Minority Report by Australian
Greens
Introduction
The
Welfare to Work regime introduced by the previous government was unfair,
punitive and ineffective in providing an adequate safety net and genuinely
engaging job seekers in securing appropriate work. The Australian Greens have
been consistent critics of the former Government's welfare to work
legislation. In particular, we have been critical of the compliance regime,
including the 8 week non-payment periods and the lack of discretion provided to
Job Network Providers and Centrelink in the assessing individual circumstances.
We have also been deeply concerned about the impact of this punitive regime on
the most disadvantaged in our community, particularly Aboriginal people.
We
acknowledge that the Social Security (Employment Services Reform) Bill 2008 is
a move in the right direction in addressing some the key problems with the
current system. The Government's recognition for the need to reform the
compliance system to "encourage participation" rather than the
current punitive approach is welcome.
The
Australian Greens agree with the Minister when he says in his second Reading
Speech that:
"The key reason
that these changes are necessary is that the current compliance regime has
resulted in thousands of counterproductive, non-discretionary and irreversible
eight week non-payment penalties. For the duration of these eight week
non-payment penalties there is no requirement for a job seeker to look for work
or to have contact with either employment service provider or Centrelink. The
consequence of this failed approach to compliance, and an obvious defect in the
system, is the eight week separation of job seekers from participation
requirements, including looking for work, gaining skills or undertaking work
experience."[1]
The
Minster goes on to say in reference to people on unemployment benefits:
"These job
seekers are some of our community's most disadvantaged people. Some are
suffering from mental illness. Others have significant language and literacy issues
and poor educational attainment. Some have a neurological impairment, and
others are homeless or at risk of homelessness.
Australians in these
circumstances are more likely to overcome an extended period of unemployment if
the compliance system encourages commitment rather than the current punitive
approach." [2]
There
are certainly positive changes in the Bill and the broader reform of employment services
that match the intent to encourage participation and acknowledge the barriers
individuals face to employment. However, like many of the organisations that
made submissions to this Inquiry, we have concerns that aspects of the
legislation retain some the punitive aspects of the current system and will
continue to be counter-productive to the broader aims.
The
Majority report covers all the key issues raised in the course of the Inquiry.
We wish to make some additional comments on a few of these issues and also make
additional recommendations.
Key
Issues
Complexity
A
key issue to emerge from the Inquiry relates to the complexity of the new
system. The complexity comes from having five different types of
"failures" each with their own particular criteria, different levels
of discretion, different consequences and different access to hardship provisions.
We
acknowledge that the intention of the structure of the new system is to provide
penalties to more appropriately reflect the relevant breach and shift from the
current "one size fits all" approach. We support this intention but
suggest greater consistency between the categories of failures in relation to
matters such as when discretion is allowed, when hardship provisions will apply
and when penalties can be "worked off" would result in a simpler
system which would be easier to understand and implement.
National
Welfare Rights Network commented in its submission that Centrelink and
Employment Services Providers would find it difficult to both understand and
explain the new system to job seekers. NWRN went on to say that they are:
"concerned that
job seekers will struggle to understand just how the new system will work,
their obligations under it and second how they can avoid penalties and if an
error occurs how it can be remedied. This is of great concern, given NWRN
members' current experience that jobseekers' lack of understanding of how the
existing compliance regime operates in practice has led to the imposition of
penalties.......The unnecessary level of complexity has the real potential to
result in a higher rate of error in Centerlink's implementation of the system
resulting in significant hardship to job seekers."[3]
Furthermore,
National Welfare Rights Network goes on to say:
"The system is
also likely to cause protracted and costly appeals (both internal and external)
especially around the imposition of individual "No Show No Pay"
failures and place further pressure on an already under resourced appeals
system within Centrelink."[4]
ACOSS
also commented on the complexity of the new rules and indicated it was
"important that job seekers and employment service providers are well
prepared for the introduction of the new system from July2009. A comprehensive
information campaign expressed in simple language will be critical."[5]
This suggestion was mirrored in Mission Australia's submission which recommended
a "clear and consist communication campaign be developed that targets both
job seekers, employment service providers and Centrelink in the lead up and
immediately following, implementation on 1 July 2008."[6]
The Greens agree with these comments. The Greens support the Majority Report's
recommendation in regards to a communication campaign.
Recommendation
1: That the Bill be amended to provide greater consistency between the
different categories of "failures" in relation to when reasonable
excuse and hardship provisions apply, and when Centrelink can exercise
discretion in the application of a penalty.
8 week non-payment penalty
The
Australian Greens are extremely disappointed the Government believes it is
necessary to keep the 8 week non-payment period as a penalty for certain types
of breaches. The Government itself acknowledges that the 8 week non-payment
penalties have been ineffective and counterproductive.[7]
The Department's submission to the Inquiry acknowledges that "many of the
job seekers who incur penalties have undisclosed vulnerabilities" and that
"stopping payment for eight weeks places already vulnerable job seekers at
great risk of disconnection and in many cases has resulted in personal crisis
and homelessness."[8]
We
appreciate that the Bill introduces changes to
the 8 week non-payment penalty regime with the intention of improving job
seeker compliance. The key changes include:
- the
introduction of a comprehensive compliance assessment before the penalty is
applied for wilful and persistent breaches;
- allowing
Centrelink some discretion in applying the penalty for wilful and persistent
breaches; and
- the
introduction of Compliance Activities where a person can have their payment
reinstated by agreeing to undertake a Compliance Activity.
These
are all improvements to the current system but we maintain that there is no
need for such a punitive penalty as 8 weeks without any payment. A number of
submissions recommended that the 8 week non-payment penalty be completely
abolished.
The
submission from Catholic Social Services Australia presents data from a study
conducted by the Social Policy Research Centre on breaching which found that as
a result of a breach:
- 40.8%
of respondents were unable to pay the rent;
- 10.9%
lost their accommodation;
- 26.8%
went without medical treatment and
- 65.5%
had problems paying household bills.
There
are also social impacts with 26.3% reported their marriage or relationship came
under stress and 15.1% stopped taking their children on outings. Homelessness Australia reported about 1 in 9
people were at risk of losing their accommodation as a result of being
breached.[9]
Catholic
Social Services Australia argues:
"It is not
acceptable to use financial hardship, or the threat of financial hardship, as a
tool to promote compliance. Nor is it acceptable to place already vulnerable
individuals and their families under severe added stress. Individuals who are
unable to support themselves through paid work should be entitled to an
adequate level of support and to lives where dignity is maintained."
The
National Welfare Rights Network also argues "the damage caused by such a
provision so far exceeds any possible deterrent effect that it is totally
counterproductive." The Australian Greens maintain that the 8 week
non-payment penalty is still unacceptable.
Recommendation
2: That the 8 week non-payment penalty be abolished.
Changes to 8 week non-payment penalty regime
Even
with the changes in the Bill above there are a
number of issues with how the new scheme will work. Our key concerns relate
to:
- The
lack of details about the comprehensive compliance assessment process;
- The
discretion in applying the penalty only applies to wilful and persistent
non-compliance and not the failure related to refusing or failing to accept an
offer of suitable employment, or the preclusion period for unemployment
resulting from misconduct or a voluntarily act; and
- Similarly,
the provision relating to ending the 8 week period by agreeing to a compliance
activity is not available to persons who voluntarily leave a job or are
unemployed due to misconduct.
We
support the introduction of comprehensive compliance assessments to be
triggered or requested before applying an 8 week non-payment period. Like most
of the submissions to the Inquiry, we are concerned however by the lack of a
reference to this initiative in the legislation. It is a key part of the new
process in attempting to engage job seekers and identify their barriers to
employment yet it is not provided for in the Bill.
We
understand the Department to be saying the Comprehensive Compliance assessment
is essentially an administrative process and as such need not be referenced in
the legislation. We appreciate that the details of the process may be more
appropriately determined through a legislative instrument or guidelines but
believe it would enhance the integrity of the system if the process had a
legislated base.
Most
of the submissions to the Inquiry called for consistency in the provisions
relating to "serious breaches" and the preclusion period voluntary
unemployment. ACOSS notes in their submission that around one third of 8 week
non-payment penalties are from 'serious breaches' related to previous
employment.[10]
The changes in the Bill do not affect these
types of breaches. For example there is no ability to undertake a serious
failure requirement and there is no discretion in applying the 8 week
non-payment penalty for voluntary unemployment. This is inconsistent with the
stated policy of the government to focus on re-engagement. Mission Australia argues:
"..that the
legislation be amended to allow all job seekers that have an eight week
non-payment period applied to them have the opportunity to engage in a
"serious failure requirement" in order to access income support
payments irrespective of the reason for unemployment.
A willingness by job
seekers to engage in periods of intensive activity, even when due to the
application of a "serious failure requirement", is to be encouraged
and recognised. It serves to maintain continuity of engagement with an
employment services provider and participation in activities that are intended
to support the achievement of sustainable employment outcomes."[11]
The
National Employment Services Association made the point in relation to the need
for discretion even where a person has been sacked because of misconduct:
"lots of job
seekers we see have been sacked because of misconduct, but it becomes fairly
evident that the misconduct was a result of mental health issues or other
personal circumstances that interfered, not that they were intentionally
sabotaging work to go back to welfare. The ability to distinguish between some
of these factors and better protect the people who are in those positions would
be welcomed."[12]
Recommendation
3: If the 8 week non-payment penalty regime is continued, that the Bill be
amended to provide consistency in relation to the Secretary having discretion
in applying the 8 week non-payment penalty and the ability of all person
receiving the penalty to re-engage through serious failure requirements.
Recommendation
4: That the Comprehensive Compliance Assessment process is referenced in the Bill.
"no show no pay" and connection and
reconnection breaches
One
of the key elements of the reforms introduced by the Bill is the "no show no
pay" regime for certain activity related breaches. The evidence to the
Inquiry highlighted a number of concerns with this scheme.
Key
concerns are that there is no upper limit on "no show no pay"
penalties, penalties cannot be recovered through re-engagement and hardship
provisions do not apply. There is also the concern that even a 1 or 2 day
deduction may make it more difficult for people to comply. These factors lead
the National Welfare Rights Network to argue that "no show no pay" is
worse and harsher than the current regime and at the very least could result in
severe financial hardship for job seekers.[13]
There
is also concern about the timing of the penalty. The Government has indicated
the intention is that the penalty will be deducted from the current payment
period or the payment period immediately following the breach. Concern was
expressed that this provided practical difficulties such as too little time for
people to prepare for a loss of income and gave insufficient time for
Centrelink to ensure it was making the correct decision.
There
was considerable confusion about the extent of discretion afforded to
employment service providers in reporting "no show no pay" breaches
to Centrelink. Most witnesses were unsure of the level of discretion employment
service providers would be able to exercise. It is of concern that even at this
stage of the development of the new system key employment service providers
were unaware or confused about the level of discretion they will have in the
new system. In evidence to the Inquiry, the Department clarified that
employment service providers will have discretion in whether to not to report a
breach to Centrelink. The Department indicated the discretion is provided for
in the Request for Tender for Employment Services and will be part of the
contractual provisions. We find it
strange that such a key element of the Government's new policy is being
implemented through the tender documents without any legislative basis.
While
the Request for Tender document outlines that employment service providers have
a discretion as to whether they report an activity breach which will result in
a no show no pay" penalty, Centrelink has no discretion in applying the
penalty, except to the extent they can assess whether the person has a
reasonable excuse. The discretion given to providers is very welcome but we
would have liked to see Centrelink being able to exercise discretion in the
actual application of the penalty.
Similarly,
for connection and reconnection failures there is a lack of discretion on the
part of Centrelink to apply the penalty, hardship provisions do not apply and
there is no ability to "work off" the penalty.
We
are particularly concerned about the impact this system may have on Indigenous
income support recipients. Under the current system we have seen a very
significant increase in breaching with a disproportionate increase in
Aboriginal communities. There is also anecdotal evidence of significant rolling
breaches in Aboriginal communities resulting in complete disengagement from the
system. There are real risks that the 'no show no pay' system could result in
disengagement for particularly vulnerable job seekers.
Recommendation
5: That the Bill be amended to provide
that the "no show no pay" scheme and connection and reconnection
scheme contain hardship provisions to allow penalties to be recovered through
reconnection, similarly to serious failures.
Recommendation
6: That the Government provide a legislative basis for employment service
providers to exercise discretion in reporting breaches to Centrelink.
Recommendation
7: That the Bill be amended to provide
Centrelink with discretion in applying a "no show no pay" or
reconnection penalty.
Vulnerable jobseekers
A
key concern of the Australian Greens is the impact on the new system on
vulnerable jobseekers. Many jobseekers face multiple barriers to engaging in
work such as mental health issues, poor language skills, and homelessness, and
these barriers need to be taken into consideration at all stages of the system.
One way to address this is to ensure appropriate discretion is provided in the
application of any penalties.
The
National Welfare Rights Network is particularly concerned about the lack of safeguards
for vulnerable people in the Bill.[14]
They question the effectiveness of vulnerability indicators and raised concerns
that people identified as vulnerable could still be subject to penalties
including "no show no pay" and the 8 week non-payment penalty.
Another concern is people with undiagnosed or unacknowledged mental health
issues potentially being excluded form the limited protections provided by
vulnerability indicators.
A
related concern is the way homelessness is taken into account in the compliance
system. There are two aspects to this: firstly, how the particular
vulnerabilities of homeless jobseekers are taken into account and, secondly,
the potential for the compliance system itself to place people at risk of
homelessness. Homelessness Australia brought to the attention of the Inquiry that there is no
definition of homelessness in the Social Security Act to provide a consistent
definition in respect legislative instruments and guidelines. They also
indicated that the definition currently used in the reasonable excuse
legislative instrument is very narrow and only applies to when an individual is
sleeping in a non-permanent location on the streets or in a refuge. This is a
completely inadequate definition of homelessness and we support Homelessness
Australia's recommendation that the Government define homelessness to reflect
the cultural definition of homelessness used in the Census.
Evidence
to the Inquiry also raised important issues concerning the hardship provisions
and the usefulness of vulnerability indicators. The National Welfare Right
Network argues that the criteria for the hardship provisions need to be
expanded.[15]
At present a person needs to be in severe financial hardship and fall into a
class of person specified by the Secretary. The determination of these
categories will be made by a legislative instrument but the explanatory
Memorandum indicates it will be limited to current financial case management
categories. The National Welfare Rights Network suggests these are too narrow
and exclude many people who would otherwise be considered vulnerable. We think
there is merit in that view and urge the Government to expand the criteria to
cover a broader group of vulnerable job seekers.
The
Greens support recommendations 1 and 2 of the Majority Report for DEEWR to
review the effectiveness of vulnerability indicators and for the Government to
include the Census definition of homelessness in all relevant legislative
instruments and guidelines.
Recommendation
8: That the government broaden the hardship provisions to include other
genuinely vulnerable jobseekers.
Legislative instruments and tender document
A
further issue raised in the course of the Inquiry relates to the amount of
detail left to legislative instruments or mentioned in the Request for Tender
but not in the Bill. We acknowledge that
regulations and legislative instruments play an important role in supporting
legislative frameworks.
However,
we would urge the Government to revise the matters they are leaving to legislative
instruments and carefully consider whether there is scope for some of these to
be provided for in the legislation. We have already referred to the
comprehensive compliance assessment process which we believe should be
referenced in the legislation. Other matters include the number of breaches
before a comprehensive compliance assessment is automatically triggered and the
timing of deductions for "no show no pay" penalties.
At
the very least the Government should release exposure drafts of the key legislative
instruments to ensure a proper process of consultation with stakeholders and
parliamentary scrutiny. Ideally, the Senate should have exposure drafts to
consider in the course of the debate on the Bill. Otherwise we are debating the framework without
relevant and significant detail.
Recommendation
9: That the Government provide exposure drafts of key legislative instruments
such as those detailing "reasonable excuse" and "hardship"
and the comprehensive compliance assessment process.
Review and further reform
The
Department in its evidence to the Inquiry indicated there would be a "very
rigorous evaluation" of the new system. We support a robust review to be
conducted after 12 months of the new system. In particular we would like to
see the government pay specific attention to the impacts of the new system on
Indigenous jobseekers. It is vital that the new system meets the needs of
Indigenous communities and that breaching rates are minimised. As such we
support recommendation 5 of the Majority Report on the collection of
comprehensive data in monitoring the new compliance system.
The
reform of the compliance regime is an important measure but there are other
aspects of Welfare to Work we believe the Government should also move to
reform.
One
of the most contentious aspects of the welfare to work reform was the changes
directed at single parents. The Smith Family eloquently reminded the Inquiry
of the particular needs of single parent families but also the importance of
such families being supported:
"The Smith
Family has an emphasis on breaking what we see as the nexus of
intergenerational disadvantage. Parents significantly shape their children's
development, and thus influence the life outcomes of their children. Another
concern is therefore that low-income, low-skilled parents are more likely to
take on jobs with long or unusual hours then those with stronger qualification
to negotiate with and that this may result in children missing out on parental
help for homework, family holidays and, more broadly, parental support during
key transitional stages in their lives."[16]
The
majority of single parents on income support are single mothers. We urge the
Government to revisit the policy of putting single parents onto Newstart with
all the attached participation requirements, including the downgrading of
educational opportunities provided to single parents.
Senator Rachel Siewert
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