This article is more than 10 months old

This article is more than 10 months old

A jobseeker who quit a job because they were being underpaid became the subject of a “non-compliance report” and had their welfare payments cut by their employment agency, the Commonwealth Ombudsman says.

In another welfare case investigated by the complaints agency, Centrelink denied compensation to an aged pensioner who was underpaid about $25,000 over four years, but later relented after the ombudsman intervened.

The cases were among those revealed in the agency’s annual report, published late last month.

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The jobseeker complaint centred around a participant in the Jobactive program who was referred to a position as a labourer by their provider, but went on to have suspicions about the pay rate they were receiving.

“They found out they were being underpaid, and their provider referred them to the Fair Work Ombudsman (FWO), who advised they had a right to leave the position and assisted them in doing so,” the ombudsman’s annual report said.

“The complainant told their provider they had left, but the provider lodged a non-compliance report to Centrelink, resulting in their Newstart allowance being suspended.”

According to the ombudsman, when the jobseeker complained to the department of employment’s customer service line, they were told to contact the Fair Work Ombudsman.

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“They then made a complaint to our office,” the report said. “Our investigation identified errors on the part of the provider and found that on the basis of the information that was provided in the complaint to the NCSL [national customer service line], it would have been appropriate for the NCSL to refer the complaint to the provider for further investigation.

“The complainant’s payment was restored, with back pay, and their record corrected.”

Overall, the ombudsman said that 80% of complaints that it received about the department of employment related to the Jobactive program, which caters to about 400,000 jobseekers.

The program has been criticised by welfare and employer groups, and the Morrison government has established a new employment services trial before embarking on a wider overhaul of the system in 2022.

Guardian Australia has revealed that thousands of jobseekers have their welfare payments incorrectly suspended each year under the Jobactive program.

The Department of Human Services, which administers Centrelink as well as the child support system, was the subject of 11,652 complaints in the 2018-19 financial year.

“This is a 7.5% decrease in complaints received, compared to 2017–18,” the report said.

But it added: “Complaints about Centrelink continue to make up a substantial proportion of complaints made to the office, representing 55% of the total number of complaints made about Commonwealth government agencies.

“Approximately 31% of issues raised in Centrelink complaints are about Disability Support Pension (DSP) and Newstart Allowance (NSA).”

The ombudsman also highlighted a case where it was asked to investigate after Centrelink denied compensation to an aged pensioner who had been underpaid.

“In 2017, the person’s financial advisers identified that they were incorrectly receiving a reduced rate of Age Pension because Centrelink believed they were a homeowner,” the report said.

“The complainant sought compensation from Centrelink under the Compensation for Detriment caused by Defective Administration (CDDA) scheme on the basis that their claim had been incorrectly assessed and they had been underpaid for four years.

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“Centrelink assessed the CDDA claim and decided that compensation was not payable. They made a complaint to our office.

“Following our investigation, Centrelink offered compensation in the form of an amount in excess of $25,000, equal to the additional Age Pension that they should have been paid over the four year period.”

There was a 12% increase in NDIS complaints in 2018-19, though the ombudsman noted that the number of participants had risen 62% in that time.

Most of the complaints were related to how the National Disability Insurance Agency had handled reviews of participants’ plans.

One complaint investigated by the ombudsman saw a NDIS participant unable to leave hospital for more than five months as they waited for the NDIA to “approve funds so they could obtain customised mobility equipment, and have modifications made to their home”.