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Chapter 2 - Employment and Workplace Relations Legislation Amendment (Welfare to Work and Other Measures) Bill 2005
2.1
The Welfare to Work reforms are targeted at four groups
of working age Australians: parents on income support; people with disabilities
on income support; mature age job seekers; and the very long-term unemployed.
The following gives an overview of the changes proposed by the Employment and
Workplace Relations Legislation Amendment (Welfare to Work and Other Measures)
Bill 2005 for each of these four groups as well as the new compliance
framework.
Parents on income support
Background
2.2
Parents may receive Parenting Payments and around
610,000 people currently receive this payment. The number of single parents on
parenting payment has grown by over 100,000 (33 per cent) in the last seven
years.[26] More than 80 per cent of
single parents receive income support and although many work part-time, on
average they remain on income support for an estimated 12 years or more of
their working age life.[27]
2.3
Welfare reform to address a range of workforce barriers
for low-income parents was instigated following the 2000 Report of the
Reference Group on Welfare Reform (the McClure Report).[28] The McClure Report noted that children
in families experiencing long term joblessness are more likely to rely heavily
on income support as they grow up and that long term economic and social
disadvantage has negative consequences for individuals, their families and the
broader community. Paid employment is also a major source of self-esteem and
lack of paid employment during the prime working years, and consequent reliance
on income support, reduce current and lifetime incomes.[29]
2.4
The McClure Report concluded that Australia's social
support system must do more than provide adequate levels of income support for
people in need; it must also 'ensure that people are actively engaged socially
and economically, including in the labour force, to reduce the risk of long
term social and economic disadvantage for themselves and their families'. The
Report detailed a participation support system which included individualised
service delivery, incentives and financial assistance to encourage and enable
participation and mutual obligations. The Reference Group indicated that it had
used the social obligations framework to develop a wide concept of mutual
obligations with income support recipients having 'a responsibility to take-up
the opportunities provided by government, business and community consistent
with community values and their own capacity'.[30]
2.5
The Report recommended that initial steps be taken to
require parents of high school age children to enter into a Participation Plan,
including job readiness and needs assessment, part-time job search, part-time
employment or part-time preparation for paid employment. It was also
recommended that parents with primary school aged children attend an annual
compulsory interview to discuss their current and future capacity for
increasing participation. These measures were introduced in the Family and Community Services Legislation
Amendment (Australians Working Together and Other 2001 Budget Measures) Act 2003.
Current arrangements
2.6
Currently, sole parents with a qualifying child aged
less than 16 years may receive Parenting Payment Single (PPS) subject to various
asset and income tests. At September 2005 the maximum rate per fortnight for
PPS was $488.90. PPS is subject to the pension income test and payment rate
rules. A single parent with one child can earn up to $148.60 per fortnight and
receive full payment. Income over this amount reduces the pension payable by 40
cents in the dollar. Part payment is received when income is less than $1385.35
per fortnight.[31]
2.7
Parenting Payment Partnered (PPP) is currently
available to those where:
(a) Partner does not get a pension:
-
for maximum payment the customer's income must
be no more that $62 per fortnight and the partner's income must be no more than
$607 per fortnight;
-
customer's income reduces rate by 50 cents for
each dollar between $62 and $245 and by 70 cents for each dollar above $245 per
fortnight;
-
partner's income up to $607 per fortnight has no
effect. Income over this limit reduces the rate by 70 cents for each extra
dollar;
-
a part payment may be available if all the
following conditions are met:
-
customer's income must be less than $635.71 per
fortnight, and
-
partner's income must be less than $1128.43 per
fortnight, and
-
the combined income of the couple must be less
than $1242.71; and
-
different limits apply if the partner receives
Youth Allowance or Austudy Payment.
(b) Partner gets a pension:
-
for maximum payment the couple's combined income
must be no more than $124 per fortnight;
-
couple's combined income reduces rate by 25
cents for each dollar between $124 and $490 and by 35 cents for each dollar
above $490 per fortnight; and
-
for part payment the couple's combined income
must be less than $1271.42 per fortnight.[32]
2.8
Parents on Parenting Payment are also eligible for
other Government support, principally Family Tax Benefits. Family Tax Benefit
adds substantially to the income support received by families in Australia.
2.9
From September 2003, those receiving a Parenting
Payment for at least six months with youngest child aged six years or more,
were required to attend an annual participation interview. Those with a youngest
child aged 13 to 15 years must attend an annual participation interview and
satisfy a part-time participation requirement – 150 hours of approved activity
over 6 months. Approved activities include paid work, looking for work,
participation in Job Network programs, education or training or voluntary work.[33]
Proposed arrangements
2.10
The proposed measures impact on both those currently
receiving Parenting Payment and new applicants. Those parents who are in
receipt of Parenting Payment Single (PPS) or Partnered (PPP) on 30 June 2006 will continue to remain
on that payment until their youngest child turns 16 years of age. However, to
access and retain this 'transitional status' the parent must meet certain
requirements. These requirements include that the person does not change his or
her relationship status; have not had their payment cancelled for more than 12
consecutive weeks; and must continue to meet the other qualification criteria
for Parenting Payment. Additionally, there are part-time participation requirements
under the transitional arrangements. The participation requirements commence
from the later of 1 July 2007
or when the youngest child turns 7 years of age.
2.11
From 1 July
2006 new applicants will be eligible for PPS when their youngest
child is aged less than 8 years. However, these parents will have part-time
participation requirements when their youngest child turns 6. For PPP
applicants Parenting Payment will apply when their youngest child is less than
6. Once the youngest child turns 6 (for Parenting Payment Partnered) or
8 (for Parenting Payment Single), post July 2006 applicants will typically
move to Newstart Allowance.
2.12
Those parents receiving Parenting Payment with
participation requirements will be required to enter a Parenting Payment Activity
Agreement. Those parents moving to Newstart Allowance will be required to enter
a Newstart Activity Agreement.
2.13
The proposed arrangements introduce the concept of
'principal carer' parent for those on Parenting Payment or Newstart Allowance
or Youth Allowance (Other) from 1 July
2006. A principal carer is a person who has the main care of a
child under the age of 16 years. For principal carers, there is only a
part-time work requirement. This reflects that 'while principal carer parents
will generally have some capacity to work, they may not be available for
full-time work when their parenting responsibilities are taken into account'.[34]
2.14
The new part-time participation requirements are
similar to the current parenting payment participation agreement provisions but
'they have been amended to more appropriately align with participation
provisions in Newstart Allowance'.[35]
The part-time participation requirements are:
-
undertaking at least 15 or more hours per week
of paid work; or
-
job search to look for part-time work of 15 to
25 hours a week (offers over 25 hours a week will not have to be
accepted), participate in employment services (usually Job Network) and
undertake an annual Mutual Obligation activity (150 hours of approved
activities over 26 weeks).
If the person is engaged for at least 30 hours per fortnight
in paid work, then no other activity is required. However, they will remain
eligible for assistance if they choose to increase their hours.[36]
2.15
For principal carers on Parenting Payment, Newstart
Allowance or Youth Allowance (other than full-time students or new
apprentices), 'suitable work' is part-time work that the person is capable of
doing, taking into account their caring responsibilities.
2.16
DEWR provided details of how the Department expects the
provision for 'suitable work' to be impacted by:
-
participation requirements;
-
requirements for accepting offers of paid work;
-
caring requirements;
-
supervision of care for teenage children;
-
effects of changes to childcare arrangements;
-
higher paying part-time work vs lower paying job
of longer hours;
-
how financial costs of compliance, such as
travel costs, will be taken into account; and
-
length of travel time.[37]
Exemptions for principal carer
parents
2.17
Special family circumstances may make it appropriate
for the participation requirements of principal carer parents to be reduced or
exempted. Automatic exemption can be applied if:
-
the principal carer is an active, registered
foster carer;
-
the parent is providing home schooling; or
-
the parent is facilitating distance education
for their child.
Any single parent, receiving Newstart or Youth Allowance and
who has an exemption in one of these three groups will receive a higher rate of
allowance (which will always be equivalent to the PPS (pension) rate). This
higher rate recognises that these parents are choosing to perform significant
and ongoing tasks over and above those involved normally in parenting and
caring, and for which there can be additional associated costs.
2.18
Temporary exemptions will be considered on a case-by-case
basis for a range of situations such as having to care for sick children or
high stress associated with recent separation or involving domestic violence.[38]
2.19
An application for an exemption must have verifiable
circumstances and will be assessed on a case-by-case basis for all groups other
than active registered foster carers, parents providing home schooling and
parents distance educating their children. Any exemption will be subject to
review and if the grounds for the period of exemption from participation no
longer exist the exemption may be revoked.
2.20
A principal carer of a child who suffers from a
physical, intellectual or psychiatric disability or illness may seek relief
from part-time participation requirements. The level of participation
requirements, when negotiated, will take into account:
-
the extent to which the child is able to attend
school, and if necessary, outside school hours care, without the principal
carer parent being constantly at hand or on call; and
-
the assessment of a treating health professional
stating that the principal carer needs to be always available to care for the
child.
The period of the exemption cannot exceed 12 months but,
following reviews, there may be subsequent exemptions from participation
requirements for one or more other periods (also not exceeding 12 months).
2.21
To support these changes, from 1 July 2006, more parents who have children with
very challenging physical, intellectual, psychological or behavioural
difficulties will qualify for an expanded Carer Payment.[39]
2.22
Allowances will be made if, for example, a parent did
not attend a job interview or training course due to caring for a sick child.
2.23
A principal carer parent unable to fully meet
participation requirements associated with having four or more school-age children
(aged 6 to 15 years) may be able to have requirements reduced, or have an
exemption from requirements granted, on a temporary basis.
2.24
Some people will fit into more than one of the Welfare
to Work target groups, for example parents with disability. In this situation,
people will be assessed for the most appropriate income support payment based
on individual circumstances. Assessment will take into account capacity to work
due to disability and availability to work as well as considering eligibility
against the other criteria for particular payments.
2.25
An exemption is also available where a person:
-
have ceased to be a member of a couple within 26
weeks of the determination;
-
have been subject to domestic violence in that
period of 26 weeks; and
-
have not again become a member of a couple.
As is current practice, situations involving domestic
violence which fall outside those special circumstances will continue to be
considered for exemptions relying on the 'special circumstances' exemption. The
first period of an approved exemption must be 16 weeks. For any subsequent
exemptions, the maximum period of the exemption from participation requirements
is 16 weeks. If the circumstances that originally applied when a period of
exemption was granted, no longer apply, then the temporary exemption ceases,
and the person is required to comply with the participation requirements.
2.26
Principal carer parents who are exempted because of
domestic violence will be connected to an employment service provider such as
Job Network, but will not have to attend an appointment during the period of
the exemption. They will be temporarily exempted (initially for 16 weeks) from
meeting requirements until their situation has stabilised. Centrelink will be
provided with guidelines detailing how domestic violence exemptions are to be
administered.
Additional assistance
2.27
Parents will have full access to employment assistance.
This includes a new employment service, Employment Preparation, which will be
established within Job Network to assist parents, carers and mature age people
returning to the workforce.
2.28
Employment Preparation will provide tailored individual
assistance to parents. It may include assistance with fees to pay for short
courses to update skills, career counselling, addressing self-esteem, or
assistance with the practicalities of using outside school hours care. Employment
Preparation will be an uncapped (ie demand driven) service for all eligible
people receiving income support. However there will also be a capped number of
places available for parents returning to the workforce who are not on income
support.
2.29
To further ensure that they receive a high level of
servicing within Job Network, parents will be given a Job Network Service
Guarantee for Parents that will specify exactly what services parents can
expect from the Job Network.[40]
2.30
Single principal carer parents in receipt of Newstart
Allowance will also have access to the Pensioner Concession Card, the
Pharmaceutical Allowance and the Telephone Allowance.
People with disabilities on income support
Background
2.31
In 1980, 2.3 per cent of Australia's
working age population were claiming the Disability Support Pension (DSP). By September
2005 this proportion had more than doubled to 5.2 per cent (708,410 people). Australian
government spending on the disability support pension exceeded $8 billion in
2004-05.[41]
2.32
Only around 10 per cent of DSP recipients are in the
paid work force in Australia
while the average among OECD countries is around 30 per cent.[42]
2.33
The Government has stated that 'the current test for
disability support pension effectively encourages many people with disabilities
who can do some work to withdraw from the labour market' and that the changes
to the work hours threshold proposed in the Bill are consistent with
recommendations of the McClure Report which recommended the work capacity
criterion for the DSP be reviewed to ensure that it does not discourage people
with disabilities who can do some work from participating in the labour market.[43]
Current arrangements
2.34
Currently
a person may receive DSP if they have an illness, injury or disability and are:
-
aged
16 or over and under Age Pension age, and
-
assessed
as not being able to work full time or be retrained for full time work for at
least two years because of the illness, injury or disability, or
-
permanently
blind, or
-
participating
in the Supported Wage System.[44]
2.35
To qualify for DSP a person must not have the capacity
to work for 30 or more hours a week at award wages within 2 years, taking into account
the training that may assist a person to increase his or her work capacity.
2.36
At September 2005, DSP for a single person over 21
years of age was $488.90 per fortnight and for a couple $408.20 each. Since
July 2000 this payment has included a pension supplement. The DSP is subject to
the pension income test and payment rate rules. The income test for a single
person on the DSP aged over 21 years allows for full payment when a person
earns up to $124 per fortnight and for part payment for earnings of less than
$1360.75 per fortnight. Different income tests apply for DSP recipients under
21 years of age. People who are permanently blind and receiving DSP are exempt
from the income test.
2.37
At present DSP recipients are not eligible for the Work
for the Dole supplement.
Proposed arrangements
2.38
In his Second Reading Speech the Minister outlined the
Government's new approach to people with disabilities. He stated:
From 1 July 2006
the focus will shift to the capacity people have to work – not their incapacity
or their inability to work.[45]
2.39
Those people receiving DSP on 10 May 2005 will not be affected by the changes
to the DSP qualification. There will be no participation requirements but
recipients can volunteer for unlimited Job Network places and capped vocational
rehabilitation or Disability Open Employment Services places.
2.40
People who qualify for DSP between 11 May 2005 and 30 June 2006 will be assessed under the current
eligibility criteria. After 1 July 2006,
these recipients will be reassessed in periodic reviews including undertaking a
Comprehensive Work Capacity Assessment. The reviews will generally be two years
after grant of the DSP.[46]
2.41
People with disabilities claiming income support after 1 July 2006 will come under the new
arrangements. A person will qualify for the DSP under the new measures if they
are assessed as, amongst other things, having a continuing inability to work
because of an impairment, that is, they are not able to do 15 hours or more
work per week at award wages within the next 2 years independent of support.
People assessed as having a continuing inability to work and so receive the DSP
will not have any activity requirements. People on DSP who leave payment for
work can return to DSP within two years if they are unable to maintain their
employment for any reason.
2.42
A person's ability to work will be reassessed by a
Comprehensive Work Capacity Assessment (CWCA). CWCAs will be conducted by
relevant rehabilitation professionals, and will determine medical impairment,
work capacity, assistance needs (including specialist rehabilitation where appropriate)
and referral options. CWCA providers will have access to a new stream of funds
– the Prevocational Account – to help with short-term rehabilitation where
appropriate.[47]
2.43
When considering a person's 'continuing inability to
work':
-
the types of activities that could assist the
person to prepare and train for work in the next 2 years are considered. The
Bill broadens the types of activities that could assist the person to build his
or her capacity and specifically includes programs and activities designed for
people with physical, intellectual or psychiatric impairments. It was noted
that 'this recognises that the work capacity of people with disabilities can
markedly improve when people access services that are appropriately tailored to
their needs'.[48] Referral options
include:
-
Job Network;
-
Disability Open Employment Services;
-
Vocational Rehabilitation Services; or
-
Personal Support Programme;[49]
-
a person's local labour market conditions will
not be considered, regardless of a person's age. This will ensure consistency
in the assessment of work capacity for all people of working age;[50] and
-
the person's ability to work independently of a
program of support is considered. To be considered to be doing work
independently of a program of support, the Secretary must be satisfied that the
person is:
-
unlikely to need a program of support to do the
work;
-
likely to need a program of support but only
occasionally; or
-
likely to need a program of support but the
provision of the program of support is not ongoing.
Programs
of support include the Disability Open Employment Services and Post Placement
Support from a Job Network Service.[51]
For example, if a person is
capable of working 15 or more hours a week at award wages within 2 years, but
to do the work the person will require ongoing or regular support, then the
person will also qualify for DSP.[52]
2.44
Under the proposed arrangements, people with a
disability who have the capacity within two years to work between 15 but less
than 30 hours per week (without ongoing support in the open labour market),
will not be eligible to claim DSP – they will have to apply for another
payment, typically Newstart Allowance or Youth Allowance (if they are under 21
years old), and will have part-time participation requirements.
2.45
The part-time participation requirements are:
-
undertake 30 hours a fortnight of paid work; or
-
job search for part-time work, participate in
appropriate employment services, and/or undertake an annual Mutual Obligation
activity.
2.46
People claiming DSP, on or after 20 September 2006, except those who are
permanently blind, will be subject to a seasonal work preclusion period. The
seasonal work preclusion period ensures that people with higher than average
earnings from seasonal work, support themselves for a period after ceasing a
work spell.[53] An income maintenance
period will also apply to DSP recipients.
2.47
The 'Work for the Dole' supplement will also, from 1 July 2006, be extended to DSP recipients
who wish to participate in an approved program of work. Part 2.3 of the Social
Security Act will be amended so disability support recipients who volunteer for
Work for the Dole will receive the supplement of $20.80 per fortnight, the same
as all other participants in the Work for the Dole program.[54]
2.48
People with disabilities will also have access to the
full range of vocational and pre-vocational programs to help them with job
preparation and job search activities. The Minister noted that 'places in
vocational rehabilitation and employment services will be guaranteed for Newstart
and Youth Allowance (Other) recipients with disabilities who have part-time
work capacity'.[55]
2.49
People with disabilities with a reduced work capacity
receiving Newstart or Youth Allowance (Other) will also receive the Pensioner
Concession Card, Pharmaceutical Allowance, the Telephone allowance and other
concessions available to card holders. Job seekers with a disability and a
part-time requirement will also be eligible for an Employment Entry Payment. A
payment of $312 will be available when a person with a partial capacity to work
who works for at least 15 hours a week for four consecutive weeks or when the
person's income from employment exceeds a threshold amount.[56]
2.50
The higher rate of Mobility Allowance will be available
to DSP, Newstart Allowance and Youth Allowance (other) recipients who are
working at least 15 hours per week (at award wages) or looking for such work
under an agreement with an employment service provider. If these people move
off income support into employment, they will be able to keep the higher rate
of Mobility Allowance while they are working.
2.51
People on DSP who leave payment for work can return to
DSP within 2 years without reclaiming, or attending an external assessment, if
they are unable to maintain their employment for any reason. They will not be
required to notify within 14 days to access this provision.[57]
Mature aged unemployed
Background
2.52
The provisions in the Bill
relating to mature-aged job seekers apply to Newstart Allowance recipients aged
between 50 and 64. From 1 July 2006
this category of Newstart recipients will have almost the same job search
requirements as other, younger, job seekers. According to DEWR:
Mature age people receiving Newstart Allowance will have their
participation requirements brought into line with other unemployed people. This
measure acknowledges that mature age people should put the same amount of
effort into job search as younger people and that employment assistance
provided should reflect the expectation that they will find work.[58]
2.53
The Explanatory Memorandum stated that:
The changes recognise that people aged 50 years or over have the
same capacity for work as younger job seekers.[59]
2.54
DEWR stated that participation rates amongst older
Australians are relatively low:
In its 2005 country report Ageing and Employment Policies: Australia,
the OECD argues that there is considerable scope to improve employment
opportunities for older Australians. It notes that the proportion of people
aged between 50 and 64 participating in the labour market is much lower in Australia
than in a number of other OECD countries such as Japan,
New Zealand, Sweden
and the United States.[60]
2.55
Currently, mature aged job seekers registering for
Newstart Allowance are referred to a Centrelink personal adviser, whereas those
under 50 participate in Job Network.[61]
This arrangement accords them the level of assistance provided to other groups
disadvantaged in their search for employment.[62]
2.56
Job search activity requirements for mature aged
Newstart recipients are, under the current arrangements, less demanding than
those applied to younger job seekers. Those aged over 55 are required to look
for four jobs a fortnight, while those over 60 may look for only two per
fortnight.[63] In addition, mature aged job seekers
are not currently required to participate in Work for the Dole.[64]
2.57
There is presently an activity test exemption for
Newstart recipients over 50 years who undertake 32 hours per fortnight
voluntary work, or 40 hours per fortnight combined unpaid voluntary and
suitable paid work.[65]
Proposed changes
2.58
Under the proposed changes, mature aged job seekers
will no longer be referred to a Centrelink personal adviser to assist them to
find work. Instead, they will be immediately referred to Job Network.
2.59
The activity requirements for mature aged Newstart recipients
will also be brought into line with other recipients, though some differences
will remain. Mature aged job seekers will share most of the activity
requirements expected of those under 50 also participating in Job Network.
These requirements are outlined in each job seeker's Preparing for Work
Agreement, which is negotiated with their Job Network provider.
2.60
Further, mature-aged job seekers up to 60 who are
deemed not to be genuine in their efforts to find work will be required to
participate in the Work for the Dole program.
2.61
There are, however, still exemptions for the
mature-aged. The Bill provides that job seekers aged 55 or over will be able to
meet their participation requirements (or Activity Test) by undertaking a
minimum of 15 hours a week (30 hours per fortnight) of approved voluntary
and/or paid work. They will not be required to job search while undertaking
this level of voluntary work.[66]
Newstart recipients over 50 years will also not be required to undertake
additional Mutual Obligation activities,[67]
as other job seekers are required to do after six months of Newstart
assistance.[68]
2.62
DEWR outlined the extra assistance new mature aged Job
Network participants would receive including eligibility for the new Employment
Preparation Service:
To support this greater emphasis on finding employment, job
seekers aged 50 or over will be eligible for the new Employment Preparation
service in Job Network. This service will assist mature age people to return to
the workforce by providing individualised assistance. This may include
assistance in understanding modern methods of seeking employment and updating
of skills, for example attending a basic information technology course. This
service is available on an uncapped basis for mature age people receiving Newstart
Allowance, and there are also a capped number of places available to mature age
unemployed people without recent workforce experience. Mature age unemployed
people not receiving income support who are interested in setting up a small
business will also be able to receive assistance through a capped number of
places in the New Enterprise Initiative Scheme (NEIS).[69]
Very long term unemployed
Background
2.63
The provisions in the Bill
relating to the very long-term unemployed apply to those who have 'completed
two periods of customised assistance'. DEWR's submission stated that the
initiatives contained in the Bill will ensure
that:
...they are neither overlooked when there is other help that
could enable them to get work, nor will they be left to sit passively on income
support when they are not serious about finding a job.[70]
2.64
Currently, Intensive Support Customised Assistance
represents the most intensive form of help offered through Job Network. DEWR
describes this extra support as follows:
Customised Assistance - If you are still unemployed after 12
months your Job Network member gives
you more services suited to your individual needs. You may receive special
training to prepare you for work, counselling and work experience.
Depending on your needs
your Job Network member may also give you:
- more intensive job search activities with
fortnightly contact
- additional services, facilities and activities,
such as interpreter services or some money for travel if you are referred to a
job interview but cannot afford to get to the interview
- support
while you are settling in to a new job.[71]
2.65
Those who have undergone this process twice without
successfully gaining employment are considered to be in the category of the
very long-term unemployed. According to DEWR, these job seekers will have been
unemployed for either 18 or 30 months, depending on their original assessment
as to likely disadvantage.[72]
Proposed changes
2.66
As a result of these changes, the very long-term
unemployed will be subject to additional efforts by their Job Network provider
to find work and/or improve their employability. After 1 July 2006, Job Network members will be required
to reassess individual very long-term unemployment job seekers to determine
what alternative 'servicing' they require.
2.67
In assessing this appropriate alternative, Job Network
members will have one of four options:
-
referral for a Comprehensive Work Capacity
Assessment:
If job seekers are thought to have additional or multiple
non-vocational barriers to employment that have prevented them from gaining
sustainable work they may be referred for a specialist assessment by a
Comprehensive Work Capacity Assessment provider who may then refer to another
more appropriate type of assistance, or payment type, such as DSP.[73]
-
referral to full-time Work for the Dole:
If a Job Network member examines a job seeker’s participation
history and determines that they have demonstrated a pattern of work avoidance
they may refer the job seeker to a Community Work Co-ordinator for a full-time
Work for the Dole placement. A full-time Work for the Dole placement consists
of 50 hours of participation per fortnight for a total of 1,100 hours. This is equivalent to 10 months
participation. Job seekers may be referred to successive full-time Work for the
Dole placements.[74]
-
placement in a full-time job with Job Network
members using Wage Assist to provide a wage subsidy to the employer:
For very long-term unemployed job seekers who are genuine in
their work efforts, Job Network members will have access to Wage Assist funds
to help them gain entry to the labour force. Wage Assist provides employers
with financial assistance up to the value of $4,600 over a 26 week period for
ongoing full-time jobs.[75]
-
ongoing Intensive Support servicing:
Job seekers who are genuine in their job search but who are not
likely to benefit from Wage Assist, or where Wage Assist is unavailable, will
continue to receive Job Network Intensive Support assistance with bi-monthly
contacts with their Job Network member. The job seeker will also continue to
undertake an annual Mutual Obligation activity, if eligible.[76]
Compliance framework
2.68
The Bill will replace
the current breaching regime. The aim of the new compliance framework is set
out in Explanatory Memorandum:
The Australian Government's employment and participation
policies are framed in the context of the responsibilities of the respective
parties. Government is responsible for providing income support for those who
require it and provide employment and related services to help people into
work. In return, job seekers on these income support payments are required
under social security law to meet the activity test in order to keep receiving
their payment. The activity test requires people to actively seek work and do
everything that they can to become ready for work.
The new compliance framework to be introduced on 1 July 2006 focuses on re-engagement
as its key principle.[77]
Current compliance system
2.69
Under the current breaching regime a Centrelink
'breach' occurs when a person receiving a Commonwealth benefit fails to fulfil
the criteria set out by Centrelink in regards to their payment. There are two
types of breaches – breaches of activity tests, (for example, failure to
actively seek work or refuse a suitable job offer) and administrative breaches
(for example, failure to comply with a notice to attend an interview with
Centrelink).
2.70
Activity test breaches incur an 18 per cent reduction
in payments for 26 weeks. A second breach incurs a 24 per cent reduction
in your payment for 26 weeks and a third breach in any 2 year period
incurs an eight week loss of payment. An administrative breach may attract a 16
per cent reduction in payment for 13 weeks.
2.71
In 2004-05, Centrelink imposed around 106,000 breaches,
including 64,000 activity test breaches and 42,000 administrative breaches. In
2004-05 there were around 3,800 third activity breaches.[78] DEWR commented that as a result of this breaching regime, job seekers can
incur long-lasting financial penalties regardless of any subsequent efforts to
meet their requirements.
New compliance framework
2.72
The new compliance framework will be introduced on 1 July 2006. It focuses on
re-engagement as its key principle. Under the proposed framework, if a job
seeker fails to meet a participation requirement, they will generally be able
to avoid any financial penalty by quickly re-engaging with their provider or
program. A job seeker who persists in their non-compliance will have their
payment withdrawn until they do comply. An 8 week non-payment period will be
retained as a deterrent to more serious failures. These include:
-
repeated participation failures (3 or more in a
12 month period);
-
refusal of a suitable job offer;
-
voluntary unemployment;
-
purposely being dismissed from a suitable job
due to misconduct; or
-
failure to participate in full-time Work for the
Dole (for long term unemployed people who have displayed a pattern of job
avoidance).
2.73
In relation to parents receiving Parenting Payment,
there are similar compliance arrangements to Newstart Allowance arrangements.
However, a participation failure for parenting payment does not include
employer contact certificates; and job seeker diary.[79]
2.74
Sole principal carer parents whose allowance is stopped
following a participation failure, including those in an 8 week non-payment
period, will retain access to concessions, including the Pensioner Concession
Card. Add-on payments that are not contingent upon the job seeker's basic
payment will not be affected by the non-payment penalty. This includes Family
Tax Benefit and Rent Assistance paid through the Family Tax system. A parent
who incurs an 8 week non-payment penalty will also be eligible for financial
assistance to meet essential expenses through the Case Management initiative
administered by Centrelink.
2.75
The new framework is broadly consistent with the
recommendations of the Breaching Review Taskforce, which included
representatives from the employment services industry and the welfare sector,
as well as Government Departments.[80]
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