Some of Australia’s outsourced employment service providers have effectively suspended the Centrelink payments of more than 90% of the jobseekers on their books, new data reveals.
Jobseekers have their payments suspended as part of the mutual obligations regime, which is meant to ensure jobseekers are actively looking and preparing for work. If they do not fulfil activities such as job applications, training courses, interviews and meetings with job providers, their Centrelink payments are suspended.
As the Albanese government mulls the future of the $9.5bn system after a damning parliamentary review, figures provided to Senate estimates show job agencies in the federal government’s flagship Workforce Australia program applied 282,830 payment suspensions in the final three months of 2023 across a total cohort of 622,315 jobseekers.
While average rate of suspensions per jobseeker for all providers was 45%, the data shows some smaller providers, particularly those catering for Indigenous jobseekers, are applying payment suspensions at an alarming rate.
Yilabara Solutions and Training Alliance Group, which are smaller providers with fewer than 1,000 jobseekers, and On-Q Human Resources, which has about 7,000 on its caseload, have applied enough payment suspensions to effectively cover 90% of their caseload in the three months to December 2023, according to data from the Department of Employment and Workplace Relations.
Among the five job agencies with the highest per capita rate of payment suspensions, three are specialist providers for Indigenous jobseekers.
The Department of Employment and Workplace Relations (Dewr) acknowledged clients who were homeless, ex-offenders or from First Nations communities were more likely to be affected by payment suspensions.
Francis Markham, a research fellow at the Centre for Aboriginal Economic Policy Research at Australia’s National University, said the rates of suspensions among Indigenous Australians showed “the current system just isn’t working”.
“Some providers might say, ‘Well, look, this is just our way of getting jobseekers to come back and have their appointment’,” he said. “Those suspensions have real-world consequences for people’s ability to pay the bills and put food on the table. Even though it’s just a suspension and people still get the payment, it’s incredibly disruptive.”
He said it showed the “urgent need” to tweak the system so that it actually helped people find jobs.
“We know from the past what things have worked better. Those have been things which looked less like mutual obligations … and more like supportive community controlled indigenous run agencies which can give unemployed First Nations peoples jobs.”
Of the suspensions between October and December, only 38.1% of them resulted in the jobseeker receiving a “demerit point”. After jobseekers receive five demerits, they enter the penalty zone, where they may have their payment completely cancelled.
This means that in all other cases where demerits were not applied, the jobseeker who had their payment suspended was later found to have a valid reason for not meeting their obligations.
Jobseekers who miss a mutual obligation requirement have 48 hours to discuss the matter with their provider before their payment is suspended and potentially delayed. It is not restored until the jobseeker meets their obligations to the satisfaction of the job agency.
The main reasons for the payment suspensions were not attending a provider appointment (168,010 suspensions) followed by failing to meet a job search target (109,850 suspensions).
The Australian Unemployed Workers Union’s Jeremy Poxon said the system was full of errors.
“Suspensions happen for all sorts of random reasons – because of tech glitches, admin error because participants simply can’t get their providers on the phone,” Poxon said.
He said the AUWU had recently helped a single mother whose payment was suspended right before a job interview, which meant she couldn’t afford new interview clothes.
“When you’re suspended, you also often have to spend hours of your life trying to get your provider, or Centrelink on the phone – it’s a constant cycle of punishment and trauma for a lot of people.”
A DEWR spokesperson said the department recognised there was “concern” over the rate of payment suspensions.
The spokesperson said having mutual obligations and a compliance mechanism to check jobseekers are meeting them was an important part of people finding work.
They said the department was working with specialist providers to make sure those at risk were placed in employment.
Guardian Australia approached the job agencies named in this story for comment.
