Profit over people: administrative evil and the TCF

Over the last 2 weeks, significant reports into the integrity of the TCF have been published, revealing serious flaws in its design that confirm the worst fears identified in digital social policy literature. This blog from @simonecasey explains why the failure of government to fully shutdown the TCF, including payment suspensions, is a form of administrative evil because employment services providers interests have been prioritised over the rights of people routinely subject to abusive provider practices.

The concept of administrative evil describes how ordinary bureaucratic processes can systematically harm individuals while appearing rational and procedurally correct.

Two major investigations—a comprehensive Deloitte technical review and an ongoing Commonwealth Ombudsman inquiry—have exposed how the Targeted Compliance Framework (TCF) operates largely without human oversight, making critical decisions about participants' income support through automated processes that lack proper legal authority

In the case of the TCF, administrative evil has been exercised by allowing a system without full documentation of legal adherence to operate in the first place. "The legal and factual basis for compliance action, particularly when initiated and administered by the IT system, cannot be readily documented or evidenced," the Deloitte report states. This fundamental lack of traceability means decisions affecting individuals' rights cannot be adequately explained, justified, or audited with reference to relevant legislation.

The Ombudsman’s report was also scathing of the Department of Employment’s failure to act when it had knowledge of faults in the TCF, and the lack of attention to robust oversight and governance of the system.

Further, the Deloitte review identified complete breakdown of administrative control defying the "Three Lines of Defence" governance model. It said that assurance processes are reactive and fragmented, with no systematic monitoring for systemic risks or participant harm. Most assurance relies on "reverse engineering" after problems occur rather than proactive prevention.

The number of people affected by suspensions is significant: approximately 194,670 individuals per quarter—or 48,667 participants monthly—experience payment suspensions under this automated system that manages over 640,000 Workforce Australia participants. There are also suspensions in the Disability Employment Services that affect another 40,000 people per quarter.

While payment suspensions mainly operate as threats that do not actually lead to payments being withheld, they are nonetheless extremely stressful for people already trying to survive on inadequate payments. Even before the Deloitte review, we knew that providers muddle the process of rescheduling requirements, notifying people of the next steps when their payments are suspended, or worse, use payment suspensions illegally to coerce people into providing payslips and/or other sensitive information. On top of that, the DEWR had identified 55 total IT defects in the TCF system, som of which are likely to use wrong dates and timestamps.

Despite being told that the integrity of the TCF cannot be assured, the government has decided to continue payment suspension. The Secretary has not declared payment suspensions to be operating illegally, despite it being clear from both reviews that they are procedurally unfair and there a concerns about provider administration of these.

What makes this administrative evil particularly insidious is that it protects a lucrative industry built on systematic harm. Private employment service providers—companies like APM, Sarina Russo Job Access, and MAX Employment—generate hundreds of millions in revenue from a system that demonstrably fails the people it claims to help.

The deeper evil lies in protecting an industry whose effectiveness is highly questionable. Despite billions in government spending, there's limited credible evidence that private employment services significantly improve employment outcomes compared to people finding work independently. Most claimed successes would likely have occurred anyway through normal labor market processes.

These providers are paid based on moving people off welfare payments, regardless of whether this occurs through genuine employment or punitive cancellations that force people out of the system entirely. With approximately 194,670 individuals per quarter experiencing payment suspensions, the compliance system generates substantial revenue through administrative fees, case management payments, and performance bonuses tied to compliance actions.

The system creates the very problems it claims to solve. Punitive compliance requirements, mandatory appointments conflicting with work opportunities, and the stress of payment suspensions actively undermine employment prospects. People become "non-compliant" partly because the system makes it difficult to maintain stable routines or focus on genuine job seeking while facing constant financial threats.

This creates a vicious circle where failure justifies more punishment rather than questioning fundamental assumptions. Poor outcomes are blamed on participant "non-compliance" rather than service ineffectiveness, protecting provider profits while appearing to address system problems.

Pausing the system would force acknowledgment that billions spent on private employment services have produced questionable results while causing documented harm. Instead, officials frame continued punishment as maintaining "program integrity"—language that obscures the economic interests being served.

Administrative evil thrives through mechanisms that create psychological distance between decision-makers and those they harm. When thousands of people monthly lose payments, individual suffering becomes statistical abstraction. Officials can rationalise continuing a known-defective system as procedurally necessary while reviews proceed at a comfortable bureaucratic pace, or a dragged out indefinitely.

The technical complexity serves as moral camouflage. Discussions of "system defects," "governance frameworks," and "administrative improvements" obscure the human reality that real people cannot afford food, rent, or medication because of bureaucratic failures. This specialised language allows officials to treat systematic wrongful punishment as a technical problem rather than a moral catastrophe.

The provider profit motive transforms human compliance into a commodity to be harvested. Performance-based payment systems create implicit quotas for compliance actions—providers have financial incentives to find people non-compliant because it demonstrates their "effectiveness" and triggers additional payments.

The system treats people as units of production to be processed through compliance mechanisms. Continuing suspensions maintains this human throughput, ensuring providers can extract value from distress while reviews proceed. Meanwhile, the real costs of ineffectiveness—long-term unemployment, social exclusion, mental health impacts—are borne by individuals and communities while providers capture profits from government contracts.

Perhaps most troubling is how this exemplifies Hannah Arendt's concept of the "banality of evil"—great harm resulting from thoughtless adherence to bureaucratic processes rather than malicious intent. Officials likely view themselves as responsible administrators maintaining system integrity, not as actors causing systematic harm.

The gap between identifying problems and stopping harmful actions allows administrative evil to flourish. The system continues damaging people while protecting itself through the appearance of responsible review and gradual reform. This creates moral hazard where bureaucratic systems face no immediate consequences for causing harm, while those harmed have limited recourse.

The government's choice to maintain payment suspensions during reviews represents administrative evil in its purest form—prioritising bureaucratic convenience and private profits over preventing documented harm to vulnerable people. While individual officials may have good intentions, the institutional logic treats systematic wrongful punishment as an acceptable cost of maintaining procedural normalcy and protecting industry interests.

This case demonstrates how administrative evil operates not through malicious intent but through organisational cultures that make the suffering of powerless people invisible or acceptable in service of broader systemic goals. The technical complexity and bureaucratic language of reform serve to obscure the fundamental moral choice being made: to continue harming people rather than disrupt profitable administrative processes.

It represents perhaps the most cynical form of administrative evil—maintaining systematic harm to protect investments in approaches that may be counterproductive to their stated goals, all while claiming to pursue reform and improvement.

This article reflects the views of @simonecasey in her academic capacity @RMIT based on her research published in related articles.

Casey, S. (2022). Towards digital dole parole: A review of digital self‐service initiatives in Australian employment services. Australian Journal of Social Issues, 57(1), 111-124.

Casey, S. (2024). Robo-compliance in Australian employment services. Australian Journal of Social Issues. https://doi.org/10.1002/ajs4.368