Welfare to Work and the Changing Nature of Job Seekers

Australia’s overall unemployment rate fell to 4.2 per cent in September 2007—its lowest level since November 1974. A low unemployment rate and the Welfare to Work changes that commenced on 1 July 2006 are key factors influencing the number and type of unemployed job seekers on income support payments requiring employment assistance. This is likely to have implications for the services provided by the Job Network (JN).

The number of unemployed job seekers receiving government-provided income support is now the lowest for many years. In August 2007, there were 497 753 unemployed job seekers on Newstart Allowance (NSA) and Youth Allowance (other) (YA). In June 1996, there were 824 957 income support recipients paid in respect of unemployment. However, the proportion of long-term unemployed (on payment for 12 months or more) has increased. The proportion of long-term unemployed on NSA in September 2007 was 61 per cent of the NSA total, compared with 33 per cent in 1996.

This employment pattern is a likely effect of the current economic boom and resultant job creation. While job seekers with readily marketable job skills quickly find work, the harder to place job seekers with significant and/or multiple employment barriers remain reliant on income support for longer periods. Therefore, although there are record low levels of overall unemployment and lower numbers of unemployed job seekers on government income support, those remaining job seekers on NSA or YA are, in many cases, those with significant employment barriers.

Further, as a result of the Welfare to Work changes that commenced on 1 July 2006, many job seekers who are now required to look for and accept work have different characteristics to those of the past. These include:

• Job seekers with a partial capacity for work, who previously would have qualified for the Disability Support Pension (DSP). These are job seekers assessed as being able to work for more than 15 hours a week, who do not now qualify for DSP, but are not capable of full-time work.

• Job seekers who are partnered parents who do not have a qualifying child under age six. These persons would have previously qualified for Parenting Payment—Partnered (PPP), but are now provided with NSA or YA and required to look for and accept part-time work (up to 15 hours a week).

• Job seekers who are single parents who do not have a qualifying child under age eight. These persons can no longer claim Parenting Payment—Single (PPS) and are now provided with NSA or YA and required to look for and accept part-time work (up to 15 hours a week).

There have also been more job seekers recently entering the unemployed job seeker pool. From 1 July 2007, a further 233 000 job seekers on PPP or PPS have been required to look for at least 15 hours a week work. These are the PPP or PPS recipients who claimed before 1 July 2006 and were allowed to stay on PPP or PPS until their youngest child turned 16. They had a year before being required to seek part-time work (up to 15 hours a week). That year ended when their youngest child turned seven or on 1 July 2007, whichever was the later.

The bulk of the assistance provided to these job seekers is provided by the contracted job placement providers under the JN arrangements. Many of these job seekers have special labour market needs and issues—job seekers who are long-term unemployed, job seekers with a disability, job seekers who are parents. Many have not been engaged in the labour market for a long time and lack current job skills. They also may need more than just job matching and job search assistance—they often need skills training and other assistance.

The Brotherhood of St Laurence has criticised the Job Network:

Job Network, with its approach of getting people quickly into work, was designed for the labour market conditions of a decade ago … The Job Network works best for job seekers who are ‘job ready’ and don’t need extra help to compete for work. Its programs are fragmented and complex, the most disadvantaged job seekers are overwhelmed by compliance obligations and penalties, and the people with the greatest need are getting a falling proportion of the Network’s resources. It is well past its use-by date.

Part of the Brotherhood’s claims may be borne out by the higher proportion of job seekers on NSA who are now long-term unemployed (61 per cent). With these different types of job seekers with differing needs often being the most disadvantaged job seekers, it will be important to consider how the JN arrangements will meet their needs into the future.

Documentation
Australian Bureau of Statistics, Labour Force, Australia, October 2007, cat. no. 6202.0, ABS, Canberra, 2007.
Department of Employment and Workplace Relations, Labour Market and Related Payments monthly profile, DEWR, Canberra, September 2007.
Kim Bond and Jie Wang, ‘Income support and related statistics: a 10-year compendium, 1989–1999’, Occasional paper No.1, Department of Families, Community Services and Indigenous Affairs, Canberra, 2001.
Brotherhood of St Laurence, Job Network past ‘use by’ date: fresh approaches needed, Media Release, Melbourne, 27 September 2007.
Brotherhood of St Laurence, Investing in people: intermediate labour markets as pathways to employment, Melbourne, 2007.
Lucinda Jordan and Michael Horn, Still looking for a break: Welfare to Work: so what’s changed?: Melbourne City Mission, Melbourne, 2007.
Catholic Social Services Australia, ‘A job network for job seekers’, Discussion paper, Canberra, 2006.