Penalties for not meeting mutual obligation requirements

Financial penalties and cancellations are paused

Financial penalties and payment cancellations are currently paused. Find out more about the decision to pause on the Department of Employment and Workplace Relations website.

We’ll let you know when the pause ends.

What happens in the penalty zone

In the penalty zone, you may get a financial penalty or have your payment cancelled if you don’t meet your mutual obligation requirements.

Your payment will first be suspended if you don’t meet your requirements. You’ll need to talk to your provider about why you didn’t meet your requirements.

If you don’t contact your provider and meet your requirements, your payment will stay suspended. You won’t be able to report or get paid.

If your provider can’t confirm you have a valid reason, they’ll report a failure to us.

You’ll need to talk to us about why you didn’t meet your requirements.

If we can’t confirm you have a reasonable excuse, you’ll get a penalty.

If you get a penalty

If you get a penalty, all the following will apply. 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. Read more about compliance, demerits and zones on the Workforce Australia website.

When you won’t face compliance action

Under some circumstances, you won’t face compliance action. This may apply if you have both:

done 30 hours or more of paid work per fortnight for 2 months
missed an appointment with your employment service provider.

The other way you won’t face compliance action is if both:

you’re newly registered with Workforce Australia or Inclusive Employment Australia
it’s the first time you don’t meet a requirement, except where you don’t agree to a job plan or attend an initial interview.

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 failure

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

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

Your payment may 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 valid reason, you’ll need to talk to us.

If we find that you don’t have a valid reason and the job was suitable, we’ll cancel your payment. You won’t get a payment for 4 weeks.

You’ll need to lodge a new claim to start getting payments again.

Unemployment failure

Usually, you can get an unemployment failure if you either:

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

If you get an unemployment failure, it means you won’t get a payment for 4 weeks.

What you need to do if your payment is cancelled

If your Centrelink online account is linked to myGov, you can submit a new claim at any time.

If your payment is cancelled because of a penalty, you can reclaim at any time, but 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 if you have a penalty applied that reduces your payment, including to a nil payment. If your payment is cancelled, your Health Care Card will no longer be valid.

How to avoid penalties

You can avoid getting demerits, payment suspensions 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.

If you don’t understand or disagree with a penalty decision

You can ask us to explain a penalty decision if you don’t understand it and it’s resulted in any of the following:

a non-payment period
a payment reduction
a payment cancellation.

You can ask us to review the decision if you don’t agree with a decision that resulted in any of the following:

a non-payment period
a financial penalty
a payment cancellation.

If you ask us to explain or review a decision

An experienced staff member will explain the decision to you, if you’ve asked for an explanation. If we find an error in the decision, we’ll fix it. We aim to contact you within 14 days to explain.

If you’ve asked for a review, an Authorised Review Officer (ARO) will review the decision. We aim to finish a formal review within 49 days from the date you applied.

Payment suspensions, non-payment periods, reductions and cancellations will stay until we finish the explanation or review. If we change the decision, you may get back pay.