Labor Senators’ Dissenting Report
Labor Senators are
deeply concerned by changes the Government is seeking to make to income support
payments for jobseekers, including those proposed under the Social Security
Legislation Amendment (Stronger Penalties for Serious Failures) Bill 2014
Labor Senators support
a just and reasonable jobseeker compliance system which encourages and supports
participation for those in receipt of participation payments.
The evidence provided
to the Committee makes it clear that the current compliance provisions for
jobseekers receiving participation payments are flexible and effective.
Submitters to the
inquiry raised real concerns about the potential financial impact of the
changes in the Bill on vulnerable jobseekers, and questioned the removal of an
incentive for reengagement for jobseekers in breach of their participation
Senators oppose the passage of this Bill in its entirety.
The Existing Provisions are Effective
The existing legislative
framework is a result of changes made under the former Labor Government.
In 2008, the then
Minister for Employment Participation, Brendan O’Connor, after extensive
consultation, preserved the punitive 8 week non-payment period for breaches of
a jobseeker’s mutual obligations introduced by the Howard Government. However,
Labor introduced the ability to reengage with participation requirements to
have withheld income support reinstated.
Many stakeholders had
been critical of the Howard Government’s ‘penalise first’ approach to
compliance as it had significant detrimental impacts on vulnerable jobseekers
and was counter-productive as it penalised jobseekers and disengaged them from
employment services during the penalty period.
To highlight the impact of
the previous provisions, the National Welfare Rights Network referenced the
survey on the impacts of the penalty system on jobseekers conducted by the
Department of Education, Employment and Workplace Relations and referred to in
the Department’s submission to the Senate Standing Committee on Education,
Employment and Workplace Relations inquiry into the Social Security Legislation
Amendment (Employment Services Reform) Bill 2008. The National Welfare Rights
Network noted the survey showed that:
fifteen percent of those with an eight week non-payment
penalty were found to have lost their accommodation. Fifty percent of job
seekers, approximately 16,000 people, who had an eight week penalty had trouble
keeping up with rent and were put at risk of homelessness.
Labor’s changes produced a system which preserved a punitive non-payment
period whilst ensuring necessary protections for the most vulnerable
Evidence provided to the Committee supported the current balance. Jobs
Australia stated that they:
...do not think further and more punitive compliance measures
are necessary for the following reasons:
the number of eight-week penalties
currently being imposed is extremely low, which means that job seekers are
complying; very few people incur second and subsequent penalties;
the existing measures whereby
waivers enable and encourage and incentivise people to re-engage immediately
are likely to be much more effective in terms of getting them engaged in the
system and getting to work; and
there is an existing punitive
element in the system, in that people are required to work off the penalty in
cases where it is waived.
For all those reasons we do not believe it is necessary to up
the ante on the penalties.
In supporting the current measures the National Welfare Rights Network
Fundamentally, the system that we have now is very effective
in ensuring that people re-engage immediately and in stopping people from
falling through the cracks... The system as it is at the moment is actually
working extremely well – certainly from our perspective and our on-the-ground
The Number of Non-Compliant Jobseekers is Very Small
Non-compliance numbers, particularly for refusal of a suitable job
offer, are extremely low. Department of Employment data shows that for the
period 1 July 2012 to 30 June 2013 there were only 27,004 serious failures, of
which 25,286 were for persistent non-compliance and only 1,718 were for failing
to accept or commence a suitable job.
The Department of Employment stated that the number of penalties
that have been applied for refusing work has nearly trebled since the change in
the penalty regime - from 644 penalties in 2008-09 to 1,718 in 2012-13.
In providing this data the Department of Employment did not provide any
further information on other possible factors which may have contributed to
The National Welfare Rights Network argued that this increase should be
considered in a broader context, indicating that a range of factors during the period
specified would have contributed to the increase. The factors identified
included the increase in the number of people who were receiving income support
due to the Global Financial Crisis, additional strain due to the tightened job
market and the drop in the number of people appealing decisions relating to
refusal of suitable work, as it was quicker and easier to reengage and do a
Changes would Discourage Jobseekers from Reengaging
Submitters contended that the current waiver provisions are important as
they encourage jobseekers to reengage in the process after non‑compliance
by allowing the non-payment period to be ended if the jobseeker reengages with
their participation obligations.
Labor Senators are
concerned that the proposed changes will discourage reengagement altogether, as
even in circumstance where a jobseeker is willing and able to reengage during
the non-payment process, the Government wants to prohibit them from doing so.
The Department of
Employment have confirmed that jobseekers will be unable to actively reengage
with participation activities during the 8 week non-payment period and their
participation obligations will cease during that period.
This change seems at
odds with the Governments stated commitment to helping jobseekers move from
welfare to work and increasing workforce participation.
A number of submissions expressed the view that the measures in the Bill
would not provide any incentive for jobseekers in breach of their participation
obligations to reengage.
The Brotherhood of St Lawrence stated:
We believe that [the changes] will have harsh unintended
consequences for job seekers, so we do not believe it will achieve the
outcomes. We know that the evidence suggests that rapid re-engagement is
absolutely crucial to achieving positive employment pathways. But what this
will do is delay that re-engagement, and in such a moralising way that people
could feel defeated by these sorts of measures, because it will have dire
consequences for their housing stability and basic living standards.
On this issue the National Welfare Rights Network submission states:
[I]t runs counter to the primary objective of the current
system, which is to rapidly re-engage the jobseeker. People who incur an eight
week penalty and who cannot “work it off” will have no incentive to re-engage
with the system during that eight week period and little or no support during
that period to find work. 
Jobs Australia supported allowing jobseekers to reengage after breaches,
stating that the current legislative framework allows, and actually encourages,
..for the vast majority of [jobseekers] to get a waiver they
have to do something, and that means re-engaging. That means we can do things
with them to get them complying, get them job searching and get them
successfully into work. If we are not having anything to do with them for
eight weeks, and if they do not have any money for eight weeks, we are just
pushing them away.
Concerns Regarding the Impact on Vulnerable People
Submitters raised significant concerns about the impact of the proposed
changes on vulnerable and disadvantaged jobseekers.
Labor Senators formed the view that jobseekers with a Centrelink
recorded ‘vulnerability indicator’, meaning that they are disadvantaged in some
way, including where they have mental illness or psychiatric problems, are
homeless, have recently been discharged from prison, have had a recent
traumatic relationship breakdown or suffer from cognitive or neurological
impairment, could be further disadvantaged by the changes in the Bill.
Data from the Department of Employment shows that of all 27,004 serious
failures recorded against jobseekers from 1 July 2012 to 30 June 2013, more
than half (14,235) had a vulnerability indicator, a mental health indicator or
were indigenous and a large proportion were under the age of 30. The proposed
changes are likely to further disadvantage these groups of people.
National Welfare Rights Network also highlighted that Indigenous
jobseekers are also overrepresented amongst those who will be penalised:
For a range of reasons already under the penalty system,
Indigenous job seekers have higher numbers of penalties. It is not because
they are not seeking work or do not want to comply but because there might be
issues of remoteness or lack of understanding of the actual system – a whole
range of issues – that result in that. Knowing that that is the case under the
current regime, one would have to expect that this will impact
disproportionately and negatively on Indigenous job seekers.
Jobs Australia also stated:
[Indigenous jobseekers] are overrepresented and again, in
some but not all cases, are more prone to some of the other vulnerabilities –
mental illness and so on – that we have been talking about...the age profile of
the Indigenous population is the exact opposite of the rest of the population,
in that there are a very large number of young people. In the event that the
government’s proposal about a six-month waiting period for under-30s actually
takes effect, it would have a very interesting and potentially very deleterious
impact on communities where the great majority of population are young
Submitters also raised concerns that the proposed changes would actually
exacerbate existing vulnerabilities and create further barriers to employment.
The Australian Council of Social Services stated:
The majority of recipients of unemployment payments have few
savings, little access to credit, and many receive little or no support from
family. A period of eight weeks without income support is very likely to cause
hardship in these circumstances, including homelessness in some cases.
Whilst the Department of Employment outlined safeguards within the
current compliance system which protect vulnerable jobseekers, other submitters
stated that the changes in the Bill would remove the final safeguard and could
potentially expose vulnerable jobseekers to further disadvantage and hardship.
ACOSS submitted that:
The Bill would, if passed, retain the basic structure of the
present compliance regime including the more timely and modest penalties for
failure to attend meetings and courses and the Comprehensive Compliance
Assessments for those at risk of an eight week penalty. However, the ‘last line
of defence’ against imposition of this penalty would be removed, at least for
those who have already had an eight week penalty waived while on income support
and people who leave a job without an acceptable reason. The result would be an
increase in eight week penalties and financial hardship.
Interaction with Other Proposed Changes to Participation Payments
Submitters also raised concerns about the interaction between the
proposed changes under the Bill and other Government proposals including changes
to unemployment benefits for jobseekers under 30 which will see them off income
support for an ongoing 6 monthly cycle, and the compounding impact they would
have on vulnerable jobseekers.
In relation to the interaction with the proposed six-month withdrawal of
payment for jobseekers under 30, the Brotherhood of St Lawrence said:
We feel greatly pained by that proposal, particularly if you
add the eight-week waiver to it. I guess we start with the premise that these
young people are our country's future, that they are going to make a
significant investment in the economy as well as in the society as a whole and
that we risk losing their contribution to the community, with both economic and
social consequences as well as, of course, dire individual consequences for
them. So we think that is of great concern.
The changes in the Bill also need to be considered in light of the
Social Security (Reasonable Excuse — Participation Payment Obligations)
(Employment) Determination 2014, a new disallowable instrument which the
Government have tabled in the Senate. This determination seeks to further
restrict “reasonable excuse” rules for jobseekers who fail to comply with their
The National Welfare Rights Network submitted that:
This “tightening” will severely restrict the discretion not
to apply certain penalties based or reasonable excuse. It will likely see a
significant increase in the number of penalties being imposed in situations
where a person was not being wilfully non-compliant and may have had a
reasonable excuse, but for some reason didn’t provide prior notice (eg flat
phone battery, insufficient credit, was confused about the appointment date,
innocently forgot about the appointment). The impact of the penalty on such a
person will be compounded by the measures in this Bill which would restrict the
ability for such a person to re-engage and “work off” a penalty.
Labor Senators are
also concerned that the impact and interactions between all the Government’s
changes to participation requirements, as well as proposed new funding
contracts for employment service providers, have not been clearly explained to
key stakeholder groups.
This is illustrated by
the fact that under questioning none of the witnesses were able to state with
confidence who the decision maker was or would be in the Government’s new
employment services contracts and many were unsure of how serious failure penalties
would apply to those impacted by the Government’s proposed changes to stop
benefits for six months of every year for jobseekers aged under 30.
This is likely due to
the Government’s failure to undertake adequate consultation prior to the
announcement of the Budget and the number of changes to participation payments
being brought forward and considered separately.
The Committee also
heard evidence that the changes would compromise the effectiveness of the Jobs
Services Australia providers.
concerns about security and occupational health and safety for job service
provider’s staff. BoysTown said:
Health and Safety considerations for JSA staff are likely to
require increased focus as it is expected that clients presenting with
anxiety/high levels of agitation will be more frequent.
Submitters also raised concerns about the impact the changes would have
on the relationship between the jobseeker and the provider, particularly how
the changes would impact on the provider’s ability to encourage jobseekers to
reengage and stay engaged.
BoysTown stated that:
One of the things we find most beneficial in working with
young people is the relationship between our worker—say, our employment
consultant—and the young person. With the changes being proposed, that
case-management relationship, we believe, will be compromised. The capacity of
that relationship to form, which is the best way to move to address barriers,
to understand what the issues are, to have the young person talk frankly about
what the issues are, I believe, will be compromised by a dual role of case
manager and a person there to assist and the compliance part of the benefit
This could have negative impacts on the ability of jobseekers to engage
and move from welfare into the workforce.
The Government has not done any consultation or analysis on the likely
increased impact of the changes on vulnerable jobseekers. Nor has it provided
any evidence at all to say that the current system is not working (indeed
experienced, on the ground providers say that it is) or that the changes will
improve the system.
The National Welfare Rights Network state that:
we have a compliance system that has been tested over a
number of years and has had a number of reviews of it, that there does not seem
to be a compelling reason to introduce these changes and that the likely upshot
of the changes is that more vulnerable people will get caught.
This view is supported by the Labor Senators, who recommend that the
Bill be opposed as the changes proposed are too harsh and are likely to
negatively impact on already vulnerable and disadvantaged jobseekers.
Labor Senators recommend that the Senate oppose the
Social Security Legislation Amendment (Stronger Penalties for Serious Failures)
Senator Carol Brown Senator
Nova Peris OAM
Senator Claire Moore
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