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.
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 and Disability Employment Services, and
- 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.
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.
Know where you’re at
The Department of Jobs and Small Business have developed an online dashboard to help you:
- keep on track with meeting your requirements, and
- be aware of your compliance status
You can access the dashboard from your JobSearch account on the jobactive website. You can also find out more about the compliance system by watching the videos on the jobactive website.
You’ll start in the green zone with no demerits.
You’re responsible for making sure you’re meeting all the requirements in your plan. This means you need to:
- go to appointments, activities and interviews arranged by your provider, and
- record your job search efforts and attendance at activities and appointments
If you can’t go to an appointment or activity you need to talk to your provider beforehand. If you miss a requirement, your payment will stop until you talk to your provider.
If you don’t have a valid reason for missing the requirement your provider will give you a demerit. You’ll also need to meet the requirement you missed before your payment starts again.
In the warning zone
Each time you miss a requirement without a valid reason you’ll get a demerit. If you have 1 or more demerits you’ll be in the warning zone.
If you disagree with a demerit you need to talk to your provider about it. We can’t change or remove demerits.
You’ll need to have a capability interview with your provider if you:
- get 3 demerits in 6 months, or
- don’t turn up to a job interview
Your provider will refer you to us for a Capability Assessment if you get 5 demerits in 6 months, or sooner if you don’t turn up to a job interview.
At the Capability Assessment you’ll have a chance to:
- discuss the reasons you haven’t met your requirements
- identify issues, and
- review your job plan and make sure you can meet your requirements
If it's found that your requirements are appropriate, you’ll move to the penalty zone.
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 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, and
- 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:
- accept a suitable job offer, or
- start a job you’ve accepted
A work refusal failure means you’ll have your payment cancelled.
You may get an unemployment failure if you:
- choose to leave your job without a valid reason, or
- lose your job due to misconduct
An unemployment failures means you won’t get a payment for:
- 4 weeks, or
- 6 weeks if you got relocation assistance for the job from your provider
If your payment is cancelled, you need to submit a new claim using your Centrelink online account through myGov. 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. If you don’t have a provider talk to us instead. You need to do this before you get a demerit or financial penalty.
You can avoid penalties by doing the things you’ve agreed to in your plan such as:
- going to all your appointments and compulsory activities
- telling your provider before your appointment or activity if you can’t attend it
- 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, you won’t get a payment 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 move with you if you change your provider. This applies if you move to a different provider in:
- Disability Employment Services, or
Page last updated: 9 January 2019