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 Community Development Program (CDP) job seeker was notified of the decision to apply the failure.

In practice, this will mean the penalty is recovered from any payment made from an instalment period ending 14 days or later following the Entitlement Period End Date (EPED) of the period in which the date of notification occurs.

The date of notification for No Show, No Pay penalties differs depending on whether the CDP job seeker received verbal notification of the decision to apply a failure, or whether the only form of notification was in writing. When the Participation Solutions Team (PST):

• verbally notifies the CDP job seeker that a decision has been made to apply the failure, this is recorded on the Decision/Recommendation screen in the Compliance Investigation workflow. This becomes the formal date of notification
• is unable to verbally notify the CDP job seeker that a decision had been made to apply a failure, written notification is sent. In these circumstances, the date of formal notification is the letter generation date plus eight working days

Note: there is no requirement to wait until after the end of a non-attendance failure or reconnection failure period or until a reconnection failure period end date is known before commencing recovery of both the non-attendance failure penalty and the reconnection failure penalty amount. A system review will recalculate the penalty amount at the completion of each EPED for CDP job seeker with either a non-attendance failure or reconnection failure penalty that spans multiple instalment periods.

The earliest recovery date for a non-attendance and reconnection penalties is the date the failure is applied.

Once the earliest recovery date has been calculated, it cannot be changed.

Recovery of the penalty amount will commence from the earliest recovery date continue until payment is fully recovered.

Non-attendance failure, reconnection failure and No Show, No Pay failure penalty amounts are only recovered from the CDP job seeker's basic participation payment entitlement.

A No Show, No Pay, non-attendance failure or reconnection failure penalty amount is not recovered from the following payments:

• Energy Supplement
• Mobility Allowance
• Pensioner Education Supplement
• Pension (PP) Supplement
• Pharmaceutical Allowance
• Remote Area Allowance
• Rent Assistance
• Telephone and Utilities Allowances
• Youth Disability Supplement
• Participation related supplementary payments

Note: even though participation related supplementary payments are included in the calculation of non-attendance failure, reconnection and No Show, No Pay failure penalties, the penalty amount is recovered from the CDP job seeker's basic participation payment.

The penalty amount becomes recoverable once the earliest recovery date has been reached.

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.

When there are multiple penalty amounts, these are recovered in order from oldest to most recent, with the oldest based on the earliest recovery date and then the event date for each failure.

The maximum amount that can be recovered in an instalment period is limited to the maximum basic rate of participation payment payable during the recovery 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 prior to Income Management processing, that is, debt repayment and income managed funds will be based on residual payment after the recovery of a penalty.

Transfer of the CDP job seeker to Workforce Australia or Disability Employment Services (DES) will not alter the recovery of the penalty.

When a CDP job seeker transfers to another participation payment prior to all of the penalty amounts being recovered, the outstanding penalty amounts will be recovered from the new payment.

If a CDP job seeker transfers to another payment that is not a participation payment, the outstanding penalty amount is held as an outstanding balance until the:

• CDP job seeker is granted an eligible participation payment, or
• the penalty amount is waived, see Step 6

When a penalty amount is outstanding when a CDP job seeker enters into a serious failure period or Unemployment Non-Payment Period (UNPP), the outstanding penalty amount is held as an outstanding balance until the:

• CDP job seeker recommences or is granted an eligible participation payment, or
• the penalty amount is waived, see Step 6

Outstanding penalty amount balances will be automatically waived 26 weeks after a CDP job seeker's:

• payment is no longer subject to participation requirements, or
• cancellation of a participation payment, if the CDP job seeker does not transfer to a new participation payment within the 26 week period

When an outstanding penalty amount is waived the penalty balance for the associated failure will be updated to $0.

When a reassessment of a CDP job seeker's record affects the rate calculation for a previously determined failure, reassessment of the penalty is only required up to the point of full recovery of the penalty.

A manually set penalty amount as a result of a review will not be automatically reassessed except in the case of the failure itself being overturned at review.

When a penalty amount changes and it results in a CDP job seeker being eligible for arrears the following will occur:

• If another outstanding No Show No Pay, non-attendance failure or reconnection penalty amounts exist, arrears may be used for the recovery of these deductible penalty amounts
• If no outstanding penalty amounts exist, the arrears will be issued subject to usual business processes

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.

At the end of a financial year, when an outstanding penalty is yet to be recovered, this penalty amount would not be reflected in the income for the tax year in which the failure was incurred.