Social Security (Exemptions from Non‑payment and Waiting Periods ‑ Activities) Specification 2017

Non‑payment period and waiting period. These are distinct concepts under the Social Security Act 1991, but the instrument treats them together. A non‑payment period is a period during which a person who is otherwise qualified receives no payment at all, often because they have not met an activity test or have been subject to a penalty. A waiting period is a period after a claim (or after certain events) before payment can start. The ordinary waiting period is a default period (usually one week or seven days) that applies to most new claims for working age payments. The instrument specifies activities that exempt a person from these periods. The distinction matters because the instrument cites different subsections for each type.

Stream C employment services. Defined in section 5 by reference to the jobactive Deed 2015‑2020. Stream C was the highest intensity stream under the former jobactive model, designed for job seekers with the most barriers to employment. The instrument does not specify what activities within Stream C qualify; any activity undertaken as part of that service counts. This broad language means that attending appointments, training, work placements, or any other task required under the Stream C service plan would be sufficient. However, the instrument relies on the existing deed, which has since been replaced by the Workforce Australia model. This creates a potential gap: Stream C no longer exists as a formal category. The instrument has not been updated to reference the new services (Workforce Australia or the new specialist streams). Practitioners should verify whether the instrument still has operative effect for participants referred post‑July 2022.

Rehabilitation program. Defined in section 5 by reference to subsection 23(1) of the Act. That subsection defines a rehabilitation program as a program provided under a rehabilitation program administered by the Commonwealth or a State or Territory, or a program approved by the Secretary. This is a broad definition that could include drug and alcohol programs, physical rehabilitation, or mental health programs. The instrument does not limit it to a specific list, so any program that falls within that definition would qualify. That gives the Secretary considerable discretion.

Community Development Programme (CDP). This was the employment programme for remote areas that started on 1 July 2015. It replaced previous remote participation arrangements. The instrument only specifies CDP activities if the person would otherwise have been referred to Stream C or a rehabilitation program. This is a nested condition: CDP participation alone does not exempt; it only exempts if the person is the kind of job seeker who would be in Stream C or rehab but for the CDP placement. This likely captures CDP participants with high barriers to employment, but it creates an interpretive burden: one must show what the person would have been referred to in the counterfactual. The condition is not self‑evident and could lead to disputes.

COVID‑19 Australian Government payment. Defined by reference to item 492 of the table in Part 4 of Schedule 1AB to the Financial Framework (Supplementary Powers) Regulations 1997. That item covers a range of pandemic‑related payments such as the COVID‑19 Disaster Payment and Pandemic Leave Payment. The instrument does not list them; it incorporates them by reference. Section 7(ii) and (iii) provide exemptions for persons who make a claim while entitled to such a payment, or within 13 weeks after the last entitlement. This creates a 13‑week window during which the ordinary waiting period is waived. After that, the exemption ends.

Ordinary waiting period exemption. Section 7 is limited to "ordinary waiting period" exemptions. The subsections cited (500WA(2)(a), 549CA(3)(a) and 620(2)(a)) correspond to ordinary waiting period provisions for different payment types (likely Newstart Allowance, Youth Allowance, and others). The COVID‑related exemptions in section 7 do not apply to other waiting periods (such as the seasonal work wait or the liquid assets waiting period). The instrument is silent on those.

The instrument directly affects three groups: social security recipients who claim or receive a working age payment (such as JobSeeker Payment, Youth Allowance (other), and Special Benefit) and who are subject to activity test requirements; persons involved in specified employment services or rehabilitations programs; and persons who made claims during the COVID‑19 pandemic period described in section 7. It also indirectly affects the providers of those services, because whether a recipient is exempt from waiting periods influences the timing of payments and the compliance burden on the provider.

For Stream C participants, the instrument means that any activity under that stream counts as serving the waiting period. This reduces the administrative cost of proving that the person has completed a specific activity; the mere fact of participation is sufficient. However, it also creates an incentive for providers to stream participants into Stream C even if a lighter stream would be more appropriate, because the exemption reduces the risk of non‑payment periods for the participant and thus makes compliance easier. This is a classic moral hazard: the exemption may change provider behaviour, not just participant behaviour.

For rehabilitation program participants, the instrument similarly waives waiting periods. This is beneficial for persons with medical conditions who need immediate income support. However, the definition of rehabilitation program is broad, and the instrument does not require that the program be certified or that the person be actively participating. A person could be enrolled in a rehabilitation program but not yet engaging; the instrument says "activity undertaken by a person as part of" a rehabilitation program. That could be interpreted to require actual participation, not mere enrolment. This ambiguity imposes a compliance risk: if a person is deemed not to have undertaken an activity, they lose the exemption.

For Community Development Programme participants, the condition is more restrictive. Only those who would have been referred to Stream C or rehab qualify. This likely excludes most CDP participants who have lower barriers. The effect is that CDP participants in remote areas may not get the exemption unless they can show they would have been in a higher‑intensity service. Given the limited appeal options in remote areas, this condition is effectively unenforceable for many. The burden of proof falls on the participant to show a counterfactual referral that never happened.

For the COVID‑related exemptions, the affected group is anyone who made a claim for a social security payment during the 12 March to 12 June 2020 window and received a payment, or who was entitled to a COVID‑19 Australian Government payment at claim time, or within 13 weeks after such entitlement ended. This is a large but temporally limited group. The exemption is not permanent; it only applies at the time of claim. If a person later makes another claim outside that window, the exemption does not apply. The 13‑week rule creates a cliff edge: after 13 weeks, the ordinary waiting period revives. This may catch people who are unaware of the time limit, especially if their last COVID payment was a lump sum that they thought ended their need for support.

The instrument also affects the Department of Social Services and Services Australia, who must administer the exemptions. The broad language in section 6(a) (any activity under Stream C) may reduce administrative disputes, but the condition in section 6(c) (CDP participants only if they would have been referred to Stream C or rehab) adds complexity. The COVID‑related exemptions in section 7 are simple to administer because they rely on payment history data, but the 13‑week rule requires a date calculation that may be prone to error.

The instrument creates no duties on private persons. It confers a right on eligible social security recipients to have a waiting period or non‑payment period waived if they have undertaken the specified activities. This right is conditional on the activity being "undertaken" at the relevant time. The instrument does not define "undertaken", leaving that to interpretation under the Act and administrative practice. Practical implication: a participant must actually perform the activity, not just be enrolled. Services Australia may require evidence such as attendance records, provider reports, or payment data from the COVID‑19 Australian Government payment.

For Stream C activities, the duty falls on the employment services provider to report participation. The instrument does not impose an obligation on providers, but the Act may require the provider to notify the Department. The right of the participant is contingent on that reporting. If the provider fails to report, the participant may lose the exemption through no fault of their own. The instrument does not address this information asymmetry.

For rehabilitation programs, the participant has a duty to inform Services Australia of the program, or the program provider may do so. The right to exemption is not self‑executing; the participant must claim the exemption by providing evidence. The Act's provisions about notice and determination apply.

For the CDP condition, the participant may have a duty to demonstrate what they "would otherwise have been referred to". This is an odd duty because it requires the participant to prove a hypothetical. In practice, Services Australia would use the person's Job Seeker Classification Instrument (JSCI) score or other assessment to determine likely referral stream. The participant has a right to have that assessment done, but they may not have access to the criteria. This creates an asymmetry of information and a potential for arbitrary decisions.

The COVID‑related exemptions are more straightforward. The participant's duty is simply to have made a claim during the specified period or to have been entitled to a COVID payment at claim time. Services Australia will have that data. The right to exemption is automatically applied if the data matches, but if the system does not capture the COVID payment correctly, the participant may need to bring it to the Department's attention.

The instrument does not create any right to review. The standard Social Security Act review mechanisms apply: internal review by Services Australia, then the Administrative Appeals Tribunal. The instrument's narrow specifications may limit the scope of review; a decision about whether an activity is "part of Stream C" is a question of fact and law that can be reviewed, but the AAT would defer to the instrument's definitions.

This instrument does not itself impose any penalties. Penalties for non‑compliance with participation requirements are in the parent Act (Social Security Act 1991). However, the instrument affects how those penalties apply. If a person is exempt from a waiting period or a non‑payment period, they cannot be penalised for failing to satisfy the activity test during that period. So the instrument indirectly shields participants from penalties.

But the instrument also creates compliance risks. If a person falsely claims to have undertaken a specified activity (e.g., claiming they were in Stream C when they were not), they could be subject to fraud provisions under the Criminal Code (s 135.2 for obtaining a financial advantage) or administrative penalties under the Social Security Act for making a false statement. The instrument does not add to those penalties, but it defines the conditions that trigger them.

The enforcement burden falls on Services Australia. The Department must verify whether a person's activity qualifies under the instrument. For Stream C, verification is by provider reporting. For rehabilitation programs, verification may require contacting the provider or obtaining a medical certificate. For CDP, the Department must assess the counterfactual referral stream. This is resource intensive. The Department may adopt a practice of accepting participant claims unless there is evidence to the contrary, due to the high verification cost. That creates an incentive for participants to over‑claim, which in turn increases the risk of future audits and clawbacks.

The COVID‑related exemptions are less prone to fraud because they rely on objective data (claim dates and COVID payment records). However, the 13‑week exemption in section 7(iii) may be misapplied if the participant believes the exemption continues indefinitely. The Department may need to issue computerised warnings when a further claim is made after the 13‑week window expires.

The instrument is made under the Social Security Act 1991 and must be read together with that Act. The relevant subsections (500WA, 549A, 549CA, 553B, 553C, 598, 620, 633, 634) each deal with specific waiting periods or non‑payment periods. The instrument lists activities that, if undertaken, trigger an exemption under those subsections. The parent Act sets the rules for when the waiting period applies; the instrument defines the escape hatch.

The instrument also interacts with the Social Security (Administration) Act 1999, which governs how claims are made and how waiting periods are enforced. The instrument does not amend that Act, but it feeds into administrative decisions about when payment starts.

The instrument references several external instruments: the jobactive Deed 2015‑2020 (for Stream C definition), the Financial Framework (Supplementary Powers) Regulations 1997 (for COVID‑19 Australian Government payment definition), and the Act's subsection 23(1) (for rehabilitation program). These are dynamic references. If the jobactive Deed is replaced (as it has been), the definition of Stream C becomes ambiguous. A strict reading would say that the instrument still refers to the deed as it existed at the time of the instrument's making, but the instrument does not specify a date. The better view is that the definition is picked up as amended from time to time, because the instrument was made under the Act and the Act often incorporates future amendments. However, the instrument does not say "as in force from time to time". This creates legal uncertainty. A participant who was in a service after the jobactive Deed ended may not be in Stream C for the purposes of the instrument.

The instrument also interacts with the Social Security (Exemptions from Non‑payment and Waiting Periods - Persons) Specification (if any), which exempts certain categories of persons rather than activities. That separate instrument is not referenced here.

Additionally, the instrument may interact with state workers' compensation or rehabilitation laws. A person undertaking a state‑funded rehabilitation program may qualify under section 6(b), but only if the program falls within subsection 23(1) of the Act. That may be narrower than state definitions. Practitioners should check whether the specific state program is approved by the Secretary. The instrument does not list approved programs; it relies on the Act's definition, which gives the Secretary discretion to approve programs.

The COVID‑19 exemptions in section 7 interact with the various COVID‑19 payments that were created under the Financial Framework (Supplementary Powers) Regulations. The instrument was amended in March 2020 to add these exemptions, and then amended again in October 2021 to update the definition of COVID‑19 Australian Government payment. The 13‑week window in section 7(iii) means that a person who received a COVID payment at the height of the pandemic may have had the exemption for up to 13 weeks after that payment ended. This could extend into periods when the person was no longer eligible for the COVID payment but still needed a social security payment.

The instrument was originally made on 22 June 2017 and registered as F2017L00719. It commenced on 1 July 2017. The original version contained only section 6 (the three activities under Stream C, rehabilitation program, and CDP). There was no section 7.

The first amendment came via the Social Security (Ordinary Waiting Period Exemption) Instrument 2020, registered on 12 March 2020 (F2020L00247). Schedule 1 of that instrument added section 7 to this Specification. The amendment commenced on 12 March 2020, the same day. This added the three COVID‑related activities for ordinary waiting period exemptions. The amendment also added the definition of "COVID‑19 Australian Government payment" to section 5.

The second amendment came on 19 October 2021 via F2021L01445, which was registered on 20 October 2021. That amendment made a minor update to the definition of "COVID‑19 Australian Government payment" in section 5, and amended section 7 (likely to update the reference to the Financial Framework regulations). The compilation date is 20 October 2021, meaning the instrument now includes both amendments.

Notable gaps: the instrument has not been amended since October 2021. The jobactive Deed 2015‑2020 ended on 30 June 2022 and was replaced by the Workforce Australia model. The instrument still references "Stream C employment services" and "jobactive Deed 2015‑2020". This means that for any person who entered employment services after 1 July 2022, it is unclear whether they can be said to be in Stream C. The instrument may be functionally obsolete for new participants. The CDP was also replaced by the Community Development Programme (CDP) under the New Employment Services Model in some regions, but the instrument still uses the original CDP definition. The instrument may need either a new amendment or a replacement instrument.

There is no reported litigation citing this instrument specifically. The instrument is a legislative instrument that has been in force since 2017, but the matters it deals with (waiting period exemptions) are not usually litigated at a high level. Disputes about waiting periods are more likely to be resolved internally or at the AAT level. A search of AAT decisions (not exhaustive) shows some cases where the instrument is mentioned, but none that have been appealed to the Federal Court. The instrument is too narrow and technical to generate substantial case law.

However, the interpretation of "activity undertaken by a person as part of Stream C employment services" could be litigated if a person argues that an activity such as a job interview or a training course did not count as "part of" Stream C. But the instrument's language is broad, and the AAT would likely give the Secretary a wide margin of appreciation. The CDP condition (paragraph 6(c)) is the most likely to be challenged, because it requires a hypothetical referral. The AAT could hear evidence about the person's JSCI score and internal guidelines to determine what they "would otherwise have been referred to". This is a factual inquiry that may lead to inconsistent decisions.

The COVID‑related exemptions are unlikely to be litigated because they are time‑bound and fact‑based. The main risk is administrative error in applying the 13‑week rule. If a person is denied the exemption due to a miscalculation, they could seek review, but the amounts at stake are small and the review cost may outweigh the benefit.

Overall, the instrument has low litigation risk. The main legal risk is that the instrument may be invalid if it exceeds the scope of the empowering provisions or if it fails to comply with the Legislation Act 2003 (e.g., no disallowance or registration issue). That has not been challenged.

First gotcha: the definition of "Stream C employment services" is tied to the jobactive Deed 2015‑2020, which is no longer in force. A person currently in employment services under Workforce Australia is not in Stream C. Unless the Department takes the view that the deed continues to apply for historical participants, new participants cannot rely on section 6(a). This is a trap for unwary advisers who assume the exemption still applies. The instrument has not been updated, so the exemption may be dead letter for most current job seekers.

Second gotcha: the CDP condition in paragraph 6(c) requires the person to show that they "would otherwise have been referred to activities listed in paragraph (a) or (b)" if not for being placed in the CDP. This is a counterfactual that is impossible to prove definitively. Services Australia may use a default rule (e.g., all CDP participants are treated as Stream C equivalent), but the instrument does not say that. If the Department applies a strict interpretation, many CDP participants may miss out on the exemption. The instrument also does not specify who bears the burden of proof. In practice, the Department may simply grant the exemption unless there is evidence to the contrary, but that is not guaranteed.

Third gotcha: the ordinary waiting period exemption in section 7 only applies to the ordinary waiting period, not to other waiting periods such as the seasonal workers waiting period, the liquid assets waiting period, or the compensation waiting period. A person who has assets over the liquid assets threshold may still face a wait even if they are exempt from the ordinary waiting period. The instrument does not address this.

Fourth gotcha: the 13‑week rule in section 7(iii) uses "last entitled to a COVID‑19 Australian Government payment". If a person was entitled to a COVID payment for a single week and then lost entitlement, the 13 weeks start from that last day. But if they later receive another COVID payment, the clock resets. The instrument does not say whether multiple entitlements extend the window. A literal reading says each last entitlement starts a new 13‑week window. A person could potentially have an indefinite stream of exemptions if they receive COVID payments frequently. However, the COVID‑19 Australian Government payments are now largely wound down, so this is a diminishing issue.

Fifth gotcha: the instrument does not cover all waiting periods. It only covers those listed in the empowering subsections. For example, subsection 598(8) deals with non‑payment periods for Youth Allowance activity test failures. Section 6 covers that. But other waiting periods, such as the ordinary waiting period for other payments (like Parenting Payment), may be covered by different subsections not listed. Practitioners must check the Act's exact provision for the payment in question.

Sixth gotcha: the instrument says "activity undertaken by a person as part of" Stream C or rehabilitation program. This implies that the activity must be done while the person is a participant in that service. If a person leaves Stream C and then does an activity (like attending a job interview) that would have been part of Stream C, it may not count unless it was part of the service plan. The instrument does not define "as part of", leaving room for dispute.

Seventh gotcha: the instrument has no transitional provisions. When section 7 was added, it applied to claims made from 12 March 2020. But what about a person who made a claim before that date and was already in a waiting period? The instrument does not say whether it exempts ongoing waiting periods. The amendment is silent on retrospectivity. Second reading material (not provided) might clarify, but the instrument itself does not. This could lead to a period of uncertainty.

Eighth gotcha: the definition of "rehabilitation program" in section 5 says "within the meaning of subsection 23(1) of the Act". That subsection is a definition section. It defines rehabilitation program as a program provided by the Commonwealth or a State or Territory, or approved by the Secretary. But the Secretary may not have approved all programs. A private drug and alcohol program not approved would not qualify. The instrument gives no guidance on how to check approval.

Compliance with this instrument is not about following a set of rules; it is about ensuring that a person's claim for a social security payment is assessed correctly so that waiting periods are waived. The primary actors are Services Australia staff and, to a lesser extent, employment services providers and the person themselves.

For a person who has participated in Stream C employment services, the compliance step is to provide evidence of that participation. Ideally, the provider should have uploaded participation records to the Department's system. A person should check their online account or contact Services Australia to confirm that their participation is recorded. If not, they can request a letter from the provider or a Centrelink review. The instrument does not specify a time limit for when the activity must have occurred, so past participation should still qualify. However, because Stream C is now defunct, new participants after July 2022 cannot rely on this exemption. They must look to other exemptions.

For a rehabilitation program participant, the person should obtain a letter from the program provider stating that the program is a rehabilitation program within the meaning of the Act, or that it is approved by the Secretary. The person should then lodge that evidence with their claim or notify Services Australia. Better practice is to cite the specific program approval if known. If the program is not approved, the exemption may not apply. The person should ask the provider whether they have approval under subsection 23(1).

For a CDP participant, compliance is tricky. The person should ask Services Australia to assess what referral stream they would have been in. That may involve a JSCI reassessment or a discussion with their provider. The person should request that the assessment be recorded. If the Department determines they would have been in Stream C or rehab, the exemption applies. If not, the person may need to argue or seek review. The instrument does not require a formal determination, but it is safest to get a written decision from Services Australia.

For the COVID‑19 exemptions, compliance is passive: the system should automatically apply the exemption if the data matches. However, a person should check the date of their claim and the date of their last COVID payment. If their claim was made outside the 12 March to 12 June 2020 window, they may still qualify under (ii) or (iii). The 13‑week rule means that if they make a claim more than 13 weeks after their last COVID payment ended, the exemption does not apply. The person should calculate the weeks carefully. If they are unsure, they can ask Services Australia for a written statement of their exemption period.

The Department's compliance burden is to verify participation. For Stream C and rehab, they should have records from the provider. For CDP, they must determine the counterfactual stream. This may require internal guidelines to standardise the assessment. The Department should issue a policy document for staff to avoid arbitrary decisions. If they do not, there is a risk of inconsistent treatment.

Finally, practitioners should monitor amendments. The instrument has not been updated since October 2021, but a new instrument may be needed soon to reflect the new employment services model. Until then, the exemptions under section 6(a) may be inoperable for new participants. A sensible compliance step for any person currently in employment services under Workforce Australia is to ask whether there is a separate exemption instrument covering the new streams. If not, they may need to rely on other exemptions (such as rehabilitation or the COVID‑19 window, if applicable).