4.1
Many submitters to the inquiry provided views and recommendations in relation to matters not directly addressed in the Social Security (Administration) Amendment (Repeal of Cashless Debit Card and Other Measures) Bill 2022 (the bill). These included:
the transition process out of the cashless debit card (CDC) program for participants and communities; and
the future of income management in Australia, including the need for consultation and choice, the importance of suitable technology, and the need for wraparound support services in communities.
4.2
As flagged in Chapter 2 of this report, these elements do not fall within the scope of the bill referred to the committee for inquiry. A further bill, to be introduced later in 2022 after consultations with affected communities, will address the transition process for individuals who access income management arrangements after their exit from the CDC program.
4.3
However, to assist in contextualising future discussions within the community, a brief overview of the evidence is set out below.
The transition process for CDC participants and communities
4.4
Submitters to the inquiry identified the need for the transition process away from the CDC program to be managed with care. They noted that the process would need a strong focus on community consultation to ensure that all support was tailored to the circumstances of each individual.
4.5
For example, Monash University stated:
The withdrawal of the CDC will need to be undertaken carefully, to allow participants to transition their finances to alternative providers in a reasonable time frame and enable communities to identify and address any impacts of the withdrawal of this policy as they arise with emphasis on locally developed solutions.
4.6
UnitingCare informed the committee they supported the Government’s ‘staged approach’ which will provide the opportunity to put in place support for individuals transitioning from the CDC program. It emphasised that it was essential that any supports were ‘available, accessible and appropriate to the needs of the individual’.
4.7
The Northern Land Council (NLC) advised that in relation to the abolition of the CDC, its focus was on transition arrangements. It recommended that any transition plan include several key elements:
Broad information sharing at a community and individual level on the changes, well before implementation begins.
Timeframes that are clearly communicated.
Information channels that are culturally appropriate and open to people with intermittent internet access, as well as accessible to people with differing levels of English literacy.
Continued or alternative pathways for money management that are clear and open to those who may choose to use them.
4.8
The Arnhem Land Progress Aboriginal Corporation (ALPA) also emphasised the need for community consultation and a ‘placed based approach’, recognising that each community will have different needs and aspirations.
4.9
The Accountable Income Management Network (AIMN) emphasised the need for immediate arrangements for CDC participants to access social security legal help, both in-person and remotely, in order to protect their rights and wellbeing as they transitioned from the CDC, potentially to other forms of income management.
4.10
Drawing upon insights from its work with clients and their families, the Queensland Indigenous Family Violence Service (QIFVS) cautioned against viewing the transition out of the CDC program as an ‘isolated matter’. It stressed the importance of providing wrap-around supports and adequate resources for those transitioning off the card.
4.11
The Australian Red Cross (Red Cross) referenced its work in the Ceduna region in South Australia (SA) and noted that the impacts of the transition away from the CDC program would be ‘far-reaching’ and likely to put strain on existing support services in the area. It detailed:
There is widespread concern within the existing community, community services and Aboriginal controlled organisations based in Ceduna that there's going to be significant strain on our existing services. Some individuals who have been unable to access family or community members' financial accounts during the cashless debit card program could now reinsert coercive control over family finances. Impacts of this could be realised in the increase of issues such as domestic and family violence, alcohol and drug abuse, and food insecurity. There are also others whose ability to effectively budget their finances could be negatively impacted. They will instead be expected to manage funds without some of the structures that the CDC helped to provide, and this not only affects the individual account holder but the family and the wider community.
4.12
In making this observation, the Red Cross emphasised that the support services in the Ceduna region did not have the financial buffers or additional staff to take on such a ‘massive influx’ of work. It argued that there was a need to ensure specific services were on hand in order to provide the expected levels of assistance required during the transition away from the CDC.
4.13
The Australian Council of Social Service (ACOSS) called for adequate funding for services to support communities, with a focus on community legal centres. It argued that this was required to ensure that social security rights are upheld, particularly in the Northern Territory (NT) where compulsory income management will continue after the abolition of the CDC.
4.14
The City of Kalgoorlie-Boulder recommended that support mechanisms be provided to assist participants in transitioning off the CDC program, at a similar level as was provided during the introduction of the CDC, with access to shopfronts for localised and in-person support. As Ms Mia Hicks, Director of Community Development explained:
In-person support is the preference, due to the cultural, language and other barriers often faced when receiving assistance remotely, over the phone.
4.15
Centacare Catholic Country SA made reference to the importance of education and support services for people coming off the CDC program, in order for individuals to understand the change and know their support options in the context of their experience in their local community.
4.16
Professor Matthew Gray referenced the second reading speech by the Minister for Social Services which mentioned the inclusion of ‘individually targeted transitional support interviews’ by Services Australia. He observed:
It's important that this be done, and done well. We consider it an activity which needs to be monitored and reported on and also needs to be accompanied by clear effort to identify service gaps and action to fill these.
The roll-out of the transition process
4.17
The Department of Social Services (DSS) reiterated to the committee that due to the sunset provision contained in the legislation, the CDC program would not be able to operate after 31 December 2022. It emphasised that one of the core purposes of the bill was to bring forward the date that participants could leave the program in order to allow for a safe and structured exit process. As Ms Liz Hefren-Webb, Deputy Secretary for Families and Communities, explained:
The purpose of the legislation is to enable an orderly transition of people off the card, to enable us to do this in a structured and planned way so that we don't have everybody exiting the card right on 31 December 2022.
4.18
DSS and Services Australia provided the committee with extensive information on how the Government would be engaging with impacted communities and supporting CDC participants through the transition away from the program.
4.19
The joint submission from the department and agency affirmed:
The abolition of the CDC and the future of IM [Income Management] has been, and will continue to be, the subject of engagement with participants and stakeholders, including representative bodies and service providers.
4.20
DSS and Services Australia noted that the Minister for Social Services had consulted with communities in Ceduna, East Kimberley and Cape York, and that the Assistant Minister for Social Services had consulted with communities in Bundaberg, Hervey Bay and Cape York, with consultations in the NT and the Goldfields region of Western Australia (WA) also scheduled.
4.21
DSS advised that community consultation between August and mid-September 2022 would inform the design of the transition approach, with feedback on the process to be sought from key stakeholders and leaders at each CDC site. It detailed a range of community engagement activities that were scheduled, such as town halls, stakeholder engagement and information sessions and workshops.
4.22
Additionally, the committee was informed that DSS, Services Australia and the National Indigenous Australians Agency, working in partnership with stakeholders on the ground, would provide information and communications to individuals about the abolition of the CDC and the support avenues available. The joint submission noted that this approach would ensure that participants would be ‘well aware ahead of time’ of the upcoming changes to their card arrangements.
4.23
DSS and Services Australia also outlined in detail the steps that would be taken from mid-September to 31 December 2022 in order to support participants as the transition process got underway.
4.24
For example, all participants will be notified of the impending end of the CDC program via a letter to be sent once the bill is passed and Royal Assent received. The letter will encourage participants to contact Services Australia for assistance and will include:
…information on voluntary Income Management (or compulsory where applicable), Centrepay, money management and other support services.
4.25
Services Australia will also send reminders via SMS to participants throughout the transition process to complement other communication tactics such as social media, radio, web, print and ‘organic communications via local networks’.
4.26
CDC participants will be able to contact Services Australia via various channels, including by phone, visiting a service centre, or speaking with the remote servicing teams which will deployed into communities. Participants will also be connected directly with Services Australia when they make contact with other Commonwealth agencies, providers or outreach teams. Additionally, participants who make contact with Services Australia for non-CDC business will be identified and connected to the CDC exit process.
4.27
DSS and Services Australia advised the committee that it was anticipated that the majority of participants would contact Services Australia either directly, or via ‘an established third party connection’, and that this would allow them to be supported through the transition process.
4.28
Services Australia provided further detail on how the exit process would be handled on the ground in communities:
If people contact us, we'll arrange for their card to be ceased. But, if they don't contact us, we will be doing continuous outbound contacts to them, even as far as our remote servicing teams having lists of customers in their communities who haven't engaged with us. This will be flexible in real time. They often can find people. They will be going through lists and trying to engage with people to support them when they're out on their community visits. In a nutshell, what we're really doing is front-loading the support from the very beginning, and we do expect that we will, through those channels, contact most people, or that they will contact the agency. As we move closer to December, we will be closely monitoring numbers of people who are still left on the card and working through different strategies. Those strategies, again, will be flexible, depending on who these people are and where they are, but they will use all the networks that we've got on the ground, across government and with service providers to have contact made with these people and to have them contact our agency.
4.29
All CDC participants who contact Services Australia will be offered support to transition off the program, including redirecting payments for essential goods and services (such as rent and utilities). If participants have existing Centrepay or Rent Deduction Scheme deductions, this will remain unchanged, and participants may also request further deductions be established to support them to manage their payments.
4.30
A representative from Services Australia detailed:
Obviously, our remote servicing teams will be out on the ground, and we have got some financial officers included in that as well, so we can help people organise their deductions when we're out in community also. So we're taking a very highly supportive approach to make sure that people don't get caught with having missed deductions or late fees or anything like that. Obviously, where people come into contact with us about the exit off the CDC, if we identify that they're in hardship or at risk in any other way, we also have tools available like referrals to social work support or financial counselling et cetera, so we'll be looking for all those indicators as well.
4.31
DSS and Services Australia advised that participants returning to income management would be offered further support to identify and commence regular payment for their ‘priority needs’, prior to commencement. Further, additional support services offered by Services Australia (such as social work support and referrals to other community organisations) would be suggested if additional vulnerabilities were identified.
4.32
In setting out these proposed actions, DSS and Services Australia emphasised that detailed implementation plans for each CDC community were ‘under development’, to be refined as community consultations occurred. The joint submission explained the focus on community feedback:
The approach to transition will continue to evolve in line with feedback received from engagement with each community. It will also be driven by customer behaviour and on the ground anecdotal feedback. This will mean that the design may change over the course of the transition period and new tactics deployed or changes to existing arrangements reviewed to ensure participants are receiving contemporary advice and appropriate support for their circumstances.
4.33
At a public hearing on 22 August 2022, Services Australia confirmed that while the resources allocated to the transition process would ‘be subject to government decision’, work was being undertaken on detailed implementation plans.
4.34
DSS further advised that the implementation plans were being created with input from CDC program communities and would continue to evolve based on local feedback:
…workshops have commenced with community to discuss that approach and get local intel about what works best in each place, where they might see certain pressures or difficulties in locating participants, or whether it's a community-by-community approach as well. Again, we test this approach with those affected communities, and that might result in some nuance. That includes some of those service delivery partners like money-management folk or financial counsellors, so they're well aware about the transitional process as well.
The future of income management in Australia
4.35
As outlined in Chapter 3, a large number of submitters to the inquiry engaged with issues surrounding the future of income management in Australia, with many strongly advocating for the end of compulsory income management in all forms.
4.36
Submitters stressed that any income management reform (including the development of voluntary tools) would need to be undertaken in close consultation with impacted stakeholders and place the principle of choice at the centre of any decisions. They also highlighted that any reform would require a significant commitment to the provision of wraparound services in order to support communities.
The need for consultation and choice
4.37
The NLC advised that within its membership there was a range of views on income management, ranging from it being a useful tool, to it adding to the stigmatisation of welfare recipients. As a general principle, it noted that:
The Northern Land Council supports policies which focus on building the capacity and independence of Aboriginal people. This includes policies which give people a choice about how they wish to run their lives. The Northern Land Council supports approaches which support Aboriginal people to build financial literacy and have access to tools which are tailored to individual money management requirements. The Northern Land Council supports decision-making about government policy that is based on evidence about what works, especially evidence about what works for Aboriginal people.
4.38
The Central Land Council urged that any withdrawal of compulsory income management be ‘managed with care’ and in close consultation with Aboriginal stakeholders. It explained:
This includes taking into account implications for rental, utilities and loan deductions attached to the current Income Management system, the need to ensure people have access to advice and appropriate services/supports to understand and manage transition off the CDC and the BasicsCard, and options for and safeguards around quarantining of welfare payments in situations involving Child Protection or extreme vulnerability. We reiterate that these issues must be considered in close consultation with Aboriginal community-controlled organisations and Aboriginal community leaders.
4.39
Aboriginal Peak Organisations Northern Territory (APO NT) echoed a call from the Northern Territory Council of Social Service to ensure that any withdrawal from compulsory income management is managed carefully and in close consultation with relevant Aboriginal Community Controlled Organisations and community leaders.
4.40
APO NT additionally advocated for any review of income management to involve a genuine opportunity for co-design and allow Aboriginal leaders to have input into the decision-making process. As Mr John Paterson, Governing Group Member, detailed:
What we'd like to see is more building of capacity of Aboriginal organisations, such as your traditional credit union, ALPA, and all those guys that are out on the ground there. Give them the financial investment and build their capacity to come up with their own design. Community cards…That's the sort of initiative, they're the sorts of schemes that we're looking for, solutions that are community led and driven, not this top-down approach.
4.41
The Wunan Foundation noted that it was imperative to avoid a ‘policy vacuum’ once the CDC ended and the future of income management and welfare reform was explored. It also noted that it was important to consider the voices of children, who were often one of the most vulnerable groups in a community.
4.42
The Traditional Credit Union (TCU) is a mutual organisation and authorised deposit-taking institution which delivers the CDC in the Northern Territory (NT). It refrained from putting forward a position on the bill, noting that its position was ‘pretty much apolitical’ and primarily focused on supporting Indigenous people on country.
4.43
However, the TCU advised the committee that while it emphatically did not agree with broad based mandatory income management, it did see a place for voluntary income management and targeted income management.
4.44
As Mr Tony Hampton, Chief Executive Officer of the TCU explained:
… as far as broad based income management goes, we don't agree with that, but we have to work under that because we're a banking organisation and our purpose is to support people on country, and that's what they have to deal with.
4.45
A submission from the Northern Territory Women’s Legal Services called for any future income management style scheme to be co-designed with the intended participants prior to implementation and operate on a true ‘opt-in’ voluntary basis, in line with principles of self-determination. It stressed that any voluntary income management program must have clear and accessible pathways for participants to opt-in and opt-out as their circumstances change.
4.46
ALPA also indicated it was supportive of ending compulsory income management in all forms, but having an income management tool as a voluntary option, should community members wish to engage with it.
Technology that is fit for purpose
4.47
As noted above, some submitters commenting on the future of income management canvassed the idea of voluntary income management or money management tools that community members could access if they wish. Discussion on this touched on the need for a card or product with the appropriate level of technology and functionality.
4.48
A number of submitters commented on the inferior technology and functionality of the BasicsCard, particularly when compared to the technology of the CDC.
4.49
The TCU stated that the CDC was ‘far superior’ to the BasicsCard from a technology and mobility sense, but also because it was a mainstream product, rather than a government-administered welfare card. TCU also confirmed that it would not be able to continue to provide the level of service it currently provided to CDC holders in the absence of the CDC technology.
4.50
Similarly, ALPA stated that from a technology perspective, the CDC was superior to the BasicsCard.
4.51
Mrs Rhonda Evans, Chief Executive Officer of the Judumul Aboriginal Corporation in WA, noted that the specific technology of the Indue card (that is, the CDC card provided by Indue) was advantageous and could potentially be useful if it operated on a voluntary basis without the restrictions of the CDC program.
4.52
Mr Justin Fenwick, giving evidence in a private capacity, drew upon his experience in the Alice Springs community to provide a comparison between the superior technology of the CDC compared to the BasicsCard. He noted that a great advantage of the CDC technology was that the card could be used as a normal bank card and had far greater accessibility to a variety of services across Australia.
4.53
However, the committee also heard evidence indicating that the CDC was not always straightforward to use, with participants citing failed transactions, difficulties purchasing items online or from certain retailers, and long clearance times for direct debit payments.
4.54
The committee additionally received evidence indicating that some individuals preferred the simple and familiar functionality of the BasicsCard. For example, DSS reported that the Minister for Social Services had recently received ‘mixed views’ on the BasicsCard during community consultations, with some people saying they preferred it because the technology was familiar and had PIN protection.
4.55
Ms Liz Hefren-Webb, Deputy Secretary for Families and Communities, told the committee:
Some women, in particular, said they liked the BasicsCard because it was simple, they knew how to use it and they didn't want a card with tap and go functionality because they felt they wanted the PIN protection—so that someone couldn't steal their card and tap and go, essentially. This was just in the course of a consultation. I'm not pretending it was a scientific poll or anything. It was just mentioned as being the view of some of the women who have been on the BasicsCard for a number of years.
4.56
DSS informed the committee that the technology had substantially moved on in the years between the introduction of the BasicsCard in 2008 and the introduction of the CDC in 2016. It noted that there had been no investment to upgrade the technology of the BasicsCard, which still operated as a ‘stored value arrangement’ on the platform it was procured on in 2008.
4.57
DSS also drew the committee’s attention to a ‘peculiarity’ of the Social Security (Administration) Act 1999 which states that a person’s funds can be placed on a ‘stored value card’.
4.58
In regard to this, DSS observed that this could make it difficult to switch to a Visa type of product. However, it advised that it was something that could be addressed through legislative change.
4.59
The committee queried Services Australia on the sort of timeline that would be required to procure a new tool or technology to operationalise income management. Mr Brendan Moon, General Manager of Working Age Programmes for Services Australia, responded:
It's challenging to say. The basis of the requirements for such a procurement would very much impact it. If it was something like a stored value card with a bit more functionality that may be a little bit shorter, because we understand that. We've been dealing with that for a lot longer. If it's something directing toward emergent technology we would need to do all manner of assessments around things like cybersecurity and sovereign risk and all of that sort of stuff. It's sort of a continuum. If it's a like for like replacement it might be something that you may be able to achieve in a 12-month period. And if you're looking at new technology you might be 18 months to two years. It just depends on what comes back from the market.
The importance of wraparound support services to address issues in communities
4.60
In advocating for the end of compulsory income management and putting forward ideas for voluntary alternatives, a number of submitters also emphasised the need for more ‘wraparound’ services to assist communities in addressing significant disadvantage. They recommended that such support services be evidence-based, adequately funded, co-designed with Indigenous communities, and geographically, culturally and linguistically accessible. Additionally, support services should cover elements such as job readiness, literacy assistance, legal services, substance abuse services, domestic violence services, financial counselling and family counselling. In putting forward these suggestions, many submitters highlighted that attempting to address complex social disadvantage with a blanket tool such as compulsory income management had proven to be ineffective as it did not solve the underlying issues at play.
4.61
For example, Ms Rachel Siewert, Deputy Chief Executive Office of Western Australian Council of Social Service (WACOSS) observed:
We believe we need to have much stronger investment in wraparound services, much stronger investment in early intervention and prevention, to address—we acknowledge—some of the significant issues that are still present in communities. If we are going to address significant disadvantage we need to be investing to change people's life circumstances, not subjecting them to a system that is compulsory, where they feel they lose agency and control over something that is most important to them in terms of their personal circumstances and that is their capacity to manage their own financial circumstances. We need to not just be abandoning income management and compulsory income management. We need to be substantially upping our investment in communities across the country to address the circumstances that people find themselves in.
4.62
UnitingCare expressed a similar sentiment:
We recommend that Government adequately fund ongoing wrap-around supports for communities, with a focus on community-led solutions that will address the underlying issues which lead to participants being placed onto Compulsory Income Management.
4.63
APO NT recommended the Government look to alternatives to income management, as well as invest in evidence-based strategies to create remote jobs, and address substance misuse and problem gambling.
4.64
The committee also received evidence in support of a banking product being available to members of the public to help voluntarily manage problem gambling and drinking.
4.65
The Shire of Wyndham East Kimberly expressed support for ‘wraparound’ services to support greater financial counselling, education and training, employment support (including job readiness and childcare services), drug and alcohol programs and family responsibility promotion. It also expressed interest in the model operated by the Family Responsibilities Commission in Queensland, with its focus on local engagement and co-design.
4.66
The Red Cross emphasised that adequate service delivery and investment in communities were worthy policy tools that would provide a more holistic approach to addressing disadvantage. It explained that its primary focus was on support services and seeing each individual and their complexity of need on a case-by-case basis.
4.67
Mr Chris Kwong, Head of Government Engagement and Strategic Initiatives, further commented that the Red Cross would be in favour of any solution moving forward which would ‘enable the maximum opportunity to respect different communities and their different needs’.