Information About Mutual Obligations

Requirements (‘mutual obligations’) for people on Jobseeker and Youth Allowance

Welcome changes should reduce the number of suspensions of unemployment payments

What are mutual obligations and what happens if they’re breached?

Mutual obligations and the CDP program

Requirements (‘mutual obligations’) for people on Jobseeker and Youth Allowance

Since late 2020, ‘mutual obligations’ or activity requirements for unemployed people have gradually resumed, along with payment suspensions and other penalties where requirements are breached.

We know many people are struggling to find employment and that these recently-restored requirements are unfamiliar to many newly unemployed.

There are still choices you can make, including whether to register with an employment services provider if an online service doesn’t work for you. You have the choice of which provider you want to register with, and you can propose training you think will skill you up and help you find employment.

You can complain, or ask to change provider, by contacting the Employment Services National Customer Service Line (NCSL), and advise the provider or call centre if you’re unable to meet new requirements like applying for twenty jobs a month.

Welcome changes should reduce the number of suspensions of unemployment payments

All participants in jobactive, ParentsNext and Disability Employment Services now have several days grace between being unable to meet a compliance requirement before they lose their payment. This gives people, and their employment service providers, time to make contact and fix the problem (for example to agree to reschedule the meeting or to send in their job search.

This is a welcome change. In the first year of the Targeted Compliance System (2018-19), there were over 2 million payment suspensions for breaches of requirements such as attending a meeting with an employment service or not reporting their job applications on time, (even if they were not aware of the meetings, or had a good reason for not meeting the requirements).

The new system will work in this way:

  1. If a person misses a meeting with their provider (and hasn’t phoned in advance to try and reschedule it), or doesn’t report their job searches or other activities on time (using the jobseeker app or by contacting their provider), they will get a message to say it appears they have missed a requirement, and that they need to contact their provider or the Digital Services Contact Centre or their payment will be put on hold in two business days.
  2. If, within two business days, the person makes contact and either provides a ‘valid reason’ or re-engages (e.g. agrees to reschedule a missed appointment), they will be able to avoid a payment suspension.
  3. If a person doesn’t make contact, or if they don’t have a valid reason and can’t meet a re-engagement requirement before the two days, their next payment will be automatically suspended once the two business days have passed.
    They will be notified that their payment has been put on hold. Then things proceed as they do now, and the payment remains on hold until they meet a re-engagement requirement.
  4. Whether or not the payment is suspended, they may accrue a ‘demerit point’ if they didn’t have a ‘valid reason’ for meeting the requirement in the first place. This could lead to reductions in future payments if they accrue additional demerit points.

We anticipate that this change may halve the number of payment suspensions and hope that it reduces anxiety for people who are unemployed and living on income support. In the many cases where people weren’t aware of a requirement, or didn’t understand it, it gives them an opportunity to fix the problem without the risk of missing their next payment.

There are other serious problems with the Targeted Compliance System (see below) but this welcome change should make a difference.

What are mutual obligations and what happens if they’re breached?

People receiving an activity tested income support payment, such as JobSeeker Payment, are generally referred to the Department of Education Skills and Employment (DESE) Online Employment Services (OES) or an employment services provider – usually either a jobactive or Disability Employment Services provider. Some parents on Parenting Payment are required to register with a Parents Next provider.

To continue to receive payments, they must meet activity or ‘mutual obligation’ requirements. These are listed in their Job or Participation Plan which is negotiated and agreed with the provider, or agreed online if in the OES.

Suspensions and penalties:

Under the Targeted Compliance System, if you do not meet the stated requirements (e.g. miss a provider appointment or activity, or don’t report your job searches on time) then:

  • Your next payment may be suspended until you ‘re-engage’ (commit to meet the requirement). Payment is generally then restored, and whether you experience a delay in payment depends how quickly this is done by Centrelink, following advice from the provider.
  • You may also have a demerit point applied, if you did not have ‘reasonable excuse’ for not meeting the requirement. If you have too many demerit points, this can eventually lead to financial penalties including suspension of payments for up to four weeks by Centrelink.
  • If you have a ‘valid reason’ for not meeting a requirement (agreed by your provider) you will no longer need to meet a re-engagement requirement to lift the hold on your payment.
  • Centrelink must interview you and give you an opportunity to explain the reasons for not meeting the requirement before financial penalties are applied. You can then seek a review of any adverse decision by Centrelink to uphold a breach, and appeal to a tribunal.

If you reject a ‘suitable’ job offer, Centrelink/Services Australia may cancel your payment and impose a four week waiting period if you re-apply:

You can seek a review of these decisions by Centrelink and appeal to a tribunal.

ACOSS view We recommend that people do their best to meet the requirements and as far as possible take control of your job search, training and other preparation for paid employment. Follow the rules but try and make the system work for you instead of the other way round.

  1. We oppose the return to the harsh pre-COVID compliance system
    Key aspects of the activity requirements and compliance system are punitive. Far too much emphasis is placed on compliance and enforcement and far too little help for people who find themselves unemployed. Australia’s compliance system for people who are unemployed is one of the toughest among the wealthy nations yet the government spends less than half the average amount on employment assistance – so for example the average employment consultant has to assist around 140 people on their caseload at any one time.

    This means that interviews with employment services are mainly about compliance rather than job referrals, training, wage subsidies, or other things that would actually help people land a job. The government’s Expert Panel on Employment Services came to similar conclusions and proposed changes to give unemployed people more control over their job search and improve services for those who need the most help – people who are unemployed long-term or at risk of it.
  2. The employment services system is not fit for purpose and must be reformed
    With more than a million people on unemployment payments (900,000 of whom are unemployed long-term) and five unemployed and under-employed people for every job vacancy (as of July 2021), our employment service system needs a major overhaul.

    Our proposals to improve employment assistance and prevent a surge of long-term unemployment are here. They include a jobs and training guarantee for people unemployed long-term and local partnershipsof employment service providers, vocational training providers, employers, unions, and community services to adjust employment services and training to local conditions and needs.
  3. People should not be required to participate in Work for the Dole.
    Work for the Dole does not improve people’s employment prospects and is experienced by many people as punitive or a waste of their time. It also wastes public funds that would be better invested in subsidies for work experience in a regular paid job.
  4. All activities and requirements must be COVID-safe.
    We welcome the government’s commitment to ensure that activity requirements – including job referrals and any face-to-face contact with employment service providers – is COVID-safe.

    When the government and service providers make people undertake activities to receive income support, they have a duty of care, especially in the midst of a pandemic.
    Putting this into practice is complicated by the diversity of COVID-related requirements among States and Territories and different workplaces, and in the susceptibility of different people to infection (for example, people with respiratory illness and those caring for older family members).
    The government should work with us, representative organisations, service providers and experts to clarify and communicate the meaning of such terms as ‘suitable work’ and COVID-safe practices.
    Employment services should inform people about State and Territory COVID-related occupational health and safety requirements and to take these properly into account in decision-making (including on activity requirements and penalties).
    The understandable anxiety of many people that they may catch the virus if exposed to regular close contact with the public should be acknowledged and taken into account.
  5. Flexibility around education and training
    We welcome the commitment to provide more flexibility around job search requirements while people are enrolled in education and training. In the past, people have had to abandon or interrupt training when casual employment opportunities came up. This is counterproductive at a time when many people will need to upskill to adjust to a rapidly-changing labour market.– At the least, job search requirements should be eased – in a consistent and predictable way – when people undertake education or training similar to that which is normally approved to meet ‘annual activity requirements’.

Mutual obligations restored in remote CDP program

The remote Community Development Program resumed full servicing from 19 October 2020. 

As of 11 May 2021 CDP participants have been able to undertake Work for the Dole activities on a voluntary basis. Participants in the CDP program will be required to:

  • attend appointments and activities with their CDP provider to meet their activity requirements
  • update their job plan
  • contact their CDP provider if unwell or required to self-isolate and NOT attend face-to-face appointments or activities.

ACOSS welcomes the government’s decision to replace this punitive program with a new remote employment program that emphasises employment opportunities and local management by Aboriginal and Torres Strait Islander communities, rather than enforcement of often pointless ‘activity’ with the threat of financial penalties. It’s vital that the government consult widely, especially with affected communities, in designing the new scheme.

Details here:

ACOSS Comment The Community Development Program (CDP) is the ‘work for the dole’ program in remote areas. Most CDP participants come from Aboriginal and Torres Strait Islander communities.
CDP participants with activity requirements were expected to complete up to 20 hours per week of work-like activities in return for income support payments.
The post COVID restoration of activity requirements in CDP was of deep concern to ACOSS, given that financial penalties were applied much more frequently to people in this program than in mainstream employment programs such as jobactive.
ACOSS supports the call from the Fair Work Strong Communities Alliance to replace CDP with a ‘Fair Work Strong Communities’ program that provides paid work, training and employment preparation, and ensures that people in remote communities retain the same entitlements to income support as in the rest of the country.