Expanding the traffic light system

The vast majority (over 98%) of our clients are doing the right thing and meeting their obligations. They’re at green in the traffic light system.  

Currently, your benefit is reduced by 50% if you don't meet your obligations for the first time, without a good reason. It’s a sanction, or consequence, for not doing what’s required to get your benefit.  

From 26 May 2025, instead of your benefit being reduced, you may have one of these 2 proposed sanctions:

• go onto Money Management and complete an activity - this means that for 4 weeks:
  • 50% of your benefit will go onto a payment card to be used at approved stores for groceries, health needs, transport and education needs, and
  • 50% of your benefit will keep being paid into your bank account, or
• have to find and do at least 5 hours of Community Work Experience each week, for 4 weeks.

These will only apply to you if you have dependent children or a 'dedicated case manager'. They will be discussed with you during an appointment with a case manager.

If you don't meet your obligations without a good reason, this is called an 'obligation failure'.

Currently, this counts against your benefit for 1 year and could affect your payments from us. If you don't meet your obligations again during that year, the sanction, or consequence, increases and your payments will reduce or stop.

It's proposed that from 26 May, any new obligation failure will count against your benefit for 2 years instead of 1.

From 26 May 2025, if you get Youth Payment or Young Parent Payment, it's planned that you will be in the traffic light colour system. 

The traffic light system helps you stay on track with your Youth activity obligations. You'll be able to see in MyMSD if you’re at green, orange or red in the traffic light system.

There will be no change to what happens if your obligations aren’t met. Youth clients already have their own money management which is quite different to the Money Management being proposed.

We ask you to fill out a Jobseeker profile so we can help you find a job now or in the future.

From 26 May 2025, it is proposed you'll have to complete a Jobseeker profile if you're applying for, or transferring to:

• Jobseeker Support
• Sole Parent Support, or
• Emergency Benefit, if you have an obligation to find work.

You'll have to do this before your benefit can be approved. Most partners will need to do this too – we’ll let you (or them) know if it’s required.

You can complete your profile either online, in MyMSD or at service centre kiosks. Get in touch if you’d like support completing it.

It's proposed there will be another 2 types of sanctions for people who don't meet their obligations for the first time without a good reason:

• Report Job Search, and
• Upskilling.

If introduced, we'll talk with you about whether Money Management, Community Work Experience or one of these other new sanctions is appropriate for you.

They were announced by the Government in early February 2025.