The controversial ParentsNext welfare program would be abolished and replaced by a new service that dials down mutual obligations and offers cash incentives for parents, under the recommendations of a parliamentary committee.
A select committee inquiring into the billion-dollar employment services system has called for sweeping changes to the Coalition’s $484m ParentsNext scheme, which has faced criticism from welfare advocates and women’s groups over several years.
While stopping short of calls to make the scheme entirely voluntary and scrapping all compliance, the interim report’s 30 recommendations would replace ParentsNext when the current contracts expire next year with a new program informed by “co-design” with stakeholders.
It would also see the government urgently blunt what the committee views as the harshest aspects of compliance.
The committee, led by Labor MP Julian Hill, said in its report that ParentsNext had grown “out of earlier efforts to help young teenage parents, and then highly disadvantaged single mums with positive net outcomes”.
“The committee’s conclusion is that the continuation of a ‘program’ (we say pre-vocational service) to support vulnerable parents is essential,” the report said. “ParentsNext, however, is now locked into a punitive frame and does too much harm for the good it also does.”
About 95% of the nearly 100,000 participants in the program are women, while 75% are single parents. Eligibility requirements are complex, but the scheme is aimed at those on parenting payment, who do not have paid employment and have children between the ages of nine months and six years of ages.
The program is aimed at preparing parents receiving benefits for the workforce, but critics says it is too onerous, particularly for those with young children, is punitive and in some cases counterproductive to a person’s goals. The committee notes, however, that providers and some participants have reported many positive outcomes in employment and education.
Under ParentsNext, participants are required to attend meetings every three months with an outsourced charity or for-profit provider and undertake regular tasks – such as study or parenting-related activities, including playgroup or storytime. They can have their welfare payments suspended for non-compliance.
In response to the consistent complaints of participants and critics about the effect of payment suspensions on parents with young children, the report recommends scrapping the “targeted compliance framework” from ParentsNext.
The current rules see participants who miss an appointment or activity told they have two days to re-engage with their provider before their payment is temporarily suspended.
The change would instead offer a seven-day window and see compliance decisions made by public servants at Services Australia, rather than job agencies.
If participants do not respond within seven days, part of their payment – potentially 25% – would be withheld, rather than the full amount as occurs now. The remaining part of the benefit would be paid once the person re-engages.
Payment penalties and cancellations – which see fortnightly benefits forfeited or stopped altogether and are very rarely used – would be scrapped entirely.
The committee was established by the employment minister, Tony Burke, who requested an interim report to inform future decisions on ParentsNext ahead of the budget.
The proposals stop short of the requests of some critics, including academics and the National Council of Single Mothers and their Children, who have called for any new scheme to be completely voluntary and without compliance.
Terese Edwards, the council’s chief executive, has previously branded the scheme as contrary to the government’s commitments on gender equity, adding that it was a “scandal” it was still going.
The committee proposes a new program that would exclude those with children under the age of three from compulsory participation.
It described the current arrangements, which refer some parents with children as young as nine months to the program, as “patriarchal” and “completely unreasonable”.
Participants would also have access to an annual “skills passport” payment of between $500 and $1,000, which they could use on expenses crucial to improving their skills.
This would be on top of the existing “participation fund”, which is controlled by providers and has faced accusations of under-use and rorting.
In a bid to clamp down on a commonly criticised practice, job agencies would be barred from referring clients to services run by the same organisation without prior approval from the department.
The latest report is one of several parliamentary reports to criticise the ParentsNext scheme.
