Unemployment due to a voluntary act or misconduct 001-10060000

Australia's welfare system is designed to provide a strong safety net for those who are unable to support themselves.

For people of working age who have the capacity to work, participation payments are intended to support those who are actively seeking and prepared to move into suitable paid work as this becomes available.

The job seeker compliance system helps to reinforce these expectations. Penalties may apply if a job seeker has contributed to their unemployment, through voluntary unemployment or dismissal for misconduct.

If a job seeker leaves suitable work voluntarily (without a reasonable excuse), or is dismissed from suitable work due to misconduct, the consequence depends on which compliance system applies.

Under the:

• Targeted Compliance Framework (TCF) when an unemployment failure (UNF) is applied:
• job seekers who claim a participation payment incur a 4 week unemployment preclusion period or, if they received relocation assistance, the preclusion period increases to 6 weeks
• job seekers receiving a participation payment will have this payment cancelled. A 4 week post cancellation non-payment period stops them from receiving payment for the preclusion period if they reapply
• Job Seeker Compliance Framework (JSCF), when an Unemployment Non-Payment Period (UNPP) is applied, an 8 week non-payment period applies

Voluntary unemployment occurs when a job seeker makes the decision to leave a job or end their contract early, therefore the job seeker becomes unemployed because of a voluntary act.

A voluntary act may include a scenario where the job seeker is temporarily unable to work due to ill health/medical condition and voluntarily stops work as a result.

A compliance action requires investigation, to determine if a reasonable excuse exists when a job seeker:

• left suitable employment voluntarily, and
• has not served the possible penalty period

For examples of circumstances when unemployment is voluntary, see the Resources page.

Unemployment due to misconduct occurs when a job seeker has contributed to their unemployment by either:

• being dismissed, or
• being given the option of resigning from suitable work, because of inappropriate actions as an employee, or
• abandons their employment

The reason for termination must be a result of misconduct as an employee and not because of their general behaviour. The incident must have either occurred in their workplace or be directly related to their work.

For examples of circumstances when unemployment is due to misconduct, see the Resources page.

A compliance action should be generated when the employer or job seeker advises on the SU1 or STP data confirms the reason employment stopped is for 'other reasons' and the additional information indicates the job seeker is unemployed due to:

• ill health/medical reason
• unauthorised absence from work
• poor performance or inability to perform tasks needed

The type of unemployment failure (UNF) or Unemployment Non-Payment Period (UNPP) generated will depend on the additional information provided by the employer or job seeker for the reasons the work stopped. For help to identify what type of UNF or UNPP will be generated, see the Resources page.

All Service Officers have an important role in the identification of potential non-compliance where the job seeker became unemployed voluntarily or because of misconduct. Careful consideration is also needed if a job seeker or employer says employment ended due to the job seeker's ill health/medical condition. If this is identified, a compliance action should be generated so the job seeker's reasons for stopping employment can be investigated.

If it is identified the job seeker is unemployed due to a voluntary act or misconduct, evidence must be collected before a compliance action is generated. For example:

• Employment Separation Certificate (via a SU1 or verbal), or
• Single Touch Payroll (STP) data
• job seeker statement, or
• additional employer statement

If a non-compliance action is generated when a person lodges a claim for a participation payment, a decision on the reasons for the job seeker's unemployment must occur before the claim can be finalised. This decision may affect the start date of the job seeker's participation payment.

Job seekers who are managed under the:

• Targeted Compliance Framework (TCF), will have an unemployment failure (UNF) generated
• Job Seeker Compliance Framework (JSCF), will have an Unemployment Non-Payment Period (UNPP) generated

The Participation Compliance workflow automatically determines the appropriate job seeker compliance system.

All Service Officers can generate a compliance action, which is then investigated by appropriately skilled staff.

If the compliance action is generated:

• before the job seeker's claim for a participation payment is finalised, Service Officers with UNPP security resource are responsible for undertaking an investigation (except where the job seeker received relocation assistance)
• the Participation Solutions Team (PST) is responsible for undertaking an investigation, if:
• the job seeker is receiving a participation payment, or
• it is identified that relocation assistance may have been paid

For a demonstration of how to generate a compliance action, see the Resources page for a link to the Participation Compliance Entry Hub.

Smart centre or service centre staff with UNPP security resource and Participation Solutions Team (PST)-skilled staff are responsible for undertaking an investigation and deciding if an unemployment failure or Unemployment Non-Payment Period (UNPP) is applied or rejected. All job seeker unemployment compliance investigations:

• allow the job seeker an opportunity to respond to adverse claims about the reasons for their unemployment, and
• focus on the facts and evidence relevant to the reasons why they became unemployed

This supports an evidence-based decision process that is in line with the legislative framework and policy intent.

An unemployment preclusion period for a UNF or a UNPP is served concurrently with other preclusion or waiting periods.

The unemployment preclusion period or UNPP, starts the day after the job seeker last worked (date of unemployment). This may mean job seekers who claim a participation payment may have self-served part or all of the preclusion period or non-payment period before claiming payment.

When an unemployment failure is applied and the job seeker is receiving a participation payment, their payment is cancelled, and a 4 week non-payment period is applied.

Job seekers may reclaim payment at any point during the post cancellation non-payment period.

Note: there are no waiver provisions for job seekers in financial hardship during this period; however, they will remain eligible for their concession card and the benefit rate Family Tax Benefit (FTB).

When an Unemployment Non-Payment Period (UNPP) is committed, an 8 week non-payment period applies.

During the non-payment period, job seekers may have their payment reinstated under hardship provisions if they:

• fall within a class of person specified by the Secretary of the Department of Employment and Workplace Relations, and
• are in severe financial hardship because of the UNPP

Job seekers can test their eligibility for payment under hardship provisions at any time during the non-payment period. When a waiver is recorded, the job seeker's payment will restart from the later of the date the job seeker:

• requested the waiver, or
• met the conditions for the UNPP to be waived

When payment is reinstated, under hardship provisions, the job seeker will be subject to compulsory mutual obligation requirements.

The job seeker has the right to apply for an explanation of a decision or a formal review by an Authorised Review Officer if they disagree with the:

• decision about if an unemployment failure has been committed
• date of effect of an unemployment preclusion period
• payment cancellation or length of a post cancellation non-payment period
• application of an Unemployment Non-Payment Period (UNPP)
• date of effect of a UNPP

See Non-compliance with compulsory requirements - review and appeals.