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A person who receives a social security participation payment and repeatedly fails to meet their mutual obligation requirements, is subject to an escalating range of compliance action under the Targeted Compliance Framework.
If a person has twice been assessed (first, by their provider and then secondly, by Services Australia) as able but unwilling to meet their mutual obligation requirements, then financial penalties may apply under the Targeted Compliance Framework.
In most cases, the eighth time a person does not meet their mutual obligation requirements without a reasonable excuse their social security participation payment may be cancelled on the basis that they have committed persistent mutual obligation failures. If this occurs, they will need to re-apply for payment and won’t be paid again for four weeks.
Decisions to cancel a person’s social security participation payment for persistent mutual obligation failures are set out in law and supported by policies.
Decisions occur under the Social Security (Administration) Act 1999 and the Social Security (Administration) (Non-Compliance) Determination 2018 (No. 1). The relevant provision in the Social Security (Administration) Act 1999 is s 42AF(2)(d).
Guidelines for these decisions are in the Social Security Guide (3.11.13).
Decisions have been paused
On 4 July 2024, the Secretary of the Department of Employment and Workplace Relations (the Secretary) paused cancellations of people’s social security participation payments due to persistent mutual obligation failures.
The reason for taking this decision
In July 2024 it became clear that decisions being made to cancel payments due to persistent mutual obligation failures may not have been validly made.
The department is reviewing its processes to ensure that decision making in this area is as robust as possible, and these decisions will remain paused while this work is ongoing. The Department will release a formal statement and directly notify people potentially impacted, of any decision to resume cancellations of payments due to persistent mutual obligations failures.
People impacted
Since 4 July 2024, people who are receiving social security participation payments have not had their payments cancelled for persistently failing to meet their mutual obligation requirements.
We have identified 964 people who had their social security participation payment cancelled 985 times between 8 April 2022 and 4 July 2024 who may have been impacted by past cancellation decisions. We will now review those decisions.
To check if you are impacted and understand the next steps, read ‘information for job seekers’.
What we’re doing
The department is reviewing each decision which cancelled a person’s social security participation payments due to persistent mutual obligation failures between 8 April 2022 and 4 July 2024.
The review is occurring under the Scheme for Compensation for Detriment caused by Defective Administration (CDDA). Information concerning this Scheme is available on the Department of Finance website.
We are contacting impacted people. More detail on the review process is available on this website.
Impacted people don’t need to do anything at this time. If there are questions, they can call the department’s National Customer Service Line or 1800 805 260.
Standard Operating Procedures
Standard Operating Procedures (SOPs) explain our processes. To provide transparency on the remediation process, you can view the SOPs on our website. They outline how we are reviewing certain decisions made to cancel people’s social security payments under s42AF(2)(d).
Read the review summary and criteria
More information
You can call the Department of Employment and Workplace Relations on the National Customer Service Line for more information, to make a complaint or provide feedback on 1800 805 260 or NationalCustomerServiceLine@dewr.gov.au.
Next steps
Our systems have been updated to ensure that people’s social security participation payments are not cancelled due to persistent mutual obligation failures.
We will continue to work to ensure decisions taken are made in a lawful and robust manner.
There is an independent assurance review examining the IT system operating the Targeted Compliance Framework against policy and business rules to ensure the system is operating as intended. There is also a legal review examining whether decisions are being properly made and whether decision making processes are aligned with the law.
If the Secretary has reasonable concerns that the system is not operating in accordance with the law, she will take action to stop those decisions immediately.
Further information is available in the Frequently Asked Questions.