Mutual obligation failures under the Targeted Compliance Framework 001-18030208

Compulsory requirements are designed to ensure that job seekers receiving a participation payment are actively looking for work and/or participating in activities that will help them into employment.

A mutual obligation failure is committed when a job seeker who is receiving a participation payment fails to:

• enter into a Job Plan
• meet their monthly points target (for Workforce Australia participants only)
• attend, or be punctual for a compulsory appointment
• participate in a compulsory activity
• undertake adequate job search efforts or meet other job search related requirements included in their Job Plan (for Workforce Australia, job search is included in their monthly points target requirement)
• undertake any other activities outlined in their Job Plan
• act in an appropriate manner during an appointment or while participating in a compulsory activity
• attend a job interview, or behaves inappropriately at an interview
• act on a job opportunity when requested to do so by their employment services provider
• record that they have complied with a compulsory requirement (for job seekers with digital literacy limitations, this will need to be done in collaboration with their Provider)

Note: a mutual obligation failure may be committed for failing to comply with a compulsory requirement scheduled on a weekend.

Green or warning zone

If the provider records that the job seeker does not have a valid reason for not complying with a compulsory requirement a demerit will be applied if the job seeker is in the green zone or warning zone.

Five mutual obligation failures within 6 active months generally indicate persistent non-compliance. After 5 demerits, job seekers enter the financial penalty zone if both a Capability Interview and Capability Assessment have found that the job seeker is capable of meeting their requirements.

Note: job seekers may enter the financial penalty zone more quickly if they fail to attend a job interview, fail to act on a job opportunity or act in a manner such that employment would not be offered to them. This recognises the seriousness of these types of mutual obligation failures.

Penalty zone

If the provider records that the job seeker does not have a valid reason for not complying with a compulsory requirement a Non-compliance Report (NCR) will be submitted to Services Australia if the job seeker is in the penalty zone.

Financial penalties apply where a job seeker has persistently committed mutual obligation failures without reasonable excuse.

A penalty count is used to determine the applicable financial penalty. The penalty is calculated based on the penalties which have already been applied in the same failure group:

• first financial penalty results in a 50% payment reduction for the payment period
• second financial penalty result in a 100% payment reduction for the payment period
• third financial penalty results in payment cancellation and a post-cancellation non-payment period

PST staff conduct a compliance investigation for an active failure.

Job seekers will transition between job seeker compliance systems where they change residential address and either commence in or cease to participate in the Community Development Program (CDP).

Where job seeker transfers to a CDP provider:

• outstanding mutual obligation failures may still be investigated and a financial penalty applied
• any non-compliance cancellation due to a mutual obligation failure or post-cancellation non-payment period will remain in place