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Northern Territory Emergency Response (NTER)
Monitoring Report

6. Welfare Reform and Employment

The Australian Government is working in partnership with state and territory governments, non-government organisations and service providers in delivering five key initiatives under a national welfare reform agenda. The aim of these initiatives is to protect children, reduce reliance on welfare and build stronger communities.

The welfare reform measures are designed to improve socially responsible behaviour for the long term benefit of individuals, families and the wider community.

6.1  Income Management

Income management is a central measure in the Northern Territory Emergency Response.  It ensures that Commonwealth Income Support and Family Assistance payments are used for the benefit of children and to increase the financial security of people raising children.

IM funds cannot be used to purchase alcohol, tobacco, pornography or gambling products. In parallel with income management, better food supply is being supported through the licensing of community stores to improve communities’ access to fresh and affordable food.
Income management affects people (Indigenous and non-Indigenous) who live in the 73 prescribed communities, their associated outstations and the 10 town camp regions of the Northern Territory, who receive income support payments.  Every community member who receives a relevant Centrelink payment is paid 50% of the total amount in the usual way, while the other 50% is reserved to pay for priority needs, such as food, clothing, housing, transport and utilities.

The number of communities participating in income management has increased from 52 communities and seven town camp regions, to 73 Communities and ten town camp regions at the end of 2008.    Income management had been extended for another 12 months in 25 of these communities and two town camps 1 January 2009.

Since July 2007, almost $124.5 million has been income managed as part of the NTER.


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6.2  Expenditure through Income Management

Table 6.2.1 Expenditure through income management
  Feb 08 - June 08 July 08 - Dec 08
Income Managed (million $) 17 23.4 91.1
Unallocated (million $) 0.6 2.1
Expenditure (%)    
Food 74 59
Store Card 18 - 11
Housing 13 9
Clothing and footwear 3 6
School nutrition program 3  
Other 7 15

Table 6.2.1 shows that the majority of expenditure under income management has been on food items.  The decline in allocated funds directed to food (15%) from one period to another can be attributed to changes in Centrelink reporting.

The large difference between the amounts income managed in the two reporting periods can be attributed to three major factors. 

  1. Economic Security Strategy (ESS) payments were made to income management customers in December 2008.  These payments were income managed at a rate of 100%. 
  2. The earlier previous reporting period was a month shorter due to changes in reporting timeframes.
  3. More customers had been income managed, so more money was involved during the second reporting period. 

Allocations to store cards had been categorised by which the store card would most likely be spent.  Most store cards were branded from Coles and Woolworths, so were recorded as food allocations.  During June 2008, Centrelink added a separate category for store cards.  The amount allocated to store cards is almost the same as the reduction in food, so it is unlikely that this drop actually represents a true change on food allocations.

At 2 January 2009, a total of $124.5 million had been income managed. 19  Of this, $119.9 million was allocated to priority goods and services.  Most money was allocated to food (62%), rent (10%), store cards (9%) and clothing and footwear (5%).

At the start of July 2008, 12% of income managed funds had been unallocated 20 and remained in the Income Management Special Account.  By the end of July, this had increased to 16%.  Much of this rise can probably be attributed to seasonal impacts, with Family Tax Benefit (FTB) reconciliation payments usually paid by Centrelink following the end of the financial year.  These payments are generally significantly larger than normal fortnightly payments and are income managed at a rate of 100%.  By 15 August 2008, only 11% of income managed funds remained in the Special Account.

From August 2008 to the start of December 2008, unallocated funds as a proportion of all IM funds dropped significantly.  At 5 December 2008, unallocated funds only accounted for 4% of all Income Management funds.  However, on 12 December 2008, the proportion of unallocated funds had increased to 10%.  This increase coincided with ESS payments that were paid to most income management customers between 8 and 19 December 2008 and were income managed at 100%.  To facilitate the quick spending of ESS payments, the daily transaction limit of the BasicsCard was raised from $800 to $1500.  At 2 January 2009, unallocated funds had dropped to 6% of all income managed funds, providing strong evidence of customers allocating and spending these payments.


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6.3  BasicsCard

As at 2 January 2009:

86% (13,268 out of 15,488) of income management customers had a BasicsCard.

Of the 18,248 BasicsCards issued, 4,980 were replacement cards for lost cards (86%), damaged cards (6%), and  stolen cards (5%).
437 customers had more than two cards lost, damaged or stolen.

Since the introduction of the BasicsCard, there have been occasional outages to the EFTPOS system or for other reasons.  This has highlighted the need to ensure that comprehensive contingency arrangements are in place when customers are not able to use the BasicsCard.

6.4  Enhanced Food Security

The operation of community stores and the quality of food they provide is critical to the Australian Government’s efforts to improve the lives of Indigenous people in remote communities of the Northern Territory.

There are long-standing concerns about the management of stores and the quality of food available in some remote stores. The community stores licensing process addresses these concerns by setting standards for food, grocery quality and store governance. Community stores are those that are primarily concerned with the provision of grocery items and drinks. Stores that are solely takeaway food shops or fast food shops are not licensed in this process.

At 31 December 2008, there was food security in all communities where income management was in place. Specifically, there were 75 licensed stores and an additional three communities having access to Bush Food Order packages.

Licences are issued to community store operators who:

Stores that do not meet acceptable standards are either not licensed until changes are made, or are issued with limited licences that require them to make improvements within a specified time period.
Where food security was identified in a community as an urgent priority alternative food security options have been developed, particularly where it was assessed that there was limited capacity to operate an effectively functioning community store.


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6.5  Increased Participation Opportunities

Increasing levels of employment, self-employment and business development helps Indigenous Australians gain and manage assets and participate in the broader economy. Having a job or running a small business can empower an individual and build their local community.

DEEWR’s main aims during the first year of the NTER included moving individuals from CDEP into jobs, increasing participation in the labour force and development of work-ready skills (including literacy and numeracy).

Individuals applying for income support, including those being transitioned from CDEP, were assessed by Centrelink and placed on an appropriate income support payment.  These individuals were referred to appropriate employment services where they were assessed as being able to participate in the labour force.  Where appropriate this assessment was undertaken by a Job Capacity Assesseor.

Table 6.5.1:  Levels of DEEWR Income Support recipients participating in DEEWR services
  Oct-07 Jan-08 Jun-08 Dec-08
NTER communities, DEEWR Income Support recipients 13,066 14,200 13,805 12,642
Proportion engaged with DEEWR Services 21 56% 74% 77% 76%

The increase in the proportion engaged with DEEWR employment services from 56% to 74% between October 2007 and January 2008 is as a result of removal of Remote Area Exemptions (RAEs). All NTER communities had RAEs removed by 12 November 2007. Currently, almost all job seekers on DEEWR payments, but not engaged with DEEWR services, either receive Parenting Payments that do not have participation requirements or have a temporary special circumstance exemption from participation requirements, for example, Indigenous sorry business.


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6.6 Income Support

Individuals are assessed for income support against a standard set of criteria.  Age, family and financial circumstance are the main considerations when assessing a person for income support. 

People aged 16 to 65 will be assessed against the working age benefits such as Newstart Allowance (NSA), Parenting Payment (PPS or PPP) and Youth Allowance (YA).  These payments are the responsibility of DEEWR.

People over 65 are assessed for the Age pension (AGE) or similar benefits.  The Age Pension is the responsibility of FaHCSIA.

People who are of working age but for caring or health reasons are unable to participate in the labour force will be considered for a benefit such as a Carer’s Payment (CAR) or Disability Support Pension (DSP).  These payments are the responsibility of FaHCSIA.

Table 6.6.1.  Income support recipients in the NTER Prescribed areas
Dec-07 Dec-08 Change (no.) Percentage Change
NSA 7,960 6,859 -1,101 -14
PPP 2,415 2,367 -48 -2
PPS 2,510 2,307 -203 -8
YAL (o) 1,121 1,032 -89 -8
AGE 2,496 2,509 13 1
DSP 3,144 3,847 703 22
CAR 265 385 120 45
Other 657 679 22 3
Total 20,568 19,985 -583 -3
Source: 1. DEEWR Centrelink data extraction

The number of income support recipients in NTER prescribed communities decreased by over 580 (3% between December 2007 and December 2008).  The number of Newstart allowees dropped by 14% and Parenting Payment Single by 8%.  Increases were seen in the number of Disability Support and Carer Pensioners.


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6.7  DEEWR Income Support

There were over 1,400 fewer people on DEEWR income support, a decrease of 8%, in prescribed communities at end of December 2008 compared to end of December 2007. 

Other contributions to the reduced numbers on Income Support were –

There were also around 700 people considered unable to participate in the labour force, who are now receiving the Disabilty Support Pension (DSP).

Seasonal factors (eg the wet) and the re-introduction of CDEP in communities are considered to have had only a minor influence on the numbers on Income Support.

6.8  Jobs Package

The Northern Territory Jobs Package provided funding for around 1,670 jobs in Australian Government-funded service delivery and around 400 jobs in local government service delivery across the Northern Territory. These figures were based on initial agency estimates about the number of sustainable jobs that could be created out of CDEP.

Now that job audits have been completed, it is clear that there were over-estimates in some sectors (municipal services 23) and under-estimates in other (education, community care).

6.9  Job Placements

Job Placements data is a measure of successful job referrals made by Job Network members for jobseekers (Indigenous and non-Indigenous) who resided in a prescribed community at the time of the job referral.   It is not a complete measure of all job placements that have occurred in these communities - only those where a Job Network member played a role in the job brokerage process.

DEEWR’s administrative dataset does not record whether a job placement is part of the NT Jobs Package.  However, by looking at other recorded information such as employer name and job description, an assessment has been made whether a job placement made by Job Network is also likely to be part of the Jobs Package.

Placements per month have trended up slightly throughout the duration of the NTER.


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6.10  Work for the Dole

Work for the Dole is about helping job seekers improve their employment prospects by providing opportunities for work experience.  NTER ‘Work for the Dole’ (WfD) participants are required to attend continually during their period of unemployment rather than six months out of 12 months for non-NTER job seekers.

Participants on WfD tend to enter and exit the program throughout the duration of an activity, for example due to medical exemptions, cultural and sorry business, short-term employment or education and training.

Since 1 August 2007 24 –

Lack of participation has been an ongoing issue. Attendance rates are around 30% - of those who commence in an activity approximately only a third attend at least once per fortnight. This compares to a national attendance rate of 60%.  Attendance is encouraged by making activities more attractive to participants and relevant to their communities.  Community consultation on the nature of the activity is important in creating community ownership and can be seen in those communities where attendance has been comparatively high.  There is anecdotal evidence to indicate that compliance action continues to have little impact as an incentive to ongoing participation in employment programs. 

6.11  Structured Training and Employment Projects (STEP), STEP Employment Related Services (STEP ERS) and Indigenous Small Business Fund (ISBF)

The Structured Training and Employment Projects (STEP) Program provides flexible funding for packages of tailored assistance, including structured and accredited training, to help employers give long term jobs to Indigenous Australians. Assistance is tailored to business needs and can include approaches such as funding for apprenticeships and mentoring that can lead to lasting employment

STEP can provide funding for apprenticeships, training and mentoring and other approaches leading to lasting employment.  STEP funding can be paid directly to employers or to organisations authorised to deliver STEP Employment and Related Services.

In total since, 1 August 2007 to 31 December 2008:

The Indigenous Small Business Fund (ISBF) offers funding to Indigenous community based organisations to assist Indigenous people to learn about business, develop good business skills and expand their businesses.

Since 1 August 2007 thirty three ISBF projects have been funded with 9 of these being funded between July and December 2008.

6.12  Non-Payment Periods(NPP)

When a person does not meet one of the conditions of payment under their participation or activity test requirements, and they do not have a reasonable excuse, they may have what is known as a ‘participation failure’ recorded against them.
Under the current compliance arrangements, an eight week non-payment period (NPP) is applied by Centrelink in instances where a job seeker has committed three participation failures within a 12 month period or has committed a serious failure, without a reasonable excuse.

Table 6.12.1 below shows that the proportion of applied Participation Reports (PRs) resulting in NPPs has decreased since the start of the reporting period.  The proportion of NPPs as a percentage of all applied PRs is also lower for NTER communities than nationally.  For example during the period 1 January 2008 to 31 December 2008, at the national level, 8.4% of PRs applied resulted in a NPP, whereas for NTER it was only 2.2%.

Table 6.12.1 – Applied PRs resulting in NPPs
Period Total Applied PRs CNPPs NPPs as% of applied PRs
01/08/07 to 31/10/07 442 36 8%
01/11/07 to 31/01/08 778 30 4%
01/02/08 to 30/06/08 1 ,301 33 2.5%
01/07/08 to 31/12/08 909 19 2%
August 07 to Dec 08 3,430 118 3.4%
Source: DEEWR

The number of PRs raised by employment service providers for job seekers living in NTER communities increased steadily until April 2008. Since then the number of PRs raised has declined significantly – over 1000 PRs were raised in April 2008 compared with about 560 in December 2008.  The number of applied PRs and non-payment periods has also declined over this period and the percentage of PRs rejected has increased markedly. 


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6.13  Off-Benefit Outcomes

An exit from income support occurs when a recipient; advises they no longer require income support, they transfer to another benefit or they have their benefit cancelled due to a failure to meet allowance eligibility requirements. 

By the end of 2008 there had been almost 6,100 exits from the activity tested payments – NSA and YAL.    Almost half of these (47%) occurred during July to December 2008. 

‘Longitudinal analysis’ of specific time periods has been used to look at any trends in the data.   The time periods used are 1 August 2007 to 31 January 2008 and 1 August 2008 to 31 January 2009. 

The analysis shows that –

According to Centrelink data only 2-3% of exits from NSA/YAL were to employment in both periods. The exits to employment are likely to be understated, as many job seekers fail to notify Centrelink when they no longer require income support (this generally accounts for over half of all exits reported). Previous research has shown that for job seekers, in general, up to 75% of such exits result from commencing employment.

25Data Notes

For the purpose of this analysis a maximum of one exit is counted for a job seeker in an analysis period – as job seekers may have multiple exits during a particular period the total above cannot be derived by adding component sub-totals. As job seekers who have an exit may subsequently return to income support, the analysis is based on the first exit reason in the period. Job seekers can be on NSA or YAL and participating in CDEP. 

As this analysis is based on the job seeker’s community at either the start of the period or at the start of receipt of the payment - whichever is later, the exit from income support may have occurred at another community.

Some figures have changed from the previous report.  As this is a longitudinal analysis it draws on the latest recorded data in respect of each period.  Income support data may be backdated when a change of circumstance is not notified (eg. failure to lodge a SU19 can take up to 13 weeks to be recorded as an exit), income support eligibility has been reassessed or an exit has been incorrectly recorded.

Examination of the raw data also shows that a number of job seekers changed their communities and that these changes were often applied to earlier analysis periods. 

Data has been provided from 1 August 2008 to 31 January 2009 to ensure a 6 months comparison could be performed from 1 August 2007. Data before 1 August 2007 is not available.

6.14  Increase Literacy and Numeracy

Language, Literacy and Numeracy Programs (LLNP) is designed to help improve the speaking, reading, writing or basic maths skills of job seekers.  The aim is to help job seekers improve their chances of getting and keeping a job, as well as making their everyday lives easier. Centrelink refers eligible job seekers to a contracted service provider for an initial assessment to determine their needs and suitability for assistance under the LLNP.

Funding for an additional 600 places was provided for the 2007-08 financial year.  Over 800 job seekers were referred to these services however as at June 2008 only a small percentage of job seekers were actually participating in LLNP.   For 2008 – 2009 funding has been provided for 486 LLNP places.  To date there have been approximately 1400 referrals to the LLNP with 159 job seekers commencing in a training program. 
Over time there has been some improvement in the take up rate, however there are significant challenges of providing LLNP services in remote communities, including –

The Program has had success in Gunbalanya and Nhulunbuy (East Arnhem communities), Bagot town camp in Darwin, with a joint LLNP and Work for the Dole project in Certificate II in Horticultural.

The NT DEEWR Office is looking to replicate this success in other communities with recent activities including activities through; the Tiwi Islands Training and Employment Board, a new LLNP STEPS – a new LLNP provider in the Central Desert region and Mission Australia in Ngukurr.


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6.15  Community Development Employment Program (CDEP)

Before the intervention commenced in July 2007 there were approximately 8,000 CDEP participants in the Northern Territory.  On 10 December 2007, the Government announced a moratorium on the transitioning of CDEP providers and their participants to income support 26.

6.16  Business Development

Indigenous Business Australia (IBA) was tasked to assist NT Indigenous organisations that managed CDEP projects, to examine the scope to transition CDEP projects into viable businesses.

During the 2007-08 financial year, 27 communities were provided with assistance to start one or more businesses during this measure with one business commencing.

Between July and December 2008, another eight former CDEP projects had made progress towards commercially viable businesses.

6.17 Childcare

Through the Jobs Package a total of 204 Indigenous people have been placed employment in childcare in existing childcare services. The majority (121) were placed between February and June 2008, with a further 28 placed between the July to December 2008 period.
Part of the NTER package includes the building and development of 9 new crèches for young children.  The first was opened on 11 August 2008 at Lajamanu.  

To support the new crèches, a workforce training measure will be implemented during 2008-09 through the Batchelor Institute of Indigenous Education (in conjunction with Charles Darwin University).  It is envisaged that up to 30 staff may be employed when the new crèches open during the 2008-2009 year.

Barriers delaying the development and opening of the crèches include: access to communities, wet season, community business, lack of construction and building expertise of departmental child care program management staff, and lack of opportunity for consultation with communities.

  1. The number of people on Income Support does not exclude Income Management exemption customers so these percentages are slightly overstated.
  2. ‘Auto income managed’ customers are customers who have not entered into a formal agreement with Centrelink – 100% of their Centrelink payments are withheld until a formal agreement is in place.
  3. The large increase in funds managed is due to: Increase in income managed Centrelink customers, one off economic Security Strategy payment in December 2008 and differences in the length of reporting periods.
  4. Store Cards: Prior to the introduction of the BasicsCard, Centrelink issued IM customers with Woolworths and Coles Stored Value Cards (SVCs) for the purpose of purchasing everyday priority goods such as food, clothing and basic household goods in urban areas.
  5. The reason for the difference is that at January 2 2009 covers from the start of Income Management. Adding the numbers mentioned above only covers 2008, whereas the figure quoted in this instance covers from Sept 07 to Jan 09 (whole period of IM to that time).
  6. It would be expected that some funds will remain unallocated over the fortnightly payment cycle, and because income managed customers are able to save funds for larger and less regular expenses, and for major purchases.
  7. The total numbers of job seekers engaged in DEEWR services includes job seekers that are not on a DEEWR payment
  8. http://ext.cdu.edu.au/newsroom/a/2008/Pages/171208-Intervention-urban-drift.aspx
  9. CDEP conversion rate has been variable and the number of municipal service jobs continues to grow
  10. Previous reports considered only prescribed communities.
  11. Data Note: These data only consist of PRs raised by employment service providers – it does not include Centrelink-initiated failures. Work is progressing to develop a standardised data source which will include both provider and Centrelink-initiated failures.
  12. The last scheduled transition day before the moratorium surrounding further CDEP transitions of 10 December 2007, was 16 November 2007. Since that date there have been no more providers transitioned
  13. Not all moves from CDEP had been to income support, some had found employment or moved onto other DEEWR programs. Some CDEP customers moved  off the CDEP program more than once since July 2007.

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