One in five who had support cut were later found by job agency to have had valid reason for not meeting obligations

This article is more than 1 year old

This article is more than 1 year old

More than 120,000 welfare recipients who had their payments suspended last financial year were later found by their job agency to have had a valid reason for not meeting their obligations, according to data obtained by Guardian Australia.

The figures suggest the Jobactive provider of about one in five people who were temporarily cut from income support accepted that they had a reasonable excuse for missing an appointment or compulsory activity.

It comes amid a debate about the rate of Newstart and after Channel Seven’s Sunrise program sparked outrage last week over a “dole bludger” segment which cited reports saying 78% of people had their payments suspended.

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The data showed that of the 744,884 participants on the flagship welfare-to-work scheme last financial year, 581,866 had their payments suspended for failing to meet their mutual obligations.

The Daily Telegraph story was later cited by the employment minister, Michaelia Cash, as evidence the government’s new compliance regime was working.

But departmental figures provided to Guardian Australia shows not all of those who had their payments temporarily cut off were found to be at fault.

Only 460,262 people were handed a “demerit point” by their job agency under the new system, meaning 121,604 people who had their income support suspended were found to have had a reasonable excuse.

After changes introduced in July last year, welfare recipients have their payment automatically suspended when their job agency records them as not meeting a “mutual obligation”. The providers do not have discretion and must issue a suspension.

Providers would previously contact the job seeker and prepare a report for Centrelink which would impose a suspension or penalty.

Under the new system, there has been a 70% increase in the number of suspensions, with job seekers having their payments temporarily cut off 2.3 million times in 2018-19.

The Australian Council of Social Service chief executive, Cassandra Goldie, told Guardian Australia the figures “show that this compliance system is not working”.

“We know that tens of thousands of people have had their payments suspended despite doing their best to meet their obligations,” she said.

“When your payment is suspended, you may not be able to buy groceries that day or pay the rent.

“People on Newstart can’t always afford phone credit or access emails but they get their payments suspended if they miss or are late to job agency appointments, even when they haven’t been notified.”

The government argues payment suspensions are not a “penalty” and uses “suspensions” as a “lever” to get job seekers to engage with the system. The number of penalties – where payments are docked or cancelled completely – have reduced dramatically under the new system.

A spokesman for the employment minister said: “Anyone who receives a payment suspension and has a legitimate excuse will be back-paid.

“This is clear evidence that the system is working.”

But critics say when people have their income support suspended, their payments are often delayed, adding to their financial distress. They also argue private agencies should not have the power to issue payments suspensions. Historically, the Department of Human Services overturned between 40-50% of financial penalties recommended by job agencies.

Sunrise (@sunriseon7) New figures show 78 per cent of #Newstart recipients have had their payments stopped - but @SenatorCash says the majority are "doing the right thing" and only a "small cohort" are "flouting the system." #sun7 pic.twitter.com/l58xBMP2K3

Jeremy Poxon, a spokesman for the Australian Unemployed Workers Union, said the union had been inundated with stories of “unfair punishments” after the Sunrise segment.

“One of the most common stories we heard was people being cut off while attending job interviews or training, because their providers abjectly refused to reschedule an appointment they were meant to attend that day,” he said.

A small group of Jobactive participants are on youth allowance or parenting payments, with most receiving Newstart, which is $277.85-a-week for a single person without children.

The government has so far defied calls for an increase to the payment, despite calls from Acoss, the business council, Labor, the Greens and John Howard.

Sunrise later apologised for the segment and took the clip down from Twitter.