The 1.3 million Australians receiving the JobSeeker payment have been granted a brief reprieve from having to apply for jobs, amid concerns the welfare system will be overwhelmed by the influx of new welfare recipients.
Mutual obligation requirements including job interviews have been suspended again until Monday 8 June, after being suspended to 22 May and then 1 June.
And when they start up again, they’ll start up gradually, employment minister Michaelia Cash and social services minister Anne Ruston said in a statement.
The two ministers said mutual obligations have been suspended to allow more time for both job seekers and employment services to prepare for the “new arrangements”.
From Tuesday 9 June job seekers will need to undertake at least one appointment with their employment services provider.
This can be done online or over the phone.
Crucially, during this first stage there will be no suspensions or financial penalties for those who do not meet this requirement.
“The government strongly encourages job seekers to maintain contact with their employment services provider at this time to ensure they are aware of opportunities available for training, upskilling or employment,” the statement read.
Sole traders and self-employed Australians will not be required to fulfil this requirement.
The next two stages of the return to mutual obligations will be announced in the coming weeks. Phase two will include applying for work and in phase three penalties for failure to uphold mutual obligations will begin again.
Prior to the suspension, those receiving the JobSeeker payment were required to have a Job Plan which lays out the steps the job seeker was taking to find work, and carry out the plan.
Australians older than 55 could meet their mutual obligations by spending 30 hours a week on paid work, self-employment or approved voluntary work and those with caring responsibilities or other extenuating circumstances could apply for a reprieve.
How will the system cope
But advocates are concerned the welfare system will struggle to cope with the influx of JobSeeker recipients and lack of jobs.
Around 1 million Australians have been forced out of work by the coronavirus, and while job advertisements on SEEK are up 39.7 per cent for the fortnight ending 24 May, they still have a significant way to go before reaching pre-coronavirus levels, with ads tumbling 65.6 per cent year on year.
And according to Greens Senator Rachel Siewert, this poses a challenge for welfare services.
“We know we have a very large number of people who are unemployed, underemployed and not currently engaged in the labour market, many of whom will be engaging with job service providers and having to deal with mutual obligations for the first time," she said.
"This will put a lot of pressure on a system that is already not fit for purpose and I am not confident the system is prepared for this influx."
But the privately-run employment agencies that work with welfare services could be in for a huge windfall, based on the existing fee structure. The government pays providers $377.30 for initial appointments with Australians younger than 30 and $269.50 for those over that age.
“Our estimates indicate that funding existing jobactive providers to provide employment services to 700,000 new recipients will cost the government around $210 million,” a report from think tank Per Capita found.
In addition, jobactive providers charge ‘outcome fees’ of around $1,515 per person when those who have lost jobs find work again
“It is questionable whether these newly unemployed people will receive services that are useful. This reflects concerns about both the capacity and capability of the jobactive providers, which have been identified in recent reviews of employment services.”
Jobactive providers have been paid a six-week advance of administration fees to help them cope with the spike in clients. As of 7 May, the jobactive caseload was 1.3 million, up from 630,000 on 29 February.