Australia proposes cashless welfare card expansion

Will it fly? The South Australian town of Ceduna has been piloting the cashless welfare card, whose rollout has been criticised by Aboriginal groups. (Image courtesy: Naparazzi/flickr)

Australian prime minister Scott Morrison has signalled that he intends to expand the use of a cashless card for distributing welfare payments, limiting recipients’ ability to choose how they spend the money.

Speaking earlier this month, Morrison said that the system – which has been trialled in selected localities for the past two years – will be extended to further territories across the country. The plan immediately drew fire from welfare experts, Aboriginal organisations and opposition MPs.

The PM, who has held office since August last year – when his conservative coalition clinched an unexpected victory in May’s general election – has made welfare reform a priority for his government, a coalition between his Liberal Party and the National Party.

Spending controls

Australia’s Cashless Debit Card programme, administered by the country’s Department of Social Services (DSS), has been trialled since 2016 in a limited number of locations, including the small town of Ceduna in South Australia and Western Australia’s also-remote East Kimberley region. These are, the DSS says, places where high levels of welfare dependence co-exist with “high levels of social harm”.

Eighty per cent of people’s welfare payment is placed onto the card, which cannot be used to withdraw cash, purchase some gift cards, gamble or buy alcohol. The remaining 20% goes into recipients’ normal bank account. The DSS says that the card is a “useful tool operating alongside other reforms to address the devastating impacts of drug and alcohol misuse and problem gambling”.

The grey-coloured card – which some refer to as the Indue Card, after the firm that provides it – is similar to a green-coloured income management card, known as Australia’s BasicsCard. The latter can only be used at approved merchants. 

A pocket policeman

The scheme has been criticised for stigmatising welfare recipients and disproportionately targeting Australia’s Indigenous communities. Media reports have also highlighted concern about the trial’s cost to taxpayers.

The Australian National Audit Office released a report in July 2018 concluding that monitoring and evaluation of the card’s trial was “inadequate”. But the National Party’s federal council has this month voted to roll out use of the cards for all those who are unemployed or receiving parenting payments and aged under 35.

Morrison – who argues that the card has been effective in cutting youth unemployment – has said that “further improvements” may be needed ahead of plans to launch the cards in Australia’s Northern Territory and remote Cape York Peninsula, ABC reported.

Hard to leave

Morrison’s plans to extend the card have coincided with a fresh wave of criticism. Adelaide news outlet Indaily focused on people’s experiences with the card in the original trial locations, while the Guardian raised concerns over the system designed to allow responsible spenders to leave the pilot.

The DSS says that in order to exit the programme, participants need to demonstrate “reasonable and responsible management of their affairs generally, including financial affairs”. Each application to exit takes into account criteria such whether the participant has been convicted of an offence in the past year. On 12 August 2019, the Social Security (Administration) Amendment (Cashless Welfare) Act 2019 legislation was passed, broadening the assessment criteria to consider participants’ personal circumstances as well as their financial management.  

So-called ‘welfare quarantining’ was first introduced in Australia in 2007, as part of the government’s controversial Northern Territory National Emergency Response.

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