This snapshot focuses on payment suspensions and cancellations. It provides a profile of who gets these and what the trends are.
This snapshot uses data for the period May and November 2021*, and some data from January 2022 that was published at Senate Estimates.
What are Payment suspensions
A payment suspension is a temporary withholding of an income support payment until a mutual obligation condition is met (see Mutual obligation Snapshot – the Targeted Compliance Framework). The first stage of receiving a payment suspension is an SMS or a message on the jobseeker dashboard that tells people they have not met a mutual obligation requirement. This warning gives people 2 days to rectify the issue before their payment is put ‘on hold’ – the term that is used for payment suspensions. About 30 per cent of potential payment suspensions are resolved this way.
The number of suspensions in May 2021 returned to the usual rate of around 200,000 per month when most places exited lockdowns. The figure is consistent with the data on suspensions that was available before the pandemic and in data that is now available for the period after lock downs.
Payment suspensions by reason
Payment cancellations occur when people have not met a ‘reengagement requirement’ within 28 days. They result in people having their payment cancelled.
The following chart shows how many payments have been cancelled when requirements to reengage have not been met. As with payment suspensions it shows there are a high number of people having their payment cancelled for not meeting job search requirements and/or attending appointments with providers.
ACOSS view on payment suspensions and cancellations
ACOSS is deeply concerned about the high number of payment suspensions, which cause anxiety and stress even when the actual payments are not affected. This was noted in a survey data we collected recently in which over 30% of respondents agreed that payment suspensions had caused them high levels of stress and anxiety, alongside other negative effects such as not being able to pay rent on time.
We are also concerned that payment suspensions are automatically applied 2 days after the initial SMS notification unless the provider or Centrelink intervene.
One of main the reasons for the large number of payment suspensions and cancellations is that the number of job searches is too high for most people (such as 20 job applications per month).There are too many payment cancellations because job searches have not been completed. Another reason is poor communication between providers and participants when appointments are rescheduled. The following chart shows how people have felt that suspensions have been applied unfairly.
ACOSS is concerned that penalties affect some groups of people more than others, such as people who are Indigenous, homeless or find it hard to get paid work because of other disadvantages. This is reflected in data that shows these groups are disproportionately affected by all kinds of financial penalties. There is little data available on what happens to people affected by a payment cancellation.
Data provided to Senate Estimates committee in 2019 showed that payment suspensions last for an average of 4.1 days EMSQ19-000012. As with other payment penalties, they last longer for people who are homeless, or have been identified as an ex-offender.
For much of 2021, Mutual Obligations were suspended in large parts of Australia. During those periods there were not as many payment suspensions or cancellations as there usually are.