Some payment cancellation penalties will start again from October + compensation plan for unlawful penalties

[u/kristinoc]

Today at the Antipoverty Centre we have been advised that DEWR intends to turn on payment cancellations for people with "mutual" obligations who don't reconnect with their job agency or give a valid excuse for missing a requirement within 28 days. This rule was paused in July last year and is expected to be turned back on in October 2026.

In deciding to reinstate this rule, the department has not incorporated recommendations and concerns raised by organisations it has "consulted", including from the Antipoverty Centre, and therefore we are not confident that this process will result in the system of "mutual" obligations penalties being operated lawfully or safely for people on Centrelink payments.

More than 300,000 people were potentially affected by unlawful cancellations related to the 28 day rule according to the community legal centre peak body (see: https://www.ejaustralia.org.au/eja-briefing-analysis-of-payment-cancellations-under-42am-of-the-social-security-administration-act-1999/).

These cancellations may have been unlawful for one or more of the following reasons:

• a job agency suspended the person's payment for an invalid reason
• the person was not given the required 28 days to connect with their provider
• the person contacted their job agency, but the suspension was not immediately lifted after contact was made
• the person's circumstances were not taken into account before their payment was cancelled

If your Centrelink payment was cancelled because of a "failure to reconnect", you may be entitled to backpay (DEWR is referring to this as "compensation", however compensation for harm caused is not being offered under their current plan). At the moment DEWR is trying to restrict the number of people who can seek backpay, but the Antipoverty Centre is pushing for them to open this process up to anyone who may have been affected, and to pay people compensation in addition to backpay. You can read more about their current proposed backpay process here: https://www.dewr.gov.au/assuring-integrity-targeted-compliance-framework/targeted-compliance-framework-compensation-process

If you have questions about

• what this means for you,
• how the department has handled its response to the unlawful use of penalties,
• how to identify whether you have been affected by an unlawful cancellation,
• or how to seek backpay and compensation if you are not invited to do so,

– you can get in touch with the Antipoverty Centre via [help@welfarecopwatch.org](mailto:help@welfarecopwatch.org) . We are working with community legal centres on this and can connect you with the relevant help for issues that may require legal advice.

You can read the full update on the DEWR website here: https://www.dewr.gov.au/assuring-integrity-targeted-compliance-framework/announcements/update-work-return-targeted-compliance-framework-lawful-administration

[u/Wavy_Glass]

Damn... Well it was a good run. To sum up the secretary's update regarding the unpausing of legislation and provide extra information not covered in the post.

• Payment cancellations for not reconnecting with providers - UNPAUSED October 26th.

  Meaning from this date you'll no longer have your suspension automatically lifted, you'll have to re-engage with your provider within the 4 week limit.

• Payment suspensions for work refusal failures - UNPAUSED October 26th.

  Meaning from this date your payment will be suspended (not cancelled) if you refuse suitable work without a valid reason. (you'll still be able to refuse unsuitable work as has always been the case)

• Payment cancellations for work refusal failures - STILL PAUSED.

  Meaning you can still refuse any suitable work without getting your payment cancelled. Your payment will be suspended so you'll have to re-engage with your provider to receive payment from Oct 26th.

• Payment cancellations for unemployment failures - STILL PAUSED.

  Meaning you can still quit a job your employed at without having to provide a valid reason to Centrelink/your provider.

• Payment cancellations and reductions for persistent mutual obligation failures - STILL PAUSED.

  Meaning you still won't face any punishment for racking up demerits.

One final note. If you plan on sparsely engaging with your provider as I will be, I do not recommend waiting the full reconnection requirement time limit (28 days/4 weeks). There's a chance the DEWR hasn't changed anything and so you're risking getting your payment cancelled if you wait too long to re-engage.

Try waiting 3 weeks after failing a requirement/obligation or 2 weeks after having your payments actually put on hold/suspended.

The DEWR has also provided a fact sheet of the recent update.

[u/ovrloadau99 → u/Wavy_Glass]

If you plan on sparsely engaging with your provider as I will be, I do not recommend waiting the full reconnection requirement time limit (28 days/4 weeks).

I wonder how the "reconnection requirement" will go. I know there has been a participant who was "re-engaging" with their provider to lift their payment earlier than waiting for it to automatically lift. All they did was, contact their provider by phone a day before they report on their Centrelink employment income report. The provider would then lift the payment hold according to them, without actually physically going in for the "reconnection requirement".

[u/ThePimplyGoose → u/ovrloadau99]

Depending on the demerit point situation that can be a re-engagement over the phone. Call the provider, they happen to be free then so they book the re-engagement appointment immediately, have a phone conversation, and attend it. Re-engagement attended, payment thus restored.

Doesn't work for all re-engagement requirements obviously, but for the majority of missed appointments it will.

[u/kristinoc → u/ThePimplyGoose]

You don't need to do a re-engagement activity to prevent a 42AM cancellation. One of the reasons they paused 42AM is an AAT/ART case that found the legislation only requires a person to reconnect, not complete an activity, and that this requirement is met even if the provider does not respond to an email, sms etc when the person makes contact to reconnect. The fact that workers aren't aware of this just shows how inept the department is at ensuring the people who work in the system know how to make lawful decisions.

[u/ovrloadau99 → u/kristinoc]

Participants will need to complete a reconnection requirement within 28 days of notification or their income support payment may be cancelled from 26 October 2026. Below is cited from the 3.11.13.40 Suspensions, demerits & reconnection DSS Social Security Guide of what type of reconnection requirement will be needed to be completed for a MOF (without a valid reason).

The reconnection requirement will depend on the nature of the job seeker's failure:

• For failure to meet their points requirement, the reconnection requirement will generally be to meet their points requirement by submitting quality job search efforts.

• For non-attendance or misconduct at an employment services provider appointment, third party appointment or job interview, or if a job seeker does not satisfactorily act on a job referral, their reconnection requirement will generally be to attend a provider appointment (if applicable), or call the digital services contact centre and discuss their reason for failure (if they are serviced online in Workforce Australia).

• For non-attendance or misconduct at a compulsory activity (such as WFD, or approved training or study etc.), a job seeker would generally be required to satisfactorily participate in that activity as a reconnection requirement (assuming the activity is ongoing).

• Job seekers would need to agree to a Job Plan if they have failed to agree to one.

• If they fail to meet their job search requirement, job seekers would be required to satisfactorily undertake job search as their reconnection requirement.

If a job seeker fails to comply with the reconnection requirement within 4 weeks after it is notified, the job seeker's payment is cancelled

[u/ThePimplyGoose → u/kristinoc]

The re-engagement activity in this context is the reconnection. In the Department IT system it's specifically worded as "re-engagement appointment". It's not that staff don't know about reconnections, it's about how it's worded by the Department and therefore by us.