ACOSS's advocacy on Mutual Obligations and Employment Services

ACOSS advocates for a fairer system of mutual obligations and employment services and our current priorities for reform are in the ACOSS Budget Priorities briefing.

ACOSS believes there is an historic opportunity to achieve full employment, where the vast majority of people seeking paid employment can readily find a job. To reach full employment in the 21st century labour market, attention must also be paid to Australia’s high levels of underemployment and insecure employment, and over-reliance on temporary migrants to fill entry-level jobs.

To ensure that people unemployed long-term can take advantage of the jobs available as we move towards full employment, we propose a flexible, community and employer- driven Jobs and Training Offer.

Find out more about our vision for full employment in the Jobs and Skills Summit position paper.

ACOSS believes that employment services need to be redesigned so that their primary purpose is to assist people to secure employment, rather than enforce compliance with payment requirements. ACOSS advocacy is focused on ensuring that:

Services are strengths-based, respectful, and responsive to the aspirations of unemployed people and needs of employers, and local labour market conditions.
People who are unemployed long-term or have other barriers to employment receive the help they need to overcome them, rather than standardised programs.
Robust ‘digital protections’ are introduced so that natural justice is assured, privacy is not compromised, and people can readily use online systems or alternative arrangements.
Disband Work for the Dole and Youth Path internships and reduce reliance on less effective schemes such as Employability Skills Training
Undertake a thorough review of the Points model for the Points Based Activation System to ensure that activities and tasks are credited with appropriate values that reflect the contribution of the activity (e.g. securing employment or training) to people’s employment prospects, and that reporting on activities is not onerous

ACOSS will continue to monitor the implementation of mutual obligations in Workforce Australia to ensure that it does not continue to impose onerous requirements and unfair penalties on people required to use employment services.

Recent updates July 2022

In our public statement today, ACOSS welcomed the changes announced by Employment Minister Tony Burke earlier this week to the new Workforce Australia employment service system. We see them as good first steps in reforming a seriously flawed system. The new system, which starts from Monday 4 July, includes a new Points Based Activation System, as well as online employment services for people closer to employment.

**How Workforce Australia changes employment services, and how it doesn’t**

There is much confusion and anxiety among people who are unemployed about the transition from jobactive to Workforce Australia and the new Points Based Activation System (PBAS), so it’s important to understand what’s changing and what remains the same.

It’s the things that remain the same that concern us most, including excessive activity requirements, automated payment suspensions when people don’t meet them, and ineffective and punitive programs like Work for the Dole.

The changes from 4 July, including the PBAS and the ability for people without major barriers to employment to use online services rather than enrol with an employment service provider, were intended to increase agency and choice for people. For example, the PBAS has a menu of options for people to meet their monthly activity requirements (to reach their monthly ‘points target’).

As the Minister indicated, people will still be able to fully meet requirements by applying for 20 jobs a month, but will have other options including training, work experience and voluntary work. Those options were already there, but many people were unaware of them because the drawing up of Job Plans with employment service providers was a ‘tick a box’ exercise where few choices were offered.

The main problem with Workforce Australia

The main problem with these reforms is that they are built on top of a flawed system of requirements and employment programs which have not yet been fully reformed.

For too long employment services have been dominated by endless rounds of inflexible ‘tick a box’ activities, such as having to apply for 20 jobs a month and participating in unpaid ‘make work’ schemes like Work for the Dole that don’t help people find regular employment. As respondents to our latest survey confirmed, jobactive was a compliance program first and foremost, not an employment service.

People receiving unemployment payments live in fear of having their payments suspended for minor infringements such as not attending a meeting with their employment service. In many cases they weren’t aware of the meeting. In the first three months of this year, an average of 200,000 payment suspensions a month were imposed – in many cases for failing to meet some sort of rigid requirement.

The pressures imposed on people to meet strict mutual obligation rules or risk losing income support are not helping them secure employment. In fact, by undermining people’s agency, confidence and mental health, they have the opposite effect.

It is important that we get this right because since the pandemic, long term unemployment has increased to its highest rate ever with over 760,000 people on Jobseeker or Youth Allowance payments for over a year. Two-fifths have a disability and one in three is 50 years or over. Simply forcing people to apply for more jobs or participate in ‘make busy’ activities won’t fix the hurdles they face in securing decent employment.

Helping people make informed career choices, train and prepare for employment, overcome barriers to employment, and connect them with the right job, are the things that will make a difference.

Immediate changes announced by the Minister

A “clean slate” policy, meaning people who have accrued ‘demerit points’ under the old system will start over with zero demerits under the new one.

Under the ‘Targeted Compliance Framework’ in place since 2018, people accrue demerit points for every breach of activity requirements (e.g. missing a provider appointment or not applying to 20 jobs a month) where they are found to be at fault.

Once five demerit points are accrued within 6 months, Services Australia interviews people to assess their circumstances and may warn them that another breach will cost them one week’s payment – unlike payment suspensions, this is not restored once the person complies with the requirement.

Additional demerit points may result in up to 4 weeks without income support.

‘Clean slating’ means that any demerits accrued under jobactive will be removed (but not for people using Parents Next or Disability Employment Services, since they have not been replaced by a new system).

ACOSS comment: Clean-slating is a positive, sensible change – called for by ACOSS – which recognises that many of the activity requirements in the previous system were unreasonable and unfairly administered. This means that few people will face a loss of 1-4 weeks’ payments for breaches of activity requirements during the first three months or so of the new system (unless they have refused a job offer).

However, they still face almost immediate payment suspensions for not meeting activity requirements such as missing a provider appointment. There were far too many payment suspensions in jobactive (200,000 a month). These cause anxiety, even where the next payment is quickly restored after people met their requirements. Further, a delayed payment can lead to an eviction.

Beyond the first month after people transfer to the new system a ‘light touch’ approach will be taken to payment suspensions in the second month.

During the first month after people transfer to the new system, most activity requirements and penalties have been lifted, as required by legislation.

Under the changes announced by the Minister, in the second month people will have their payments restored (ending the suspension) as soon as they indicate a willingness to comply with requirements in future, rather than having to meet the ‘missed’ requirement (e.g. apply for a certain number of jobs).

However, non-attendance at provider appointments will still attract a payment suspension, including in the first month of the new system.

ACOSS Comment: This is an improvement but falls short of the longer suspension of mutual obligations we sought – of up to three months – while people adjust to the new system. We have also argued for removal of payment suspensions for non-attendance at provider appointments, at least in the first month. In a system that’s designed to increase choice and agency for people, they should be given the opportunity to freely engage with their provider (or the online service) before being threatened with payment suspensions.

Reducing the minimum job search requirement from 5 to 4 a month

There are some exemptions to this (see below) but in general, people must apply for a minimum of 4 jobs a month, then undertake other activities to reach their monthly points target.

Since job applications attract 5 points, people can still fully meet their requirements by applying for 20 a month, as was the case for many people in jobactive.

ACOSS Comment:

This is a small change, but a welcome one. We still consider that having to apply for 20 jobs a month (where people don’t commit to alternative activities) is excessive and should be reduced.

Removing job search requirements for many people undertaking full-time study or training

that improves their employment prospects

This includes Migrant English language courses and other basic literacy courses.

Some people may still be required to apply for the minimum 4 jobs a month, but that can be waived by their provider.

Note that many training activities attract weekly rather than monthly points because they may only run for a week or two. If they continue for four weeks, the points score should be multiplied by four.

ACOSS Comment: This is a positive and significant change that gives people room to fully participate in training that helps them secure employment in future, rather than having to apply for and accept short-term casual jobs at the same time.

However, there is no guarantee that people undertaking an approved fulltime course will be exempted from job search requirements.

Further, if they undertake a full-time course for more than 12 months, people over 24 years old are likely to have to transfer to the much lower Austudy Payment. This anomaly should be removed.

Reducing the monthly ‘points target’ for certain groups to better recognise personal circumstances and weak labour market conditions that impact their ability to find jobs

Once the Department of Employment’s IT system is adjusted later in the year, the points target will be reduced automatically below 100 points a month for ‘principal carer’ parents, people with a partial work capacity, people 60 years and over, and people in areas with few jobs.

Previously people could ask their provider to discount their requirements to take these factors into account (as they are recognised in legislation), but many were unaware of this or fearful of asking.

ACOSS Comment: This is a positive and sensible change that was sought by ACOSS, to remove the need for people to summon up the courage to ask their provider for reduced requirements when they are clearly needed (and in many cases legislated). The government should consult with representative organisations and experts over the new formula for applying ‘points credits’ in regions where few jobs are available.

Employment services and people using them should be informed of this change so that it is as widely applied as possible before being automated.

Increasing points for activities such as obtaining a job

The Minister announced many smaller changes to increase the points allocated for different activities, including:

Obtaining a job or a job interview;
Obtaining a driver’s licence or a work-related licence;
Non-vocational activities such as counselling.

These are detailed in the Minister’s media release.

ACOSS Comment: Broadly speaking, increases in points awarded for these activities are welcome, and we‘ll comment further once we’ve had time to absorb the detail.

Short-term changes that are still needed

ACOSS has advocated more substantial changes to the new employment services system, many of which could be introduced by the end of 2022, whether or not there is scope to make them immediately. They include:

Removal of Work for the Dole, beginning with the so-called ‘fulltime’ version of 25 hours a week, which was expressly introduced as a punishment and requires people to work for much less than the equivalent of the minimum wage.
Removal of automated payment suspensions, so that people have the opportunity to talk with a human ‘decisionmaker’ before their payments are impacted.
Replacement of employment assistance that has little or no impact on employment prospects (e.g. Work for the Dole, Employability Skills Training) with an annual Jobs and Training Offer for people unemployed long term (including wage subsidies, vocational training, and placement with an employer who is likely to keep them on).
Making the ParentsNext program for parents with preschool-age children voluntary and ultimately replacing it with a quality career guidance program for people returning to the paid workforce.

**How Workforce Australia changes employment services, and how it doesn’t**

The main problem with Workforce Australia

The main problem with these reforms is that they are built on top of a flawed system of requirements and employment programs which have not yet been fully reformed.

Helping people make informed career choices, train and prepare for employment, overcome barriers to employment, and connect them with the right job, are the things that will make a difference.

Immediate changes announced by the Minister

A “clean slate” policy, meaning people who have accrued ‘demerit points’ under the old system will start over with zero demerits under the new one.

Additional demerit points may result in up to 4 weeks without income support.

Beyond the first month after people transfer to the new system a ‘light touch’ approach will be taken to payment suspensions in the second month.

During the first month after people transfer to the new system, most activity requirements and penalties have been lifted, as required by legislation.

However, non-attendance at provider appointments will still attract a payment suspension, including in the first month of the new system.

Reducing the minimum job search requirement from 5 to 4 a month

There are some exemptions to this (see below) but in general, people must apply for a minimum of 4 jobs a month, then undertake other activities to reach their monthly points target.

Since job applications attract 5 points, people can still fully meet their requirements by applying for 20 a month, as was the case for many people in jobactive.

ACOSS Comment:

This is a small change, but a welcome one. We still consider that having to apply for 20 jobs a month (where people don’t commit to alternative activities) is excessive and should be reduced.

Removing job search requirements for many people undertaking full-time study or training

that improves their employment prospects

This includes Migrant English language courses and other basic literacy courses.

Some people may still be required to apply for the minimum 4 jobs a month, but that can be waived by their provider.

However, there is no guarantee that people undertaking an approved fulltime course will be exempted from job search requirements.

Further, if they undertake a full-time course for more than 12 months, people over 24 years old are likely to have to transfer to the much lower Austudy Payment. This anomaly should be removed.

Reducing the monthly ‘points target’ for certain groups to better recognise personal circumstances and weak labour market conditions that impact their ability to find jobs

Employment services and people using them should be informed of this change so that it is as widely applied as possible before being automated.

Increasing points for activities such as obtaining a job

The Minister announced many smaller changes to increase the points allocated for different activities, including:

Obtaining a job or a job interview;
Obtaining a driver’s licence or a work-related licence;
Non-vocational activities such as counselling.

These are detailed in the Minister’s media release.

ACOSS Comment: Broadly speaking, increases in points awarded for these activities are welcome, and we‘ll comment further once we’ve had time to absorb the detail.

Short-term changes that are still needed

Removal of Work for the Dole, beginning with the so-called ‘fulltime’ version of 25 hours a week, which was expressly introduced as a punishment and requires people to work for much less than the equivalent of the minimum wage.
Removal of automated payment suspensions, so that people have the opportunity to talk with a human ‘decisionmaker’ before their payments are impacted.
Replacement of employment assistance that has little or no impact on employment prospects (e.g. Work for the Dole, Employability Skills Training) with an annual Jobs and Training Offer for people unemployed long term (including wage subsidies, vocational training, and placement with an employer who is likely to keep them on).
Make ParentsNext voluntary and consult with representatives of people directly affected over its replacement by a co-designed voluntary program for parents with pre-school-age children.

Update 28 April

Read our briefing on advocacy on the Streamlined Participation Requirements and Other Measures (SPROM) Bill.

This advocacy resulted in legislative commitments to review the new employment services (called Workforce Australia) and mutual obligation requirements within 2 years of the commencement of the new model in July 2022. These commitments were included in amendments to the SPROM bill and the review will involve people directly affected as well as the organisations that work with, and represent them.

The advocacy also resulted in a commitment to implement a Digital protections framework for employment services programs and other improvements to protections for people who are required to use employment services.

Previous updates October 2021

When Mutual Obligations were restored after the COVID-19 related lockdowns, ACOSS wrote to the Minister and Department of Employment requesting that:

Mutual obligations and requirements to attend face to face meetings or activities should remain suspended during lockdowns and for at least a month after lockdowns are lifted
Any restoration of mutual obligations should be carefully phased, taking account of health restrictions and the state of labour markets at State and local levels (we note that default job search requirements were gradually built up to 4 then 10 per month last year, and do not believe requirements above this are appropriate in any case)
The phasing of obligations should be clearly communicated to all parties in a timely way
Face to face servicing in currently locked down areas should remain optional for the time being; Scheduled six-monthly and annual activities in the locked-down areas should be deferred.

Read more about the concerns ACOSS had when Mutual Obligations were restored in October 2021 in our briefing A new post-lockdown health hazard: Sudden reintroduction of unrealistic job search requirements and penalties.