Social Security Rights and the Targeted Compliance Framework

admin SOCIAL SECURITY RIGHTS REVIEW

Dr Simone Casey, Associate Future Social Services Institute RMIT*

The Targeted Compliance Framework (TCF) raises several long-standing concerns about the decision-making role of privatised employment services providers (Providers).  This article explains the features of the TCF and the decision making of Providers.  It draws on TCF Guideline and Reference Guides as sources of administrative direction provided to Providers.  It identifies several areas where Social Security decision making arguably has been handed over to Providers due to their role in the assessment of the valid and acceptable decisions that lead to demerit points.  The article identifies this and some other significant precursor decisions that lead to financial penalties for the consideration of the SSRN. 

The TCF was implemented on 1 July 2018 because of the Welfare Reform Act Amendment to the Social Security (Administration) Act 1999 Schedule 15—Targeted compliance framework.  The passage of the bill was followed by an extensive training exercise for the employment services workforce involving train the trainer sessions at which all Providers (currently active at that time) and online training materials.  This training has since been supplemented by additional training sessions and online learning materials.[1]

The TCF aims to foster job search behaviour by suspending and then restoring payments with back-pay on compliance, and applying actual rate reductions or non-payment periods for those few ‘wilfully’ doing the wrong thing.  DJSB estimated the TCF would only affect job seekers gaming the compliance system.  Estimates of the numbers affected in the Intensive compliance phase for the Financial Year 2018-2019 were: One week: 83,000; Two weeks: 42,000, Four weeks: 22,000.[2]

Sources of powers

In a legal sense, the job seeker compliance framework is based on the interaction between rules for social security eligibility (Social Security Act 1991); the administration of social security payments (Social Security Act 1999); specific program legislation to create program participants such as with CDP and ParentsNext, a number of statutory Instruments and the employment services contract which imposes the requirement to administer the compliance framework according to the Secretary’s rules and guidelines.

Employment services agencies have ‘to all intents and purposes’ have delegated powers to ensure adherence to social security rules.[3]   There are two areas of actual delegation.  The first is the specific responsibility for notification.  The TCF Guidelines/Manual clearly state that job seekers must be provided with notification of their ‘mutual obligation’ and informed about the consequences of non-compliance.  In the transition period to the TCF job agencies were required to review all job plans before 31 October in order to provide notification of the model.  Acceptance of the job plan is the mechanism by which notification is formally documented.

The second is they also are contractually required to decide whether or not there is a valid reason or acceptable reason for noncompliance.  These decisions lead to the accrual of demerit points which are the mechanism which leads to Social Security payment penalties (now called payment preclusion periods).

Demerit points

Demerit decisions depend on the interaction between the job seekers mutual obligation, (as notified in the job plan) and Provider decision making regarding valid and acceptable reason.  When a job seeker knows they cannot attend or meet a requirement in the future, they must give their Provider prior notice of this.  That means they have to contact their Provider before a requirement is due to start (e.g. before their activity begins) or before a requirement is due to be completed (e.g. before their Job Search Period ends), and explain what is preventing them from meeting their requirements.

TCF involves the accrual of demerit points which lead to payment preclusions after 5 demerit points*.[4].  This is explained in the reference guide as an administrative mechanism that triggers a notional demerit point when a job seeker does not comply with a Mutual Obligation Requirement.  The Demerit then remain in place until such time as it is either confirmed or removed, depending on the outcome of the Provider’s discussion with the job seeker.

Demerit decisions depend on Providers making an assessment of valid and reasonable reasons.  These decision draw on guidelines in which the Reasonable Excuse Instrument has been interpreted.  The reference guide says:

Providers are required to assess whether the job seeker had an Acceptable Reason or a Valid Reason for not being able to meet a requirement. Providers are directed to take several factors into consideration to make this assessment, depending on whether the requirement is either:

  • in the future and the job seeker is advising they cannot meet the requirement, or
  • in the past and the job seeker is giving a reason for why they did not meet the requirement.

Acceptable Reasons are only assessed before any non-compliance has occurred. When assessing whether the job seeker has given an Acceptable Reason, the Provider needs to:

  • Consider whether the given reason would be accepted by an employer if it had been given by an employee.
  • Take into account what they already know about the job seeker and their personal circumstances. This could include knowledge of family or caring responsibilities, transportation limitations or ongoing medical issues.

A valid reason is only valid if the job seeker could not have reasonably advised beforehand. The Provider needs to:

  • consider whether the given reason would be accepted by an employer,
  • whether it aligns with what the Provider knows about the job seeker and their circumstances, and
  • assess whether the job seeker could reasonably have given prior notice of their inability to meet the requirement.

If the reason is not accepted the payment suspension remains until the job seeker meets their Re-engagement Requirement and the job seeker will accrue a Demerit. 

TCF and the decision-making powers of employment services agencies

It is important to note demerit points cannot be appealed as such.  Centrelink does not play any role in the demerit decisions made by employment services.  They are now involved only from the point of the Capability Assessment (7th demerit point) and they then make the payment preclusion decisions if there are any further non-compliance events.  This means job seekers cannot appeal demerits to Centrelink until decisions of this character are made.  These employment services Provider decisions are precursor decisions.  Providers are contractually obligated to generate this ‘grist’ (info/assessments) for the compliance decision-making ‘mill’ within Centrelink; and (ii) when Providers determine that a demerit point has accumulated, and/or pass that on to Centrelink as contractually required–that may not, in itself qualify as a ‘decision’ for the purposes of ARO or Administration Act ‘review and appeals’.  The reason being that it is not yet ‘final and constitutive of an adverse consequence’[5] but only becomes such when 7 accumulate to trigger a rate reduction or preclusion penalty.

The appealability of demerits is also affected by the automation introduced in the Information Technology systems so that Providers cannot use any discretion in entering information, they just answer yes/no to a specific set of questions about the valid reason/reasonable reason.  This means the rules are hard wired somewhat into the system owned by DJSB, which shifts responsibility for TCF related social security decision making back to the designers of the processes and the IT infrastructure.

The TCF highlights several long-standing concerns about the decision-making.  The first concern is about the status of the precursor decisions that result in demerit points.  These interpretive elements of the TCF recall long-standing concerns about the relationship between the administrative responsibility of the ES workforce, and their capability relative to public servants.  It is by now clear that the ES workforce must interpret the guidelines, AND make decisions which resonate within the delegated authorities of the Social Security Administration Act. 

For example, the interpretive powers of Providers are apparent in guideline clauses about valid reasons directing them to “consider whether the given reason would be accepted by an employer”.  These ‘reasons’ are not defined and therefore rely on subjective interpretation and this requirement arguably lacks legal substance because it does not exist in the Reasonable Excuse Instrument.  Furthermore, the decision making of TCF has shifted from employment consultants to reception staff.  This shifted assessment of valid and acceptable interpretation from individual employment consultants to admin support roles. 

The public service prides itself on ensuring that those with delegated legal and administrative responsibility in Social Security are trained effectively.  Under contracting out of de facto responsibilities to Providers, the practical onus of training has been shifted to Providers through the ‘train-the-trainer’ and online tutorials.  Its effectiveness or otherwise is measured against contractual guidelines against which Providers are monitored as part of their contract compliance.  Since the employment services workforce is in flux there is a constant requirement for Providers to train new staff, and ensure they have reception staff who can administer TCF decisions.  This is a serious weakness because even at the best of times employment service workers are not public servants and operate in a more flexible or entrepreneurial culture.  The operating culture and goals of ES Providers are and are intended to be very different from the procedural consistency and other cultural norms of government public servants.  As a result, processes and substantive ‘decisions’ conveyed by Providers to the real legal decision-makers jeopardises the accuracy and fairness of those delegated public service decision-makers.

Payment suspensions

Payment suspensions under the TCF are problematic because they are triggered automatically when attendance at an appointment or activity has not been reported or recorded.  The TCF introduced a job seeker calendar available to job seekers as a dash board via app or website interface.  Activities agreed in the job plan are then scheduled in the job seeker calendar, where they become appointments at which the program participant, Provider or an external activity host must record attendance. 

The TCF introduced a distinction between reporting attendance and recording attendance, and in who is responsible for each.  Job seekers are required to report their attendance at appointments using the job seeker application or MyGov; while Providers and activity hosts are required to record attendance at appointments and activities with them.  ES Providers can record attendance directly onto ES Web, while activity hosts use the supervisor app, and scan QR codes as verification that job seekers have attended.

There are grounds for challenging the validity of any payment suspensions under Social Security Law.  This is because they qualify as ‘operative decisions’ of a Centrelink delegate and thus the ultimate decision (and then its precursor Provider actions) can be challenged by asking for ARO or Administrative Appeals Tribunal review.  However, since suspensions are lifted (except when a job seeker fails to report for 28 days and their payment is cancelled), it is unlikely they would form the basis of a legal challenge. Any correction of Provider actions comes very late in the piece, often well after concerns first arose.  What is more likely is that job seekers whose payment suspension resulted in adversity such as homelessness caused by not being able to access payments on the date expected will be left without compensation.

Other areas of concern in the TCF

The interpretations inherent in the TCF administration also introduce several other precursor decisions.  One of these precursor decisions is the decision about self-reporting.  A decision as to whether a job seeker is capable of self-reporting is arguably another Social Security ‘decision’ which is effectively being made by the Provider instead of by a public servant.  The reference guide directs that:  

Providers must make an assessment about job seeker capability and capacity to record/report their attendance and, based on this assessment, choose to keep the PA03 code in the job seeker’s Job Plan or remove it.

However, the guidelines acknowledge there will be occasions when job seekers cannot report attendance because they do not have access to IT etc.  Yet the guidelines insist in these circumstances that:

“job seekers are still responsible for reporting their attendance to their Provider or an Activity Supervisor to ensure that their participation has been recorded for that day. Note: regardless of whose responsibility it is to record attendance at Third Party Appointments, Job Interviews and activities, it must be recorded by close of business on the day of the requirement. Otherwise, the job seeker’s payment will be suspended overnight.”

The requirement for job seekers to contact their Provider when for example they have no telephone for self-reporting is morally unreasonable.  Lifting the suspension requires making contract with the Provider or the customer service line which again unreasonably presumes access to telephones or internet.

Since the introduction of the TCF there is evidence that payment suspensions are occurring due to Provider errors or when job seekers forget or have been incorrectly assessed as having the capacity to self-report.  Payment suspensions can thus be triggered by a job seekers own inaction which shifts administrative responsibility for the decision making into a Mutual Obligation failure.  While this shift has been identified in the concept of personal responsibility, this topic requires further elaboration in Social Security Law.

*Acknowledgements: Simone Casey is employed as a policy analyst at the peak body Jobs Australia. This article has been improved with the advice of Professor Terry Carney but should not be read as legal opinion.

[1] During the transition, the old compliance framework remained the active job seeker compliance framework until the job plan had been updated and notification provided. It is important to note that not all the job plan codes for job seekers or program participants were updated in the transition period meaning some financial penalties incurred post November 2018 may still have been applied (and subject to appeal) under the old compliance framework rules.

[2] Senate Estimates 29 May 2017 data

[4] If the job seeker then meets their requirements for three months, they return to the start of the process with zero demerits (green zone). After accruing five demerits in six months, further failures may result in escalating financial penalties which are not back-paid. Job seekers risk losing one week’s pay, then two weeks’ pay. Job seekers who still do not comply will have their payment cancelled and will have to wait four weeks before they can get paid again (red zone). Serious failures (like refusing work outright) will result in immediate loss of payment for four weeks, unless the job seeker has a reasonable excuse.

[5] (the Bond case test)