Jobactive providers paid lump sum in anticipation of COVID-19 unemployment surge

Lines outside Woden Centrelink in March: The jobactive caseload has increased from around 630,000 on February 29 to more than 1.3 million on May 7. Picture: Karleen Minney
Lines outside Woden Centrelink in March: The jobactive caseload has increased from around 630,000 on February 29 to more than 1.3 million on May 7. Picture: Karleen Minney

Private job agencies were paid six weeks of administration fees up front to prepare for a coronavirus-induced spike in unemployment, despite a moratorium on mutual obligations reporting because of the pandemic.

Job seekers were given a reprieve on the ordinary hoops they had to jump through to receive Centrelink unemployment payments until June 1, due to COVID-19 restrictions.

The lockdown to contain the spread of the virus in Australia has caused unprecedented job losses.

The jobactive caseload has increased from around 630,000 on February 29 to more than 1.3 million on May 7.

In anticipation of this surge, employment minister Michaelia Cash approved a six-week advance of administration fees to provide "immediate assistance" for jobactive providers.

"The advance was extended to provide temporary and immediate cash flow assistance to help providers maintain their staff and increase the number of appointments that will be required to service new job seekers requiring support," the department said, noting there had been a "strong take-up".

The department said it had been closely monitoring the operational and financial impacts on jobactive providers as the COVID-19 situation evolved, "with close regard to both the anticipated surge of demand for employment services from the recently unemployed and the continued achievement of outcomes".

The government pays jobactive providers $377.30 for initial appointments with under-30s and $269.50 for over 30s. Providers also charge outcome fees of $1515 when their client finds work again.

Thinktank Per Capita last month estimated the government would pay job providers $210 million to provide employment services to people laid off due to the coronavirus.

The revelation was contained in the government's response on Thursday to a February 2019 senate report which warned the system was wasting the time of both employees and employers.

The government announced a trial of a new digital self-service model of mutual obligations reporting at several sites across Australia, after an earlier Deloitte report found the system was outdated.

Nevertheless the government defended the jobactive scheme, saying more Australians had been employed under it than over programs

"Over the period from 1 July 2015 to 30 April 2020, jobactive has achieved more than 1.6 million job placements," the government said.

However Per Capita says the entire system needs to be dismantled, and sending hundreds of thousands of newly unemployed workers to jobactive would be a waste of public spending.

"Although a trial of a New Employment Services Model is underway, it was designed in conditions vastly different from those that are in store for us after the COVID-19 economic shock. This means that both the current jobactive system and the New Employment Services Model are unfit for the post COVID-19 unemployment scenario," the thinktank said.

This story Jobactive providers paid lump sum in anticipation of COVID-19 unemployment surge first appeared on The Canberra Times.

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