This chapter outlines some of the key issues raised by submitters and
witnesses in relation to the Social Services Legislation Amendment (Cashless
Debit Card Trial Expansion) Bill 2018 (bill).
Many submitters and witnesses noted the importance of reducing the
social harms caused by alcohol, gambling and drug abuse,
the key object of the bill. However, some submitters and witnesses raised
concerns relating to the expansion of the cashless debit card trial to a new
site and the operation of the card, including:
selection of the Bundaberg and Hervey Bay area as a trial site,
the participant cohort for that trial site, and the extent to which the
communities of that area were consulted;
operation of the cashless debit card; and
ongoing concerns about the cashless debit card scheme, which may
have an impact on the new site, such as:
communication with participants;
monitoring and evaluation of current trials; and
human rights implications.
Bundaberg and Hervey Bay area trial site
The bill defines and introduces the Bundaberg and Hervey Bay area (new
trial area) as a trial site for the cashless debit card scheme.
In its submission, the Department of Social Services (Department) noted statistics
that demonstrated the high levels of long-term and intergenerational welfare
dependency in the region which the cashless debit card trial aims to address:
90 per cent of the people in the region under the age of 30 and
on Newstart or Youth Allowance, had a parent or guardian who received income
support at some point in the last 15 years; and
13 per cent of that cohort had a parent or guardian who received
income support at least once each year for the past 15 years.
Community views on site selection
The committee received a large number of submissions from members of the
new trial area community which discussed the significant problems with alcohol,
drugs and gambling in the proposed trial site area and praised the introduction
of the cashless debit card to address these problems.
Witnesses at the hearing also voiced their concerns about social
problems in the region. Ms Faye Whiffin told the committee that the problems of
'welfare dependency and neglected children will not go away' in the community,
Mr Steven Beer referenced a very high youth unemployment rate.
The youth unemployment rate in the Wide Bay region, which includes the Hinkler
electorate, was 28.7 per cent as at March 2018.
However, others have expressed reservations about whether these problems
were specific to the cohort of the population which would be targeted in the
trial, or were more general to the region. Mr George Seymour, Mayor of Fraser
Coast, in his capacity as a private citizen, submitted that he had not seen any
causal evidence which linked the target cohort with alcohol, drug and gambling
Some submitters also questioned how the cashless debit card would solve the
issue of high youth unemployment, given a low number of job vacancies in the
Submitters and witnesses were concerned that, with discussion being
focused on the social issues in the region as the purpose of the card, that participants
would be stigmatised as 'bludgers' or addicts, even if they do not personally
have problems with drugs, alcohol or gambling.
The statement of compatibility with human rights for
the bill (statement of compatibility) addresses a number of these concerns,
describing that the cohort for the trial was selected in response to the
community's concerns particularly about youth unemployment, intergenerational
welfare and families who need assistance in meeting the needs of their
children. It also observes that the area of the trial site was selected to
include Bundaberg and Hervey Bay 'which have the largest population, service
and employment hubs in the region' to ensure employment opportunities and
support services are available to participants.
The explanatory memorandum for the bill also provides context for the
area being chosen as a trial site:
...to help in addressing key
social problems that were identified during extensive consultations conducted with community stakeholders. These include the high
youth unemployment and intergenerational welfare dependence as well as the high
use of alcohol, drugs and gambling. Consultations also revealed significant
problems with alcohol, drugs and gambling among young families.
Regarding the selection of the participant cohort for the new trial site,
the statement of compatibility reports:
... targeting a younger cohort allows the Cashless Debit Card
to influence positive behaviour change before welfare dependency becomes
entrenched. Setting the age limit at 36 allows the Australian Government to target
most young people and families with young children who are receiving welfare
The Department also noted that, in deciding to trial a younger cohort
for the site, it had consulted extensively with stakeholders in the region,
including community organisations, local councils, church groups and members of
Participant cohort—inclusion and
As detailed in Chapter 1, trial participants in the new trial area will be
a targeted cohort aged under 36 years and receiving Newstart Allowance, Youth
Allowance or Parenting Payment. Some submitters have raised questions about
specific measures in the bill that include or exclude participants from this
Under proposed subsection 124PGA(4), the Secretary of the Department
(Secretary) will have powers to determine that a person is not a trial
participant if participation would pose a serious risk to that person's mental,
physical or emotional wellbeing. Some submitters were critical of the related
subsection 124PGA(5), which does not put an onus on the Secretary to enquire
into whether a participant's wellbeing would be adversely affected by the card
prior to them becoming a participant.
The Parliamentary Joint Committee on Human Rights (human rights committee) made
a similar observation, noting that:
It is not clear how the secretary would be made aware of
whether a person's participation in the trial is impacting a person's mental,
physical and emotional wellbeing.
The Department explained that a wellbeing exemption assessment can be
initiated if the Department becomes aware of a participant being at serious
risk via a referral from the Cashless Debit Card Hotline, local partners, Indue
Ltd, or the Department of Human Services (DHS). The participant may then be
referred to a DHS social worker for assessment and, where appropriate, be
exempted from the scheme.
Professor Matthew Gray and Mr Robert Bray PSM, from the ANU Centre for
Social Research and Methods, questioned why people from the new trial area would
be unable to volunteer as participants if they are not in the specified cohort.
The Department explained in its submission that:
This will allow the Government to test the impacts of the [cashless
debit card] trial exclusively for the selected group, as has been asked for by the
Some submitters raised the issue of people being included as
participants in the trial even if they subsequently move away from the new
The ANU Centre for Social Research and Methods submission noted that, although
there is an exclusion under subsection 124PGA(3) for students from the trial
area who are undertaking full-time study outside of the area on the grounds
that these students 'may find it impractical to use a cashless debit card
outside the trial area', there is no such exclusion for job-seekers who move
out of the trial area to find employment and 'would be in the same situation'.
The Department noted that the Australian Government invests in support services
across the country and that those participants who move away from the trial
site will be able to access support services in the area they reside in.
Furthermore, those participants will be able to use the cashless debit card in
any store that accepts EFTPOS and at approved online stores.
The committee also received a number of submissions from individuals in
the new trial area receiving other welfare payments, such as Disability Support
Pension or Aged Pension, or in other age groups, who questioned whether this
trial would be later expanded to include them.
The committee notes that the bill does not include provisions to expand
the new trial area's participant cohort and that any such expansion would
require further legislation.
Services and supports for new trial
Several submitters have raised concerns about whether there are
sufficient 'wrap-around services' in the new trial area to support
participants. Such services may include employment services; services to manage
drug, alcohol and gambling addiction; financial counselling and support; family
violence programs; parenting programs; and housing.
In its submission, the Department noted that a Community Reference Group
was established in the new trial area in late 2017 'to work through local
policy and implementation issues', including to ensure that the trial is 'complemented
by appropriate supports' for participants.
Also in late 2017, the Minister for Human Services, the Hon Alan Tudge
MP, and the Federal Member for Hinkler, Mr Keith Pitt MP, issued a joint media
release announcing a further investment in community services of $1 million to
'assist in providing for any unmet need as a result of the card'.
The Department explained that these services may include drug and alcohol
services, financial capability services to help people transition onto the
card, employment, and families and children’s programs, and that it would
'continue to work with the local community to determine how the funding would
be best allocated'.
Ms Faye Whiffin told the committee that her small community of Howard currently
had limited wrap-around services, but that the local community centre has a
partnership with a service provider in Hervey Bay to come and provide financial
counselling programs. She noted that the additional funding committed by the
Government would mean that '[i]f the card comes here, the services will come
here faster than they would without the card'.
Role of community bodies in the
The bill proposes a new subsection 124PE(2) be inserted into the Social
Security Administration Act 1999 (Cth) (Act), which empowers the Minister
for Social Services to authorise, by notifiable instrument, an incorporated or
unincorporated body in the new trial area as a 'community body'. This community
body must provide, or intend to provide, services relating to the care,
protection, welfare or safety of adults, children or families residing in the
This community body would have statutory powers under section 124PK of the Act
to direct the Secretary to vary the percentage amounts applying to a
participant's restricted payment.
Some submitters have noted that the role of the community bodies or panels
under section 124PE has been confusing for participants in existing trial sites,
with some participants being unaware of their existence or function.
The Auditor-General also noted in the report into The Implementation
and Performance of the Cashless Debit Card Trial (ANAO report) that the
Department had reviewed the role of community panels in earlier trial sites and
found that they:
...were not as effective as envisaged, resulting in lengthy
delays in making decisions and that they would not be introduced into new
Correspondence between the Department and the Minister for Social
Services in October 2017, referenced in the ANAO report, stated that community
panels would not be a mandatory feature or focal point in future trial sites.
The Department told the committee that the bill provides the new trial
area community with the option:
...to establish a Community Panel, if it so wishes, to assess
applications from participants to reduce the restricted portion of their
Centrelink payments from 80 to 50 per cent if an applicant is assessed as
meeting agreed social norms.
Consultation with the new trial
During the second reading debate of the bill in the House of
Representatives, the Attorney-General, the Hon Christian Porter MP, noted that
the payment types and age group for the new trial area were selected based on
feedback from over 188 meetings held in the Bundaberg and Hervey Bay area
between May and September 2017, including three community information sessions:
These [meetings] canvassed views from a very broad range of
stakeholders, including the community sector, service providers, community
members, church groups, the business sector and all levels of government. These
meetings demonstrated a clear need for support and intervention in the areas of
youth unemployment, young families and intergenerational welfare dependency.
Submissions from individuals in the region show that the trial has
significant support among the community.
However, several submitters to the inquiry have questioned whether the level of
consultation with those who may become participants in the trial has been adequate.
A number of individuals impacted by the trial expansion in the Bundaberg
and Harvey Bay area have expressed their concern in submissions to the
committee that their voices have not been heard in the consultation process and
are of the belief that the trial does not have the support of the broader
At the hearing on 7 August 2018, Miss Kathryn Wilkes from Say No to the
Cashless Welfare Card Australia told the committee that she believed there had
been insufficient public consultation, that some individuals felt their views
about the trial were being ignored, and that consultation sessions had been
held at times inconvenient for potential participants, such as during school
Mr Peter Feerick, an individual who believes he meets the criteria for
participation in the new trial area, also told the committee that a
consultation session he had attended in Bundaberg was an information session
about how the card would work, rather than an opportunity for concerns about
the broader scheme to be addressed.
However Mr Steven Beer from IMPACT Community Services, one of the
community service organisations working with the Department to hold
consultation with the community, told the committee that his experience had
been that people who held concerns had been misinformed about the operation of
the cashless debit card and that consultation meetings appeared to have a
positive impact on people's perception of the scheme:
Once they've got information about what the card is and is not,
what it looks like, how it operates and works et cetera, whilst those younger
people came into those sessions with some fairly negative points of view and
some great questions, most of them left thinking that it was a fairly good
thing to proceed with.
Operation of the cashless debit card
The bill introduces new provisions which prevent the purchase of
cash-like products, such as gift cards, money orders and digital currency, which
could be used to obtain alcohol or gambling, from the restricted portion of a
welfare payment on a cashless debit card across all trial sites.
Submitters raised concerns that the limitations on the purchase of
cash-like products restrict a trial participant's ability to participate freely
in the economy of their community,
while others suggested that preventing people from purchasing digital currency
may have the effect of locking participants out of potential engagement with
the online economy.
Individual submitters affected by the cashless debit card scheme have
expressed disappointment with this provision, noting that not being able to
purchase gift cards will limit their ability to purchase birthday gifts for
friends and family members.
The National Social Security Rights Network also questioned in its
submission whether participants will be restricted from also buying gift cards
or store cards from a merchant that does not sell any of the targeted
Submitters told the committee that gift cards for digital stores, for example, are
used to buy educational apps necessary for children's school devices
or for clinical apps for mental health or stress management.
The Department explained in its submission that:
These products are included as restricted goods, as has
always been the intention of the program, and in line with existing cash
withdrawal restrictions on the [cashless debit card] account. Clarifying this
provision to include 'cash-like' products will support product level blocking
amendments, and help prevent participants from circumventing the program and
spending their welfare payments on alcohol, gambling and drugs.
In relation to gift cards for stores that do not sell restricted items,
the statement of compatibility clarifies that:
Cash-like products that could not be used to obtain alcohol
and gambling, such as a 'closed loop' gift card for a specific store, would not
The committee also notes that participants remain able to purchase
cash-like products at their discretion, as well as other restricted products,
using the unrestricted portion of their welfare payment.
Contingent amendments and cash-like
The bill also contains contingent amendments to section 124PM of the
Act, in line with other provisions in the bill to introduce the cash-like products
into the list of restricted products.
The form of these amendments is contingent on whether the Social Services
Legislation Amendment (Housing Affordability) Bill 2017 (housing affordability
bill), which at the date of reporting was still before the House of
Representatives, has been passed into law.
A small number of submitters to this inquiry have expressed reservations
about provisions in the housing affordability bill which would allow a
deduction of social housing rent from the unrestricted portion of a cashless
debit card trial participant's welfare payment, leading to a reduction in
The committee considered this matter in its report into the housing
Product-level blocking of
As discussed in Chapter 1, the bill introduces a provision which authorises
a supplier of goods or services to decline a transaction which uses money in a
welfare restricted bank account and involves obtaining restricted products
(i.e. alcohol, gambling or cash-like products), which will allow merchants to
introduce product-level blocking for transactions.
Dr Elise Klein, Lecturer in Development Studies at the University of
Melbourne, noted that because the cashless debit card currently stops purchases
of alcohol at a merchant level, some shops that serve both alcohol and food (such
as pubs and restaurants) in existing trial sites are either unable to accept
the card or need to have a separate till for the card to allow participants to
The submission from the ANU Centre for Social Research and Methods
questioned how product-level blocking would be operationalised, what the level
of implementation and cooperation would be among merchants, and the extent to
which legitimate purchases may be erroneously blocked.
The AIMN also told the committee that product-level blocking may have an
unintended consequence of 'highly public' discrimination against participants
if transactions are declined at the point of sale.
The Department explained in its submission that product-level blocking
will allow merchants to be more readily able to service participants in the
cashless debit card trial.
The statement of compatibility further notes that the provisions for
product-level blocking are consistent with current processes for merchants to
block purchases of restricted products, but will reduce manual management of
transactions for merchants who sell both restricted and un-restricted products.
Participants' access to the
restricted portion of the payment
During the committee's inquiry into the Social Services Legislation
Amendment (Cashless Debit Card) Bill 2017 (2017 bill), evidence was received relating
to participants' access to their restricted welfare payments for bills, online transactions
and transfers, including the role of technology in using the restricted portion
on the card.
The committee has received evidence to the current inquiry which expresses
ongoing concerns about the functionality and usability of direct debit, BPAY,
online shopping and other non-EFTPOS uses of the cashless debit card.
Submitters have observed that participants in existing trial sites who
were unable to use technology to set up their own direct debits and bills
payments have been subject to late fees after setting up their payments through
Indue Ltd, the provider of the cashless debit card.
No Cashless Card Kalgoorlie & Surrounds described a situation where one
participant was issued a breach notice for her rental property due to a mistake
made in processing her rent.
Participants also detailed frustrations in not being able to use their cashless
debit card for online transactions to purchase medical devices, gifts, or other
items which are not restricted.
The Department explained in its submission that, following existing
trials, a number of learnings had informed and improved its communications
about using the cashless debit card to address these concerns. These include:
- Clear, effective messaging about setting up direct debits and automatic
payments. Where appropriate, the Department will also consider refunding
participants who were financially at risk due to fees associated with issues in
setting-up direct debits and automatic payments from the cashless debit card.
Communication of the availability of external transfers in some
circumstances, ensuring participants are aware that these can take a number of
days to occur. The Department is also investigating the use of the banking
sector's new payments platform, which can facilitate instant transfers between bank
Online merchant identification improvements, including streamlining
processes for approval of online merchants.
During the hearing on 7 August 2018, Miss Crystal Silk, an individual
who believes she meets the criteria for participation in the new trial area,
told the committee her fear was that she would not be able to make direct debit
payments for her car loan using the cashless debit card, which requires direct
debit to be made from a bank account.
The Department explained that, in such an instance, a trial participant can
contact the cashless debit card hotline and set up a higher recurring transfer
limit to allow for the loan payment amount to be transferred to another bank
Other witnesses raised concerns about participants in the new trial site
being able to access loan products in the first instance. Mrs Annette Mason and
Mrs Patti Webb from the Bundaberg and District Neighbourhood Centre described
that the process for people on low income to access a No Interest Loan Scheme (NILS)
loan requires verification of their spending habits, generally through copies
of applicants' bank statements, and questioned whether applicants would be able
to provide similar statements in relation to a cashless debit card.
The Department confirmed that participants receive a downloadable bank
statement via the Indue Ltd online portal or mobile app and may also choose to
have a physical statement mailed each month.
Participants' access to the
unrestricted portion of the payment
A number of submitters and witnesses raised concerns about the cashless
debit card scheme directing only 20 per cent of a participants' income for
unrestricted use, limiting their access to cash for purposes such as farmers'
markets, second-hand goods, tank water and firewood, and whether lack of access
to cash for these purposes could lead to undue hardship and stress for some
These concerns were also raised by submitters to previous inquiries into
the cashless debit card scheme and are discussed by the committee in its
reports into the Social Security Legislation Amendment (Debit Card Trial) Bill
(2015 bill) and the 2017 bill.
As discussed previously in this chapter, the Secretary will have powers
to determine that a person is not a trial participant if participation would
pose a serious risk to that person's mental, physical or emotional wellbeing.
The Department explained in its submission that this power 'will be used to
ensure vulnerable people are not adversely affected by the trial'.
The committee also notes the Department's submission to the 2017 bill
inquiry, which observed that the 80 per cent restricted/20 per cent
unrestricted payment ensures that income support recipients have enough money
available for life's essentials and that the cashless debit card will have very
little impact for people who already spend their money responsibly.
Other issues related to the cashless debit card scheme
Across the course of this inquiry the committee received a wide range of
evidence from submitters and witnesses that, although not specific to the
expansion of the cashless debit card trial proposed in the bill, related to the
cashless debit card scheme in a more broad sense. The committee notes that
several submitters and witnesses expressed an opinion that any ongoing concerns
with the cashless debit card scheme should be addressed before further
expansion into new trial sites, as proposed in the bill.
Several key themes raised by submitters in relation to the scheme are
with participants in the trial
Beyond concerns about communication of the operation of the cashless
debit card itself, as discussed above, some submitters noted general issues
relating to communication between the Department, other stakeholders, and
The ANAO report found that the Department had developed and implemented
a communication strategy that was largely effective, but had also identified
areas for improvement.
The Commonwealth Ombudsman told the committee that, in the small number
of complaints received in relation to the cashless debit card trial, a common
theme was 'poor or inadequate communication of the arrangements that apply to a
person when they become a participant in the trial'.
The Community and Public Sector Union (CPSU) reported that both community
engagement and the need for better resourcing and coordination between DHS and
the Department has been a common theme among its members. CPSU described that
frontline staff from DHS had been unable to help trial participants to fix
problems that arose with their cashless debit card. CPSU noted that even where
DHS staff provided the appropriate contact number for the Department,
participants still attended DHS offices to try and find a face-to-face solution
to their problem due to a lack of knowledge that the Department, and not DHS,
managed the card.
Uniting Communities raised a similar concern about participants not
being able to receive face-to-face information or help relating to their card,
noting that 'not everyone is literate or numerate, and technology can be
confusing, overwhelming and alienating'.
The Department explained that Indue Ltd contracts local organisations to
provide face-to-face services for trial participants in each trial location.
A list of all local partners providing these services in existing trial sites is
published on Indue Ltd's website.
The Department reported that the local organisations that would provide
services in the new trial site had yet to be identified and that this would be
done through consultation with the Community Reference Group.
Monitoring and evaluation
As discussed in the committee's report for the inquiry into the 2017
bill, submitters and witnesses to that inquiry questioned the methodology and
characterisation of the results of the final evaluation report prepared by
ORIMA Research in 2017 about the cashless debit card trial. In evidence to the
committee at a hearing for that inquiry, the Department informed the committee
that ORIMA Research had recognised in its reports the limitations of some of
the data sources and provided caveats where necessary.
Submitters to this inquiry reiterated their concerns about the quality
of the ORIMA Research evaluation as evidence of the efficacy of the cashless
debit card trial, with many also noting the Auditor-General's findings in
relation to this matter.
In the ANAO report, the Auditor-General found that while the Department
had developed 'high level guidance' which informed its evaluation processes, it
had not been 'fully operationalised'. The report further found that:
Social Services did not build evaluation into the [cashless
debit card trial] design, nor did they collaborate and coordinate data
collection to ensure an adequate baseline to measure the impact of the trial,
including any change in social harm.
In response to these concerns about the evaluation processes for the
cashless debit card trial, the Auditor-General recommended that:
Social Services should fully utilise all available data to
measure performance, review its arrangements for monitoring, evaluation and
collaboration between its evaluation and line areas, and build evaluation
capability within the department to facilitate the effective review of
evaluation methodology and the development of performance indicators.
The Department responded to the ANAO report findings, noting that it was
in the process of implementing this recommendation and making improvements,
including appointing a Chief Evaluator and establishing a new evaluation
The Department explained that it is 'actively working' on these
improvements and that it is:
...also looking at its procedures and guidance material
relating to its procurement practices and developing new approaches to data
monitoring and evaluation.
The Department also informed the committee that it is currently in the
process of putting out a tender to seek a provider to conduct a second
evaluation of the current trial sites. This second evaluation will build on
baseline data currently being collected in the Goldfields region.
Human rights considerations
Other notable issues raised by submitters were the extent to which the
bill engages and limits certain human rights and the disproportionate impact of
the bill on the rights of Aboriginal and Torres Strait Islander peoples, who
are overrepresented in current trial cohorts.
As reported in Chapter 1, the human rights committee raised similar concerns.
These issues were also raised by submitters to previous inquiries into
the cashless debit card scheme and are discussed by the committee in its
reports into the 2015 bill
and the 2017 bill.
The statement of compatibility recognises that the scheme engages and
limits three human rights: the right to social security; the right to a private
life; and the right to equality and non-discrimination. The statement of
compatibility notes that, to the extent that the bill may limit human rights:
...those limitations are reasonable and proportionate to
achieving the objectives of the welfare quarantining measures. The Cashless
Debit Card will assist to reduce immediate hardship and deprivation, reduce
violence and harm, encourage socially responsible behaviour, and reduce the
likelihood that welfare payment recipients will remain on welfare and out of
the workforce for extended periods of time.
In relation to concerns about the disproportionate impact of the
cashless debit card scheme on Aboriginal and Torres Strait Islander peoples,
the statement of compatibility acknowledges previous concerns about the
indirect impact the trial may have on the right to equality and
non-discrimination in existing trial sites. The statement of compatibility explains
that cashless debit card scheme is not applied on the basis of race or culture,
but is trialled in communities chosen on objective criteria such as high levels
of welfare dependence and community harm, and that the indirect impact on
Aboriginal and Torres Strait Islander peoples was a consideration in selecting a
new trial site with an urban population. With the addition of the new trial
area in Bundaberg and Hervey Bay, the proportion of Indigenous participants
across all cohorts will be approximately 33 per cent.
The committee notes the wide support for solutions to reduce the social
harms caused by alcohol, gambling and drug abuse. However, the committee
recognises that views continue to differ on whether the cashless debit card is
the most appropriate and effective solution to reduce these social harms in the
The committee notes that there has been extensive consultation conducted
in the Bundaberg and Hervey Bay area by the Department of Social Services and
that a high level of community support has been fundamental to the proposed introduction
of the cashless debit card to the area. The committee believes that the
cashless debit card trial will address the community's concerns about youth
unemployment, intergenerational welfare, and families who need assistance in
meeting the needs of their children in the region.
It is the committee's view that the results of the independent evaluation
have shown the cashless debit card to have had a positive effect on communities
in existing trial sites. The committee acknowledges concerns about the
evaluation process and recognises the significant steps being taken by the
Department of Social Services to improve its evaluations in the future,
including the appointment of a Chief Evaluator, following recommendations by
The committee also recognises the frustrations of some participants in
existing trial sites who believe that communication about the cashless debit
card scheme to date has not been clear or easy to understand. The committee is
encouraged that the communications strategies employed by the Department of
Social Services, particularly around the operation of cashless debit card, have
been informed and improved by this feedback.
The committee acknowledges that this bill may limit a participant's
human rights. However, the committee remains satisfied that the cashless debit
card scheme only limits those rights to the extent required to achieve the
objective of reducing the social harms caused by alcohol, drugs and gambling.
The committee recommends that the bill be passed.
Senator Slade Brockman
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