Policy Status: Proposed changes to an existing policy.
NOTE: This is only to be introduced if there are no serious moves towards less controlling payments, for example a universal basic income (UBI).
Minister for Social Services
The Hon. Dan Tehan
Brief description of the policy proposed:
To ensure the enactment of legislative bases to establish the rights and responsibilities of both providers and recipients of an income support payment. This should state clearly both the roles and rights of the government and recipients. In particular, those receiving income support should have an established right to control the spending of any such payments, unless there are case-related, individual legally binding orders in place. Entitlements to such payments should be based on financial need and related issues of access to income, but not limited by conditions on type of spending.
Why are these changes needed?
The lack of defined rights of income support recipients as to how they use their benefits is leading to serious changes in the sense of agency of less financially viable citizens. Moving away from income support being money the recipient can choose how to spend to an official control-based mode removes rights and undermines self-control and self-respect for an individual.
An official debit card not only involves cuts to recipients’ control over cash' but restricts certain spending. Applying this to broad categories of income recipients is creating confusion and resentment from those who are competent money managers.
Trialled by the BasicsCard, and now the Cashless Debit Card, there are increasing examples of the tendency to set conditions and controls on payments. The compulsory recipients included in these ‘pilots’ are not people who have identified needs for some external control. Instead, whole populations, on particular types of benefits, in defined locations, are put on the program, when the majority do not have spending or addiction issues.
There is current discussion of universalising and expanding such models of constraints, despite the lack of evidence of their efficacy. A range of evaluations, including a major one from UNSW Social Policy Research Centre 2014, have failed to find any serious benefit in control of alcohol or violence or other benefits amongst those who have been compulsorily placed on the BasicsCard.
Some studies indicate possible damage to recipients through a loss of control and other feelings of inadequacy, as well as serious difficulties in managing shared costs and taking advantage of cheaper cash possibilities. This can be exacerbated by other compliance requirements and overly bureaucratic procedures. Limited by specifying rights and obligations can result in recipients being stigmatised and damage to their self-esteem.
Where there are legal orders or individual case plans, controls may be accepted, but these should not be universalised.
Who benefits/gains from the policy proposal?
There will be considerable financial savings from reducing excessive administrative processes to control these systems. The current and future recipients who prefer to retain control over their finances will do so and retain their dignity. It should also allow a clearer focus to be given to those with difficulties, so their particular needs can be dealt with effectively by services needed.
Who may lose from the policy proposal?
Some subcontractors who profit by providing the card system; the extra staff needed to police and manage complex administrative processes; recipients who enjoy having their bills paid by the government, but who may learn to be financially irresponsible.
Does this policy have major party support?
The Greens would support the above changes. The ALP and LNP introduced and supported most of these types of controlling policies, so are likely to oppose it. Some in the ALP may be interested, so the debate is worth having.
Groups and categories of people supportive of your proposal?
Most major welfare groups; the more informed academics and members of the general public; most Indigenous communities and organisations.
Groups that would oppose it? Why?
Some commercial groups e.g. Indue and Serco, that have been funded to run related services may lose their contracts. The LNP Government definitely and the ALP less enthusiastically, see this as a way of dealing with welfare failures, and gaining votes, despite the lack of evidence of its efficacy.
Will extra costs will be incurred?
No. There would be savings, as the current measures tend to be administratively expensive.
Timeline for the proposal to be implemented:
There should be some consultation, but the termination of the current 'trials’, legislation should be as soon as possible.
Keywords/search terms for identifying the policy:
Income Management, BasicsCard, welfare payments, Indigenous welfare, Cashless Debit Card, welfare reform.