Purpose of the bill
1.1
The Social Security (Administration) Amendment (Income Management to Cashless Debit Card Transition) Bill 2019 (bill) was introduced into the House of Representatives on 11 September 2019.
1.2
The bill seeks to amend the Social Security (Administration) Act 1999 (Act) to:
establish the Northern Territory (NT) and Cape York as cashless debit card (CDC) trial areas, and transition Income Management (IM) participants onto the CDC trial in 2020;
extend the end date for existing CDC trial areas to 30 June 2021;
remove the cap on the number of CDC trial participants;
remove the exclusion to allow people in the Bundaberg and Hervey Bay trial area to voluntarily participate in the trial;
enable the Secretary of the Department of Social Services (DSS) to advise a community body when a person has exited the trial; and
improve the workability of the evaluation process.
Background
Cashless debit card trial
1.3
The CDC trial commenced in Ceduna on 15 March 2016, the East Kimberley on 26 April 2016, the Goldfields region on 26 March 2018 and the Bundaberg and Hervey Bay region on 29 January 2019.
1.4
In the current CDC trial sites, the trial program applies to most people on working-age welfare payments. Under the trial, 80 per cent of a participant's welfare payment is placed on a Visa debit card that can be used at any merchant that accepts EFTPOS and Visa and does not primarily sell restricted goods. The CDC cannot be used for the purchase of alcohol, gambling products, certain cash-like products such as gift cards, or to withdraw cash. The remaining 20 per cent of the welfare payment is deposited into the participant's regular bank account which the participant can use at their discretion, including being withdrawn as cash.
Objectives of the trial
1.5
The objectives of the CDC trial are 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 where they have the opportunity for paid employment.
Transition from BasicsCard to CDC
1.6
IM has been operating in communities in the NT and Cape York for more than ten years. Under IM, a welfare recipient has the option to access their income managed funds via a BasicsCard which can be used at approved stores and businesses, through the EFTPOS system.
1.7
BasicsCard merchants are stores or businesses that have applied and been approved to accept the BasicsCard through the EFTPOS system. As at 28 June 2019 there were approximately 16 400 BasicsCard approved merchants across Australia. Merchants are only approved for BasicsCard transactions if:
their main business activity is the sale of priority goods or services as defined in the approval framework;
they are able to prevent the sale of excluded goods and services including alcohol, tobacco, pornography and gambling goods and services; and
they are able to comply with the obligations set out in the BasicsCard Merchant Terms.
1.8
The CDC is automatically accepted at over 900 000 EFTPOS terminals nationally, giving participants a greater number of merchants from whom they can make purchases, including online businesses. It also relaxes some of the restrictions on purchases.
1.9
Under the proposed transition in the bill, the rate of income quarantining in the Cape York and NT trial sites will not be set at 80 per cent of a participants' income as in other trial sites. Instead participants in the Cape York and NT trial sites will retain their existing ratio of quarantined income when they transition from the IM system to the CDC trial. DSS are consulting with participants and stakeholders in communities to determine how the transition process should work.
Evaluation and reports
1.10
The Commonwealth Government commissioned ORIMA Research to undertake an independent evaluation of the CDC trial in Ceduna and the East Kimberley. The evaluation was reported in three stages: Initial Conditions Report, (Wave 1), Interim Evaluation Report and Final Evaluation Report (Wave 2). The Final Evaluation Report was released on 1 September 2017.
1.11
The Australian National Audit Office undertook an independent performance audit of the CDC trial, the objective of which was to assess DSS's implementation and evaluation of the trial. The Auditor-General presented the report to Parliament on 17 July 2018.
1.12
The Future of Employment and Skills Research Centre at the University of Adelaide was commissioned by DSS to collect base-line data for the CDC trial in the Goldfields Region. Its report was released in February 2019.
1.13
The findings of these reports were referenced frequently in submissions made to this inquiry and are discussed, where relevant, in Chapter 2.
Previous inquiries
1.14
The Senate Community Affairs Legislation Committee (committee) has reported on legislation relating to the CDC trial and IM in Cape York and other trial sites on several occasions in recent years:
The Social Security Legislation Amendment (Debit Card Trial) Bill 2015 (report tabled 12 October 2015) established the CDC trial in the East Kimberley and Ceduna.
The Social Services Legislation Amendment (Queensland Commission Income Management Regime) Bill 2017 (report tabled on 20 June 2017) also extended the Cape York IM program.
The Social Services Legislation Amendment (Cashless Debit Card) Bill 2017 (report tabled 6 December 2107) expanded the CDC trial to the Goldfields region.
The Social Services Legislation Amendment (Cashless Debit Card Trial Expansion) Bill 2018 (report tabled 14 August 2018) expanded the CDC trial to the Bundaberg and Hervey Bay region.
The Social Security (Administration) Amendment (Income Management and Cashless Welfare) Bill 2019 (report tabled 1 April 2019) extended the Cape York IM program and the end date for CDC trial sites in East Kimberley, Ceduna and the Goldfields.
Key provisions of the bill
NT and Cape York transition
1.15
Item 3 of the bill adds new subsection 123UF(4) which provides for the relationship between section 123UF and Part 3D of the Act as a person transitions from IM to the CDC trial. This new subsection provides that the Secretary of DSS (secretary) may transfer an amount equal to funds held in a person’s IM account to their CDC account when transitioning from IM to the CDC trial in order to ensure that person will be able to access all their funds through one source at any one time.
1.16
Item 10 amends the definition of 'trial area' under subsection 124PD(1) to establish the Cape York area and the whole of the NT as CDC trial areas for the purposes of Part 3D of the Act. The term 'trial area' is currently subject to exclusion of any part of an area as determined in a notifiable instrument made by the minister under subsection 124PD(2).
1.17
Item 15 will allow the minister to make a notifiable instrument under subsection 124PD(2) to exclude any part of the NT from the trial area. The minister’s power to make a notifiable instrument under subsection 124PD(2) is a pre-existing power being modified to support the extension of the CDC trial to the NT.
1.18
Item 34 amends subsection 124PJ(1) to ensure that trial participants moved onto the CDC trial under new sections 124PGD and 124PGE will not be subject to the same restricted portion and unrestricted portion as existing trial areas. This will maintain the current restricted and unrestricted portions for the NT and Cape York area under IM.
Extending the end date for the CDC trial
1.19
Item 17 repeals paragraph 124PF(1)(b) and substitutes it with a new paragraph which provides that the end date for the trial is 30 June 2021 for all trial areas other than the Cape York area, which will have a trial end date of 31 December 2021.
Removing the cap on participants
1.20
Item 18 repeals subsection 124PF(3) to remove the cap on the number of CDC trial participants. This amendment will ensure that all IM participants in the Cape York area and the NT are able to transition to the CDC trial.
Enabling voluntary participation
1.21
Item 28 omits ‘except the Bundaberg and Hervey Bay area’ from paragraph 124PH(1)(b). This amendment will allow a person in the Bundaberg and Hervey Bay area to enter the CDC trial as a voluntary trial participant.
Sharing information with community bodies
1.22
Item 43 adds new sections 124POA, 124POB, 124POC and 124POD at the end of Division 4 of Part 3D, which authorises certain information disclosures to be made to the secretary by an officer or employee of a financial institution or by a member, officer or employee of a community body. New section 124POA will allow the secretary to disclose information to a member, officer or employee of a community body that a person has ceased to be a trial participant or a voluntary trial participant.
Improving the evaluation process
1.23
Item 51 repeals subsections 124PS(2) and (3) to remove the statutory requirement that an evaluation be conducted by an independent expert within six months of the completion of the trial review. This addresses the potentially circular nature of current section 124PS. The repeal of subsection 124PS(3) removes the requirement on independent experts to consult trial participants which, in turn, will avoid the ethical implications of unnecessary repeat contact with vulnerable individuals.
Financial implications
1.24
The explanatory memorandum to the bill notes that $17.8 million will be provided for support services to assist the transition from IM to CDC in the NT and Cape York area.
Legislative scrutiny
Parliamentary Joint Standing Committee on Human Rights
1.25
The Parliamentary Joint Committee on Human Rights (PJCHR) had not finalised its consideration of the bill before the committee's reporting date. Consideration of previous related legislation by PJCHR is outlined in the committee's previous reports on legislation relating to the CDC trial.
Senate Standing Committee for the Scrutiny of Bills
1.26
The Senate Standing Committee for the Scrutiny of Bills (scrutiny of bills committee) raised concerns about the increase in the minister's discretionary powers, and the safeguarding of participants' privacy.
Broad discretionary power
1.27
The scrutiny of bills committee expressed concerns about the extension of the minister's powers under the Act. It noted that proposed subsections 124PJ(2A) and (2B) would confer on the minister a broad power to determine the portion of a participants' payments that are restricted. The scrutiny of bills committee requested the minister provide detailed advice in relation to the necessity and exercise of the proposed increase in the minister's discretionary powers.
Privacy
1.28
The scrutiny of bills committee also noted that Item 46 of the bill seeks to amend paragraph 192(db) of the Act, to extend the secretary's power in section 192 to Part 3D. This would permit the secretary to require a person to give information or produce a document to the DSS which the secretary considers may be relevant when determining whether a person should not participate in the CDC trial on the basis of their mental, physical or emotional wellbeing. The scrutiny of bills committee requested the minister's detailed advice in relation to the nature of participants' information which could be collected and the safeguards for participants' privacy.
Conduct of inquiry
1.29
On the 12 September 2019, the Senate referred the provisions of the bill to the committee for inquiry and report by 7 November 2019.
1.30
The committee advertised the inquiry on its website and invited submissions by 4 October 2019, which it later extended to 18 October 2019. The committee received 108 submissions, listed at Appendix 1 of this report.
1.31
The committee also conducted three public hearings in:
Darwin on 23 September 2019;
Canberra on 14 October 2019; and
Alice Springs on 31 October 2019.
1.32
A list of witnesses for those hearings is included at Appendix 2 of this report.
Acknowledgment
1.33
The committee would like to thank those individuals and organisations that made submissions and gave evidence at the public hearings.
Notes on references
1.34
References to the committee Hansard are to the proof transcript. Page numbers may vary between the proof and official Hansard transcript.