Employment service providers have warned the newly unemployed will have to wait three months to claim up to $1,200 for training and other expenses from July, when the federal government winds back changes that eased access to a special jobseeker fund during the coronavirus pandemic.
The government had axed a 13-week wait for the money to flow to employment providers in response to Covid-19, but the sector says the change will expire in July – despite estimates 500,000 people are yet to be connected to the flagship jobactive employment program.
Pointing to dire unemployment figures released on Thursday, the National Employment Services Association chief executive, Sally Sinclair, said the move would hurt job prospects for the newly unemployed and should be delayed until December.
“At this stage, the immediate access to the fund finishes at the end of June for those who are newly unemployed,” Sinclair said.
“It puts them three months behind in terms of their competitiveness in the labour market.
“That could very much be the difference between getting back into work quickly or staying unemployed for a long period of time.”
The government disputed claims that jobseekers would have to wait to access the fund, which is used by providers in the jobactive employment program to cover a wide range of jobseeker expenses such as training programs, driving lessons, or petrol and new clothes to attend job interviews. The fund is likely to take on greater significance once the supplements to welfare benefits introduced at the height of the pandemic are cut in September.
But a spokesman for the employment minister, Michaelia Cash, said there was “no waiting period for job seekers receiving assistance from the employment fund”.
“Assistance is available to all job seekers from the first day they commence in jobactive,” he said.
The dispute hinges on the timing of so-called “employment fund” credits which are provided to employment service providers to allow them to claim cash expenses on behalf of jobseekers. Providers argue that the 13-week delay of these credits leaves them unable to access the fund on behalf of jobseekers until the credits are banked.
Figures released on Thursday found 227,000 jobs were shed as the jobless rate hit 7.1%, the highest level since 2001, while the underutilisation rate, which also includes underemployment, soared to 20.2%. About 1.6 million people are now claiming the jobseeker payment.
Given estimates showing the average jobactive consultant’s caseload pre-pandemic was 148, the government brought forward administration fees for the sector last month. Meanwhile, research has suggested the bulging jobless figures could be lucrative for privately run job agencies.
Sinclair said there would be “a lot of challenges” in the weeks ahead.
“We still have an estimated 500,000 people that have not yet been connected to services,” she said. “Even though we’ve already had a significant increase, it’s still early days.”
Emma Dawson, the executive director of left-leaning thinktank Per Capita, said it was wrong for the government to withdraw the quick access to support, but the entire system was ill-equipped to get people into work.
Dawson said it was realistic to expect there would still be about 1.5 million people relying on the jobactive system by the end of the year and that the figure would not fall for some time.
“We do have concerns,” she said. “The system currently is not designed to get people into work that lasts or matches their skill set.”
The jobseeker payment is slated to halve to $550 a fortnight when the coronavirus supplement expires in September, although some reports have suggested the government is open to reviewing the rate of the benefit when the jobkeeper wage subsidy expires.
It also reintroduced mutual obligations this month, although no penalties currently apply for those who breach job search and appointments requirements.
The Australian Unemployed Workers Union said the employment fund was flawed and would not be necessary if welfare payments were set at a reasonable level.
“The employment fund is hard to access, costly to administer, and if welfare payments were fair it would be totally unnecessary,” said AUWU spokeswoman Kristin O’Connell.
Guardian Australia reported last year that the fund has faced claims of rorting by employment services providers, according to jobseeker complaints lodged with the Department of Employment.