Document ID: chunk:federal_register_of_legislation:C2018A00026:clause:15_42af:p1
Version: federal_register_of_legislation:C2018A00026
Segment Type: clause
Provision Reference: sch 15 cl 42AF (pt 1/2)
Character Range: 248641–251571

42AF  Compliance action for mutual obligation failures

Usual rule
 (1) If a person commits a mutual obligation failure (the relevant failure), the Secretary must:
 (a) determine that the person's participation payment is not payable to the person for a period (see section 42AL); and
 (b) take action under subsection (2) (if applicable).
Note: The person may be eligible for back pay once the payment suspension period ends (see subsection 42AL(4)).

Special rule—persistent mutual obligation failures and no reasonable excuse
 (2) If:
 (a) the Secretary is satisfied in accordance with an instrument made under subsection 42AR(1) that the person has persistently committed mutual obligation failures; and
 (b) the person does not satisfy the Secretary that the person has a reasonable excuse for the relevant failure (see sections 42AI and 42AJ);
the Secretary must, in accordance with that instrument, determine:
 (c) that an instalment of the person's participation payment for an instalment period is to be reduced (see section 42AN), in addition to making a determination under paragraph (1)(a) of this section; or
 (d) that the person's participation payment is cancelled (see section 42AP).
Note 1: For paragraph (c), the person may be eligible for back pay once the person's payment suspension period ends (see subsection 42AL(4)). However, the back pay may be reduced (including to nil) if the instalment period for which an instalment is to be reduced under paragraph (c) overlaps with the payment suspension period.
Note 2: For paragraph (d), a further consequence is that participation payments will not be payable to the person for the person's post‑cancellation non‑payment period (see subsection 42AP(5)).
 (3) A determination made under paragraph (2)(d) for the relevant failure has effect despite any determination made under paragraph (1)(a) for the relevant failure.

Special rule—discretion not to take action for certain failures
 (3A) Despite subsections (1) and (2), the Secretary may decide not to make a determination under either or both of those subsections for the relevant failure if it was committed under paragraph 42AC(1)(a) or subparagraph 42AC(1)(c)(i).
Note 1: Paragraph 42AC(1)(a) relates to a failure to comply with a requirement notified under subsection 63(2) or (4). Subparagraph 42AC(1)(c)(i) relates to a failure to attend, or to be punctual for, an appointment that a person is required to attend by a notice under subsection 63(2).
Note 2: The Secretary may instead cancel or suspend the participation payment under section 80 (see section 42AS).
 (3B) In deciding whether to make a decision under subsection (3A), the Secretary must have regard to any matters determined under subsection 42AR(1A) and may have regard to any other relevant matters.

Action not to be taken—instalment already reduced to nil for instalment period when failure committed
 (4) Despite subsections (1) and