Payment cancellation decisions for persistent mutual obligation failures

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 (TCF).

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 TCF.

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 4 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.

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.

The department has 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.

What we’re doing

The department has reviewed 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.

Compensation has been paid under the Compensation for Detriment Caused by Defective Administration (CDDA) Scheme to people who were found to suffer a detriment on initial review. As of 2 October 2025, more than $870,000 has been repaid to more than 600 individuals.

The department has contacted the remaining affected individuals so they can provide further information to support consideration for compensation. The department has considered additional information provided to date and made decisions under the CDDA Scheme.

The department will continue to review this additional information and make further compensation decisions as appropriate.

The review process

The review had 2 stages.

Stage 1: Preliminary assessment

The department reviewed existing records which outlined the original decision.

These records could be held by:

• the department;
• Workforce Australia employment providers; or
• Services Australia.

If the original decision didn’t take all relevant information available in those records at the time into account, people were repaid for the loss of their social security participation payment.

Stage 2: contact for additional information

We contacted people if:

• we didn’t have enough information in our records to review the original decision; or
• our preliminary assessment was that the decision to cancel their payment was appropriate.

A chance to provide more information was given, which included whether a person:

• had difficulty in accessing transportation
• had a medical condition or illness or were caring for an unwell person
• could not contact your employment service provider or Services Australia
• was experiencing violence/family violence
• did not have stable housing; or
• was experiencing other personal difficulties that may have affected your ability to meet requirements.

If you give more information, the decision maker will take that into account to see if you should receive a payment.

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 reviewed certain decisions made to cancel people’s social security payments under s42AF(2)(d).

Read the review summary and criteria

Meeting your mutual obligations

If you are currently receiving social security participation payment benefits, you still need to meet those activities which are in your Job Plan.

Talk to your employment services provider about what those activities are.

If you don’t meet your mutual obligations without a reasonable excuse, your social security participation payment may still be suspended.

If your social security participation payment is suspended, reach out to one of the following contacts to discuss having your suspension lifted:

• Your employment services provider if you have one, or
• The Digital Services Contact Centre on 1800 314 677

If you have a question or a complaint

Please call the department’s National Customer Service Line for more information on 1800 805 260.

If you do not agree with the outcome of the review

You can ask for the decision to be reviewed again.

You can seek assistance from the Commonwealth Ombudsman at Office of the Commonwealth Ombudsman using the online complaints form.

If you are unable to complete the online form, you can call them on 1300 362 072.

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.

Freedom of Information

The Freedom of Information Act 1982 (FOI Act) gives every person the right of access to documents held by Australian Government agencies, unless the documents are exempt from disclosure.
For more information, go to Freedom of Information (FOI) - Department of Employment and Workplace Relations