The legality of the system designed to penalise jobseekers has been thrown into doubt after the commonwealth ombudsman found a government department’s automatic system unlawfully cancelled payments.
The ombudsman has found 964 jobseekers had their payments unlawfully cancelled between April 2022 and July 2024 by the automated IT system that underpins the targeted compliance framework system.
TCF is designed to make sure jobseekers meet requirements such as attending meetings with an employment provider and applying for jobs to continue to receive their payments.
Payment cancellations have been paused since January after the government found a further 1,326 people had financial penalties “applied incorrectly” due to an IT issue.
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On top of this, 45 people had their payments illegally cancelled because the system continued to operate in error.
On Wednesday the ombudsman found the payments had been cancelled unlawfully and recommended the government continue to pause cancellations until the it could review the legality of the entire TCF system.
The ombudsman, Iain Anderson, said he had investigated cancellations in which public servants working at the Department of Employment and Workplace Relations had failed to consider individual circumstances before cancelling a payment as laid down by law.
“They were just automating the cancellation without considering the individual circumstances of the jobseeker and whether it was appropriate to cancel the payment or not,” he told Guardian Australia.
“The target compliance framework itself has been very problematic in that regard.”
Anderson said that in 2022 DEWR was also meant to put in a “digital protection framework” to ensure jobseekers were treated fairly but the department had failed to do so.
Anderson said the secretary of DEWR, Natalie James, needed to be “completely confident” the system was working properly before the cancellations resume.
“The targeted compliance framework has had a number of different problems, and so the secretary of DEWR needs to do much more than simply look at the unlawful cancellation issue.
“They need to be really certain that the entire target compliance framework is going to comply with the law and be fair.”
He said there were also concerns as to whether the suspension of payments, which happens in tens of thousands of cases each month, was legal.
“We have some concerns as to whether the suspension process is happening fairly and reasonably,” he said.
On top of this, Guardian Australia understands a Deloitte report into the IT system that underpins the TCF has found that it is not functioning within the proper legal frameworks.
The Deloitte report – which has yet to be published – recommends overhauling the TCF’s IT system to ensure that the suspension or cancellation of payments is done legally.
The Greens have called for the government to abolish the TCF and release the report.
“It is clear that the TCF is an expensive hangover from a conservative government which has been heartlessly prolonged by this Labor government for far too long,” Senator Penny Allman-Payne said.
The DEWR is also conducting a legal review to examine the way decisions are being made under the legislation.
The ombudsman will continue to investigate the TCF with another report due out later in the year.
