Labor to scrap Coalition’s ‘punitive’ ParentsNext scheme from next year

The Albanese government will scrap the controversial ParentsNext program from next year and stop compulsory obligations for participants immediately in a significant win for campaigners.

The decision comes after years of protest from advocates about the pre-employment program, which saw about 100,000 people on parenting payments drawn into the mutual obligations system.

Under the scheme introduced by the Coalition in 2018, parenting payment recipients were sent to a privatised job agency that provided career advice, linked individuals to courses and training and required them to complete education or parenting activities to keep their welfare payments.

Guardian Australia first revealed concerns about the program in 2018, detailing how some single mothers were made to take their children to story time sessions at the local library or playgroup under threat of having their Centrelink payments stopped.

The program was continually criticised by groups including Single Mothers Australia (formerly National Council for Single Mothers and their Children) and a former program participant, Ella Buckland, who launched a support group for parents in the program.

It also faced criticism from the Australian Human Rights Commission and more recently the government's Women's Equality Taskforce and the Economic Inclusion Advisory Committee, which both said it should be scrapped. In March, a parliamentary committee chaired by the Labor MP Julian Hill also recommended the scheme be wound up and immediate action be taken to blunt its harshest aspects.

ParentsNext, which was most tipped to cost $484m across the forward estimates, was reformed several times with some changes easing the burden on participants, but Labor has concluded it remains too punitive.

In a joint statement, the minister for women, Katy Gallagher, and the employment minister, Tony Burke, said: "Women around the country have been telling us that the former government's ParentsNext program is punitive, counterproductive and causes harm.

"At the election we committed to listen to women's experiences and make decisions that make their lives better and fairer."

Gallagher and Burke said the scheme would be abolished from 1 July 2024, which is in line with when the contracts expire. "As a first step, from 5 May 2023, we will immediately pause all compulsory requirements for participants in ParentsNext," they added.

The government will co-design a new program before July next year.

ParentsNext was particularly controversial because it placed mutual obligations requirements on those on parenting payments with children as young as nine months old. About 95% of the nearly 100,000 participants in the program are women, while 75% are single parents.

Critics of ParentsNext said the scheme was sexist because it failed to acknowledge that parenting was work and did not adequately recognise the complexity of life for single-parent families, particularly those with young children. One parent told Guardian Australia she had her payments suspended through the program during a period in which she was also hospitalised due to complications from a pregnancy. Another described being penalised for failing to attend appointments with a ParentsNext provider because she had been at work.

A key complaint was that parents who failed to meet their obligations would have their payments temporarily suspended, which caused significant stress and anxiety and, in the most grave cases, left them unable to buy groceries or pay bills. Those payment suspensions were less common in later iterations of the scheme but remained an issue.

Supporters say the scheme helped thousands of disadvantaged parents to learn new skills and eventually return to the workforce.

While the design of the program was a major controversy, others were also critical of the for-profit and nonprofit providers that reaped hundreds of millions of dollars running the program.

In 2019 a whistleblower told Guardian Australia that staff at one provider were dissuaded from exempting women presenting with health issues from the program, so participants would remain on the provider's books.

In 2022 a Guardian Australia investigation into the mutual obligations system detailed how one ParentsNext participant - a single mother with disability and with children with disability - completed online modules in topics such as "body language" and "making decisions" through the ParentsNext program.

The woman, who had taken off time from study due to health issues, said the online courses were a waste of time. The provider claimed more than $100,000 in extra taxpayer-funded reimbursements for putting ParentsNext participants through these courses, which it also operated.

Last year Guardian Australia also revealed an internal audit had found ParentsNext providers had lodged a significant proportion of invalid claims for taxpayer-funded payments.

Guardian Australia has also reported expectations the government will also raise the children's eligibility age for the single parent payment to 14. But it is likely to ignore recommendations to raise the jobseeker payment for all recipients in favour of an increase for those over 55.