220.127.116.11 Description of zones
Description of zones
Administratively, the targeted compliance framework consists of 3 zones: the Green Zone, the Warning Zone and the Penalty Zone, described in more detail below. These zones, as well as their associated demerits and capability interviews/assessments, are not legislative concepts so do not appear in the legislation. Rather, they are the administrative mechanisms by which a job seeker's compliance history can be monitored, to allow them to be determined to have persistently committed mutual obligation failures, which is a legislative requirement for the application of any financial penalty for a mutual obligation failure.
All job seekers will begin in the Green Zone and will be subject to payment suspension for any failure to meet a mutual obligation requirement. No financial penalties will apply to the job seeker in this zone, except for work refusal or unemployment failures (18.104.22.168).
If a job seeker commits a mutual obligation failure without a valid reason, they will accrue a demerit (22.214.171.124), in addition to having their payment suspended, and will then enter the Warning Zone. In this phase, each failure to meet a requirement will result in a payment suspension and accrual of a demerit if there is no valid reason. No financial penalties will apply to the job seeker in this phase, except for work refusal or unemployment failures (126.96.36.199). A demerit will be added to the job seeker's record (but will not be confirmed until the provider has determined that a valid reason does not exist) if they fail to record their attendance at an appointment or activity, or if their provider records that they have failed to do so. Job seekers will remain in the Warning Zone until they accrue 5 demerits over 6 months and enter the Penalty Zone, or their demerits are reset to zero and they return to the Green Zone.
If a job seeker accrues 3 demerits within 6 months, their provider will conduct a capability interview (188.8.131.52), to try to determine the causes of non-compliance and determine if the job seeker's requirements are appropriate. If a job seeker's requirements need to be adjusted, their demerits are reset to zero and they will return to the Green Zone.
Where no adjustment is made because the job seeker's requirements are appropriate, and the job seeker goes on to accrue 2 further demerits, resulting in 5 within 6 months, Services Australia will conduct a capability assessment (184.108.40.206). If the job seeker is found to have undisclosed issues affecting their capability to meet their requirements, or if the requirements are otherwise inappropriate for the job seeker, they will return to the Green Zone with zero demerits. Providers will be required to adjust the job seeker's Job Plan to take into consideration new information about the job seeker's circumstances. Where a job seeker's requirements are appropriate for their circumstances, they will enter the Penalty Zone.
Job seekers who fail to attend a job interview, fail to act on a job opportunity, or act in a manner such that an offer of employment would not be offered to them will immediately undergo the next capability interview or assessment they are due for regardless of the number of demerits they have.
If a job seeker accrues 5 demerits within 6 active months (220.127.116.11) and the capability interview and assessment (18.104.22.168) find that the job seeker's requirements are appropriate, they will enter the Penalty Zone.
In the Penalty Zone, job seekers will incur strong financial penalties for each failure to meet a mutual obligation requirement. The legislation provides that penalties should apply for mutual obligation failures in cases where the job seeker has persistently committed mutual obligation failures. If a job seeker has incurred sufficient demerits to enter the Penalty Zone and their requirements are appropriate, then they can be considered to have persistently committed mutual obligation failures.
A job seeker can still avoid penalties in the Penalty Zone if they meet all their requirements. Those who remain fully compliant for 3 active months will return to the Green Zone, with their demerits reset to zero.
If a job seeker continues to commit mutual obligation failures in the Penalty Zone, they will face increasing penalties, beginning with loss of half their fortnightly payment for their first failure without reasonable excuse. They will lose all of their fortnightly payment for their second failure. For their third failure, job seekers will be subject to payment cancellation for 4 weeks. See 22.214.171.124.