New Welfare Sanctions Rolled Out to Encourage Jobseeker Compliance

The Government has introduced two new non-financial sanctions under its ongoing welfare reform strategy, aimed at encouraging more beneficiaries to move from welfare into work. Social Development and Employment Minister Louise Upston confirmed that, starting today, the Money Management and Community Work Experience sanctions will apply to individuals who fail to meet their agreed welfare obligations under the Jobseeker Support and other main benefits.

The measures form the second phase of the Traffic Light System, an accountability framework designed to clarify jobseeker obligations and introduce escalating consequences for non-compliance. The initiative stems from the ACT-National coalition agreement, which committed to a more structured and supportive approach to welfare reform.

Money Management: Benefit Restrictions via Payment Card

One of the key tools now in effect is the Money Management sanction. Under this measure, individuals who breach their obligations—such as failing to attend job interviews or training sessions—may have 50 percent of their main benefit transferred onto a payment card for a period of four weeks.

This card restricts spending to approved categories, including groceries, transportation, health services, and education-related items, and can only be used at designated merchants. The remaining portion of the benefit and any supplementary financial support (like housing assistance) will continue to be paid directly into beneficiaries’ bank accounts.

Minister Upston described this as a “sensible move,” saying, “This allows clients to retain their benefit entitlements while ensuring greater responsibility over how taxpayer money is used.”

Community Work Experience: Constructive Consequences

In tandem with the financial restriction, the Government has introduced Community Work Experience as a new form of non-compliance sanction. Beneficiaries with work obligations who fail to meet their agreed commitments may now be required to complete at least five hours of community service per week for four weeks. This work must be arranged through recognised voluntary or community sector organisations.

According to Upston, the goal is not punitive but rather to foster habits and routines associated with active employment. “This measure reinforces the expectation that individuals should contribute meaningfully when they’re not engaging with work preparation activities,” she said.

Mandatory Jobseeker Profiles and Extended Obligation Periods

Today also marks the start of a new rule requiring beneficiaries—and in some cases, their partners—to complete a Jobseeker Profile before their application for benefits can be granted. This profile helps match individuals with suitable employment opportunities and ensures their job search efforts are tailored and trackable.

Additionally, the Government is extending the period during which an obligation failure counts against a person. Previously set at one year, this period will now stretch to two years. The change is expected to improve the accuracy of assessments and help case managers identify repeat non-compliance patterns.

“These are fair and proportionate responses,” Minister Upston said. “They offer support while also requiring accountability. Under the old system, non-compliance could result in an immediate 50 percent financial reduction. These new sanctions preserve income but require practical steps towards employment.”

High Compliance Rates and Future Expansions

Currently, 98 percent of beneficiaries are meeting their obligations, according to the Ministry of Social Development (MSD). The new measures are targeted at the small percentage who are not actively engaging with their employment requirements.

“These changes are about helping that remaining two percent to reconnect with the workforce,” said Upston. “They will help us reach our Government’s target of reducing the number of people on Jobseeker Support by 50,000 by 2030.”

MSD staff have undergone comprehensive training to implement these new sanctions, including coaching on how to support beneficiaries affected by the Traffic Light System. The Minister praised their efforts, noting that “the faster we can help people into work, the better it is for their wellbeing, their families, and the country’s economic future.”

Looking Ahead: More Sanctions to Come

The reforms will continue into the second half of 2025, with two additional non-financial sanctions—Report Job Search and Upskilling—set to become available in October. These will require clients to regularly document their job-hunting activities and participate in skill development or training programs, respectively.

With the full Traffic Light System coming into place, the Government is emphasizing proactive support over punitive measures, aiming to balance social responsibility with structured guidance.

“We are building a welfare system that expects effort, but also provides the right tools and support,” Upston concluded. “This approach benefits not only the beneficiaries but also the communities and economy they are part of.”