A new report has uncovered that over 310,000 Australians had their Centrelink payments unlawfully cancelled due to a glitch in the government’s automated mutual obligations system. The findings, based on analysis by Economic Justice Australia (EJA), suggest that the scale of the issue is far greater than initially acknowledged by the Department of Employment and Workplace Relations.
This revelation raises significant concerns over the effectiveness of the system that supports vulnerable Australians. The government’s mutual obligations scheme, which ties welfare payments to job-seeking activities, has long been controversial, but this new data highlights a potentially damaging flaw in its execution.
A Glitch That Affected Hundreds of Thousands
Between 2020 and 2024, an estimated 310,000 people saw their Centrelink payments cancelled after missing compulsory meetings with job providers. According to EJA’s analysis, these cancellations occurred due to an error in the system that did not allow jobseekers the legally mandated 28-day period to reconnect with a provider after missing an appointment. The system, which automatically tracks jobseeker compliance with mutual obligations, failed to provide sufficient time for re-engagement.
The department initially identified only a small number of affected individuals but later acknowledged the full extent of the problem after the EJA presented their findings. “The system is being applied unlawfully at worst, and it’s defective administration at best. It’s thousands and thousands of people who are having really serious consequences because there are errors in the automated processes.” said Kate Allingham, CEO of Economic Justice Australia. The analysis, based on public data and legal cases, indicates that many individuals faced financial hardship as a direct result of these errors.
Impact on Vulnerable Australians
The ramifications of these wrongful cancellations have been severe for those affected. One case involved a woman, referred to as “Jane,” who enrolled in the New Enterprise Incentive Scheme (NEIS) in 2021.
The program was designed to help Australians start their own businesses and did not require participants to attend job provider meetings. Despite being told she was exempt, Jane’s payment was suspended and cancelled before the 28-day grace period. Left without financial support, she struggled to cover basic living expenses and fell into financial distress.
Kristin O’Connell from the Antipoverty Centre stressed that the issues were not just administrative mistakes but were indicative of unlawful decisions at every step of the process. “What is fundamental to this is that while some of these processes can progress automatically, every single one of these things involves an unlawful decision by a human being at the beginning of the process,” O’Connell explained.
Despite the department halting the cancellations in 2024, the problem remains unresolved for many, with the government failing to compensate affected individuals adequately. O’Connell calls for immediate action, including the suspension of payment cancellations and compensation for those harmed by the system’s flaws.
The Australian government has faced mounting pressure to address the issue. Although the Department of Employment and Workplace Relations has paused the cancellations, both the department and Employment Minister Amanda Rishworth have yet to comment directly on the findings of the EJA report.
