The Commonwealth Ombudsman has again cast serious doubts on Australia’s automated compliance system for jobseekers, heaping more pressure on the Employment department administering it.
While the department has sought to contain its malfunctioning technology and lack of discretion in unlawfully cancelling support payments as repairable, the new findings released on Tuesday point to more systemic failures.
They raise more doubts about the highly automated system, known as the Targeted Compliance Framework (TCF), that hands private employment service providers powers that can lead to support payments being suspended, reduced or cancelled.
“We could not be assured that DEWR (Department of Employment and Workplace Relations) maintains effective oversight of decisions made by providers, including through monitoring and responding to inconsistent or inappropriate decision-making by providers,” Ombudsman Iain Anderson’s report found.
“When we considered this against the unlawful cancellations, it calls into question the fairness and reasonableness of decision-making that resulted in job seekers losing vital financial support.”
Aspects of DEWR’s decision making in cancelling almost 1,000 jobseeker support payments and its eventual remediation strategy were also found to be “not fair and reasonable” by the Ombudsman.
IT faults and incorrect application of social security law and policy have led to almost 1,000 jobseekers having support payments illegally cancelled by the government since 2022.
But it took more than two years for DEWR to implement a pause on the cancellations, which remain in place today amid ongoing assurance reviews and doubts about thousands more decisions.
After accepting the faults with cancellations, DEWR asked some of these jobseekers to retrieve evidence from years earlier about the detriment they suffered and access compensation schemes.
This was because the same automated system that inflicted the damage lacked the proper records in many cases and the lag in remediation ruled out simpler repayments.
“Putting the burden on job seekers to provide accurate and relevant historical additional information to dispute a decision of non-compensation, or to seek additional compensation through another… claim, after an agency error and three-year delay, is not a fair and reasonable approach…” the report said.
Oversight missing
While these cancellations remain paused today, jobseekers still face payment suspensions if their outsourced provider determines they have persistently failed to meet “mutual obligations” like attending meetings and applying for jobs.
Advocates have repeatedly warned the mutual obligations and TCF have become a tool for subterfuge and coercion of jobseekers by private providers to increase their payments from government.
More than one in four of the provider decisions that a jobseeker had persistent failures in mutual obligations are overturned when reviewed by Services Australia and discussed with the jobseeker.
But the Ombudsman found DEWR’s compliance activities against providers “do not appear to align to the high number of overturned rates of provider decisions”.
The department told the Ombudsman earlier this year it had built a risk monitoring app for the TCF capable of providing alerts about potential provider non-compliance like retrospectively booking appointments the jobseeker cannot make or when there is a spike in demerits.
But DEWR later backtracked when the Ombudsman requested more information, telling investigators the app was incomplete and would not start gathering data until the end of 2025.
“Given the high rate of decisions that are being overturned, we welcome the new assurance tool that will be able to be used to alert DEWR to poor provider performance,” the Ombudsman said.
Advocates responded to the new report on Tuesday by repeating warnings of systematic failure in the TCF and renewing calls for the Albanese government to step in.
“The Ombudsman’s findings show that this is a system in crisis,” Antipoverty Centre spokesperson and JobSeeker recipient Jay Coonan said.
“For too long, welfare cops have avoided accountability while being gifted billions of dollars in public money to surveil, torment and punish welfare recipients.
“Payment suspensions cause immeasurable damage to our lives, destabilising people when we are already struggling to survive. This scandal must end, not when the government decides what tweaks it would like to make to this system, but now.”
Economic Justice Australia chief executive Kate Allingham said the latest report shows “just how little regard for human life is had by private service providers, who are in fact incentivised to mistreat people receiving Centrelink payments”.
“It is also clear that neither DEWR nor Services Australia have the ability to administer the employment services system in a way that is fair to the many hundreds of thousands of people who access these payments,” Ms Allingham said.
Australian Council of Social Service CEO Cassandra Goldie said the TCF must be removed.
“This report demonstrates widespread harmful action against low income people and complete lack of oversight of private providers, alongside the thousands of illegal payment cancellations already identified,” Dr Goldie said.
“In a system which hands employment service providers $1.2bn a year, the lack of robust independent oversight is unacceptable.”
DEWR has accepted all seven of the relevant recommendations from the Ombudsman to improve the operation of the TCF, but challenged Mr Anderson’s finding of unfair remediation for cancellations, with secretary Natalie James telling him it was “fit for purpose”.
Employment minister Amanda Rishworth declined to say whether she has confidence that the TCF is operating legally.
In a statement, Ms Rishworth said she expects the Ombudsman’s recommendations to be “implemented in a timely manner”.
“The government understands the importance of ensuring government systems operates with integrity, particularly when interacting with vulnerable people,” she said.
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