The federal government clawed back more than $1m in wrongful claims made by privatised employment services providers last year, freedom of information documents reveal.
Under the jobactive and ParentsNext programs, which are designed to get jobseekers into work and prepare parents for employment respectively, outsourced providers claim “outcome payments” for placing their clients into jobs or education courses.
Documents obtained by Guardian Australia under freedom of information show that since 2015, when the jobactive contracts began, $5.3m in outcome payments have been recouped by the government.
The documents show $1.03m was clawed back in 2020, while $340,000 has been recouped so far this year.
Overall, the documents suggest there were more than 5,000 recouped payments between 2015 and 2021, including hundreds of occasions where job agencies claimed the bonuses without evidence, and even more where the claims did not meet the program’s rules.
The industry peak body noted many of the claims were made in error, with most picked up by providers, but welfare groups argued the figures showed more regulation was needed.
Cassandra Goldie, the chief executive of the Australian Council of Social Service, called for an independent regulator to oversee providers.
“The scale of these clawbacks shows there is still a serious problem with the way that government holds employment services to account for delivering high quality and effective services for people who need their help,” she said.
“An independent regulator would provide greater transparency, and empower people who are unemployed to make complaints and have their complaints dealt with promptly.
“A regulator would also be mandated to ensure that examples of poor performance or unjustifiable payment claims by employment service providers are dealt with quickly, transparently and appropriately.”
Kristin O’Connell, of the Antipoverty Centre, said she believed the figures understated the number of false claims in the system.
“The number of reports we hear about people being pressured to sign false records suggest that this is a drop in the ocean,” O’Connell said.
She said it was “astounding” that most of the claim errors appear to have been picked up by agencies and called on the government to provide more details about how provider conduct was investigated.
“The government needs to be transparent about this,” she said. “How can the public have confidence that there aren’t more job agencies rorting the system if they don’t tell us how many claims they investigate? We just don’t know whether the department is being given enough resources to do this work.
“The government publishes information about how many people on payments are being penalised and what for, they need to do the same thing with job agencies.”
Former employment consultants alleged to Guardian Australia in 2019 they witnessed staff doctoring forms so providers could claim payments for job seekers not working sufficient hours, while other allegations have included the agencies offering the unemployed cash and petrol to lie about their employment status.
Guardian Australia revealed in May that the government had “locked down” its IT systems to prevent rorting in another employment services scheme, disability employment services.
The providers were accused of claiming education outcome payments for ineligible job seekers.
The government is currently reforming the Jobactive system, with a new system to begin next year that includes a licensing system for providers. It also intends to reform disability employment services.
Sally Sinclair, chief executive of the National Employment Services Association, said providers operated in a “complex contractual framework and highly transactional operating environment with significant administrative requirements”.
She said the system was monitored “very closely”, but that while “employment services systems and practices aim to achieve 100% claim accuracy”, “errors do occur”.
Sinclair noted that a “substantial proportion of claims providers have self-identified and reported to DESE as being made in error with a request to recover”.
“There is no evidence available to us that there is systemic intentional submission of ‘false claims’,” she said.
A spokesperson for the Department of Education, Skills and Employment said providers consistently achieved “high compliance rates across payment integrity assurance activities conducted by the department”.
“The recovery of outcome payments made to providers, for all reasons ranging from non-compliance to data entry errors, represents less than 0.5% of the total value of outcome payments made in 2019-20,” the spokesperson said.
While the sum of clawed back bonuses under Jobactive is much lower than the $41m in three years recovered under the previous, pre-2015 system, the spokesperson warned against comparisons.
“Data on the recovery of outcome payments over time and between different employment services models cannot be meaningfully compared, and do not necessarily reflect changes in provider compliance rates,” the spokesperson said.
Meanwhile, a government-chaired parliamentary inquiry last week recommended that the controversial ParentsNext program – which is targeted at single parents – should be made voluntary.
“It is welcome to see members from both sides of politics calling on the Morrison government to reform this broken program, and to stop forcing women and young children deeper into poverty,” said the Human Rights Law Centre’s legal director Meena Singh.
“This confirms what Aboriginal and Torres Strait Islander, women’s and human rights’ organisations have been saying for years – the ParentsNext program doesn’t work, and only makes life harder for mums with young children.”