7. The activity test

7.1 Overview of the activity test

Since 1 January 2003, some Special Benefit recipients have been required to satisfy a special “activity test” in order to remain qualified for Special Benefit. Nominated visa holders (see 7.2 below) must satisfy the “nominated visa holders activity test”. Where they fail to satisfy the activity test they may be held to have committed a “participation failure”. Three “participation failures” in 12 a month period can result in an eight week no payment penalty.

Other Special Benefit recipients who are not “nominated visa holders” may also be subject to less formal “activity testing”. In most cases, these recipients of Special Benefit will be asked to record a specified number of job search contacts every fortnight. This is so they can establish that they satisfy the qualification criteria of being “unable to earn a sufficient livelihood”. Unlike people subject to the “nominated visa holders activity test”, these recipients cannot have a “participation penalty” imposed if they fail to look for work while they are receiving Special Benefit. However, their payment may be suspended while Centrelink reviews whether or not they are actually “unable to earn a sufficient livelihood”.

7.2 To whom does the “nominated visa holder activity test" apply?

The “nominated visa holder activity test” may apply to holders of visa subclasses nominated by the Minister in a Ministerial Declaration. The subclasses covered by current declarations are:

447 (Secondary movement offshore);
451 (Secondary movement relocation);
785 (Temporary protection);
785 (Temporary protection);
786 (Temporary humanitarian concern);
787 (Temporary witness protection)(trafficking);
695 (Return pending);
070 (Removal pending); and
the Criminal Justice Stay visa (where the visa was issued in relation to people trafficking, sexual servitude or deceptive recruiting).

The "nominated visa holder activity test" will only apply to holders of these subclasses of visa who claimed or were granted Special Benefit on or after 1 January 2003. Recipients who were granted Special Benefit before 1 January 2003 will not be subject to the activity test, unless they have their payment cancelled and recommence on Special Benefit on or after 1 January 2003. A nominated visa holder who was granted Special Benefit before 1 January 2003 may also become subject to the "nominated visa holder activity test” if they turn Youth Allowance age after that date. Importantly, a person who is not required to satisfy the "nominated visa holder activity test" because their payment was granted before 1 January 2003, or because they have an exemption, cannot have a “participation failure” recorded against them or a “participation penalty” imposed.

The "nominated visa holder activity test" only applies to people of “workforce age”. This means that it applies to people who have turned at least the minimum age for Youth Allowance (16 years) but who have not turned Age Pension age (see Chapter 27).

The "nominated visa holder activity test" will not apply to people who would qualify for Disability Support Pension, but for the fact that they are not residentially qualified for that payment. This means that Centrelink will need to be satisfied that the person meets the qualification requirements for Disability Support Pension (see Chapter 23 for information on these requirements).

7.3 Exemptions from the "nominated visa holder activity test"

A general 13 week exemption from the activity test applies to all temporary protection, humanitarian or safe haven visa holders who apply for Special Benefit on or after 1 January 2003. This 13 week exemption period begins the day after the day on which the person is granted the visa (usually the day after a person is released from detention).

Exemptions from the "nominated visa holder activity test" also apply in the following circumstances:

Dependent child – a person who has a dependent child under 6 in their care cannot be required to satisfy the "nominated visa holder activity test".
Caring responsibilities – a person who has caring responsibilities and would qualify for Carer Payment or Carer Allowance, but for the fact that they are not residentially qualified for these payments, will be exempt from the "nominated visa holder activity test". See Chapter 25 for information on the qualification criteria for Carer Payment and Carer Allowance.
Childbirth and pregnancy – a woman cannot be required to satisfy the "nominated visa holder activity test" in the six weeks before and after she is due to give birth. Note that if the child remains in the woman’s care, she should receive an exemption from the activity test on the basis of having a dependent child in her care. Women who are pregnant have no job search requirements during the last three months of their pregnancy, however they may be required to undertake other suitable activities to satisfy the activity test (unless one of the activity exemptions listed in this section applies).
Temporary incapacity – a person may be exempted from the "nominated visa holder activity test" if they are temporarily incapacitated for work due to sickness or an injury. In order to be granted such an exemption, the person will need to present a medical certificate to Centrelink stating the nature of the sickness or injury, that the person is incapacitated for work and the period for which the person will be incapable of working. The exemption can only be granted if the nature of the incapacity means that the person is unable to work for at least eight hours per week at the applicable legal minimum wage or above. Presentation of a medical certificate stating that a person is temporarily unable to work eight or more hours per week will not automatically result in a temporary incapacity exemption from the activity test. Centrelink may decide that the person is not incapacitated for "work”, despite what their doctor has indicated on their medical certificate, or that although they are incapacitated for "work", they should be required to undertake another "suitable activity".
Special circumstances – a person may be granted an exemption from the "nominated visa holder activity test" if special circumstances exist, that are beyond the person’s control, which make it unreasonable to expect the person to comply with the activity test for a certain period. An exemption on this basis generally cannot run for more than 13 weeks. However, Centrelink may grant a further exemption if it is satisfied that special circumstances continue to exist after the expiration of the first exemption period. See Chapter 17, section 12.3 and Table 17.2 for Centrelink policy on special circumstances exemptions).
Voluntary work – in some circumstances, a person who is 55 or over may be exempt from the "nominated visa holder activity test" where they are doing at least 30 hours per fortnight of either unpaid work for an approved voluntary organisation or suitable paid work or a combination of both.
Rural areas – a person is taken to satisfy the "nominated visa holder activity test" if they remain willing to undertake paid work and they live in an area where there is no locally accessible work or training course and it would be considered unreasonable to expect a person to comply with the activity test.
“Principal carer” parent exemptions – a “principal carer” parent may also be granted an exemption under one of the special exemptions listed below. These exemptions also apply to Newstart Allowance “principal carers” and are explained in detail in Chapter 17 at 12.5. They are as follows:

automatic exemption (foster carers, home schoolers, distance educators, those with a, large family and certain principal carer parents living with a child who is a relative in accordance with a Family Court Parenting Order only);
special family circumstances (domestic violence, various caring responsibilities and stress due to relationship breakdown); and
domestic violence.

“Principal carer” parents and people with a “partial capacity to work” working at least 15 hours per week - a “principal carer” parent and a person with a “partial capacity to work” who is undertaking at least 15 hours of “suitable” paid work per week is exempted from the “nominated visa holders” activity test.
Person undertaking certain paid work or other activities – Centrelink may decide that a person who is working or undertaking other activities is not required to satisfy the activity test having taken into account the nature, duration and remuneration of the work and any other relevant circumstances.

7.4 Requirements of the "nominated visa holder activity test"

The "nominated visa holder activity test" requires that a person is at all times actively seeking and willing to undertake “suitable” paid work in Australia. (See Chapter 17, 6.1 and 6.2 for an explanation of the terms “actively seeking” and “willing to undertake”.)

Work of a particular type will be considered unsuitable where:

the person lacks the skills, experience or qualifications that are needed to perform the work and the employer will not provide appropriate training;
the person has an illness, disability or injury that would be aggravated by the work;
the person is a “principal carer” parent and does not have access to appropriate care and supervision of the children at the times when the person would be required to undertake the work;
performing the work would constitute a risk to health or safety and would contravene occupational health and safety legislation;
the conditions of work would be worse than the relevant statutory conditions;
commuting between the person’s home and the place of work would be unreasonably difficult. This would generally be the case if the journey would exceed 90 minutes in duration or the weekly travel costs would exceed 10% of the person’s gross wage or if other people living in the same area do not regularly commute to the area in which the work is available. For “principal carer” parents and people with a “partial capacity to work”, commuting would be considered “unreasonably difficult” where the trip between the person’s home and place of work, including via child care, would normally exceed 60 minutes. A journey of less than 60 minutes may render a job unsuitable in some circumstances, eg where the hours of work are of a limited duration, such as three hours per shift;
the work requires the person to move to another place; or
for any other reason, the work is unsuitable.

It is important to note that Centrelink cannot require a person to seek work outside the area in which they live. It is up to the person to elect such a move, normally through their Job Network agency and then, the issue of whether the work is “suitable” for that person can be considered. However, where a person has agreed to look for work outside their home or local area, they will be required to accept offers of permanent full-time work that are outside their local area, even if the travel time would otherwise be considered to be unreasonably difficult.

Where a person has indicated a willingness to move and the person is then offered permanent full-time work which involves moving home or commuting to work within reason, the work may still be considered unsuitable work where:

the person is under 18;
the person or the person’s partner is pregnant;
the person or the person’s partner has a severe medical condition which makes it unreasonable for the person to accept the offer;
accepting the offer would jeopardise the current employment or employment prospects of the person’s partner;
the person or the person’s partner has a child who is under 16 that lives with them or lives in the area that they previously lived;
the person or the person’s partner has caring responsibilities in the old area. Centrelink policy states that significant caring responsibilities include caring for elderly or disabled parents or friends, or a child of a person or their partner who is 16 or over who is substantially dependent on the person or their partner;
the educational, cultural or religious background of the person makes it unreasonable for the person to accept the offer;
it is more appropriate for the person to participate in education or training than to accept the offer; or
the person will suffer from “severe financial hardship” if the offer is accepted. A person is considered to suffer “severe financial hardship” where the wage or salary would not allow them to meet either reasonable living expenses in the new area, or the reasonable cost of commuting to the new area.

A person may also be required to apply for a particular number of advertised jobs during a specified period. In such a case, the person will be required to give Centrelink written verification, on an approved form, of the job applications, unless a special circumstance exists so that it is not reasonable to expect the person to submit the form.

Centrelink may also require a person to enter into an Activity Agreement (see 7.5). Where this is the case, the person must comply with the terms of the Activity Agreement. Where Centrelink forms the opinion that a person is not complying with the activity test, Centrelink may record a “participation failure” or impose a “participation penalty” on that person. There are strict rules for when this can occur and there may be a number of grounds for appealing against such a decision (see 7.6 and Chapter 22).

There are different “activity test” requirements applying to people who are 55 or over, which aim to take into account the increased difficulty that mature age people experience in trying to find paid work, especially those who have no ”recent workforce experience”. For more information see Chapter 17.

7.5 Who may be required to enter into an Activity Agreement?

Centrelink may require any holder of a nominated visa who claims or is granted Special Benefit on or after 1 January 2003, to enter into an Activity Agreement, unless they are exempt from the activity test for one of the reasons set out in 7.1 or 7.2.

A person who is required to sign an Activity Agreement must be given a “notice” which specifies the place and time at which the Activity Agreement is to be discussed.

A person may be treated as having failed to enter into an Activity Agreement where they have been "notified" of the requirement for them to enter into an Activity Agreement and they either refuse to sign the Activity Agreement or do not:

go to a meeting or meetings to discuss the terms of the Agreement;
reply to any correspondence that they receive about the intended Agreement; or
agree to the terms of the Agreement as proposed.

A person may incur a “participation failure” and “participation penalty” for failing to enter into an Activity Agreement, except where they have a “reasonable excuse” for not doing so (see 7.6 and Chapter 22).

7.6 Special Benefit Activity Agreements – terms

General

Subject to the “reasonable” test set out below, an Activity Agreement may require a person to undertake one or more activities that Centrelink regards as suitable. Such activities include:

job search;
voluntary work;
a vocational training course;
training that would help a person search for work;
paid work experience;
measures designed to eliminate or reduce any disadvantage the person has in the labour market;
a Language, Literacy and Numeracy Program (LLNP);
a Community Work Program;
a “Work for the Dole” program;
any other activity that Centrelink regards as suitable for the person, and is agreed upon by the person and Centrelink.

In considering the terms appropriate for an Activity Agreement, Centrelink must take into account the person’s capacity to comply with the proposed terms and the person’s needs. The law states that this will involve the consideration of:

the person’s education, experience, skills and age;
the impact of any disability, illness, mental condition or physical condition of the person on the person’s ability to work, to look for work or to participate in training activities;
family and caring responsibilities of the person
the state of the labour market and transport options in the locality where the person lives;
the length of travel time required;
the financial costs of complying with the terms, such as travel costs;
the participation opportunities available to the person; and
any other factors that Centrelink considers relevant in the circumstances.

Note that both the person who is subject to the Activity Agreement and Centrelink may request a review of the Agreement at any time.

Special rules for “principal carer” parents and people with a “partial capacity to work”

Activity Agreements for “principal carer” parents and people with a “partial capacity to work” must require the person to look for suitable part-time work for an “appropriate” number of hours per week. The “appropriate number of hours is at least 15, unless another amount of hours is considered appropriate having regard to the person’s circumstances. Centrelink policy guidelines state that a “principal carer” parent is not required to accept a job offer of more than 25 hours per week, although they may choose to do so.

“Principal carer” parents and people assessed as having a "partial capacity to work" are taken to satisfy the activity test where they are engaged in at least 15 hours per week of “suitable” paid work.

There may be other situations for both "principal carer" parents and people with a "partial capacity to work" which could make work unsuitable (see Chapter 17 for more details about the special rules for “principal carer” parents and people with a “partial capacity to work”). Any person with an explanation as to why they could not look for or be willing to accept certain work should explain in detail to Centrelink their reasons. If Centrelink does not accept that the work is unsuitable, then the person should be encouraged to appeal to an Authorised Review Officer (see Chapter 48).

“Work for the Dole”

A “nominated visa holder’s” Activity Agreement may include a requirement that the person participate in a “Work for the Dole” programme. A person cannot be required to participate in “Work for the Dole” where:

the person is under 18;
the person is 50 or over, unless the person is under 60 and has a “demonstrated pattern of work avoidance” (see Chapter 17, 11.3);
the person or their partner has income;
there is medical evidence that the person has an illness, disability or injury that would be aggravated by the programme; or
the work would constitute a risk to health or safety or would contravene occupational health or safety law.

More details about “Work for the Dole” can be obtained from Chapter 17, 11.3.

7.7 Penalties for failing to comply with activity test requirements

There is a range of possible “participation failures” and “repeated or more serious failures” that may result in a “participation penalty” being imposed. These are detailed in Chapter 22. All such decisions can be appealed on various grounds, including having a “reasonable excuse” for the failure. Examples of “participation failures” include failure to comply with a reasonable requirement, failure to satisfy the activity test, failure to enter into or comply with an Activity Agreement and failure to attend a job interview.

Three “participation failures” in 12 months can result in a penalty as severe as an eight week no payment period. There are also a number of “more serious participation failures” which can result in the immediate imposition of an eight week no payment period. See Chapter 22 for a detailed discussion of “participation failures” and “participation penalties” and what grounds are available for appeal.