3.11.13.40 Suspensions, demerits & reconnection

Introduction

Certain decisions under the SS(Admin)Act are currently paused while work is underway to assure the integrity of the Targeted Compliance Framework system. Relevant information is being continually updated in the Social Security Guide. For more information refer to Assuring the integrity of the Targeted Compliance Framework.

From 12 March 2025, the first time a job seeker does not meet a mutual obligation requirement, they will receive a warning and messaging about their requirements. In addition, job seekers who are working over 30 hours per fortnight cannot be suspended or receive a demerit if they do not attend an appointment with their provider.

For a failure to meet requirements, subsequent to their first failure, job seekers may have their income support payment suspended and be given a reconnection requirement, which they must generally meet in order to end the payment suspension. Payment suspension is also ended if the job seeker provides a valid reason for the failure, in which case the job seeker does not need to meet the reconnection requirement. Unless the person is in the Penalty Zone and is subject to a penalty, when their payment suspension ends they receive back-pay for the period that their payment was suspended, subject to other provisions of the social security law.

Where no valid reason is identified, the reconnection requirement a job seeker may need to meet to end a payment suspension may vary, but, generally, it will be for the job seeker to undertake the requirement they did not meet. Every failure by job seekers to meet their requirements in the Green Zone, except for their first failure, or Warning Zone without valid reason will result in accrual of a demerit.

Demerits

For most mutual obligation failures committed without valid reason, a job seeker will incur one demerit. A record of the job seeker's demerits is kept on the IT system and the number of demerits accrued determines when they should undergo a capability interview (3.11.13.20) (generally after 3 demerits) or capability assessment (3.11.13.20) (generally after 5 demerits). Demerits also ultimately determine whether the job seeker should enter the Penalty Zone and become subject to penalties for future failures, because they can at that point be considered to have 'persistently committed mutual obligation failures'.

When the job seeker commits a failure relating to job interviews (failing to attend an interview or acting in a manner that could result in a job offer not being made), or fails to act on a referral to a job, they will immediately undergo either a capability interview or, if they have already had a capability interview, a capability assessment, regardless of the number of demerits already accrued.

Neither the application of demerits nor the finding that a job seeker is capable of meeting their requirements (and, if this is determined as a result of a capability assessment, that the job seeker should therefore enter the Penalty Zone) are decisions under social security law. They are the administrative mechanisms to satisfy a decision maker, when considering a mutual obligation failure, that a person has persistently committed mutual obligation failures and should therefore be subject to a penalty for their latest failure. These administrative mechanisms and the following rules pertaining to them are set out in a legislative instrument (Social Security (Administration) (Non-Compliance) Determination 2018 (No. 1)).

The accrual of demerits is based on the decision maker's assessment of the job seeker's reasons for non-compliance in relation to the requirement that they have failed to meet. The demerit is generally not accrued until the decision maker has spoken to the job seeker about the failure and determined that a valid reason does not exist.

If a job seeker does not agree with the application of a demerit, they should discuss this with their provider or the digital services contact centre as appropriate in the first instance. If they are still not satisfied, or if they don’t feel comfortable discussing the matter with their provider or the digital services contact centre, job seekers may contact DEWR' National Customer Service Line.

Active months

'Active months' generally refers to the period a job seeker has mutual obligation requirements and does not include the time a job seeker is not ‘active’ in employment services, such as the time a job seeker is exempt from requirements or is serving a non-payment period due to non-compliance, or the time between a person's referral to Services Australia for a capability assessment and completion of that assessment. However, any time that a job seeker is not receiving payment (for reasons other than because of a penalty, such as when the job seeker is in employment) counts towards active months. This is because these job seekers are supporting themselves and not relying on government assistance.

The calculation of active months is prescribed by the Social Security (Administration) (Non-Compliance) Determination 2018 (No. 1), which directs decision makers when to be satisfied that a job seeker has persistently committed mutual obligation failures and therefore that a penalty should apply (3.11.13.50).

Although 3 active months (which is the time since their last failure that a person remains in the Penalty Zone (3.11.13.10)) is defined as 91 days, from July 2024, job seekers will generally only remain in the Penalty Zone for 91 days irrespective of whether the job seeker was ‘active’ for the duration of the period.

Six active months (the length of time until a demerit expires) is defined as 182 days. Six active months continues to exclude periods of exemptions, non-payment periods due to non-compliance, and the time between a referral to a capability assessment and its completion, and may prolong the time it takes for the 6 active months to pass. Six active months cannot be longer than 12 calendar months.

Each demerit a job seeker has will expire after 6 active months, and a job seeker will only enter the Penalty Zone once they accrue 5 demerits within 6 active months.

Payment suspension

Where a job seeker fails to meet a requirement (after their first failure in the Green Zone), including where:

• they did not meet their points requirement
• they did not attend a requirement
• their job search has been inadequate
• they have behaved inappropriately during an appointment or activity, or
• they have a requirement to record or report their attendance at, or completion of, certain activities and did not,

the job seeker's participation payment may become non-payable (that is, suspended). If the job seeker in the Green or Warning Zone of the targeted compliance framework does not have a valid reason they will accrue a demerit, and their payment may be suspended if they do not re-engage with their requirements within 5 business days 'resolution time' (or immediately if in the Penalty Zone). Any payment due to the job seeker for the payment suspension period is withheld. Job seekers are generally back paid the amount withheld when they re-engage with their requirements or provide a valid reason for missing the requirement.

The payment suspension period generally begins at the start of the instalment period in which the person commits the mutual obligation failure (unless the decision maker determines that a different instalment period is more appropriate, for example, because of resolution time or the failure is reported after the job seeker has been paid for the instalment period in which it occurred).

Job seekers will be notified of their mutual obligation failure and the reconnection requirement they must meet to restart their payment. Once a job seeker satisfies their reconnection requirement, their payment suspension will be lifted. If they are found to have a valid reason for committing the failure, no demerit will be accrued. The last day of the suspension period will be the day immediately before the day the person complies with the reconnection requirement (unless the decision maker determines that an earlier day is more appropriate, for example, because the job seeker has been granted an exemption and is no longer required to meet their reconnection requirement).

The reconnection requirement will depend on the nature of the job seeker's failure:

• For failure to meet their points requirement, the reconnection requirement will generally be to meet their points requirement by submitting quality job search efforts.
• For non-attendance or misconduct at an employment services provider appointment, third party appointment or job interview, or if a job seeker does not satisfactorily act on a job referral, their reconnection requirement will generally be to attend a provider appointment (if applicable), or call the digital services contact centre and discuss their reason for failure (if they are serviced online in Workforce Australia).
• For non-attendance or misconduct at a compulsory activity (such as WFD, or approved training or study etc.), a job seeker would generally be required to satisfactorily participate in that activity as a reconnection requirement (assuming the activity is ongoing).
• Job seekers would need to agree to a Job Plan if they have failed to agree to one.
• If they fail to meet their job search requirement, job seekers would be required to satisfactorily undertake job search as their reconnection requirement.

If a job seeker fails to comply with the reconnection requirement within 4 weeks after it is notified, the job seeker's payment is cancelled.