Major SA disability job provider loses contract amid national shake-up

South Australia’s largest disability employment services provider, Maxima, has been rocked by the loss of its federal funding contract after a recent tender. The not-for-profit, which supports over 6,000 job seekers with disabilities nationally, told staff it failed to win the bid to continue services in any state except Western Australia. This means that from November 1, Maxima will no longer deliver Disability Employment Services in SA – a role that will be taken over by a new provider selected under the federal government’s latest tender (the winning provider has yet to be publicly announced due to a government-imposed embargo). Maxima’s management, speaking with ABC News, called the outcome “significant and difficult,” assuring its 400 employees that “this is not the end of Maxima” and that the organisation will continue other programs and its WA services.. In an internal memo, staff were promised support to transition to jobs with other providers or find new employment.

A national overhaul of disability employment services

The upheaval in South Australia comes as part of a broader national reshaping of Disability Employment Services (DES). The federal government has “rebranded” DES as Inclusive Employment Australia (IEA) and conducted a competitive, open tender to select providers for the next five years. In a media release, Social Services officials said the changes follow extensive consultation with the disability community and will inject additional funding to improve outcomes. Key changes under the new IEA program include:

• More funding and capacity: An extra $227.6 million over five years and expanded eligibility criteria are expected to allow 15,000 more people with disability to access employment support each year
• Specialist providers: The new program features a more diverse network of providers, including specialists in particular disabilities or communities, replacing the one-size-fits-all model
• Improved support and accountability: Providers must meet higher training standards and will be held to stricter performance measures, with funding shifts if outcomes lag. Wage subsidies for employers are being streamlined and boosted (up to $10,000) to encourage sustainable hiring of people with disability.

The Inclusive Employment Australia program will officially replace the current DES system nationwide on November 1, 2025. The Department of Social Services (DSS) stresses there will be “no reduction of services in any area”, including South Australia. In total, 84 organisations have received funding offers to deliver IEA across Australia – a significant consolidation given the DES program previously had nearly 100 providers. “As with any tender, some organisations have been successful and others haven’t,” a DSS spokesperson speaking with the ABC News noted. People with disability will have roughly 20 different provider organisations to choose from under IEA, with new options catering to specific needs.

Winners and losers: Providers grapple with change

The tender outcome signals a changing of the guard among disability employment providers. Maxima is one of several established players that lost their contracts entirely in the shake-up. Industry sources suggest a number of smaller providers also missed out on IEA funding, continuing a trend of weeding out underperformers. (In a 2022 interim review, for example, eight providers were stripped of all their DES sites and dozens more had business reduced.) By contrast, some large operators have maintained or expanded their role. The nation’s single biggest provider, APM, was left “unaffected” by previous cuts and is expected to remain a major presence under the new scheme. The full list of winners is due to be published by DSS in early August once the embargo lifts, but the immediate ramifications are already being felt.

For Maxima’s staff and clients, the news has been jarring. Frontline employees face potential redundancy or transfers; Maxima’s memo urged staff to keep the news confidential until an official announcement, even as it acknowledged the outcome was “not anticipated”. Other DES agencies nationally are likely in similar positions, bracing for layoffs or closures if they failed to secure new contracts. The federal government has appointed a transition support service to help providers adjust over the coming months.

Disabled jobseekers in limbo – and hope

Bedford, a major disability employer in SA, has separately fallen into crisis. The 80-year-old Bedford group announced it will enter administration, putting 1,400 supported workers in jeopardy. 

The changes come at a tumultuous time for South Australians with disabilities seeking work. On the same day Maxima’s news broke, disability support enterprise Bedford – Australia’s second-largest employer of people with disability – warned it would likely enter voluntary administration, directly imperilling about 1,400 supported workers in SA. Bedford’s crisis stems from waning NDIS funding for its sheltered workshops, but its potential collapse underscores the fragility of disability employment models. “It is a devastating situation with vast personal impact,” Bedford CEO Myron Mann told media, describing the situation as “heartbreaking” for the hundreds who rely on Bedford’s jobs.

Meanwhile, thousands of DES participants across Australia now face the prospect of switching to new job agencies by November. The government has sought to reassure clients that support will continue uninterrupted. Officials note that current participants “don’t need to do anything just yet” – they will be contacted and able to choose a new provider that suits their needs, with a dedicated hotline and guidance on hand for the transition. Past experience suggests the scale of disruption will be significant: roughly 15,000 jobseekers had to be referred to new providers during a smaller reallocation in 2022, and the national overhaul this year could eclipse that. Disability advocacy groups have long argued that stability and trust are key to successful employment outcomes, and there are concerns that forced changes of provider may set back some jobseekers’ progress. At the same time, many in the community are hopeful that the new Inclusive Employment Australia program – developed in part by people with disability – will finally address chronic issues in the system. “We know a one-size-fits-all approach doesn’t work,” Social Services Minister Tanya Plibersek said earlier, emphasising that IEA’s personalised, flexible model “puts people with disability back at the heart” of employment services.

As South Australia transitions to a new disability job service provider and the nation moves into uncharted territory with IEA, the immediate focus is on ensuring no client falls through the cracks. For people like those served by Maxima and Bedford, the coming weeks bring uncertainty – but also the prospect of a revamped support system that, if it delivers as promised, could open more doors to meaningful work. The true test will be in how smoothly these changes are implemented and whether they can live up to the promise of better opportunities for Australians with disability.