Income management and the Racial Discrimination Act

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Income management and the Racial Discrimination Act

Posted 21/03/2012 by Luke Buckmaster



Mick Gooda
Image source: indigenous.gov.au
In March 2011, the Aboriginal and Torres Strait Islander Social Justice Commissioner, Mick Gooda, is reported to have said that it is likely that some time in the future a complaint under the Racial Discrimination Act (RDA) will be lodged with the Australian Human Rights Commission (AHRC) in relation to income management of welfare payments on the grounds that it discriminates against Indigenous people. If any such complaint were upheld, this would be a significant test of one of the main pillars of the Australian Government’s welfare reform agenda.

This raises the question of how the AHRC—the statutory body with responsibility for resolving complaints of discrimination or breaches of human rights under federal laws such as the RDA—would be likely to respond to a complaint made in relation to income management and the RDA.

This question is examined in a recent Parliamentary Library Background Note, Income management and the Racial Discrimination Act, which considers the issues that are likely to arise if the AHRC is asked to make a determination in relation to income management and the RDA.

An important initial question is likely to be: which form of income management are we talking about? While people often speak as if income management is a single program, there are actually six different income management measures, each of which operates under different rules. The results of any challenge to income management under the RDA would potentially be different depending on the income management measures involved.

The six different income management measures are:
  • 'Participation/Parenting', applying to people in the Northern Territory who are in receipt of certain welfare payments for a period of time deemed by the Government to put them 'at risk'
  • 'Vulnerable Welfare Payment Recipients', applying to people who have been referred for income management by a Centrelink Social Worker
  • 'Child Protection Income Management', applying to people in the Northern Territory and parts of Western Australia whom a child protection officer has referred to Centrelink
  • the Cape York measure, applying to people in Cape York whom a statutory body has ordered should be subject to income management for engaging in dysfunctional behaviour
  • 'Place Based Income Management', applying from 1 July 2012 to people living in one of five targeted communities who have been referred for income management and
  • 'Supporting People at Risk', applying (should the relevant legislation pass) from 1 July 2012 to people referred for income management by particular state and territory agencies (initially Northern Territory authorities will have the power to refer people for income management for alcohol related problems).
In November 2009, the AHRC issued draft guidelines 'to provide practical assistance to Parliament and the Government in designing and implementing income management measures that protect human rights and are consistent with the RDA'. According to the AHRC, ‘while not legally binding, they provide important guidance as to the operation of the RDA and will be relevant in assisting the resolution of complaints’.

The guidelines posed three key questions in relation to whether income management measures are consistent with the RDA:
  • where the measure is established by legislation, does it ensure equality before the law (section 10 of the RDA)?
  • is the measure implemented in a way that avoids both ‘direct’ and ‘indirect’ discrimination (section 9 of the RDA)? and
  • if either of the first two questions is answered in the affirmative, is the measure a ‘special measure’ (otherwise known as 'positive discrimination') (section 8 of the RDA)?
The Background Note examined the various income management measures in relation to the ACHR guidelines, particularly focusing on whether the legal framework for income management discriminates against Indigenous people, rather than whether discretionary actions under those laws are discriminatory. The paper focused on indirect discrimination because, as the AHRC has commented in its submission to the Senate Community Affairs Legislation Committee, Inquiry into the Stronger Futures in the Northern Territory Bill 2011 and two related bills:
Due to its general application [application not based on race] the income management measure is not expressed to be intended to operate as a special measure under the RDA and does not raise issues of direct discrimination. In order to be consistent with the RDA, it only remains to identify whether it raises concerns of indirect discrimination.
So, are the various income mangement measures indirectly discriminatory? The AHRC guidelines state that if, in practice, income management has a greater impact upon people of a particular race it may be discriminatory.

Statistics from the Department of Families, Housing, Community Services and Indigenous Affairs suggest that overall, compulsory income management has a substantially greater impact on Indigenous people than non-Indigenous people. For example, as at 24 June 2011 (the most recent available figures), Indigenous people made up the overwhelming number of people subject to compulsory income management under the largest scheme—the Participation/Parenting measure in the Northern Territory (11 106 people, around 87 per cent).

However, the guidelines indicate that it may be permissible to limit rights in pursuit of a legitimate, non-discriminatory goal. The guidelines specify five criteria that should be met by an income management measure:
  • it should be subject to the application of the RDA and state/territory anti-discrimination legislation
  • it should not apply automatic quarantining—different options that should be considered may include allowing for a voluntary/opt in approach or a last-resort suspension approach
  • it should provide for a defined period of income management
  • it must allow for review and appeal processes, and
  • it should include additional support programs that address the rights to food, education, housing, and other forms of social support.
The Background Note found that in relation to these criteria, the Participation/Parenting measure is the income management measure that would be viewed the least favourably by the AHRC. This is because it only clearly meets two of the AHRC criteria (one and four, with five, ‘additional support programs’, possibly met but unclear). The Parenting/Participation measure clearly does not meet the criteria that it should be a voluntary/opt in/last-resort or be applied for a defined period.

This can be contrasted with each of the other measures which target specific classes of individuals whom it is considered would benefit from income management and which are applied for defined periods of time.

The Background Note concludes that while the Government has asserted that the Participation/Parenting measure is compliant with the RDA, one way of increasing the possibility that the AHRC and the courts would share this view would be to align the Participation/Parenting measure with the other targeted and time-bound income management measures.


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