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Discussion paper

Mutual obligation after COVID-19: the work for the dole time bomb

Welfare recipients Job creation Unemployment Long-term unemployment Welfare state Australia

During the economic lockdown that was instituted during the COVID-19 pandemic, ‘mutual obligation’ requirements for people in receipt of unemployment benefits were suspended. For three months, unemployed people were exempt from the usual requirements to look for work, attend appointments with Jobactive providers, and engage in other compulsory activities. From 9 June 2020, these mutual obligation requirements were re-introduced in a phased approach.

In this discussion paper, the author argues that we cannot return to the system of mutual obligation that was in place before the lockdown. The current mutual obligation framework is inflexible and ineffective: a return to this system would impose strict job search requirements that are unreasonable in a labour market where competition for jobs will be fierce. It also currently imposes a requirement that unemployed people undertake work for the dole once they have been unemployed for 12 months and after that once for every six months of unemployment that follows.

Key recommendations:

  • Disband work for the dole and replace it with a genuine work experience program for people experiencing long term unemployment
  • Review mutual obligation requirements so that they can be personalised according to each unemployed worker’s individual circumstances and work history
  • Introduce job search requirements that are proportionate to labour market conditions
  • Ensure that points-based activation is flexible and fair under the New Employment Services Model
  • Fund genuine job creation and skills development activities in areas, communities, and industries hit hard by the COVID-19 economic shock
  • Provide a “Youth Guarantee” to young unemployed people, and similar measures to support older unemployed people who are at risk of long-term unemployment
  • Investigate job service provider errors in Social Security Law decision-making and introduce process improvements
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