Calculating the effect of Job Seeker Compliance Framework failure penalties on fortnightly instalments 001-10120050

The earliest recovery date for a No Show, No Pay failure penalty amount is the end of the instalment period following the instalment period in which the CDP job seeker was notified of the decision to apply the failure.

For Non-attendance failures and reconnection failure penalties the earliest penalty recovery date is the date the failure is imposed if this is also on or after the end of an outstanding entitlement period during which a penalty has accrued. Once the earliest recovery date has been calculated it cannot be changed.

The penalty amount will remain provisional until reporting for the relevant instalment period has been completed, at which time the final penalty amount can be calculated. This means when a penalty period accrues over two or more instalment periods, penalty recovery in any instalment period is limited to the non-attendance failure period that falls within that instalment period.

When multiple failures have occurred, the recovery of penalty amounts occurs in order from the oldest to most recent, with the oldest being determined based on the earliest recovery date then the event date for each failure.

Whilst the penalties are calculated based on the basic rate, participation related supplementary payments and Energy Supplement (when this is received fortnightly), the penalty amount is recovered from the CDP job seeker's basic rate of participation payment. A penalty amount is not recovered from add-ons, supplementary or family assistance payments.

The penalty amount to be recovered from a CDP job seeker's payment will be confirmed at the time they report. Any outstanding penalty amount, or penalty accrued during the reporting period may be recovered from the payment issued for that period. However, the maximum amount that can be recovered in an instalment period is limited to the maximum basic rate of participation payment payable during that instalment period. Any remaining balance of the penalty amount is then recovered from subsequent instalment periods.

The recovery of a non-attendance failure, reconnection failure or No Show, No Pay failure penalty amount takes precedence over the recovery of a debt and occurs prior to Income Management processing.

When a CDP job seeker transfers to another participation payment while a penalty amount is still owing, the outstanding balance will transfer to the new payment. An outstanding penalty amount balance is only waived 26 weeks after a CDP job seeker's participation payment is:

• no longer subject to participation requirements, or
• cancelled and the CDP job seeker has not transferred to a new participation payment

When an outstanding penalty amount is waived, the penalty balance for the associated failure will be updated to nil.

The CDP job seeker's tax liability is assessed on the participation payment actually received by the CDP job seeker after deduction of the penalty amount. Any penalties incurred by the CDP job seeker are reflected as 'non reportable' amounts on the CDP job seeker's income support taxation notice of assessment.