Thousands of people may have had their social security payments wrongly reduced or cancelled because the mutual obligations system was not “operating in alignment with the law”.
On Friday, the Department of Employment and Workplace Relations (DEWR) announced it had paused more payment reductions and cancellations, with more than 10,000 people understood to be affected.
It comes after the federal ombudsman launched an investigation into the compliance framework’s functioning while the full mutual obligation system undergoes three separate reviews.
Mutual obligation requirements include jobseekers attending employment provider meetings and applying for jobs in return for receiving payments. After jobseekers receive five demerits, they enter the “penalty zone”, where they may have their payment cancelled.
In a statement, the DEWR secretary, Natalie James, said she had “paused some parts of the systems”.
“The work underway by my department has identified examples where the system is not operating in alignment with the law and policies or is not operating with the rigour that I expect,” she said.
“In taking these decisions, I have considered my legal duty to administer the law and take decisions as intended by the law.
“I also have considered my current level of confidence in how the system, and decision-making processes within the system, is operating and the impact of these decisions on people. Of critical importance is that people subject to these frameworks are often our most vulnerable, including those who are homeless, First Nations people and people with a disability.”
Welfare groups were quick to condemn the system, calling for an end to mutual obligations and the targeted compliance framework.
The ACOSS executive director of policy and research, Jacqueline Phillips, said it was a “massive and fundamental failure of government”.
“It is very disturbing that in the aftermath of robodebt, governments continue to make unlawful social security decisions on such a scale affecting people with little means or power,” she said.
Antipoverty Centre spokesperson and jobseeker recipient Jay Coonan called for the dual obligation system to be abolished.
“This whole process shows that ‘mutual’ obligations are an immoral and destructive tool,” Coonan said. “We will not stop until they’re abolished and those responsible for these policies are held accountable.”
In February, the peak body for community legal centres, Economic Justice Australia (EJA), wrote to the employment and workplace relations minister, Murray Watt, to ask for an immediate suspension of the penalty zone system.
The EJA CEO, Kate Allingham, said it was positive that DEWR was reviewing the system. However, she said the reviews needed to be made public, and any compensation to jobseekers who had payments cut illegally should be paid immediately and automatically.
“While these reviews show the government’s commitment to fixing errors going forward, people need to be compensated for the significant harm that has already been caused,” Allingham said.
“The burden must not be on individuals to prove their payments were incorrectly cancelled. The government has a duty to ensure everyone impacted is fully compensated without being forced through an arduous and unworkable appeals process, like what we saw with robodebt.”
