Centrelink penalties resume amid warnings of unlawful payment cancellations and inadequate safeguards

As Centrelink penalties resume this week, the Antipoverty Centre has launched a new survival guide to help welfare recipients understand their rights and protect themselves from unfair treatment.

Welfare groups had urged the Albanese government to scuttle plans to restart the payment cancellations, warning that unresolved legal concerns and inadequate safeguards could leave vulnerable Australians without money for food or rent.

“The ‘Mutual’ Obligations Survival Guide is designed to cut through the bullshit and give people confidence that when something sounds like a lie, they can point to the evidence that it is,” said Antipoverty Centre spokesperson Jay Coonan.

The penalties form part of the Targeted Compliance Framework (TCF), which can suspend or cancel payments when recipients fail to meet compulsory employment requirements.

Payment cancellations for people who fail to reconnect with employment services within four weeks resumed this week.

The Department of Employment and Workplace Relations has also restarted suspensions for refusing suitable employment or failing to start an accepted job.

The Antipoverty Centre said around one million people receiving Centrelink payments are required to undertake compulsory activities, including attending appointments with employment services and participating in training it described as “useless”.

Artist and welfare advocate Mel Fisher, who also volunteers at the Australian Unemployed Workers’ Union helpline, said she couldn’t wait to hand out the guides.

“It’s important that I and others trapped in this system know our rights,” she said.

“There’s so much dishonesty that comes from job providers and we’re often given conflicting stories. This will also make it easier for me to find the information I need to give advice to others when they call the AUWU helpline.”

The penalties were suspended more than two years ago, with two subsequent reports by the Commonwealth Ombudsman exposing unlawful cancellations and failings in the government’s approach to compensating affected people.

In August 2025, Commonwealth Ombudsman Iain Anderson recommended the government establish a compensation scheme.

A second report in December 2025 found the department’s remediation approach was unfair and unreasonable, warning that stigma against job seekers may also contribute to inadequate oversight of employment service providers.

Analysis by Economic Justice Australia found that roughly 310,000 people had their payments unlawfully cancelled between 2020 and 2024.

The government has confirmed it has begun inviting potentially eligible people to claim compensation.

It says changes to IT systems have been tested, with guidance and training improved to ensure the rules are applied lawfully.

“We want to know why Minister [Amanda] Rishworth is refusing to answer questions about whether she has confidence that the TCF is operating lawfully,” said Mr Coonan.

“It should be her highest priority to ensure that inflicting pain on people in poverty is ended entirely, not making it lawful, but at the very least she should be taking responsibility for upholding the law.”

The National Aboriginal and Torres Strait Islander Legal Services (NATSILS) revealed last week that Aboriginal and Torres Strait Islander people accounted for 46 per cent of those whose payments were unlawfully cancelled between April 2022 and July 2024.

“This is systemic and structural racism at play,” said NATSILS executive director Nick Espie.

“These kinds of measures, and inaction on righting the wrongs, demonstrate how governments are failing on those commitments.”

Inclusion Australia raised concerns, pointing to the 3,200 people with an intellectual disability who are currently subject to compulsory activities under the Targeted Compliance Framework.

“People with an intellectual disability face significant barriers to navigating requirements, communicating with providers, using digital systems and completing administrative processes,” said Inclusion Australia CEO Maeve Kennedy.

The Australian Council of Social Service (ACOSS) has also voiced “deep concern” that the protections framework wasn’t in place.

“Strong digital safeguards are essential given how heavily the system relies on automation and the catastrophic administrative failures of recent years, including Robodebt,” said ACOSS CEO Dr Cassandra Goldie.

“We strongly opposed the Targeted Compliance Framework when it was first introduced by Minister Cash under the Coalition Government. It should be abolished once and for all.”