Almost half of all people using employment services received threats to suspend their payments in the last quarter, new data has revealed.The data from the Department of Employment and Workplace Relations (DEWR) showed a 23% increase in the number of payment suspension notices issued by Workforce Australia, with 618,000 issued from 1 July to 30 September 2025, up from from 504,000 in the previous quarter.It comes as advocates call for a pause in suspensions until the government can ensure the target compliance framework (TCF), the automated system that runs mutual obligations and has just been investigated by the commonwealth ombudsman, is working legally.In an October 2025 Senate estimates hearing, Senator Jess Walsh said the government knew Centrelink payment suspensions were causing harm, but defended leaving them on despite questions over whether they were used lawfully.Of the 618,000 payment suspension notices issued, 347,000 were issued by employment service providers and resulted in at least a temporary pause of payment.

That amounts to nearly half of all employment services participants receiving a threat of payment suspension in a single quarter, analysis by the Australian Council of Social Services (Acoss) showed.First Nations people were most affected, with 52% of those with a provider having at least one suspension in the quarter.Sign up: AU Breaking News emailThe suspensions have taken place under Centrelink’s mutual obligations regime, which is meant to ensure recipients are actively looking and preparing for work.Spokesperson for the Antipoverty Centre Kristin O’Connell said the numbers were “shocking”.“We have now had confirmation from the commonwealth ombudsman, the Deloitte assurance review and an admission from DEWR itself in Senate estimates that their systems do not even hold enough information to confirm whether a payment suspension was lawful,” she said.

“Continuing to allow these penalties to be used when there are huge legal question marks is absurd and shows the government cares more about the financial viability of job agencies than the wellbeing of people in poverty.”Just 11.7% of jobseekers in Australia found long-term employment through a job provider in the latest financial year, at a cost of $750m to taxpayers, data released to parliament shows.Service providers are allowed to claim an “outcome payment” from the government when a client reaches milestones of four, 12 and 26 weeks in employment – regardless of whether the client found the job without the provider’s assistance.The largest for-profit providers – those that have received $10m or more in contracts – were paid $300m in the last financial year, amounting to 41% of Workforce Australia’s contract spending, the data shows.

Acoss CEO Dr Cassandra Goldie said the system was failing to meet its “own employment targets and large numbers of provider decisions are being overturned”.“Any decision that affects a person’s access to income support should not be made by private companies,” she said.“It is also crystal clear that an independent quality commission is needed to ensure accountability of providers and protect people from the harm being inflicted.”On Tuesday, a second report by the commonwealth ombudsman found the department was not maintaining “effective oversight” of employment providers, with the majority of decisions being overturned.That report was specifically looking into the failures of the targeted compliance framework.

In an earlier report, released in August, the ombudsman found 964 jobseekers had their payments unlawfully cancelled by the automated system between April 2022 and July 2024.“We could not be assured that DEWR maintains effective oversight of decisions made by providers, including through monitoring and responding to inconsistent or inappropriate decision-making by providers,” the report said.When we considered this against the unlawful cancellations, it calls into question the fairness and reasonableness of decision-making that resulted in job seekers losing vital financial support.”About half (51%) of these private provider decisions were overturned, but not before people were cut off from vital payments, the report said.Kate Allingham, the CEO of peak welfare group Economic Justice Australia, said the investigation showed there was “little regard” for welfare recipients.

“It is also clear that neither DEWR nor Services Australia have the ability to administer the employment services system in a way that is fair to the many hundreds of thousands of people who access these payments,” she said.“The fact that more than half of the people receiving income support were given compulsory activities that were impossible to meet shows how far this system has strayed from being genuinely supportive and accessible.”A spokesperson for DEWR said approximately 90% of payment suspensions were lifted before resulting in any gap or delay in a person’s payment.It said the government had taken “several measures to safeguard the use of suspensions”, including increasing the resolution time from two to five days; ensuring people cannot have a payment suspension applied for missing an appointment with their job provider if they are attending paid work; and introducing a warning rather than a payment suspension if it’s the first time a person has missed a mutual obligation requirement.“The department regularly monitors key aspects of the system, including how providers make decisions under the targeted compliance framework,” a department spokesperson told Guardian Australia.

“Where incorrectly or inappropriately applied non-compliance action is identified, including payment suspensions, the department overturns these decisions and gives feedback to providers about why those decisions were reversed.”