4 Selecting and Referring to Providers

Introduction

4.1. After their initial Centrelink interview, most jobseekers are allocated for referral to one of the employment assistance programs. In most cases, but not in "work for the dole" referrals, the jobseeker is given an opportunity to choose their own provider from amongst those who have been funded to provide the program. In general, the choice of a particular provider is made by the jobseeker or generated by a computer process known as "auto-referral". In some cases, the first appointment with the provider may then be made directly by the jobseeker. But in many cases, it is made by the provider and then notified to the jobseeker by letter. Such appointments may occur several weeks or even months after the initial choice of provider.

4.2. The fact that failure to attend an initial appointment with a provider is one of the most frequent reasons for breaching suggests that there may be need for improvement in these selection and referral processes. Many subsequent breaches appear also to have their origins at least partly in problems at this earlier stage which contribute to an inappropriate or ineffective selection of provider.

4.3. In this chapter we focus on three principal issues

• initial selections of providers;

• referral processes;

• changing providers.

Initial selections of providers

4.4. We focus here on initial selections of providers of Intensive Assistance and Job Search Training, and especially the first of those programs. They are the programs in which there is jobseeker choice and a significant incidence of breaches.

4.5. Either at the initial interview or later, Centrelink usually gives jobseekers who are to be referred to one of these programs an opportunity to choose a provider. The choice can be made at any time within the next fourteen days and is then registered and advised to the selected provider. The jobseeker waits for a referral letter to say that a place has become available with their chosen provider and that they should attend the provider for an interview on a specified date. If no place with that provider becomes available within 28 days, the jobseeker will be automatically referred to the next provider which has an available place. This referral after 28 days often occurs and, in some areas of Australia where there is a shortage of places, a further wait may occur before being allocated to another provider.

4.6. The great majority of jobseekers do not make a choice and, indeed, many of them indicate that they do not intend doing so. If jobseekers do not choose a provider within fourteen days, the choice is made for them through the auto-referral process. This means that DEWR's computer system generates the name of the provider in the jobseeker's locality which has the next available place and the jobseeker is automatically referred to that provider.

Encouraging choice

4.7. Substantial benefits can be gained from providing greater encouragement and assistance for jobseekers to choose their own providers. In many instances, it will increase the likelihood of an appropriate and geographically convenient provider being chosen and of a positive relationship being engendered between provider and jobseeker. In turn, the prospect of successful employment outcomes is increased and the risk of breaches is reduced. It is important, however, that the jobseeker's choice is made on a reasonably well-informed and voluntary basis rather than being affected unduly by pressure to make an immediate decision or else accept an "auto-referral".

4.8. Our inquiries suggest that many jobseekers are not encouraged sufficiently to take time in making a choice and that many of them have insufficient information on which to do so. There seems to be a clear need to improve the information which is available to them, especially by requiring all local providers to attend Centrelink's information seminars and/or to provide weekly "inspections" of their offices for jobseekers who may wish to consider selecting them. This would require, of course, ensuring that jobseekers are not under excessive pressure to decide quickly and that there is a "cooling off" period or some other means for ensuring that jobseekers are not unduly pressured by providers or Centrelink officers. It is also important that jobseekers should not be required to make a hurried selection when there is little prospect of actually making an appointment with the provider for a considerable period.

4.9. On the other hand, it is important that the choice is not unduly delayed. If a choice is made at a Centrelink interview, for example, the officer can contact the chosen provider and seek to make an early appointment while the jobseeker is still present. This may significantly reduce the risk of non-attendance at the appointment with the provider.

A recent pilot

4.10. As mentioned earlier, Centrelink began late in 2001 to trial a Streamlined Referral pilot in a small number of its offices. The pilot involves making greater efforts to achieve a choice of provider by the jobseeker at the initial Centrelink interview and then, in the jobseeker's presence, immediately to arrange an early appointment with that provider. In order to facilitate the process, jobseekers are required to attend an information seminar before the initial interview and the seminar may also be attended by a Job Network Access Centre (JNAC) adviser who specialises in assisting selection of providers and early referral to them. The JNAC adviser is also usually available to assist with selection and referral at the time of the initial interview.

4.11. We understand that the great majority of jobseekers in the pilot have selected a provider at the initial interview. Centrelink has then made an appointment directly with the provider and notified the jobseeker before he or she leaves the interview. The rate of attendance at these initial appointments with providers has apparently been much higher than under the usual system where appointments are made, and then notified by letter, some time after the initial interview. We understand, however, that the pilot has been conducted in areas where there is a relatively high number of unfilled places with providers rather than, as in many areas, a significant shortage and consequential waiting period.

4.12. There are obvious potential benefits in the approach taken in the pilot. But there are also major concerns that would need to be addressed in any proposed expansion. First, it would be essential to ensure that jobseekers are not unduly pressured to make a decision too quickly and, especially, to select a provider which might be suggested by Centrelink (perhaps largely because that provider has an immediate place available). Second, it would be essential to ensure that the jobseekers have attended an information seminar at which local providers were present and also have had an opportunity to visit one or more providers before making their choice. Third, it would be necessary to trial the scheme in areas where there is a relative shortage of provider vacancies and, consequently, there might be a greater danger of undue pressure to select a provider with an immediately available place. Finally, it would be essential to ensure an adequate level of Centrelink resourcing.

Better information

4.13. Whether or not the Streamlined Referral pilot is expanded, jobseekers clearly need to be given much better information about particular providers. During the last year or two, at least, many providers have usually been able to rely on getting a referral from Centrelink as soon as they have a vacancy. This has tended to reduce the competitive pressure on them to provide accessible and helpful information, and to vigorously promote their services and achievements, in order to fill the maximum number of places for which they are funded by DEWR.

4.14. Under these circumstances, there is a stronger case for imposing specific requirements on providers in relation to provision of helpful and accessible information. For example, they could be required to provide accessible information in brochures, videos and at information seminars about matters such as languages spoken; types of jobseeker specially catered for; particular industries and employers focussed upon; payments for job interview travel costs and other purposes; special services such as fares assistance or provision of mobile phones; and relevant statistics about services and employment outcomes.

4.15. There could be considerable benefits if one or more independent sources began publishing information, and perhaps some assessments, in relation to particular providers' services. Such a service should receive reasonable cooperation from DEWR and Centrelink. It would not be appropriate, however, to promote for public use the current type of outcome ratings collated by DEWR. These ratings are based on criteria that may be considered useful for DEWR's own purposes but, at least in their current form, are not generally appropriate as a reliable criterion for a jobseeker selecting a provider. Indeed, widespread use for that purpose could be seriously misleading to many jobseekers, unfair to many providers, and counter-productive to the general effectiveness of the Job Network system. This can occur, for example, because publication of DEWR's principal measures of providers' success in obtaining employment for jobseekers can encourage them to engage in "creaming". This practice involves focusing excessively on jobseekers for whom it is relatively easier to find employment, to the detriment of those who face greater labour market barriers. It may even involve an interest in having the latter kind of jobseeker removed from their quota through multiple breaches, in the hope that it will be easier to find employment for the next person referred to them.

"Auto-referral" and Centrelink selection

4.16. Despite changes of the kind we recommend, it is likely that there will be a substantial number of jobseekers who still do not choose a provider within a reasonable period. For them, under the current system "auto-referral" would continue to operate. It is widely believed, including by providers, that the introduction and heavy use of "auto-referral" since 1999 has been a key cause of the major increase in breaches. Certainly, the sharp increase developed shortly after the system was introduced. It appears that early experience of the Streamlined Referral pilot tends to confirm the linkage.

4.17. As explained earlier, the system does not allow for consideration of individual jobseekers' circumstances, except by usually making sure that the provider is in their locality. The "locality" for this purpose is defined by DEWR. It is sometimes very large in rural regions but even in urban areas the provider which is generated by the computer may be located as much as an hour or so away from the jobseeker's home. The impact of a total round trip of two or more hours to attend a provider can be unduly harsh on the jobseeker and their families, reduce the ability to engage in other job search activities, and substantially increase the likelihood of non-attendance. Moreover, if jobseekers have part-time work or for some other reason are ineligible for concessionary travel, the fares may be a considerable burden.

4.18. Limiting the incidence of "auto-referral", and improving its utility when applied, is an essential step for improving the effectiveness and fairness of the employment services system and reducing the number of breaches. The highest priority in this respect should be to avoid use of "auto-referral" for especially vulnerable jobseekers. In such cases, if the jobseeker does not make their own choice, the selection should be made by a Centrelink officer after detailed consideration of the jobseeker's particular circumstances. This process should also be extended, where possible, to a wider range of cases. Where "auto-referral" is still used, it should be refined so that jobseekers are not referred to providers which involve them in an unreasonable travel time or cost, or which are clearly inappropriate to the particular jobseeker's circumstances and needs.

R10. Jobseeker Selection of Providers

(1) Centrelink should provide jobseekers with greater assistance and encouragement to make an informed choice of the provider to which they are referred. However, jobseekers should not be required or pressured to make a choice at the initial interview or to choose a particular provider.

(2) Accordingly, Centrelink should provide jobseekers at their initial interview and on suitable subsequent occasions with clearer and more helpful information about their right to make a choice and about the providers from which they can choose.

(3) Each Centrelink office should organise its information seminars for new claimants on at least a weekly basis and local providers should be required to attend in order to explain their services and be available for discussions with individual jobseekers.

(4) Providers should also be required to offer "inspections" of their services for interested jobseekers and distribute information on specified aspects of their services and achievements.

R11. "Auto-referral" and Centrelink Selection

(1) The use of "auto-referral" of a jobseeker to the provider with the next available place should be reduced substantially, and should not be used at all in relation to especially vulnerable jobseekers.

(2) Instead, if a jobseeker does not make a choice, greater use should be made of a process by which a Centrelink officer selects an appropriate provider after a discussion with the jobseeker and close consideration of his or her individual circumstances.

(3) Where "auto-referral" remains in operation, it should be modified to ensure that the provider is within 10 kilometres of the jobseeker's home or, if that is not possible, is the closest provider which delivers services that are appropriate for the jobseeker in question.

Referral processes

4.19. A substantial proportion of jobseekers referred from Centrelink fail to attend the first appointment. When a referral is made, it is desirable to reinforce its detail in the mind of a jobseeker. The referral letter should encourage the jobseeker to be positive about the potential benefits that can be gained from the referral, while also reminding the jobseeker of the seriousness of their obligations. Where the letter is conveying the time, date and place of the first appointment referral, it should do so clearly and prominently together with emphasis on sanctions for non-attendance. In each of these respects there is a need to improve on the current types of letter generated through the Centrelink system. In addition, as suggested earlier, jobseekers could be provided with material such as cards or wall calendars that convey important information about referral processes, obligations and rights in a succinct, durable and convenient format.

4.20. Improvements of these kinds are especially important in relation to "auto-referral", where lack of recent contact with Centrelink staff may make the content and style of the letter particularly significant if attendance at the first appoinment is to be achieved and to be effective. Inclusion of an offer to facilitate attendance at the appointment would be especially useful.

4.21. We recognise that there are necessary limits to the amount of personal information about a jobseeker that Centrelink should be permitted to pass on to the provider. Nevertheless, such transfers commonly achieve considerable benefits for all concerned. Certainly, providers' effectiveness can be substantially reduced by ignorance of key information gathered at the initial interview or subsequent follow-up interviews. Also, jobseekers often assume that any information which they gave to Centrelink automatically becomes available to the provider and accordingly they may not volunteer it again or resist being required to do so. Strengthening the transfer of information at the time of initial referrals should therefore be a high priority, subject to compliance with guidelines of the kind that we have proposed should be developed in the form of a Privacy Code.

Especially vulnerable jobseekers

4.22. Many of those who fail to attend their first appointment with a provider are people who fall within the category we have described as "especially vulnerable jobseekers". The special efforts that we have recommended should be taken to identify and assist such jobseekers at early Centrelink interviews can be expected to reduce this problem of non-attendance, especially when combined with our recommendations for assisting appropriate selection of providers. Further measures will also be necessary, however, in relation to specific referral processes for especially vulnerable jobseekers.

4.23. These measures should include, for example, Centrelink seeking to minimise the time between selection of a provider and the date of the first appointment, making the appointment by telephone in the presence of the jobseeker, and providing assistance with travel arrangements. But, as stated earlier, there must not be undue pressure to make a selection long before any appointment with the selected provider is likely to be scheduled. It will also be important to ensure that the provider is aware of the jobseeker's special vulnerability and of ways in which the provider can help to reduce this vulnerability. A reminder from the provider to the jobseeker a day or two before the appointment would enhance the probability of attendance.

4.24. It is important to ensure that people who should have been classified as especially vulnerable jobseekers but were not so classified prior to referral are promptly detected by providers. The government has recently decided to strengthen its encouragement for providers to conduct their own assessments during the first month or so after referral, principally to consider whether to recommend to Centrelink that the jobseeker should be referred to another program such as the Community Support Program. This initiative partly reflects a recognition that many jobseekers are unable or unwilling to disclose at an early stage of engagement, especially with a government agency, some items of personal information that may indicate considerable levels of special disadvantage and difficulty. This is also the reason why we propose that the provider assessment process should include looking for especially vulnerable jobseekers who have not already been so classified.

R12. Referral Processes

(1) All notifications to jobseekers of initial appointments with a provider should state more clearly and prominently the time, date and place of the appointment and the risk of sanctions for non-attendance. They should also explain more effectively the purpose and potential benefit of the referral while emphasising the possible penalties for failure to attend.
(2) Providers should be required to assess at their first appointment with a jobseeker, or shortly thereafter, whether there are grounds for recommending to Centrelink that he or she should be
• classified as especially vulnerable;
• granted an activity test exemption;

• referred to a different employment service program or provider.

(3) Jobseekers should be provided by Centrelink with the cost of travel to and from the initial appointment with their provider.

R13. Referrals of Especially Vulnerable Jobseekers

(1) When referring especially vulnerable jobseekers to a provider, Centrelink should notify it of the reasons for the vulnerability and of the special arrangements which have been made for contacting and communicating with them, subject to the proposed Privacy Code.

(2) When making such referrals, Centrelink officers should be required to consider using special measures to reduce the risk of non-attendance at the initial appointment with a provider. This could include, for example, arranging an appointment with the provider by telephone while interviewing the jobseeker, ensuring that the date is within the next few days, and helping to make travel arrangements.

(3) Providers should be required to remind especially vulnerable jobseekers shortly before the date of their initial appointment, unless the initial communication was made only a day or two before the appointed date.

Changing providers

4.25. A jobseeker may wish to change from their chosen provider because they have further advice or information about another provider which they believe is more appropriate, because they have moved to a different area, or because they are not comfortable with the relationship. But unless they are relocating to another area, jobseekers can only change providers if Centrelink is persuaded that there are irreconcilable differences with their provider. Centrelink usually adopts a strict approach to assessment of irreconcilable differences. This may be partly perhaps because particular jobseekers or providers may sometimes wish to exaggerate any difficulties or, at least, make little attempt to overcome them. But it appears that some jobseekers have been unable to change providers when they have sound reasons for wishing to do so, such as travel difficulties or a reasonable belief that another provider is more likely to be helpful.

4.26. As emphasised earlier, it is important for jobseekers to be confident that their provider is appropriate for their particular circumstances and needs. In general, this will increase the prospects of successful outcomes and improve the overall cost-effectiveness of the system. It is also consistent with the current government policy in favour of competition in the provision of employment services. Accordingly, there is a strong case for reversing the current onus so that change of providers is permitted unless clearly unreasonable rather than, as at present, being prohibited unless irreconcilable differences are clearly established.

4.27. This approach recognises that clearly unreasonable changes in provider should be prohibited because of the danger of obstructionism and delay by particular jobseekers or lack of effort by providers, especially where a jobseeker seems likely to require a lot of assistance. Here, as in other respects, difficulties appear to be exacerbated by lack of sophistication and flexibility in the system of payments to providers. In particular, the current system can give undue encouragement for some providers to obtain the up-front payment for conducting an initial interview with a particular jobseeker but then to provide little or no further assistance because they believe it will be difficult to find work for that jobseeker and therefore the cost and effort are unlikely to be recompensed by further outcome-based payments.

4.28. As explained earlier, it is not within the scope of our review to recommend fundamental changes to fee payment structures in the Job Network system, especially Intensive Assistance. However, particularly for those most in need of them, consumer choice and effective provision of assistance would be substantially improved if payments to Intensive Assistance providers were not so rigidly divided into a lump sum after first interview and one or two additional lump sums in the event of specified employment outcomes. A more graduated system would provide greater encouragement for ongoing assistance rather than early "dumping" by providers of those jobseekers for whom further payment seems difficult to achieve. It would also provide greater incentive for providers to ensure that jobseekers attend their first appointment and continue to meet their obligations to cooperate.

R14. Changing Providers

(1) Jobseekers should be entitled to change their choice of provider within fourteen days after their initial Centrelink interview or within twenty eight days after their initial interview with the chosen provider. In the event of such a change, DEWR payments to the provider should be reduced where appropriate.

(2) Jobseekers should be entitled to change their choice of provider at other times unless it is clearly unjustifiable to do so, irrespective of whether there are irreconcilable differences in the relationship with their provider.