The Secretary of the Department of Employment and Workplace Relations has made a statement to outline recent decisions to pause social security payment reductions and cancellations in the employment services system, while legal and IT reviews into the system are ongoing.
While this is being resolved, people who receive social security payments will not have their payments:
- reduced for persistently failing to meet their mutual obligations requirements (as applied under 42AF(2)(c);
- cancelled for failing to meet their mutual obligations requirements (as applied under 42AF(2)(d);
- cancelled or have a 4-week time preclusion period applied (not being able to apply for or receive a social security payment) for an ‘unemployment failure’ (as defined in 42AE and applied under 42AH); and
- cancelled where a person has not complied with a ‘reconnection requirement’ within 4 weeks after being notified of that requirement (as applied under 42AM).
Payments may still be suspended when people fail to comply with their mutual obligations, however, those payments will be reinstated when people re-engage.
Any decisions to reinstate reductions or cancellations will be communicated clearly and well ahead of those penalties being re-activated.
The Secretary’s statement is below.
Assuring the integrity of the Targeted Compliance Framework
Under social security law, job seekers have ‘mutual obligation’ requirements which set out activities that a person is required to do to demonstrate their willingness to actively seek and to accept and undertake suitable paid work. Mutual obligations will vary depending on a person’s circumstances. A failure to meet them can result in a suspension or reduction of social security payment, or ultimately a cancellation of a person’s social security payment. This system is established by the Social Security (Administration) Act 1999 (Administration Act).
On 26 February 2025, I made an opening statement in Additional Estimates to the Senate Education and Employment References Committee (Senate Committee). This statement outlined my concerns about the administration of the compliance framework that applies to people required to meet mutual obligations. This statement was on our website and can be viewed here. Secretary's opening statement.
Update from Secretary Natalie James issued 21 March 2025
Review progress
As outlined in my statement to the Senate Committee, reviews are underway to ensure that decisions taken are made in a lawful and robust manner.
- An independent assurance review is examining the IT system operating the Targeted Compliance Framework against policy and business rules to ensure the system is operating as intended.
- A legal review is also examining whether decisions are being properly made and whether decision making processes are aligned with the law.
I have taken decisions to pause some parts of the system. The work underway by my department has identified examples where the system is not operating in alignment with the law and policies, or is not operating with the rigour that I expect.
The decisions I have taken
On 5 March 2025, I 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) of the Administration Act. These remain paused.
On 6 March 2025, I took a decision to pause reductions of people’s social security payment due to persistent mutual obligation failures made under subsection 42AF(2)(c) of the Administration Act. These remain paused.
These decisions follow an earlier decision I took to pause cancellation of people’s social security payment due to persistent mutual obligation failures made under subsection 42AF(2)(d) of the Administration Act. These were paused on 4 July 2024. These remain paused. A process to review 42AF(2)(d) decisions (decisions made between 8 April 2022 and 4 July 2024) will shortly commence – further details are available here.
The Department of Employment and Workplace Relations has also paused cancellations of people’s social security payment where a person has not complied with a ‘reconnection requirement’ within 4 weeks after being notified of that requirement under section 42AM. These decisions were paused on 24 September 2024. They remain paused.
Basis for taking these decisions
My role to administer this system is set out in the Administration Act. I am also required to act in accordance with my responsibilities under the Public Governance, Performance and Accountability Act 2013 and Public Service Act 1999.
If I have reasonable concerns that the system may not be operating in accordance with the law, I have a duty to urgently address this.
The implementation of mutual obligations profoundly impacts on people’s experience of the employment services system and critically, their payment.
I have taken action where I have received advice that decisions impacting on people’s payments are not being made in alignment with the legal framework, or where I consider that decision making processes are not as robust as they must be in this area.
In taking these decisions, I have considered my legal duty to administer the law and take decisions as intended by the law. I also have considered my current level of confidence in how the system, and decision-making processes within the system, is operating and the impact of these decisions on people. Of critical importance is that people subject to these frameworks are often our most vulnerable, including those who are homeless, First Nations people and people with a disability.
At all times, my department’s highest priority is to ensure people’s social security payments are not affected except in accordance with the law.
Next steps
My department and I will implement and communicate any decisions that are taken as quickly as possible. We will work with people who are in this system to help them understand the decisions and their rights.
I am continuing to take advice from those conducting the reviews. If I am not confident decisions are lawful and robust, I will take action to stop those decisions immediately.