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Income management: some answers to key questions


From 1 July 2012, income management will be extended to five new disadvantaged communities across Australia: Bankstown (New South Wales), Logan (Queensland), Rockhampton (Queensland), Playford (South Australia) and Greater Shepparton (Victoria).

While the policy of income management of welfare payments has been highly controversial, the specific details of its various forms are not generally well understood.

The Parliamentary Library has released a Background Note seeking to address this lack of understanding. It provides a brief overview of the history of income management and responses to a number of key questions about the policy.

Questions answered by the Background Note include:
  • what is income management?
  • what is the BasicsCard?
  • how is income management intended to work?
  • has income management been tried elsewhere?
  • what are the different forms of income management?
  • are exemptions from income management possible?
  • how many people are subject to income management?
  • is income management racially discriminatory?
  • what does income management cost? and
  • is income management working?

One of the key findings of the Background Note is that the development and implementation of income management measures around the country from the period 2005–06 to 2014–15 will cost the Commonwealth in the range of $1 billion. This does not reflect the total cost to government, only the budget outlays for new measures. It also does not include expenditure on the income support payments that are subject to income management.
 
The most recent available figures (April 2012) reveal that there were 17 567 people on income management in the Northern Territory, 1379 in Western Australia and 152 in Cape York. At the same time, 2433 people had been granted an exemption from income management and 39 people had decisions to place them on income management set aside.
 
As noted in another recent Parliamentary Library Background Note, in none of the locations in which it operates is there unambiguous evidence for or against the effectiveness of income management. The overall picture emerging from the available evidence is one in which positive changes have been uneven and fragile. On the other hand, there is no clear evidence that income management is responsible for a worsening of the situation in areas in which it operates.