Australia’s welfare system is in crisis, with multiple scandals and allegations of unlawfulness, according to experts. The system, run by three departments and hundreds of private companies, has seen parts paused because the government cannot confirm if they are operating legally.
Christopher Rudge, a welfare expert at the University of Sydney, highlighted three major issues: income apportionment, unlawful cancellations under the targeted compliance framework (TCF), and a new class action. In July, the Federal Court found that the method used to calculate payments from the early 1990s to 2020 was invalid. The government is now legislating to compensate around 3 million affected people with up to $600 and waive about 1.2 million small debts up to $250.
Additionally, an estimated 310,000 Centrelink recipients had their payments unlawfully cancelled between 2020 and 2024 because they were not given enough time to reconnect with job providers. A class action launched in September seeks compensation for about 20,000 Aboriginal and Torres Strait Islander people forced to work longer hours under worse conditions in a work-for-the-dole scheme.
The Commonwealth Ombudsman is investigating the TCF and has already found unlawful cancellations. Since March, the entire cancellation system has been paused, though suspensions continue. Between May and July this year, there were 321,995 suspensions affecting 205,870 jobseekers.
Kristin O’Connell from the Antipoverty Centre noted that the government lacks information to determine if suspensions or other decisions are lawful. The use of private job agencies with little accountability exacerbates problems. Kate Allingham of Economic Justice Australia described the system as having “too many cooks,” with overlapping responsibilities between the Department of Social Services, Services Australia, and private providers.
