The analysis showed that approximately 310,000 people had their Centrelink payments wrongly cancelled between 2020 and 2024 because they were not given sufficient time to reconnect with a job provider after missing a compulsory activity as part of their mutual obligations.
Jobseekers are required to meet mutual obligation requirements, such as attending meetings with an employment provider and applying for jobs, in order to continue receiving their payments. After receiving five demerits in the mutual obligation system, individuals enter the “penalty zone,” where their payment may be completely cancelled.
Payment cancellations were paused in July of last year after the Department of Employment and Workplace Relations admitted to unlawfully cancelling the payments of 964 people. However, the Economic Justice Australia claims the number of affected individuals is much higher.
Kate Allingham, the chief executive of Economic Justice Australia, stated that the system is either being applied unlawfully or is defective, leading to serious consequences for thousands of people due to errors in automated processes.
Economic Justice Australia believes that around 20% of the affected individuals may be eligible for some form of compensation and is considering litigation options.
Payments were cancelled before the legal time frame of 28 days after missing a mutual obligation. Providers are not obligated to check why a person did not engage in required activities.
A case study highlighted a participant, known as “Jane,” who had her payment suspended and cancelled after missing a meeting with her employment provider while enrolled in the New Enterprise Incentive Scheme. Jane had been informed in writing that she did not need to engage with the provider, but she continued to receive harassing calls and messages from the provider.
Kristin O’Connell from the Antipoverty Centre stated that the issues extend beyond cancellations to payment suspensions, which are triggered by providers. O’Connell called for an immediate pause on payment suspensions and compensation for affected individuals.
The Department of Employment and Workplace Relations and the employment minister were contacted for comment regarding the accuracy and awareness of the Economic Justice Australia report but refused to answer.
The employment minister, Amanda Rishworth, stated that the department had assured her that they quickly paused the issues when they were detected.
The government understands the importance of ensuring that systems and processes operate effectively, particularly when they interact with vulnerable people.
