Note 1: In certain circumstances a person is taken to be receiving a participation payment even if it is not payable to the person: see section 42AQ.
Note 2: See Division 2B for the circumstances in which paid work is unsuitable to be done by a person.
(2) However, a person does not commit a work refusal failure if:
(a) the person is the principal carer of at least one child or has a partial capacity to work; and
(b) the person refuses or fails to accept an offer of paid work in Australia that is more than 15 hours per week.
Note 1: For principal carer see subsections 5(15) to (24) of the 1991 Act.
Note 2: For partial capacity to work see section 16B of the 1991 Act.
42AE Unemployment failures
(1) A person commits an unemployment failure if:
(a) the person is receiving a participation payment; and
(aa) in the case where the participation payment is parenting payment—the person is not someone to whom paragraph 500(1)(ca) of the 1991 Act applies; and
(b) the person becomes unemployed:
(i) as a direct or indirect result of a voluntary act of the person; or
(ii) as a result of the person’s misconduct as an employee.
Note: In certain circumstances a person is taken to be receiving a participation payment even if it is not payable to the person: see section 42AQ.
(2) A person also commits an unemployment failure if:
(a) the person is not receiving, but has made a claim for, a participation payment; and
(aa) in the case where the participation payment is parenting payment—the person is not someone to whom paragraph 500(1)(ca) of the 1991 Act applies; and
(b) the person becomes unemployed (whether before or after making the claim):
(i) as a direct or indirect result of a voluntary act of the person; or
(ii) as a result of the person’s misconduct as an employee.
(3) However, a person does not commit an unemployment failure because of subparagraph (1)(b)(i) or (2)(b)(i) if the person satisfies the Secretary that the voluntary act was reasonable.
(4) A person also does not commit an unemployment failure if:
(a) the person is the principal carer of at least one child or has a partial capacity to work; and
(b) the work in relation to which the person became unemployed was work of more than 15 hours per week.
Note 1: For principal carer see subsections 5(15) to (24) of the 1991 Act.
Note 2: For partial capacity to work see section 16B of the 1991 Act.
Subdivision C—Compliance action that must be taken for particular failures
42AF Compliance action for mutual obligation failures
Usual rule
(1) If a person commits a mutual obligation failure (the relevant failure), the Secretary may:
(a) determine that the person’s participation payment is not payable to the person for a period (see section 42AL); and
(b) take action under subsection (2) (if applicable).
Note: The person may be eligible for back pay once the payment suspension period ends (see subsection 42AL(4)).
Special rule—persistent mutual obligation failures and no reasonable excuse
(2) If:
(a) the Secretary is satisfied in accordance with an instrument made under subsection 42AR(1) that the person has persistently committed mutual obligation failures; and
(b) the person does not satisfy the Secretary that the person has a reasonable excuse for the relevant failure (see sections 42AI and 42AJ);
the Secretary may determine:
(c) that an instalment of the person’s participation payment for an instalment period is to be reduced (see section 42AN), in addition to making a determination under paragraph (1)(a) of this section; or
(d) that the person’s participation payment is cancelled (see section 42AP).
Note 1: For paragraph (c), the person may be eligible for back pay once the person’s payment suspension period ends (see subsection 42AL(4)). However, the back pay may be reduced (including to nil) if the instalment period for which an instalment is to be reduced under paragraph (c) overlaps with the payment suspension period.
Note 2: For paragraph (d), a further consequence is that participation payments will not be payable to the person for the person’s post‑cancellation non‑payment period (see subsection 42AP(5)).
(3) A determination made under paragraph (2)(d) for the relevant failure has effect despite any determination made under paragraph (1)(a) for the relevant failure.
Action not to be taken—instalment already reduced to nil for instalment period when failure committed
(4) Despite subsections (1) and (2), the Secretary must not make a determination under this section for the relevant failure if:
(a) the Secretary has previously determined under paragraph (2)(c) that an instalment of the person’s participation payment for an instalment period is to be reduced; and
(b) the instalment for the instalment period is reduced by the whole of the amount of the instalment (see paragraph 42AN(3)(b)); and
(c) the person commits the relevant failure during that instalment period.
42AG Compliance action for work refusal failures
(1) If a person commits a work refusal failure, the Secretary may:
(a) determine that the person’s participation payment is not payable to the person for a period (see section 42AL); or
(b) determine that the person’s participation payment is cancelled (see section 42AP) if the person does not satisfy the Secretary that the person has a reasonable excuse for the work refusal failure (see section 42AI).
Action not to be taken—instalment already reduced to nil for instalment period when failure committed
(4) Despite subsection (1), the Secretary must not take action under this section for a work refusal failure (the relevant failure) if:
(a) the Secretary has previously determined under paragraph 42AF(2)(c) that the amount of an instalment of the person’s participation payment for an instalment period is to be reduced; and
(b) the instalment for the instalment period is reduced by the whole of the amount of the instalment (see paragraph 42AN(3)(b)); and
(c) the person commits the relevant failure during that instalment period.
42AH Compliance action for unemployment failures
Unemployment failures committed by persons receiving a participation payment
(1) If a person receiving a participation payment commits an unemployment failure, the Secretary may determine that the participation payment is cancelled (see section 42AP).
Note: Participation payments will not be payable to the person for the person’s post‑cancellation non‑payment period (see subsection 42AP(5)).
Unemployment failures committed by persons claiming a participation payment
(2) If a person who has made a claim for (but is not receiving) a participation payment has committed an unemployment failure, the Secretary may determine that participation payments (whether or not the same as the participation payment that was claimed) are not payable to the person for a period (see section 42AO).
42AI Reasonable excuses—matters that must or must not be taken into account
Matters to be taken into account
(1) The Secretary must, by legislative instrument, determine matters that the Secretary must take into account in deciding whether a person has a reasonable excuse for committing:
(a) a mutual obligation failure (see paragraph 42AF(2)(b)); or
(b) a work refusal failure (see paragraph 42AG(1)(b)).
(2) To avoid doubt, a determination under subsection (1) does not limit the matters that the Secretary may take into account in deciding whether the person has a reasonable excuse.
Matters not to be taken into account
(3) The Secretary may, by legislative instrument, determine matters that the Secretary must not take into account in deciding whether a person has a reasonable excuse for committing:
(a) a mutual obligation failure (see paragraph 42AF(2)(b)); or
(b) a work refusal failure (see paragraph 42AG(1)(b)).
42AJ Reasonable excuses for mutual obligation failures—prior notification required for certain failures
(1) For the purposes of paragraph 42AF(2)(b), an excuse cannot be a reasonable excuse for a mutual obligation failure mentioned in subsection (2) of this section that is committed by a person unless:
(a) the person notifies the excuse as mentioned in subsection (3) of this section; or
(b) the Secretary is satisfied that there were circumstances in which it was not reasonable to expect the person to give the notification.
Note: The Secretary may also decide for other reasons that the excuse is not a reasonable excuse.
(2) The failures are as follows:
(a) a failure to comply with a requirement that was notified to the person under subsection 63(2) to attend an office of the Department, to contact the Department, or to attend a particular place;
(b) without limiting paragraph (a), a failure to attend, or to be punctual for, an appointment that the person is required to attend by a notice under subsection 63(2);
(c) a failure to attend, to be punctual for, or to participate in, an activity that the person is required to undertake by an employment pathway plan that is in force in relation to the person;
(d) a failure to attend, or to be punctual for, an appointment that the person is required to attend by an employment pathway plan that is in force in relation to the person.
(3) The person must notify the excuse:
(a) for a failure mentioned in paragraph (2)(a) or (b):
(i) before the end of the time specified under subsection 63(2); and
(ii) to the person or body specified by the Secretary as the person or body to whom prior notice should be given if the person is unable to comply with the notice under subsection 63(2); and
(b) for a failure mentioned in paragraph (2)(c) or (d):
(i) before the start of the activity on the day concerned, or before the time of the appointment; and
(ii) to the person or body specified in the employment pathway plan as the person or body to whom prior notice should be given if the person is unable to undertake the activity or attend the appointment.
42AK Relationship between provisions of this Subdivision
Sections 42AF, 42AG and 42AH do not limit each other.
Subdivision D—Effect of taking particular compliance action
42AL Payment suspension periods for mutual obligation failures and work refusal failures
(1) If the Secretary determines under section 42AF or 42AG that a participation payment is not payable to a person for a period, the participation payment is not payable for the period (the payment suspension period) worked out under this section.
(2) The payment suspension period begins at the start of:
(a) the instalment period in which the person commits the mutual obligation failure or the work refusal failure (unless paragraph (b) applies); or
(b) if the Secretary determines that a later instalment period is more appropriate—that later instalment period.
(3) The payment suspension period ends immediately before:
(a) the day the person complies with the reconnection requirement imposed under subsection 42AM(1) (unless paragraph (b) of this subsection applies); or
(b) if the Secretary determines that an earlier day is more appropriate—that earlier day.
(4) If the payment suspension period ends under subsection (3) for a person, then, for the purposes of the social security law after the end of that period:
(a) the participation payment is taken to be payable to the person from the start of that period (subject to the social security law); and
(b) the Secretary is taken to have made a determination to the effect mentioned in paragraph (a).
Note: The effect of this subsection is that the person may receive back pay for the payment suspension period. However, the back pay may be reduced (including to nil) if the instalment period for which an instalment is to be reduced under section 42AN overlaps with the payment suspension period.
42AM Reconnection requirements for mutual obligation failures and work refusal failures
(1) The Secretary must impose a requirement (the reconnection requirement) on a person if the Secretary determines under section 42AF or 42AG that a participation payment is not payable to the person for a period.
(2) The Secretary must notify the person, in any way the Secretary considers appropriate, of:
(a) the reconnection requirement; and
(b) the effect of not complying with the reconnection requirement.
(3) The Secretary must determine that the person’s participation payment is cancelled if:
(a) the Secretary does not determine an earlier day for the purposes of ending the person’s payment suspension period under paragraph 42AL(3)(b); and
(b) the person fails to comply with the reconnection requirement within 4 weeks after it is notified under subsection (2) of this section.
(4) If the Secretary makes a determination under subsection (3), the participation payment is cancelled at the end of the 4 weeks mentioned in paragraph (3)(b).
42AN Reducing instalments of participation payments for mutual obligation failures
(1) This section applies if:
(a) a person commits a mutual obligation failure; and
(b) the Secretary makes a determination (the reduction determination) under paragraph 42AF(2)(c) that an instalment of a participation payment for an instalment period (the reduction period) is to be reduced.
(2) The reduction period must be:
(a) the instalment period in which the person commits the mutual obligation failure (unless paragraph (b) applies); or
(b) if the Secretary determines that a later instalment period is more appropriate—that later instalment period.
(3) The instalment payable to the person is reduced by an amount included in the reduction determination that is equal to:
(a) half of the instalment that would otherwise have been payable for the reduction period; or
(b) the whole of the instalment that would otherwise have been payable for the reduction period.
Note: Paragraph (b) may have the effect of reducing the amount of the instalment to nil. However, the participation payment remains payable (see subsection (6)).
(4) The Secretary must determine which of paragraph (3)(a) or (b) applies in relation to the reduction in accordance with an instrument made under subsection 42AR(1).
(5) The Secretary may make the reduction determination in accordance with paragraph (3)(b) for the reduction period even if the Secretary has already made a determination for the person in accordance with paragraph (3)(a) for the same instalment period for a different mutual obligation failure.
(6) The participation payment remains payable for the reduction period even if the amount of an instalment is reduced to nil in accordance with this section.
42AO Unemployment preclusion periods for unemployment failures by persons claiming participation payments
(1) If the Secretary determines under subsection 42AH(2) that participation payments are not payable to a person who has made a claim for a participation payment, then participation payments are not payable to the person for the period (the unemployment preclusion period) of:
(a) 4 weeks beginning on the day the person becomes unemployed as a result of the person’s voluntary act or misconduct (unless paragraph (b) applies); or
(b) 6 weeks beginning on that day, if, during the 6 months ending on the day immediately before that day, relocation assistance, for the employment to which the voluntary act or misconduct related, has been paid to or for the benefit of the person.
Note 1: The unemployment preclusion period may affect the person’s start day for a claim (see clauses 5 and 5A of Schedule 2).
Note 2: For the purposes of this subsection, it is irrelevant which participation payment the person claimed (see subsection 42AH(2)).
(2) For the purposes of this Act, relocation assistance for employment means a payment:
(a) that is made by or on behalf of the Commonwealth to or for the benefit of a person for the purpose of assisting the person to take up the employment; and
(b) that is specified under subsection (3).
(3) The Secretary may, by legislative instrument, specify one or more payments for the purposes of paragraph (2)(b).
42AP Cancelling participation payments
(1) This section applies if the Secretary determines under Subdivision C that the participation payment of a person who has committed a mutual obligation failure, a work refusal failure or an unemployment failure is cancelled.
When payments are cancelled
(2) For a mutual obligation failure or a work refusal failure, the participation payment is cancelled at the start of the following day (the cancellation day):
(a) the first day of the instalment period in which the person commits the failure (unless paragraph (b) applies);
(b) if the Secretary determines that a later instalment period is more appropriate—the first day of that later instalment period.
(3) For an unemployment failure committed by a person who was receiving the participation payment when he or she became unemployed, the participation payment is cancelled at the start of the following day (the cancellation day):
(a) the day that the person becomes unemployed as a result of the person’s voluntary act or misconduct (unless paragraph (b) applies);
(b) the first day of the first instalment period for the person that begins after the day the Secretary makes the determination under subsection 42AH(1), if the Secretary considers it more appropriate.
(4) For the purposes of paragraph (3)(b), the day the Secretary makes the determination is the day the Secretary originally makes the determination (even if another decision in relation to the determination is later made on review).
Participation payments not payable for post‑cancellation non‑payment period
(5) A participation payment (whether or not the same as the participation payment that was cancelled) is not payable to the person for the period (the post‑cancellation non‑payment period) of:
(a) 4 weeks beginning on the cancellation day (unless paragraph (b) applies); or
(b) 6 weeks beginning on the cancellation day, if: