision-making policy and good practices around making decisions that are valid and enforceable.
- collaborating with Services Australia to review both agencies’ public facing information about complaints and review pathways to provide clear delineation between a review and a complaint, and the responsibilities of the department and those of Services Australia.
The department will continue to implement the Ombudsman’s recommendations, with a focus on establishing and building assurance over the TCF, implementing system repair and improvements, and providing assurance that decision-making under the TCF is operating as intended and in accordance with the legislative framework.