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Centrelink's breaching policies do the unemployed more harm than good

By Simon Schooneveldt - posted Monday, 22 March 2004

Unemployment benefit recipients must engage in specified job search and allied activities under threat of breach penalties or cessation of payment for any non-compliance. In 2000/2001, Centrelink issued 386,946 breach penalties. Most breach penalties are applied to unemployment benefit recipients, and there were only about 680, 000 recipients on Centrelink’s books during that period. The high breach numbers suggest that many people must have received multiple breaches, which contradicts the Howard government’s stated expectation that applying breach penalties would coerce welfare recipients into complying with the activity requirements mandated under the government’s Mutual Obligation policy.

Currently there are about 600,000 unemployment recipients on Centrlink’s books, with unemployment officially at 5.8 per cent. Almost half of those people have been unemployed for over two years. There are simply not enough jobs available for jobseekers. Carmen Lawrence put the figure at ten job seekers for every vacancy. It is not yet widely understood by Australians that we now have more casualised, part-time and short term jobs (51.5 per cent) than we have permanent full-time jobs (48.5 per cent), a far cry from the “real” jobs of years gone by (Schooneveldt 2003). Moreover, the official unemployment figure does not represent the real numbers of unemployed people, when under-employed people, discouraged job-seekers and disguised unemployed people are taken into account. Tomlinson puts the real unemployment figure between 12 per cent and 18 per cent.

While first and second Centrelink breach penalties decrease allowances over time, a third breach aggregates to a total penalty of $3,384. This level of “fine” is very high when compared with many of the fines handed out for criminal offences. Non-compliance with Centrelink requirements is not criminal activity, and can be as minor as failing to contact Centrelink when requested, missing an interview or failing to correctly fill out a job search diary. There are over 50 “reasons” for which a person can be breached by Centrelink and Centrelink’s operating manual “Intralink” specifically instructs that staff must not give the benefit of the doubt to customers when considering breach penalties (emphasis in original).


Centrelink’s enthusiasm for breaching has been driven by the Howard government’s neo-liberal economic fundamentalist (there is nothing rational about it) ideology that individuals will respond to monetary incentives and disincentives. The ideology gave rise to the policy of Mutual Obligation, the idea that certain welfare recipients, but not others deemed more worthy, should give something back to the community in return for their benefits.

Since 1996 “giving something back” has been popularly accepted by Australians when applied to people perceived to be “dole bludgers” and work shirking free-loaders. It will be interesting to see how supposedly egalitarian Australians respond to Treasurer Costello’s (2004) latest actuarially unsound concerns about the costs of sustaining Australia’s ageing population, as he drives his new wedge question “is it fair to allow those with superannuation assets to retire early, run down their assets, and then rely on taxpayers to fund the major part of their retirement?” Retirees, along with people who have disabilities and single parents are increasingly being labelled as unworthy recipients of welfare who need to be coerced into working to pay for themselves.

While pondering these coercive behaviours of the Howard government, the author surveyed a total of 56 welfare recipients who had been breached by Centrelink on Brisbane’s north side. A survey form of 33 questions was completed by the respondents on the footpath outside of the Mitchelton, Chermside and Nundah Centrelink offices. Some of the responses were similar to those found by other researchers. Nevertheless they indicate a lack of concern on the part of the government as to the wellbeing and fair treatment of these 56 unemployed people who need to claim benefits for their survival. There were two findings that directly challenged the government’s stated intent for its Mutual Obligation driven breaching program.

Some understandable responses, although at higher than expected proportions, were:

  • 95 per cent of respondents (53 people) thought that, when they were breached, Centrelink was being unfair to them.
  • 93 per cent of respondents (52 people) felt their self-esteem was diminished and many felt Centrelink had put pressure on them to stop claiming benefits.
  • 91 per cent of respondents (51 people) did not realise beforehand, that they were about to be breached. This suggested Centrelink exhibited a lack of concern about customer rights, due process and procedural fairness as the Ombudsman’s inquiry also found.
  • 73 per cent of respondents (41 people) believed that they were not more likely to get paid work by doing any Centrelink compulsory activity undertaken because there are not enough suitable jobs. Further, the job search activity requirements were unrealistic and unreasonable.
  • 57 per cent of respondents (32 people) felt they could not look any harder for work than they already were.
  • 41 per cent of respondents (23 people) indicated that, once breached, they needed to obtain assistance from family, another 15 people were helped by charities and 7 people indicated that their church was of help. Increasing rates of charity support need have been noted by the St Vincent de Paul Society and other researchers.

Two specific findings stood out as surprising, and of concern: First, getting breached once does not work as an incentive, as the government expected, to ensure compliance and avoidance of further breaches.

  • 62 per cent of respondents (35 people) indicated getting a breach penalty was of no help to them in avoiding further breach penalties. A majority 56 per cent, (31 people) reported more than one breach. 14 per cent, (eight people) reported receiving three or more breaches.

Second, if one does get breached, there is a significant risk that, as a consequence, there will be a need for that individual to move into less desirable accommodation than was previously enjoyed. This is a very important finding because it indicates that a serious consequence of being breached is that people’s accommodation standards could be reduced. Such downward mobility does not enhance the prospects of obtaining employment or maintaining morale.

  • In this survey, 12 people out of 56 (almost 22 per cent) reported needing to move into less desirable accommodation, an unexpectedly high proportion.

Three respondents wrote “on the streets” and another reported moving to a “men’s homeless shelter”, which represents severe punishment indeed for minor infringements of Centrelink’s Mutual Obligation driven activity requirements.

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About the Author

Simon Schooneveldt lectures at the School of Humanities and Human Services at QUT and is a PhD candidate with the Centre for Social Change Research.

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