Kelly, a 43-year-old woman, had her jobseeker payments suspended while hospitalized for psychosis after being admitted to Macquarie Hospital in New South Wales on April 8, 2025.

During her hospitalization, Kelly's jobseeker payment was cut off because she missed a face-to-face appointment with her provider, CoAct, while experiencing severe mental health issues.

Despite doctors providing four medical certificates confirming her condition, Centrelink rejected them, claiming psychosis was merely a 'medical symptom' and not a valid diagnosis.

Kelly was eventually able to have her payment reinstated after a difficult appointment where she struggled to understand and sign documents due to her condition.

Centrelink has acknowledged the issue, apologizing to Kelly and indicating a commitment to assist individuals facing similar circumstances.

Similar cases have been reported, including a welfare recipient who had his payment suspended while recovering from brain surgery, highlighting a systemic issue with payment suspensions during medical crises.

In February 2025, there were 157,680 payment suspensions reported, with the highest monthly rate occurring in that month, where payments were paused for over one recipient every minute.

The Commonwealth Ombudsman has expanded its investigation into the legality of these payment cancellations, emphasizing concerns raised by the Department of Employment and Workplace Relations about the system's compliance with the law.

Advocacy groups assert that the stress from payment suspensions can exacerbate poverty, calling for a suspension of the mutual obligation requirements altogether.

Advocates argue that the suspensions may be unlawful, urging the federal government to reform the mutual obligations framework that penalizes jobseekers for missing appointments or failing to meet job application quotas.