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Thursday, 25 September 2014
Page: 10550


Mr HARTSUYKER (CowperDeputy Leader of the House and Assistant Minister for Employment) (09:41): I move:

That this bill be now read a second time.

Today I introduce the Social Security Legislation Amendment (Strengthening the Job Seeker Compliance Framework) Bill 2014.

This bill will ensure that more job seekers in receipt of income support meet their mutual obligation requirements to attend scheduled appointments with their employment provider.

This will help to promote a more efficient employment services system and enhance the integrity of our social security system.

It has long been a feature of our social security system that unemployed people in receipt of income support are asked to do certain activities in return for that taxpayer funded benefit.

This concept has also received bipartisan support over many years.

One of the activities that job seekers are asked to do is attend scheduled appointments with their employment provider to discuss job options and to review progress in finding work.

These appointments are not onerous and are designed to maximise the chances of a person moving from welfare to work.

Most job seekers are required to attend an appointment with their employment provider only once a month.

Appointments are generally of short duration and take into account the job seeker's capacity to attend at certain times.

Job seekers are given clear and reasonable notice of the appointments, and are also given reminders of their appointments.

This is done both formally—in person or in writing, including time, date, place—and informally via SMS, phone, or email.

Job seekers are also informed in advance that a failure to attend an appointment without giving prior notice may result in suspension of their payment or the imposition of a penalty.

If a job seeker contacts their provider ahead of the scheduled appointment to let them know they are unable to attend due to a good reason, then no suspension of payment or penalty is applied.

And if it is subsequently found that a job seeker has a reasonable excuse for the failure to attend and the failure to notify ahead of time, then no suspension of payment or penalty is applied either.

These are common sense rules in keeping with the types of behaviours and standards expected in the workplace.

However—despite these flexibilities—attendance rates by job seekers at appointments with their employment provider remain unacceptably low.

Similarly, in the 2013-14 financial year 12.75 million compulsory appointments with employment providers were scheduled—and of these 4.47 million were not attended by job seekers.

This is an attendance rate of only 65 per cent and a non-attendance rate of 35 per cent.

This sheer volume of missed appointments creates a huge red tape burden and additional costs for employment providers.

Instead of helping people with their job search, front line staff end up wasting time trying to contact the job seeker to reschedule and in submitting reports to the Department of Human Services.

All of this extra effort on the part of employment providers could be avoided if more job seekers did the right thing first time by either attending the scheduled appointment or picking up the phone to reschedule ahead of time if they are unable to attend.

This is not a big ask.

Apart from the impost on employment providers, the sheer number of people not meeting this requirement undermines the integrity of our income support system.

In 2012-13, over 238,000 job seekers had at least one participation failure applied by the Department of Human Services for missing a regular appointment or a reconnection appointment with their employment provider.

In 2013-14, this had grown to almost 280,000 job seekers. That is more than one in five of all job seekers who received an activity tested payment at some time during the year.

The Department of Human Services only applies these participation failures after a series of checks and balances—such as whether the person should have been required to attend the appointment, whether they had a reasonable excuse or if the notification of the appointment had been sent to the wrong address.

So it is clear that there are 280,000 cases each year where both the person's employment provider and the Department of Human Services agree that there were no extenuating circumstances that explain the job seeker's failure to attend.

Keeping the current rules in place which allow this number of people to fail to attend is not fair by those taxpayers who get up every day to go to work and pay their taxes that help to fund income support payments and our employment services system.

Workers are expected to keep commitments—like appointments—in return for their wages and the same sort of standards should be expected of job seekers in receipt of taxpayer funded income support.

In 2011, the former government introduced legislation that tightened the rules for those job seekers who did not attend appointments.

The then Minister for Employment Participation—the current Member for Adelaide—commenting on the then attendance rate said, 'I believe that attendance at appointments can and must improve. This is why we made an election commitment to strengthen the compliance system.'

The then minister also went on to say, 'All Australians on income support should have the opportunity of work—but with the opportunity comes responsibility—and with this bill we are going to firmly expect that people meet those responsibilities.'

We on this side of the House—when in opposition—supported these measures as a positive first step towards improving attendance rates.

Unfortunately, while the measures introduced have made a modest improvement to the attendance rate—the larger problem still remains.

As I mentioned, 35 per cent of all scheduled appointments are missed each year and more than one in five of all job seekers who receive a payment in any year have at least one participation failure applied for missing an appointment with their provider.

It is time to make further changes to drive improved attendance rates and reduce the red tape burden and financial strain on employment providers and our social security system.

The bill will achieve this by introducing stronger incentives so that more job seekers do the right thing first time round.

Currently, a job seeker who has their income support payment suspended because they failed to attend an appointment can get that suspension lifted simply by indicating they will attendanother appointment.

That is a person can simply say they will attend another appointment—even if they have no real intention of doing so—and still get their income support payment.

Given the sheer number of regular and reconnection appointments that are missed each year, it is clear that the current arrangements are not providing a sufficient incentive for job seekers to do the right thing.

More needs to be done to ensure that more job seekers are attending appointments and not wasting their employment provider's time.

Under this bill, from 1 January 2015, job seekers who have their payment suspended for missing an appointment with their provider—without giving prior notice of a valid reason—will typically only have their suspension lifted when they actually attend another appointment.

This will provide a stronger incentive for job seekers to attend their appointments and remain engaged with their employment provider.

From 1 July 2015, the bill will further strengthen compliance arrangements by providing that, if a job seeker has had their income support payment suspended for failing to attend a regular appointment with their employment provider—and it is subsequently determined that they have no reasonable excuse for that failure to attend—then they will not be back-paid for the period of noncompliance.

This provides a much stronger incentive for job seekers to either attend their scheduled appointment in the first place or to pick up the phone ahead of time, explain why they are unable to attend, and, where it reasonable, get the appointment changed.

This is what is expected of people in the workplace if they cannot make it to work and it is only fair and reasonable that a similar standard is applied to those people in receipt of taxpayer funded benefits.

The bill does not change the rules with regard to reasonable excuses.

The bill will not impact those whose failure to attend is beyond their control, for instance, where they were taken ill or had an unexpected caring commitment and gave prior notice.

And it will not impact the majority of job seekers who attend their appointments or those who let their provider know in advance if they genuinely cannot attend.

As is the case now, job seekers with a reasonable excuse will not have the suspension or penalty applied if they gave prior notice.

In addition, employment providers will remain able to exercise discretion in when they report a failure to the Department of Human Services.

The bill will not remove any of the current safeguards in the system that are designed to ensure that vulnerable job seekers do not incur penalties inappropriately.

Other amendments

The bill will also make changes to provisions that allow job seekers who are 55 years or older and have a full-time mutual obligation requirement to meet that requirement just by undertaking part-time voluntary work or paid work.

With an ageing population, it is important to encourage older people to continue to participate in the workforce, both for the good of the economy and so that they themselves continue to enjoy the benefits of working.

The Australian government believes it is vital that we increase mature age workforce participation, and through the Restart program we are providing strong financial incentives to employers of up to $10,000 to employ an eligible mature age worker. Yet the current legislation effectively allows some job seekers to become parked on income support at age 55 years.

This bill will introduce a provision that will allow cohorts of job seekers who are specified in a legislative instrument to be precluded from these provisions.

These job seekers would continue to participate in employment services and will be required to look for full-time work. For example, it is intended that job seekers aged 55 to 59 years old who would currently be in Job Services Australia would be specified in the instrument.

The bill also makes minor changes to broaden the existing delegation power under social security law to include regulations or other instruments made under the social security law.

The main impetus for this amendment relates to the recent legislative instruments for the Job Commitment Bonus, which contain secretarial powers that will need to be exercised from 1 July 2015.

Conclusion

The Australian government is committed to building a more efficient and more effective employment services system that helps more job seekers into work.

The government is also committed to ensuring the integrity of our income support system so that it is affordable and sustainable over the long term. In order to do that, we need a strong job seeker compliance framework that includes appropriate incentives and sanctions for job seekers.

While the previous government's changes resulted in a modest improvement—it was well short of what is needed.

This bill builds on the changes made in 2011 by introducing new incentives to drive more widespread change in job seeker behaviour. The government is determined to reduce the number of missed appointments each year so as to reduce the red tape burden and costs on employment providers.

The government does not consider it acceptable that job seekers miss nearly 4.5 million appointments every year when it is a simple task to pick up the phone and reschedule.

The government does not consider it acceptable that more than one in five of all job seekers in receipt of income support payments each year have at least one participation failure applied for missing an appointment with their provider.

These figures show that the problem Labor tried to resolve in 2011 persists, and that further change is needed if we are to see a significant reduction in these numbers.

The changes proposed will provide stronger incentives for job seekers to take responsibility and take appropriate action in the first place.

This is the sort of respect and courtesy expected in the workplace, and it is only appropriate that job seekers treat their employment providers in exactly the same way.

All the existing rules with regard to reasonable excuses and protection of vulnerable job seekers will remain in place.

Recently, the government announced its proposed model for a new employment services system. The government is investing $5.1 billion over three years in this new model that is designed to drive stronger performance and better outcomes for job seekers.

The government is committed to reducing red tape for employment providers so that they have more time to spend on what they do best—namely helping job seekers with finding and keeping a job.

This bill will markedly improve attendance rates at employment provider appointments and reduce the costs and impact for employment providers, whilst also maintaining taxpayer confidence in our social security system.

I commend the bill to the House.

Debate adjourned.