Feds admit jobless could fall through the cracks under budget changes

The Morrison Government has talked up the benefits of changes to income support obligations but a newly released document reveals the risks.

May 21, 2021, updated May 21, 2021
Jobless figures have slipped a little higher this month.. (File image).

Jobless figures have slipped a little higher this month.. (File image).

Under changes finalised in the budget, job seekers receiving welfare payments will be required to liaise with service providers online, saving the government hundreds of millions dollars each year. The Coalition’s ongoing bid to rein in welfare spending has been interrupted only by the pandemic.

The Department of Skills, Education and Employment estimates that when the new employment services model starts in July 2022, 42 per cent of existing job seekers will be in Digital Services and 58 per cent in the more intensive Enhanced Services. Over the longer term, more than two thirds of new job seekers will go straight to Digital Services, as the department largely phases out in-person meetings.

While Treasurer Josh Frydenberg used his budget speech to talk about “modernising employment services,” the Australian Council of Social Service expressed concern that providers would spend their time policing benefit requirements rather than helping job seekers. In the background, there has also been a debate over the need for more services to prevent homelessness.

Since the budget, the department has quietly published a risks and benefits statement that acknowledges the new employment services model will disrupt the industry and leave cracks in services, partly due to providers leaving rather than meet the requirements.

It acknowledges job seekers face “some additional administrative burden” and should expect setbacks in their quest for employment due to the anticipated turnover of providers.

“While these arrangements will help to maintain a high level of service quality, they may also lead to a higher turnover of providers than under jobactive,” the department states.

“This has the potential to disrupt a job seeker’s job search. The department has established processes to transition job seekers to new providers; however; a period of adjustment to a new provider would be inevitable for the job seeker.”

The changes will also put additional pressure on providers, leaving the department to assess whether they are underperforming and, if so, what should be done about it.

“Providers that transition from jobactive will need to invest time and resources into developing a new business model,” the department states.

“The characteristics of job seekers in Enhanced Services will be substantially different to jobactive, which included job-ready job seekers.

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“Job seekers in Enhanced Services will be a more disadvantaged cohort, with the majority experiencing barriers to employment. Vulnerable cohorts, such as Indigenous Australians and people with disability, are overrepresented in Enhanced Services.

“As a result, providers will need to have appropriately qualified staff and will need to engage with potential employers in different ways, including by strengthening post-placement support.”

Nonetheless, the department believes the changes could help mitigate the impact of recent trends in job-seeking.

“With the influx of more job-ready job seekers in the labour market following the COVID-19 pandemic, job seekers with more barriers to employment are at risk of being left behind,” the department states.

“Data from jobactive shows that wage subsidies are beneficial to securing employment for disadvantaged job seekers. Limiting wage subsidies to employers of job seekers in Enhanced Services directs more support to disadvantaged job seekers, and recognises that these job seekers will get a greater benefit from the financial incentives than job-ready job seekers in Digital Services.”

Services Australia, the government behemoth that handles Centrelink and Medicare claims, is also looking to replace its human greeters at offices with computerised check-in machines.

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