A fairer and simpler welfare system

Australia’s welfare system will be simpler and provide greater encouragement for people to move from welfare into work with the passage of the Welfare Reform Bill through the Senate today.

The Turnbull Government has delivered significant reform with the passage of the Social Services Legislation Amendment (Welfare Reform) Bill 2017 that will ensure Australia’s welfare system is fair, sustainable and continues to provide support to those most in need.

A new single JobSeeker Payment will progressively replace or consolidate seven existing payments between March 2020 and January 2022, simplifying an often confusing and complex welfare system. More than 99 per cent of people will have no change to their payment rates.

From 1 July 2018*, job seekers will no longer be exempt from mutual obligation requirements solely due to drug or alcohol abuse. From 1 July 2018, job seekers will no longer be able to use drug or alcohol dependency as a reasonable excuse to avoid their mutual obligation requirements, unless they agree to seek treatment.

The Turnbull Government wants to help people find a job and get off welfare as fast as possible, which is why, from 20 September 2018, people receiving working-age welfare payments will have greater assistance to find employment, and clearer, more consistent mutual obligation requirements.

From 1 July 2018, a new approach to compliance will be introduced based on a demerit points system, similar to how a driver’s licence operates. This will end the current situation where, in more than 90 per cent of cases, job seekers who decline work or persistently miss requirements face no real consequences because penalties can too easily be waived.

Under this approach, a demerit points Personal Responsibility Phase will be followed by a ‘three strikes’ Intensive Compliance Phase to identify those who need more assistance early, while being tougher on those who are clearly flouting the system.

In the first phase, job seekers will accrue demerit points for any mutual obligation failure. Once five demerit points are incurred over a six-month period, they will be assessed to determine whether extra support is required or they enter the Intensive Compliance Phase.

* This release has been updated because the Act received Royal Assent on 11 April 2018, and therefore the commencement date changed from 1 April 2018 to 1 July 2018.