Targeted Compliance Framework: Mutual Obligation Failures Guideline

In the 2017–18 Budget the Australian Government announced the introduction of the Targeted Compliance Framework (TCF) commencing from 1 July 2018. The framework is designed to ensure only those job seekers who are persistently and wilfully non-compliant incur financial penalties while providing protections for the most vulnerable. It is designed to encourage job seekers to engage with their employment services provider (Provider), take personal responsibility for managing and meeting their Mutual Obligation Requirements, and actively look for work. 

The TCF is comprised of three zones: Green Zone, the Warning Zone and the Penalty Zone. All job seekers will start in the Green Zone and, so long as they meet all their Mutual Obligation Requirements, they will remain in this zone. Where a job seeker commits a Mutual Obligation Failure they will move to the Warning Zone. If they continue to be non-compliant, they will be in either the Warning Zone or the Penalty Zone. 

Mutual Obligation Failures committed by job seekers in the Green or Warning Zone result in the creation of a Demerit. If the Provider establishes that the job seeker has a Valid Reason for the failure, the Demerit is removed. If the Provider establishes that the job seeker did not have a Valid Reason, the Demerit is confirmed. A job seeker’s first confirmed Demerit will move them from the Green Zone to the Warning Zone. Job seekers only accrue Demerits in the Warning Zone for Mutual Obligation Failures—i.e. there are no financial penalties in this zone. Instances of non-compliance will result in suspension of payment until the job seeker re-engages with their requirement. Providers are responsible for managing job seeker non compliance by using payment suspensions and the accrual of Demerits. This will encourage job seekers to remain engaged and change their non-compliant behaviour prior to the application of any financial penalties.  

Non-compliance without a Reasonable Excuse when the job seeker is in the Penalty Zone will result in financial penalties. Job seekers will only enter the Penalty Zone following multiple Mutual Obligation Failures and two reviews—one by their Provider and one by Department of Human Services—to confirm they have the capacity to meet their requirements outlined in their Job Plan.

For the purposes of this Guideline, for ParentsNext the term ‘job seeker’ refers to ‘Participant’ and ‘Job Plan’ refers to ‘Participation Plan’. 

Last modified on Wednesday 20 November 2019 [45441|165070]