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Five key changes to welfare and work rules in Labor’s employment white paper

<span>Photograph: Julian Smith/AAP</span>
Photograph: Julian Smith/AAP

Job seekers will be able to work for longer while retaining social security concessions, and changes to allow pensioners to work more before payments are reduced will become permanent, under two major welfare law reforms.

The Albanese government will spend $85.2m over four years on the two measures, which are the centrepiece of nine new policies adopted through the employment white paper, titled Working Future, released on Monday.

The treasurer, Jim Chalmers, said the white paper provides “the roadmap for Australia to build a bigger, better-trained and more productive workforce – to boost incomes and living standards and create more opportunities for Australians to participate to their full potential”.

Related: Job services must shift from clipping tickets to changing lives | Paul Karp

So what are the major new measures in Working Future?

1. Pension changes made permanent

After the jobs and skills summit in September, Labor allowed aged pensioners and veterans to earn up to $4,000 more a year before seeing a reduction in their pension, a key demand of the Coalition.

The white paper announces this change will be made permanent at a cost of $42.4m through to 2026-27. From 1 January 2024, all aged pensioners and eligible veterans will be able to earn $11,800 a year before their payments are reduced.

2. Support for welfare recipients get support

Despite the Coalition calling on the Albanese government to double the amount of income job seekers can earn before their payments are reduced, the white paper eschews that option.

The paper noted that 78% of jobseeker recipients “do not make use of the income free area” while those who do earn income “do not appear to restrict their income to align with the income free area threshold”.

Instead, the government will smooth the transition to work for many income support recipients by doubling the period they can receive a nil rate of payment, allowing them to retain access to social security benefits such as concession cards for longer when they first get back into work.

Labor will seek to legislate so that from 1 July 2024, recipients of payments will have up to six months in a job before they lose their connection to the welfare system.

It is designed to address concerns that losing access to concession cards, childcare subsidies and other supplementary payments, or having to reapply and wait for income support if things don’t work out, is discouraging people from taking up work, particularly short-term, casual and gig economy jobs.

At a cost of $42.8m over four years, the measure is estimated to benefit 138,000 people, particularly those on jobseeker or youth allowance.

3. Apprenticeships and Tafe

The government aims to double the take up of higher apprenticeships in the priority areas of care, digitisation and net zero emissions over five years, and will create six new centres of Tafe excellence.

Labor will spend $31m on the Tafe centres and $10m to develop higher and degree apprenticeships to enter priority industries without going to university.

Higher apprenticeships are vocational qualifications combined with paid employment.

4. Job services reform

The Workforce Australia job services model is also set for a shake-up, after the white paper found although “the system may work relatively well for an average job seeker, it has failed those who are most disadvantaged”.

The current system will be revamped with eight new principles recognising the need for services that “protect the dignity and respect rights of individuals”, provide a pathway towards “decent jobs” and deliver “strong Australian Public Service stewardship in the system … to ensure that individuals are not left behind”.

Related: Albanese government pledges $41m for six Tafe centres of excellence and more higher apprenticeships

The government has said it will reform the local jobs program to improve its flexibility and provide practical initiatives and action to better help jobseekers, including deploying public servants to Broome, Geraldton and Kalgoorlie in Western Australia.

The Albanese government is reforming the community development program, disability employment services model and the controversial ParentsNext program. Further changes to the Workforce Australia model are expected after a parliamentary inquiry reports in November.

5. National skills passport

The government will spend $9.1m on a business case to define the scope, outcomes and benefits of a national skills passport.

The Business Council of Australia has welcomed the measure, noting it will provide employers with a nationally consistent format to view and verify a potential employee’s skills, and make learning more flexible by giving students recognition of what they’ve already achieved when they switch degrees or institutions.

Bran Black, the BCA chief executive, said the council had “long advocated for a skills passport and a national framework for a digital, portable skills sharing system, and [the] announcement is a game changer”.