Tackling ‘corrosive’ welfare

Dr Luke Buckmaster and Michael Klapdor, Social Policy Section

Can reforms to the way welfare is delivered change individual behaviour in a meaningful way?

While Australia’s income support system is primarily aimed at alleviating disadvantage, a number of recent welfare reforms have focused on the potential role welfare has in sustaining or even causing disadvantage. This reflects an emerging policy consensus on the need for governments to address the negative effects of welfare dependency, including engaging in active interventions in the lives of welfare recipients.

Concern that welfare has a ‘corrosive’ or ‘corrupting’ influence on its recipients has been a feature of welfare policy debates throughout Australia’s history. This concern has contributed to a policy focus on targeted income support payments to those most in need. Recent debate has shifted from participation requirements and the means tested conditions of entitlement. It now centres on the living conditions of those being targeted and whether the behaviour of welfare recipients is contributing to their disadvantage.

Recent reforms and proposals targeting the personal behaviour of welfare recipients include:

  • Income management (or ‘welfare quarantining’), under which a portion of a recipient’s payments is set aside for ‘priority needs’, such as food, rent and utilities. This measure was introduced by the Howard Government as part of the Northern Territory Emergency Response in 2006 and was expanded under the Rudd-Gillard Government.
  • The School Enrolment and Attendance through Welfare Reform Measure, which uses case management and the threat of payment suspension/cancellation to encourage parents to enrol their children in school and take steps to ensure attendance.

The Labor Party’s election commitment to require children of income support recipients to undergo health checks before their parents can receive an end of year Family Tax Benefit A supplement.

The stated purpose of these measures is to address the health and welfare needs of children living in families dependent on income support. A further purpose is to encourage people to move from ‘passive welfare’ to participation in employment and/or education.

Australia is not alone in implementing behavioural conditions for welfare recipients. A number of states in the United States and developing countries in Central America have introduced systems to encourage certain kinds of behaviour, including child immunisations and increased school enrolments. The Australian approach differs markedly in the extent to which intervention occurs in welfare recipients’ lives.

Few dispute that the lives of many families dependent on income support could be improved by ensuring income is allocated towards necessities and spending on alcohol, drugs and gambling reduced. However, critics have highlighted a range of concerns with recent policy in this area. Evidence as to the effectiveness of these policies is limited, administrative costs are high and a question persists as to whether it is possible to encourage people to take responsibility for themselves if they do not have control over important aspects of their lives. Some critics have also argued that targeting personal behaviour by withholding income payments is inconsistent with the rights-based approach to income support that has been a feature of welfare policy in Australia since World War II.

A further issue is that the main objectives of this more paternalist approach to welfare—ameliorating the detrimental effects of welfare and encouraging participation—may not always be complementary. For example, it could be that income management simply helps individuals to manage their livelihoods as ‘passive’ welfare recipients better. Addressing both objectives will most likely require reforms to welfare payment delivery to be coordinated with other policies addressing disadvantage, employment participation and opportunity, as well as access to services; that is, policies aimed at the non-behavioural factors affecting the lives of ‘at-risk’ welfare recipients.

Both Labor and the Coalition have expressed commitment to addressing long-term welfare dependency, and for this to be achieved through greater government control over the spending of income support recipients. The push for income management to become a mainstream approach to welfare delivery, and for further reforms to the social security system in terms of conditionality, raise a number of questions for the new parliament to address:

  • What evidence will be required to evaluate whether the new approach to welfare has been a success?
  • What, if any, limits ought there to be on the nature and extent of interventions in the lives of welfare recipients?
  • To what extent can these reforms deliver enduring changes to the behaviour of individuals and to the lives of those in disadvantaged communities in Australia?

New Income Management

  • commenced July 2010
  • will affect 20 000 people in the Northern Territory including disengaged youth and long-term welfare recipients
  • to cost $350 million over four years plus $53 million for support services.

Cape York project

  • welfare reform trial in four communities
  • welfare recipients are referred to a Family Responsibilities Commission (FRC) for anti-social behaviour, criminal activity or if their children fail to attend school
  • FRC can impose income management and compel individuals to attend support services.

WA pilot

  • child protection/income management trial in Perth and the Kimberley
  • more than 200 hundred families have volunteered for income management
  • more than 60 families placed on income management as a result of a referral from state child protection. authorities.

Library publications and key documents

L Buckmaster, J Gardiner-Garden, M Thomas and D Spooner, Social Security and Other Legislation Amendment (Welfare Reform and Reinstatement of Racial Discrimination Act) Bill 2009, Bills digest, no. 94, 2009-10, Parliamentary Library, Canberra, 2009, http://www.aph.gov.au/Library/pubs/bd/2009-10/10bd094.pdf

Australian Institute of Health and Welfare (AIHW), Report on the evaluation of income management in the Northern Territory, AIHW, Canberra, 2009, http://www.fahcsia.gov.au/sa/indigenous/pubs/nter_reports/Pages/income_management_evaluation.aspx

Senate Community Affairs Legislation Committee, Report of the inquiry into the Social Security and Other Legislation Amendment (Welfare Reform and Reinstatement of Racial Discrimination Act) Bill 2009 and two related Bills, The Senate, Canberra, March 2010, http://aph.gov.au/Senate/committee/clac_ctte/soc_sec_welfare_reform_racial_discrim_09/index.htm