‘Rushed’ welfare payments overhaul will cost JobSeeker recipients up to $457

The Morrison government has been accused of trying to 'rush' through welfare payment changes.

The Morrison government has been accused of trying to 'rush' through welfare payment changes. Photo: TND

More than 140,000 JobSeeker recipients will be up to $457 worse off under a planned job services crackdown, a Senate hearing has heard.

The Morrison government is trying to save $191.6 million over four years by dumping a grace period that backdates JobSeeker payments to when a claim is first made, instead requiring recipients to finish a job plan first.

As The New Daily reported in May, it’s part of an overhaul of employment services that will cut another $352 million from the system over four years. 

About 144,000 people will lose between $346 and $457 in payments in 2022-2023 on average under backdating changes, government officials revealed on Friday – much higher than earlier estimates of $83.

“The behaviour we want to see is them [payment recipients] engaging with digital services … to agree their job plan,” government official Melissa Ryan said.

Excluding those who complete plans immediately, it takes 12.4 days on average for people to move from making an income claim to completing a digital job plan – officials hope a crackdown will reduce this by 2 days.

Employment department officials said there are “technicalities” in those figures though, but did not specify exactly what they were, taking questions on notice instead.

“We hope they [payment recipients] will be able to have a lot more choice and control in how they meet their requirements … they could agree [to] a job plan and then immediately vary it,” Ms Ryan explained.

Welfare advocates warn of  ‘catastrophic’ impacts

But welfare advocates fear JobSeeker and Youth Allowance recipients will rush their jobs plans under the rules and will also be punished for failing to quickly navigate the new digital system.

Currently JobSeeker pays just $44 a day, a figure that is below the poverty line.

“The more days you have $0 instead of $44, the more likely you are to be thrown into homelessness, to get behind on your bills, to not be able to eat,” anti-poverty centre spokesperson Kristin O’Connell told TND. 

“The real impact on people’s lives will be catastrophic.”

Ms O’Connell presented evidence at the Senate hearing on Friday along with several other advocates, most of whom said the reforms are being rushed through without time to consider the consequences.

Australian Council of Social Services (ACOSS) advisor Peter Davidson said legislation enabling the new system – the most significant overhaul of employment services in decades – must be delayed by two months.

The laws were only introduced into parliament two weeks ago.

“This matters a lot for people on unemployment payments. Their income, livelihoods and mental health are at stake,” Mr Davidson told senators.

“We don’t understand why the government is in such a rush to pass this major redraft of social security laws so quickly.”

Richard Butler, a policy adviser at Jobs Australia, which represents non-profit employment services organisations, said he felt “exposed” appearing before senators with such little time to consider the new laws in detail.

“We believe the simplification of the bill is an important action,” Mr Butler said, explaining his organisation supports the main thrust of the Bill.

‘Entrenched inequality’

In broad terms, the new system sets up a two-tier employment services system that splits people into self-managed digital channels and tougher in-person “enhanced services”.

Each stream will have different mutual obligation requirements, including work for the dole programs for those in enhanced services and training for those in the digital system, under a new points-based program.

The government argues the reforms streamline the existing system and make it easier to navigate for job seekers, but Ms O’Connell disagrees.

“The budget saving proposed in this legislation is yet another move from the political establishment to increase poverty and entrench inequality,” Ms O’Connell told Senators on Friday.

“It is depressing that after years and years of evidence provided by many organisations and individuals, the knee-jerk response is to find savings in social security when the need is more urgent than ever.”

Mr Davidson said the bill “adversely affects” income-support recipients, including by watering down protections for carers, people with disabilities and mature-age workers with mutual obligation exemptions.

“They shouldn’t be required to search for up to 20 jobs a month, accept jobs with more than 15 hours a week, or undertake mutual obligations for 25 hours a week, and we would submit nor should others,” he said.

The Senate Standing Committee on Education and Employment hands down a report into the Bill on June 18.

Federal Labor has yet to decide whether it will support the reforms. But if they don’t the government will need votes from Senate cross-benchers.

If the legislation is passed, the new employment services model will come into effect from July 1, 2022.

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