(Image: Unsplash/Josh Appel)

The idea? Hundreds of millions of dollars are poured into an ambitious scheme by the federal government to fund private companies to secure genuine jobs for Australians with disabilities.

The outcome? Less than 1% of the jobseekers recruited into these disability employment service (DES) providers in 2017 had landed a job for six months or more by 2019.

The bottom line? More than $713 million spent by government to fund these companies between 2017-18 has resulted in abysmal success rates.

Stories from the workplace unearthed by Inq provide the human dimension behind those dismaying statistics:

  • A man with a hearing-impairment offered phone interviews
  • A woman with chronic photosensitive migraines put forward for computer administration gigs
  • Another woman with a Bachelor of Communications enrolled to study a certificate in communications.

What’s more, dozens of these providers also run education services, making them an even more lucrative one-stop shop to collect millions of dollars in government funding. 

What’s the problem?   

Just over a quarter of people with disabilities are employed full time. Australia has one of the lowest levels of employment rates of OECD nations, ranking 21 out of 29

Australians with a disability live in poverty at the highest rates in the OECD. A quarter of DES recipients are on Newstart, according to the Department of Social Services (DSS), surviving on less than $40 per day. 

Despite ambitious targets, disability employment rates have gone backwards — in NSW, employment rates in the public sector dropped from 2.7% to 2.5% between 2017-18. Federally, the number is 4.3%, with a goal of 7% by 2025. 

Yet the country spends less than half of the OECD country average on employment assistance (between $1000-2000 dollars per person per year), supporting a system with a virtually non-existent success rate.

Labor has criticised the jobactive employment services program, arguing it does not deliver value for money, while Greens senator Rachel Siewert told Inq the system was concerning, with 104,000 people dropping out. 

The Royal Commission into Violence, Abuse, Neglect and Exploitation of People with Disability is currently underway. In 2016, the Australian Human Rights Commission developed the Willing to Work report, while in 2018 an expert advisory panel submitted recommendations on how employment services can assist job seekers, finding “many job seekers with a disability are not getting the support they need”. The Australian National Audit Office is preparing a report on the management of DES contracts, due next year.

Minister for the NDIS Stuart Robert announced an NDIS participant employment strategy last month. And in 2018, DES reforms were introduced to give more choice to participants. But on the ground, not much has changed. 

How does it work? 

There are 117 disability employment providers with more than 8500 sites in Australia, according to the latest DES review. All are private, some are not-for-profit and others are owned by international corporations. As of October this year, there are 265,975 people using DES. Clients can choose a provider, or be referred to one, after being evaluated for eligibility by the Department of Human Services. 

As of 2018, providers operate in the open market and must recruit job seekers, instead of being assigned them. After signing a client up, the provider is paid in advance — they get $2512 in government funding for the first six months to act as a disability management service, followed by quarterly service fees.

When a client lands work, the company is paid an outcome fee between $381 up to $10,946, depending on how long the client stays in that job (up to 26 weeks), and the client’s disability. If the client keeps their job for 52 weeks, the provider gets another lump sum, this time between $397 and $2432. Unless a client is deemed eligible for ongoing support, the funding ends there.

Another huge revenue stream for providers is placing a client in full-time education, which earns the provider the same as an employment outcome so long as the client completes one semester of a minimum two-semester course. If a client completes a training course and finds a job within 12 months, the company is paid an extra 20% of the outcome fee. 

What do providers actually do? 

All providers have to do to receive funding is to create a job plan with their client, setting out the services the company will provide. There are no other enforceable services. Funding for companies is unlimited: a Department of Social Services spokesperson said, “the demand-driven nature of DES means there are no caps”. 

A huge problem with DES providers is there are no regulations about who they should hire. People with Disabilities Australia senior policy officer Samantha French says inexperienced staff were a large cause for concern among the organisation’s members.

“There’s no national skillset of qualification or even minimum criteria DES employees have to have,” she told Inq. “Members tell us staff are often very young, inexperienced, and they themselves haven’t experienced unemployment, or even had much experience in the workplace,” she said.

DES staff turnover is tremendous — in 2016, 42% of staff left their roles.

This is part one of a three-part series. For part two, go here.