It’s only February but we are already receiving referrals and managing a large caseload and expect you are too. The work we do with financial counsellors is critical to provide an effective wrap-around service for clients and we would like to acknowledge the referrals received and given are an important part of what our partnership offers clients. Thank you for strengthening our partnership and supporting clients through your referrals. We look forward to even more cross-referrals this year.

Keeping financial counsellors up to date with changes in social security law and policy is another way we strengthen our partnership and support financial counsellors to guide clients.

In this article we will update you on recent changes to Centrelink policy regarding temporary incapacity exemptions for job seekers. Many of the clients we see in our clinics are incapacitated due to a temporary illness, injury or episodic condition for defined periods of time and are therefore unable to meet their mutual obligations which can impact their eligibility for Centrelink payments.

Changes to temporary incapacity exemptions

1. Mutual obligations for job seekers

The policy reasoning behind mutual obligations is that it is fair and reasonable to expect people who are unemployed to look for work, or participate in a program that supports their return to work. Mutual obligations are a strict requirement for clients who receive participation payments. These include JobSeeker Payment, Youth Allowance, and Parenting Payment (when the youngest child turns 6). Special Benefit is also a participation payment but these recipients’ mutual obligations will depend on whether they hold a nominated visa or not.

Job seeker’s mutual obligations are generally determined by their age, assessed work capacity and the primary responsibility for the care of a child. Mutual obligations can be part-time or full-time but it is a basic requirement that in order for job seekers to receive a Centrelink payment they must voluntarily engage in looking for work, or approved work participation activities.

Social security law provides for temporary incapacity exemptions from mutual obligations if certain criteria are met. These criteria can include special circumstances such as special family circumstances for example, and temporary exemptions which can be applied when a person is unable to work due to a medical condition. A medical condition can be due to surgery and recovery time needed as well as rehabilitation.

2. Temporary incapacity exemption – what’s changed?

As of 1 January 2025, temporary incapacity exemptions can be granted for periods of up to 24 months. Prior to this change, temporary medical exemptions could only be obtained for up to three months with a further approved medical certificate required for each subsequent exemption.

A practitioner’s assessment will determine the duration of the incapacity, and ultimately Centrelink will make a decision about the duration of the exemption that Centrelink will apply. This change to the policy will hopefully reduce the need for clients to seek subsequent new medical certificate to cover the same medical condition.

3. Eligibility to meet temporary incapacity exemption

To be eligible for a temporary incapacity exemption clients need to first be assessed by their medical practitioner and provide Centrelink with an approved medical certificate.

Centrelink requires the medical certificate to be signed and dated by the practitioner and it must be on the practitioner’s letterhead. It should include:

• the diagnosis and prognosis of the medical condition, including the length of time it will take for the client to recover;
• the client is incapacitated for work or any other suitable activity for 8 hours or more per week;
• the period a client is unable to work or study.

While Centrelink will accept medical certificates with the information noted we recommend clients use the Centrelink Medical Certificate form (SU415) which can be found on Centrelink’s website.

For rural and remote clients who live in communities without a doctor, Centrelink will accept medical certificate completed by a community nurse. For all other Victorian residents, medical doctors must complete and sign a medical certificate.

There may be situations where medical evidence is provided to support an exemption, but Centrelink still assesses the individual as being able to undertake full or reduced job seeking activities.

Reduced job seeking activities could include staying in contact with employment service providers, making a monthly call to prospective employers, or modifying an existing employment plan. This will vary according to assessments undertaken by Centrelink, who are required to consider individual barriers and medical conditions.

Where your client disagrees with Centrelink’s assessment, they may be able to seek review of Centrelink’s decision, or it might be appropriate to make a complaint.  You are welcome to contact SSRV for a secondary consult or refer the client to our service so we can discuss their situation with them.

4. Finally

Keeping up to date with recent changes to social security law and policy will help financial counsellors provide the right guidance for clients and we will continue to update you of any important changes.

We welcome any questions you have and encourage you to keep contacting us through the Worker Help Line as you need.