Child protection income management in the Northern Territory

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The Gillard Government recently announced that child protection income management was being rolled out in the Northern Territory (NT). Under this program, child protection workers in the NT will be able to refer parents to Centrelink for compulsory income management when children are being neglected or are at risk of neglect.

Provision for child protection income management to be introduced into the NT was created through changes  to the NT Emergency Response earlier this year.

Income management refers to arrangements whereby a percentage of the income support and family payments of certain people is set aside to be spent only on ‘priority goods and services’ such as food, housing, clothing, education and health care.

Generally, access to income managed funds is provided through what is known as the BasicsCard. This is a PIN protected card, which allows customers to access their income managed money through existing EFTPOS facilities at approved stores and businesses. The BasicsCard cannot be used to withdraw cash or to buy alcohol, tobacco and pornographic material.

Provision for child protection income management to be established throughout Australia actually already existed through the original income management legislation introduced by the Howard Government in 2007. The other two forms of income management introduced at this time were for welfare recipients in specified Indigenous communities in the NT (as part of the NT Emergency Response) and welfare recipients subject to the Cape York Welfare Reform Trials.

While child protection is generally a state and territory matter, the child protection form of income management was introduced in order to provide a Commonwealth mechanism to help ensure that income support paid to parents is spent in the interests of children. 

Until recently, child protection income management had only been introduced in trial form (along with a trial of Voluntary Income Management) in the Kimberley region and metropolitan area of Perth in Western Australia (WA). This was done in partnership with the WA Department for Child Protection (DCP) and is supported by a bilateral agreement between the Commonwealth and WA Governments. Under the trial, a case manager from the WA DCP can refer a person to Centrelink to have up to 70 per cent of their payments managed where it is believed that this will assist the person in providing for the priority needs of their children.

The Commonwealth Government has provided $18.9 million for WA’s (compulsory and voluntary) income management trial.

According to a recently published evaluation report of the trial, from the beginning of the trial in November 2008 through to 30 April 2010, 328 people were subject to child protection income management (803 people participated in voluntary income management). At 30 April 2010, there were 226 people on child protection income management (372 were on voluntary income management).

Findings in relation to effectiveness of child protection income management based on surveys of participants in the program included:
  • 34 per cent of respondents thought it had made their life a lot better; 28 per cent thought that it had made their life a bit better; 19 per cent thought it had not made much difference to their life; and 19 per cent thought that IM had made their life a bit or a lot worse
  • 37 per cent of respondents reported that they had already recommended income management to someone else and 28 per cent said that they planned to do so in the future
  • 49 per cent of respondents thought it had made their children’s lives a lot better and 12 per cent a bit better; 33 per cent thought it had not made much difference to their children’s lives; and 7 per cent thought that it had made their children’s lives a bit worse.
The report also found that there were relatively low actual referral and take-up rates of financial management services among participants in income management.

Stakeholders (including Centrelink staff, DCP staff, financial counsellors, money management advisers and peak welfare and community organisations) were also surveyed as part of the evaluation. Among other findings, they identified both positive and negative possible outcomes of both compulsory and voluntary income management that they thought may emerge in the future.

On the positive side, these included improved budgeting and financial management skills and improved individual and family wellbeing. On the negative side, these included the possibility that people would become dependent on the system and not be able to manage their finances without remaining on IM and misuse of the BasicsCard.

On the potential for dependency on income management, it is interesting to note that 15 per cent of those on child protection income management cited 'not needing money management skills when having their money income managed' as a reason for not using financial management services.

It is worth noting that there has been some debate in recent years about the validity of evidence presented either for or against the effectiveness of income management (see for example, here and here). In particular, participants in these debates have highlighted the absence of adequate baseline data against which to measure change and the fact that most evidence so far is qualitative (based on, for example, subjective responses to surveys, interviews and focus groups) rather than quantitative. The WA income management evaluation has similar limitations and should be considered with this in mind.

Under changes  made by the Government earlier this year, the income management scheme concentrated  in remote NT communities has been replaced with a new national scheme to be introduced over time in disadvantaged areas throughout Australia (though, initially only in the NT).

These changes apply to people in the following categories:
  • people aged 15 to 24 who have been in receipt of specified payments for more than three of the last six months
  • people aged 25 and above who have been in receipt of specified payments for more than one year in the previous two years
  • people referred for income management by child protection authorities and
  • people assessed by Centrelink social workers as requiring income management due to vulnerability to financial crisis, domestic violence or economic abuse.
As such, the child protection income management program recently announced by the Government is one of several strands of income management introduced through changes to social security legislation made earlier this year.

An important question for the future arising from the introduction of this and other forms of income management (and highlighted by the evaluation report discussed above) will be the extent to which the potential benefits to participants and their children are balanced against potential negative outcomes such as dependence on income management itself.

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