Automatic systems unlawfully cancelled 964 jobseekers' payments in two years, watchdog finds

Australia Broadcast Center

6 hours ago

Almost a thousand jobseekers had their income support payments unlawfully terminated over two years, the federal watchdog has found, cautioning the breach likely had a "profound if not catastrophic" impact on vulnerable people.
The cancellations occurred automatically under the Targeted Compliance Framework, a system set up to monitor "mutual obligations", which are the conditions people have to meet to continue receiving payments, like job hunting and attending interviews.
New laws introduced after the Robodebt scandal require agencies to consider the jobseeker's circumstances before cutting off a payment, which did not occur in 964 cancellations between April 2022 and July 2024.
"Imagine that if you were already living under the poverty line, so you can't necessarily afford to pay rent, to feed yourself, to clothe yourself, but imagine then that that income is cut off for four weeks or more," Commonwealth Ombudsman Iain Anderson said.
"What are you supposed to do? That's the type of catastrophe that we are talking about."
The Department of Employment and Workplace Relations paused the cancellation of payments in July last year, but the watchdog found it took too long to act after identifying the issue.
It then informed the Commonwealth Ombudsman in December that it had not implemented the new legislation, which was passed two years earlier, sparking an investigation into how the lapse occurred.
In his findings, the Ombudsman invoked conclusions from the Robodebt royal commission that warned automated processes in the delivery of support payments can have serious impacts on highly vulnerable people.
"[The Robodebt royal commissioner] noted that automation requires a lot of care and skill to make sure that things don't go wrong," Mr Anderson said.
"And while this is not the same as Robodebt, in that it wasn't a deliberate intention of doing things wrongly, there just wasn't the adequate care and skill being employed to ensure parliament's instructions in terms of the legislation were properly implemented."
The department was involved in developing the new laws, according to the Ombudsman, which shifted the requirement from the secretary "must" cancel payments to "may" if they determine the recipient failed to meet their obligations without an acceptable excuse.
"That big change required the individual circumstances of each jobseeker to be considered before their payment was cancelled, and that's the step that they didn't do — instead the system went on automatically cancelling payments," he said.
The report makes seven recommendations, including that the department not resume cancellations until the errors have been corrected and that systems are put in place to provide ongoing assurance that the framework complies with the law.
All the recommendations be accepted by the department and Services Australia.
The Ombudsman is also investigating whether the decision-making process that leads to cancellations is fair and reasonable, and the role of employment agencies, with the findings to be released in a second report later this year.
Under the framework, recipients accrue demerit points if they fail to meet their obligations without a valid reason, which can lead to their payments being suspended, reduced or cut off. More than 883,000 Australians are currently on the scheme, according to government data.
A separate review by Deloitte into the framework's computer system — which was completed in June but is yet to be publicly released — found it had become "increasingly unstable, with volatility directly impacting compliance function operation" and increasing the possibility of unexpected results "including flawed determinations".
Employment Minister Amanda Rishworth did not respond to a request for comment.