Complaints to jobs department’s tip-off line say lying was encouraged to help providers falsely claim payments

This article is more than 1 year old

This article is more than 1 year old

Out-of-work Australians have complained that private job service providers offered them cash and petrol to lie about their employment status to help falsely claim incentive payments.

Those allegations of fraud are contained in a document detailing complaints to the jobs department’s tip-off line, released under freedom of information laws just days after a Senate inquiry found the JobActive system was failing jobseekers.

In one complaint received in November 2018 a jobseeker alleged a staff member created false purchase orders for bicycles, pocketing money from a government fund set-up for job service providers to buy goods and services to help people gain skills and find work.

The complaints may be the tip of the iceberg, with Greens senator Rachel Siewert warning that “with little oversight of the quality of services I wonder how much [fraud] is getting identified” and calling on the department to “address these claims immediately”.

The heavily redacted jobs department document details one complaint from August 2018 alleging that a job-services provider “encouraged the job seeker to report employment details incorrectly to [the Department of Human Services] and offered the job seeker ‘free fuel’ as a reward”.

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“[The provider] also requested that the job seeker alter the start date of employment to 10 August 2018 and to sign a blank piece of paper.”

Another received in May 2017 alleged that an employment consultant “offered them cash to pretend that they are still in employment so they could receive a 26-week outcome claim”. That complaint is listed as “closed” although the outcome is redacted or not specified.

Employers are eligible for wage subsidies of up to $10,000 if they hire new staff for at least 20 hours a week for 26 weeks.

JobActive providers receive payments after four, 12 and 26 weeks if workers they place stay in jobs, totalling up to $11,000 after 26-weeks for the most disadvantaged jobseekers down to $1,550 after 26-weeks for the least.

One complaint from June 2018 alleged a jobseeker with just five hours’ work a week was “recorded as 30 hours so that the jobseeker would not have to attend the site”, allowing the provider to “inappropriately [claim] an outcome for the job seeker”.

A second document titled Program Integrity Subcommittee for Employment Services (Pisces) details five open tip-offs.

It includes an allegation made in Queensland in October 2016 that a provider “is making false claims relating to job seeker employment including falsely creating wage subsidies and paying the money back into their own bank account without employer knowledge”.

A spokesperson for the department of jobs and small business said that of the complaints listed in the document: three investigations were ongoing; 28 cases were “unsubstantiated or had insufficient evidence to proceed with further action”; and one matter concerning allegations of fraud “was substantiated and payment recovery was undertaken”.

“The host organisation was excluded for 12 months.

“The Australian government takes any allegations of fraud made against the Commonwealth very seriously.”

Labor’s employment services spokeswoman, Terri Butler, said the complaints related “to allegations, not proven incidents” and it was “reassuring that those concerns are seemingly being investigated”.

Siewert told Guardian Australia the complaints to the department echo concerns in the Senate committee inquiry of “people being ‘churned and parked’ for financial reasons”.

“The way the system works focuses on any job – [JobActive providers aim to] get them in there and get their payment,” she said.

“The program should be about assisting people to address the barriers they face and work with them to find education and employment pathways that will be fulfilling in the long term.”

The Labor and Greens controlled employment references committee recommended the government review the funding model to ensure job services actually boost chances of finding work and consider public service delivery of employment services for some unemployed people.

It also recommended the “effectiveness of employment services be regularly independently evaluated”.

Siewert said that where there are allegations of fraud or misconduct “providers should be investigated, prosecuted where appropriate and lose their contracts”.

A spokesman for the Australian Unemployed Workers Union said it had called for “an independent body – an Employment Services Ombudsman – to investigate agencies and ensure these kinds of frauds don’t continue to occur”.