ACOSS has called on the Federal Government to abandon plans to restore income support payment cancellation penalties under the Targeted Compliance Framework, which forms part of the current mutual obligations framework.
In a Senate estimates hearing on Tuesday the Department of Employment and Workplace Relations confirmed the system would be back online by early 2027.
Payment cancellations have been paused since 2024 after it was found the automated system was illegally cancelling people's vital income support payments, with subsequent Ombudsman reports calling out unfairness and illegality.
"Switching punitive policies back on will not help anyone to secure paid work, but it will cause serious harm to people who are already living in poverty," said ACOSS Acting CEO Edwina MacDonald.
"Removing a person's vital income support payment for four weeks is inhumane, completely disproportionate and serves no purpose other than punishment.
"Financial penalties disproportionately impact people with the most substantial barriers to paid work, including people who are homeless and those with significant mental health issues.
"Last week the Employment Minister acknowledged that mutual obligation activities are not helping many people to access paid work, yet this week we have the Government doubling down on extremely harmful penalties which target the most disadvantaged people in our society."
ACOSS is calling for the broken Targeted Compliance Framework – the penalty system that governs mutual obligations – to be scrapped as part of employment services reform.
"Australia's employment services system is failing to get people into decent paid work, and causing large scale harm through pointless activities and harsh penalties. The system needs a fundamental overhaul, including an immediate end to the Targeted Compliance Framework, to ensure the existing failures do not continue," said Ms MacDonald.
