Welfare suspensions roll on despite legal concerns about system
Department of Employment and Workplace Relations secretary Natalie James paused cancellations and reductions of welfare benefits after the legality of the system was called into question, but suspensions have been inexplicably allowed to continue.
The government has continued to suspend the welfare benefits of thousands of Australians despite concerns the system is not lawful.
The Targeted Compliance Framework (TCF) is an automated system used by the Department of Employment and Workplace Relations to ensure individuals receiving JobSeeker and other welfare benefits meet “mutual obligations”, including attending appointments with employment service providers, applying for jobs and engaging with training.
Individuals who fail to meet their mutual obligations accumulate demerit points, which may lead to a cancellation, suspension or reduction of their benefit.
The system was introduced by the Coalition government in 2018.
DEWR secretary Natalie James paused cancellations and reductions of benefits based on mutual obligations violations in March after the department received external legal advice the system might be unlawful, but suspensions have continued despite being underpinned by the same legislative framework.
Deputy secretary of employment and workforce Tania Rishniw told a hearing of the Education and Employment Legislation Committee on October 9 more than 320,000 suspensions relating to just over 205,000 people receiving JobSeeker benefits were made between May and July this year.
At the same hearing, Ms James conceded the TCF was not currently operating in accordance with the legislation.
“It’s not currently operating in alignment with the legislative framework because I have taken decisions to pause a number of aspects of that because of concerns about how they were being operationalised before,” the secretary said in response to a question on notice by Greens senator Penny Allman-Payne.
Neither Ms James nor Senator Jess Walsh, representing Employment and Workplace Relations Minister Amanda Rishworth, would say if they had confidence in the legality of the TCF when pressed by Ms Allman-Payne.
The secretary said in an earlier statement she would “not take any decision to resume social security payment reductions or cancellations unless and until it can be clearly demonstrated that the process to support the decision making complies with the law”, but the department did not respond to questions from The Australian about why suspensions have continued while cancellations and reductions were paused.
A spokesperson for Senator Allman-Payne said welfare suspensions should stop until the department could be certain the system was operating lawfully.
“Hundreds of thousands of welfare recipients lose access to payments every year, and Labor have said they can’t even say if it’s lawful,” the spokesperson said. “These payments can be the difference between food on the table or going hungry.
“If Labor can’t defend the system, they should end the TCF and stop suspending payments immediately.”
A report produced by the Commonwealth Ombudsman in August found 964 JobSeeker benefits were unlawfully terminated by DEWR between April 2022 and July 2024 because of glitches in the TCF system.
The federal watchdog lashed the department’s failure to comply with an amendment made to the legislation in 2022 that requires DEWR employees to exercise their discretion when deciding whether to penalise a welfare recipient based on their compliance with mutual obligations.
“Failure to exercise a discretion … poses a potentially significant, if not catastrophic, consequences for vulnerable job seekers,” it found.
The Ombudsman also slammed the slow rollout of the so-called Digital Protections Framework legislated in 2022 and reinforced by Robodebt Royal Commissioner Catherine Holmes in 2023.
The DPF is a safeguard designed to protect welfare recipients from abuse and unfair treatment caused by automated systems following the Robodebt scandal, which used data-matching technology to raise false debts against hundreds of thousands of Australians.
“We do not consider a delay of over three years, coupled with an indefinite commitment to future action, is reasonable,” the Ombudsman wrote.
“In our view, if parliament imposes an obligation on an agency head without specifying a time frame (as was the case here), the agency head should aim for implementation as soon as reasonably practicable.”
The department accepted all seven recommendations made by the Ombudsman, and the second instalment of its report is due before the end of the year.
An independent assurance report commissioned by the Albanese Labor government and released in September made substantively similar findings relating to the TCF’s operational flaws and governance deficiencies, but it was largely overshadowed by the revelation consultancy firm Deloitte used generative artificial intelligence to produce it.
The consultancy firm will refund the government a portion of its $440,000 fee for the report, and DEWR officials told the Senate estimates hearing they stood by the findings.
A DEWR spokesperson told The Australian the department “is taking immediate steps to address the urgent actions identified” by the Commonwealth Ombudsman and in the Deloitte report.
“All processes that might impact a person’s payment are being tested, mapped end to end, clearly documented and assured,” the spokesperson said.
“(And) any IT changes are limited to only essential changes, thoroughly tested before implementation, and focused on improvements that are beneficial to participants.”
The spokesperson also said processes had been put in place to ensure decisions regarding cancellations and reductions were upheld, and “governance and assurance mechanisms have been strengthened to confirm that any changes are aligned with law, policy and operations”.
Scrutiny of the legality of the TCF follows an announcement by Social Services Minister Tanya Plibersek that half of the debts in the nation’s social security backlog would be wiped, and welfare recipients affected by an unlawful income calculation method known as income apportionment would be eligible for resolution payments worth hundreds of dollars as part of a $300m taxpayer-funded package.
Income apportionment was used by the Department of Social Services to calculate benefits from the late 1990s to 2020, when a new construction of the legislation was adopted. In contrast to the TCF, it has never been used by the Albanese Labor government.
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