{"id":"F2018L00795","name":"Social Security (Administration) (Non-Compliance) Determination 2018 (No. 1)","slug":"social-security-administration-non-compliance-determination-2018-no-1","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":97455,"registerId":"commonwealth-F2018L00795-current","compilationNumber":null,"startDate":"2026-04-02","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"Name","content":"#### 1 Name\n\n  This instrument is the Social Security (Administration) (Non-Compliance) Determination 2018 (No. 1).","sortOrder":0},{"sectionNumber":"3","sectionType":"section","heading":"Authority","content":"#### 3 Authority\n\n  This instrument is made under subsection 42AR(1) of the Act.","sortOrder":1},{"sectionNumber":"4","sectionType":"section","heading":"Definitions","content":"#### 4 Definitions\n\n> Note: Some expressions used in this instrument are defined in the Act or the 1991 Act, including the following:\n\n    (a) participation payment;\n    (b) post-cancellation non-payment period;\n    (c) Human Services Department;\n    (d) Employment Department; and\n    (e) employment pathway plan.\n  In this instrument:\n\n> 1991 Act means the Social Security Act 1991.\n\n> 3 active months means:\n\n  (1) the shorter of:\n    (a) 91 consecutive days (beginning on or after 1 July 2018) plus any days equal to the number of days a person spends in the following periods during those 91 days:\n    (i) time spent exempt or relieved from activity test requirements under Division 3A of Part 2.10, Subdivision C of Division 1 of Part 2.11, Subdivision BA of Division 1 of Part 2.12, sections 602B, 602C, 603, 603A, 603AAA, 603AB, 731DA, 731DB, 731E, 731F, 731GA, 731JA, 731K of the 1991 Act;\n    (ia) periods during which the person is not required to satisfy the employment pathway plan requirements under section 40L, 40M, 40N, 40P or 40Q of the Act;\n    (ii) one week for each instance that the Secretary has determined that an instalment of the person’s participation payment be reduced by an amount specified in paragraph 42AN(3)(a) of the Act;\n    (iii) two weeks for each instance the Secretary has determined that an instalment of the person’s participation payment be reduced by an amount specified in paragraph 42AN(3)(b) of the Act;\n    (iv) a post-cancellation non-payment period under 42AP(5);\n    (v) the time between:\n    i., a person’s referral to the Human Services Department for a DHS assessment; and\n    ii. the completion of that assessment; and\n    (b) twelve months.\n  (2) For the purposes of this definition, if any two or more of the periods listed in paragraph 1(a) overlap, the days that overlap will only count once when calculating the days equal to the number of days the person spends in those periods.\n\n> 6 active months means:\n\n  (1) the shorter of:\n    (a) 182 consecutive days (beginning on or after 1 July 2018) plus any days equal to the number of days a person spends in the following periods during those 182 days:\n    (i) time spent exempt or relieved from activity test requirements under Division 3A of Part 2.10, Subdivision C of Division 1 of Part 2.11, Subdivision BA of Division 1 of Part 2.12, sections 602B, 602C, 603, 603A, 603AAA, 603AB, 731DA, 731DB, 731E, 731F, 731GA, 731JA, 731K of the 1991 Act;\n    (ia) periods during which the person is not required to satisfy the employment pathway plan requirements under section 40L, 40M, 40N, 40P or 40Q of the Act;\n    (ii) one week for each instance that the Secretary has determined that an instalment of the person’s participation payment be reduced by an amount specified in paragraph 42AN(3)(a) of the Act;\n    (iii) two weeks for each instance the Secretary has determined that an instalment of the person’s participation payment be reduced by an amount specified in paragraph 42AN(3)(b) of the Act;\n    (iv) a post-cancellation non-payment period under 42AP(5);\n    (v) the time between:\n    i. a person’s referral to the Human Services Department for a DHS assessment; and\n    ii. the completion of that assessment; and\n    (b) twelve months.\n  (2) For the purposes of this definition, if any two or more of the periods listed in paragraph 1(a) overlap, the days that overlap will only count once when calculating the days equal to the number of days the person spends in those periods.\n\n> Act means the Social Security (Administration) Act 1999.\n\n> demerit means a record on the Employment Department’s Information Technology System that the person has committed a mutual obligation failure without a valid reason.\n\n> DHS assessment means an assessment by the Human Services Department to assess whether the person’s employment pathway plan is suitable for them.\n\n> mutual obligation failure means a mutual obligation failure under subsection 42AC of the Social Security (Administration) Act 1999.\n\n> relevant failure means the relevant failure described in subsection 42AF(1) of the Act.","sortOrder":2},{"sectionNumber":"5","sectionType":"section","heading":"Circumstances where a person has, and has not, persistently committed mutual obligation failures","content":"#### 5 Circumstances where a person has, and has not, persistently committed mutual obligation failures\n\n  Circumstances where a person has persistently committed mutual obligation failures\n  (1) For the purposes of paragraph 42AF(2)(a) of the Act, the Secretary must be satisfied that a person has persistently committed mutual obligation failures if:\n    (a) the relevant failure was committed within 3 active months beginning on a day worked out under subsections (2) or (3); or\n    (b) in the 3 active months prior to the relevant failure, the person has committed at least 1 mutual obligation failure without a reasonable excuse where the Secretary was satisfied that the person had persistently committed mutual obligation failures.\n  (2) For the purposes of subsection (1), and subject to subsection (3), if, in any 6 active months:\n    (a) a person commits:\n    (i) at least 5 mutual obligation failures to which a demerit is attached; or\n    (ii) 2, 3 or 4 mutual obligation failures to which a demerit is attached, where at least 1 of those mutual obligation failures was:\n    (A) failing to attend a job interview; or\n    (B) failing to act on a job opportunity when requested to do so by an employment services provider; or\n    (C) the person intentionally acting in a manner and it is reasonably foreseeable that acting in that manner could result in an offer of employment not being made to the person; and\n    (b) the person undergoes a DHS assessment;\n  then the day is the day on which the DHS assessment is complete.\n  (3) For the purposes of subsection (1), and despite subsection (2), if, in any 6 active months, the circumstances set out in either:\n    (a) subparagraph 5(2)(a)(i) and subsection 5(2)(b); or\n    (b) subparagraph 5(2)(a)(ii) and subsection 5(2)(b);\n  apply to a person, but one or more of the person’s demerits is reversed after the person undergoes the DHS assessment, and the person subsequently commits one or more mutual obligation failures to which a demerit is attached that is not subsequently reversed, then the day is the day upon which the person commits:\n    (c) the fifth mutual obligation failure in 6 active months to which a demerit is attached that is not subsequently reversed; or\n    (d) the second, third or fourth mutual obligation failure in 6 active months to which a demerit is attached that is not subsequently reversed, where at least 1 of the mutual obligation failures recorded in the Employment Department’s Information Technology System is of the kind described in subparagraphs 5(2)(a)(ii)(A), (B) or (C).\n  (4) For the purposes of this section, a demerit is reversed if it is removed from the Employment Department’s Information Technology System, including because:\n    (a) it was recorded in respect of a mutual obligation failure by a person who subsequently underwent a DHS assessment, and the outcome of the DHS assessment was that the person’s employment pathway plan was not suitable for the person;\n    (b) it was recorded in respect of a mutual obligation failure by a person who subsequently underwent a capability assessment with their employment services provider, and the outcome of that assessment was that the person’s employment pathway plan was not suitable for the person;\n    (c) it was recorded in respect of a mutual obligation failure by a person and the person was subsequently found to have had a valid reason for committing the failure; or\n    (d) it was recorded in error.\n\n> Note: If the outcome of the DHS assessment is that the person’s employment pathway plan is not suitable for the person, then all the person’s demerits will be removed from the Employment Department’s Information Technology System at that time.\n\n  Circumstances where a person has not persistently committed mutual obligation failures\n  (5) Despite subsections (1) to (3), for the purposes of paragraph 42AF(2)(a) of the Act, the Secretary must not be satisfied that a person has persistently committed mutual obligation failures if the person has not committed a mutual obligation failure to which a demerit is attached, or a mutual obligation failure without a reasonable excuse, in the 3 active months prior to the relevant failure.\n  (6) For the avoidance of doubt, despite subsections (1) to (3), for the purposes of paragraph 42AF(2)(a) of the Act, the Secretary must not be satisfied that a person has persistently committed mutual obligation failures if one or more of the person’s demerits referred to in subparagraphs 5(2)(a)(i) or (ii) is reversed, with the result that:\n    (a) the person has not committed at least 5 mutual obligation failures to which a demerit is attached, for the purposes of subparagraph 5(2)(a)(i); or\n    (b) the person has not committed 2, 3, or 4 mutual obligation failures to which a demerit is attached (at least one of which was a mutual obligation failure described in subparagraphs 5(2)(a)(ii)(A), (B) or (C)), for the purposes of subparagraph 5(2)(a)(ii).","sortOrder":3},{"sectionNumber":"6","sectionType":"section","heading":"Circumstances where a person’s participation payment is to be reduced (and by how much) or cancelled","content":"#### 6 Circumstances where a person’s participation payment is to be reduced (and by how much) or cancelled\n\n  Reduction of payment by half the instalment\n  (1) If:\n    (a) the Secretary determines under paragraph 42AF(2)(c) of the Act that an instalment of a person’s participation payment for an instalment period is to be reduced; and\n    (b) the Secretary is satisfied that the circumstances set out in paragraph 5(1)(a) or (b) of this instrument apply to the person;\n  then, for the purposes of subsection 42AN(4) of the Act, the Secretary must determine that paragraph 42AN(3)(a) of the Act applies in relation to the reduction.\n  Reduction of payment by the whole instalment\n  (2) Despite subsection (1), if:\n    (a) the Secretary determines under paragraph 42AF(2)(c) of the Act that an instalment of the person’s participation payment for an instalment period (the relevant instalment period) is to be reduced; and\n    (b) in the 3 active months prior to the relevant failure:\n    (i) the Secretary has previously determined under paragraph 42AF(2)(c) of the Act that an instalment of the person’s participation payment for an instalment period (whether for the relevant instalment period or another instalment period) is to be reduced by the amount specified in paragraph 42AN(3)(a) of the Act; and\n    (ii) that previous determination was the last determination made under paragraph 42AF(2)(c) of the Act in relation to the person before the determination referred to in paragraph (a);\n  then, for the purposes of subsection 42AN(4) of the Act, the Secretary must determine that paragraph 42AN(3)(b) of the Act applies in relation to the reduction referred to in paragraph (a).\n  First relevant failure after cancellation – reduction of payment by half the instalment\n  (4) Despite subsection (2), if:\n    (a) the person previously received a participation payment; and\n    (b) that payment was cancelled under paragraph 42AF(2)(d) of the Act; and\n    (c) the relevant failure is the first mutual obligation failure where the person does not have a reasonable excuse in the 3 active months since that cancellation;\n  then, for the purposes of subsection 42AN(4) of the Act, the Secretary must determine that paragraph 42AN(3)(a) of the Act applies in relation to the reduction referred to in paragraph (2)(a) of this instrument.","sortOrder":4}],"analysis":{"flash_summary":{"complexity_score":7,"scope_assessment":{"changed":false,"description":"This instrument operates under subsection 42AR(1) of the Act (s3) and does not itself create new substantive offences or new powers beyond the Act. Instead it specifies how the Act’s existing mutual‑obligation failure and sanction provisions are to be applied: defining 'active months', setting numerical thresholds and timing rules for persistent failure, detailing demerit reversal grounds, and prescribing when half or whole instalment reductions apply (Definitions s4; Circumstances s5; Payment reductions s6). It therefore narrows implementation mechanics rather than expanding the statutory scope."},"complexity_factors":["Extensive cross‑references to the Act and the Social Security Act 1991 for defined terms and authority (see Authority s3; Definitions s4).","Layered time‑period calculations for '3 active months' and '6 active months' including added days for various exempt periods and overlap rules (Definitions s4).","Conditional, tiered thresholds for persistent failure (5 demerits, or 2–4 with at least one specified serious type) within 6 active months (Circumstances s5(2)).","Interaction with DHS assessments and capability assessments that change the trigger date and can reverse demerits (s5(2)(b), s5(3), s5(4)).","Demerit reversal logic that depends on multiple outcomes (unsuitable employment pathway plan, valid reason, administrative error) and affects counting (s5(4)–(6)).","Look‑back and escalation rules for payment reduction from half to whole instalment based on prior determinations within the prior 3 active months, with a carve‑out where cancellation was the last outcome (s6(1)–(4)).","Reliance on departmental IT records ('Employment Department’s Information Technology System') as the operative record for demerits and reversals (Definitions; s5)."],"plain_english_summary":"This Determination sets the mechanics for when the Secretary treats a jobseeker as having persistently failed mutual‑obligation requirements and prescribes how participation payments are reduced or cancelled. It defines the calculation of “3 active months” and “6 active months”, how demerits are recorded or reversed, and when a DHS assessment resets or fixes the relevant day. The Secretary makes the decisions; affected recipients face half or whole instalment reductions depending on recent demerits and assessment outcomes."},"flash_summary_failed":{"failed":true,"reason":"A positive credit balance is required for all requests, including BYOK, so fallback providers remain available. Add credits at https://vercel.com/d?to=%2F%5Bteam%5D%2F%7E%2Fai%3Fmodal%3Dtop-up to continue.","source":"analysis-cron"},"kimi_summary":{"content_quality":"ok","complexity_score":8,"scope_assessment":{"changed":false,"description":"This instrument appears to be operating within its original intended scope as a technical determination under section 42AR(1) of the Social Security (Administration) Act 1999. It implements the specific compliance framework (demerit point system) that was the stated policy intent of the 2018 welfare reforms. The complexity arises from the detailed operational rules necessary to implement the policy, not from scope creep."},"complexity_factors":["Multiple nested defined terms with recursive calculations (3 active months and 6 active months definitions that reference each other and multiple external statutory provisions)","Heavy cross-referencing to the Social Security Act 1991 and Social Security (Administration) Act 1999 (over 20 specific section references)","Complex conditional logic with multiple exceptions to exceptions (e.g., section 6 has 'Despite subsection (1)' followed by 'Despite subsection (2)')","Demerit reversal mechanics that require tracking historical administrative decisions and their outcomes","Overlapping period calculations with anti-double-counting rules in the active months definitions","DHS assessment trigger points that depend on cumulative failure counts and specific failure types (job interview failures weighted differently)","Temporal tracking requirements spanning 3-month and 6-month rolling windows with variable start dates"],"plain_english_summary":"This law is the rulebook for the welfare \"demerit point\" system that reduces or cancels payments when people on JobSeeker or Youth Allowance don't meet job‑seeking obligations. It defines how demerits accrue, when failures are \"persistent,\" the reduction scale (first failure halves payment, second cancels it), and which months count toward compliance.\n\nIt affects participation payment recipients, employment service providers, and welfare departments. It matters because it decides when income is halved or cut and includes checks on whether an employment plan is suitable."}},"importantCases":[],"_links":{"self":"/api/acts/social-security-administration-non-compliance-determination-2018-no-1","history":"/api/acts/social-security-administration-non-compliance-determination-2018-no-1/history","analysis":"/api/acts/social-security-administration-non-compliance-determination-2018-no-1/analysis","conflicts":"/api/acts/social-security-administration-non-compliance-determination-2018-no-1/conflicts","importantCases":"/api/acts/social-security-administration-non-compliance-determination-2018-no-1/important-cases","documents":"/api/acts/social-security-administration-non-compliance-determination-2018-no-1/documents"}}