Work and Income obligations and sanctions: the traffic light system explained

Green, orange and red

The traffic light system covers work-related and social obligations: finding or preparing for work, Work Ability Assessments, activities with Work and Income's service providers, and, if you care for dependent children, social obligations such as enrolling them with a doctor. You are in it if you, or your partner, get Jobseeker Support or Sole Parent Support with those obligations. Most people on Supported Living Payment are not.

Work and Income describes the colours this way:

• Green: you are on track and meeting your obligations. Work and Income says over 98% of its clients are at green.
• Orange: you have not met an obligation and do not have a good reason. You need to contact Work and Income straight away. If you do not get back on track within 5 working days, you move to red.
• Red: your benefit could be reduced or stopped. Contact Work and Income immediately to get back on track.

Work and Income says it will try to contact you before you move to orange, sends a letter if you are at orange or red, and shows your colour in MyMSD. At orange it books an appointment to talk about what happened. If you had a good reason, you go back to green at that appointment. If not, it records an "obligation failure" and arranges an activity, and doing it within the 5 working days takes you back to green with no change to your payment.

The obligations themselves are worth knowing exactly. Sections 144 and 146 of the Social Security Act 2018 say you must be available for, and take reasonable steps to get, suitable work, accept any offer of suitable work, go to interviews Work and Income refers you to, and report on how you are meeting those obligations as often as, and in the way that, Work and Income reasonably requires. There is no set number of applications in that law. Our guide to job hunting on Jobseeker Support covers what counts as job search activity day to day.

What happens at red: one, two or three failures

At red, Work and Income counts the obligation failures you have, because the sanction depends on the number. Each failure counts against your benefit for 2 years. Under the Act, a second failure only counts once you have put the first one right, and a third only once you have put the second right.

In the Act, those three steps are a reduction for a first failure (section 236), suspension for a second (section 237) and cancellation for a third (section 238), which carries 13 weeks without a main benefit. Section 324 lets six continuous weeks of an approved activity end those 13 weeks early. One warning from the third row: if you start the 6-week activity and do not finish it, Work and Income says you will have to repay what you were paid during it.

The non-financial sanctions

For a first failure, Work and Income can use one of four non-financial sanctions instead of cutting your benefit. Money Management and Community Work Experience began on 26 May 2025, and Report Job Search and Upskilling from 20 October 2025. They only apply if you have dependent children or a dedicated case manager, and you need to meet Work and Income while you are at orange. Work and Income decides which, if any, suits your situation.

• Money Management: for 4 weeks, 50% of your benefit goes onto a payment card for approved stores (groceries, health needs, transport and education needs) and 50% keeps going to your bank account. You also do an activity in those 4 weeks to get back to green.
• Community Work Experience: you find an unpaid position at a community or voluntary organisation for at least 5 hours a week, for 4 weeks, and you have up to 2 weeks to find it. Your full benefit continues while you do it.
• Report Job Search: you do and record at least 3 job search activities each week in MyMSD, for 4 weeks.
• Upskilling: you do and record at least 5 hours of employment-related training each week, for 4 weeks.

Report Job Search is the one most often misunderstood. It is a sanction, imposed only after a first failure, on someone in active case management or with dependent children, and only where Work and Income is satisfied it is the most appropriate option. It is not the everyday rule for people on Jobseeker Support, who report on their job search as often as, and in the way that, Work and Income reasonably requires. If you are put on it, though, its weekly standard is exactly what you have to meet: under section 236F, failing it without a good and sufficient reason means your benefit is reduced to zero until you put it right.

Turning down a suitable job offer

Refusing an offer of suitable work without a good reason is treated more seriously than other failures. Work and Income says your benefit is affected as if you had 3 obligation failures, even if it is the first time: paid at 50% with dependent children, or stopped without, with a 6-week activity and a new application to get it back, and 13 weeks without a benefit if you will not do the activity. Section 244 of the Act requires the cancellation.

What counts as suitable is the question that matters. Under section 145, suitable employment is work Work and Income is satisfied is suitable for you, for a number of hours a week it decides. Work and Income says full-time obligations generally mean looking for work of at least 30 hours a week, and part-time obligations at least 15. The obligation also covers temporary, seasonal and subsidised work.

If you have doubts about an offer, such as hours that would clash with caring for a child, a health condition, or a commute you cannot manage, talk to Work and Income before you say no, explain why, and keep a note of what you said and when. A reason given at the time is much easier to rely on than one raised after a sanction.

The rules for 18 and 19 year olds are changing too. Our article on the Parental Assistance Test for 18 and 19 year olds explains the new condition from 2 November 2026.

Giving your reason, and asking for a review

You have 5 working days from Work and Income's notice to dispute a failure, and under section 256 of the Act a sanction cannot take effect before those 5 days are up. The notice must say what the failure was, when the sanction would start, and that you can ask for a review. If you had a good reason, call 0800 559 009 straight away and explain it. The Act also counts it as a good reason if meeting the obligation depended on help Work and Income said it would give and did not.

If you still disagree after talking to Work and Income, you can ask for a review of decision:

1. Call first. Work and Income says it may be able to fix it over the phone.
2. Apply within 3 months of the decision, on the Review of Decision form or in a letter with the date you heard about the decision, what it was about and why you disagree. You do not need legal language, and an advocate can apply for you.
3. Internal review. Work and Income looks at the decision again and writes to you within 2 weeks.
4. Benefits Review Committee. If the decision stands, a committee of two Work and Income staff who were not involved and a community representative appointed by the Minister holds a hearing, in person, by video or by phone. You can bring a support person, advocate or lawyer. Its decision arrives about 10 working days later.
5. Appeal. If you are still not satisfied, you can appeal to the Social Security Appeal Authority within 60 working days of receiving the Committee's report.

At every step, evidence of what you were doing helps: dated applications, calls, interviews and appointments, made at the time rather than pieced together later. In the demo, which needs no account, the Work and Income record shows a job search laid out by date, employer and outcome, ready to print or save as a PDF for a case manager or a review hearing.

Keep the record that backs you up