(2) The notification does not have to be in writing, but must occur before the person is required to comply with the reconnection requirement or the further reconnection requirement.
42L Deduction of penalty amount
If the Secretary determines that a person commits a reconnection failure, the person’s penalty amount (see section 42T) for the reconnection failure is to be deducted from the person’s instalment of a participation payment for the instalment period determined under subsection 42H(5).
Note: The balance of the penalty amount is to be deducted from instalments of the participation payment for any later instalment periods, or from any instalments of any other participation payment paid to the person (see section 42V).
Subdivision D—Serious failures
42M Serious failure for persistent non‑compliance
(1) The Secretary may determine that a person commits a serious failure if:
(a) the Secretary is satisfied that the person has, up to the day the Secretary makes the determination, persistently failed to comply with his or her obligations in relation to a participation payment (including by committing no show no pay failures, connection failures or reconnection failures); and
(b) the person receives a participation payment for the instalment period in which the Secretary makes the determination.
Note 1: A participation payment is not payable for 8 weeks for a serious failure (see section 42P).
Note 2: For the day the Secretary makes the determination, see section 42Y.
(2) In determining whether a person commits a serious failure under subsection (1):
(a) the Secretary must not take into account failures that were outside the person’s control; and
(b) the Secretary may only take into account any other failures that occurred intentionally, recklessly or negligently.
Limitations on determining persistent non‑compliance serious failures
(3) The Secretary must not determine that a person commits a serious failure under subsection (1):
(a) while the person is in a serious failure period for another serious failure determined under subsection (1); or
(b) if the person is a new apprentice; or
(c) if the person is someone to whom section 42SB applies.
Legislative instrument
(4) The Minister must, by legislative instrument, determine matters that the Secretary must take into account in deciding whether a person persistently failed to comply with his or her obligations in relation to a participation payment.
(5) In deciding whether a person persistently failed to comply with his or her obligations in relation to a participation payment, the Secretary must take the matters determined under subsection (4) into account.
(6) To avoid doubt, subsection (5) does not limit the matters that the Secretary may take into account in deciding whether the person failed to comply with his or her obligations.
42N Serious failure for refusing or failing to accept an offer of paid work
(1) The Secretary may determine that a person commits a serious failure if:
(a) the person is receiving a participation payment; and
(b) the person refuses or fails to accept an offer of paid work in Australia, except particular paid work that is unsuitable to be done by the person.
Note 1: A participation payment is not payable for 8 weeks for a serious failure (see section 42P).
Note 2: See Division 2B for the circumstances in which paid work is unsuitable to be done by a person.
(2) Despite subsection (1), the Secretary must not determine that a person commits a serious failure under that subsection if:
(a) the person satisfies the Secretary that the person has a reasonable excuse for the failure; or
(b) the person is someone to whom section 42SB applies.
Note: The Secretary must take certain matters into account for the purposes of paragraph (a) and may be prohibited from taking other matters into account for those purposes (see section 42U).
(3) Despite subsection (1), the Secretary must not determine that a person commits a serious failure under that subsection 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.
42NA Comprehensive compliance assessment
(1) Before the Secretary determines that a person has committed a serious failure under section 42M, the Secretary must conduct a comprehensive compliance assessment in relation to the person.
(2) The comprehensive compliance assessment must assess the following:
(a) the reasons why the person may have committed failures under this Division;
(b) the reasons why the person may have failed to meet other requirements under the social security law;
(c) whether the person has any barriers to employment;
(d) whether the person’s participation requirements are appropriate.
42NC Determination about serious failure requirements and severe financial hardship
If the Secretary determines that a person commits a serious failure, the Secretary must also determine that this section applies unless the Secretary is satisfied that:
(a) the person does not have the capacity to undertake any serious failure requirement; and
(b) serving the serious failure period would cause the person to be in severe financial hardship.
42P Consequences of serious failure
Participation payment not payable during serious failure period
(1) If the Secretary determines that a person commits a serious failure and has determined that section 42NC applies, a participation payment is not payable to the person during the person’s serious failure period.
Note 1: The Secretary may end a serious failure period under section 42Q or determine that a participation payment is payable, despite this section, under section 42R.
Note 2: The Secretary may continue the participation payment pending the outcome of an application for review (see sections 131 and 145 of the Administration Act).
(2) The person’s serious failure period is the period:
(a) beginning on the first day of the first instalment period that begins after the day the Secretary makes the determination; and
(b) ending:
(i) if the Secretary ends the person’s serious failure period under section 42Q—on the day mentioned in that section; or
(ii) otherwise—8 weeks after the period begins.
Note: For the day the Secretary makes the determination, see section 42Y.
Serious failure requirements
(3) If the Secretary determines that a person commits a serious failure, then the Secretary may require the person to comply with a requirement (the serious failure requirement).
Note: A person who complies with a serious failure requirement may have his or her serious failure period end under section 42Q. A person who fails to comply with a serious failure requirement may commit a no show no pay failure under section 42C.
42Q Ending serious failure periods
(1) The Secretary may end a person’s serious failure period if:
(a) the person begins to comply with a serious failure requirement imposed on the person; or
(b) the Secretary determines that:
(i) the person does not have the capacity to undertake any serious failure requirement; and
(ii) serving the serious failure period would cause the person to be in severe financial hardship.
Note: For in severe financial hardship see subsection 14A(7) of the 1991 Act.
(1A) The Secretary may make a determination under paragraph (1)(b) on request or on his or her own initiative.
(2) The person’s serious failure period ends on:
(a) if paragraph (1)(a) applies—the day before the person begins to comply with the requirement; or
(b) if the Secretary makes a determination under paragraph (1)(b) on request—the day before the request was made; or
(c) if the Secretary makes a determination under paragraph (1)(b) on his or her own initiative—the day before the Secretary makes the determination.
Note: For the day the Secretary makes the determination, see section 42Y.
(3) Section 42NC does not affect the operation of this section.
42R Determining that participation payments payable
(1) The Secretary may determine that, despite a person’s serious failure period, a participation payment is payable to the person during the period mentioned in subsection (2) if the person informs the Secretary that the person intends to comply with a serious failure requirement imposed on the person.
(2) The participation payment is payable during the period that:
(a) begins on the day that the person informs the Secretary; and
(b) ends on:
(i) the day before the person begins to comply with the serious failure requirement; or
(ii) if the person does not begin to comply with the serious failure requirement on the day the person is required to begin—the day before that day.
(3) If a period ends under subparagraph (2)(b)(ii), the period (the payability period) mentioned in subsection (2) does not count towards the 8 weeks of the person’s serious failure period.
Subdivision E—Unemployment resulting from a voluntary act or misconduct
42S Unemployment resulting from a voluntary act or misconduct
(1) A participation payment is not payable to a person for the period mentioned in subsection (3) if the Secretary determines that:
(a) the person is unemployed as a result (whether direct or indirect) of a voluntary act of the person; or
(b) the person is unemployed as a result of the person’s misconduct as an employee.
Note: The Secretary may continue the participation payment pending the outcome of an application for review (see sections 131 and 145 of the Administration Act).
(2) Despite paragraph (1)(a), the Secretary must not make a determination under that paragraph in relation to a person if:
(a) the Secretary is satisfied that the voluntary act was reasonable; or
(b) the person is someone to whom section 42SB applies.
(2A) Despite subsection (1), the Secretary must not make a determination under that subsection in relation to a person 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.
Period of non‑payment
(3) The participation payment is not payable to the person for the period (the unemployment non‑payment period) of:
(a) 8 weeks beginning on the initial day; or
(b) 12 weeks beginning on the initial day if, during the 6 months ending on the day immediately before the person becomes unemployed, relocation assistance, in relation to the employment to which the voluntary act or misconduct related, has been paid to or for the benefit of the person.
Note: The Secretary may end an unemployment non‑payment period under subsection (4).
(3A) For the purposes of subsection (3), the initial day is:
(a) the day that the person becomes unemployed as a result of the person’s voluntary act or misconduct; or
(b) the first day of the first instalment period that begins after the day the Secretary makes the determination if:
(i) the Secretary considers that first day is more appropriate than the day mentioned in paragraph (a); and
(ii) the person is receiving a participation payment at the time of the voluntary act or misconduct.
Note: For the day the Secretary makes the determination, see section 42Y.
Ending unemployment non‑payment periods
(4) The Secretary may end a person’s unemployment non‑payment period if:
(a) the Secretary determines that serving the unemployment non‑payment period would cause the person to be in severe financial hardship; and
(b) the person is in a class of persons specified by legislative instrument under subsection (5).
Note: For in severe financial hardship see subsection 14A(7) of the 1991 Act.
(5) For the purposes of subsection (4), the Secretary may, by legislative instrument, specify a class of persons.
Subdivision EA—Immediate non‑payment of participation payments for certain failures
42SA Immediate non‑payment of participation payments for certain failures
(1) The Secretary may determine that a participation payment is not payable to a person if:
(a) the person fails to participate, on a day, in an activity that the person is required to undertake by an employment pathway plan that is in force in relation to the person; or
(b) the person fails to attend an appointment that the person is required to attend by an employment pathway plan that is in force in relation to the person; or
(ba) the person fails to attend an appointment that the person is required to attend by a notice under subsection 63(2); or
(c) the person fails to comply with a reconnection requirement or a further reconnection requirement.
Note: If paragraph (1)(a), (b) or (ba) applies, a reconnection requirement must be imposed for that failure (see section 42G).
(1A) Despite subsection (1), the Secretary must not make a determination under that subsection that a participation payment is not payable to a person if the person is someone to whom section 42SB applies.
(2) The participation payment is not payable to the person for the period beginning on the day the person first commits the failure and ending at the end of:
(a) for a failure referred to in paragraph (1)(a), (b) or (ba):
(i) if the person complies with the reconnection requirement imposed on the person under paragraph 42G(e) because of that failure—the day before the day on which the person so complies; or
(ii) if the person fails to comply with the reconnection requirement imposed on the person under paragraph 42G(e) because of that failure—the day before the day on which the person first commits the failure to comply with that reconnection requirement; or
(aa) for a failure referred to in paragraph (1)(c)—the day before the day on which the person complies with a reconnection requirement or further reconnection requirement; or
(b) if the Secretary determines that an earlier day is more appropriate than the day that would otherwise apply under paragraph (a) or (aa)—that earlier day.
(2AA) If:
(a) a participation payment is not payable to a person for a period (the non‑payability period) under subsection (2) because of the person’s failure to attend an appointment with the person’s employment provider; and
(b) on a day (the relevant day), the Secretary requires the person to attend a rescheduled appointment with the person’s employment provider; and
(c) the rescheduled appointment is on a day that is more than 2 business days after the relevant day;
then, despite subsection (2), the non‑payability period is taken to end under that subsection at the end of the relevant day.
Note 1: The requirement to attend the rescheduled appointment will be a reconnection requirement or further reconnection requirement.
Note 2: For business day, see section 2B of the Acts Interpretation Act 1901.
(2A) If:
(a) a participation payment is not payable to a person for a period under subsection (2); and
(b) the participation payment is payable to the person for any days occurring before that period begins;
then, despite any other provision of the social security law, the Secretary may withhold payment of the participation payment to the person for those days until that period ends.
(3) If a period ends under subsection (2) in relation to a person, then, subject to the social security law, the participation payment becomes payable to the person for that period.
Note: For a failure referred to in paragraph (1)(b) or (ba), a penalty amount may be deducted from the person’s participation payment: see Subdivision EC.
(4) The Secretary must notify the person of a determination under subsection (1). The Secretary may do so in any way that the Secretary considers appropriate.
Subdivision EB—Failures by certain recipients of parenting payments
42SB Suspension of payments for certain failures
(1) This section applies in relation to a person who:
(a) is receiving a participation payment that is a parenting payment; and
(b) is someone to whom paragraph 500(1)(ca) of the 1991 Act applies.
(2) The Secretary may determine that the parenting payment is not payable to the person if:
(a) the person fails to comply with a requirement that was notified to the person under subsection 63(2) or (4); or
(b) the person fails to comply with a requirement under section 40A to enter into an employment pathway plan; or
(c) the person fails to participate, on a day, in an activity that the person is required to undertake by an employment pathway plan that is in force in relation to the person; or
(d) the person fails to attend 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 parenting payment is not payable to the person for the period beginning on the day the person first commits the failure and ending at the end of:
(a) the day before the day on which the person notifies the Secretary that the person intends to comply with the requirement; or
(b) if the Secretary determines that an earlier day is more appropriate than the day that would otherwise apply under paragraph (a)—that earlier day.
(4) If a period ends under subsection (3) in relation to the person, then, subject to the social security law, the parenting payment becomes payable to the person for that period.
Subdivision EC—Non‑attendance failures
42SC Non‑attendance failures
(1) The Secretary may determine that a person commits a non‑attendance failure if the Secretary makes a determination under subsection 42SA(1) because of the person’s failure referred to in paragraph 42SA(1)(b) or (ba).