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How many people were impacted?
964 people had their social security participation payment cancelled 985 times between 8 April 2022 and 4 July 2024.
Will these social security participation payment cancellations be reviewed?
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.
The review is under the Scheme for Compensation for Detriment caused by Defective Administration (CDDA).
Why are reviews being undertaken through CDDA?
The Secretary decided CDDA was the most appropriate way to review decisions to enable payments to be made to people.
What is the department doing to ensure decisions are lawful and robust?
- An independent assurance review examined the IT system operating the Targeted Compliance Framework against policy and business rules to ensure the system is operating as intended.
- The review and its recommendations, together with the findings of the Commonwealth Ombudsman’s first report are being acted on as a priority and the urgent actions identified in the reviews are underway.
- There is also a legal review examining whether decisions are being properly made and whether decision making processes are aligned with the law.
This work has identified examples where the system is not operating in alignment with the law and policies or is not operating with the rigour that we expect.
Decisions that affect people's social security payment can have a profound impact on people.
This has led to decisions to pause decision making in some parts of the system.
If we have reasonable concerns that the system is not operating in accordance with the law, we will look to change the processes and systems, so decisions are being made lawfully.
What other decisions under the Social Security (Administration) Act 1999 are paused?
The effect of decisions taken by the department is that all payment reductions and payment cancellations made as a result of mutual obligations failures under the Social Security framework are paused.
These will remain paused until we are certain that the processes and systems support lawful and robust decisions.
On 5 March 2025 the Secretary took a decision to pause cancellations of people’s social security payment and imposition of preclusion periods due to an “unemployment failure” (defined in section 42AE) made under subsection 42AH(1) and (2) the Social Security (Administration) Act 1999 (Administration Act). These remain paused.
On 6 March 2025, the Secretary took a decision to pause reductions to people’s social security payment due to persistent mutual obligation failures made under subsection 42AF(2)(c) of the Administration Act. These remain paused.
On 5 July 2025, the Department paused decisions under 42AG of the Administration Act impacting a person’s social security payment for work refusal failures.
Earlier decisions were taken to pause two further decisions occurring. These are set out below.
- On 4 July 2024, social security participation payment cancellation decisions due to persistent mutual obligation failures made under subsection 42AF(2)(d) of the Administration Act were paused.
- On 24 September 2024, social security participation payment cancellations where a person has not complied with a ‘reconnection requirement’ within 4 weeks after being notified of that requirement under section 42AM were paused.
What are mutual obligation requirements?
Job seekers have mutual obligation requirements when they receive a social security participation payment.
These mutual obligation requirements set out activities that a person does to demonstrate their willingness to actively seek and to accept and undertake suitable work.
Mutual obligations will vary depending on a person’s circumstances.
A failure to meet them can result in a suspension of social security participation payments.
What is a mutual obligation failure?
When a person fails to meet their mutual obligation requirements this is known as a ‘mutual obligation failure’.
Examples of a mutual obligation failure includes when a person fails to:
- enter into a Job Plan
- meet their points requirement
- attend, or be punctual for an appointment, either with their provider, or a third party
- participate in a compulsory activity
- undertake adequate job search efforts
- undertake any other activities outlined in a person’s Job Plan
- act in an appropriate manner during an appointment or while participating in an activity
- attend a job interview, or behaving inappropriately at an interview, and
- act on a job opportunity when they have been referred to one.