What does the new Commonwealth Prac Payment mean for students? Will it do enough to end ‘placement poverty’?

The federal government has announced a “Commonwealth Prac Payment” to support selected groups of students doing mandatory work placements.

Those who are studying to be a teacher, nurse, midwife or social worker will be eligible to receive A$319.50 per week while on placement. This amount is benchmarked to the single Austudy per week rate. Other support payments received by a student will not be affected.

The payment, which is part of the upcoming federal budget, is due to start in July 2025 and will be means-tested (the details of which are still to be worked out). It follows a recommendation from the Universities Accord final report and will be welcomed by many students facing “placement poverty” as they complete their degrees. But is it enough?

Why is a Prac Payment needed?

Unpaid work experience has become a compulsory rite of passage to paid employment in many areas of study.

This experience is thought to increase skills, knowledge, experience and students’ identity in the profession. Research also shows students believe work experience (whether paid or unpaid) builds job and social skills, helps them decide on a career path, and boosts their chances of getting a job when they graduate.

But due to their long hours and intensive nature, unpaid placements can also result in financial stress and have negative impacts on wellbeing as students juggle paid work, study obligations and unpaid work.

Being unable to afford to do mandatory unpaid work can also prevent some students from completing their degree on time or at all.

As more students are expected to undertake long or multiple unpaid placements, this also limits the types and amounts of paid work they can do while studying, making their financial and employment situation more precarious.

Does the plan go far enough?

Many degrees require students to do the equivalent of up to six months’ unpaid work.

For example, social work students are expected to complete 1,000 hours of full-time, unpaid work experience. Education students must do a minimum of 80 days. Both of these student groups will be eligible for the prac payment.

But many other degrees can require hundreds of hours of unpaid placement time but are not supported by the Commonwealth Prac Payment. This means other allied health students, such as occupational therapy students (who must complete a minimum of 1,000 unpaid hours), or speech pathology students who may be required to take a rural or remote placement, are excluded from the payment.

To enhance graduate employability, universities and other tertiary training institutions (such as TAFEs) have also expanded obligatory “work-integrated learning” into fields of study where there are no statutory or professional requirements for it. This includes areas such as urban planning, communication and creative industries, and journalism.

This means students do projects or placements with organisations outside of the university as part of their coursework.

When asked about broadening the set of courses involved, Education Minister Jason Clare told Radio National “that’s something that we’d have to look at down the track”.

Mandatory versus ‘voluntary’ unpaid work

On top of mandatory placements, it is common for students to also do other work experience on their own initiative while studying. Researchers call these “open-market internships”.

Sometimes this is billed as “voluntary” but the lines here can be very blurry. Students can see this unpaid work as necessary to develop networks and fill CVs to become more competitive for graduate jobs.

Unpaid work undertaken as part of a degree or vocational education program is lawful in Australia, but some open-market internships may not be.

Dubious arrangements include interns doing the same work as regular paid employees and undertaking work that does not predominantly involve observing or performing mock or simulated tasks.

What more is needed?

If employers and universities genuinely believe work experience is they key way students become employable graduates, they must find ways of making such experiences accessible to all students. Payment for placements and other meaningful financial support is a good place to start.

For example, earlier this year, the Queensland government announced a $5,000 cost-of-living allowance for eligible final-year nursing and midwifery students who do placements in regional, rural or remote Queensland.

But safeguarding the financial and general wellbeing of students is not just the responsibility of governments. Universities, vocational education and training providers (such as TAFEs) and employers also need to make sure the benefits of unpaid work placements are not outweighed by the costs.

We need to look at new regulations that limit how long an unpaid placement can last, and offer alternatives to unpaid placements, such as “supervised service learning”. An example of this is the National Tax Clinic Program. Run through the Australian Taxation Office, students studying tax-related courses provide free tax advice to individuals and small businesses under the supervision of qualified professionals.

Employers also need to ensure they properly train, induct and pay graduates and students undertaking work that benefits their business.

As the Prac Payment details are worked out and evaluated, we need to make sure the government does indeed look again at the list of eligible courses, to make sure the scheme helps all students who need it.