Australia's jobless to face mutual obligation rule despite few job vacancies

Jobseekers face the renewed threat of benefit suspension after the federal government announced the return of welfare mutual obligations.

From 28 September, about 1.5 million people receiving unemployment benefits will need to search for up to eight jobs a month, sign a job search plan and participate in meetings with an employment services provider.

That’s despite limited job availability amid the Covid-19 recession, with analysis of government data showing there are 13 jobseekers for every job vacancy across Australia.

Benefits suspensions – which have been paused during the pandemic – will recommence, meaning jobseekers can have their payments stopped for not meeting these obligations.

In a move condemned by advocates who doubt its value and whether it is safe, the controversial work for the dole program for longer-term unemployed will also return in cases where the government believes it is “safe to do so and all health and safety requirements are met”.

Related: Australia's unemployment rate falls to 6.8% – but more Victorians are out of work

Mutual obligations will remain paused in Victoriaas it grapples with tough coronavirus restrictions.

The changes coincide with a $300-a-fortnight cut to the coronavirus supplement – added to jobseeker, student and parenting benefits – on 25 September, a move that may cost the economy $31bn and 145,000 full-time jobs over two years.

Kristin O’Connell, spokesperson for the Australian Unemployed Workers Union, said the government was putting “unemployment cops back on the beat while there are no jobs to be had”.

“While ‘mutual’ obligations were suspended, we received countless reports from people saying they feel properly equipped to look for work for the first time,” she said.

“Without any penalties for not applying for jobs, job ads were receiving more applications than ever before.”

Cassandra Goldie, chief executive of the Australian Council of Social Service, said requiring jobseekers to search for eight jobs a month was “too high in the highly competitive jobs market”.

She added that the Work for the Dole program “does nothing to improve employment prospects [and] could put people at risk under Covid-19”.

Greens senator Rachel Siewert also added to the criticism, blasting the government for throwing struggling Australians under the bus to “line the pockets of private companies”.

“We are in the midst of a recession, the jobs are not there and we are basically making people chase their tails, pushing paper to keep this government happy, and line the pockets of private companies who are making a lot of money out of the unemployment industry,” she said.

Related: Jobkeeper cuts to strip $9.9bn from Australian economy by Christmas, report says

Since 2015, the government has awarded more than $7bn worth of welfare-to-work contracts to private employment service providers.

Guardian Australia has reported extensively on the blunt nature of the welfare compliance regime, which saw jobseekers’ payments temporarily stopped 2.3 million times in 2018-19.

Of the 581,866 people who had their payments suspended last financial year, 121,604 were later found to have had a reasonable excuse.

In a joint statement, the employment minister, Michaelia Cash, and social services minister, Anne Ruston, said labour force data showed Australians were “returning to the workforce and many businesses are looking for workers”.

On Thursday, the ABS said unemployment fell by 0.7% to 6.8% in August. Economists said the shift was mostly driven by an increase in people describing themselves as self-employed, likely reflecting a boost to gig economy jobs such as food delivery.

But government data on jobseeker payment recipients shows there was a negligible change in recipients between July and August. The figure stood at 1.5 million in both months. There was little difference among those who recorded employment income.

The ministers said the government was also focusing on upskilling jobseekers as the labour market shifts due to the pandemic.

“Given the changing nature of the labour market, with many roles changing significantly because of Covid-19, the government is also increasing opportunities for jobseekers to train and upskill to become more employable in areas of high skill demand,” they said.

The ministers said short education or training courses would also count towards mutual obligation requirements under more flexible rules.

They said the government acknowledged it was “a challenging time for those looking for work” and encouraged people to access the support services made available.

This included “skills training, assistance for other work preparation activities and referral to relevant support services – including mental health services, if required”.

Related: Cut to jobseeker payment estimated to cost Australian economy $31bn

Labor’s employment spokesman, Brendan O’Connor, said the opposition supported the “principle of mutual obligation” but it should not be punitive and the government needed to create jobs, rather than just cut benefits.

Exemptions from mutual obligations will be available for those who can demonstrate special circumstances.

The new rules will apply to people on the jobactive program, the new online employment services program, disability employment services and ParentsNext.

In the case of ParentsNext, it means participants, who are mostly single mothers, may have their payments stopped for failing to attend activities that have previously included things like taking their children to playgroup or StoryTime session at the library.

Although people can have their payments restarted by “re-engaging” with their job agency, critics argue a delay to welfare payments often leaves those on benefits struggling to afford essentials and cover bills.