Job agencies for Workforce Australia, the government’s employment service, have been forced to hand back more than AUD 8.5 million (USD 5.5 million) in government payments in one year, more than double the previous 12 months, after an apparent crackdown on faulty claims, according to an investigation by The Guardian. Under the employment services system, providers are funded with so-called ‘outcome payments’ for placing their clients into employment or courses and they can claim reimbursements for money spent helping jobseekers prepare for work.

The Workforce Australia scheme, which is under review by the government, is expected to cost more than AUD 9.5 billion (UDS 6.2 billion) over the next four years, amid sustained criticism that the privatised system is ineffective. Data obtained by Guardian Australia shows in the past four financial years, the government has recovered AUD 17,490,143 (USD 11.4 million) from employment services providers, with AUD 8,558,253 (USD 5.5 million) of that recovered in 2022-23 alone.

A Department of Employment and Workplace Relations spokesperson said the most common reason for recovery was because the provider supplied “inadequate documentary evidence” when claiming payments or had wrongfully made a claim. They said the money had been recovered after random sampling of expenditure and more targeted investigations. “The department has also over time invested in more sophisticated assurance and program monitoring tools,” the spokesperson said.

A parliamentary review ordered by the government found in November that the full privatisation of Australia’s employment services system had failed. It called on the government to re-establish a commonwealth job agency and overhaul the mutual obligations regime. The government is yet to respond to its findings.