Urgent employment services reform needed to address compliance failings and restore trust and dignity

The Brotherhood of St. Laurence (BSL) says the Commonwealth Ombudsman’s damning report into the Targeted Compliance Framework signals the point of no return for public confidence in Australia’s employment services system.

The Ombudsman found that the automated system used to apply Centrelink compliance penalties had unlawfully cancelled at least 964 payments between April 2022 and July 2024, with further errors automatically cancelling a further 45 people’s payments, even after a pause was introduced. 

The report described the Federal Government’s failure to implement essential protections, their inadequate consultation processes, holes in quality assurance, and delays in decision making, as having “potentially significant, if not catastrophic” consequences for people already living in poverty. It stated, “A person receiving Job Seeker Payment is under the poverty line. If their Job Seeker Payment is cancelled, the impact on an individual can be catastrophic.”

“This report confirms serious failings in the current compliance system,” said Dr Travers McLeod, Executive Director of BSL.

“These compliance failures are additional to an already struggling system with poor employment outcomes and diminishing public confidence.”

This is not the first report to identify the need for deep reform. In November 2023, the House of Representatives Select Committee on Workforce Australia Employment Services described the nature and extent of the obligations on income support recipients as “like using a nuclear bomb to kill a mosquito.” The Committee’s final report, Rebuilding Employment Services, recommended a fundamental redesign of the system. Reports from the Economic Inclusion Advisory Committee have reaffirmed these findings and recommendations, including the harm that can be caused by payment suspensions and cancellations.

“We need a new approach that is lawful, fair, and focused on building capability and confidence to help people move into employment, not punitive measures that push people further away from the labour market. There is an urgent need to work together on a better system that builds trust and gets results.” Dr McLeod said.

BSL joins calls from across the community sector for the Federal Government to:

• Immediately stop all Centrelink payment penalties, including suspensions, reductions and cancellations related to compulsory activities
  

• Remove the Targeted Compliance Framework, a program that has caused systemic and avoidable harm, and comprehensively reform the Workforce Australia system

Despite recent pauses to some payment cancellations, the compliance framework remains in operation, with thousands of people still experiencing payment suspensions every quarter under Workforce Australia.

“At BSL, we see every day that people make progress when they are treated with dignity and offered the right quality support,” Dr McLeod said.

“Workforce Australia is not a productive human services system. The House of Representatives Review declared this to be the case nearly two years ago. The Ombudsman’s report has now made similar damning findings. We call on the Federal Government to work with service participants, providers, employers, and community organisations to build a system that reflects true partnership and enables people to thrive.” 

Read the Commonwealth Ombudsman's report: Automation in the Targeted Compliance Framework: when the law is changed but the system isn’t

For media enquiries, please contact media@bsl.org.au or 0491 159 256