Targeted Compliance Framework financial penalties and payment cancellations 001-18030209

Under the Targeted Compliance Framework, financial penalties apply when a job seeker has persistently committed mutual obligation failures. Job seekers are considered to have persistently committed mutual obligation failures if they have incurred sufficient demerits to enter the financial penalty zone, their requirements have been determined as appropriate during a Capability Assessment, and a subsequent mutual obligation failure is committed 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:

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

Note: work refusal failures and unemployment failures committed while a job seeker is in the financial penalty zone are not included in the penalty count or failure group.

Where payment is cancelled as a result of a third financial penalty and a participation payment is re-claimed within 3 active months, the job seeker will return to the financial penalty zone. A new failure group commences for the purpose of calculating the penalty count, this means, a subsequent mutual obligation failure after re-commencement of payment will be a first mutual obligation failure and will result in a 50% payment deduction, a second will result in a 100% payment deduction, etc.

Financial penalties for mutual obligation failures are calculated based on the total amount of participation payment that is payable after application of the income test, including supplementary payments that are included in the rate, of:

• JobSeeker Payment (JSP)
• Youth Allowance (YA)
• Parenting Payment (Single), or
• Special Benefit (SpB)

The amount of Family Tax Benefit (FTB) payable to the job seeker or their partner, including Rent Assistance (RA) paid with FTB, is not affected by the financial penalty.

Generally, a penalty for a mutual obligation failure will affect the instalment period in which the mutual obligation failure was committed. Where payment has already been released for this instalment period, the penalty amount will be calculated against, and deducted from, or the cancellation applied to, the next available instalment period.

A penalty count for a failure group may change due to an applied mutual obligation failure being revoked as a result of:

• retrospective payment cancellation with a date of effect prior to the failure event date
• retrospective exemption from compulsory requirements covering the period of the failure event date
• a favourable outcome returned for a review of decision to apply a financial penalty where the review was sought within 13 weeks of being notified of the decision to apply a financial penalty

A non-compliance cancellation may occur as a result of:

• failure to re-engage within 4 weeks of a re-engagement requirement being notified for a work refusal failure or mutual obligation failure
• a work refusal failure
• an unemployment failure committed while the job seeker was in receipt of a participation payment
• a third financial penalty applied for a mutual obligation failure

When a non-compliance cancellation is applied, the post-cancellation non-payment period is 4 weeks.

During a post cancellation non-payment period, a participation payment is not payable. There are no waiver provisions for job seekers in financial hardship during this period, however the job seeker will maintain concession card and benefit rate Family Tax Benefit (FTB) eligibility.

Job seekers may reclaim payment at any time after a non-compliance cancellation. They may be subject to RapidConnect. The start date of a return to payment will be affected by the post-cancellation non-payment period. Job seekers generally return to the Targeted Compliance Framework zone they were in prior to the non-compliance cancellation.