SYDNEY, June 15, 2025
Centrelink Suspends Payments Amid Mental Health Crisis
A woman’s jobseeker payment was suspended while she was in hospital, highlighting concerns about Australia’s welfare system.
- Thousands of jobseeker payments are suspended monthly.
- Medical certificates were rejected by Centrelink, creating payment suspensions
- Advocates are calling for reforms to teh mutual obligations framework.
What happens when a person in crisis faces payment suspensions from Centrelink? Kelly, a 43-year-old, began experiencing psychosis on March 26 adn was admitted to Macquarie Hospital in NSW on April 8.While receiving treatment, her jobseeker payment was suspended as she missed a mandatory appointment.
“I was completely out of my mind,” Kelly recalls. “When I had the psychosis, I thought I was being poisoned and people were watching me. I couldn’t even tell you my name. I didn’t think my name was my name; I was completely just in another world.”
In March, Services Australia paused most payment cancellations due to legal concerns about its IT systems.Though, government data reveals that thousands of payments are still being suspended each month. Between January and April 2025, there were 157,680 payment suspensions. In February,over one recipient had their payments paused every minute.
Advocates are alleging that these suspensions might be unlawful. They are urging the federal government to overhaul the mutual obligations framework, which penalizes jobseekers for failing to meet requirements.
Kelly’s doctors wrote four medical certificates, but Centrelink rejected them all. The agency said psychosis wasn’t a diagnosis but a “medical symptom.” As a result, she was told to attend an in-person appointment to restore her payment. With her driver’s license revoked, a hospital social worker drove her to the provider, coact.
During the meeting, her job coach suggested she seek eight jobs instead of six. “I signed the document I couldn’t even read and left crying,” she says.
Kelly’s experience is not an isolated one, prompting the Commonwealth Ombudsman to expand the scope of its inquiry of the legality of such payment cancellations.
Kelly remained in the hospital for nearly another week, without income, and unable to pay rent. Her case echoes that of a Victorian-based welfare recipient whose payment was suspended while hospitalized after brain tumor surgery. He was also homeless.
The Commonwealth Ombudsman has expanded its investigation into the legality of the payment cancellations. Natalie James, secretary of the Department of Employment and Workplace Relations, expressed concerns that the system might not be operating legally and extended the pause on cancellations in March.
Jay Coonan, a spokesperson for the Antipoverty Center, emphasizes that the legality of payment suspensions is at issue.”We’ve heard of cases of people in ICU having their payment suspended,” he says. “We’ve heard of people who have been on their deathbed and their families have been working with social support in hospitals to try and stop this from happening.”
in April, 877,355 people were registered on Jobseeker, with the majority (625,140) receiving the full rate of $781.10 a fortnight. Coonan warns that these suspensions are stressful and can lead to further poverty, even outside the hospital setting. He advocates for a complete pause of the system, highlighting that the department doesn’t seem to care.
A department spokesperson, Hank Jongen, stated that Centrelink apologized to Kelly and worked to resolve her case. He encouraged anyone in similar situations to contact them for assistance.
Kelly eventually had three more certificates from her psychiatrist accepted.These certificates outlined her psychosis and were finally able to get her mutual obligation paused while she recovered. She is now recovering, but the episode and bureaucratic struggles have left her exhausted and depressed.
“People seriously look down on Centrelink recipients,” she says. “But anyone can find themselves needing their help.” CoAct were approached for comment.
Beyond the Hospital: The wider Impact of Centrelink Suspensions
The ordeal Kelly faced, detailed in the initial report, highlights the immediate consequences of Centrelink payment suspensions: a lack of income during a critical health crisis. Though,the long-term ramifications extend far beyond the hospital walls,frequently enough exacerbating existing vulnerabilities and creating new challenges. The impact of these disruptions on mental health, specifically, is becoming increasingly apparent.
Coonan’s warnings that suspensions lead to increased stress are echoed by many, including advocacy groups and mental health professionals. The financial insecurity created by these pauses can substantially worsen existing mental health conditions and even trigger new ones. For individuals already struggling, the added burden of navigating the complex Centrelink system while unwell can be overwhelming. This is especially true for those experiencing severe symptoms such as psychosis, as kelly described.
The Vicious Cycle of Suspension and Deterioration
The process itself can be a source of immense frustration. Requirements to attend appointments, provide documentation, and communicate with Centrelink can feel unachievable when someone is in distress. When faced with payment suspensions, individuals may delay or avoid seeking essential medical care, fearing further complications or financial strain. This can lead to a vicious cycle of worsening mental health, missed appointments, and continued payment interruptions.
- Increased Isolation: Financial instability often results in difficulty paying bills, purchasing food, or maintaining housing.
- Difficulty Accessing Treatment: Many people are unable to afford necessary medical or mental health care.
- Exacerbation of Existing Conditions: The stress and uncertainty can worsen mental health symptoms, as highlighted in Kelly’s case.
The impact is not confined to those in acute crisis. The fear of suspension constantly looms over many vulnerable Australians. This anxiety can prevent people from seeking needed assistance, further complicating the support system’s already-strained capacity.
What Needs to Change?
Addressing this complex challenge requires a multi-faceted approach. Improving the efficiency of the system is simply not enough, advocates argue. The priority must be human-centered design.
- Streamline Interaction: Employ clear communication channels.
- Simplify processes: Reduce the complexity of claiming and appealing decisions.
- Train Staff: Ensure Centrelink staff get adequate training in mental health awareness.
What can Jobseeker recipients do who are struggling with mental health issues? Seek support from mental health professionals and social workers to navigate the Centrelink system. How can someone seek help? Document all interactions with Centrelink, and seek assistance from advocacy groups like the Antipoverty Center, which can provide support and legal advice.
The Department of Employment and Workplace Relations is responsible for overseeing Services Australia, which runs Centrelink. The department has a duty to ensure its services meet the needs of struggling Australians.
Table of Contents
