This Bills Digest was produced at short notice to assist early consideration of the Bill. It provides an overview of some of the policy issues raised by the Bill as well as background information to help readers understand the policy context. The Digest does not include a detailed discussion of the Bill’s provisions nor does it canvass the views of stakeholders.

Key points

• Enhanced Income Management (eIM) is a hybrid welfare quarantining regime which has replaced the Cashless Debit Card (CDC) regime. The Bill proposes to also replace the existing Income Management (IM) regime with eIM. Welfare quarantining restricts the way a portion of a social security recipient’s payment can be spent.
• eIM is a hybrid regime in that it reflects the policy and legislative framework of the existing IM regime but uses an identical technology platform as the CDC regime to operate.
• The Bill proposes to:
  • extend the eIM regime to include all the measures currently covered by the existing IM regime
  • allow individuals currently subject to the IM regime to voluntarily move onto the eIM regime
  • close the existing IM regime to new entrants and move all new individuals subject to welfare quarantining onto the eIM.
• The Bill will allow the Minister to extend eIM compulsory and voluntary measures to new locations via legislative instrument, although the Explanatory Memorandum states there is no intention to expand the ‘Long-term welfare payment’, ‘Disengaged youth’ and voluntary measures.
• The Government does not appear to have settled on a long-term plan for the future of welfare quarantining. The Government has stated its preferred option is a voluntary welfare quarantining scheme (except in Cape York) with the option to allow for communities to make referrals for compulsory welfare quarantining. A consultation process is ongoing.

Introductory Info

Date introduced: 9 March 2023
House: House of Representatives
Portfolio: Social Services
Commencement: The earlier of Proclamation or 6 months after Royal Assent.

Purpose of the Bill

The purpose of the Social Security (Administration) Amendment (Income Management Reform) Bill 2023 (the Bill) is to amend the Social Security (Administration) Act 1999 (the SS Admin Act) to:

• extend the enhanced Income Management regime (eIM) to include all the measures currently covered by the existing Income Management (IM) regime
• allow individuals currently subject to the IM regime to voluntarily move onto the eIM regime
• close the existing IM regime to new entrants and move all new individuals subject to income management onto the eIM.

According to the Bill’s Statement of Compatibility with Human Rights, the proposed amendments will commence on 4 September 2023.[2]

The measures follow the repeal of the Cashless Debit Card (CDC) regime in October 2022 via the Social Security (Administration) Amendment (Repeal of Cashless Debit Card and Other Measures) Act 2022. The CDC regime operated in a number of trial sites around Australia. The Social Security (Administration) Amendment (Repeal of Cashless Debit Card and Other Measures) Bill 2022 initially proposed moving those subject to the CDC regime in the Northern Territory and Cape York trial sites to the pre-existing IM regime, but the Government amended the Bill to instead create the eIM which operates on a platform essentially identical to the CDC regime.

Background

Income management

Income management quarantines a proportion of a social security recipient’s payment, restricting the goods and services the quarantined funds can be spent on. Income managed funds cannot be spent on alcohol, gambling, tobacco, pornography and other related products and cannot be withdrawn as cash.

Northern Territory

Income management was first introduced by the Howard Government as part of the Northern Territory Emergency Response (NTER). The NTER was announced in June 2007 as a response to what the Government described as a crisis of child sexual abuse in Indigenous communities. In addition to income management, the NTER included alcohol restrictions, measures to enforce school attendance, bans on pornography and a number of other initiatives.[3]

At the time, the Minister for Families, Community Services and Indigenous Affairs, Mal Brough, likened the NTER to the Australian Government’s response to the Indonesian tsunami. He spoke about returning communities to normality over a 5-year period through a 3-phase approach of stabilisation, normalisation, and exit.[4]

Initially there was no dedicated platform for income management. Policymakers improvised a solution using a combination of existing products and services such as direct debit and store cards.[5]

A dedicated income management platform arrived with the introduction of the BasicsCard in September 2008. The BasicsCard was a PIN-protected card that used the EFTPOS network. People subject to income management were able to use the card at approved merchants to purchase goods and services.[6]

The BasicsCard was only one of the tools used in income management. When a person starts on income management they attend an allocation interview with Centrelink. At the interview the Centrelink officer can arrange to have expenses such as rent and utilities paid directly from their income managed funds. The remainder of their income managed funds would normally be allocated to their BasicsCard.[7]

Cape York

Income management was introduced in the Cape York Welfare Reform trial communities in July 2008, shortly after income management was introduced in the Northern Territory. However, it was developed independently and the two income management models differ significantly. According to Noel Pearson:

… in Cape York the reform agenda was the initiative of Aboriginal leaders, and the policy proposals came from the Cape York Institute–not from government. The Northern Territory policy was unilaterally decided by government. [8]

In Cape York, compulsory income management is used as a sanction for individuals who have breached their obligations, as determined by the Family Responsibilities Commission.[9] In the Northern Territory it is applied in a blanket way to entire categories of income support recipients.

According to Pearson, ‘the difference from the Territory is that the Cape York scheme encourages community members to take up their responsibilities. If people are being responsible, they are not affected by income management’.[10]

In the Cape York model income management is designed as ‘a catalyst for behavioural change’.[11] In the long term, it attempts to reduce problems such as alcohol abuse by encouraging responsible behaviour. In contrast, the Northern Territory model applies income management in a much less targeted way.

Other income management sites

Between 2008 and 2014 the Government extended income management to a number of smaller sites across Australia. Income management in these sites was targeted more tightly than in the Northern Territory.

Child protection sites

From 2008 the Rudd Labor Government extended income management to the Perth metropolitan area and the Peel and Kimberley regions in Western Australia, and to Greater Adelaide in South Australia. In these sites income management only applied to people referred by child protection authorities and to volunteers.[12]

Place based income management sites

In 2012 the Gillard Labor Government extended income management to five new sites around Australia. These were:

• Playford (South Australia)
• Greater Shepparton (Victoria)
• Bankstown (New South Wales)
• Rockhampton (Queensland)
• Logan (Queensland).

In these sites income management was targeted to people identified as vulnerable (mostly those identified through ‘youth triggers’), those referred by child protection authorities, and volunteers.[13]

Remote Indigenous communities in South Australia and Western Australia

In 2012 the Gillard Labor Government extended income management to the Anangu Pitjantjatjara Yankunytjatjara (APY) Lands in South Australia and in 2013 to Laverton and the Ngaanyatjarra Lands, including Kiwirrkurra, in Western Australia.[14]

In these sites income management was targeted to people identified as vulnerable, those referred by child protection authorities, and volunteers.[15]

Ceduna

In July 2014 the Abbott Coalition Government extended income management to Ceduna in South Australia.[16]

Income management in Ceduna was targeted to people identified as vulnerable, those referred by child protection authorities, and volunteers.[17]

Cashless Debit Card

The CDC also quarantines a proportion of a social security recipient’s payment, restricting the goods and services the quarantined funds can be spent on. The CDC could not be used to purchase alcohol, gambling, gift cards, or to withdraw cash.

The CDC regime was proposed by a 2014 review led by Andrew Forrest. The proposed card was called the ‘Healthy Welfare Card’. Forrest argued that the BasicsCard was providing valuable support but was expensive to run, operated outside the mainstream banking system and came with some stigma for recipients.[18] In contrast, his proposed ‘Healthy Welfare Card’ would be issued by mainstream financial institutions and would rely on the ability of the existing Visa and MasterCard systems to block purchases at particular categories of merchant and prevent cash withdrawals.[19]

Forrest’s proposal was developed into the CDC regime. Funding for a trial of the CDC was announced in the 2015–16 Budget.[20]

The Cashless Debit Card regime was eventually expanded to six areas around Australia—Ceduna (South Australia), Kununurra and Wyndham in the East Kimberly (Western Australia), the Goldfields region (Western Australia), the Bundaberg and Hervey Bay region (Queensland), the Northern Territory, and Cape York (Queensland).[21]

Attempts to wind back the Income Management regime

The Northern Territory and Cape York CDC sites were added in 2020. Originally the Morrison Government planned to move all participants in the IM regime onto the CDC. In March 2019, Minister for Families and Social Services Paul Fletcher, said:

… we will replace the technical aspects of the existing income management program in the Northern Territory and Cape York with the more effective Cashless Debit Card - while maintaining the basic income management triggers and operating model.[22]

The idea was to keep the policy settings for welfare quarantining in the Northern Territory and Cape York the same while incorporating the two sites into the legislative framework for the CDC regime. The aim was to replace the financial services platform of the BasicsCard with the new CDC platform. A Regulation Impact Statement submitted by the Department of Social Services (DSS) in 2015 suggests the department was in favour of replacing IM:

… Income Management is … a complex and costly policy, not suited for further expansion. The ongoing operating cost for Income Management is around $73 million per year. This is mainly due to the individualised nature of referral and servicing, as well as the intensive merchant management processes. The personalised targeting of Income Management and different placement criteria and payment splits adds to the complexity of the program.[23]

Elsewhere in the Regulation Impact Statement, the department describes IM as ‘a largely incoherent policy that has a limited ability to create change within communities’.[24]

During negotiations over the Social Security (Administration) Amendment (Continuation of Cashless Welfare) Bill 2020 the Government compromised. IM participants in Cape York moved over to the CDC while IM participants in the Northern Territory were given the option to transfer to the CDC or stay on IM.[25]

Abolishing the Cashless Debit Card

In the lead up to the 2022 election, the CDC became an issue. Labor promised to abolish the CDC. One of Labor’s objections to the CDC was the role of a private company—Indue—in delivering the card. In May 2021, Leader of the Opposition Anthony Albanese said:

We think there's a role if communities are requesting a government run system in terms of cashless welfare. So I don't want to say that it never has a role because it did have a role. But the idea of a privatised organisation running the welfare system like this and doing it in a way in which they have an interest in its expansion, that's the thing. They introduced the profit motive above what is the public interest. It's the public interest that's got to count here. And under Labor, that is precisely what we would do.[26]

In April 2022, Labor’s Shadow Minister for Social Services Linda Burney told the Guardian Australia that Labor’s ‘fundamental principle on the basics card and the cashless debit card, it should be on a voluntary basis’.[27]

There were also concerns about the cost-effectiveness of the CDC regime. In a 2018 report, the Auditor-General recommended DSS should undertake a cost-benefit analysis of the CDC.[28] DSS commissioned a report from the Centre for International Economics (CIE). The report concluded that costs of the CDC outweighed the benefits: ‘The final benefit-cost ratio of 0.16 indicates that benefits would have to be more than six times higher than estimated to result in a positive net benefit’.[29]

Shortly after winning office, the new Albanese Government introduced legislation to abolish the CDC regime—the Social Security (Administration) Amendment (Repeal of Cashless Debit Card and Other Measures) Bill 2022. The Minister for Social Services, Amanda Rishworth, cited the lack of evidence of effectiveness as well as problems such as shame and stigma.[30]

At the time, the Government had not reached a decision on the future of the IM regime. Its original plan (as proposed initially in the 2022 Bill) was to have the option of transferring CDC participants in the Northern Territory and Cape York to IM when the CDC regime was abolished. It also proposed to allow income support recipients in the former CDC sites to volunteer for IM.[31]

This plan quickly ran into criticism. Noel Pearson of the Cape York Institute told a Senate inquiry into the Bill: ‘You can't consider going back to the BasicsCard. It is a very inconvenient card. It doesn't have the functionality of the CDC’.[32]

Creating the enhanced Income Management regime

The Government responded to these criticisms by amending the Bill to create a new welfare quarantining regime called enhanced Income Management (eIM). This was created by inserting new ‘Part 3AA—Enhanced income management regime’ into the Social Security (Administration) Act 1999.

The approach dealt with the limitations of the IM regime’s BasicsCard platform by creating a hybrid regime that combined the CDC’s platform with policies modelled on those of the existing IM regime.

When the CDC regime ended in March 2023, former participants who remained in welfare quarantining (as compulsory or voluntary participants) moved to the eIM regime.[33]

Comparing the three welfare quarantining regimes

Each welfare quarantining regime has three elements:

• Policy—The rules that set out who participates in the program, where the program operates, and how the program operates (for example, how much of a person’s payment is income managed and which goods and services are excluded)
• Platform—The technology used for delivering income management services. This includes an income managed account and a card that allows the user to make purchases using funds in the account.
• Legislative framework—Provisions in the Social Security (Administration) Act 1999 (the SS Admin Act) that determine how the Government can make changes to the regime’s policy. For example, which policy changes require new legislation and which can be done through legislative instruments.

Income Management regime

In the IM regime, the policy is structured around ‘measures’. Each measure applies to a particular group of income support recipients (for example, disengaged youth or long-term welfare payment recipients), operates in particular income management locations, and quarantines a particular percentage of a person’s income support payments. Most of the policy for these measures is set out in the Act.

The IM regime relies on the BasicsCard platform. The BasicsCard is a PIN protected magnetic strip card that allows IM participants to spend their payments at approved businesses. The card works on the EFTPOS system. IM participants do not have an IM bank account and no interest is earned on amounts quarantined to the card.

One of the features of the BasicsCard platform is that businesses need to be approved by Services Australia before they can accept the card. This limits the number of places IM participants can use their card as well as making it difficult for the Government to expand the IM regime to new areas.

The legislative framework for the IM regime is written around the BasicsCard platform. The Government cannot change the platform without amending the Act.

While the IM regime’s legislative framework sets out much of the policy for IM measures, it does not set out the locations where each measure operates. The Act allows the Minister to ‘specify a State, a Territory or an area’ where the measure operates using a legislative instrument.[34]

The IM regime’s legislative framework makes it easy for the Government to expand. However, the platform makes it difficult.

Cashless Debit Card regime

The CDC regime was structured around trial sites. Each trial site was identified in the SS Admin Act and could have separate policy settings. For example, in the Bundaberg and Hervey Bay trial site, only people aged under 36 years were automatically placed on the card.[35] This restriction did not apply in other trial sites.

The CDC regime’s platform was built around the Cashless Debit Card.[36] This was a Visa debit card issued by payments company Indue (and, more recently in the Northern Territory, by the Traditional Credit Union). Cardholders could use their card at any physical store that accepted Visa debit unless the store has been blocked. Cardholders could also use the card to make online purchases at approved online merchants. The card was linked to a ‘welfare restricted bank account’.[37] Amounts in this account earned interest (at 1%, paid by the Australian Government).[38]

The CDC platform worked by using merchant category codes (MCCs) to block certain merchant categories. An MCC is a four digit code that identifies merchants by the kind of goods or services they sell. The system automatically blocks specific MCCs including those covering drinking places, packaged liquor stores, gambling venues and a category known as ‘quasi cash’ (a category that includes things such as traveller’s cheques). More recently this was combined with a point-of-sale system that merchants could use to block particular products (known as ‘product level blocking’).[39]

A limitation of the CDC regime is that it is more difficult to block products such as tobacco that can be sold by merchants whose main business (and MCC) is selling goods such as food and groceries. Unless these merchants adopt product level blocking technology, it is not clear how policymakers can automatically enforce restrictions on the sale of these kinds of goods (large retail chains are more likely to use product level blocking).

The legislative framework for the CDC regime was more restrictive than for the IM regime. The SS Admin Act included a sunset clause (in section 124PF).[40] This meant that the Government periodically needed to seek Parliament’s approval to extend the CDC (there was no sunset clause for IM). It was also more difficult to expand than the IM because new locations could only be added by amending the SS Admin Act.

Enhanced Income Management regime

The eIM regime is a hybrid. Most of the policy is modelled on the IM regime but it adopts the platform of the CDC regime.

The platform is essentially identical to the one used in the CDC regime. Former CDC participants will have the same welfare restricted bank account and can continue to use the same card. Eventually, CDC participants will be issued with a new card. This will look different and will have a new name: the ‘SmartCard’.[41] As with the CDC and the BasicsCard, the banking services attached to the SmartCard—including the bank account itself, the physical card and the connection to financial systems—are provided by Indue.[42] DSS officials told Senate Estimates in February that those moved from the CDC to eIM would keep the same bank account.[43]

As the Traditional Credit Union (TCU) explains to card holders, restrictions on the card have changed (a policy change) but the differences between the CDC and the new SmartCard are its colour and its name.[44]       The new restrictions are pornography and tobacco purchases (restricted under IM but not the CDC).[45]

One further difference is that no interest is accrued on funds in the restricted bank account.[46]

The Bill brings all the existing IM measures into the new eIM regime’s legislative framework. One feature of this, is the ability of the Minister to add new locations through a legislative instrument. Unlike the CDC regime, there is no sunset clause and no need for the Minister to amend the Act to expand eIM.

With the Bill’s proposed amendments, the eIM regime has the potential to be easier for Government to expand than either IM or the CDC. It will combine IM’s less restrictive legislative framework with the CDC easier to expand platform.

Committee consideration

Senate Community Affairs Legislation Committee

The Bill has been referred to the Senate Community Affairs Legislation Committee for inquiry and report by 6 June 2023. Details of the inquiry are at: Social Security (Administration) Amendment (Income Management Reform) Bill 2023 [Provisions].

Financial implications

In the Explanatory Memorandum for the Bill, the Government states:

The amendments made by this Bill have commercial implications for contracted service providers. Due to these commercial implications, the financial impacts are not suitable for publication at this time.[47]

Currently there are two service providers involved in delivering card and banking services under the eIM regime. These are Indue Ltd and the Traditional Credit Union Limited. These are the same providers that were engaged to deliver card and banking services under the CDC regime.

Statement of Compatibility with Human Rights

As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bill is compatible.[48]

Key issues and provisions

Making the Cashless Debit Card platform a universal platform for welfare quarantining

The Bill moves towards making the CDC/SmartCard platform a universal platform for welfare quarantining. It seeks to do this by closing the IM regime to new entrants and allowing existing IM participants to transition to eIM. New entrants into welfare quarantining in the Northern Territory will be placed on eIM. As discussed in the ‘Comparing the three welfare quarantining regimes’ section above, eIM combines the CDC platform with the policy approach of the IM regime.

Schedule 1 of the Bill incorporates provisions for each of the existing IM measures into Part 3AA of the Social Security (Administration) Act 1999. This means that the new eIM regime will inherit most of the policy setting of the IM regime.

Table 1      Existing Income Management measure provisions and the relevant measure provisions under enhanced Income Management proposed in the Bill

Measure	Income Management	enhanced Income Management (proposed)
Child protection	123UC	123SCA
Vulnerable welfare payment recipients	123UCA	123SCL
Disengaged youth	123UCB	123SD* (NT) 123SDA (areas outside NT)
Long-term welfare payment recipients	123UCC	123SD* (NT) 123SDA (areas outside NT)
School enrolment	123UD	123SCB
School attendance	123UE	123SCC
Queensland Commission (Cape York)	123UF	123SC*
Other state/territory referrals	123UFAA	123SCJ
Voluntary income management agreement	123UFA	123SE* 123SF*

*These are existing sections in the SS Admin Act, inserted by the Social Security (Administration) Amendment (Repeal of Cashless Debit Card and Other Measures) Act 2022. Amendments to these provisions are proposed by the Bill.

Less Parliamentary scrutiny over expansion

Another feature inherited by eIM will be the Minister’s ability to expand the locations the measures apply to by legislative instrument. The relevant provisions providing for the expansion of each eIM measure are:

• child protection: proposed subsection 123SCA(7)
• school enrolment and attendance: proposed section 123SCF
• other state/territory referrals: proposed subsection 123SCK(1)
• vulnerable welfare payment recipients: proposed subsection 123SCL(5)
• disengaged youth: proposed subsection 123SDA(2)
• long-term welfare payment recipient: proposed subsection 123SDA(6)
• voluntary: proposed subsection 123SF(5).

The Explanatory Memorandum states that the Minister intends the ‘Disengaged youth’ and ‘Long-term welfare payment recipients’ measures to continue to operate only in the Northern Territory, despite creating a specific section which provides for these measures to apply in areas outside of the Northern Territory (proposed section 123SDA inserted by item 32). It is not clear why the Bill proposes giving the Minister the power to expand these measures by legislative instrument when this is contrary to the Minister’s intention.[49] If there is no intention to allow the expansion of eIM to new locations, the Bill could have been drafted to limit the application of all of the eIM measures to current IM locations.

The SS Admin Act gives the Minister the power to expand the existing IM measures to new locations via legislative instrument. However, the IM regime’s BasicsCard platform makes expansion administratively difficult and costly. These limitations do not apply to the platform eIM inherits from the CDC regime.

Closing Income Management to new entrants

Schedule 2 of the Bill contains provisions to close the IM regime to new entrants. Individuals who would have been subject to the IM regime under the existing provisions will be placed under the eIM regime, where they meet the criteria for the applicable measure.

Lack of evidence of effectiveness

IM began as part of the NTER—a set of measures designed to respond to an acute problem. The stabilise, normalise, exit model suggested that IM was a temporary measure. IM eventually became seen as a permanent response applicable to problems associated with disadvantage. In 2009, then Minister for Families, Housing, Community Services and Indigenous Affairs Jenny Macklin envisaged a ‘national roll out of income management in disadvantaged regions’.[50]

The most recent evaluations of IM measures in the Northern Territory were undertaken almost a decade ago.[51] The Regulation Impact Statement accompanying the Bill noted that the 2012 evaluation of New Income Management found ‘few indicators of strong or consistent impacts of IM, rather, they found there have been diverse outcomes that affect a wide range of people and inconsistent range of views and experiences’.[52]

There is some evaluation evidence that IM in the Northern Territory has entrenched reliance on Government rather than building individual and community capacity. According to a 2014 evaluation of New Income Management in the Northern Territory:

… rather than the program building people’s capacity and motivating them to take responsibility and become independent and self-reliant, for these people it has acted to make their lives more comfortable by relieving them of having to take responsibility for some aspects of their financial management. This in turn has made them more dependent and reliant upon welfare (p. 319).[53]

An evaluation of the place-based measures was published in 2015 and a strategic review of Cape York Income Management was published in 2018.[54] The Regulation Impact Statement concluded its summary of all the IM evaluations by noting:

A consistent theme throughout several evaluations was the negative impacts of the restrictions including; limitations on where they could shop, difficulties using IM for public transport and widespread feelings of unfairness and disempowerment. Evaluators for the First Evaluation Report indicated that many people subject to compulsory income management appeared not to demonstrate the behaviour problems or financial difficulties income management was intended to remedy.[55]

It is not clear from these evaluations that the policy settings eIM will import from IM are likely to be effective.

Possibly the most powerful argument for the shift to eIM is not that it will be more effective, but that that it will be easier to administer and less costly than the IM regime. If IM and the BasicsCard is eventually phased out, the CDC’s platform will become the universal platform for welfare quarantining.

DSS’ Regulation Impact Statement states the preferred option for welfare quarantining going forward is a voluntary IM program based on consultation with communities alongside culturally suitable support services co-designed with affected communities.[56] This option ‘also considers options for communities and state authorities to refer people onto a reformed IM program (subject to further government consideration)’.[57] The document states that this option ‘offers the most net benefit for participants while also reducing the regulatory burden costs in both the short and long-term, and will deliver the best value for money to Government’.[58] However, the same document notes:

The lack of conclusive evidence from the evaluations on the difference the programs are having on reduced alcohol, drugs and gambling means it is not possible to estimate the effect of abolishing or reforming the programs. This has been emphasised through the consultations with communities, with law enforcement agencies saying there has been no noticeable difference in crime as a result of the CDC while others in the community holding the view that there has been a positive impact.

There is no quantitative research which would provide the Department with the ability to determine the impact of this option. The Department has therefore made assumptions on the potential social impacts of the proposal.[59]

The Government appears to be pursuing a policy where welfare quarantining continues, primarily in a voluntarily form but with options being explored for individuals in some communities to be subject to mandatory income management. The platform which makes such an option possible and less expensive is the CDC/SmartCard model. The government admits, however, that there is no strong evidence that this policy will address the social problems it is aimed at.

Exclusion of Age Pension and veterans’ payments from ‘Vulnerable welfare payment measure’

The Bill specifically excludes Age Pension and veterans’ affairs payment recipients from eligibility for the eIM ‘Vulnerable welfare payment measure’.

The IM regime criteria for the ‘Vulnerable welfare payment recipient’ could apply to ‘category H welfare payment’ recipients if they met the other applicable criteria.[60] Category H welfare payments include any social security benefit or pension, ABSTUDY Living Allowance and three payments paid by the Department of Veterans’ Affairs: the Service Pension, Income Support Supplement and Veteran Payment.[61] The Secretary of the Department of Social Services (or their delegate) has to make a specific determination that an individual is a ‘vulnerable welfare payment recipient’ in accordance with decision-making principles set out in a legislative instrument.[62]

It is unclear if any Age Pension recipients or veterans’ affairs payment recipients are, or have been, subject to the measure.

The proposed criteria for the vulnerable measure under the eIM regime includes ‘category F welfare payment recipients’.[63] Category F welfare payment are defined as social security benefits, Disability Support Pension, Carer Payment, Parenting Payment (Single) and ABSTUDY Living Allowance.[64] This definition captures most social security income support payments but excludes Age Pension and any veterans’ affairs payments.

Numbers affected

According to the Bill’s Statement of Compatibility with Human Rights, more than 24,400 individuals currently subject to the IM regime will be able to move to the eIM regime under the proposed amendments.[65] An unknown number of people will become subject to eIM under the proposed amendments as the existing IM measures will be closed.

As at December 2022, there were:

• 15,599 people subject to the ‘Long term welfare payment recipients’ IM measure in the Northern Territory
• 4,540 people subject to the ‘Disengaged youth’ IM measure in the Northern Territory
• 1,949 people under voluntary IM in the Northern Territory
• 373 people subject to the ‘Vulnerable welfare payment recipient’ measures in the Northern Territory and
• over 1,900 people under the IM regime in locations outside the Northern Territory.[66]

Concluding comments

The Government does not appear to have settled on a long-term plan for the future of welfare quarantining. Minister Rishworth stated in her second reading speech for the Bill:

The Albanese government is working with communities on the future of income management and what it looks like for them. Any decisions about the future of income management will be based on genuine consultation with affected communities, state and territory governments and experts in the field. Until that time, this bill will ensure that income management is more in tune with the needs of participants based on the feedback we have already heard.[67]

In the Regulation Impact Statement, Reforming the Cashless Debit Card and Income Management, the Government’s preferred option includes making welfare quarantining voluntary (except in Cape York) with the option to allow for communities to make referrals for compulsory welfare quarantining. However, the Regulation Impact Statement indicates that this is subject to further consideration by Government.[68]

If eIM were to become a purely voluntary scheme, the numbers of participants would likely fall significantly and the per-person cost would increase. Under these circumstances it is not clear whether any benefits of the scheme would outweigh its costs. This could affect the long-term viability of welfare quarantining.