The Guides to Social Policy Law is a collection of publications designed to assist decision makers administering social policy law. The information contained in this publication is intended only as a guide to relevant legislation/policy. The information is accurate as at the date listed at the bottom of the page, but may be subject to change. To discuss individual circumstances please contact Services Australia. Types of failures

Mutual obligation failures

Mutual obligation requirements are designed to ensure that people receiving income support payments for the unemployed are actively looking for work and/or participating in activities that will help them into employment, unless Services Australia or a ParentsNext provider has granted them an exemption from these requirements.

If they are subject to the targeted compliance framework, a person commits a mutual obligation failure:

  • when they fail to

    • enter into a Job Plan (or participation plan for ParentsNext participants)
    • meet their points requirement
    • attend, or be punctual for an appointment, either with their provider, or a third party
    • participate in a compulsory activity
    • undertake adequate job search efforts
    • undertake any other activities outlined in the job seeker's Job Plan or participation plan
    • act in an appropriate manner during an appointment or while participating in an activity
    • attend a job interview, or behaving inappropriately at an interview, and
    • act on a job opportunity when they have been referred to one, or
  • if they
    • intentionally act in a manner and it is reasonably foreseeable that acting in that manner could result in an offer of employment not being made to that person.

Not all people subject to the targeted compliance framework will be subject to the full range of mutual obligation requirements listed here. For example, ParentsNext participants will not be compelled to undertake job search.

Nothing in social security law prevents a job seeker from being taken to have committed a mutual obligation failure for not meeting a requirement scheduled on a weekend.

Generally, job seekers are required to record that they have complied with their mutual obligation requirements.

A person must be receiving a participation payment in order to commit a mutual obligation failure.

Depending on the Zone a person is in, they may face financial penalties for committing mutual obligation failures as well as having their payment suspended.

Some failures, such as not undertaking sufficient tasks to meet a points requirement, non-attendance at an appointment, activity or job interview, or submitting an insufficient number of job searches are factual. Other failures however, such as misconduct at an activity or appointment, or inadequate job search, may require the exercise of judgement by a decision maker. Whether or not an exercise of judgment is required, a mutual obligation failure will generally result in payment suspension until the job seeker complies with the requirement. However, a mutual obligation failure will only result in a demerit if the job seeker had no valid reason for their failure and will only result in a penalty if the job seeker is in the Penalty Zone and Services Australia determines that the job seeker did not have a reasonable excuse for committing the failure (

Misconduct at an activity or appointment

If a job seeker attends an activity or appointment but behaves inappropriately, this may constitute a mutual obligation failure. Behaving inappropriately means failing to behave according to commonly expected standards. Inappropriate behaviour could include not following reasonable instructions, being uncooperative, aggressive, violent, offensive or disruptive, harassing other participants or behaving in a dangerous manner. It may also include being intoxicated or consuming intoxicants whilst in the activity or appointment. In general, inappropriate behaviour is serious in nature, deliberate and within the job seeker's control.

If the purpose of any appointment with an employment services provider cannot be achieved due to the behaviour of the job seeker at that appointment then they can be taken to have committed a mutual obligation failure, even though the job seeker has attended the appointment.


Attendance at the premises of a provider or telephoning the provider for an appointment does not count as attendance at the appointment if the job seeker arrives or calls too late for the appointment to be conducted. It also does not count as attendance if the provider, for good reason, decides not to conduct the appointment.

Example: Sarah arrives on time for an appointment at the premises of her employment services provider wearing no shoes and the receptionist refuses to admit her for reasons of workplace health and safety. As Sarah was previously told of the requirement to wear shoes, Sarah cannot be considered to have attended the appointment.

Inadequate job search

A job seeker's job search is inadequate if they do not undertake the number of job searches necessary to meet their requirements specified in their Job Plan. It will also be inadequate, despite the job seeker having submitted a sufficient number of job searches, if they submit inappropriate or incomplete applications or only apply for positions for which they are unqualified or unsuited. A job seeker's job search may also be inadequate if the job seeker only applies for work in a specific field, despite having been advised that they must apply for work in a variety of fields.

Example: John uses a computer application to send out multiple proforma job applications and makes no effort to tailor his applications to each individual job or employer. While the use of proforma applications may be appropriate in some circumstances, after investigating John's job search efforts, his employment services provider thinks that he is sending out such applications just to meet his monthly job search requirement with no genuine intention of gaining employment.

In determining whether a person has committed a mutual obligation failure due to inadequate job search, the decision maker must consider the matters set out in the Social Security (Administration) (Job Search Efforts) Determination 2018.

Failure to behave appropriately at a job interview

If a job seeker attends a job interview with a prospective employer but deliberately behaves in a manner that could be expected to result in the job seeker not receiving a job offer, this constitutes a mutual obligation failure. Failing to behave appropriately at a job interview could include:

  • dressing in a way that is clearly inappropriate for the interview
  • displaying an obvious lack of interest in the job on offer
  • using inappropriate language, or
  • overplaying the impacts of real or non-apparent injuries or illnesses.

Circumstances not within the job seeker's control such as excessive nervousness, poor language or verbal skills or a limited wardrobe cannot be considered as deliberate misbehaviour. It must also have been reasonably foreseeable that the behaviour would result in an offer of employment not being made.

Act reference: SS(Admin)Act section 42AC Mutual obligation failures

Work refusal failures

A job seeker commits a work refusal failure if they fail to accept an offer of suitable employment ( without a reasonable excuse, which includes accepting but not commencing a job. Generally, job seekers are required to accept any offer of suitable work, even if is not work in their preferred field. A job seeker who commits a work refusal failure is generally subject to payment cancellation and a 4-week non-payment period (, regardless of whether they are in the Green, Warning or Penalty Zone. A 4-week non-payment period is immediately applicable for work refusal failure (unlike mutual obligation failures, where only job seekers who have persistently committed failures are subject to penalties) because work refusal failures give reason to doubt that the job seeker is genuine in wanting to find work and are therefore more serious than other failures.

Job seekers who are principal carer parents or who have a partial capacity to work do not commit a work refusal failure if the work that they do not accept or commence is more than 15 hours per week.

Unemployment failures

A person commits an unemployment failure if they become unemployed (whether or not they are receiving payment) because of a voluntary act, unless the act was reasonable, or due to misconduct as an employee. A person who is a principal carer parent or has a partial capacity to work does not commit an unemployment failure if the work that they leave or are dismissed from is more than 15 hours per week.

The rationale for precluding people from payment if they are voluntarily unemployed is that the community expects that a person who chooses to leave employment without a good reason should not expect to receive immediate financial assistance from the community. However, the preclusion period does not apply if the voluntary act was reasonable or if the work was unsuitable for the person.

In determining whether the work was unsuitable (, the delegate must consider the factors listed in the legislation. In deciding whether the voluntary act was reasonable, the delegate should consider, on a case-by-case basis, all relevant issues presented, including any claims of sexual harassment, bullying or unsafe work conditions, any unlawful activity by an employer, as well as the job seeker's personal circumstances. Claims by a job seeker that the work they were doing was unsafe, or that unreasonable demands or constraints were placed upon them by their employer, need to be assessed against what is reasonable and appropriate given the nature of the work and relevant industry standards.

A person is unemployed due to misconduct if their employer has dismissed them or has given them (and they have accepted) the option of resigning, after action including, but not limited to:

  • deliberate failure to produce or deliver a reasonable amount of work
  • unauthorised absences from work without good reason
  • improper behaviour or practices, such as theft, assault or harassment of other employees or customers
  • actions that cause serious risk to the health or safety of other employees or customers
  • deliberate misuse of work related equipment or facilities, such as vehicles, internet connections or IT hardware, or
  • actions that threaten the reputation, viability or profitability of the business.

The delegate must consider whether or not the employment was suitable for the person and whether or not their actions that led to their dismissal were reasonable. The legislation does not state this explicitly but it is implicit in the use of the term misconduct. A reasonable act will not constitute misconduct.

The intention of this policy is not to penalise people for something over which they had no control. It is to deter a person from trying to avoid a penalty for leaving employment voluntarily by behaving inappropriately at work with the intention of causing his or her own dismissal. A person is not unemployed due to misconduct if they have been dismissed for lack of ability to do the job or for incompetence, unless their behaviour was within their control. This is particularly important when considering the behaviour of people with mental illnesses.

If it is not certain a job seeker was seeking dismissal, Services Australia should only apply a penalty if it is reasonable to expect the person to have understood that their action would have resulted in dismissal.

A person can only be considered unemployed due to misconduct as a result of their misconduct as an employee. As well as misconduct that occurred in the workplace, this includes extensions of the workplace such as work-related functions or when using facilities or information that are only available due to a person's employment (e.g. misusing a company vehicle or computer equipment when not at work). However, a person cannot be considered to have committed misconduct if they have been dismissed because they can no longer fulfil their duties because of something they have done outside of work and not in their capacity as an employee. For example, if a person loses their driving license out of work hours in their own vehicle and they lose their job because they are required to drive as part of their duties, then this would not be unemployment due to misconduct.

Act reference: SS(Admin)Act section 42AD Work refusal failures, section 42AE Unemployment failures

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