Jobactive participants had their Centrelink payments cut more than a million times in the first six months of ‘punitive’ program

This article is more than 1 year old

This article is more than 1 year old

Welfare suspensions have increased 40% under the government’s new compliance regime, as new data reveals participants on Australia’s flagship jobs program had their payments temporarily cut off more than 1m times in six months.

And while the new system, which sees the unemployed handed “demerit points” for failing to meet their required activities, has also resulted in a dramatic reduction in the number of “financial penalties”, the new figures show small numbers of Australia’s most vulnerable job seekers are still being thrown off income support.

After the new system was introduced in July 2018, Jobactive providers dished out 1.16m payment suspensions in the six months to December, government data provided to a Senate inquiry shows.

Jobless suffering under 'punitive' Jobactive program, says Senate report Read more

By comparison, between July and December 2017, those on the Jobactive program had their payments temporarily cut off around 700,000 times.

On average, people waited 4.1 business days until their payment was restored, but the suspensions lasted two weeks on 250,000 occasions, while 17,000 suspensions were not resolved for four weeks.

The $7bn Jobactive program, which both the Coalition and Labor say they intend to reform, is the main scheme accessed by those on Newstart and Youth Allowance.

A Senate inquiry report last week described Jobactive as “punitive” and said people were getting jobs “in spite” of the program, which contracts private companies and not-for-profits to help the unemployed find work.

In July last year, the government introduced a new welfare compliance system aimed at targeting those it claims repeatedly avoid their “mutual obligation” requirements. The scheme was opposed by welfare groups, who, while welcoming some aspects of the policy, remained concerned by some compliance aspects.

Citing the new data, the government last week pointed to the fact welfare penalties under the new scheme had fallen about 95%. Unlike suspensions, “penalties” see a jobseeker have their payment docked or cut completely for at least a month.

But figures provided to the Senate show that, across all welfare programs, 260 people with a “homelessness” indicator on their Centrelink file were kicked off welfare payments for a month for non-compliance in the final half of 2018. There were also 96 single parents who lost their Centrelink payments for four weeks.

In total, 1,134 homeless or at risk and 240 single-parent welfare recipients either lost their payments completely or had a fortnightly payment docked by half or in full.

The data was provided to the inquiry in response to questions from the Greens senator Rachel Siewert.

Homeless Australians given financial penalties under Coalition's welfare regime Read more

Last month Guardian Australian revealed in the first three months of the new regime nearly 20,000 homeless people had copped at least one “demerit point”, which is usually accompanied by a payment suspension. Over six months, that figure is now nearly 30,000.

Under the new compliance system, jobseekers have their payments suspended automatically if they fail to attend an appointment or meet another requirement. Their payments are restored with full backpay once they re-engage with their provider, but critics say suspensions are often imposed unreasonably or in error.

The government argues these suspensions are used as a “re-engagement tool” to encourage jobseekers to attend their appointments and comply with their mutual obligation requirements.

But welfare groups say the suspensions can have drastic consequences for those on low incomes, who risk missing rent payments or struggling to feed themselves when their money does not come through on time.

The new compliance regime has also been controversially applied to the ParentsNext program, with data showing one in five participants had received a payment suspension.

A Senate inquiry into that program will hear from participants in Melbourne next week.