15 July 2015
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Don Arthur
Social Policy Section
Introduction
Income management sets aside (or ‘quarantines’) a
proportion of a recipient’s Australia Government income support payment to pay
for necessities such as food, clothing, housing and utilities. Recipients can spend their
income-managed funds using a PIN protected debit card, known as the BasicsCard,
or by arranging for Centrelink to make payments on their behalf (for example,
regular rent and utilities payments).
What is income management for?
The
objectives of income management are to:
-
reduce immediate hardship and deprivation by directing welfare
payments to the priority needs of recipients, their partner, children and any
other dependents
-
help affected welfare payment recipients to budget so that they
can meet their priority needs
-
reduce the amount of discretionary income available for alcohol,
gambling, tobacco and pornography
-
reduce the likelihood that welfare payment recipients will be
subject to harassment and abuse in relation to their welfare payments and
-
encourage socially responsible behaviour, particularly in the
care and education of children.
Who is placed on income management?
There is no simple answer to the question of who is placed
on income management because different rules apply in different places.
Centrelink places people on income management only if they volunteer
or meet certain criteria. These criteria are set out in a number of income
management ‘measures’. Each measure targets a particular group of income
support recipients. As well as having different eligibility criteria, different
income management measures quarantine different proportions of a person’s income
support payment and have different exemptions and other conditions.
Income management can be voluntary or compulsory. Compulsory
measures fall into two main groups: those where people are placed on income
management on a case by case basis and those where people are placed because
they are members of a category or ‘class’.
The tables below outline how each measure works. Full
details on each measure are available in the Guide to Social
Security Law.
Case by case measures
Case by case measures are those where a decision maker
considers a person’s individual circumstances before referring them for income
management. These measures are set out in the table below.
Membership of a class measures
The membership of a class measures are those where
individual circumstances are not considered (unless an individual seeks
an exemption). These measures are set out in the table below.
Measure
|
Details
|
Guide to Social Security Law reference
|
Vulnerable
(youth triggers)
|
Target group: Young people are placed on the
Vulnerable measure (unless an exclusion applies) if they:
-
are granted the Unreasonable To Live At Home rate of Youth
Allowance, Disability Support Pension (DSP) or ABSTUDY by a Centrelink social
worker or
-
are under the age of 16 and are granted Special Benefit by a
Centrelink social worker or
-
are under the age of 25 and receive a crisis payment due to
prison release.
Under certain circumstances a Centrelink social worker can
decide to exclude a person from the Vulnerable measure.
Percentage of payment income managed: 50%
|
11.4
Vulnerable Welfare Payment Recipients Measure
|
Disengaged
youth
(NT only)
|
Target group: Young people who are:
-
aged 15 to 24 and have been receiving one of the following
payments for three of the last six months:
- Youth
Allowance
- Newstart
Allowance
- Special
Benefit
- Parenting
Payment Partnered or Parenting Payment Single.
Under certain circumstances a recipient may be able to
receive an exemption from income management.
Percentage of payment income managed: 50%
|
11.5
Disengaged Youth Measure
|
Long
term welfare payment recipient
(NT only)
|
Target group: People who are
-
aged 25 years and above and have been receiving one of the
following payments for more than one of the last two years:
- Youth
Allowance
- Newstart
Allowance
- Special
Benefit
- Parenting
Payment Partnered or Parenting Payment Single.
Under certain circumstances a recipient may be able to
receive an exemption from income management
Percentage of payment income managed: 50%
|
11.6 Long-term
Welfare Payment Recipients Measure
|
Where does income management operate
and how many people are subject to income management?
Income management operates in a number of locations around
Australia. The following table sets out which measures apply in which location,
and the number of people subject to income management in each location as at 27
March 2015.
Locations
|
Measure
|
No. of people
|
Cape
York Welfare Reform (Queensland)
|
|
153 (total)
|
-
Aurukun
-
Coen
-
Hope Vale
-
Mossman Gorge
|
Voluntary Income Management
|
N/A
|
Conditional Income Management (Cape York only)
|
N/A
|
Income
management in the Northern Territory
|
|
20,655 (total)
|
-
Entire Northern Territory
|
Voluntary Income Management
|
3,524
|
Vulnerable Measure (Social Worker Referrals)
|
178
|
Vulnerable Measure (Youth Trigger)
|
449
|
Child Protection Measure
|
68
|
Disengaged Youth Measure
|
4,279
|
Long Term Welfare Payment Recipient Measure
|
11,963
|
Supporting People at Risk
|
194
|
Income
Management in Western Australia
|
|
1,613 (total)
|
-
Metropolitan Perth
-
Peel region
-
Kimberly region
|
Voluntary Income Management
|
1,333
|
Child Protection Measure
|
280
|
Place
based income management
|
|
2,738 (total)
|
-
Bankstown (New South Wales)
-
Logan (Queensland)
-
Rockhampton (Queensland)
-
Playford (South Australia)
-
Greater Shepparton (Victoria)
|
Voluntary Income Management
|
611
|
Child Protection Measure and
Vulnerable Measure (Social Worker Referrals)
|
75
|
Vulnerable Measure (Youth Trigger)
|
2,052
|
Indigenous communities in
South Australia and Western Australia
|
|
504 (total)
|
|
Voluntary Income Management
|
435
|
Child Protection Measure
Vulnerable Measure (Social Worker Referrals) and
Vulnerable Measure (Youth Trigger)*
|
69
|
*According to the Department
of Social Services, the Vulnerable Measure (Youth Trigger) is available in the Ceduna
region but not the APY Lands, Ngaanyatjarra Lands or Laverton. However, the most recently published statistics show no participants under this measure in Ceduna.
Source: Department of Social
Services, ‘Income Management Summary Data’, data.gov.au website, 2015.
How income management has developed over time
Income management was first introduced into a number of
Northern Territory Indigenous communities in 2007 as part of the Howard
Government’s Northern
Territory Emergency Response. It was then extended to other locations in
stages:
As shown in the table above, in
March 2015 there were 25,663 income support recipients on income management
across all locations with 80 per cent (20,655) of participants in the Northern
Territory. Outside of the Place Based Income Management sites, the majority of
participants are Indigenous.
The BasicsCard
The BasicsCard
allows people to spend income managed funds at shops and other businesses. It
works in a similar way to bank issued debit cards but does
not allow the card holder to access cash.
Not everyone on income management needs to use a BasicsCard.
For example, a person who has 50 per cent of their income support payment
managed may spend all of this on rent and utilities and rely on their
non-income managed funds for food, clothing and other expenses.
Where can people use their
BasicsCard?
Not all stores take BasicsCard. To accept payment by BasicsCard
a merchant needs to apply to the Department of Human Services. To
get approval their main business must be the sale of priority goods and
services (for example, food, clothing, education, health).
If a person wants to buy something from a business that does
not accept BasicsCard they can arrange
for Centrelink to pay the business directly.
What can people buy with
BasicsCard?
The BasicsCard can be used to buy any good or service
available from an approved merchant except:
-
alcoholic beverages (or home-brew kits or home brew concentrate)
-
tobacco products
-
pornographic material
-
gambling products or services, or
-
Gift cards or vouchers.
Merchants cannot give cash refunds for BasicsCard
transactions.
Evaluation reports
The Australian Government has commissioned a number of
evaluations of income management. The reports are listed in the table below.
The evidence from evaluations suggests that income
management has had a positive impact on the lives of some individuals and
families. People who have volunteered for income management seemed to have
benefited most. It is less clear that compulsory participation has been
beneficial. The evaluation reports published to date have not provided strong
evidence of benefit for those referred under the ‘membership of a class’
measures.
Future directions
The
2015–16 Budget announced a trial of a new approach to income management
based on a recommendation of the Indigenous Jobs and Training Review (the Forrest
Review). In its report Creating
Parity, the Forrest Review recommended introducing a new cashless
welfare system based on existing debit card technology.
The Forrest Review’s proposal differs from the current
system of income management in a number of ways:
-
the new card would rely on existing debit card technology. Andrew
Forrest, the Review’s chair, argues that it would be cheaper than the
BasicsCard because it does not require specialised infrastructure such as the
dedicated electronic kiosks that allow users to check
their balances
-
merchants would not have to opt into the system. Any merchant
that accepts Visa and MasterCard with electronic and EFTPOS payment facilities
would be able to accept payments made with the new debit card unless they had
been excluded and
-
the range of excluded goods may be narrower.
In a
submission to the Forrest Review, the Australian Bankers’ Association
warned that there were a number of technical challenges involved in its
implementation.
The 2015–16 Budget provided funding over three years from
2014‑15 to trial of new
debit card arrangements in up to three communities. The Budget also announced a
two year extension for income management in all existing locations along with
a number of minor changes designed to reduce the cost of administering the
scheme.
Further reading—Parliamentary
Library publications on income management
L Buckmaster, C Ey and M Klapdor, Income
management: an overview, Background note, Parliamentary Library, Canberra,
21 June 2012.
L Buckmaster, D Spooner and K Magarey, Income
management and the Racial Discrimination Act, Background note,
Parliamentary Library, Canberra, 28 May 2012.
L Buckmaster and C Ey, Is
income management working?, Background note, Parliamentary Library, Canberra,
5 June 2012.
L Buckmaster, ‘Does
income management work?’, Briefing book: key issues for the44th
Parliament, Parliamentary Library, Canberra, 2013.
D Arthur, ‘Income
management’, Budget review 2015–16,
Research paper series, 2014–15, Parliamentary Library, Canberra, 2015.
D Arthur, ‘Where
to for income management?’, FlagPost, Parliamentary Library blog, 25 June
2015.
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