Last year the federal government replaced the jobactive employment support program with what was expected to be a more flexible and improved support system for jobseekers, Workforce Australia.
Yet, in the 16 months the contracted-out system has been running, almost 2 million income support payments have been suspended, affecting 70% of participants.
Under the new system, participants must meet a points target to receive payments.
For example, if the default points target is 100 per month, this can be met by a minimum of four job applications (worth 5 points each) and a mix of other activities. Points targets are adjusted to 60 per month for parents and people with disabilities.
Why are payments suspended?
Payment suspensions are supposed to get people to comply with requirements such as attending job interviews and undertaking training, education classes or other activities to reach their points target.
When these criteria are not met, participants are given a two-day grace period to resolve the problem, after which payments are automatically suspended. The suspension remains until the target is met or the suspension is lifted by a job service provider. The average suspension period is four days.
The figure of almost 2 million payment suspensions, cited at a Senate Estimates committee meeting last month, showed they have been occurring at an alarming rate since Workforce Australia started.
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Committee member and Greens senator Janet Rice highlighted concern about the high suspension rate and representatives from the Department of Employment, which runs the program, agreed it was an issue.
If 70% of participants have been suspended, that makes it very likely some people have lost payments multiple times. These people might be long-term unemployed due to health, disability or discrimination in the workplace.
Suspending payments to these already disadvantaged groups has a devastating impact because income support payments are grossly inadequate. The single person rate of JobSeeker payment is only $749.20 per fortnight, and the maximum rate of Commonwealth rent assistance is $101.07, adding up to $860.27 a fortnight.
Meanwhile an average share house rent in a capital city like Melbourne is $446 per fortnight – with single renters often paying double – and this leaves people without much room for delays to their income support payments.
The damage caused by suspending payments
Research into the impact of payment suspensions on people’s mental health shows the consequences are dire.
This is especially so during the current cost-of-living crisis when people have enough to worry about just paying rent, buying food or keeping a car on the road.
The harm caused by suspending payments is apparent in my recent analysis of the individual submissions to the parliamentary inquiry into Workforce Australia.
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I coded the frequency of words relating to poor psychological wellbeing as represented in the table. Of the 69 submissions reviewed, 52 identified how payment suspensions caused high levels of stress and affected trust of the job service provider.
The word-frequency results show threats to payments have a devastating effect on the mental health of people receiving unemployment payments. Many felt bullied by their job services providers.
The impact of suspensions is reflected in this quote from one of the submissions. As one 53-year-old woman said in her submission:
I would ask you to consider and recognise that those of us who are reliant on this system are deprived of any means to control our circumstances. A system failure, a missed phone call, a misunderstanding or a simple lack of communication can lead to a suspension of payments.
The stress associated with being constantly under threat by the whims of a particular person, system faults or even a missed phone call is immeasurable. That I might be unable to eat, go to the doctor, pay for medication, buy petrol, pay bills on time (so as not to incur further costs), pay for internet/phone … is considerable and has a massive impact for those of us who are living under these unfortunate circumstances.
It effects our physical and emotional health, our ability to participate in our communities, our sense of future and diminishes our sense of self-worth and our accomplishments – reducing them to meaninglessness while keeping us in poverty.
Why is the suspension rate so high?
The suspension rate is high because the criteria people must meet to receive payments are unrealistic, and because job service providers make mistakes.
Some people can’t meet targets or report points under the points model on time, or don’t attend appointments because they’ve been given insufficient notice or the appointments have been scheduled at times they are already working or in training.
In a speech last month, Labor MP Julian Hill, who heads the parliamentary inquiry into Workforce Australia, told a conference the powers of the system’s providers to make decisions affecting payments was a “major false economy”.
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This “false economy” of payment suspensions has been a fixture of job services requirements for nearly two decades.
Workforce Australia was meant to have addressed this with the points model. Instead, the points reporting is onerous and there is no evidence it improves the employment prospects of people who have been struggling to find work.
The next steps
When the parliamentary inquiry into Workforce Australia submits its report this month, it is likely to recommend big changes including returning and payment suspension decisions to the government’s former Human Services department, Services Australia.
If that happens, it will be vital to move swiftly.
As was the case with the former government’s highly discredited and unlawful automated debt assessment and recovery system, Robodebt, the widespread use of payment suspensions is unfair and causes acute distress to people already surviving on inadequate income support.
