3.1.13.40 Serious Failures & Penalties

Introduction

This topic concerns information on serious failures and penalties under the compliance arrangements set out in SS(Admin) Act Part 3 Division 3A. These arrangements only apply to job seekers on participation payments who are declared program participants (i.e. CDP participants) under the Social Security (Declared Program Participant) Determination 2018.

Serious failures are:

  • refusing or failing to accept an offer of suitable employment, and
  • persistent non-compliance.

Refusing or failing to accept a suitable job offer

A job seeker who refuses or fails to commence a suitable job without a reasonable excuse may have an 8-week non-payment penalty imposed. Before imposing an 8-week non-payment penalty for refusing an offer of a suitable job the decision maker must consider carefully whether or not the work was suitable and, if it was suitable, if the job seeker had a reasonable excuse for refusing it (see 1.1.U.55 for the definition of unsuitable work).

Persistent non-compliance

DHS must undertake a CCA before determining if a job seeker has persistently failed to comply with their mutual obligation requirements.

A number of matters, set out in the Social Security (Administration) (Persistent Non-compliance) (Employment) Determination 2015 (No. 1), assist decision makers in deciding whether a job seeker has been persistently non-compliant. However, decision makers should consider all relevant information, including matters not mentioned in the determination.

The decision maker cannot decide that a job seeker has been persistently non-compliant unless:

  • they have taken into account the findings of the job seeker's most recent CCA,
  • the job seeker has incurred 3 or more connection, non-attendance, reconnection or NSNP failures in the 6 months before the CCA or since the end of the last serious failure period applied due to persistent non-compliance, whichever is the later,
  • they have taken into account the failures referred to above and considered whether they demonstrate a pattern of non-compliance, rather than a single instance of non-compliance, and
  • they have considered the extent to which the job seeker has otherwise complied with their mutual obligation requirements during the 6 months preceding their last CCA or, if shorter, the period since the end of their last serious failure period for persistent non-compliance.

The term 'persistent' has its ordinary meaning. The non-compliance does not need to be total - a job seeker may be persistently non-compliant over a period despite complying with some of their mutual obligation requirements over that period. Equally, if the job seeker's record indicates that they are genuine in their efforts to find work, despite instances of non-compliance, the decision maker may find that they have not been persistently non-compliant. It is particularly important to consider the job seeker's overall compliance record if their CCA has been automatically triggered by failures that could be considered a single instance of non-compliance.

Example: Three NSNP failures incurred on successive days.

In considering if a job seeker's non-compliance has been persistent, DHS can only take into account failures within the job seeker's control that were committed intentionally, recklessly or negligently.

Serious failure penalties

The consequence of a serious failure is the application of a serious failure period, which stops the job seeker's participation payment for a period of 8 weeks. All add-on payments that rely on payment of the participation payment stop because the job seeker is not payable during this period. FTB (and RA where it is paid with the FTB) is not affected.

The serious failure period commences on the first day of the first instalment period that begins after the Secretary has made the determination to apply the serious failure.

Ending a serious failure period early by undertaking a serious failure requirement

A job seeker can avert or end a serious failure period early by undertaking a serious failure requirement, known as a compliance activity. The serious failure period ends the day before the job seeker commences a compliance activity. A job seeker 'commences' a compliance activity as soon as they enter into a Job Plan with their provider that includes a compliance activity requirement. However, their allowance will become conditionally payable from the time the job seeker advises DHS that they want to undertake a compliance activity, to the date they attend a booked appointment with their provider and accept/sign a Job Plan that contains a compliance activity requirement. While income support is conditionally payable during that time, DHS can reinstate the serious failure period if the job seeker then fails to attend the appointment with their provider or fails to enter into a Job Plan that includes the compliance activity requirement. A job seeker can end a serious failure period at any time.

For example, after serving part of a serious failure period a person may approach DHS and agree to undertake a compliance activity for the remainder of the period.

Act reference: SS(Admin)Act section 42M Serious failure for persistent non-compliance, section 42N Serious failure for refusing or failing to accept an offer of suitable employment, section 42P Consequences of serious failure

Last reviewed: 2 July 2018