Demerits and penalties for not meeting mutual obligation or participation requirements

Job seekers and ParentsNext participants could get demerits and financial penalties for not meeting mutual obligation or participation requirements.

Who this applies to

Demerits and financial penalties apply to:

  • job seekers, including those on Youth Allowance for job seekers, who are with Workforce Australia or Disability Employment Services
  • compulsory ParentsNext participants.

Who this doesn’t apply to

There are different penalties for job seekers in the Community Development Program. Read about mutual obligation requirements in the Community Development Program.

How demerits work

You may have your payment suspended and get a demerit if you don’t meet your mutual obligation or participation requirements.

Before your payment can start again, you’ll need to either:

If they decide you don’t have a reasonable excuse they’ll give you a demerit, but you won’t lose any money.

Each demerit lasts 6 months from the date you get it.

If you get 3 demerits in 6 months

You’ll need to attend a Capability Interview with your provider to discuss your circumstances and why you’re not meeting your requirements.

If you get 5 demerits in 6 months

You’ll need to have a Capability Assessment with us. This is to make sure your requirements are suitable for your circumstances.

You may be fast tracked to a Capability Interview or a Capability Assessment if you fail to attend or act appropriately in a job interview.

If you disagree with a demerit

If you disagree with a demerit, you need to talk to your provider. We can’t change or remove demerits. If you don’t agree with your provider, you can call the Department of Employment and Workplace Relations National Customer Service Line.

If you’re with Workforce Australia Online, call the Digital Services Contact Centre.

How to keep track of your demerits

You can keep track of any demerits through either your:

  • online dashboard if you’re with Disability Employment Services or ParentsNext
  • on the homepage of your Workforce Australia online account.

You can sign in to your Workforce Australia online account through myGov.

The dashboard or homepage of your online account shows 3 zones. These are:

  • green zone
  • warning zone
  • penalty zone.

In the green zone

You have no demerits.

You’re responsible for making sure you’re meeting all your requirements.

You must record what you do to meet your requirements in your Workforce Australia account. This includes recording your:

  • attendance at activities and appointments
  • job search efforts.

If you’re unable to meet a requirement, you must talk to your provider.

If you’re with Workforce Australia Online, call the Digital Services Contact Centre.

In the warning zone

You’ll get a demerit each time you don’t meet your requirements, and you don’t have a reasonable excuse.

If you have one or more demerits, you’ll be in the warning zone.

In the penalty zone

There are no demerits in the penalty zone. Instead, you may get a financial penalty or have your payment cancelled.

What happens in the penalty zone

Your payment will be suspended and you’ll need to talk to your provider about why you didn’t meet your requirements. If your provider decides you don’t have a reasonable excuse, they’ll report a failure to us.

If it’s your first or second failure in the penalty zone, you can either:

  • talk to us about your reasons for not meeting your requirement
  • accept the penalty without talking to us.

If you’re facing a third penalty you cannot accept it without talking to us. If you don’t contact us, your payment will stay suspended, and you won’t be able to report or get paid.

If you get a penalty you’ll:

  • lose half of your fortnightly payment for the first penalty
  • lose all of your fortnightly payment for the second penalty
  • have your payment cancelled for at least 4 weeks for a third penalty.

We can’t waive these penalties.

If you meet your requirements for 3 months while in the penalty zone, you’ll return to the green zone.

What other penalties apply

Your income support payment could be cancelled if you get a work refusal or unemployment failure. This applies even if you don’t have any demerits.

Work refusal and unemployment failure penalties don’t apply if you’re in ParentsNext.

Work refusal failure

You may get a work refusal failure if you don’t:

  • accept a suitable job offer, even if it’s not in your preferred field
  • start a job you’ve accepted.

Your payment will be suspended until you talk to your provider about the failure.

If you’re with Workforce Australia Online, call the Digital Services Contact Centre.

If they decide you don’t have a reasonable excuse, you’ll need to talk to us.

If we find that you don’t have a reasonable excuse and the job was suitable, we’ll cancel your payment.

Unemployment failure

You may get an unemployment failure if you:

  • choose to leave your job without a reasonable excuse
  • lose your job due to misconduct.

An unemployment failure means you won’t get a payment for either:

  • 4 weeks
  • 6 weeks if you got relocation assistance for the job.

What you need to do if your payment is cancelled

You can submit a new claim at any time using your Centrelink online account through myGov. If your payment is cancelled due to a penalty, you’ll need to wait at least 4 weeks before you’re paid again. When you reclaim, waiting periods may also apply.

Read more about what payments you can claim online.

Using your Health Care Card

If you already have a Health Care Card, you can keep using it even if you have a penalty applied.

How to avoid penalties

You can avoid getting demerits and penalties by meeting all your requirements.

If you’re finding it hard to meet your requirements, it’s important to let your provider know as soon as possible. You need to do this before you miss an appointment or activity.

If you’re with Workforce Australia Online, call the Digital Services Contact Centre. Let them know if you’re having difficulties.

If you can’t go to an appointment or activity

Before your appointment or activity is due to start, you need to talk to your provider.

If you’re with Workforce Australia Online, call the Digital Services Contact Centre.

What happens if you move to a different provider

Your demerits and financial penalties stay with you if you change your provider.

Who to contact if you disagree with a demerit or penalty

If you disagree with a demerit

If you want to discuss a demerit, you’ll need to talk to your provider. If you disagree with your provider, you can call the National Customer Service Line.

If you’re with Workforce Australia Online, you can call the Digital Services Contact Centre.

We cannot review or change demerits.

If you disagree with a penalty

If you don’t agree with a decision that has resulted in a financial penalty or payment cancellation, you can ask us to review the decision. If this happens, the penalty will stay in place until we finish the review. If we change the decision, you may get back pay.

Read more about review and appeals of a Centrelink decision.

Page last updated: 12 September 2022