Budget 2019: New Employment Services Model

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The “New Employment Services Model(the Pilot) is intended to trial the model which will eventually replace the existing ‘jobactive’ program.

Brief overview

The Pilot will provide digital employment servicing with associated training for people who are deemed as ‘job-ready jobseekers.’ ‘Enhanced Services’ will be offered for people identified as ‘disadvantaged jobseekers.’

The Pilot is to commence as a trial from 1 July 2019 and will be implemented in phases, with enhancements to the digital system progressively rolled out throughout the trial.  The Government intends to expand the Pilot nationwide by July 2020.

The two trial regions are:

  • Adelaide South in South Australia, and
  • Mid North Coast in New South Wales.

Criteria used to determine if a person is ‘job-ready’ or ‘disadvantaged’

When lodging a claim for an income support payment, the answers provided by the person will determine whether they are deemed to be either ‘job-ready’ or ‘disadvantaged’, and to what extent they will be required to satisfy their activity requirements and reporting obligations online.

Department of Human Services will design questions that will supplement the claim forms. These questions will be used to determine a person’s ability to access online services and to assess their levels of digital literacy.

The Pilot

The Pilot is to be delivered in three streams intended to cater for different jobseekers’ suitability for the digital environment:

  1. Stream A – Digital First,
  2. Stream B – Digital Plus, and
  3. Stream C – Enhanced Services.

Digital First (Stream A)

If a person has been assessed as being appropriate for Digital First, the person will be required to satisfy all their activity requirements and reporting obligations online.

In this stream, a person will access information and tools to satisfy mutual obligation activities digitally. Instead of attending face-to-face provider appointments, a person will be required to search for jobs online and satisfy reporting obligations online.

As the technology evolves, it is intended that people in the Digital First stream will be offered targeted suggestions of activities and options to improve their chances of finding work.

Digital Plus (Stream B)

If a person has been assessed as being appropriate for Digital Plus, the person will be required to go online to satisfy their activity requirements. The person will also be provided with some additional support through the contact centre, including skills development or training.

It is intended that people in the Digital Plus stream will be provided with additional financial support to assist with their transport or employment related expenses.

People in the Digital Plus stream may be connected to an employment services or training provider for specific services, such as training to help them use the digital service or work skills training.

Enhanced Services (Stream C)

A person should be assessed as being appropriate for the Enhanced Services stream if they face multiple barriers to employment.

People assigned to the Enhanced Services stream will receive tailored case management from an employment services provider to help build their ‘job readiness’, organise training and education opportunities, and connect them with complementary services and work experience.

Jobseekers in the Enhanced Services stream will have access to the digital platform and will be supported by their employment services provider to access services online where appropriate.

Who does this measure affect?

This measure will immediately affect people in the selected trial regions (listed above) who are deemed as ‘job-ready’ and are assessed as being digitally literate (Stream A).

From late 2019, providers will start delivering the new Enhanced Services for people who face barriers to engage in work (Stream B).

Approximately 95,000 people in the selected trial regions will participate in the Pilot.

By July 2020 all people who are in receipt of a payment subject to activity requirements, including Newstart Allowance and Youth Allowance (looking for work), will be required to satisfy activity requirements under the New Employment Services Model.

The Targeted Compliance Framework will continue to operate, however, a new points-based system will be introduced. People who are required to participate in the Pilot will be subject to the Targeted Compliance Framework. Failure to meet activity requirements can result in the person receiving a demerit point, which may contribute to a payment suspension or cancellation.

It is planned that the Department of Human Services and Department of Jobs and Small Businesses will notify people in these trial regions and provide updates on changes to a person’s reporting obligations, activity requirements, and job plan.


NSSRN recognises that the current employment services system, especially the main jobactive program, is not adequately meeting the needs of unemployed people.

Effective consultation required for tailored services

In NSSRN’s view, access to tailored and adequately resourced social services programs for people looking for work is critical to ensuring their successful transition to paid work. Employment services need to be equipped with the relevant expertise and adequate resources to understand each person’s particular needs. For this reason, it is critical that existing specialist employment services providers, such as Disability Employment Service Providers, continue to operate rather than relying only on the generalised services in the Enhances Services stream.

However, in many cases, the current employment service system does not adequately assist people to transition to paid employment. In developing the new system, meaningful consultation should take place with people who are participating in trial regions. This consultation process must seek out and take into account the views and experiences of those people who have engaged with employment service providers.

Redirection of savings to Enhanced Services (Stream C) and adequate resourcing

The shift to digital servicing has been estimated in the Budget to result in net efficiencies of $59.4 million over five years from 2018 – 2019. This is a result of the reduction in expenditure for face-to-face servicing arrangements under the jobactive program. According to the Minister for Jobs and Small Business[1], savings made from the shift to digital servicing is intended to be reinvested in the employment services system to provide support to those who most need it. NSSRN would strongly support this reinvestment into providing ‘Enhanced Services’ to jobseekers in Stream C.

However, in Senate Estimates on 10 April 2019, it was revealed that overall spending to jobactive funding would be reduced.[2]

The measure is projected to cost:

  • $31.5 million invested into Information Communication Technology costs,
  • $11.6 million invested into contact centre support,
  • $4.3 million invested into Department of Human Services, including funding towards the cost of Information Technology and communications,
  • $27.4 million into establishing, administering and evaluating new arrangements,
  • $73 million into extending the complementary jobactive programs and other initiatives including: $35.3 million for employment fund injection, $8 million extension of the online employment services trial, $6.5 million for Launch into Work, and $15 million for the extension of early access to tailored employment services.

NSSRN notes that the allocated funding in the 2019 Budget for employment services is less than half of the OECD average. Instead of reducing the overall spending to already under-resourced employment services, additional resources should be invested to ensure job service providers are serving their purpose of reducing prolonged unemployment.

Risks for the most vulnerable

It is essential that any new automated system, including this new digital employment services program, is not implemented before adequate design, user testing and rigorous evaluation. In our experience, automation can be problematic, particularly for people who are digitally illiterate or require face-to-face consultation. Careful consideration of the impact of transitioning the most vulnerable people to digital servicing, including Aboriginal and Torres Strait Islanders, people from culturally and linguistically diverse backgrounds, sole parent families and people escaping domestic and family violence.

The reduction in face-to-face services poses greater risks for the most vulnerable group who are streamed into the Stream C Enhanced Services. This group will be most at risk of being penalised for failing to comply with their activity requirements as they will be required to attend face-to-face appointments rather than being able to satisfy their obligations through the digital platform.

For this reason, the use of the online platform for automating decision-making on activity requirements and compliance should be completely avoided. Those decisions should rest with Department of Human Services, not providers or artificial intelligence.

Particularly in light of our recent experience with ‘robodebt’, it is important to ensure that any decisions that may adversely affect a person’s income support payment must be held accountable and any delegation of decision-making should not prevent a person from exercising their administrative rights to appeal decisions.

Frontline Department of Human Services staff will need to be adequately resourced to enable them to effectively monitor the operation of the program, maintaining oversight of whether:

  • providers are making decisions in accordance with Guidelines and taking into account a person’s circumstances when applying demerit points,
  • there is any increased application of demerit points under the new system,
  • any payment suspensions are being correctly applied, and
  • particularly vulnerable income support recipients are struggling to engage with the new automated system, taking proactive steps to avoid the risk of vulnerable people losing income or disengaging with the system entirely.

This monitoring role will also allow the Department of Human Services to provide recommendations to improve the program prior to its nationwide expansion.

This factsheet was prepared by the National Social Security Rights Network (NSSRN). The NSSRN is the peak community organisation in the area of income support law, policy and administration. NSSRN members are community legal centres across Australia which provide free and independent legal assistance to people experiencing issues with social security and family assistance payments.

April 2019

[1] Minister of Jobs and Industrial Relations, ‘Budget 2019 — Significant reforms to boost Australian jobs’ (Media Release 2 April 2019) <https://ministers.jobs.gov.au/odwyer/budget-2019-significant-reforms-boost-australian-jobs>.

[2] Commonwealth, Parliamentary Debates, Education and Employment Legislation Committee, 5 April 2019, 25; Commonwealth, Parliamentary Debates, Education and Employment Legislation Committee, 10 April 2019, 6, 31.