Centrelink changes to mutual obligations causing fear and confusion

‘Dramatic’ changes to Centrelink mutual obligations are causing fear and confusion among recipients, with payment suspensions and ‘punishments’ on the cards for those who fail to meet new requirements set to commence from 1 July.

Centrelink JobSeeker recipients say they have received little information about the incoming points-based mutual obligation system, and welfare advocates want the Labor government to delay the rollout of the system until it is ‘fit for purpose’.

The points-based activation system (PBAS) was trialled by the Department of Education, Skills and Employment in 2020 and is due to replace the existing mutual-obligation system next month.

Under the new system, job seekers will need to complete a set of tasks and satisfy certain expectations, such as completing job applications or training courses, to ‘earn’ 100 points a month and qualify for payments.

PABS has been billed as a more flexible way for people to meet their obligations, but welfare advocates are sceptical, having already received many reports from people saying the new system hasn’t been properly explained to them.

On top of the new system, from 4 July, Services Australia’s main unemployment program, Jobactive, will be replaced by ‘Workforce Australia’, which will immediately affect around 792,000 people.

Read: What are the options when facing unemployment later in life?

As part of the change, ‘job-ready’ participants will be moved to an online portal to manage their job searches, while others will be referred to a new face-to-face job provider.

Those who’ll need to complete mutual obligations will also transition to the PBAS.

Targets may be reduced based on “personal circumstances” and extra points can be carried over into the next month, states the Department of Education, Skills and Employment (DESE) website.

But if recipients don’t satisfy obligation requirements, they will miss out on payments.

However, Centrelink told The Guardian that payment suspensions would be cancelled for the first month of the rollout.

Read: Labor pledges myGov overhaul if it wins federal election

Welfare advocates are concerned the changes enforce more obligation requirements than the current rules.

People currently on the work for the dole program full-time would get only 20 points a week under the new program, so they would need to complete additional activities to keep their payments.

Work for the dole will also be compulsory for some recipients after six months instead of after 12 months. However, they’ll need to do it for only two months instead of six under the current arrangement.

Under the PBAS, attending a job interview or starting a job will be worth 20 points, while completing an application would be worth five points.

ACOSS deputy CEO Edwina MacDonald is also concerned about the points-based mutual-obligation model.

“In its current form, it does not provide the flexibility originally intended and risks reproducing the same issues that led to 200,000 people every month having their payment suspended in Jobactive,” she says.

People without internet access or those with poor digital literacy would face difficulties with the online reporting system, she says, adding that she hopes the system could be more ‘manageable’ at least for older people.

“One example is to automatically reduce the requirements for older workers, parents, people with disability and people living in regions with few jobs,” she says.

“Requiring people who are already working 20 hours per week, or doing full-time work for the dole, to continue to complete points for other tasks is unnecessarily onerous.”

The “dramatic” changes have caused fear and confusion among the hundreds of thousands of Centrelink recipients, says Antipoverty Centre spokesperson Kristin O’Connell.

“We’re going to have people trying to figure out how to navigate a new system at the same time as worrying about losing their payment at a time when costs are out of control,” she says.

Read: Older Australians pessimistic about employment prospects

The new online system would mean an increase in “decisions made by computers” with “no regard” for individuals, she adds.

“Governments do not have a good track record of delivering digital services in this country, and we don’t expect the tech rollout … to go smoothly,” she says.

“We don’t have great hope that people are going to understand their options or feel supported when they’re trying to navigate either the online system or the face-to-face one.”

While the employment sector says moving nearly 592,000 people to new job providers by 4 July and starting them on new job plans would be challenging, the “principles” of the reforms have been well supported.

“I think people are actually looking forward now to being able to work in a way that’s intended … to provide more intensive services to people who are the furthest from the labour market,” says National Employment Services Association CEO Sally Sinclair.

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