Australian government admits hundreds of thousands of welfare payments cancelled illegally

Representatives for the Department of Employment and Workplace Relations told a Senate estimates hearing on Wednesday that an automated system glitch led to the illegal cancellation of payments for hundreds of thousands of recipients under the mutual obligations scheme.

The department said the total number of cancellations, where recipients were not given the required 28 days to reconnect with a job provider after missing a compulsory activity, was in the vicinity of 300,000.

Background on the cancellations Guardian Australia previously reported analysis by Economic Justice Australia showing 310,000 people had payments unlawfully cancelled between 2020 and 2024. At the time the department publicly acknowledged only 9,510 unlawful cancellations.

Department representative Bronwyn Field said the department's internal analysis aligned closely with the earlier estimate but noted some recipients had found work and no longer needed to reconnect.

Current status and concerns Payment cancellations remain paused since July 2024.

Between January and March this year the department issued 299,305 suspension notices, averaging more than 3,300 per day. Economic Justice Australia chief executive Kate Allingham said the group raised the issue with the department more than a year ago and has seen no concrete steps to address ongoing problems with automated decision-making.

Allingham said the organisation is concerned that discretion is not being applied when recipients miss appointments, leaving people in difficult situations without opportunity to explain their circumstances. Last week the department announced plans to overhaul the employment services system, stating the current model is ill-equipped to help people find work.