An external review of the Commonwealth’s punitive, malfunctioning mutual obligations framework will not report until after the next federal election, even as thousands of jobseekers await resolution onpayments unlawfully suspended or cancelled.
Tender documents for the review, unpublished but obtained by The Saturday Paper, reveal uncertainty at the Department of Employment and Workplace Relations (DEWR) over whether the system of jobseeker conditions that supports almost $2 billion worth of outsourced services each year is functioning as intended, or is even legal.
The terms of mutual obligation require welfare recipients with at least some capacity to work to perform a certain number of activities each month, through an online service or via a private provider, in order to accrue an arbitrary total of points and keep their payment.
Failure to do so results in penalties, meted out through the Targeted Compliance Framework (TCF) – a complicated traffic light system of warning and so-called penalty zones – which can include a person’s payment being cancelled for four weeks or more.
The Saturday Paper last week revealed the latest major error in a series: the unlawful cancellation of welfare payments to 1000 people because DEWR apparently failed to update its policy documents following legislative amendments in April 2022. The mistake was picked up after a separate issue wrongly suspended 1326 people from benefits, due to a coding error in the labyrinthine IT architecture. Further issues have since come to light, though the department has declined to publicly identify them or explain how they affect people.
Any firm selected to conduct the review – which is likely to cost in excess of $1 million – will have until the end of February to deliver a“draft assurance statement”.
That statement will include an “independent assessment of the effectiveness of the operational policy, business rules and IT support systems in delivering the TCF in line with relevant policy and social security law”, the request for quote says.
“Identify any areas of higher risk requiring urgent action or remediation. The successful vendor will prepare options to address opportunities or anomalies that may be identified.
“These options may include governance oversight, quality assurance mechanisms, technology uplift or workflow processes to ensure the integrity of how mutual obligation requirements and the TCF are administered.”
Australian Council of Social Service (ACOSS) chief executive Cassandra Goldie wrote to Employment and Workplace Relations Minister Murray Watt, as well as Attorney-General Mark Dreyfus and Social Services Minister Amanda Rishworth, last Friday to demand the involvement of the Commonwealth Ombudsman and a fully independent legal and human rights review ofthe system.
“This system cannot continue to operate whilst the legality of decisions affecting a person’s income support payment is in question,” Goldie wrote. “The government must immediately suspend the TCF to prevent further harm to people receiving income support and undertake a full, independent legal and human rights review of its operations.
“Given the seriousness of the issues presented, you should immediately refer this matter for independent investigation by the Commonwealth Ombudsman.
“ACOSS can make this referral. However, we consider that your government should make this referral to give the public confidence in the system, noting the recommendations of the Robodebt Royal Commission and the need for government to rebuild the community’s trust in social security administration.”
During the robodebt rollout, PwC was brought in on an initial $1 million contract to provide a “business process improvement strategy” of the illegal income compliance scheme. The royal commission into the scheme found the final report, which did contain criticisms of the income-averaging methodology, was never received by the then Department of Human Services because the secretary at the time, Kathryn Campbell, directed that it was not to be finalised or delivered.
The Commonwealth Ombudsman has recovered from its own lapses over the robodebt scandal and focused its energies on the historic, ongoing revelations of unlawful income-apportionment practices at Services Australia dating back to 1991, affecting possibly more than five million debts worth more than $4 billion.
DEWR only told the Ombudsman about its compliance issues last Wednesday, a day after receiving questions from The Saturday Paper about the matter, and again this week, also after questions from this newspaper.
A spokesperson for the office said the Ombudsman then received a further briefing from the DEWR secretary on Wednesday.
“The Ombudsman is currently engaging with DEWR to seek further detailed information on specific questions we have about the Targeted Compliance Framework, the application of legislation and payment cancellations.”
Antipoverty Centre coordinator Kristin O’Connell tells The Saturday Paper the slow response from government on this issue is symptomatic of an entrenched view on welfare.
“If this was any other public system and it didn’t affect just welfare recipients, if it affected the broader community, these rules would have been paused immediately, the moment the problem was identified,” she says. “And there would have been a much more public effort to communicate to people that this had happened. It would be more transparent, it would be more robust, and they would be taking it much more seriously.”
At issue in the most recent discovery of unlawful payment cancellations is, according to the department, an April 2022 legislative amendment that was supposed to give delegates of the DEWR secretary more discretion in whether to cut someone off from their income support payment.
This support – the only income available to the affected person – can be shut off for a month plus whatever additional time it takes to reapply, all on the assumption that the person has “committed mutual obligation failures”, as identified by the “demerit” points assigned by privatised job service providers.
For the final decision, departmental delegates are required to personally make a determination. They were apparently not told of updates to the legislation in 2022 that gave them the discretion to consider a welfare recipient’s circumstances before cancellation.
One of the crucial considerations is the financial hardship test: if a person has less than two weeks’ payment in their account, they would be plunged into unacceptable penury by a cancellation. This is the test as explained by departmental officials to advocacy groups last week. As some noted, if that were applied routinely, then welfare payments would almost never be cut off, because the recipients already exist in a cycle of hand-to-mouth poverty.
“The government has discovered that laws exist that are intended to protect a person from full destitution if they can’t comply with mutual obligations requirements,” O’Connell says. “If the laws say that, it calls into question why we would have a system like this at all. This requirement to consider financial hardship before cancelling someone’s payment is an admission that no matter what the reason is that you have failed to comply with mutual obligations, nothing justifies the punishment of ripping away what meagre income you have.”
Meanwhile, 634,000 people on the Workforce Australia caseload – and more in disability employment services that are hosted on DEWR platforms – are supposed to fight for job vacancies that simply do not exist.
On Wednesday, Anglicare Australia released its ninth jobs availability snapshot, analysing entry-level positions advertised over the month of August that could be suitable for people with barriers to finding work. As aproxy, the study canvasses people who have been on JobSeeker payments for more than a year. There were 21 such people for every entry-level job advertised in the month of August and, removing that filter, there were 33contenders for each low-skill position.
“Throughout Australia, there is no jurisdiction with enough entry-level jobs to meet demand,” the report says.
“The situation is worse in the Northern Territory and Tasmania, where there are 65and 50 JobSeeker recipients competing for each entry-level role respectively.”
Mutual obligations must be abandoned in light of consistent evidence that there is nothing mutual about them, Anglicare says.
“In some cases, mutual obligations have made people less employable, as the focus on compliance undermines people’s intrinsic motivation to seek work, replacing it with a frustrating cycle of busywork,” the report says.
“A study of the impacts of mutual obligation on 6,253 unemployed people showed that people who were not subjected to mutual obligations found work more quickly.”
Minister Watt has a political problem. Mutual obligation is supported by both major parties, but its function is increasingly absurd. As his own department concedes in its unpublished tender documents, the system cannot cope.
“TCF legislation and its operational policy is complex, as is the IT system that unpins [sic] the framework. The IT system operates between the Department of Employment and Workplace Relations (DEWR) and Services Australia,” the documents state.
“The Department of Social Services and National Indigenous Australians Agency use DEWR’s IT for their participants including Mutual Obligations application. The IT system has provided a stable foundation to support the operationalisation of the TCF.
“However, it is now experiencing complications due to significant multiple policy changes over the last 7 years. While this met delivery needs at the time, the ability to flexibly adapt and implement changes to Government policy in a timely manner is now challenging.
“To mitigate the risk of incorrect application of penalties and payment cancellations, the department proactively undertakes daily assurance activities.”
Despite these concessions, Minister Watt has reiterated the government’s support for mutual obligations that “don’t penalise people unfairly”.
“The concept of mutual obligations is widely supported by the Australian community,” he told The Saturday Paper in a statement. “Our government is determined to rectifythe problems the Coalition built into their flawed compliance system, as we undertake broader reform of the employment services system.
“I recognise theDepartment acted swiftly to rectify the issue when it was identified, by immediately pausing payment cancellations and finding solutions for those who may have been impacted.
“The Department has advised me that based on the latest advice and to the best of their knowledge, the system is operating correctly. However, to provide further confidence that it is working as intended,I have requested an external assurance review be undertaken,so that any furtheranomalies or errors are identified and corrected as soon as they are detected. The Department is also undertaking alegal review of key elements of the Targeted Compliance Framework.”
The government will pause mutual obligation requirements from December 16 until January 6.
Amid this uncertainty, advocacy groups say, waiting several months for such an assurance without at least temporarily suspending the system in the meantime is an “administratively negligent” approach.
On Thursday, ACOSS referred the matter directly to the Commonwealth Ombudsman and requested an investigation.
This article was first published in the print edition of The Saturday Paper on December 7, 2024 as "Serial errors force review".
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