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Modernising Australia's welfare system.

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Modernising Australia's Welfare System

Jenny Macklin,Julia Gillard,Mark Arbib posted Wednesday, 11 August 2010

A re-elected Gillard Labor Government will put in place new measures to help encourage workforce participation and focus new effort on modernising Australia’s welfare system.

Federal Labor will trial a relocation assistance package to help connect jobseekers with jobs in other parts of Australia. We will also impose tougher new rules for jobseekers who fail to meet their obligations with a job service provider.

These changes build on the reforms to education, welfare and employment services that Federal Labor has delivered during the past three years.

Connecting people with jobs

A re-elected Gillard Labor Government will offer assistance of up to $6,000 to unemployed Australians who relocate to take up a job.

The grants will be in the form of reimbursement of actual expenses incurred in the relocation, such as removalist’s costs. They will also cover other forms of support, such as employment services, mentoring or community engagement.

Relocation assistance will be $6000 for those moving to a regional area and $3,000 for those moving to a metropolitan area. Relocation assistance would not be available to move between or within a capital city.

The Gillard Labor Government is committed to putting in place practical assistance that will help the long term unemployed move to areas which offer greater employment opportunity.

Relocation assistance will use existing definitions about reasonable travel within the employment services system.

Our proposal is to trial the provision of assistance for up to 2,000 eligible job seekers over two years from 1 January 2011.

Assistance will be targeted to those who have been unemployed for more than 12 months and who reside in an area of high unemployment, so they can take up an ongoing full time position or apprenticeship in a new area.

Federal Labor is tackling the barriers that prevent jobless Australians from taking up meaningful opportunities to work in new locations. We understand that families with dependent children will incur higher costs when relocating. Accordingly, we will provide these families with an additional $3,000 to help meet the extra costs.

As part of this package, employers will receive a $2,500 financial incentive for taking on a relocated jobseeker. This subsidy will be $500 per week for the first five weeks.

If a job seeker leaves a job placement for which they received relocation assistance within 6 months without good cause, the standard non-payment penalty period for unemployment benefits will be increased by 50 per cent, from 8 weeks to 12 weeks.

This proposal will cost $14.8 million over three years from 2010-11. These costs will be fully offset from unused quarantined funding under the Employment Pathway Fund that is already provided for in the Budget.

Tougher rules for jobseekers

The second component of today’s announcement relates to tougher rules for jobseekers.

For those jobseekers currently receiving welfare payments, the Gillard Labor Government will tighten up the rules to ensure they are making the most of opportunities to find work.

A new penalty for non-attendance at employment services appointments will be introduced to ensure jobseekers make use of assistance that will help improve their chances of getting a job.

The current attendance rate for employment services appointments is just 58 per cent. Of those who don’t attend, approximately half have been recorded as having a valid reason for missing the appointment.

The overall rate of non-attendance of 42 per cent needs to be reduced to improve engagement and job outcomes.

Guidelines will be strengthened to ensure that all job seekers are aware that failure to attend appointments, or other activities required by their employment service provider, may result in an immediate withholding of income support until re-engagement with their employment service provider occurs.

These new penalties will target job seekers who fail to attend an employment service appointment or any other related activity required by the employment service providers such as training programs or a Work for the Dole project.

Under the new rules, penalties can apply from the first instance that the jobseeker fails to attend an appointment.

The first time a jobseeker fails to attend a Job Services Australia interview, Centrelink will put a temporary stop to a person’s income support payments. Payment will only re-commence once a jobseeker contacts Centrelink and confirms they will attend their rescheduled appointment. On first failure, full back pay will be provided.

On the second failure, payments will be immediately stopped and there will be no back pay. Payments will immediately restart from the time of re-engagement.

These tougher new rules will improve on the current situation in which jobseekers are only advised that failure to comply with a requirement could impose future penalties.

This new regime of responsibilities and penalties will require jobseekers to attend Job Services Australia interviews.

The new rules will apply from 1 July 2011 and allow employment services providers to report jobseekers who have failed to attend appointments directly to Centrelink. Centrelink is the agency of government responsible for the administration of these penalties.

Those job seekers with a known vulnerability, such as homelessness or mental illness, will be eligible for an exemption.

If a jobseeker has a reasonable excuse for non-attendance, such as being unwell, and the provider is informed prior to the appointment, then no penalty will apply. This is similar to when an employee takes responsibility for their own actions by calling their employer in the morning to advise if they are sick and unable to come to work that day.

Strengthening compliance

Federal Labor will also strengthen the compliance regime on the use of default income in child support assessments.

Under legislative changes made in 2006 and implemented during 2008, a new default income of two thirds of male total average weekly earnings (MTAWE) has applied in cases where a person does not lodge their tax return for more than two years.

This has led to a more than 300 per cent increase in the use of this default income where it is lower than the person’s previous taxable income.

A change will be made to strengthen compliance so that when a person does not lodge a tax return, the default income will no longer apply where that income is lower than their last known taxable income. Instead, the old taxable income will be indexed by wages growth. This stronger compliance measure will save $58.8 million over four years.

These reforms are vital to lifting Australia’s long term prosperity by increasing productivity and workforce participation. They are essential for maintaining our economic growth as the Australian population ages.

A re-elected Gillard Labor Government will keep moving forward on modernising Australia’s family support system - because with opportunity comes responsibility, if all Australians are to have a sense of dignity and worth.

Further information on these measures can be accessed at

Tags: families, Gillard, Labor, support, Welfare Tags: Bowen, Cheeseman, Chris, Darren, Marles, Richard