Mutual obligation Snapshot – the Targeted Compliance Framework

This snapshot explains what the Targeted Compliance Framework is and how it works. It also includes some data on demerit points and payment penalties.

Employment service users are required to interact with a ‘self-service’ job seeker dashboard on an app or on MyGov, through which they are expected to monitor their upcoming tasks, goals and appointments and to report job searches or attendance at activities.

If they do not meet any of the requirements that have been set in their job plan, the Targeted Compliance Framework involves the accrual of demerit points which lead to payment penalties after 6 demerit points have accrued.

Under the Targeted Compliance Framework, unemployment payments are suspended automatically when participation in or attendance at an appointment or activity in the job plan has not been reported.
The suspension is lifted when job seekers meet the requirement for re-engagement which might be attending an appointment, activity or completing a task such as job search targets.

The TCF zones

Demerit points accumulate for failing to meet requirements, and after five demerit points, the employment service provider undertakes an assessment of capability to comply with the requirements in the job plan. After 6 demerit points, Services Australia undertake a review called a Capability Assessment to see if there are reasons people have not been able to meet the requirements in the job plan. They also decide if the job seeker goes into the “Penalty Zone” when payment penalties begin.

The diagram shows how the compliance indicator on the dashboard looks when demerit points have begun to accrue and job seekers enter the “Warning Zone” and then the graphic that appears when they have entered the “Penalty zone”.
If people maintain compliance for three months in the “Warning Zone”, demerit points are reset to zero. Demerits are reset to zero after six months in the “Penalty Zone”.

Payment penalties in the TCF

Payment penalties for other breaches escalate in duration from 1, 2 to 4 weeks without payment once people are in the ‘penalty zone’. Payment penalties for failing to attend a job interview or for not staying in a job result in a payment cancellation of 4 weeks irrespective of the number of demerit points that have accrued.

Because the TCF was suspended in 2021 there were fewer payment penalties than in 2019. We can assume that now the TCF is back in operation that numbers of payment penalties will climb back to 2019 levels.

Reasonable excuse and prior notice

In order to avoid a payment suspension and/or demerit point, job seekers are required to provide prior notice that are unable to meet a requirement.  That means they are required to contact their Provider before a requirement is due to start (e.g. before their activity begins) or before a requirement is due to be completed, and explain what is preventing
them from meeting their requirements.

The TCF guidelines say that when assessing whether the job seeker has given an Acceptable Reason,
the Provider needs to consider whether the given reason would be accepted by a member of the public or had been given by an employee and take into account what they already know about the job seeker and
their personal circumstances. This could include knowledge of family or caring responsibilities, transportation limitations or ongoing medical issues.

See more information here about how a reasonable excuse is defined in Social Security Law.

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.

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

Service Australia 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, Services Australia may cancel your payment and impose a four-week waiting period if you re-apply.

ACOSS views on the Targeted Compliance Framework

The TCF is problematic because of automatic payment suspensions (see our snapshot on payment suspensions). When the TCF was introduced it was not clear how widespread these would be.

There have been changes to the language on payment suspensions (the use of the term placed on hold) and a delay to when they take effect (from immediately until two days later).

ACOSS believes there is a need to remove payment suspensions, and to ensure that all decisions made about payments should be made by Government officials rather than digital systems or employment service providers.

More resources:

Government fact sheets