- Service provision and program design: For jobseekers
This chapter examines the design and delivery of person-centred, tailored services for jobseekers, particularly as they apply to Job Coach case management services. A truly person-centred employment services system must provide clients with a genuine roadmap to employment: one that recognises there are a variety of pathways to participation, enables choice and control (although this does not mean choices are wholly unconstrained), and outlines commitments made by service partners as part of a genuinely mutual approach to employment support. The current Job Plan in Workforce Australia is not a plan to get a job—it is a cut and paste list of mutual obligations that serves as a compliance monitoring tool. Clients need an actual plan that helps them to understand how the employment services system will help them achieve their goals and map out at least an initial plan to get a jobor build capacity for employment. One way to do this is to document the kinds of supports to be provided, as outlined in Chapter 5, noting that those supports must be aligned to individual’s needs and aspirations as identified during the assessment process but also evolve over time. Goal-based plans along these lines are more effective in helping clients as well as those who work with them. For this reason, it is proposed that a more comprehensive Participation and Jobs Plan form the core of a rebuilt system’s planning tool for clients. This will also underpin a person’s tailored mutual obligations and be a living document—regularly reviewed and adjusted as required. It is envisaged that all clients in the Commonwealth Employment Services System would have a Participation and Jobs Plan. People in digital hybrid services would be provided with guidance on to develop a plan that combines job search with complementary supports and activities. People in case management services would negotiate their plan with their case manager, Job Coach, or service partner. Participation and Jobs Plans would also be in place for those registered with the public sector Employment Services Australia (ESA) Regional Hubs, such as those who have been referred to allied services or social participation programs and those who have failed to meaningfully engage with a contracted service partner. Adjustments to related processes will be required so that people are able to receive initial income support after acknowledging their mutual obligations, which would remain provisional until their Participation and Jobs Plan is in place. A rebuilt employment service, consistent with revised policy objectives, should include overarching goals of helping people to progress into decent, secure work. This will require clear principles to be developed that articulate an Australian view as to what constitutes ‘high-quality’ decent jobs, drawing on international experience and examples. Jobs and Skills Australia (JSA) would be ideally placed to lead this work. Post-placement support will also be a critical element of the rebuilt system, especially in circumstances where the evidence is clear that longer term support is required to help a job match ‘stick’ or to help a person progress from initial or insecure work that may not meet their aspirations. A new service focused on support for career planning, career development and career transition should also be made available, particularly for people in lower-paid and precarious work. There are a number of international examples that the Australian system can draw from, with the career progression service to be established through a process of co-design and trialled before national rollout. The employment services system also needs to ensure that there are flexible funds available to address clients’ barriers to employment. In this regard, the Employment Fund (EF) should be retained and complemented by other funding arrangements for complementary programs and social enterprises (as outlined in Chapter 13). However, the administration of the EF should be overhauled to increase flexibility and reduce the burden and complexity associated with claiming legitimate expenses. Consistent with the view that clients should not be required to shoulder additional costs when searching for work, there should be more certainty around access to EF for some expenses, such as acquiring driver licences or transport costs to job interviews. The contentious issue of providers referring jobseekers to activities, services, or training delivered in-house or by related third parties, and accessing the EF to support such initiatives, warrants a change to the rules. A default principle should be adopted whereby contracted service partners (providers) should not be permitted to refer participants on their caseload to training programs which they or a related entity deliver except with express approval by DEWR. Approval would only be expected in limited circumstances, for example in thin regional markets. Moreover, as a general principle the EF is for the direct benefit of and to pay for things directly for jobseekers, not to support providers to deliver services and activities that they do not want to provide at their own expense. Consistent with the Committee’s recommendations in its interim report—for ParentsNext’s Participation Fund—it is proposed that clear rules be developed which prohibit referrals to, and expenditure on, in-house or related entity programs except where explicitly permitted (whether in general guidelines or case-by-case approvals). When developing these rules, reasonable consideration should also be given to ensuring that clients in thin market areas have access to the training and supports they need, and to ensure that the programs are of high-quality and represent value for money. Clients should be told explicitly where a provider proposes to claim a training or other expense paid to themselves. |
Pathway planning
11.1Within the employment services system, a jobseeker’s commitment to participate in employment services in return for income support is reflected in their Job Plan. The Job Plan is provided for in social security law and is referred to as an ‘Employment Pathway Plan’.
11.2The Job Plan details the jobseeker’s mutual obligation requirements, including:
- meeting points targets via Points Based Activation System (PBAS), including minimum job search requirements;
- attending and acting appropriately during any compulsory appointments;
- following up on work opportunities to which the participant is referred;
- attending and acting appropriately during a job interviews;
- accepting any offer of a suitable job and not voluntarily leaving a suitable job;
- accurately recording or report attendance at required activities; and
- meeting mandatory activation requirements.
- Providers are required to discuss the contents of the Job Plan with the jobseeker to ensure the jobseeker understands the Plan and the potential consequences of non‑compliance with obligations at the first appointment. Those in online services enter their Job Plan upon referral, with additional information available on the Workforce Australia for Individuals website.
- Most jobseekers are subject to RapidConnect arrangements, and accordingly cannot receive income support until they agree a Job Plan (online or with a provider). Those exempt from RapidConnect may also have their income support cancelled if they refuse to enter into a Job Plan.
- Stakeholders expressed concern that Job Plans are little more than compliance tools which set out the jobseeker’s mutual obligations and called for the current Job Plan to be replaced by a genuine roadmap to meaningful employment. At site visits and via evidence to the Committee, providers indicated that they develop comprehensive plans with jobseekers to support progression to employment. However, these are separate from the Job Plan in the social security law and are designed to respond to concerns about high levels of prescription in the formal Job Plan.
- The Committee also heard that jobseekers must have greater choice and control over their Job Plans, and that plans must be a product of negotiation between jobseekers and providers—based on a relationship of trust. Dr Ann Nevile stated that assistance for jobseekers must proceed from mutual accountability. This must involve giving jobseekers and providers freedom to develop tailored JobPlans that set out the aspirations and goals of the jobseeker, actions the jobseeker will take to achieve them, and assistance that they will receive.
- The Australian Centre for Career Education (ACCE) stated that jobseekers feel they have little input to their Job Plan, and that items in the plan may not adequately prepare jobseekers to look for work or support them to achieve their career goals.
- The Australian Council of Social Service (ACOSS) stated that additional time may be needed to negotiate a Job Plan and asserted that a person’s first income support payment (at a minimum) should not be contingent on signing a Job Plan—to give participants time to consider options, obtain advice, and put forward proposals.
- Other stakeholders indicated that the Job Plan must recognise that employment may not be appropriate in the immediate or short term, and plans should capture a range of vocational and non-vocational supports. This was broadly consistent with the view put forward by the Brotherhood of St Laurence (BSL) that employment services must adapt to participants’ life stages and pathways to employment:
[Workforce Australia should] work across the life course and with the types of jobseekers that are presently in the … system, and pick up what are described as capability pathways—things that range from social participation, pre-vocational programs and then employment pathways … [T]here is quite a heterogeneous group that require a differentiated approach based on their life stage and where they are, which is why we are quite worried about the adaptability of the present system and the providers within it to work for those jobseekers.
11.10During its European delegation, the Committee heard that other jurisdictions and programs have adopted alternative ways of mapping pathways to economic and social participation. For example, in the Netherlands there is a strong focus on mapping a client’s skills rather than focusing on specific roles or qualifications. The Committee heard that this supports lifelong learning and development.
11.11The National Employment Services Association (NESA) stated that genuine case management involves giving a jobseeker agency to determine an appropriate plan and coordinating support to address the jobseeker’s needs. This includes assisting the jobseeker to navigate and access a range of service networks and supporting joined-up, wrap-around service delivery.
11.12The Department of Employment and Workplace Relations (DEWR) noted that the Job Plan has limited functionality in terms of mapping a participant’s pathways to employment and is a means of formally recording a participant’s obligations. Instead of setting fixed requirements in Job Plans, Workforce Australia uses PBAS to encourage participants to exercise choice as to the activities they complete.
Defining and measuring job quality
11.13Stakeholders indicated that there is a need to define ‘quality’ jobs for the purpose of the employment services system, particularly to enable pathways to employment which focus on sustainable work and career planning. Stakeholders also provided examples of where attempts have been made to define ‘quality’ or ‘decent’ work.
11.14Social Ventures Australia (SVA) noted that both the Organisation for Economic Co‑operation and Development (OECD) and the UK Government have done ‘considerable work’ identifying indicators of quality employment, stating that employment services could be designed as part of a wider strategy to improve quality of jobs nationally.
11.15The OECD’s framework to measure job quality uses the following three indicators: earnings, labour market security (including risk of job loss and its economic cost for workers) and working environment (non-economic aspects of job quality such as the nature and content of work performed, work time arrangements, and relationships) for benchmarking job quality across member countries.
11.16The UK’s Office for National Statistics defines a series of measures which seek to capture ‘quality’ employment, including work hours; overtime; contract type and zero-hours contracts; pay; career progression; employee involvement in decision-making; union representation; and health and safety. These are also reflected in ‘Measuring Good Work’ research conducted by the Carnegie Trust, which emphasised non-economic aspects of job quality such as health, safety, and psychosocial wellbeing; nature of work; social support and cohesion; and work-life balance.
11.17Defining ‘quality’ jobs is also a live issue in Australia. For example, the Melbourne Institute attempted to define job quality using the Household, Income and Labour Dynamics in Australia (HILDA) survey. Boosting job security, wages, and other indicators of job quality were considered at the 2022 Jobs and Skills Summit.
11.18Jobs and Skills Australia (JSA) indicated that their legislative framework would permit the organisation to develop an accepted view of ‘decent’ or ‘quality’ jobs. However, JSA also acknowledged that developing such as view would require extensive qualitative research and consultation with key stakeholders.
11.19Stakeholders also indicated that additional data will also be required to assess whether Workforce Australia is successful in moving jobseekers into ‘quality’ employment. This may include data on the length of time a jobseeker has been in a work (beyond current 26-week timeframes), average wages in jobs obtained through employment services, the extent of career progression, and feedback on whether employment has contributed to overall wellbeing.
Post-placement support and career progression
11.20Several stakeholders indicated that there is a greater need for support of jobseekers post-placement, as well as for those in employment but at risk. The level and type of support needed will vary according to the individual and will fluctuate over a person’s career. Professor Jeff Borland noted that best practice in post-employment support involves ongoing monitoring and advice to employers and employees, tailored to the needs of both parties. An example of effective support would be providing access to a support worker who an employer can call should difficulties arise. The support worker might also meet regularly with jobseekers.
11.21Stakeholders indicated that post-placement support could be enhanced, noting that this will require additional investment. WDEA Works proposed that funding be made available to for post-placement support for long-term unemployed (LTU) people; that additional subsidies (beyond wage subsidies) be offered to employers; and that career development resources be developed for participants.
11.22NESA expressed support for piloting a career development approach to employment services, noting that there are various international examples which could be used as models. NESA stated that a career development approach would involve:
- regular case management support to build capacity and high-level employability skills and address risks to work retention;
- support to identify skills pathways and coordinate access to appropriate training to meet learner needs; and
- a development plan informed by the employer’s skills needs to enable participants to add value to the employer’s business while enabling opportunities for promotion and greater employment security.
- NESA’s proposal was reflected in more general support for expanding eligibility for employment services to current employees seeking additional hours or to progress in their careers—particularly to employees in low-skilled, low-paid, or precarious work. MAX Solutions (MAX) stated that this proposal would:
… enable providers to engage with job seekers who are in work to support improved quality, quantity, and sustainability of employment through career advancement and career laddering approaches, or skills development and job search support to explore external opportunities without having to disengage from existing work.
11.24The Disability Employment Services (DES) program provides support to current employees via the Work Assist program. It also supports eligible employees who have difficulty fulfilling the requirements of their role due to injury, disability, or health condition.
11.25Certain organisations have also implemented their own career development services For example, the Australian Services Union (ASU) noted that it administers a Job Connect program to support members develop careers in the community and disability support sectors.
11.26The Committee also heard that providers are not incentivised to offer post-placement support over the long-term (beyond 26-weeks). Stakeholders called for the payment framework for employment services to recognise longer-term outcomes to encourage providers to invest in capacity-building and career progression. The same time also heard that current funding arrangements can incentivise providers to monitor participants’ engagement with their work placements solely for the purpose of achieving paid outcomes—rather than providing genuine support.
The Employment Fund
11.27The Employment Fund (EF) is a flexible pool of funds available to Workforce Australia Services providers and the Digital Services Contact Centre (DSCC). It can be used to purchase goods and services to help participants to secure sustainable employment and support them after they have started work.
11.28Notional credits are allocated for each participant in Workforce Australia Online and Workforce Australia Services, as follows:
- For Workforce Australia Online, $300 is allocated for each new participant, and $75 was allocated for each participant who transitioned from jobactive.
- For Workforce Australia Services, $1,600 is allocated for each new participant, and between $400 and $1,200 was allocated for each participant transitioning from jobactive depending on the participant’s period of unemployment.
- Expenditure from the EF is at the discretion of the provider and the DSCC, based on individual circumstances. Moreover, credits are not quarantined to one participant. Providers and the DSCC can, for example, use the EF pay for items for a single participant that exceed their individual allocation, or use the EF to set up larger programs or services. This is provided that expenditure satisfies principles such as funding integrity and value for money and falls within set funding categories.
- As set out in Table 11.1 below, as of 31 December 2022 approximately 23 per cent of total EF funding had been committed. Most funding was committed for participants in Workforce Australia Services, reflecting the different service needs for participants in digital services and those in provider-led services.
Table 11.1EF usage as of 31 December 2022
| | | | |
Workforce Australia Online | $15,910,350 | $471,918 (3%) | 807 | $585 |
Workforce Australia Services | $462,666,000 | $107,519,555 (23%) | 114,663 | $938 |
Total | $478,576,350 | $107,991,473 (23%) | 115,470 | $935 |
Source: DEWR, Submission 254, p. 202
11.31Expenditure is below long-term trends, as participants who transitioned from previous employment services attracted additional credits which provide a significant one-off increase. Data for the period July 2022 to September 2023 suggests that there has been an increase in expenditure from the EF, with 41 per cent ($300.4 million) of the $727.6 million in credits allocated providers having been committed over that period. In addition, in the first year of Workforce Australia, around $1.28 million was spent by the DSCC from the EF.
11.32There was general support for the policy objectives of the EF, with some individuals noting that they had benefited from financial support for work-related items. Others noted difficulties in accessing EF following discussions with their providers in relation to training or licensing.
11.33The Committee also heard that administrative and governance arrangements for the EF require improvement if the EF is to be a truly effective source of financial support for jobseekers. A key concern was that claiming under the EF is complex and represents a significant administrative burden. This leads to providers being reluctant to use EF to support jobseekers. CoAct stated:
[There have been] many examples where, despite a jobseeker achieving an employment outcome, incorrect coding of an expense in an Employment Fund claim resulted in denial or claw-back of payments. Concerns around the potential for inadvertent non-compliance, coupled with ever increasing restrictions on the range of allowable expenditure, has resulted in many providers being unwilling to use the Employment Fund to support jobseekers.
11.34Stakeholders also observed that EF guidelines restrict expenditure to work-related expenses and vocational supports, notwithstanding that jobseekers face a range of complex barriers to employment and require supports via multiple service sectors.
11.35The Committee heard that the following supports and training opportunities that can be critical to improving jobseekers’ employability are not funded, are underfunded, or are difficult to access through the EF:
- soft skills development such as literacy, numeracy, and digital literacy, including non-accredited and in-house training;
- bespoke help such as wellness programs and confidence-building initiatives;
- post-placement support for jobseekers and employers;
- mentoring and coaching supports for First Nations peoples;
- devices and subsidies for phone and internet connections and data; and
- support obtaining drivers’ licenses—including meeting the costs of lessons.
- Stakeholders told the Committee that guidelines for the EF can stifle innovation and prevent the development of bespoke solutions, asserting that there must be greater flexibility in how the EF can be used Sarina Russo Job Access (SRJA) stated providers should be able to use the EF to assist people and families to address the causes of their unemployment, including addressing human capital-related needs.
- Yilabara Solutions similarly called for the flexibility to support First Nations peoples, including provision through the EF for:
- obtaining personal identification;
- obtaining Proof of Aboriginality;
- building stronger connections to culture and language;
- providing of cultural and professional support;
- engaging First Nations peoples in community liaison roles; and
- transport to and from training, medical, housing or welfare appointments.
- SYC Ltd (SYC) noted that under the New Employment Services Trial (NEST) there was considerably more flexibility to use the EF for skills training and workplace ‘taster’ programs. SYC also noted that Transition to Work (TtW) does not include an EF or similar financial entitlement. However, providers receive significantly higher upfront payment which can be used to tailor services to participants’ unique needs. According to SYC, this enables TtW providers to deliver better employment outcomes than Workforce Australia providers.
- A related concern was that providers have discretion over how EF credits are spent and may elect not to fund supports, irrespective of whether the supports are vital to a jobseeker’s path to employment and fall into a specified funding category. One jobseeker stated:
I raised the issue of drivers’ licenses on one occasion as many jobs say this is an essential requirement (when really it shouldn’t be). I asked if they would pay for me to get lessons but alas the one skill that may have been of great help to me, they could not help me with.
11.40The Committee also heard that the overall amount allocated to the EF for each participant ($1,600) is insufficient, particularly in light of the increasing complexity of jobseekers’ needs. Stakeholders also indicated that there has been a reduction in funding relative to the jobactive contract, as well as a reduction in the number and types of items that may be funded (see above).
11.41As noted in Chapter 4, ACOSS advocated for the establishment of an annual jobs and training offer for LTU people. According to ACOSS, this should be backed by the expansion of national complementary programs so that providers have the tools they need to assist LTU people, and by an annual credit to the EF in respect of LTU people.
In-house services and related entities
11.42Many Workforce Australia providers and related third parties deliver complementary programs and services such as accredited and non-accredited training. Some of fall under the program responsibilities of DEWR, while others could be funded by other sources.
11.43Providers may refer participants to Employability Skills Training (EST) and Career Transition Assistance (CTA) courses delivered in-house or by a related entity. When consultation was undertaken on purchasing arrangements for Workforce Australia, it was proposed to ban referrals to in-house and related entity training for EST. However, this was revised following strong feedback from industry. Providers are now required to ensure that at least 50 per cent of the clients they refer to EST and CTA are directed to other providers delivering those programs. In addition, EST cannot be funded through the EF.
11.44In the period 1 July 2022 to 30 September 2023, there were 1,303 commencements in EST for participants referred to in-house training, for a total value of $967,025. Over the same period, there were 395 commencements in EST for participants referred to training delivered by a related entity for a total value of $292,425. Based on this data, referrals to in-house training or training delivered by a related entity accounted for 11.5 per cent of commencements (total of 14,729), and 10.6 per cent of expenditure (total of $11.9 million).
11.45In the period 1 July 2022 to 30 September 2023, there were 1,540 commencements in CTA for participants referred to in-house training, for a total value of $2.44 million. Over the same period, there were 106 commencements in EST for participants referred to training delivered by a related entity for a total value of $155,520. Based on this data, referrals to in-house training or training delivered by a related entity accounted for 23.9 per cent of commencements (total of 6,868), and 27.3 per cent of expenditure (total of $9.5 million).
11.46Providers also have discretion on how they use the EF and are allowed to claim expenses under the EF for certain services delivered in-house and by related entities. This includes accredited training and professional services delivered by qualified psychologists or allied health professionals.
11.47In the period 1 July 2022 to 30 September 2023, a total of 166,515 commitments were made from the EF to a provider in relation to good and services produced or delivered in-house (including payments for which reimbursement had not yet been claimed), for a total value of $44.66 million. A total of 37,889 payments were made from the EF to related entities, for a total value of $11.78 million. Based on this data, commitments relating to goods and services produced or delivered in-house or by related entities amounted to 18.8 per cent of expenditure from the EF (total of $300.1million over the period July 2022 to September 2023).
11.48Several stakeholders expressed strong concern in relation to providers referring participants on their caseloads to training delivered in-house and by related entities, noting that this practice gives rise to potential conflicts of interest and leads to participants being placed in poor-quality training that is not be effective in building participants’ capacity or preparing them for employment. Anglicare Australia stated that there is ‘almost no quality assurance’ in relation to these course, and that the courses are ‘unhelpful’ and ‘in many cases pointless’. Anglicare Australia also highlighted findings by the BSL:
[Y]oung people struggling to get into the workforce are not well-served by training unlinked to viable job opportunities, with 20 per cent of long-term unemployed [LTU] young job seekers…having completed three or more courses in the last five years…Instead of linking training and work experience to a real job placement, training has simply become another income stream for providers.
11.49The Australian Youth Affairs Coalition (AYAC) similarly expressed concern about the impact of training delivered in-house or by related entities on young people, stating that young people had reported being pushed into generic training focused on basic tasks rather than being offered the more specific training they had requested.
11.50The Community and Public Sector Union (CPSU) stated that in-house and related entity referrals reflect a clear profit motive within the system, and simply establishes a mechanism for providers to boost their revenue.
11.51Per Capita observed that providers are paid up to 70 per cent of their fee upfront for jobseekers commencing in EST. As many Workforce Australia Services providers also have contracts to provide this training, the incentive to refer people from their own caseload is high and can result in conflicts of interest. Per Capita stated that it will be important to monitor the degree to which this permission is utilised going forward. Per Capita raised similar concerns in relation to the CTA program.
11.52The negative impacts on referrals to in-house and related third party training has been widely publicised, with journals noting that providers are paying themselves a very significant amount each year through in-house and related entity referrals, and that the training delivered can be poor or harmful. There are reports of providers giving jobseekers instructions on how to complete routine personal hygiene activities and suggesting failures to find employment are a result of the jobseeker’s laziness. Negative media attention in relation to these issues has persisted since at least the start of the Workforce Australia contract.
11.53Some providers argued in favour of referrals to in-house services and related third party services, stating that this practice can be beneficial to participants. However, those providers acknowledged the potential for conflict of interest, and stated that measures are (and should continue to be) in place to ensure the services represent value for money. For example, Asuria People Services (Asuria) stated that self-referrals are particularly important where there is only one provider in a region and recommended that guidelines for the EF enable providers to deliver wrap-around, holistic services from common locations—including self-referral where there is a clear benefit to the participant. Bamara expressed similar views, noting that the ability to deliver these wrap-around services from a single location is especially important in the context of supporting First Nations jobseekers.
11.54DEWR also acknowledged that allowing providers to refer their participants in-house services can give rise to conflict where the financial interests of the provider are perceived to be at odds with the participant’s needs.
11.55DEWR stated that it deploys several strategies to mitigate against unscrupulous practices, including monitoring the flow of CTA and EST referrals; specifying maximum per-minute rates that providers may charge the EF for professional services delivered by their own organisation; and limiting fees that can be charged by the provider’s business. DEWR also has strong assurance processes such as ongoing audits, data analytics and participant verification surveys.
Committee comment
11.56A genuinely effective employment services system that seeks to achieve broader objectives including economic security, workforce participation and improved productivity needs to provide jobseekers with tailored, flexible support to meet their needs, informed by an understanding of the jobseeker’s aspirations and the current and future labour market. This should be informed by a clear understanding of whether a job is of higher and lower quality, and whether it will lead to sustainable and secure employment over the longer term. The system must also be underpinned by sufficient and flexible funding arrangements.
11.57The Committee was genuinely stunned to see the reality of the so-called ‘Job Plan’ when DEWR walked members through it in a public hearing. To call it a ‘Jobs Plan’ is frankly Orwellian. It is a list of statutory mutual obligations that an applicant for social security must sign before receiving a payment. It does not outline a roadmap to employment in any meaningful way and in reality the Plan is nothing more than a compliance tool. It bells the cat by revealing the flawed theory and excessive focus on supply-side measures and compliance which underly the current system.
11.58The Committee considers that it is imperative that jobseekers receive the support they need as part of their pathway to employment, in accordance with the principles outlined in Chapter 5 and that the income support and compliance processes be separated from employment services and supports. Especially for people assessed as not suitable for online or hybrid services, this requires a plan which is co-produced with a jobseeker as a genuine roadmap to employment, including recognition that there will be multiple pathways to employment and that some of these will not involve preparing for or obtaining work in the immediate or short‑term.
11.59As part of rebuilding the system including the enhanced assessment process outlined earlier, a reimagined Participation and Jobs Plan is proposed. Such a plan should outline an individual’s strengths and goals and the support that will help to meet these goals, including employment, pre-employment, and pre-vocational supports; training and skills development; work placements; and engagement with allied health, community, and social care services. Supports outlined in the Plan would necessarily vary with the jobseeker’s needs and identified pathway to employment and be a living document.
11.60The Committee understands that several providers have developed similar plans with participants on their caseloads, and that these plans have been more effective in helping participants and providers to map out pathways to employment. In simple terms the Committee encourages anyone interested in this or those responsible for redesigning this part of the system to imagine how they would like to be treated, or how they would assist a friend or family member facing unemployment. This would certainly not be by forcing someone to sign a standard list of dot points that bore no relationship to their aspirations, barriers, or circumstances.
11.61Participation and Jobs Plans must also be based on genuine discussions between the jobseeker and provider, reflect the obligations of each party in terms of engagement and support, and evolve over time as a jobseeker’s circumstances change. People referred to online services should be provided with guidance on how to develop a plan that balances a work first approach and their aspirations and goals.
11.62The Committee acknowledges that in redesigning a new Participation and Jobs Plan, it will be necessary to adjust the processes whereby an individual accesses income support, given the statutory requirement to complete an ‘Employment Pathway Plan’ as a condition of receiving payments. The Committee would expect that a redesigned approach may be achieved without the need to change primary legislation. However, without the benefit of legal and technical advice, the Committee is not in a position to make detailed recommendations as to how this should occur. The Committee notes a number of possibilities and matters for further consideration by DEWR in advising Government, including the following:
- It is reasonable to inform an applicant of their participation requirements (mutual obligations) as part of the application process for income support, and to expect them to acknowledge these before an initial payment is made.
- It is unhelpful and counter-productive to expect a person to prepare a meaningful plan that meets their circumstances in a very short space of time when applying for income support—especially while they are likely under intense emotional and financial stress.
- It is reasonable to impose a timeline on finalising an initial Participation and Jobs Plan, and to set some content requirements for the Plan. It is reasonable that timelines and content requirements be conditions of receiving income support.
- Possible approaches to reconcile dilemmas associated with the interaction between the Participation and Jobs Plan and the receipt of income support without changes to legislation could include:
- Requiring a person applying for income support to acknowledge and commit to a redrafted set of broad and genuinely ‘mutual’ obligations, including:
- the client making reasonable efforts to secure work; to undergo thorough assessment as required by Employment Services Australia (ESA); to prepare a Participation and Jobs Plan within a default timeline; and to comply with the requirements of their Plan and report as required.
- ESA and contracted service partners be available to reassess circumstances and keep the Participation and Jobs Plan updated; to help clients make and prepare for job applications and interviews and secure work; to make recommendation or referrals to local Job Coach case management services and other supports; to help jobseekers access allied and community services; to provide information regarding complementary programs, study and training opportunities and financial support to overcome barriers to employment.
- Making clear that acknowledgment of genuinely mutual obligations is the first phase of a Participation and Jobs Plan, and that income support payments are provisional until a full Participation and Jobs Plan is finalised. Consideration could also be given to a default time by which a Plan must be completed (for example two fortnights).
- In designing the new Participation and Jobs Plan, government should also give consideration to the approach to pathway planning in other jurisdictions. In particular, government should have regard to the ‘A, B, C’ approach (planning for the ‘dream job’, the job for which a client is qualified, and the job a client could reasonably manage) used in the Danish employment services system. Some further detail on this approach is included in Chapter 3.
- Government should also give consideration as to whether a client should be treated as having ‘commenced’ in services when they sign a Participation and Jobs Plan, and whether upfront payments for providers should be linked to the signing of the Plan. Linking signing of a Plan to upfront payments may give the client a stronger basis for negotiating their supports with the provider. However, consideration must also be given to whether this would create a perverse incentive for providers to pressure participants into signing their Plan, even where the Plan does not reflect a genuine pathway to greater social and economic participation.
- The goal-based, pathway driven Participation and Jobs Plan outlined above would be separate to this acknowledgement and should be added to the system for use by all clients—including those who may not be on income support. This would be a living document, reviewed regularly, which sets out the activities with which the jobseeker will engage, outlines how they activities and other support offered will contribute to achieving the jobseeker’s longer-term aspirations, and record participation. It will also clearly detail the obligations of government, providers and the DSCC to the jobseeker, as part of a genuinely mutual approach to employment support.
11.67The Committee recommends that the Australian Government design and implement a new policy framework to give effect to the legislative requirement for an Employment Pathway Plan, which should include the following key elements:
- An acknowledgement of the requirement to show commitment and engage meaningfully with the employment services system and a broad explanation of the genuinely mutual obligations which apply. This includes the preparation of a Participation and Jobs Plan within a default timeline and that a payment is provisional until the plan is approved.
- A new Participation and Jobs Plan is developed: by the participant— online if in hybrid services; with Employment Services Australia if being case managed there; or with a contracted partner Job Coach provider if referred for outsourced case management. This would be a goal-based plan which should include, at a minimum:
- an overview of the participant’s aspirations, needs, and circumstances;
- the support the provider will deliver to help the jobseeker address their needs and achieve their aspirations;
- activities in which the participant commits to engage, including how these will contribute to building capacity and moving toward employment;
- timeframes for completing expected activities; and
- agreed requirements for regular appointments (the timeframe for which may vary depending on individual circumstances).
- The Participation and Jobs Plan is a result of genuine negotiation between jobseeker and provider.
- The Participation and Jobs Plan is regularly reviewed and updated to ensure that it aligns with the current needs and circumstances of the jobseeker.
- Another critical issue, as outlined in earlier chapters, is that the current system primarily cares about quickly moving people off welfare and is blind to economic security. There is a lack of care or concern as to the ‘quality’ of jobs. This lack of clarity may impede career planning and generate confusion in relation to the supports which should be funded and offered to jobseekers. If broader objectives are adopted for a rebuilt system, consideration must be given to whether a job is of ‘higher’ or ‘lower’ quality. This already occurs in other jurisdictions. Without understanding this, it is likely to be difficult to design and implement new initiatives focused on longer‑term career progression and reducing precarious employment.
- A rebuilt employment service, consistent with revised policy objectives, should include overarching goals of helping people to progress into decent, secure work (while recognising that for some people may prefer casual or flexible working arrangements). This will require clear principles to be developed that articulate an Australian view as to what constitutes ‘high quality’ and ‘low quality’ work. These principles should capture matters reflected in international and Australian research, including pay and conditions and the quality of the working environment. Noting that the employment services system should—at least as far as possible—help enable Australia to respond to current and future skills needs, the principles should also capture the longer-term prospects of the relevant industry.
- The JSA conducts substantial research and provides advice on labour market trends, training and skills needs, and current and future skills demand, and it is well placed to lead the development of principles which define ‘decent’ or ‘quality’ jobs. Government would need to consider timing and resourcing questions given JSA’s existing responsibilities and work pressures.
- Metrics should be developed to assess whether the employment services system has been successful in moving jobseekers into higher quality roles and secure work. The Committee sees merit in collecting data on matters such as length of time a jobseeker has remained in a position, average wages in jobs obtained through employment services—collected (potentially) using Single Touch Payroll (STP) data—and the extent of any career progression. Successes in terms of securing higher quality roles might also be measured via jobseeker and employer feedback.
11.72The Committee recommends that the Australian Government, consistent with the adoption of broader objectives for a rebuilt employment services system such as economic security and productivity uplift, develop and articulate:
- guiding principles for job quality informed by international experience and approaches, including a typology of ‘lower’ and ‘higher’ quality jobs, to set out an Australian view as to what constitutes decent work which the system should aspire to help people secure; and
- develop metrics to evaluate the success of the employment services system in supporting jobseekers to obtain ‘quality’ employment.
- Post-placement support is critical to enabling sustainable employment outcomes, including by ensuring the jobseeker adjusts to a new work environment, linking to training or onboarding support that would typically be facilitated by the employer, and paying for work-related items such as licenses, clothing, and tools. These functions can also help reduce perceived risks to the employer of hiring a jobseeker from the employment services caseload.
- There would be merit in establishing a new service focused on career progression, accessible to the occupants of lower-paid, lower-skilled, or precarious employment. This could be modelled on the proposal by NESA that such a service include, among other matters:
- case management support to address risks to work retention;
- targeted support that builds capacity and higher-level employability skills;
- support to identify pathways in and external to the participant’s organisation; and
- employer engagement to coordinate access to training and skills development.
- Noting that this service is expected to be used on an as-needs basis, the Committee considers that a fee-for-service model is the most appropriate means of funding this service. There may need to be prohibitions on contracted service providers from advertising this support or making self-referrals as an integrity and cost control measure with referrals instead coming via ESA.
- The Committee notes that there are international examples of career development programs and encourages the government to learn from these models in developing a service offering for the Australian employment services system.
11.77The Committee recommends that the Australian Government develop—through a process of co-design—trial and evaluate the cost-effectiveness of a career progression assistance program targeted to employees in lower-paid, entry-level, and insecure jobs. This should be funded on a fee-for-service basis.
11.78The Committee concludes that a rebuilt employment services system should retain EF to support jobseekers with funding for work-related matters and individual supports aligned with their Participation and Jobs Plan. However, the Committee is concerned with the scope and complex administration requirements of the current fund.
11.79Evidence is compelling that claiming reimbursement from the EF remains a difficult process and may be discouraging providers from using the EF to support participants. Numerous staff are tied up in administration and payment related activities. Anecdotally, the Committee heard that a key concern for providers are the significant evidence requirements associated with claiming. These issues should be addressed as a matter of some urgency.
11.80Onerous administration requirements appear to be driven by a combination of a lack for clarity over what can be claimed; a punitive culture rather than a relational contracting model between DEWR and providers; and ongoing concern about own and related entity payments.
11.81Clearly it is desirable that administration of the EF be simplified to ensure providers are able to claim reimbursement in a timely manner and are not discouraged from supporting participants on their caseloads—while still ensuring a sufficient level of oversight over public expenditure. The Committee considers that if access to the Fund is to be rationalised and less resources devoted to unproductive administration then all drivers must be addressed.
11.82The primary focus of the EF should be to directly support jobseekers to build capacity and move into employment rather than attempting to strictly control every instance of expenditure. With respect to clarity over what can be claimed, there would be merit in more clearly specifying some items such as Drivers Licences, transport costs to job interviews, appointments, or mandatory activities. There should be increased flexibility in how the EF may be used by expanding categories of permissible expenditure to include supports such as ‘soft skills’ training and mentoring for First Nations peoples.
11.83Jobseekers should be clear and confident they will be supported to meet necessary or unavoidable costs of preparing for and finding employment. Funding should be made available—either via the EF or the creation of a separate entitlement—to meet these costs and should be directly available to the jobseeker. Funding should cover, at a minimum, the cost of transport to attend appointments, meetings, and interviews, and a data allowance to enable participants to access the websites and digital tools.
11.84One way of achieving this is to link financial support (for example, a transport voucher) directly to registration of an activity or recording of an activity in their pathway plan. The Committee leaves the detail of the proposal to co-design.
11.85The Committee also considers that a less onerous and punitive approach by DEWR to policing the fund should be trialled. The overheads involved and consequences for providers of a minor mistaken claim seem disproportionate to the risk, taking account of the number of staff involved and what appears to be terror by providers in getting something wrong even by a few dollars leading to overly risk-averse use of the EF and wasted resources tied up in administration and checking of receipts. A more relational contracting model using a ‘Trust but Verify’ approach and more assurance-based auditing of expenditure would seem reasonable given the relative maturity of the sector while ensuring a more onerous approach continues in relation to any in‑house or related entity payments (discussed further below).
11.86Government should also consider whether additional credits should be allocated to the EF for on an annual basis for very-LTU clients (those unemployed for two years or more), to support ongoing investment in supporting this cohort to achieve the goals and outcomes detailed in their Participation and Jobs Plan.
11.87The Committee recommends that the Australian Government review governance arrangements for the Employment Fund, including administrative requirements for reimbursements and approved categories of expenditure. This should include:
- clarifying the items that should be automatically allowable and directly accessible for jobseekers such as meeting transport costs to interviews, services and mandatory activities; data; and Drivers Licence training and acquisition;
- simplifying the process to claim reimbursements using a less punitive ‘Trust but Verify’ approach to contracted partners to reduce the number of staff devoted to administration and compliance and free up these resources for more productive activities;
- increasing flexibility in how the Employment Fund may be used (for payments that are not to a provider or a related entity); and
- giving consideration to crediting the Employment Fund annually for very-long-term unemployed clients.
- The contentious issue of providers accessing the EF to support activities delivered in‑house or by related third parties (including but not limited to formal complementary programs or training) warrants a change in approach and to the rules. Evidence indicates that this issue is widespread, with almost 20 per cent of all expenditure from the EF from July 2022 to September 2023 being used to fund activities of this kind.
- The use of the EF for activities delivered in-house or by related entities also raises a more fundamental question for a rebuilt system: why there appears to be such reliance by providers on accessing the EF for things the Committee considers should be core activities in a properly functioning, quality service system. Examples of such matters include allied health supports, employability training, and group activities. This question cannot be answered simply but requires the public sector to re-establish a view over time of what a quality service is and what it should cost in order to consider optimal funding mechanisms.
- As a general principle, the Committee considers that the EF is for the direct benefit of and to pay for things directly for jobseekers, not to support providers to deliver services, training or activities that they do not want to provide at their own expense. The Committee instinctively shares community and stakeholder concerns that contracted providers are accessing millions of dollars of funding from the EF for in‑house and related entity payments and the high risk of inappropriate behaviours due to the perverse incentives that arise. However, without a clearer view as to whether the core funding available to providers is sufficient to provide a quality service, it is difficult to form a definitive view whether current access to the fund is driven by profiteering behaviour when providers seek funding for things that they should be paying from their own resources, or whether necessary activities can genuinely only be provided with support from the EF given current funding arrangements.
- Also of concern is the discrete yet related issue of providers referring clients on their caseload to EST and CTA courses that they deliver or which are delivered by a related entity. There has been substantial negative media attention in relation to this issue, with some accounts claiming that millions have been ‘skimmed’ off government contracts by providers seeking to exploit the system by claiming payments for (often irrelevant or ineffective) training delivered in-house or by related entities. Government data confirms that referrals to in-house courses or courses delivered by related entities is a widespread phenomenon. Approximately 11 per cent of all commencements in EST, and 24 per cent of commencements in CTA, follow referrals from the same entity which delivers the training, or from a related entity.
- The Committee accepts evidence that many of the programs and training that jobseekers are referred to in related entities are of little to no value to the participant and seem to be driven primarily by mutual obligations requirements even aside from commercial incentives, and in the worst cases result in reports of participants suffering psychological harm. DEWR implicitly acknowledged this issue when it originally proposed that referrals to in-house courses and courses delivered by related entities for the EST program be prohibited. However, the Committee also acknowledges that training or services delivered in-house or by a related entity can, if properly managed, can be critical to ensuring that participants have access to employability and skills development in thin market areas.
- Until a rebuilt system re-establishes a better evidence base regarding funding levels and a better commissioning and payment model, consistent with the Committee’s recommendations in its Interim Report, default rules should be developed to prohibit referrals to, and expenditure on, own entity or related entity payments except where explicitly permitted (whether general guidelines or case by case approvals). This is guard against the risk of providers exploiting system for financial gain, and to help ensure that participants are only referred to high-quality training.
- Guidelines should also be developed to ensure that in making rules and considering requests by providers, government gives reasonable consideration to ensuring that participants in thin market areas have access to the training and supports they need, and to ensure that the programs are of high quality and represent value for money. There should also be a safeguard that requires a client to be told in every instance when an own or related entity payment is sought from the EF, that activities funded must never be imposed by a provider on a client, and that they be advised of potential alternatives given the conflict-of-interest risk.
- The Committee is also recommending in Chapter 13 that as part of rebuilding a Commonwealth Employment Services System, complementary programs be consolidated, with the supports provided through EST rolled into the core services of providers and regional gateways overseen by ESA. It is proposed that CTA would be retained. Accordingly, policy settings relating to referrals to in-house and related entity training programs and services would need to be reviewed during the reform process.
11.96The Committee recommends that the Australian Government establish a clear default principle that:
- Providers are not permitted to refer participants on their caseload to training programs which they deliver or which are delivered by a related entity except with express approval by the department which would only be expected in limited circumstances. Guidelines should be developed to clarify the circumstances in which approvals may be given. These should require DEWR to have regard to whether refusing to approve referrals would unduly restrict access to training or support in thin market areas, and to whether the training is of high quality and represents value for money.
- Providers are not permitted to use the Employment Fund to pay for activities, services, or programs that they deliver or which are delivered by a related entity except with express approval from the department. Guidelines should be developed to clarify the circumstances in which these approvals may be given.
- There should also be a safeguard that requires a client to be told in every instance when an own or related entity payment is sought from the Employment Fund, that activities funded must never be imposed by a provider on a client, and that they be advised of potential alternatives given the conflict-of-interest risk.
These default principles should be reviewed as part of the reforms leading to a rebuilt Commonwealth Employment Services System to determine whether they remain necessary.