…it's very hard to give a hand up with the same hand that you slap someone down with.
Overview
8.1
For jobactive participants, access to welfare payments and jobactive services is conditional on participants continuing to meet the mutual obligation requirements discussed in Chapter 7. Demerit points and financial penalties can be imposed when participants do not meet their mutual obligation requirements.
8.2
This chapter examines the impacts and consequences of the compliance framework for jobactive participants. The chapter is structured according to the following topics:
Overview of the Targeted Compliance Framework
An overemphasis on compliance
Negative impacts of the compliance framework
Complexity of the compliance framework
Impacts of compliance on work readiness
The proper role of providers
8.3
The committee's recommendations are set out throughout the chapter.
Overview of the Targeted Compliance Framework
8.4
On 1 July 2018, the Targeted Compliance Framework (TCF) commenced, replacing the previous compliance framework. The TCF is the mechanism for enforcing mutual obligation requirements:
The TCF is comprised of three zones: Green Zone, the Warning Zone and the Penalty Zone. All job seekers will start in the Green Zone and, so long as they meet all their Mutual Obligation Requirements, they will remain in this zone. Where a job seeker commits a Mutual Obligation Failure they will move to the Warning Zone. If they continue to be non-compliant, they will be in either the Warning Zone or the Penalty Zone.
8.5
Under the previous framework, compliance decisions were made by the Department of Human Services (DHS) based on reports of non-compliance from providers. The previous framework therefore gave providers discretion over whether to report non-compliance. Under the TCF, this discretion has been removed and responsibility for compliance has largely been shifted to providers. Providers are now responsible for applying demerits for any failures to meet the mutual obligations set out in the participant's Job Plan. For example, a demerit would apply for a missed appointment or if the participant did not apply for the required number of jobs. A participant can also incur a demerit by 'behaving inappropriately during an appointment or activity or by acting in any manner than can be judged as threatening a potential offer of employment'.
8.6
The Department of Jobs and Small Business informed the committee that the TCF is 'designed to encourage job seekers to engage with their employment services provider and take personal responsibility for managing and meeting their [mutual obligation requirements]'. The Department advised that the TCF gives greater support to jobactive participants who are 'genuinely trying to meet their obligations', while also imposing 'strong penalties for the small number of job seekers who persistently and deliberately do not meet their mutual obligation requirements'.
8.7
As at 30 September 2018, three months into the TCF, 32.6 per cent of the caseload had at least one demerit point resulting in support payment suspension, with 665 participants already in the 'penalty zone' resulting in support payment cancellation or reduction.
8.8
Since then, the proportion of participants being financially penalised or having their payments suspended has increased. As at 31 December 2018, 42.5 per cent of the caseload had at least one demerit point resulting in support payment suspension, with 4101 participants in the penalty zone.
8.9
Disturbingly, more than half of all Indigenous participants have at least one demerit (as at 31 December 2019). Despite Indigenous people making up only about 13 per cent of the jobactive caseload, Indigenous people make up almost 28 per cent of people in the penalty zone.
8.10
Homeless people are also overrepresented in the compliance data. More than half of all homeless participants have at least one demerit. Despite making up only 11 per cent of the caseload, homeless people make up almost 20 per cent of people in the penalty zone.
An overemphasis on compliance
8.11
The committee received substantial evidence that there is an unwarranted overemphasis on compliance under jobactive. Since the introduction of jobactive in July 2015, 461 771 financial penalties have been imposed (as at 28 November 2018).
8.12
Although stakeholders recognised the need for a compliance framework, most considered that the TCF represented an overemphasis on compliance. For example, the Australian Council of Social Service (ACOSS) considered there was a need for compliance systems 'to get people engaged with the labour market and effectively searching so that they don't give up', however 'the level of prescription is far too great' under the TCF.
8.13
The committee received evidence that the penalties imposed have 'a significant rate of error':
…of the penalties imposed during the 2015-16 year, around 50% were found by Centrelink to have been imposed in error, meaning that close to a million unemployed workers that year were penalised when they had done nothing wrong.
8.14
This high error rate was a major concern for the Australian Unemployed Workers' Union (AUWU):
The evidence plainly shows, unemployed workers are having their payments withdrawn and reduced due to no fault of their own. Unfair penalties are so rampant in employment services that the dysfunctional and punitive system has become a national emergency.
8.15
A number of submitters detailed personal experiences of having payments suspended due to administrative errors. The following case from the Edmund Rice Centre WA illustrates the impact of errors on participants:
A 25 years old single lady, refugee from Myanmar approached the caseworker as her Centrelink payment was suspended due to a missed Jobactive appointment. With the help of an interpreter in the ERCWA [Edmund Rice Centre WA], it was established that the client arrived 6 months ago in Australia, and never missed any appointment. When the client went to Centrelink to re‑install her payment, the Centrelink referred the client back to the Jobactive agency. The agency explicitly refused to talk to the client, and told her to go back to Centrelink. The assisting ERCWA caseworker eventually insisted that the Jobactive employee checks their record. It was established that the client actually attended the appointment, but the service provider failed to update the client's data in the system.
8.16
Jobactive providers are able to remove demerit points in cases where the demerit has been applied in error. However, the committee heard that it can be difficult to undo an incorrectly applied suspension. According to Mr Johnny Windus, National Advocacy Coordinator for the AUWU, providers are not willing to acknowledge their mistakes:
With nine out of 10 complaints that we received on the phone line, they were cut off for no reason—none at all. Again, most of the time now, with the demerit points system, even when you go in to re-engage, they will reaccess your money and they will put you back on benefits, but they will still leave your point sitting there. You will still have one, two or five demerit points sitting there for whatever you've done, although they have said that you were not guilty of it. They just leave it there. It is too much of a problem. That's because we have a system where that job service provider now needs to write something in writing as to how they made a mistake to have that removed, and they're not willing to do it. They just totally not willing to do it. You can ring the Department of Jobs and Small Business and complain. You go around and around in a circle, and it doesn't matter. It is just left there.
8.17
Ms Kylie Wright, an employment services consultant, was castigated by her employer for attempting to resolve compliance errors in her own time:
Due to my own stress and anxiety levels exacerbated by this new compliance system, I have on occasions neglected to result [record] appointments correctly, or neglected to add comments, or load other required information into the system, and have lay in bed at night worrying about what I have forgotten, so have gone into the office the next day, in my own time to fix what has been missed so as not to cause the job seeker any compliance issues. I have been castigated by my employer for doing this. I have also had job seekers contact me on my time off worrying because they have been unable to attend things in their diary or unable to enter their job search due to system errors etc, so again I have gone into the office in my own time to assist them and have been castigated by my employer.
8.18
The committee also heard that the TCF does not allow room for error, as reported by ACOSS:
… we're hearing a few things. One is that the timing of decision-making, both of providers and of Centrelink, to suspend payments, where, for example, someone hasn't attended an appointment, is very fine-tuned. So there isn't much room for error, and if there are glitches in IT systems or someone records something incorrectly and says they didn't attend when they did, for example, people are having their payments suspended all of a sudden without the opportunity to talk to the provider, to talk with Centrelink, as they previously had.
8.19
This point was also noted by Mr David Toscano of Northern Community CareWorks, a Work for the Dole host, who gave evidence to the committee:
They apply the demerits before they ask questions about what's going on. We had an unfortunate situation with a clerical error within our office—our admin team are human and they do make mistakes. They marked one person in one line above as 'present' and the person below as 'absent'. The following day we found out that that person who had been marked 'absent' had been notified that they were being cut off from their payments. Thankfully, their payments were not due for another week. We were able to rectify that the following day.
8.20
The committee heard that the government recently restricted the power of Centrelink to overturn penalties, despite the high rate of errors. As noted by Per Capita and the AUWU, until 1 July 2018, 'Centrelink had the power to overturn penalties imposed by providers if it judged them to be unfairly punitive'.
8.21
Jobactive participants' appeal rights are considered separately in Chapter 9.
Committee view
8.22
The committee is of the view that the new TCF arrangements are unnecessarily burdensome and prioritise a punitive compliance approach over meaningful employment outcomes. This is strongly demonstrated by the evidence of the Department of Jobs and Small Business which shows that almost half of all jobactive participants have been found to be non-compliant. Additionally, the number of people in the penalty zone has gone from 665 in the first three months of the TCF to over 4000 three months later. Furthermore, the astonishingly high error rate of 50 per cent during the 2015-16 year clearly demonstrates the real risk of participants being unfairly punished. These errors have real-life consequences for jobactive participants, including the suspension of support payments.
8.23
Additionally, the committee considers that it is unacceptable that administrative errors by providers can result in payment suspensions with no recourse to Centrelink. The committee considers that in certain circumstances Centrelink must have discretion over penalties, including demerits. The government's punitive approach to delivering employment services does not provide value for money for taxpayers nor opportunities for decent and stable jobs for unemployed Australians.
8.24
The committee recommends that the government ensure that Centrelink has the discretion over penalties (including demerit points) which are either unfairly punitive in nature or affected by administrative error.
Negative impacts of the compliance framework
8.25
A number of submitters raised concerns about the severe consequences of the TCF and supported the cessation of the TCF. These stakeholders highlighted the negative impacts of the TCF for particular groups. For example, the committee heard that the compliance framework was particularly punitive for single mothers and inhibited 'efforts to become self-reliant'.
8.26
A number of submitters considered that the TCF was overly punitive. The Refugee Council of Australia expressed concerns that the TCF is more punitive than the previous system. For example, in cases where payments were previously suspended for non-compliance, they are now cancelled. The Community and Public Sector Union (CPSU) reported concerns about the 'injudiciousness of decisions when customers are not capable of meeting or understanding the obligations and who are incapable of understanding the metrics of the new system'.
8.27
Dr Tony Ward, a Fellow of the University of Melbourne, noted that the implicit rationale for the tougher compliance framework is that 'people need to be pushed into job search activities'. Dr Ward submitted that recent studies indicate that 'any toughening of compliance rules can be counter-productive, especially for more disadvantaged workers'.
8.28
Dr Ward drew the committee's attention to existing international evidence of the negative impacts of punitive compliance frameworks. For example, a comparison of policies across 25 European welfare states found a 'correlation between the harshness of the work-related sanction and the risk of severe material deprivation'. This pattern was also found in the UK where new tougher sanctions for unemployment support recipients merely 'increased the numbers of people in severe hardship, having to rely on food banks', rather than encouraging more employment activity.
8.29
Jobactive participants who provided a submission reported a range of negative impacts of the compliance framework. One submitter described the compliance system as 'like a discipline and corrections system' and emphasised the adverse impact it had:
Coupled with the enduring demands of Centrelink, it impacts my self‑esteem causing me to experience anger and frustration which on one occasion, when a Centrelink worker suggested that "if I didn't like the system I could always just get a job", my rage was expressed explicitly and resulted in being banned from entering Centrelink offices for 6 months. To be reduced to blind rage is a devastating outcome, it has deeply shaken my sense of self control and has impacted on the range of jobs I am now confident to apply for. I often feel debilitated and handle adversity increasingly poorly.
8.30
A number of stakeholders emphasised that payment suspensions can be highly stressful for participants. One participant described the framework as 'extremely stressful to handle'. The following testimonial is illustrative:
I received several Centrelink suspensions for not attending appointments. This advice invariably arrived by text message at 17.05 asking me to call the office urgently (though my Provider's office closed at 17.00). The suspensions were received despite me always giving my Provider more than 24 hours’ notice prior to my appointment that I would not be able to make the appointment (due to work or job interviews). This was often distressing as the text messages would arrive on a Friday at 17.05, leaving me with a weekend of worrying about why I’d been suspended.
8.31
In addition, the committee heard that the compliance framework can be harmful to the mental health of participants. Mr Robbie Buckmaster, a jobactive participant, described the impact of the framework on his health:
The stress from being cut off and having threatening appointments eventually led to my having panic attacks. I was terrified of being watched. I could imagine my every day life being construed as non-compliance and my payments being suspended at random. I had internalised the compliance nature of the mutual obligations and it aggravated my depression. My life was spiraling out of control.
8.32
Another participant submitted that the compliance system was 'literally driving people to suicide':
I was physically and emotionally exhausted, and I couldn’t see any way out of my personal problems. In February 2018, I tried to take my own life. It was after this attempt, that I saw a new GP and was taken out of Stream A and into DES/DSM [Disability Employment Services]. But the damage was already done. I have absolutely no faith or respect for the Jobactive system. I have continually been put down, embarrassed, humiliated and made to feel like a failure by system.
The current Jobactive compliance framework paints the job seeker as “the enemy” that needs to be controlled and coerced into behaving appropriately. The vast majority of job seekers want to do the right thing by their Jobactive Providers, yet it is the Providers who are abusing the system, not the job seekers.
8.33
The committee heard that the compliance framework can also result in severe financial hardship for participants. This point was emphasised by the Edmund Rice Centre WA:
Considering that the recipients of the New Start Allowance are people living below the poverty line (which in practical terms means that they are unable to cover costs of everyday living, accommodation and basic needs), any irregularity in the Centrelink payments will, inevitably, result in severe hardship. One of the most obvious examples of such hardship is [a] client defaulting on their rent and being evicted.
8.34
Good Shepherd Australia New Zealand (GSANZ) interviewed 26 single mothers and found that 24 of the 26 participants experienced 'issues beyond their control in meeting compliance at one point or another as a result of ambiguous interpretations of policy by providers':
In each case, it was the responsibility of the client to rectify the situation and ensure that payments were reinstated. While providers often gave reassurance that the funds would be reimbursed, they did not seem to realise that their clients had no buffer even for a short delay in receiving payments. This was one of the most stressful and anxiety-provoking aspects of the policy for the women in our research, and the reason why they self-monitored to a high degree to ensure they remained compliant.
8.35
The committee received evidence that severe hardship can occur irrespective of whether the penalty was appropriately applied. Mr Aidan Jarvis, a participant, was told that an appointment was voluntary and then had his payment cut for missing the appointment. This had severe consequences:
In this process of my payment being cut, my rent went so far in arrears that I was almost evicted. Clearly, the landlord wouldn't want to renew my lease, so when that ran out, I became homeless, couch-surfing for months. I'm worried that I have been blacklisted in the private rental sphere, and I will never be able to find a rental again, without the assistance of government bodies and charities.
8.36
One submitter, Ms Mallory Allen, was effectively forced off income support because the compliance framework was incompatible with casual work and study:
I was doing three days of TAFE and the rest of my days were at work.
This made going to the job agency appointments impossible. Not to mention I was still putting in 10 job searches a month, I tried to discuss with Sureway the problems I was having.
I didn’t have any time to come to the appointments they were making me. I didn’t understand why I needed to look for a job when I already had one.
I went in to Sureway and they were very rude and said they couldn’t do phone interviews and if I missed another appointment my payment would be suspended. Due to how many hours I was working I wasn’t getting any payment anyway but felt I needed to keep my Youth allowance as I only had causal work that could be very unreliable at times.
I then decide to speak to Centrelink about what other options I had. They were not helpful and told me I needed to put in a complaint, and they couldn’t do anything. After this I had to ask them to cut off my benefit because there wasn’t any way I could keep up with their requirements. This was a little scary because I wasn’t sure if I lost my work what I would do with no other income.
8.37
Ms Ruth Bretherton, a jobactive participant, pointed out that financial penalties can result in severe hardship for the whole family of a participant:
So if someone has their payments cut or suspended, it is very often not only the recipient who is affected, but other family members as well who rely on the recipient for support, including children and older family members.
8.38
Mr Daniel McIntyre, another jobactive participant, suggested that the compliance framework was itself acceptable but was not applied correctly:
It is my feeling that the Job Seeker Compliance Framework is in and of itself acceptable. There is however, in my experience; a systemic deliberate reliance on certain sections of the framework which favour enforcement whilst simultaneously ignoring elements which are protective of the rights of the jobseeker.
8.39
The National Social Security Rights Network submitted that the primary issue with the compliance system is that the financial penalties cannot be waived:
We are concerned that people experiencing crises, such as the onset of psychiatric mental illness or exposure to family violence, may struggle to remain engaged with their required job activities and lose access to income despite their vulnerabilities.
Committee view
8.40
The committee recognises the need for an appropriate and responsive compliance framework. However, the committee is concerned by the severe consequences of the TCF, particularly for vulnerable groups. Specific issues and consequences of the TCF are discussed below.
Complexity of the compliance framework
8.41
A number of submitters raised concerns about the complexity of the TCF. Ms Ruth Bretherton described the framework as 'quite difficult to navigate'. Similarly, the National Social Security Rights Network reported that 'most people are very confused about the demerit system and don't understand it'. The National Social Security Rights Network gave evidence to the committee about discussions with a group of jobactive participants about the TCF:
All of them were totally confused and had no understanding… Most of the people didn't understand how to use that new job app that discusses everything…
A lot of people are having to reapply because they're not understanding what they're meant to do, and there have been difficulties with the provider saying, 'I can't make an appointment for you till a later date.' In the meantime the rent hasn't been paid. And because we do tenancy at this agency, we've seen a lot of people with notices for termination because they haven't been paid and they have already been two weeks behind in their rent and this final episode causes a termination notice.
8.42
The Refugee Council of Australia submitted that the 'complexity and strictness of the rules add to the anxiety of people trying to meet their other settlement needs including learning English'. The Refugee Council has previously highlighted the inappropriateness of the compliance framework for refugee and humanitarian entrants, who may not be able to read English.
8.43
The complexity of the TCF is also an issue for employment services consultants. Ms Kylie Wright, a consultant, had the following to say:
Since July first [2018] when the new Compliance rules have been introduced, I have struggled greatly with trying to learn the new system of Demerit points and penalty zones, along with the new reporting requirements and compliance changes. I have had very limited training in most aspects of the Employment consultant role, and these changes have made my job an unpleasant experience.
8.44
Jobactive providers also experience difficulty with the complexity of the TCF. The committee heard from the provider Advanced Personnel Management, who considered that the TCF was 'convoluted':
It's very much geared towards legislation and, as a result, it creates a lot of work and noise and red tape, and for an employment consultant or someone at the front end to service a client can take up to 45 minutes.
8.45
This point was also made by Ms Dianne Fletcher, the Chief Executive Officer of Sarina Russo Job Access, who advised that the risk of making an inadvertent error is an additional stress on staff:
…this contract has seen increased complexity, more administration than intervention, devolution of legislative decision-making in the context of the TCF… So the other aspect of compliance, which gets no visibility in any of the dialogue, is our own staff's obligation to comply with the deed. This also causes significant stress to our staff, because an inadvertent human error, which we all make, can mean that the organisation they work for is penalised financially…and can place the contract at risk.
8.46
Ms Fletcher also pointed out that the expectation that consultants are qualified to understand legislation and apply penalties under the TCF was problematic:
…there's an expectation that providers are legally qualified and understand the ins and outs of the social security legislation, which is indeed very complex. But we are asked to apply penalties, and the documentation that is prepared around those penalties will then be submitted to the AAT [Administrative Appeals Tribunal] and the SSAT [Social Security Appeals Tribunal]... So we are asking people whose main emphasis in coming to work every day is to get someone a job to effectively write a document and a submission that are of legal standard to withstand the SSAT and the Administrative Appeals Tribunal.
Committee view
8.47
The committee is of the view that the TCF is overly-complex. It is unclear to the committee that the complexity of the TCF is justified.
Impacts of compliance on work readiness
8.48
As noted above, the Department of Jobs and Small Business informed the committee that the TCF is 'designed to encourage job seekers to engage with their employment services provider'. Despite this, the committee received overwhelming evidence that the compliance framework does not improve the work readiness of participants. For example, Ms Wright submitted that the TCF 'does absolutely nothing toward assisting people find employment'. Similarly, GSANZ submitted that:
Our respondents were unanimous in their disdain for the compliance framework to assist them in any way. They described it as a 'tick and flick' exercise that was monitored for the benefit of the jobactive provider to ensure their compliance with government policies. Its rigid nature meant that, even when providers were courteous or showed concern, they were required to adhere to the framework to the detriment of client outcomes. Requirements were often irrelevant and unnecessary and seemed designed to keep already over-stretched women 'busy' rather than achieving any tangible outcome.
8.49
The AUWU submitted that the TCF 'functions to make receiving an unemployment benefit a humiliating, enraging, depressing and hopeless experience', which prevents people from participating in social life, including work:
Diminished resilience and cynicism born out of negative experience becomes a gross disadvantage for unemployed workers and can alienate them from positive life chances. Three decades worth of social and community sector research by credible institutions and scholars exposes how negative affect prevents people from participating positively in social life, including work.
8.50
The committee received concerning evidence that the compliance framework can operate as a direct barrier to employment, as participants are forced to turn down or lose work in order to avoid a penalty. The AUWU provided the following testimonial from one of its members:
It seems the only way to stop these job providers from trying to harass me is to turn down work so I can jump through their inflexible hoops that don't lead me to employment anyhow.
8.51
GSANZ found that perversely some of the women interviewed were leaving paid employment to attend meetings. A number of examples were provided:
Bille…would call to reschedule meetings when she received a commission for paid work that clashed with the time; perversely, instead of congratulating her on the job, she was lectured about non-compliance and threatened with having her payments cut…
Jo had to continue to apply for positions even after being offered a full‑time role with a delayed start; while Jess had all her payments cut after she missed a meeting that was scheduled last-minute by her provider because she was working. Several women reported leaving paid employment to attend meetings in order to stay compliant.
8.52
GSANZ reported that the issue occurred even when participants were exempt from meetings:
Gayle was technically exempt from attending monthly meetings because she was on a contract for 30 hours per week. However she continued to attend meetings because she found her payments were cut if she did not.
8.53
The committee also received evidence that participants have experienced difficulty meeting compliance demands whilst undertaking tertiary studies.
Committee view
8.54
The committee notes evidence that participants are turning down paid work in order to avoid receiving a demerit point. The committee considers that it is highly inappropriate that the compliance framework can in practice take precedence over genuine employment opportunities.
The proper role of providers
8.55
Under the TCF, jobactive providers have a dual role in both helping and policing participants. The committee heard that these two roles are inconsistent with each other and can undermine the ability of providers to build a relationship with participants and provide meaningful support. For example, the Settlement Council of Australia submitted:
…we have repeatedly heard reports of the negative impact the current compliance model has on the relationship between the job seeker and their service provider.
8.56
The Victorian Council of Social Service (VCOSS) commented on the need to build a trusting relationship:
We want people to be able to build up a relationship with the people that they're working with to be able to get them back into work, but at the same time they are the ones who are dishing out the punishment because people can't comply. There is a mismatch there which makes it very hard to build a trusting relationship between the two. Having that encouragement and so-called assistance to get back into work, we know there isn't enough of that at the moment.
8.57
Under the TCF, providers are given 'complete authority' to impose payment suspensions, without government oversight. The AUWU submitted that the power 'makes any form of trusting relationship between unemployed workers and case managers impossible'. Similarly, ACOSS reported that 'in many cases, people feel as though their consultant is like their parole officer'.
8.58
This point was also made by the UNSW Canberra Public Service Research Group:
Delegating authority to jobactive [providers] to suspend jobseekers' income support payments for non-compliance escalates risk of harm both for frontline staff and jobseekers. More broadly, it destroys trust between employment consultants and their clients, who need to work together to achieve employment outcomes.
8.59
According to Mr Matthew Hall, the Chief Executive Officer of Sureway Employment and Training, trust between consultants and participants can be completely severed by the new powers:
…in a lot of incidents that trust is severed and irreparable. It may take a single instant to generate that severity of reaction, so in a very small town where you take away the one way a person has to put food on the table, through that compliance, the trust is severed.
8.60
The committee received substantial evidence that the new powers have led to an increase in participant aggression towards consultants. The CPSU advised that provider staff 'struggle with the impact of customer aggression' and are not receiving support. The CPSU also reported on the flow on impacts to Centrelink staff, as the new powers for providers have:
… led to an increase in agitated and aggressive customers calling through to the Participation Solutions Team, who are the relevant Centrelink team, to try to overturn suspension and cancellations.
8.61
The CPSU submitted that participant aggression is pronounced in cases of payment suspensions, 'despite public servants having no control'. According to Ms Dianne Fletcher, the Chief Executive Officer of Sarina Russo Job Access, staff can also be reluctant to formally record participant aggression because it can have an adverse impact on a participant's record. Mrs Karena Newland, the Chief Operating Officer of Sureway Employment and Training, advised that the new compliance framework was causing problems for staff in the small towns they operate in:
When a jobseeker can perceive any action taken under the framework negatively, regardless of if we were actually responsible for the action, our staff can be targeted by disgruntled clients both inside our premises as well as whilst carrying out their personal lives in their community. When serious incidents do occur, where staff are threatened with harm to themselves or even self-harm by a jobseeker, staff can be fearful to venture out in their personal lives.
8.62
The committee heard that the ability to impose payment suspensions may give providers too much power over participants:
The fact that the providers have the ability to tell Centrelink to suspend payments means that they can coerce jobseekers into attending activities. For instance, I was put into 3 Work for the Dole activities while I was working a casual job and so getting a reduced rate of NewStart, which according to the jobactive deed I didn't have to do…
It seems these are no consequences for the providers when they give false information and jobseekers feel they have to comply with whatever the provider asks them for fear of being cut off from Centrelink…
8.63
One participant observed that the major problem with putting under-skilled people into position of power is that 'they generally overreach that power'. Ms Wright, an employment services consultant, was also concerned about the new powers granted to jobactive providers:
I found some of the “Language" used in the training online manual from Centrelink to be concerning. Telling some consultants that we now have “Power” to enforce compliance, is just not an acceptable practice when considering the personalities of many people who do this type of work. Many employment consultants treat the job seekers like second class citizens already. Power will ultimately be abused by some.
8.64
For one submitter, their main reason for choosing to coming off Newstart was that they did not want to deal with their provider:
I still feel furious with them for the stress they caused me by the punitive, ill-equipped and aggressive way that they dealt with me.
8.65
A number of submitters, including some providers, expressed strong support for the separation of the compliance function from the supportive function of providers, and the restoration of public sector responsibility for monitoring compliance. The Settlement Council of Australia submitted that this would allow providers to focus on 'supporting and advocating for their client'. The CPSU submitted that compliance decisions should be made by the Department of Human Services, who can provide a 'consistent approach' delivered by trained staff.
8.66
The committee also heard from some organisations that deliberately chose to not be jobactive providers or otherwise be involved in the program. For example, Ms Imogen Ebsworth, Director of Policy and Research at Anglicare Australia, stated that Anglicare chose not to work with the jobactive program because of its rigidity:
Anglicare Tasmania doesn't formally work with the jobactive program because it's so rigid, in terms of requirements of people and providers, that they couldn't actually leverage the resources out of it effectively and just said, 'It doesn't work. We better do it ourselves.'
8.67
Similarly, Professor Shelley Mallett, Director of the Research and Policy Centre at the Brotherhood of St Laurence, advised that the Brotherhood of St Laurence chose not to be a jobactive provider:
We made an absolute decision not to engage in jobactive. We looked scrupulously at the evidence both from former versions of Job Services as well as through our experience of providing innovative practices over several decades and decided that it was not a contract that was fit for purpose for enabling people, particularly the most disadvantaged, to get into jobs.
Committee view
8.68
The committee notes the view of the UNSW Public Service Research Group, the AUWU and others that giving providers the role of policing participants is incompatible with their supportive role. Giving responsibility for the entire compliance framework to a public sector body could improve the oversight of the system. Accordingly, the committee is of the view that the government should consider the merits of transferring responsibility for the compliance framework to the Department of Human Services or another public body.
8.69
The committee recommends that the government consider the merits of transferring responsibility for the compliance framework, including the imposition of demerits, to the Department of Human Services or another public body.
Reasonable excuse rules
8.70
Currently, it is up to providers to determine whether a participant has a 'valid reason' for a failure to meet their requirements. The committee heard that the government has recently tightened the 'reasonable excuse' rules for missing an appointment or other activity and has taken away the previous discretion for providers to not record a breach. Additionally, drug and alcohol related illnesses can no longer be considered by providers in making a decision. Ms Kylie Wright, an employment services consultant, summarised the changes:
Under the new compliance rules, there is no longer “Discretionary” reason for missing an appointment.
Working is no longer listed as an acceptable excuse for missing an appointment. Homelessness is only able to be used ONCE within a term of unemployment.
Everything the job seeker does such as appointments, medical appointments, school activities, work rosters, are all expected to be entered into the job seekers shared diary, which is accessible by the consultant. If a job seeker misses an appointment for any reason which is not showing in their shared diary, they are expected to be listed as DNAI [did not attend with an invalid reason] and face compliance demerit points.
8.71
Ms Wright submitted that the new framework made it very hard to do her job:
I have been on stress leave for the last 6 weeks due to my own anxiety over the job (and Bullying by my employer) and the new compliance changes, as I have been informed that I am too soft on people and have to start to get tough. Basically I am not allowed to show any discretion or compassion toward these people who I know and have lived in the same community as for many years.
8.72
The committee received substantial evidence that the reasonable excuse rules are inappropriately restrictive. The AUWU provided the following testimonial from a jobactive participant:
Attended to a critical incident with a neighbour. He needed an ambulance, [I] was told that if I didn't make appointment I would be suspended. I refused to leave him [the critical injured neighbour] and was suspended…
8.73
The committee also heard that the removal of exemptions makes it more difficult to take into account the individual circumstances of a participant 'to ensure that vulnerable clients do not suffer'. The removal of provider discretion was a concern for a number of submitters. Mr Spurrell, Executive General Manager of MAX Solutions, explained the impact:
Up until July [2018] staff had much more discretion in how they applied that compliance regime. A lot of that discretion has been removed, so they are somewhat powerless. Someone either attended an appointment or they didn't. That result has to be entered on the same day as the appointment. They can't make efforts to try to contact the person the next day to see why they didn't attend. It has to be entered that day. If it's not entered that day, they didn't attend.
8.74
The committee heard that providers generally do not first check for a reasonable excuse before imposing a penalty. The suspension is effectively automatic. The committee also heard that it can be difficult for participants to provide prior notice that they will miss an appointment. The AUWU reported that 83.1 per cent of respondents to a survey indicated that their job agency did not contact them on the day of their penalty to see if they had a reasonable excuse. This can be particularly problematic for casual employees, as illustrated by the following testimonial:
As a casual employee I receive offers of work early in the morning, at short notice. There are times when an offer of work coincides with a job service provider (JSP) appointment. I am already at work when the JSP opens their office. I phone them after work to tell them why I missed the appointment. By then I am already suspended and receiving texts from the job service provider and Centrelink. I queried why I was suspended when I had a reasonable excuse and was told suspension is automatic. So every time I go to work and miss the JSP appointment I receive all the texts to tell me I am suspended. I heard there is going to be a demerit point system so I could lose demerit points too.
8.75
A number of participants that made a submission experienced this issue. One submitter reported that they always made contact with their provider to let them know they were working however they would still have their payment suspended. Another participant, Mr Jeremy Poxon, explained how he felt punished under the current system for doing the right thing:
A few weeks ago, I was cut off my payments for "failing to attend an appointment" with my agent. I was unable to attend that appointment, because I had been called in, last minute, to work a shift at my casual job – a job I got, mind you, without any help from a job agent. I tried to call and call my agency but nobody there ever answers the phone. (I brought this up at a later date and my JSP said they're too understaffed to answer the phones). Because I couldn't get through to re-schedule my appointment (i.e. my compliance demand) I received a text message to say that I was immediately stripped of payments.
8.76
One participant reported that their provider demanded a medical certificate while they were still in hospital being treated, and threatened a breach of requirements for not providing the certificate by close of business.
8.77
Ms Wright, an employment services consultant from a remote area of Tasmania, gave evidence about her reasonable approach to missed appointments and the negative way this is perceived by her employer:
If a job seeker misses their appointment, I will call them after about 20 minutes and ask them why they have not attended. Many people genuinely forget, or on occasion find they have been called in to work unexpectedly, or have sick children, or are unwell themselves, or have no fuel or phone credit, and were unable to contact me. Often I will find that they have called my Launceston office the day before and left a message, but the message had not been passed on to me. On most occasions the job seekers come in to the office later in the day and attend the appointment with no issues. If they are unable to attend and I believe that their reason is acceptable, I will reschedule their appointment to a more suitable time. If I am unable to contact them and do not hear from them within a reasonable time I will DNAI them. I think this is a very fair way of performing my role.
I am been told by my employer that I am “Too nice to people” that I need to “Toughen up”. I have been told that I have an “Unusually high level of compliance” and that I must be letting people get away with too much.
8.78
Ms Wright informed the committee that the TCF reduced her 'ability to show compassion and discretion and actually talk to them [jobactive participants] and find out what the real reasons are' for missing an appointment.
8.79
Ms Wright gave evidence that participants are only able to use homelessness as a reason 'once during their entire term of unemployment'. Ms Wright observed:
If you are homeless you have no fixed address. You have no reliable source of power, internet, phone service etc. How on earth are you expected to be reminded of an appointment, or notified of a change of appointment.
8.80
However this was contradicted by the Department of Jobs and Small Business, who advised that it does not mandate the timeframes or number of times for which homelessness can be used as a reasonable excuse for missing an appointment. This may point to a lack of consistent application or a lack of understanding by some providers about the policy.
8.81
GSANZ recommended that missing a meeting 'should not lead to sanctions unless it is a chronic issue'.
Committee view
8.82
The committee notes evidence that the existing reasonable excuse rules can be restrictive and lead to disproportionate and at times harsh outcomes for participants. Accordingly, the committee is of the view that the government should ensure the reasonable excuse rules protect the welfare of unemployed people.
8.83
The committee recommends that the government ensure the 'reasonable excuse' rules protect the welfare of unemployed people.
The future of compliance
8.84
The Employment Services 2020 Report prepared by the Employment Services Expert Advisory Panel recommends that the future compliance framework include both rewards and penalties. The rationale for recommending rewards is that 'job seekers will be incentivised to remain actively engaged throughout their journey towards employment'.
8.85
The report also recommends automating compliance, stating that it 'is smarter to automate compliance'. The report suggests that automating compliance will reduce the administrative burden on jobactive participants and providers.
Committee view
8.86
The committee supports the Expert Advisory Panel's recommendation for the compliance framework to include rewards to incentivise participants. The Panel's report acknowledges that very few participants are wilfully and persistently non-compliant. However the committee is concerned that the Panel's report does not give sufficient consideration to the need to reduce the punitive nature of current compliance requirements.
8.87
The committee acknowledges the time and cost savings associated with automating compliance. However the committee is concerned that the significant issues plaguing the Targeted Compliance Framework have not been acknowledged in the Panel's report. If not carefully implemented, it is likely that the automation of compliance would have disastrous and often unfair consequences for participants. For example, under the current system administrative errors by providers can result in payment suspensions with no opportunity to comment before the suspension is applied and no recourse to Centrelink. Given the government's poor record of rolling out automated systems, for example the robo-debt debacle and the online census failure, the committee considers that any automation must be fully tested by providers and participants before proceeding.
8.88
The committee recommends that the government conduct thorough testing of the new online compliance system before implementation is rolled out nationally.