Failures

7.157 On 1 July 2009, a new system commenced to ensure compliance by job seekers with activity tests and participation requirements. This system includes the following four levels of ‘failure’ to comply with activity tests and participation requirements:

• No Show, No Pay Failures;
• Connection Failures;
• Reconnection Failures; and
• Serious Failures.^[140]

A failure cannot be imposed if a person has a ‘reasonable excuse’, discussed below.

7.158 A ‘No Show, No Pay Failure’ results in the loss of one day’s payment for each day that a person does not show up for one of the compulsory activities in his or her EPP, does not attend a job interview, or deliberately acts in a way in a job interview that could result in a job offer not being made.

7.159 A ‘Connection Failure’ may be made if a person fails to attend an appointment with Centrelink or a JSA provider, sign an EPP, look for a job, or hand in a Job Seeker Diary. A Connection Failure does not result in a loss of payment. Rather Centrelink will contact the person to arrange a new appointment or to sign an EPP. If a person still does not satisfy these requirements—known as a ‘Reconnection Requirement’—a person may have a reconnection failure resulting in the loss of one day’s payment for every day until the requirement is met.

7.160 A ‘Serious Failure’ applies where a person has had at least three no show no pay, connection or reconnection failures or a combination of these types of failures, in the last six months and Centrelink believes that the person is deliberately and persistently not complying with requirements or a person refuses to accept a suitable job offer. The penalty for a serious failure is an eight week non-payment period.

7.161 A Serious Failure is not imposed unless a CCA decides that the job seeker has been persistently non-compliant. Where a Serious Failure is imposed, the new structure still pursues its emphasis on re-engagement by establishing a Compliance Activity option which allows the job seeker to undertake an activity similar to work experience for eight weeks in lieu of the loss of payments.

7.162 Centrelink is responsible for determining whether to impose a failure or penalty for non-compliance with activity test requirements. However, job service providers generally initiate the process by reporting to Centrelink instances of potential non-compliance by lodging a ‘Participation Report’—an online form detailing the circumstances of the job seeker’s potential non-compliance.

Unemployment Non-Payment Period

7.163 In addition, an Unemployment Non-Payment Period—a preclusion period of an eight-week loss of payment—applies to any job seeker who voluntarily leaves a job without reasonable excuse, or loses a job through misconduct.^[141] An Unemployment Non-Payment Period may be ended if a person is in a class of persons specified by a legislative instrument and serving the non-payment period would cause the person to be in severe financial hardship.^[142]

7.164 Currently, those who do not have access to safe, secure and adequate housing or who are using emergency accommodation or a refuge are considered to be within the ‘class of persons’.^[143] Access to safe, secure and adequate housing also means having a right to remain, or a reasonable expectation to remain, in their accommodation.^[144] However, a person experiencing family violence is not referred to expressly as a person who might fall in a relevant class of persons for unemployment non-payment periods.

Reasonable excuse

7.165 In addition to activity tests and participation requirements, in some cases, social security recipients must comply with various administrative requirements. These may include:

• providing certain information;
• attending a particular place;
• completing a questionnaire; or
• undergoing a medical, psychiatric or psychological examination.^[145]

7.166 Failure to comply with such administrative requirements can lead to non-payment, unless the person can demonstrate a ‘reasonable excuse’. In addition, where a person fails to meet activity or participation test requirements and does not have a ‘reasonable excuse’ or an exemption, this may constitute a ‘failure’, discussed above, and a penalty may apply. Such penalties may apply to Newstart Allowance, Youth Allowance, Parenting Payment, Austudy and Special Benefit.^[146] As discussed above, penalties range from a reduction in the person’s payment, to non-payment for eight weeks.^[147]

7.167 The term ‘reasonable excuse’ is not defined in the Social Security Act. The Guide to Social Security Law provides that, in determining whether a person has a reasonable excuse, the decision maker must take into account whether the person had access to safe, secure and adequate housing, or was using emergency accommodation or a refuge at the time of the failure and the person was subjected to criminal violence (including ‘domestic violence’ and sexual assault). A person is taken not to have access to safe, secure and adequate housing where such housing threatens or is likely to threaten the person’s safety.^[148]

Submissions and consultations

7.168 In the Social Security Issues Paper the ALRC asked whether, in practice, Centrelink customers were aware of exemptions—including the ‘reasonable excuse’ exemption—available in circumstances of family violence and whether customers were likely to use the exemption.^[149]

7.169 Stakeholders who responded to this question indicated that Centrelink customers were given very little information about provisions to help them in circumstances of family violence.^[150]

7.170 The Commonwealth Ombudsman submitted that:

Our office is aware that family violence may be a ‘reasonable excuse’ for a failure to comply with a requirement, but it is not clear whether customers are aware of this or whether compliance staff specifically question customers about the existence of family violence … when deciding whether to apply a failure. It may be appropriate for either the social security law or policy to provide specific guidance to staff about whether family violence may be a relevant consideration in determining whether a customer has a ‘reasonable excuse’.^[151]

ALRC’s views

7.171 In the context of ‘reasonable excuse’, the Guide to Social Security Law currently refers to ‘domestic violence’ as a criminal offence. The ALRC is concerned that not all family violence amounts to a criminal offence and therefore, not all family violence may lead a decision maker to conclude that a person has a reasonable excuse which, in turn, may mean that a victim of family violence has their payments suspended and cannot access independent financial assistance. Accordingly, the ALRC considers that the Guide to Social Security Law should expressly refer to family violence as a ‘reasonable excuse’ to ensure that the range of violent conduct is included. This proposal is complemented by Proposal 3–1 which proposes a broad definition of family violence for the purposes of social security law.

7.172 In addition, the ALRC is concerned about the lack of knowledge about the ‘reasonable excuse’ provisions among victims of family violence which may prevent a victim of family violence accessing the exemption and having their payment cut off. The ALRC therefore proposes that information about the reasonable excuse exemption be included in Proposal 4–8.

7.173 The ALRC is also seeking further information as to whether the current criteria on which Centrelink can end a person’s Unemployment Non-Payment Period presents a barrier to the safety of victims of family violence.