Application of penalties under Welfare to Work

Social security Ombudsman Disability Pensions Australia
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This investigation was prompted by 124 complaints received by the Ombudsman’s office about Centrelink’s administration of the activity test requirements following the implementation of Welfare to Work reforms on 1 July 2006.

The report was critical of the practice of stopping a person’s welfare payment before a decision was made about whether or not a penalty should apply. Under the Welfare to Work reforms, a jobseeker who does not comply with an activity (such as attending an interview) can face an eight-week non-payment period for a third or subsequent participation failure (or breach) in any 12-month period. Before a decision is made to stop payment, the suspected breaches must be reviewed by a specialist Centrelink officer to check if the person had a reasonable excuse for not completing the activity.

The Ombudsman’s investigation queried whether the practice of stopping a payment before a decision is formally made was supported by the social security law. Timeliness in decision making was also raised as an issue. The practices criticised in the Ombudsman’s report could adversely disadvantage Centrelink customers, by depriving them of the following options: arranging their financial affairs in anticipation of a penalty being imposed; applying for a review of Centrelink’s decision (because no formal decision had yet been made); accessing the Financial Case Management scheme administered by Centrelink, which can assist a customer to meet the costs of essential household and living expenses.

The three agencies involved – Centrelink, the Department of Employment and Work Place Relations (as it then was) and the Department of Human Services – have all responded positively to the Ombudsman’s report.

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