SOCIAL SERVICES LEGISLATION AMENDMENT (WELFARE REFORM) ACT 2018 (NO. 26, 2018) - SCHEDULE 15 Targeted compliance framework

This Division is about the Secretary taking action to ensure that people (other than declared program participants) meet their obligations in relation to participation payments. The participation payments are newstart allowance and, for some people, youth allowance, parenting payment and special benefit.

A person commits a mutual obligation failure for failing to comply with obligations relating to participation payments, such as attending appointments, undertaking activities, or taking action to gain employment. A person commits a work refusal failure for failing to accept an offer of suitable employment. A person commits an unemployment failure for becoming unemployed because of a voluntary act (except a reasonable act) or misconduct.

For a mutual obligation failure or a work refusal failure, the participation payment will usually not be payable until the person complies with a reconnection requirement. The person may then receive back pay. The participation payment must be cancelled if the person fails to comply with the reconnection requirement within 4 weeks.

If a person who commits a mutual obligation failure has persistently committed mutual obligation failures and does not have a reasonable excuse then, depending on the circumstances, the person's participation payment will usually be reduced by either 50% or 100% for a period (in addition to not being payable) or be cancelled. In addition, a participation payment must be cancelled if a person does not have a reasonable excuse for a work refusal failure. No participation payments are payable to a person for 4 weeks if a participation payment is cancelled for a mutual obligation failure or a work refusal failure.

If a person commits an unemployment failure, no participation payments are payable to the person for either 4 or 6 weeks, depending on whether relocation assistance had been paid to help the person take up the employment concerned. Also, the person's participation payment must be cancelled if he or she was receiving a participation payment when the unemployment failure was committed.

This Division applies in relation to a person if the person is not a declared program participant.

(1) A person commits a mutual obligation failure if the person is receiving a participation payment and any of the following applies:

(a) the person fails to comply with a requirement that was notified to the person under subsection 63(2) or (4);

(b) the person fails to comply with a requirement, under section 501, 544A, 605 or 731L of the 1991 Act, to enter into an employment pathway plan;

(d) the person fails to attend, to be punctual for, or to participate in, an activity that the person is required to undertake by an employment pathway plan that is in force in relation to the person;

(e) an employment pathway plan is in force in relation to the person and the person fails to satisfy the Secretary that the person has undertaken adequate job search efforts in relation to a period worked out in accordance with the plan (see subsection (2));

(f) an employment pathway plan is in force in relation to the person and the person fails to comply with any other requirement of the plan that applies to the person;

(g) the Secretary is satisfied that the person acted in an inappropriate manner:

(i) during an appointment to which paragraph (c) applies that the person attended; or

(h) the person intentionally acts in a manner and it is reasonably foreseeable that acting in that manner could result in an offer of employment not being made to the person;

(ii) act on a job opportunity when requested to do so by an employment services provider.

Note: In certain circumstances a person is taken to be receiving a participation payment even if it is not payable to the person: see section 42AQ.

(2) For the purposes of paragraph (1)(e), the question whether a person has undertaken adequate job search efforts in relation to a particular period is to be worked out in accordance with a determination in force under subsection (3).

(3) The Secretary must, by legislative instrument, make a determination for the purposes of subsection (2).

(4) Paragraph (1)(c) does not limit paragraph (1)(a), and paragraph (1)(i) does not limit paragraph (1)(h).

(aa) in the case where the participation payment is parenting payment--the person is not someone to whom paragraph 500(1)(ca) of the 1991 Act applies; and

Note: In certain circumstances a person is taken to be receiving a participation payment even if it is not payable to the person: see section 42AQ.

(aa) in the case where the participation payment is parenting payment--the person is not someone to whom paragraph 500(1)(ca) of the 1991 Act applies; and

Note: In certain circumstances a person is taken to be receiving a participation payment even if it is not payable to the person: see section 42AQ.

(a) the person is not receiving, but has made a claim for, a participation payment; and

(aa) in the case where the participation payment is parenting payment--the person is not someone to whom paragraph 500(1)(ca) of the 1991 Act applies; and

(3) However, a person does not commit an unemployment failure because of subparagraph (1)(b)(i) or (2)(b)(i) if the person satisfies the Secretary that the voluntary act was reasonable.

(1) If a person commits a mutual obligation failure (the relevant failure ), the Secretary must:

(a) determine that the person's participation payment is not payable to the person for a period (see section 42AL); and

Note: The person may be eligible for back pay once the payment suspension period ends (see subsection 42AL(4)).

(a) the Secretary is satisfied in accordance with an instrument made under subsection 42AR(1) that the person has persistently committed mutual obligation failures; and

(b) the person does not satisfy the Secretary that the person has a reasonable excuse for the relevant failure (see sections 42AI and 42AJ);

(c) that an instalment of the person's participation payment for an instalment period is to be reduced (see section 42AN), in addition to making a determination under paragraph (1)(a) of this section; or

Note 1: For paragraph (c), the person may be eligible for back pay once the person's payment suspension period ends (see subsection 42AL(4)). However, the back pay may be reduced (including to nil) if the instalment period for which an instalment is to be reduced under paragraph (c) overlaps with the payment suspension period.

Note 2: For paragraph (d), a further consequence is that participation payments will not be payable to the person for the person's post-cancellation non-payment period (see subsection 42AP(5)).

(3) A determination made under paragraph (2)(d) for the relevant failure has effect despite any determination made under paragraph (1)(a) for the relevant failure.

(3A) Despite subsections (1) and (2), the Secretary may decide not to make a determination under either or both of those subsections for the relevant failure if it was committed under paragraph 42AC(1)(a) or subparagraph 42AC(1)(c)(i).

Note 1: Paragraph 42AC(1)(a) relates to a failure to comply with a requirement notified under subsection 63(2) or (4). Subparagraph 42AC(1)(c)(i) relates to a failure to attend, or to be punctual for, an appointment that a person is required to attend by a notice under subsection 63(2).

Note 2: The Secretary may instead cancel or suspend the participation payment under section 80 (see section 42AS).

(3B) In deciding whether to make a decision under subsection (3A), the Secretary must have regard to any matters determined under subsection 42AR(1A) and may have regard to any other relevant matters.

Action not to be taken--instalment already reduced to nil for instalment period when failure committed

(4) Despite subsections (1) and (2), the Secretary must not make a determination under this section for the relevant failure if:

(a) the Secretary has previously determined under paragraph (2)(c) that an instalment of the person's participation payment for an instalment period is to be reduced; and

(b) the instalment for the instalment period is reduced by the whole of the amount of the instalment (see paragraph 42AN(3)(b)); and

(1) If a person commits a work refusal failure, the Secretary must determine that the person's participation payment is not payable to the person for a period (see section 42AL).

(2) However, if the person does not satisfy the Secretary that the person has a reasonable excuse for the work refusal failure (see section 42AI), the Secretary must determine that the person's participation payment is cancelled (see section 42AP).

Note: Participation payments will not be payable to the person for the person's post-cancellation non-payment period (see subsection 42AP(5)).

(3) A determination made under subsection (2) for a work refusal failure has effect despite any determination made under subsection (1) for the failure.

Action not to be taken--instalment already reduced to nil for instalment period when failure committed

(4) Despite subsections (1) and (2), the Secretary must not take action under this section for a work refusal failure (the relevant failure ) if:

(a) the Secretary has previously determined under paragraph 42AF(2)(c) that the amount of an instalment of the person's participation payment for an instalment period is to be reduced; and

(b) the instalment for the instalment period is reduced by the whole of the amount of the instalment (see paragraph 42AN(3)(b)); and

(1) If a person receiving a participation payment commits an unemployment failure, the Secretary must determine that the participation payment is cancelled (see section 42AP).

Note: Participation payments will not be payable to the person for the person's post-cancellation non-payment period (see subsection 42AP(5)).

(2) If a person who has made a claim for (but is not receiving) a participation payment has committed an unemployment failure, the Secretary must determine that participation payments (whether or not the same as the participation payment that was claimed) are not payable to the person for a period (see section 42AO).

(1) The Secretary must, by legislative instrument, determine matters that the Secretary must take into account in deciding whether a person has a reasonable excuse for committing:

(2) To avoid doubt, a determination under subsection (1) does not limit the matters that the Secretary may take into account in deciding whether the person has a reasonable excuse.

(3) The Secretary may, by legislative instrument, determine matters that the Secretary must not take into account in deciding whether a person has a reasonable excuse for committing:

(1) For the purposes of paragraph 42AF(2)(b), an excuse cannot be a reasonable excuse for a mutual obligation failure mentioned in subsection (2) of this section that is committed by a person unless:

(a) the person notifies the excuse as mentioned in subsection (3) of this section; or

(b) the Secretary is satisfied that there were circumstances in which it was not reasonable to expect the person to give the notification.

Note: The Secretary may also decide for other reasons that the excuse is not a reasonable excuse.

(a) a failure to comply with a requirement that was notified to the person under subsection 63(2) to attend an office of the Department, to contact the Department, or to attend a particular place;

(b) without limiting paragraph (a), a failure to attend, or to be punctual for, an appointment that the person is required to attend by a notice under subsection 63(2);

(c) a failure to attend, to be punctual for, or to participate in, an activity that the person is required to undertake by an employment pathway plan that is in force in relation to the person;

(d) a failure to attend, or to be punctual for, an appointment that the person is required to attend by an employment pathway plan that is in force in relation to the person.

(ii) to the person or body specified by the Secretary as the person or body to whom prior notice should be given if the person is unable to comply with the notice under subsection 63(2); and

(i) before the start of the activity on the day concerned, or before the time of the appointment; and

(ii) to the person or body specified in the employment pathway plan as the person or body to whom prior notice should be given if the person is unable to undertake the activity or attend the appointment.

(1) If the Secretary determines under section 42AF or 42AG that a participation payment is not payable to a person for a period, the participation payment is not payable for the period (the payment suspension period ) worked out under this section.

(a) the instalment period in which the person commits the mutual obligation failure or the work refusal failure (unless paragraph (b) applies); or

(b) if the Secretary determines that a later instalment period is more appropriate--that later instalment period.

(a) the day the person complies with the reconnection requirement imposed under subsection 42AM(1) (unless paragraph (b) of this subsection applies); or

(b) if the Secretary determines that an earlier day is more appropriate--that earlier day.

(4) If the payment suspension period ends under subsection (3) for a person, then, for the purposes of the social security law after the end of that period:

(a) the participation payment is taken to be payable to the person from the start of that period (subject to the social security law); and

(b) the Secretary is taken to have made a determination to the effect mentioned in paragraph (a).

Note: The effect of this subsection is that the person may receive back pay for the payment suspension period. However, the back pay may be reduced (including to nil) if the instalment period for which an instalment is to be reduced under section 42AN overlaps with the payment suspension period.

(1) The Secretary must impose a requirement (the reconnection requirement ) on a person if the Secretary determines under section 42AF or 42AG that a participation payment is not payable to the person for a period.

(2) The Secretary must notify the person, in any way the Secretary considers appropriate, of:

(3) The Secretary must determine that the person's participation payment is cancelled if:

(a) the Secretary does not determine an earlier day for the purposes of ending the person's payment suspension period under paragraph 42AL(3)(b); and

(b) the person fails to comply with the reconnection requirement within 4 weeks after it is notified under subsection (2) of this section.

(4) If the Secretary makes a determination under subsection (3), the participation payment is cancelled at the end of the 4 weeks mentioned in paragraph (3)(b).

(b) the Secretary makes a determination (the reduction determination ) under paragraph 42AF(2)(c) that an instalment of a participation payment for an instalment period (the reduction period ) is to be reduced.

(a) the instalment period in which the person commits the mutual obligation failure (unless paragraph (b) applies); or

(b) if the Secretary determines that a later instalment period is more appropriate--that later instalment period.

(3) The instalment payable to the person is reduced by an amount included in the reduction determination that is equal to:

(a) half of the instalment that would otherwise have been payable for the reduction period; or

(b) the whole of the instalment that would otherwise have been payable for the reduction period.

Note: Paragraph (b) may have the effect of reducing the amount of the instalment to nil. However, the participation payment remains payable (see subsection (6)).

(4) The Secretary must determine which of paragraph (3)(a) or (b) applies in relation to the reduction in accordance with an instrument made under subsection 42AR(1).

(5) The Secretary may make the reduction determination in accordance with paragraph (3)(b) for the reduction period even if the Secretary has already made a determination for the person in accordance with paragraph (3)(a) for the same instalment period for a different mutual obligation failure.

(6) The participation payment remains payable for the reduction period even if the amount of an instalment is reduced to nil in accordance with this section.

(1) If the Secretary determines under subsection 42AH(2) that participation payments are not payable to a person who has made a claim for a participation payment, then participation payments are not payable to the person for the period (the unemployment preclusion period ) of:

(a) 4 weeks beginning on the day the person becomes unemployed as a result of the person's voluntary act or misconduct (unless paragraph (b) applies); or

(b) 6 weeks beginning on that day, if, during the 6 months ending on the day immediately before that day, relocation assistance, for the employment to which the voluntary act or misconduct related, has been paid to or for the benefit of the person.

Note 1: The unemployment preclusion period may affect the person's start day for a claim (see clauses 5 and 5A of Schedule 2).

Note 2: For the purposes of this subsection, it is irrelevant which participation payment the person claimed (see subsection 42AH(2)).

(2) For the purposes of this Act, relocation assistance for employment means a payment:

(a) that is made by or on behalf of the Commonwealth to or for the benefit of a person for the purpose of assisting the person to take up the employment; and

(3) The Secretary may, by legislative instrument, specify one or more payments for the purposes of paragraph (2)(b).

(1) This section applies if the Secretary determines under Subdivision C that the participation payment of a person who has committed a mutual obligation failure, a work refusal failure or an unemployment failure is cancelled.

(2) For a mutual obligation failure or a work refusal failure, the participation payment is cancelled at the start of the following day (the cancellation day ):

(a) the first day of the instalment period in which the person commits the failure (unless paragraph (b) applies);

(b) if the Secretary determines that a later instalment period is more appropriate--the first day of that later instalment period.

(3) For an unemployment failure committed by a person who was receiving the participation payment when he or she became unemployed, the participation payment is cancelled at the start of the following day (the cancellation day ):

(a) the day that the person becomes unemployed as a result of the person's voluntary act or misconduct (unless paragraph (b) applies);

(b) the first day of the first instalment period for the person that begins after the day the Secretary makes the determination under subsection 42AH(1), if the Secretary considers it more appropriate.

(4) For the purposes of paragraph (3)(b), the day the Secretary makes the determination is the day the Secretary originally makes the determination (even if another decision in relation to the determination is later made on review).

(5) A participation payment (whether or not the same as the participation payment that was cancelled) is not payable to the person for the period (the post-cancellation non-payment period ) of:

(a) 4 weeks beginning on the cancellation day (unless paragraph (b) applies); or

(ii) during the 6 months ending on the day immediately before the person becomes unemployed, relocation assistance, for the employment to which the voluntary act or misconduct related, has been paid to or for the benefit of the person.

Note 1: If the person makes a claim for a participation payment, the post-cancellation non-payment period may affect the person's start day for the claim (see clauses 5 and 5A of Schedule 2).

Participation payment taken to not be cancelled for certain purposes during post-cancellation non-payment period

(6) Despite subsections (2) and (3), the participation payment is taken to not be cancelled for the purposes of the following provisions until the end of the post-cancellation non-payment period:

(a) a provision of the social security law, or the Family Assistance Act, that refers to a post-cancellation non-payment period or a compliance penalty period, other than a provision that is determined by the Minister under subsection 42AR(2) of this Act for the purposes of this paragraph;

(b) section 106B of this Act (automatic cancellation of certain concession cards);

(c) a provision of the social security law that is determined by the Minister under subsection 42AR(2) of this Act for the purposes of this paragraph.

If, under this Division, a participation payment is not payable to a person for a period, then, for the purposes of the following provisions, the person is taken to be receiving that participation payment for that period:

(a) Subdivision B (except if the participation payment is not payable because of subsections 42AH(2) and 42AO(1) (unemployment preclusion periods));

(c) any other provision of the social security law, or the Family Assistance Act, that is determined by the Minister under subsection 42AR(2) of this Act for the purposes of this paragraph.

(a) for the purposes of paragraph 42AF(2)(a)--circumstances in which the Secretary must, or must not, be satisfied that a person has persistently committed mutual obligation failures;

(i) circumstances in which the Secretary must make a determination under paragraph 42AF(2)(c); and

(ii) circumstances in which the Secretary must make a determination under paragraph 42AF(2)(d);

(i) circumstances in which paragraph 42AN(3)(a) applies in relation to the reduction of an instalment for an instalment period; and

(ii) circumstances in which paragraph 42AN(3)(b) applies in relation to the reduction of an instalment for an instalment period.

(1A) The Minister may also, by legislative instrument, determine matters to which the Secretary must have regard for the purposes of subsection 42AF(3B) in making a decision under subsection 42AF(3A).

(2) In addition, the Minister may, by legislative instrument, determine provisions of the social security law or the Family Assistance Act for the purposes of paragraph 42AP(6)(a) or (c) or 42AQ(c) of this Act.

Nothing in this Division affects the power of the Secretary to cancel or suspend a participation payment under section 80.

Note: However, the Secretary cannot suspend or cancel a participation payment under that section on the basis that the participation payment is not, or was not, payable because of the operation of this Division (see paragraph 80(1)(b)).

3 Subsection 23(1) (before paragraph (a) of the definition of compliance penalty period )

(aa) for a person other than a declared program participant--any of the following periods during which a participation payment (within the meaning of the Administration Act) is not payable to the person:

(iii) a post-cancellation non-payment period (within the meaning of that Act); or

4 Subsection 23(1) (paragraph (a) of the definition of compliance penalty period )

5 Subsection 23(1) (paragraphs (b) and (c) of the definition of compliance penalty period )

because of the operation of any of the following provisions of the Administration Act:

(i) subsection 42AL(1) (payment suspension periods--persons other than declared program participants);

(ii) subsection 42AO(1) (unemployment preclusion periods--persons other than declared program participants);

(iii) subsection 42AP(5) (post-cancellation non-payment periods--persons other than declared program participants);

(v) subsection 42S(1) (unemployment non-payment periods--declared program participants); and

(i) subsection 42AL(1) of the Administration Act (payment suspension periods--persons other than declared program participants);

(ii) subsection 42AO(1) of that Act (unemployment preclusion periods--persons other than declared program participants);

(iia) subsection 42AP(5) of that Act (post-cancellation non-payment periods--persons other than declared program participants);

(iib) subsection 42P(1) of that Act (serious failures--declared program participants);

(iic) subsection 42S(1) of that Act (unemployment non-payment periods--declared program participants);

(iii) subsection 42AL(1) of the Administration Act (payment suspension periods--persons other than declared program participants); or

(iv) subsection 42AO(1) of that Act (unemployment preclusion periods--persons other than declared program participants); or

(v) subsection 42AP(5) of that Act (post-cancellation non-payment periods--persons other than declared program participants); or

(vi) subsection 42P(1) of that Act (serious failures--declared program participants); or

(vii) subsection 42S(1) of that Act (unemployment non-payment periods--declared program participants); or

Omit "42P(1) or 42S(1) or section 81", substitute "42AL(1), 42AO(1), 42AP(5), 42P(1) or 42S(1), or section 81,".

The Secretary may determine that a declared program participant commits a no show no pay failure, a connection failure, a reconnection failure or a serious failure.

A declared program participant commits such a failure by failing to comply with his or her obligations in relation to a participation payment. The participation payments are newstart allowance and, for some people, youth allowance, parenting payment and special benefit.

For a no show no pay failure, a penalty amount is deducted from the participant's participation payment.

For a connection failure, a requirement may be imposed on the participant (and if the participant fails to comply with the requirement, the participant commits a reconnection failure).

For a reconnection failure, generally a penalty amount is deducted from the participant's participation payment until the participant complies with a requirement imposed on the participant.

For a serious failure, a participation payment is not payable to the participant for 8 weeks. The 8 week period may be ended in certain circumstances.

The Secretary may also determine that a declared program participant is unemployed as a result of a voluntary act or misconduct. If the Secretary does so, a participation payment is not payable to the participant for either 8 or 12 weeks, depending on the circumstances.

The Secretary may also determine that a participation payment is not payable to a declared program participant for a period because of certain failures. Once that period ends, the participant may be able to receive back pay. For a failure to attend an appointment, a penalty amount may be deducted from the participant's participation payment.

This Division applies in relation to a person if the person is a declared program participant.

After "payable", insert "(other than because of the operation of Division 3AA)".

Note: Division 3AA is about compliance with participation payment obligations for persons who are not declared program participants.

After "participation payment", insert "and the person receiving the payment was a declared program participant".

After "participation payment", insert "and the person is a declared program participant".

(bb) immediately before the start of a payment suspension period for the person under section 42AL; or

(aa) the adverse decision is not made under Division 3AA of Part 3 (compliance with participation payment obligations: persons other than declared program participants); and

"post-cancellation non-payment period " has the meaning given by subsection 42AP(5).

(a) for a mutual obligation failure or a work refusal failure--has the meaning given by subsection 42AM(1); and

(b) for a failure mentioned in section 42G--has the meaning given by that section.

"unemployment preclusion period " has the meaning given by subsection 42AO(1).

(1B) Subclause (1) applies only in relation to a start day for a participation payment to a person if the exclusion period to which the person is subject is:

(i) the Secretary determines under Subdivision C of Division 3AA (compliance with participation payment obligations: persons other than declared program participants) that the other member's participation payment is not payable for a period;

(ii) the Secretary determines under that Subdivision that the other member's participation payment is cancelled;

(iii) the Secretary determines that the other member of the couple, being a declared program participant, commits a serious failure; or

(iv) the Secretary makes a determination under subsection 42S(1) (unemployment as a result of a voluntary act or misconduct obligation--declared program participants) in relation to the other member of the couple; and

Omit all the words after "parenting payment is", substitute "worked out in accordance with subclause (2)".

(2) For the purposes of subclause (1), the other member's start day is the first day after the end of:

(a) if subparagraph (1)(c)(i) applies--the other member's payment suspension period or unemployment preclusion period; and

(b) if subparagraph (1)(c)(ii) applies--the other member's post-cancellation non-payment period; and

(d) if subparagraph (1)(c)(iv) applies--the other member's unemployment non-payment period.

Division 3AA of Part 3 of the Administration Act applies in relation to a mutual obligation failure, a work refusal failure, or an unemployment failure, that is committed on or after the commencement of this item by a person who is not a declared program participant.

(1) The amendments made by this Schedule do not limit the continued effect, on and after the commencement of this item, of anything done before that commencement under the old compliance rules in relation to a person who is a declared program participant.

Limited continued application for persons who are not declared program participants

(2) The old compliance rules cease to apply, at the commencement of this item, in relation to a person who is not a declared program participant, even if a determination had been made under those rules for the person before that commencement.

(a) the Secretary made a determination under the old compliance rules, before the commencement of this item, that results in a participation payment not being payable for a period for a person who is not a declared program participant; and

then the period ends, by force of this subitem, immediately before that commencement, despite anything else in the old compliance rules.

(a) the Secretary made a determination under the old compliance rules before the commencement of this item; and

(b) the determination would, apart from subitem (2) and the amendments made by this Schedule, have resulted in a penalty amount being deducted from a person's instalment of a participation payment for one or more instalment periods ending after that commencement;

then the penalty amount must continue to be deducted after that commencement in accordance with the old compliance rules.

(5) If a penalty amount is deducted from an instalment in accordance with subitem (4), and the effect of the deduction is that the instalment is reduced to nil for an instalment period, the Secretary must not take action under section 42AF or 42AG of the Administration Act for a mutual obligation failure or a work refusal failure committed by the person during the instalment period.

old compliance rules means Division 3A of Part 3 of the Administration Act, as in force immediately before the commencement of this item.

41 Transitional provision--instruments specifying payments for definition of relocation assistance

An instrument made under paragraph 42S(3B)(b) of the Administration Act that was in force immediately before the commencement of this item continues in force (and may be dealt with) as if it had been made under subsection 42AO(3) of that Act (as amended by this Schedule).

Commonwealth Numbered Acts

SOCIAL SERVICES LEGISLATION AMENDMENT (WELFARE REFORM) ACT 2018 (NO. 26, 2018) - SCHEDULE 15