The moral hazard of conditionality: Restoring the integrity of social security law

This article examines the extent to which the Australian and UK social security systems meet their legal obligations to provide basic relief to citizens in need. Conditionality and “mutual obligation” are at the core of both the UK and Australian social security systems and are based on the concept of moral hazard, the goal being to ensure that claimants do not consider living on benefits to be preferable to engaging in paid work. Yet, we argue that the element of “mutuality” is missing in both systems; welfare claimants are subject to myriad conditions and obligations, whilst the state operates free of any legal responsibility to provide even basic relief to those in need, to prevent or alleviate extreme poverty and destitution. We outline the extent to which Australian and UK social security laws require governments to relieve destitution, examining both domestic and human rights law. We conclude that legal protections are weak and that both systems fail to meet the basic conditions of humanity toward their citizens. On this basis, we argue that such failings demonstrate a lack of integrity which undermines the standing of both the UK and Australia to invoke a claim of moral hazard to defend claimant conditionality.