PAYMENT BY
OUTCOMES TRIAL
Australia’s first federally funded trial proving jobs-focused social enterprises can deliver stronger employment outcomes for people facing complex barriers to work.
PROVING THAT SOCIAL
ENTERPRISE WORKS
The Payment by Outcomes Trial (PBO3) was Australia’s first federally funded trial of outcomes-based funding for jobs-focused social enterprises.
Delivered in partnership with the Department of Social Services, the trial ran from July 2022 to March 2026 and involved 17 jobs-focused social enterprises across Australia.
For the first time, jobs-focused social enterprises were paid for the employment outcomes they create, recognising the sustained employment and tailored support that are central to their model.
Independent evaluation by the Centre for Social Impact Swinburne found participants experienced stronger employment and wellbeing outcomes.
Independent economic analysis by Taylor Fry found jobs-focused social enterprises outperformed Disability Employment Services across key employment measures and projected lower long-term costs to government.
A LANDMARK TRIAL
3
years
17
social enterprises
3
impact investors
$3.8m
outcome payment pool
132
people supported into real, paid employment
The trial continues
Following the original three-year trial, PBO3 has been extended through to March 2027.
The remaining program funding is supporting a new enrolment period involving 18 jobs-focused social enterprises and 56 participants, with a refined milestone structure. The participating organisations include returning social enterprises alongside new participants, including the program’s first Tasmanian social enterprise.
The results presented on this page relate to the original three-year trial. The extension will be independently evaluated following its completion.
THE PROOF
The trial enabled an independent comparison between jobs-focused social enterprises and Disability Employment Services (DES). Taylor Fry found jobs-focused social enterprises delivered stronger employment outcomes for people facing complex barriers, while projecting lower long-term costs to government.
“If this outcomes-based model were to be scaled to 10K individuals, this could save government an estimated $220M over five years.”
Taylor Fry Report, 2024
Employment milestones achieved
Outcome payments were made when participants reached agreed employment milestones, based on how long they stayed in work and how much they earned.
participants reached the first employment milestone (13 fortnights in work).
reached the second employment milestone (26 fortnights in work).
reached the first transition milestone (13 fortnights in competitive employment).
reached the second transition milestone (26 fortnights in competitive employment).
More than half of all participants remained employed at the end of the trial.
remained with their socal enterprise
had transitioned into roles with other employers
BEYOND THE NUMBERS:
Employment delivered more than a job.
Independent evaluation by the Centre for Social Impact Swinburne found participants experienced improved financial wellbeing, greater confidence and self-belief, better mental health and wellbeing, and stronger social connection and belonging.
“Having work shows that I am doing something, and that has an effect on my mental health. If you aren’t doing anything, you feel stagnant.”
Lia, transitioned to new employment
“I’m doing a lot better, not just with the whole work side. I’m able to do things on my own, and I’m not having my anxiety try and stop me.” (Kade, transitioned to new employment)
Kade, transitioned to new employment
HOW IT WORKED
What was PBO3?
PBO3 was Australia’s first federally funded trial to pay jobs-focused social enterprises for the employment outcomes they create. It ran from July 2022 to March 2026.
Who was involved?
The Department of Social Services, White Box Enterprises, three impact investors, and 17 jobs-focused social enterprises. PBO3 was co designed by these partners to test a new way of funding sustained employment outcomes for people facing complex barriers to work.
Who did it support?
People aged 16 to 59 who had been unemployed for at least nine of the previous 12 months, were receiving government income support, and were eligible for Disability Employment Services or the Community Development Program.
How did the funding model work?
The Department of Social Services contracted White Box Enterprises to manage the trial. White Box distributed outcome payments to participating social enterprises when agreed employment milestones were achieved.
What were outcome payments?
Social enterprises earned payments when a participant reached milestones of 13, 26, or 39 fortnights of continuous employment, and again when they transitioned into competitive employment. These payments were designed to cover the intensive, tailored wrap-around support that jobs-focused social enterprises provide to help people gain and sustain employment.
What role did impact investors play?
Impact investors helped design the funding model and provided the upfront working capital that made the trial possible. Because government payments were only made after employment outcomes had been achieved, their investment enabled social enterprises to deliver support while waiting for outcome payments. The trial also generated practical lessons that are informing future impact investment in the sector.
What role did White Box play?
White Box acted as the program aggregator, managing relationships between government, impact investors and participating social enterprises. The model reduced transaction costs and let capability and knowledge be shared across the whole sector. It also meant smaller social enterprises could take part, organisations that might not have had the resources to manage a direct government contract on their own.
WHY THIS MATTERS?
PBO3 provides one of Australia’s strongest evidence bases on the role jobs-focused social enterprises can play in creating employment opportunities for people facing complex barriers to work. Its findings show that outcomes based funding can support sustained employment while providing practical lessons for designing future employment programs and funding models.
What we learned
PBO3 demonstrated that outcomes-based funding can work for jobs-focused social enterprises. It also showed how future funding models could be strengthened.
The trial shifted the conversation from what jobs-focused social enterprises cost to the value they create through sustained employment outcomes. At the same time, it showed that outcome payments need to better reflect the true cost of delivering intensive, tailored support, and that milestone structures should be flexible enough to reflect the varied employment journeys of people facing complex barriers to work.
Our analysis also showed that jobs-focused social enterprises created value beyond what the funding model recognised. Participants were employed for an average of 42 fortnights, but only 20 fortnights met PBO3’s earnings thresholds for payment. This demonstrates that jobs-focused social enterprises continued supporting people beyond the milestones recognised by the funding model.
Beyond participant outcomes, PBO3 strengthened the capability of participating social enterprises. Organisations built new expertise in delivering wrap-around support, supporting transitions into mainstream employment, and working within an outcomes-based funding model.
Finally, the trial demonstrated the value of collaboration. The aggregator model reduced administrative complexity, enabled smaller organisations to participate, and created opportunities for government, social enterprises, impact investors and intermediaries to learn together and refine the model over time.
data talks
We’re strengthening our case for social enterprise with data so Australia’s key decision makers can see just how valuable these businesses are to individuals, our communities and the economy.
FINAL CSI
EVALUATION
CSI Swinburne completed its final independent evaluation of the PBO Trial.
This is what they discovered
- Outcomes report
- Insights report
- Outcomes and insights brief
- Participant stories
Year 2 CSI
Evaluation
CSI Swinburne completed its second year independent evaluation of the PBO Trial.
This is what they discovered:
2024 TAYLOR FRY
REPORT
An updated report comparing social enterprise with Disability Employment Services.
The findings present a compelling case for social enterprise to play a more permanent role in our national employment services system.
YEAR 1 CSI
EVALUATION
CSI Swinburne completed its first year independent evaluation of the PBO Trial.
This is what they discovered:
HOW SOCIAL ENTERPRISE
COMPARES
We engaged Taylor Fry in 2023 to compare social enterprise with Disability Employment Services.
The results are extraordinary:
Participating social enterprises
White Box Enterprises wouldn’t exist today without our community of values-aligned partners, funders and supporters.
Impact investors
PBO3 was the third Payment by Outcomes trial launched under the Australian Government’s Social Impact Investing agenda, and the first to involve impact investors.
Thank you to Macquarie Group Foundation, Tripple, and Hand Heart Pocket Foundation, this trial would not have been possible without your support.
Latest PBO Trial News
New data shows social enterprise delivers better outcomes for long-term unemployed.
New report backs social enterprises as key to long-term employment success for jobseekers with complex barriers.
From little things big things grow
New data reveals individuals earn more and stay employed longer in a social enterprise
ADVOCATING THROUGH ACTION
We advocate for change by doing. We build the evidence through testing and trialling with the sector. Then we share what we learn with government, philanthropy and other key influencers.
STAY CONNECTED
If you’re a jobs-focused social enterprise, join our database so you’re the first to know the latest updates and opportunities for jobs-focused social enterprises.