Thousands of individuals may have experienced incorrect reductions or cancellations of their social security payments due to the mutual obligations system not aligning with the law. On Friday, the Department of Employment and Workplace Relations announced a pause in payment reductions and cancellations, affecting over 10,000 people. This follows an investigation by the federal ombudsman into the compliance framework’s functionality, which is currently undergoing three separate reviews. Mutual obligation requirements include attending employment provider meetings and applying for jobs in exchange for payments. Jobseekers who accumulate five demerits enter a penalty zone, potentially leading to the cancellation of their payment. The DEWR secretary, Natalie James, stated that they had paused certain parts of the system due to identified instances of non-compliance with the law and lack of rigor. She took into account her legal duty to administer the law and the impact of these decisions on vulnerable populations, such as those who are homeless, First Nations people, and individuals with disabilities. Welfare groups criticized the system and called for an end to mutual obligations and the targeted compliance framework. The ACOSS policy and research director, Jacqueline Phillips, labeled it a massive failure of the government and expressed concerns over unlawful social security decisions affecting individuals with limited means. The Antipoverty Centre spokesperson and jobseeker recipient, Jay Coonan, demanded the abolition of the dual obligation system, labeling it as immoral and destructive. Economic Justice Australia (EJA) CEO Kate Allingham expressed support for the review of the system but emphasized the need for transparency and immediate compensation for those affected by incorrect cancellations. Allingham highlighted the government’s duty to ensure full compensation without forcing individuals through a burdensome appeals process.

Source: https://www.theguardian.com/australia-news/2025/mar/21/centrelink-jobseeker-payments-wrongfully-reduced-cancelled