Demerits and penalties for not meeting mutual obligation requirements

Job seekers and ParentsNext participants could get demerits and financial penalties for not meeting mutual obligation requirements without a valid reason.

From 28 September 2020, you must start meeting mutual obligation requirements. This may apply to you if you get JobKeeper Payment and an income support payment, like JobSeeker Payment.

Who this applies to

Demerits and financial penalties for not meeting mutual obligation requirements under the Targeted Compliance Framework apply to:

  • job seekers in jobactive or Disability Employment Services
  • ParentsNext participants.

Who this doesn't apply to

There are different penalties for job seekers participating in the Community Development Program who don’t meet their requirements.

Read more about not meeting mutual obligation requirements in the Community Development Program.

How to keep track of your demerits and penalties

The Department of Education, Skills and Employment have developed an online dashboard. The dashboard helps you keep track of your requirements. It also shows your compliance status. It will show you’re in 1 of these:

  • green zone
  • warning zone
  • penalty zone.

You can access the dashboard from your JobSearch account on the jobactive website.

How demerits work

Your payments will stop if you don’t meet your mutual obligation requirements. You’ll also get a demerit each time you miss a requirement without a valid reason.

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

If you get 5 demerits in 6 months you may move to the penalty zone. This means if you miss any more requirements, you risk getting a financial penalty or having your payment cancelled.

You may move to the penalty zone sooner than this if you don’t turn up to a job interview.

If you disagree with a demerit, you need to talk to your provider about it. We can’t change or remove demerits.

Your provider will refer you to us for a Capability Assessment if you get 5 demerits in 6 months. You may get referred sooner if you don’t turn up to a job interview.

Read more about the Capability Assessment.

What happens in the penalty zone

In the penalty zone there are no demerits. Instead you’ll get a financial penalty if you don’t meet your requirements and you don’t have a reasonable excuse.

This means you will:

  • lose half of your fortnightly payment for the first penalty
  • lose all of your fortnightly payment for the second penalty
  • have your payment cancelled if you get a third penalty.

We can’t waive these penalties.

If you do the right thing for 3 months, you’ll return to the green zone with no demerits.

What other penalties apply

You could have your payment cancelled if you get a work refusal or unemployment failure. This applies even if you don’t have any demerits. These cancellations don’t affect family payments. These 2 failures don’t apply if you’re taking part in ParentsNext.

Work refusal failure

You may get a work refusal failure if you don’t do either of these:

  • accept a suitable job offer
  • start a job you’ve accepted.

A work refusal failure means your payment will be cancelled.

Unemployment failure

You may get an unemployment failure if you either:

  • choose to leave your job without a valid reason
  • 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 from your provider.

What you need to do if your payment is cancelled

If your payment is cancelled, you need to submit a new claim using myGov through your Centrelink online account. You need to wait at least 4 weeks before you get a payment. You may also need to serve other waiting periods.

Read more about claiming a payment online.

Using your Health Care Card

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

How to avoid penalties

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.

You can avoid getting demerits and penalties. You need to do the things you’ve agreed to in your plan and anything your provider asks you to do. These can be things like:

  • going to all your appointments and compulsory activities
  • telling your provider before your appointment or activity if you can’t attend
  • agreeing to or changing your plan if asked
  • not leaving a job, training course or program without a valid reason
  • showing you’re actively looking for suitable paid work
  • accepting suitable job offers
  • going to job interviews.

If you don’t agree with a demerit or penalty

If you disagree with a demerit, you need to talk to your provider. We can’t change or remove demerits.

If you disagree with 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.

What happens if you move to a different provider

Your demerits and financial penalties stay with you if you change your provider. This applies if you change to any of the following providers:

  • jobactive
  • Disability Employment Services
  • ParentsNext.

Page last updated: 18 September 2020