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2019-2020
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
SOCIAL SECURITY (ADMINISTRATION) AMENDMENT
(CONTINUATION OF CASHLESS WELFARE) BILL 2020
EXPLANATORY MEMORANDUM
(Circulated by the authority of the
Minister for Families and Social Services, Senator the Hon Anne Ruston)
SOCIAL SECURITY (ADMINISTRATION) AMENDMENT
(CONTINUATION OF CASHLESS WELFARE) BILL 2020
OUTLINE
This Bill removes trial parameters to establish the Cashless Debit Card (CDC) as an
ongoing program and transitions Income Management (IM) in the Northern Territory
(the NT) and the Cape York region to the CDC. The Bill also:
removes a current exclusion to allow people in the Bundaberg and Hervey
Bay program area to be able to voluntarily participate in the CDC program;
allows a voluntary participant to continue to volunteer for the CDC even if they
no longer reside in a program area;
enables the Secretary to advise a community body when a person has exited
the CDC program;
allows the Minister to determine decision-making principles for the purposes
of determining whether a person can demonstrate reasonable and
responsible management of the person's affairs (including financial affairs);
enables the Secretary to review a wellbeing exemption or exit determination in
certain circumstances and revoke the determination as a result of such
review;
enables the Secretary to issue a notice informing the person that they are a
CDC program participant. The Secretary may also issue a notice revoking
that notice;
improves the workability of the evaluation process; and
extends the sunset date for IM in Cape York, Queensland from 30 June 2020
to 31 December 2021.
FINANCIAL IMPACT STATEMENT
Costs associated with changing the CDC to an ongoing measure are not for
publication.
Funding of $17.5 million for support services has been allocated to assist the
transition in the NT and Cape York area.
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
The statement of compatibility with human rights appears at the end of this
explanatory memorandum.
REGULATION IMPACT STATEMENT
The Regulation Impact Statement appears at the end of this explanatory
memorandum.
1
SOCIAL SECURITY (ADMINISTRATION) AMENDMENT
(CONTINUATION OF CASHLESS WELFARE) BILL 2020
NOTES ON CLAUSES
Abbreviations and Acronyms used in this explanatory memorandum
1991 Act means the Social Security Act 1991;
Social Security Administration Act means the Social Security
(Administration) Act 1999;
CDC means the cashless welfare arrangements established by Part 3D of the
Social Security Administration Act;
CDC account means a welfare restricted bank account within the meaning
of section 124PP of the Social Security Administration Act;
community body means a body authorised in an instrument made under
section 124PD of the Social Security Administration Act;
Department means the Department of Social Services.
FRC means the Family Responsibilities Commission, which is a statutory
body within the meaning of the term 'Queensland Commission' as defined
in section 123TC of the Social Security Administration Act;
IM means the Income Management regime established by Part 3B of the
Social Security Administration Act;
IM account means an income management account kept in accordance with
section 123WA of the Social Security Administration Act;
NT means Northern Territory.
Secretary means Secretary of the Department.
Clause 1 sets out how the new Act is to be cited - that is, as the Social Security
(Administration) Amendment (Continuation of Cashless Welfare) Act 2020.
Clause 2 provides a table setting out the commencement dates of the various
sections in, and Schedules to, the new Act.
Clause 3 provides that each Act that is specified in a Schedule is amended or
repealed as set out in that Schedule, and any other item in a Schedule to the Bill has
effect according to its terms.
2
Schedule 1 - Amendments
Summary
This Schedule:
removes the trial parameters to establish the Cashless Debit Card (CDC) as
an ongoing program;
establishes the NT and Cape York area as CDC program areas and
transitions IM participants in these areas onto the CDC program in 2021;
removes a current exclusion to allow people in the Bundaberg and Hervey
Bay program area to be able to voluntarily participate in the CDC program;
allows a voluntary participant to continue to volunteer for the CDC even if they
no longer reside in a program area;
enables the Secretary to advise a community body when a person has exited
the CDC program;
allows the Minister to determine decision-making principles for the purposes
of determining whether a person can demonstrate reasonable and responsible
management of the person's affairs (including financial affairs);
enables the Secretary to review a wellbeing exemption or exit determination in
certain circumstances and revoke the determination as a result of such
review;
enables the Secretary to issue a notice informing the person that they are a
CDC program participant. The Secretary may also issue a notice revoking
that notice;
improves the workability of the evaluation process; and
extends the sunset date for IM in Cape York, Queensland from 30 June 2020
to 31 December 2021.
Background
Overview
The Social Security Administration Act currently sets an end date of 30 June 2020
for the cashless welfare arrangements in trial areas. On 5 May 2020, the Minister for
Families and Social Services extended the end date for all CDC sites and IM in the
Cape York region to 31 December 2020 under the deferred sunset provisions in
Schedule 16 to the Coronavirus Economic Response Package Omnibus Act 2020.
This Bill will allow the CDC to continue as an ongoing measure in all existing sites.
The CDC will only be made ongoing in the new NT and Cape York areas following
transition from IM in these areas. Lastly, the Bill makes a number of minor changes
to program administration.
3
Continuing the CDC as an ongoing measure
Legislation to date has generally provided for 12 month extensions to the CDC
arrangements. In the 2020-21 Budget, the Australian Government announced that
the CDC will continue as a permanent welfare delivery arrangement in existing sites.
The continuation of the CDC in the established sites is a direct response to calls
from community leaders requesting that the Government deliver certainty to
participants, stakeholders and the communities by making the trial an ongoing
measure. This Bill will sustain the positive impacts and effectiveness of the CDC
and signal the Government's long-term commitment to the future of the CDC with
financial institutions.
Transition from IM to CDC in the NT and Cape York region, Queensland
In the 2019-20 Budget, the Australian Government announced that IM participants in
the NT and Cape York area in Queensland will transition to the CDC . If enacted,
this Schedule will implement this decision by establishing the Cape York area and
the NT as CDC program areas and providing transitional arrangements for
IM participants residing in these areas. CDC participants in the Cape York area and
the NT will be subject to different approaches to ensure current IM settings and the
role of the FRC in managing IM participants in the Cape York area are maintained
under the CDC.
Transitioning participants in the NT
In the NT, there will be a staggered rollout of the CDC commencing from three
months after Royal Assent, as a result of which approximately 25,000 IM participants
in the NT will transition to the CDC program over a period of nine months. The CDC
participant criteria for the NT largely replicate the criteria for IM. The provision
requiring that a person is an IM participant because they receive a veteran payment
will also not be transitioned to the CDC as there are currently no IM participants in
the Northern Territory on a veteran payment. There will be no changes to these IM
provisions under Part 3B.
From the day after Royal Assent, no new participants will be transitioned onto IM
under the disengaged youth and long-term welfare payment recipient measures.
This means that these people will not have to participate in IM for the short period
prior to their community being transitioned onto the CDC.
Extension of IM and transitioning participants onto the CDC in the Cape York
area
Approximately 150 IM participants within the Cape York area will transition to the
CDC from three months after Royal Assent.
This schedule enables notices issued by the FRC which relate to IM participants
to remain in force to be taken to be notices for the purposes of the CDC. This
approach acknowledges the existing legal framework and current arrangements
in a way that ensures that the FRC maintains its functions and jurisdiction and avoids
unnecessary administrative burdens.
4
5
The CDC participant criteria for the Cape York area largely replicate the criteria for
IM participation. However, the provision requiring that a person is an IM participant
because they receive a veteran payment will not be transitioned to the CDC given
there are only small numbers of IM participants in the Cape York area on a veteran
payment.
The sunset date for IM in the Cape York area will be extended to 31 December 2021
to allow the transition to occur in 2021.
Sharing information with community bodies
The Social Security Administration Act allows for sharing of information in certain
circumstances. Among other things, the amendments made by this Schedule will
enable the Secretary to advise a community body when a person ceases
to be a participant in the CDC. This will provide community bodies with essential
information to monitor the effectiveness of the CDC in their communities.
Remaining a voluntary participant after moving out of a program area
The Bill will allow a person the choice to remain in the CDC program as a voluntary
participant after they move out of a program area to continue to receive ongoing
support and build on positive outcomes. It ensures that a person is no longer
excluded on the basis that they have moved out of a program area should the
person wish to continue to be subject to cashless welfare arrangements.
Allowing reviews of wellbeing exemption determinations
This Bill will ensure that decisions made in relation to wellbeing exemptions can be
reviewed in specific circumstances where an employee or officer of a State or
Territory agency or body considers there are medical or safety reasons related to the
person or their dependents which means it is necessary for the person to be a
program participant. Such determinations would only be revoked in specific
circumstances where an employee or officer of a State or Territory agency or body
considers that there is new information that needs to be considered to demonstrate
there is no risk to the person's wellbeing and will ensure the CDC continues to
support welfare recipients to budget and manage their finances.
Enabling determinations for exit criteria
A person may apply to the Secretary to exit the cashless welfare arrangements if the
person can demonstrate reasonable and responsible management of the person's
affairs. These exit applications are determined on a case by case basis. This Bill
will insert a new Ministerial power to enable the making of a legislative instrument
that allows the Minister to determine decision-making principles for current exit
criteria. This would not add new criteria, rather it would set out principles that will
provide participants with greater clarity relating to the considerations that underpin
the determination of exit applications.
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Reviewing exit determinations
The Bill will ensure the Secretary has the power to review and revoke any existing or
future exit determinations made under section 124PHB of the Social Security
Administration Act where the Secretary ceases to be satisfied that a person is
reasonably and responsibly managing their affairs.
Enabling the Secretary to issue notices
The Social Security Administration Act currently provides that a person is
automatically placed onto the CDC program once that person meets the participant
criteria. This Bill will add an additional criterion in all existing sites that the Secretary
must give a person a written notice, which may be revoked at any time, before that
person is triggered onto the program. This will ensure that administrative practices
are in line with the legislation and any unforeseen circumstances can be managed.
However, a person who was already a participant immediately before the
commencement of this Bill will not require a notice as long as they continue to meet
all other participant criteria. Decisions to issue such notices will not be reviewable
under subsection 127(4) and section 144 of the Social Security Administration Act.
Improving the evaluation process
The Social Security Administration Act presently requires that, where the Minister
causes a review of the CDC to be conducted, the Minister must cause the review
to be evaluated. This requirement is potentially circular and, unless resolved, might
generate ongoing evaluation under section 124PS. The proposed amendments
address this issue and support a desktop evaluation of any review of the CDC
to lessen the ethical implications associated with avoidable repeat contact with
vulnerable individuals.
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Explanation of the changes
Part 1 - Stage 1 amendments
Amendments to the Social Security Administration Act
Items 1 and 2 omit references to the term 'trial participant' under paragraph
70B(1)(a) and subparagraph 123UC(1)(h)(i) of the Social Security Administration Act
respectively and substitute those references with 'program participant'. This
terminology reflects the Government's commitment in continuing the CDC as an
ongoing program to ensure the welfare system is fit-for-purpose and delivers positive
outcomes for vulnerable people, families and communities.
Items 3 and 4 add subsections 123UCB(5) and 123UCC(5) which provide that
a person is not subject to IM under the relevant section on or after the day the
subsection commences, unless the person was subject to IM on the day before that
day. Sections 123UCB and 123 UCC set out the criteria for the disengaged youth
and long-term welfare payment recipient measures. This will ensure that a person is
not commenced on IM under these sections for a short period of time prior to the
rollout of the CDC program in their community.
Item 5 extends the sunset date for IM in Cape York, Queensland from 30 June 2020
to 31 December 2021 under paragraphs 123UF(1)(g) and 123UF(2)(h) of the Social
Security Administration Act. This reflects that the transition to the CDC in the Cape
York region will not occur until after the existing test time of 31 December 2020 as
extended by the Coronavirus Economic Response Package (Deferral of Sunsetting -
Income Management and Cashless Welfare Arrangements) Determination 2020.
Item 6 repeals and substitutes the heading with Part 3D - Cashless welfare
arrangements.
Item 7 repeals and substitutes the simplified outline of the cashless welfare
arrangements under section 124PB. This reflects the establishment of the cashless
welfare arrangements as an ongoing measure.
Item 8 omits the phrase 'to trial' in section 124PC and substitutes it with 'to
administer'. This terminology reflects the continuance of the CDC as an ongoing
program.
Item 9 amends the objects provision by repealing paragraphs 124PC(b) and (c) and
substituting new paragraph 124PC(b). This reflects the change from a trial to an
ongoing measure and identifies that supporting program participants and voluntary
participants with their budgeting strategies is a key objective of the program.
8
Item 10 inserts the following new definitional terms in subsection 124PD(1):
program area means the following:
(a) the Ceduna area;
(b) the East Kimberley area;
(c) the Goldfields area;
(d) the Bundaberg and Hervey Bay area;
other than any part of such an area determined in an instrument under
subsection 124PD(2).
program participant: see sections 124PG to 124PGC.
These new definitional terms give effect to the cashless welfare arrangements
becoming an ongoing measure in the specified areas.
Items 11, 18, 19, 21, 22, 24, 25, 27, 28, 30, 31, 34, 38, and 41 to 46, omit
references to the term 'trial participant' and substitute those references with 'program
participant'.
Item 12 repeals the definition of trial area under subsection 124PD(1).
Item 13 repeals the definition of trial participant under subsection 124PD(1).
Item 14 omits the reference to 'trial area' and substitutes it with 'program area'.
Item 15 repeals and substitutes the heading to Subdivision A of Division 2 of Part 3D
with 'Subdivision A - Program participants'.
Item 16 repeals section 124PF. This amendment removes the trial parameters for
the cashless welfare arrangements, reflecting the transition to the CDC as an
ongoing measure. The ability to place people onto the CDC program is still limited by
the operation of the program participant and voluntary participant criteria in
Division 2 of Part 3D, which only captures people receiving certain welfare payments
in particular locations.
Item 17 repeals and substitutes the heading to section 124PG with 'Program
participants - Ceduna area'.
Item 20 repeals and substitutes the heading to section 124PGA with 'Program
participants - East Kimberley area'.
Item 23 repeals and substitutes the heading to section 124PGB with 'Program
participants - Goldfields area'.
Item 26 repeals and substitutes the heading to section 124PGC with 'Program
participants - Bundaberg and Hervey Bay area'.
9
Item 29 omits the phrase 'is within a trial area' under paragraph 124PH(1)(b) and
substitutes it with 'is, becomes or was within a program area'. This allows a person
the choice to remain as a voluntary program participant if the person no longer
resides in a program area. It ensures that a person is not excluded from the program
on the basis that they have moved out of a program area should the person wish to
continue to be subject to cashless welfare arrangements.
Item 32 repeals subsection 124PHA(3) and substitutes it with new
subsections 124PHA(3), (3A) and (3B). Section 124PHA provides the requirements
under which a person may be determined not to be a program participant where
being a participant would pose a serious risk to the person's mental, physical or
emotional wellbeing.
New subsection 124PHA(3) applies where the Secretary has previously determined
that a person is not a program participant under subsection 124PHA(1). An officer or
employee of a State or Territory, or of an agency or body of a State or Territory may
request the Secretary reconsider the determination, if the officer or employee
considers it necessary for the person to be a program participant due to medical or
safety reasons that relate to the person or their dependents. This applies to both
existing and future determinations, so the Secretary is able to reconsider existing
wellbeing exemptions if asked to do so by an officer or employee of a State or
Territory.
New subsection 124PHA(3A) provides that the Secretary must revoke the
subsection 124PHA(1) determination if the Secretary receives a request under
subsection 124PHA(3) and the Secretary is no longer satisfied that being a program
participant poses a serious risk to the person. This ensures that a person will only
be placed back onto the program where it is considered necessary for medical or
safety reasons, and the person is no longer at risk of adverse impacts on their
mental, physical or emotional wellbeing as a result of being subject to the program.
New subsection 124PHA(3B) provides that subsection 124PHA(3A) does not
prevent the Secretary from making another determination under subsection
124PHA(1). This clarifies that if the Secretary is satisfied at a later point in time that
being a program participant would pose a serious risk to the person's mental,
physical or emotional wellbeing under subsection 124PHB(3)(1), the Secretary can
still make a determination that the person will not be subject to the CDC program.
Item 33 omits the phrase 'the trial of cashless welfare arrangements' under
subsection 124PHB(1) and substitutes it with 'cashless welfare arrangements under
this Part'.
Item 35 repeals and substitutes the heading to subsection 124PHB(6) with
'Minister's instruments'.
Item 36 omits the reference to 'trial participants' and substitutes with 'program
participants'.
10
Item 37 inserts new subsections 124PHB(7A) and (7B) in section 124PHB.
Section 124PHB provides that a person may exit the CDC if the Secretary is satisfied
that a person can demonstrate reasonable and responsible management of their
affairs (including financial affairs) in line with the requirements set out in this section.
New subsection 124PHB(7A) provides that the Secretary must comply with any
decision-making principles determined in an instrument under
subsection 124PHB(7B) when deciding whether the Secretary is satisfied of the
requirements mentioned in subsection 124PHB(3). Subsection 124PHB(3) provides
the criteria that the Secretary must be satisfied of to determine that a person is not a
program participant because the person can demonstrate reasonable and
responsible management of their affairs (including financial affairs). Such
determinations are to be made on a case by case basis.
New subsection 124PHB(7B) provides that the Minister may, by legislative
instrument, determine decision-making principles for the purposes of subsection
124PHB(7A). This instrument is subject to disallowance. Such principles would not
introduce new criteria, rather they will help to guide the future exercise of discretion
and provide participants with greater clarity relating to the considerations that
underpin the determination of exit applications.
Item 39 inserts new subsection 124PHB(9A) which provides that, if the Secretary
ceases to be satisfied as mentioned in subsection 124PHB(3), the Secretary must
revoke the exit determination. While a person may have met the criteria at one point
and been exited from the CDC program, this provision ensures that the Secretary
has the power to review and revoke an exit determination where the Secretary
becomes aware of information that suggests a person is no longer reasonably and
responsibly managing their affairs.
Item 40 omits the phrase 'Subsection (9) does' under subsection 124PHB(10) and
substitutes it with 'Subsections (9) and (9A) do'.
Item 47 repeals and substitutes the heading to section 124PS with 'Evaluation of
review of Part's operation'.
Item 48 omits the phrase 'trial of the cashless welfare arrangements mentioned in
section 124PF' under subsection 124PS(1) and substitutes it with 'extent to which
the operation of this Part has achieved the objects mentioned in section 124PC', due
the repeal of section 124PF in item 16.
Item 49 provides application and transitional provisions for the Part 1, Schedule 1
amendments. Sub-items (1), (2), (6), (8), (10) to (12) provide for transitional
arrangements and sub-items (3) to (5), (7) and (9) are application provisions.
Sub-item (1) provides that a person who was a trial participant immediately before
the commencement of this item is taken on and after commencement to be a
program participant.
11
Sub-item (2) provides that a person who was a voluntary participant immediately
before the commencement of this item is taken on and after commencement to be a
voluntary participant.
Sub-items (1) and (2) respectively ensure that a person who was a trial or voluntary
participant continues to be a program or voluntary participant after commencement
of this Bill.
Sub-item (3) provides that sub-items (1) and (2) do not prevent a person ceasing to
be a program participant or a voluntary participant on or after the commencement of
this item.
Sub-item (4) provides that the amendment of paragraph 124PH(1)(b) of the Social
Security Administration Act made by item 29 of this Part applies in relation to a
person regardless of whether the person's usual place of residence occurred within a
program area before, on or after commencement of this item. The amendment
under item 29 enables a person to become a voluntary participant even if their usual
place of residence was in a program area prior to the commencement of the
amendments made by Item 29 of this Bill.
Sub-item (5) provides that subsections 124PHA(3) and (3A) of the Social Security
Administration Act, as substituted by item 32 of this Part, apply in relation to a
determination made under subsection 124PHA(1) of that Act before, on or after the
commencement of this item. Subsection 124PHA(3) currently provides that the
Secretary must not revoke a determination under subsection 124PHA(1) exiting a
person from the CDC where they are satisfied that being a participant would pose a
serious risk to the person's mental, physical or emotional wellbeing. The
amendment made by item 32 provides a means for the Secretary to revoke the
subsection 124PHA(1) determination.
Sub-item (6) provides that an application under subsection 124PHB(1) of the Social
Security Administration Act that was pending immediately before the commencement
of this item is taken on and after that commencement to be an application under that
subsection as amended by item 33 of this Part. The amendment to
subsection 124PHB(1) is a technical amendment resulting from the change from the
CDC as a trial to an ongoing measure. This subsection currently provides that a
person may apply to exit the CDC trial.
Sub-item (7) provides that subsection 124PHB(7A) of the Social Security
Administration Act, as inserted by item 37 of this Part, applies in relation to a
decision on an application under subsection 124PHB(1) of that Act, where the
decision is made on or after the commencement of this item.
Sub-item (8) provides that a request under subsection 124PHB(8) of the Social
Security Administration Act that was pending immediately before the commencement
of this item is taken on and after that commencement to be a request under that
subsection as amended by item 38 of this Part. The request under
subsection 124PHB(8) is a request by a health or community worker that a person
who has been exited from the CDC should once again be subject to CDC for medical
or safety reasons.
12
Sub-item (9) provides that subsection 124PHB(9A) of the Social Security
Administration Act, as inserted by item 39 of this Part, applies in relation to a
determination made under subsection 124PHB(3) of that Act before, on or after the
commencement of this item.
Sub-item (10) provides that a determination in effect under subsection 124PJ(3) of
the Social Security Administration Act immediately before the commencement of this
item in relation to a person who was a trial participant continues in effect on and after
that commencement in relation to the person as a program participant.
Section 124PJ provides the percentage amounts of the restricted and unrestricted
portions of a person's restrictable payment.
Sub-item (11) provides that a direction in effect under subsection 124PK(1) of the
Social Security Administration Act immediately before the commencement of this
item in relation to a person who was a trial participant continues in effect on and after
that commencement in relation to the person as a program participant. Section
124PK provides for a community body to give directions to the Secretary to vary a
person's percentage amounts in respect of the person's restrictable payment.
Sub-item (12) provides that an instrument in force under subsection 124PP(1) of the
Social Security Administration Act immediately before the commencement of this
item continues in force on and after that commencement as if it has been made
under that subsection as amended by item 46 of this Part. Section 124PP provides
for the Secretary to determine a kind of bank account to be maintained by legislative
instrument. This instrument can be found on the Federal Register of Legislation at
https://www.legislation.gov.au/Browse/Results/ByTitle/LegislativeInstruments/InForc
e/So/0/declinable/principal.
Part 2 - Stage 2 amendments
Amendments to the Social Security Administration Act
Item 50 adds new subsection 123UF(4) which provides for the relationship between
section 123UF and Part 3D of the Social Security Administration Act as a person
transitions from IM to the cashless welfare arrangements. New subsection 123UF(4)
provides that the Secretary may transfer an amount equal to funds held in a person's
IM account to their CDC account within 60 days of a person transitioning from IM to
the CDC program in the Cape York area.
When a person has transitioned to the CDC program, their IM account will be closed.
Where a person exits the CDC program before a CDC account is credited with any
amounts, the Secretary may decline to credit the CDC account and instead close the
person's IM account and pay any outstanding credit balance to them in accordance
with Part 3B.
In allowing a 60-day transfer period, new subsection 123UF(4) allows sufficient time
for a person to ensure that their CDC account (and associated card) is activated and
deduction arrangements are in place prior to the transfer of funds.
13
Item 51 amends section 123UO by inserting new subsection 123UO(3A).
New subsection 123UO(3A) provides that, if a voluntary IM agreement in relation to
a person is in force, and the person's usual place of residence is within the NT, then
the Secretary may, by written notice given to the person, terminate the agreement.
New subsection 3A also clarifies that the termination takes effect on a day specified
in the notice (which must not be earlier than the day on which the notice is given).
This amendment has the effect of ensuring that volunteers do not continue on IM in
the NT after the roll out of the CDC in their community.
Volunteers who are terminated under this amendment will be invited to volunteer for
the CDC.
Item 52 adds a new Subdivision E--Relationship with Part 3D for Northern Territory
program participants. This item also adds new section 123UP, which allows for the
transfer of funds from a person's IM account to their CDC account within 60 days
of transitioning to the cashless welfare arrangements in the same manner (as
described in item 51 above), and with the same objectives, as provided for under
new subsection 123UF(4) above.
New subsection 123UP(4) ensures that once a person transitions to the CDC
program, they are no longer subject to the IM regime. If a person exits the CDC
program prior to their CDC account being credited with funds from their IM account,
the Secretary may close their IM account and pay any outstanding credit balance
(defined as the residual amount) to the exiting participant in accordance with Part 3B
of the Social Security Administration Act.
New subsection 123UP(5) provides that a person will not be prevented from
returning to the IM regime if they do not meet the criteria to be a CDC program
participant under new section 124PGE and their usual place of residence is outside
the NT. However, new subsections 123UCB(5) and 123UCC(5) and item 50 have a
limiting effect on the amendments proposed by item 52 as they will prevent an
exiting CDC program participant from returning to IM where that person meets the
criteria for the IM disengaged youth or long-term welfare payment recipient
measures.
Item 53 inserts a new paragraph (aa) into subsection 123ZN(1) of the
Social Security Administration Act. The new paragraph will provide authority for
funds to be appropriated from the Consolidated Revenue Fund for the purposes
of making payments under paragraph 123UF(4)(a) or subsection 123UP(2),
that is, to support the transfer of funds from a person's IM account to their CDC
account.
Item 54 amends section 124PB which contains a simplified outline for Part 3D
relating to the CDC program. This item amends the second paragraph of the outline
to reflect existing arrangements with community bodies in specific program areas
and allows communities to have a say in how the cashless welfare arrangements are
implemented in the relevant community. The amendments explain how the
restricted and unrestricted portions of certain welfare payments may be varied by the
Minister of the Secretary under Part 3D.
14
Item 55 inserts new defined terms into subsection 124PD(1), for the purposes of
Part 3D of the Social Security Administration Act. All but one of these new terms
have the same meaning as in Part 3B of the Social Security Administration Act
relating to IM. The definition of the 'Cape York area' is defined to mean the area
determined in an instrument under subsection (1A) - which is a new provision to be
inserted by item 63 of this Schedule.
Items 56, 57 and 64 will extend the CDC program area to the Cape York area and
the NT and allow areas to be excluded.
Item 56 amends the definition of program area under subsection 124PD(1) (inserted
by item 10) to establish the Cape York area and the whole of the NT as CDC
program areas for the purposes of Part 3D of the Social Security Administration Act.
The term program area is currently subject to exclusion (or carve-out) of any part of
an area as determined in a notifiable instrument made by the Minister under
subsection 124PD(2). Item 57 will allow the Minister to make a notifiable instrument
under subsection 124PD(2) to exclude any part of the NT from the program area.
Subsection 124PD(2) does not require an express reference to the Cape York area
as the Minister's power to make such an instrument will automatically expand upon
the enactment of item 56. Item 64 is required to amend the definition of program
area so that it takes account of any notifiable instrument that identifies any part of the
NT as being outside the program 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 cashless
welfare arrangements to the NT.
Item 58 amends the definition of program participant by omitting a reference
to section 124PGC and substituting it with a reference to section 124PGE. This
means that a person who meets the criteria in new sections 124PGD or 124PGE will
be defined as a program participant for the purposes of Part 3D of the
Social Security Administration Act. This supports the transition of the Northern
Territory and Cape York region form Income Management to the CDC.
Item 59 inserts definitions of Queensland Commission and recognised
State/Territory authority in subsection 124PD(1) which have the same meaning as in
Part 3B of the Social Security Administration Act.
Items 60 and 61 amend the definition of restrictable payment in subsection
124PD(1).
Item 60 maintains the existing definition of restrictable payment for existing program
areas by confining the current definition to sections 124PG, 124PGA, 124PGB and
124PGC (that is, in respect of the Ceduna area, the East Kimberley area, the
Goldfields area and the Bundaberg and Hervey Bay area).
Item 61 then inserts a new subparagraph 124PD(1)(aa) to list each payment that will
be a restrictable payment for CDC program participants in the Cape York area and
the NT under new sections 124PGD and 124PGE.
15
Item 62 inserts a definition of vulnerable welfare payment recipient to give it the
meaning applied in Part 3B of the Social Security Administration Act. This term is
used to determine whether a person is a program participant for the purposes of
section 124PGE relating to a person whose usual residence is, becomes or was
within the NT.
Item 63 inserts a new subsection 124PD(1A) to provide that the Minister may
determine an area for the purposes of the definition of Cape York area by notifiable
instrument. This is required to establish the area as a program area and ensure
consistency with the definition of the Cape York area used by the FRC. This new
power to make a notifiable instrument is consistent with the existing power under
section 124PD(2), which is to be modified to establish the NT as a program area.
Item 65 inserts new subsection 124PD(3) clarifying that a notifiable instrument
determining an area to be a program area, made under subsection 124PD(1A) or
(2), may make provision in relation to a matter by applying, adopting or incorporating,
with or without modification, any matter contained in an instrument or other writing
as in force or existing from time to time. This clarification is made to set out a
contrary intention to subsection 14(2) of the Legislation Act 2003. This approach is
necessary to ensure that the cashless welfare arrangements operate seamlessly for
people who usually reside in the Cape York area. The process will also assist the
FRC to perform its role effectively and according to Commonwealth and Queensland
law. The Department will make any incorporated material freely available to the
public either by publication of the material on the Department's website and by
allowing public inspection of any incorporated material at its National Office.
Items 66, 68, 70 and 72 repeal paragraphs 124PG(1)(d), 124PGA(1)(d),
124PGB(1)(d) and 124PGC(1)(d) and substitute new paragraphs (d) in each
provision. Under current arrangements, a person can only be a program participant
where the person does not have a Part 3B payment nominee (within the meaning of
Part 3B of the Social Security Administration Act). New paragraphs 124PG(1)(d),
124PGA(1)(d), 124PGB(1)(d) and 124PGC(1)(d) will only exclude persons from
being a program participant where they have a nominee who is not a CDC program
participant or is not subject to IM under Part 3B.
Items 67, 69, 71 and 73 repeal paragraphs 124PG(1)(f), 124PGA(1)(f),
124PGB(1)(f) and 124PGC(1)(e). This replicates the current arrangements for
IM participants who receive weekly payments to provide consistency across all CDC
program areas and ensures that a person is not excluded from being a CDC
program participant on the basis of receiving weekly payments.
Item 74 adds new sections 124PGD and 124PGE at the end of Subdivision A
of Division 2 of Part 3D of the Social Security Administration Act. These new
sections, respectively, establish the criteria that lead to a person becoming a
program participant in the Cape York area or the NT.
16
New subsection 124PGD(1) provides that a person is a program participant in the
Cape York area if:
(a) the person's usual place of residence is, becomes or was within the Cape
York area; and
(b) the person, or the person's partner, is an eligible recipient of a category P
welfare payment; and
(c) a written notice given under a law of Queensland from the Queensland
Commission (presently the FRC) to the Secretary requiring that the person
be a program participant under this section is in force; and
(d) if the person has a Part 3B payment nominee--that nominee is a CDC
program participant or is subject to IM under Part 3B.
Sub-item 97(2) translates notices given by the FRC to the Secretary, requiring
a person to be subject to IM, for the purposes of the cashless welfare arrangements
under subsection 124PGD(1).
Subsection 124PGD(2) clarifies that where a person becomes a program participant
under subsection (1) and continues to satisfy those criteria, the person continues to
be a program participant even if their usual place of residence is no longer in the
Cape York area.
New section 124PGE provides a person can become a program participant in the NT
under subsections (1), (2), or (3). These subsections largely replicate the IM
participant criteria in order to ensure that existing IM participants are captured in the
transition and that people will be able to be placed onto the cashless welfare
arrangements on an ongoing basis.
For the cashless welfare arrangements, subsection 124PGE(1) reproduces the
long-term welfare recipients and disengaged youth measures established under IM
but combines the criteria into one subsection for the purposes of the cashless
welfare arrangements. In a similar way, subsection 124PGE(2) merges the child
protection and recognised State/Territory authority referral measures, while
subsection 124PGE(3) largely replicates the vulnerable welfare payment recipient
measure.
Under subsection 124PGE(1) a person is a program participant if the:
(a) the person's usual place of residence is, becomes or was within the NT; and
(b) the person is an eligible recipient of a category E welfare payment; and
(c) the person has not reached pension age; and
(d) if the person has a Part 3B payment nominee--that nominee is a CDC
program participant or is subject to IM under Part 3B; and
(e) the person is not undertaking full-time study (as defined by section 541B of
the 1991 Act); and
(f) the Secretary gives the person a notice under subsection (5) stating that the
person is a program participant under this subsection and the notice is in
force; and
(g) the person is not covered by a determination under subsection 124PHA(1);
and
(h) the person is not covered by a determination under subsection 124PHB(3).
17
The criterion in subparagraph (c) of subsections 124PGE(1), (2) and (3) will exclude
Age Pension recipients in the NT from becoming compulsory program participants.
This ensures consistency with existing CDC program areas and prevents Age
Pension recipients from being placed onto the Card without their agreement.
Age Pension recipients will be able to volunteer for the CDC. This is consistent with
other CDC program areas and will support existing Age Pension recipients on IM in
the NT who wish to continue receiving budgeting support.
Age Pension recipients may be placed onto the CDC in the Cape York region,
consistent with current IM arrangements. The FRC does not support the exclusion
of Age Pension recipients from becoming compulsory program participants in the
Cape York Region on the basis that it may put people at risk of financial abuse in a
vulnerable position. The Government is committed to working with the FRC and
other local stakeholders as part of the partnered approach to delivering welfare
reform in the Cape York Region.
The criterion to become a program participant in subparagraph 124PGE(1)(f) that the
Secretary must have given the person a notice has been included to facilitate the
staggered rollout of the cashless welfare arrangements across the NT.
Subparagraphs 124PGE(1)(g) and (h) ensure that a person does not become
or continue to be a program participant if they are covered by a wellbeing or exit
determination under subsection 124PHA(1) or subsection 124PHB(3).
The criteria to become a program participant under subsection 124PGE(2), are
consistent with subsection (1) except that the person or their partner must instead be
an eligible recipient of a category P payment and, under subparagraph (2)(d), a child
protection officer of the NT, or an officer or employee of a recognised State/Territory
authority of the NT, must have given the Secretary a written notice requiring that the
person be a program participant under the section and the notice is in force.
Additionally, paragraph 124PGE(2)(e) requires that the notice was given either under
a law (whether written or unwritten) in force in the NT (other than a law of the
Commonwealth) or in the exercise of the executive power of the NT.
The criteria to become a program participant under subsection 124PGE(3) differ
from subsection 124PGE(2) only in relation to the requirement that the person be an
eligible recipient of a category P welfare payment and that the person is a vulnerable
welfare payment recipient (within the meaning given in section 123UGA).
The category of payments to become a program participant under
subsections 124PGE(2) and (3) are broader as they apply to measures with
additional criteria, for example the referral of a child protection officer. Subsection
124PGE(4) clarifies that if a person becomes a program participant under subsection
(1) (2) or (3), the person continues to be a program participant, even if their usual
place of residence ceases to be in the NT, provided they continue to satisfy the
criteria specified in the subsection under which they became a program participant.
18
Subsection 124PGE(5) enables the Secretary to give a person a written notice
stating that the person is a program participant under subsection (1), (2) or (3). This
allows the Secretary to ensure that when a person transitions from IM to the
cashless welfare arrangements, they become a program participant under the
corresponding provision. Subsection 124PGE(6) provides that the Secretary may
revoke the notice at any time, while subsection 124PGE(7) clarifies that a notice
given under subsection 124PGE(5) is not a legislative instrument.
Item 75 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 become a voluntary program participant.
Item 76 repeals paragraph 124PH(1)(ba) which currently excludes a person from
being a voluntary program participant on that basis that they have a Part 3B payment
nominee. New paragraph 124PH(1)(ba) provides that a person who has a Part 3B
payment nominee is a voluntary program participant where the nominee is a CDC
program participant or is subject to IM under Part 3B.
Item 77 repeals paragraph 124PH(1)(bc) to ensure that a person is no longer
excluded from being a voluntary participant on the basis that they have a weekly
payment arrangement.
Item 78 adds new subsection 124PHA(5) which provides that a determination under
subsection 124PHA(1) has no effect in relation to section 124PGD (which relates
to program participants in the Cape York area). This excludes a person who is a
program participant from being exempted under 124PHA on the basis that the FRC
has existing wellbeing exemption processes for people in the Cape York area who
become CDC program participants. Cape York participants are able to apply to the
FRC under Queensland legislation if they wish to cease being subject to these
arrangements.
Item 79 amends subsection 124PHB(1) to ensure that a person who is a CDC
program participant in the Cape York area under section 124PGD is not able to exit
the cashless welfare arrangements under section 124PHB. This also ensures the
transition to the CDC does not undermine the jurisdiction of the FRC.
Items 80 and 85 inserts new headings 'Payments by instalments' and 'Payments
otherwise than by instalments' before subsections 124PJ(1) and 124PJ(2)
respectively to guide the reader.
Item 81 amends subsection 124PJ(1) to ensure that program participants who
transition to the cashless welfare arrangements under new sections 124PGD and
124PGE will not be subject to the same restricted portion and unrestricted portion as
existing program areas. This will maintain the current restricted and unrestricted
portions for the NT and Cape York area under IM.
Item 82 repeals paragraphs 124PJ(1)(a) and (b) and substitutes new paragraphs
setting out the restricted and unrestricted portion percentages that apply to a person
to a program participant or a voluntary participant.
19
Paragraph 124PJ(1)(a) provides that the percentage of the gross amount of the
restricted portion for a person who is:
(a) a program participant under section 124PG, 124PGA, 124PGB or 124PGC, is
80 per cent;
(b) a voluntary participant and whose usual place of residence is not within the
NT, is 80 per cent;
(c) a voluntary participant and whose usual place of residence is within the NT, is
50 per cent.
Paragraph 124PJ(1)(b) provides that the percentage of the gross amount of the
unrestricted portion for a person who is:
(a) a program participant under section 124PG, 124PGA, 124PGB or 124PGC, is
20 per cent;
(b) a voluntary participant and whose usual place of residence is not within the
NT, is 20 per cent;
(c) a voluntary participant and whose usual place of residence is within the NT, is
50 per cent.
This provision maintains current restriction rates for program participants and
voluntary participants in existing program areas, while ensuring voluntary
participants in the NT continue to be subject to the 50 per cent restriction rate which
currently applies for those participants under IM.
Item 83 adds a note at the end of subsection 124PJ(1) to inform the reader that the
restricted and unrestricted portion percentages may be varied under subsection (3)
or section 124PK.
Item 84 adds new subsections 124PJ(1A), (1B) (1C) and (1D) after
subsection 124PJ(1), which outline the restricted and unrestricted portion
percentages that apply to a person who becomes a program participant under new
sections 124PGD and 124PGE.
New subsection 124PJ(1A) provides that for a person who is a program participant
under section 124PGD, the restricted portion is set at the percentage specified in a
notice given by the Queensland Commission (presently the FRC) under
paragraph 124PGD(1)(c). If the notice given under paragraph 124PGD(1)(c) does
not refer to a percentage for the purposes of the restricted portion, then the restricted
portion will be set at 50 per cent of the gross amount of the payment. The
unrestricted portion is then set at either the remainder required to be equal to
100 per cent for those who are subject to notice in which the percentage of the
restricted portion is specified, or the remaining 50 per cent where a notice does not
specify a percentage for the restricted portion. This subsection includes a note
clarifying that the percentages for the restricted and unrestricted portions may be
varied under subsection 124PJ(3).
20
New subsection 124PJ(1B) provides that for a person who is a program participant
under section 124PGE(1), both the restricted and unrestricted portions of a person's
gross payment are set at 50 per cent. This subsection includes a note clarifying that
the percentages for the restricted and unrestricted portions may be varied under
subsection 124PJ(2A) or (3).
New subsection 124PJ(1C) provides that for a person who is a program participant
under section 124PGE(2), the restricted portion of the gross amount of a person's
payment is 70 per cent, with the unrestricted portion being the remaining 30 per cent.
This subsection includes a note clarifying that the percentages for the restricted and
unrestricted portions may be varied under subsection 124PJ(2B) or (3).
New subsection 124PJ(1D) provides that for a person who is a program participant
under section 124PGE(1), both the restricted and unrestricted portions of a person's
gross payment are set at 50 per cent. This subsection includes a note clarifying that
the percentages for the restricted and unrestricted portions may be varied under
subsection 124PJ(2B) or (3).
The restricted and unrestricted portions being applied to the Cape York area and the
NT under section 124PJ(1A), (1B), (1C) and (1D) reflect the portions that currently
apply to these regions under IM.
Item 86 adds a note at the end of subsection 124PJ(2) clarifying that the restricted
and unrestricted portion percentages may be varied under subsection 124PJ(3).
Item 87 inserts new subsections 124PJ(2A), (2B) and (2C) which relate to the
variation of the restricted and unrestricted portion percentages for NT program
participants.
New subsection 124PJ(2A) provides that the Minister may make a notifiable
instrument that, for persons who are program participants under
subsection 124PGE(1) and whose usual place of residence is, becomes or was
within an area specified in the instrument, varies:
(a) the percentage for the restricted portion amount in paragraph 124PJ(1B)(a)
to an amount higher than 50 per cent and less than or equal to 80 per cent;
and
(b) the percentage for the unrestricted portion amount in paragraph
124PJ(1B)(b) to an amount that is below 50 per cent.
This subsection will enable the Minister to increase the restricted portion to a
maximum of 80 per cent, for program participants under 124PGE(1) for specific
communities in the NT to reflect community requests. This subsection is included to
allow communities that wish to increase the restricted portion to 80 per cent. This is
consistent with arrangements for existing CDC program areas where the maximum
restricted portion is 80 per cent. It is appropriate for these variations to be made by
determination because the Secretary has a power under subsection 124PJ(3) to
determine the restricted and unrestricted portions for an individual which (as
discussed below) will prevail over any Ministerial determination in accordance with
new subsection 124PJ(2C).
21
A notifiable instrument made under subsection 124PJ(2A) or 124PJ(2B) is not
subject to disallowance.
New subsection 124PJ(2B) provides that the Minister may make a notifiable
instrument that, for persons who are program participants under
subsection 124PGE(2) or (3), varies:
(a) the percentage for the restricted portion amount in paragraph 124PJ(1C)(a)
or (1D)(a) to a percentage (not exceeding 80 per cent and including
0 per cent); and
(b) the percentage for the unrestricted portion amount in paragraph 124PJ(1C)(b)
or (1D)(b) to a percentage (not exceeding 100 per cent).
This subsection will enable the Minister to either increase or decrease the restricted
and unrestricted portions for the entire cohort of program participants under
subsection 124PGE(2) or (3), to reflect requests made by a recognised
State/Territory authority in the NT or a child protection officer.
The power for the Minister to vary the percentages in subsections 124PJ(2A and
124PJ(2B) is consistent with the approach of the measure that was introduced by the
Social Security and Other Legislation Amendment (Welfare Reform and
Reinstatement of Racial Discrimination Act) Act 2010. That is, it is not appropriate
to specify the requirements of this in legislation to ensure the format of these
requests and the nature of any necessary engagement with the community following
a request, is flexible to respond to the specific circumstances of that community.
The Minister will only exercise this power following a request from the community.
The measure recognises the different approaches that different communities may
take to submit a request. For example, some communities may prefer to use a local
Aboriginal corporation, local government organisation or other representative body to
act on behalf of the community in making such a request.
When considering a community request, the Minister will undertake necessary
consultation before deciding whether to make an instrument varying the restricted
portions.
New subsection 124PJ(2C) clarifies that a determination made under
subsection 124PJ(2A) or (2B) has no effect in relation to a program participant
during the period a determination under subsection 124PJ(3) is in effect in relation to
the program participant. This ensures that a (general) Ministerial determination
made under subsection 124PJ(2A) or (2B) has no effect where the Secretary has
made a determination varying the percentages of the restricted and unrestricted
portions for an individual under subsection 124PJ(3).
Item 88 inserts the heading 'Variation by Secretary' before subsection 124PJ(3)
to guide the reader.
Items 89 and 91 make a technical amendment by omitting 'the' and substituting with
'a' in paragraphs 124PJ(3)(a) and (b) as a result of the amendment made by item 82.
Items 90 and 92 amend paragraphs 124PJ(3)(a) and (b) to extend the Secretary's
power to vary the restricted and unrestricted portions for a person who
22
is a program participant or voluntary participant so that it applies to people in the
Cape York area and NT program areas.
Item 93 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 (as well as certain reverse disclosures).
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 program
participant or a voluntary participant. This provision will support the functioning
of community bodies in monitoring the effectiveness of the cashless welfare
arrangements. Community bodies will be advised of the provision under which a
person ceased to be a participant and would not be provided any detail of factors
taken into consideration or other sensitive personal information relevant to the
person.
New sections 124POB, 124POC and 124POD replicate the current information
sharing provisions in place for IM in Part 3B of the Social Security Administration Act.
This will support information sharing between the Secretary on the one hand and,
on the other, the FRC, child protection officers in the NT or other officers or
employees of recognised State/Territory authority of the NT. These powers are
essential to ensure that the cashless welfare arrangements operates effectively and
that people can, or are only required to, enter and exit the cashless welfare
arrangements as is appropriate to their circumstances.
Items 94 and 95 insert new paragraphs into subsection 127(4) and section 144 of
the Social Security Administration Act so that specified decisions relating
to program participation are not reviewable, respectively, by the Secretary or the
Administrative Appeals Tribunal. These are decisions to:
(a) make a payment to the credit of a CDC account under paragraph 123UF(4)(a)
or subsection 123UP(2); and
(b) a decision to give a notice under subsection 123UO(3A); and
(c) give a notice under subsection 124PGE(5) that a person is a program
participant; and
(d) revoke a notice under subsection 124PGE(6) that a person is a program
participant.
These decisions will be excluded from merits review due to their purpose and
character as well as the inefficiencies associated with reviewing these matters.
In relation to decisions to transfer amounts from an IM account to a CDC account,
this is an essential feature of participation in the cashless welfare arrangements such
that review and appeal processes could frustrate the cashless welfare arrangements
and create inefficiencies to the review and appeals system.
Excluding the decision to terminate a voluntary IM agreement with a participant in
the NT from merits review is essential to ensure the cessation of IM in the NT.
If an individual wishes to continue receiving financial management support, they will
be able to apply to be a voluntary participant for the purposes of the CDC.
23
A decision to issue a notice to a person under subsection 124PGE(5) is also
excluded from merits review on the basis that the notice is just one precondition to a
person becoming a CDC program participant. The purpose of the notice is to
activate the transition to the cashless welfare arrangements in the Cape York area or
the NT through an administrative process. The precondition provides an evidentiary
fact to commence program participation and merely reflects other decisions made by
other bodies such as the FRC, child protection officers of the NT or officers or
employees of recognised State/Territory authority of the NT. Those decisions will
themselves be subject to review under the laws of the relevant jurisdiction.
For persons in respect of whom a notice is revoked under new subsection
124PGE(6), they will be able to become a voluntary participant provided they are
within the scope of Part 3D of the Social Security Administration Act. Otherwise,
their participation in the cashless welfare arrangements will not be appropriate.
Accordingly, any review of these decisions would be unwarranted and at risk of
frivolous review applications.
Item 96 relates to the Secretary's general powers to obtain information in section
192 of the Social Security Administration Act in the context of the cashless welfare
arrangements. Section 192 allows the Secretary to require a person to give
information, or produce a document, to the Department if the Secretary considers
that the information or document may be relevant to a range of matters, including the
operation of IM under Part 3B (see paragraph 192(db)). This item amends
paragraph 192(db) so that it extends to the operation of the cashless welfare
arrangements under Part 3D of the Social Security Administration Act. The effect of
this amendment is that where the Secretary considers that information may be
relevant to Part 3D, such as whether a person is or should be a CDC program
participant or how payments are administered, she may require information
or a document under a person's custody or control to be provided to the Department.
This amendment is essential to allow the Secretary to determine whether a person
should not participate in the cashless welfare arrangements on the basis of their
mental, physical or emotion wellbeing or where they can demonstrate reasonable
or responsible management of their affairs (including their financial affairs).
Item 97 provides application and transitional provisions for the Cape York area.
Sub-item 97(1) provides that new section 124PGD of the Social Security
Administration Act applies in relation to a person whose usual place of residence is
or becomes within the Cape York area on or after the day the item commences. The
note at the end of this sub-item clarifies that section 124PGD may continue to apply
to a person if the person's usual place of residence ceases to be within the Cape
York area after the item commences.
Sub-item 97(2) provides a mechanism for recognising a written notice, given by the
Queensland Commission (presently the FRC) in compliance with section 123UF of
the Social Security Administration Act, requiring a person to be subject to IM to have
the effect as if it had been given (in essentially the same circumstances) under
section 124PGD. This sub-item ensures minimal impact on the FRC and
IM participants who are transitioning to the cashless welfare arrangements because
24
there will be no need for FRC to issue new notices. It relates to notices issued by
the FRC before the commencement of item 97.
Sub-item 97(4) similarly translates written notices requiring a person to be subject
to IM given by the Queensland Commission (presently the FRC) on or after the
commencement of item 97 in compliance with section 123UF. By allowing the
Secretary to accept notices given for the purposes of IM, this sub-item allows the
FRC to continue referring people for welfare quarantining without amending the
Families Responsibilities Commission Act 2008 (Qld) which would otherwise
be required.
Sub-items 97(3) and (5) provide that sub-item (2) and (4) cease to apply in relation
to the person and a notice referred to in paragraph (2)(a) and (4)(a) in item 97 if the
notice is withdrawn or revoked.
Sub-item 97(6) provides that if sub-item (2) or (4) applies in relation to a person;
and the notice referred to in paragraph (2)(a) or (4)(a) specifies a percentage in
connection with the exercise of a power of the Secretary under subsection 123XM(3)
of the Social Security Administration Act in relation to the person, then that
percentage is taken to be the percentage applicable under subparagraph
124PJ(1A)(a)(i) of that Act in relation to the person. This sub-item ensures that the
FRC maintains its capacity to determine the appropriate restricted and unrestricted
portion percentages in line with current IM arrangements.
Item 98 sets out application and transitional provisions for the NT. Sub-item 98(1)
provides that new section 124PGE of the Social Security Administration Act applies
in relation to a person whose usual place of residence is within the NT on the day
this item commences or becomes within the NT, on or after the day this item
commences. The note at the end of this sub-item clarifies that section 124PGE may
continue to apply to a person if the person's usual place of residence after the
commencement of this item ceases to be in the NT.
Sub-item 98(2) transitions written notices given by a child protection officer under
and in compliance with section 123UC, or an officer or employee of a recognised
State/Territory authority of the NT under section 123UFAA, to be a notice in respect
of which paragraphs 124PGE(2)(d) and (e) of the Social Security Administration Act
are satisfied. For a notice to be transitioned, this sub-item also requires that the
notice be given under a law (whether written or unwritten) in force in the NT (other
than a law of the Commonwealth), or in the exercise of the executive power of the
NT; and that the notice was in force immediately before the commencement of this
item.
Sub-item 98(4) similarly transitions written notices requiring a person to be subject
to IM given by relevant persons on or after the commencement of item 98
in compliance with section 123UFAA.
Sub-items 98(3) and (5) provide, respectively, that sub-items 98(2) and (4) cease
to apply in relation to the person and notice referred to in paragraph (2)(a) and (4)(a)
if the notice is withdrawn or revoked.
25
Sub-item 98(6) provides that new paragraph 123PGE(3)(d) that a person
is a vulnerable welfare payment recipient (which is a precondition for program
participation in the NT) applies in relation to a determination made under
section 123UGA before, on or after item 98 commences.
Item 99 provides that new section 124POA will apply to a person who ceases
to be a program participant or a voluntary participant on or after the commencement
of item 98. This is required to ensure that section 124POA will apply to exiting
program participants so that information disclosures can take place in a way that
provides protective support.
Item 100 confers a power on the Minister to make rules, by legislative instrument,
prescribing transitional matters (including saving or application provisions relating
to the amendments or repeals made Part 2 of Schedule 1). The new power is not
limited by any other amendments in the Part 2 of Schedule 1 other than
by sub-item 100(2), which provides that the rules may not:
(a) create an offence or civil penalty;
(b) provide powers of (a) arrest or detention or (b) entry, search or seizure;
(c) impose a tax;
(d) set an amount to be appropriated from the Consolidated Revenue Fund under
an appropriation in this Act; or
(e) directly amend the text of this Act.
As a legislative instrument, any rule made by the Minister under this provision will be
subject to disallowance by the Parliament.
Part 3 - Stage 3 amendments
Items 101, 103, 105 and 107 inserts new paragraphs 124PG(1)(ha),
124PGA(1)(ha), 124PGB(1)(ha) and 124PGC(1)(ga) which respectively relate to
program participants in the Ceduna area, East Kimberley area, Goldfields area and
Bundaberg and Hervey Bay area. These paragraphs enable the Secretary to give a
notice to a person under subsections 124PG(4), 124PGA(4), 124PGB(4) and
124PGC(4) stating that the person is a program participant under the relevant
section and that the notice is in force.
Items 102, 104, 106 and 108 respectively add new subsections 124PG(4), (5) and
(6), 124PGA(4), (5) and (6), 124PGB(4), (5) and (6) and 124PGC(4), (5) and (6) that
relate to the Secretary's notice under paragraphs 124PG(1)(ha), 124PGA(1)(ha),
124PGB(1)(ha) and 124PGC(1)(ga).
New subsections 124PG(4), 124PGA(4), 124PGB(4) and 124PGC(4) provide that
the Secretary may give a written notice stating that the person is a program
participant under the relevant section and comes into force on a day specified in the
notice which must not be earlier than the day on which the notice is given. The note
at the end of each subsection clarifies that the Secretary may give more than one
notice to a person as provided under subsection 33(1) of the Acts Interpretation Act
1901.
26
New subsections 124PG(5), 124PGA(5), 124PGB(5) and 124PG)(5) enable the
Secretary to revoke the notice and requires the Secretary to notify the person of the
revocation.
New subsections 124PG(6), 124PGA(6), 124PGB(6) and 124PGC(6) provide that a
notice given under subsection 124PG(4), 124PGA(4), 124PGB(4) and 124PGC(4)
respectively is not a legislative instrument. These subsections are merely
declaratory of the law rather than prescribing a substantive exemption from the
requirements of the Legislation Act 2003.
Item 109, 110, 111 and 112 respectively amend new paragraphs 127(4)(ab),
127(4)(ac), 144(la) and 144(lb) of the Social Security Administration Act so that
decisions to give notices relating to program participation under
subsections 124PG(4) and (5), 124PGA(4) and (5), 124PGB(4) and (5) and
124PGC(4) and (5) are not reviewable, by the Secretary or the Administrative
Appeals Tribunal.
A decision to issue a notice to a person under paragraphs 124PG(1)(ha),
124PGA(1)(ha), 124PGB(1)(ha) and 124PGC(1)(ga) is excluded from merits review
on the basis that the notice is just one precondition to a person becoming a CDC
program participant. There is currently no requirement for a notice to commence
participation in existing program sites. However, this administrative process is being
introduced to enable the triggering of participants to be staggered or temporarily
paused, for example, in response to emergency situations such as bushfires or
COVID-19. The precondition provides an evidentiary fact to commence program
participation and reflects that the person is still required to meet all other relevant
eligibility criteria.
Item 113 provides applications provisions for the new notice provisions for the
Ceduna area, East Kimberley area, Goldfields area and Bundaberg and Hervey Bay
area.
Sub-item (1) provides that the amendments made to sections 124PG, 124PGA,
124PGB and 124PGC of the Social Security Administration Act by Part 3 do not
apply in a relation to a person who was a program participant under one of those
sections immediately before the commencement of this item.
Sub-item (2) provides that sub-item (1) ceases to apply in relation to a person if the
person ceases to be a program participant under Part 3D of the Social Security
Administration Act on or after the commencement of this item.
Item 114 repeals subsections 124PS(2) and (3) to remove the statutory requirement
that an evaluation be conducted by an independent expert within 6 months of the
completion of a review of the cashless welfare arrangements. This addresses the
potentially circular nature of current section 124PS. The repeal of
subsection 124PS(3) removes the requirement on independent experts to consult
program participants which, in turn, will avoid the ethical implications of unnecessary
repeat contact with vulnerable individuals.
27
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny)
Act 2011
SOCIAL SECURITY (ADMINISTRATION) AMENDMENT (CONTINUATION OF
CASHLESS WELFARE) BILL 2020
This Bill is compatible with the human rights and freedoms recognised or declared
in the international instruments listed in section 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011.
Overview of the Bill
This Bill sets out the transition of Income Management (IM) participants in the
Northern Territory (NT) and Cape York region in Queensland onto the Cashless
Debit Card (CDC) and provides for the cashless welfare arrangements to continue
as an ongoing measure from the day after this Bill receives royal assent in all
existing sites, as well as the NT and Cape York region following transition from IM.
This Bill also makes other program improvements to ensure that the benefits of the
CDC can be more clearly articulated. These measures will give further certainty to
participating communities and will continue to improve outcomes for individuals and
families in those communities.
Human rights implications
The Parliamentary Joint Committee on Human Rights conducted a review of the
Social Services Legislation Amendment (Cashless Debit Card) Bill 2017, which
notes that the CDC engages and limits three human rights: the right to social
security, the right to a private life and the right to equality and non-discrimination.
These rights, and a number of other specific human rights, are addressed in turn
below.
Objectives
The objectives of the CDC, set out in Part 3D of the Social Security (Administration)
Act 1999 (the Social Security Administration Act), and as amended by this Bill are to:
(a) reduce the amount of certain restrictable payments available to be spent
on alcoholic beverages, gambling and illegal drugs; and
(b) support program participants and voluntary participants with their budgeting
strategies; and
(c) encourage socially responsible behaviour.
28
Statement of compatibility with human rights
This Bill adds a new objective to section 124PC of the Social Security Administration
Act to clarify that the CDC is designed as a budgeting tool to support welfare
recipients in managing their financial affairs and ensuring that they are able
purchase basics and essential items.
The consumption of alcohol and drugs and partaking in gambling at harmful levels
can negatively impact on a person's ability to work and meet the needs of any
children, and can lead to long-term welfare dependency. The primary purpose of the
CDC program is to reduce harm at a community level from the use of harmful
products such as alcohol, illicit drugs and gambling. A flow-on impact of providing
this tool to help address these issues is that participants are able to stabilise their
lives, leading to an increased ability to participate in the workforce.
The first independent evaluation of the CDC Trial by ORIMA Research was released
on 1 September 2017, and included results from the first two trial sites, Ceduna,
South Australia, and the East Kimberley, Western Australia. It found that the CDC
has had a "considerable positive impact" in the communities where it has operated.
The evaluation also concluded that the trial "has been effective in reducing alcohol
consumption and gambling in both trial sites and [is] also suggestive of a reduction in
the use of illegal drugs", and "that there is some evidence that there has been a
consequential reduction in violence and harm related to alcohol consumption, illegal
drug use and gambling." Results found that of those participants surveyed who
stated they drank alcohol before the trial started, 41 per cent reported drinking less
frequently; of those participants surveyed who stated they were using illegal drugs
before the trial started, 48 per cent reported using drugs less frequently; and 48 per
cent of those participants surveyed who stated they gambled before the trial started
reported gambling less often.
A report on the baseline data collection in the Goldfields, Western Australia,
undertaken by the University of Adelaide, was released on 21 February 2019. The
baseline data collection identified socioeconomic conditions in the Goldfields at the
time if the introduction of the CDC and captured the community's initial perceptions
of the card immediately following its introduction. A majority of respondents were of
the opinion that early impacts were starting to be observed, including a reduction in
levels of substance misuse, a decrease in alcohol-related antisocial behaviour and
crime, improvements in child welfare, and improvements in financial literacy and
management.
Legislation to date has generally provided for 12 month extensions to the CDC
arrangements. Maintaining the CDC as an ongoing measure would help to ensure
these early positive impacts are maintained and built upon, ensuring community
leaders, participants and their families and children continue to receive support.
29
Statement of compatibility with human rights
General safeguards
The CDC program aims to support communities where high levels of welfare
dependence coexist with high levels of social harm by limiting the amount of welfare
payment available as cash in a community. It does not affect people according to
race, religion, ethnicity or any other factor. It is not a punitive measure, nor is it
designed to stigmatise people. It aims to ensure that income support payments are
spent in the best interests of welfare payment recipients and their dependents, and
in line with community expectations.
A number of general safeguards that help to protect human rights have been
incorporated into the operation of the CDC program and the transition of IM
participants onto the CDC program in the NT.
First, the rollout of the CDC has been and continues to be the subject of an
extensive community consultation and engagement process.
The Department of Social Services (the Department) has held several information
sessions throughout the NT in preparation for the transition and consulted with key
community leaders and organisations to provide initial information about the CDC
and seek guidance about the most appropriate way to consult with the broader
community. The information sessions focused on providing communities with an
understanding of the CDC product, how it operates, and how the card is different in
both policy and function to the BasicsCard in the IM regime.
Secondly, following the initial independent evaluation of the first two CDC program
areas, the Government is conducting a second impact evaluation of the CDC
program across the first three program sites, to assess the ongoing effectiveness of
the program. This will continue to build on initial results and further develop a
rigorous evidence base for the CDC. It will draw on data and methodology
developed as part of the Goldfields baseline data collection, and utilise data
collected through program monitoring. Findings from the second impact evaluation
will be published from late 2019.
Thirdly, a person can apply to the Secretary to exit the cashless welfare
arrangements under section 124PHB of the Social Security Administration Act if the
person can demonstrate reasonable and responsible management of their affairs.
This Bill also allows the Secretary to review and revoke any existing or future exit
determinations where the Secretary ceases to be satisfied that a person is
reasonably and responsibly managing their affairs.
Fourthly, the wellbeing exemption provisions under section 124PHA the Social
Security Administration Act provides that the Secretary must determine that a person
is not a program participant if being on the program poses a serious risk to their
mental, physical or emotional wellbeing. This is determined on a case by case basis,
taking into account the applicant's personal circumstances. This Bill also allows the
Secretary to undertake reviews and revoke determinations made to ensure that the
cashless welfare arrangements continue to support welfare recipients to budget and
manage their finances where there is no risk to their wellbeing.
30
Statement of compatibility with human rights
The right to social security
Article 9 of the International Covenant on Economic, Social and Cultural Rights
(ICESCR) recognises 'the right of everyone to social security, including social
insurance'. The United Nations Committee of Economic, Social and Cultural Rights
(the UN Committee) has stated that implementing this right requires a country, within
its maximum available resources, to provide 'a minimum essential level of benefits
to all individuals and families that will enable them to acquire at least essential health
care, basic shelter and housing, water and sanitation, foodstuffs, and the most basic
form of education'.
Across all CDC program areas, the right to social security is limited only in the
participant's ability to use a proportion of their payment to purchase harmful goods,
in an area where there are demonstrated high levels of community harm. In targeted
communities, support from leaders is driven by the view that the CDC program can
help address this harm, particularly where dependence is also high.
These amendments do not detract from the eligibility of a person to receive welfare,
nor reduce the amount of a person's social security entitlement. Rather, there
is a limitation on how payments can be spent and provides a mechanism to ensure
that certain recipients of social security entitlements are restricted from spending
money on alcohol, gambling and drugs.
Further, the Bill does not introduce a new area to welfare quarantining
arrangements. Rather, the Bill transitions the NT and Cape York area from IM to the
CDC and continues the CDC arrangements in existing sites as an ongoing measure.
Under both the IM regime and the CDC program, portions of social security
payments received by a participant are quarantined, and the participant is unable to
purchase restricted goods or withdraw cash using this portion. IM participants have
between 50 and 90 per cent of their payment quarantined, according to the
participant's specific measure.
Participants transitioning from the IM regime to the CDC program will get to keep
their existing quarantine rate. The benefits of the CDC program include a more
streamlined approach to welfare quarantining, the use of improved technology, and
fewer restrictions on purchases that allow participants to shop from a wide variety of
sellers, including online retailers, thereby increasing a participant's ability to spend
their welfare payments to meet their essential needs.
Businesses that sell restricted items can serve participants where they have systems
in place that do not allow for the sale of such products to holders of a CDC. These
limitations are necessary to ensure that restricted products cannot be purchased with
the restrictable portion of a participant's social security payment. Without the
diversion of social security payments into a restricted bank account, welfare
quarantining would not be possible and the objectives of the CDC, outlined above,
could not be met.
31
Statement of compatibility with human rights
The restricted bank account functions like a standard, mainstream bank account.
This serves to minimise restrictions on the way social security is received. The CDC
itself is a standard Visa debit card that can be used at the majority of merchants that
accept EFTPOS payments. The account allows for a range of flexible payment
options including online transfers, BPAY, online shopping and recurring deductions.
As well as accessing these services online, a mobile application has been developed
for use on smartphones. There are also two hotline services operated by the card
provider and the Department to provide technical and practical support for
participants.
Given the objectives of the CDC program, the prevalence of social harm in the areas
these schemes operate, any limitation on the right to social security is reasonable
and proportionate.
The right to a private life
The impact of the program on the right to a private life and privacy has previously
been raised.
Article 17 of the International Covenant on Civil and Political Rights sets out the right
to a private life. It prohibits arbitrary or unlawful interferences with an individual's
privacy, family, correspondence or home.
The CDC program seeks to achieve the legitimate objective of reducing the amount
of funds available to be spent on alcoholic beverages, gambling and illegal drugs,
supporting program participants with their budgeting strategies, and encouraging
socially responsible behaviour.
By reducing a person's choice in how and where they access and spend their social
security payments, the CDC limits the right to a private life. The CDC program is
targeted to communities where high levels of welfare dependence exist alongside
high levels of social harm.
This limitation on the right to a private life is directly related to the ultimate objective
of reducing such harm. This is because the limitations put in place restrict
transactions at businesses selling goods that contribute to such harm. Therefore,
the limitation that is placed on the right to a private life with the CDC is directly
related to improving the welfare of the recipient and any dependents.
The CDC program also engages the right to privacy. Section 124PN of the Social
Security Administration Act allows the disclosure of information to the Secretary by a
financial institution. Section 124PN does not provide a blanket exemption from
privacy laws. It merely allows the sharing of information necessary for the operation
and evaluation of the CDC program. As a result, there are still safeguards in place
to protect individual's privacy. Any information collected by the Department or
Services Australia will be protected information that is subject to the secrecy
provisions in the Social Security Administration Act.
32
Statement of compatibility with human rights
Both Government and the card provider are required to act in accordance with the
Privacy Act 1988, more generally, and the Australian Privacy Principles (APPs). The
APPs set out strict rules around how personal information can be used. For
example, they prohibit the disclosure of personal information for direct marketing.
Notably, under the CDC, the Government cannot see what items or products people
are purchasing, only the merchants in which the money is being spent.
The section seeks to enable that the CDC program achieves a legitimate objective
and is necessary for the program to operate and be evaluated effectively. In order to
establish bank accounts for participants, Services Australia must transfer customer
information to the card provider. The card provider in turn provides new account
details back to Services Australia. While the CDC program is operating, the card
provider must also transfer information about participants to the Department. The
Department uses this information to run and evaluate the program. Without this
sharing of information, new accounts cannot be set up and the CDC program could
not proceed.
Proposed sections 124POA to 124POD of the Bill expand the existing disclosure
provisions for the disclosure of information under IM to the CDC program provisions.
The purpose of disclosures by the Secretary under these provisions is to ensure that
the CDC program is properly administered and appropriate information can be
shared about a participant to provide protective support.
Any limitation on a person's right to privacy is reasonable and proportionate given
the extensive social harm that exists in the program areas. There are also effective
community safeguards over the extent of the restrictions imposed.
The rights of equality and non-discrimination
The rights of equality and non-discrimination are provided for in a number of the
seven core international human rights treaties to which Australia is a party, most
relevantly the International Covenant on Civil and Political Rights (ICCPR) and the
Convention on the Elimination of All Forms of Racial Discrimination (the CERD). In
particular, article 5 of the CERD requires parties 'to prohibit and eliminate racial
discrimination in all its forms and to guarantee the right of everyone, without
distinction as to race, colour or national or ethnic origin, to equality before the law',
notably in the enjoyment of 'the right to ... social security and social services' (article
5(e)(iv)).
Discrimination is impermissible differential treatment among persons or groups that
results in a person or a group being treated less favourably than others, based
on a prohibited ground for discrimination, such as race. However, the UN Human
Rights Committee has recognised that 'not every differentiation of treatment will
constitute discrimination, if the criteria for such differentiation are reasonable and
objective, and if the aim is to achieve a purpose which is legitimate under the
Covenant'.
33
Statement of compatibility with human rights
The rights to equality and non-discrimination are not directly limited by the CDC.
The program is not applied on the basis of race or cultural factors. Locations for the
program have been chosen based on objective criteria. This includes high levels of
welfare dependence and community harm, as well as the outcomes of
comprehensive community consultation. For example, the Bundaberg and Hervey
Bay region was selected as the fourth site for the CDC program following calls from
key stakeholders in the region to address social issues such as the high youth
unemployment rate and intergenerational welfare dependence.
Anyone residing in locations where the CDC program operates, receiving a payment
and being of a certain age as specified by instrument or legislation, will become a
CDC program participant. The CDC program is therefore not targeted at people of a
particular race, but to welfare recipients who meet particular criteria. In addition, this
Bill continues the operation of the CDC in existing sites as an ongoing measure and
introduces the CDC into the NT and Cape York area where IM arrangements are
already in place.
Right to be free from self-incrimination
Article 14(3)(g) of the ICCPR protects the right of an individual to be free from
self-incrimination in the determination of a criminal charge by providing that a person
may not be compelled to testify against him or herself or confess guilt. The privilege
against self-incrimination may be subject to permissible limits. Any limitations must
be for a legitimate objective and be reasonable, necessary and proportionate to that
objective. The right to privilege against self-incrimination can be revoked where
a statutory body is authorised to compel individuals to produce information, which
may incriminate that individual.
The proposed amendment to paragraph 192(db), to extend the powers to Part 3D
of the Social Security Administration Act, seeks to achieve the legitimate objective of
investigating the operation of the CDC including to determine whether a person is or
should be a CDC participant or how payments are administered. There is not a less
restrictive investigative technique available that provide the same information
gathering purpose and requiring program participants to provide information
voluntarily is unlikely to be effective. Compelling a person to provide information
under this section is reasonably capable of achieving the stated aim of investigating
the effective operation of welfare payments and the CDC program. Section 197A
excludes information given on a compulsory basis from being admissible in criminal
proceedings (except for proceedings in respect of giving false or misleading
information).
34
Statement of compatibility with human rights
Items 93 and 96 of the Bill operates to limit the right to be free from self-incrimination
by expressly removing the privilege against self-incrimination in relation to the
production or disclosure of information specific to the program or voluntary
participant. This is necessary to ensure that the Department can check the records
(required to be kept by law) to verify that a person is receiving whole or part of
certain welfare payments and therefore subject to welfare quarantining under the
Social Security Administration Act. Allowing a claim of privilege in relation to such
information would be contrary to the purpose of the legislation, as the production of
this disclosed information is directly relevant to the operations of Part 3D under the
Social Security Administration Act. These provisions are in place to ensure the due
performance of functions or exercise of powers provided for under legislation, and
also ensure that a proper transition from IM to the CDC can be adequately and
appropriately implemented.
Items 93 and 96 of the Bill also provide for the collection, storage, use or disclosure
of other personal information, removing the privilege against self-incrimination which
represents a loss of personal liberty for a welfare recipient whose information
(whether they are a program participant or voluntary participant) is shared between
the Secretary and community bodies, the Queensland Commission (presently the
Family Responsibilities Commission), child protection officer of the NT, or officers or
employees of a recognised State or Territory authority of the NT.
The limitations discussed above are reasonable, necessary and proportionate
to achieving the objectives of the CDC program as they enable the Secretary to
ascertain the fact regarding the circumstances of program participants. By modifying
the application of the privilege against self-incrimination, the Bill ensures that it is in
the public interest to properly transition IM participants onto the CDC, and to improve
their financial management practices more generally.
The right to self-determination
Article 1 of the ICESCR states that "all peoples have the right of self-determination".
By virtue of that right they freely determine their political status and freely pursue
their economic, social and cultural development'.
Under the CDC program, people are able to spend their restricted funds on any
goods or services except alcohol, gambling and illicit drugs because of having less
access to discretionary cash. The limitation on these products and services ensures
that vulnerable people are protected from abuse of these substances, and any
associated harm and violence. In addition, the transition from IM to the CDC
program offers more opportunities for participants to spend their quarantined welfare
payments, for example by allowing the use of online shopping.
The transition of IM participants to the CDC program will not impact on or interfere
with a person's right to freely pursue their economic, social or cultural development.
35
Statement of compatibility with human rights
The right to an adequate standard of living
Article 11(1) of the ICESCR states that everyone has the right to "an adequate
standard of living for himself and his family, including adequate food, clothing and
housing, and to the continuous improvement of living conditions" and that
"appropriate steps" be taken to "ensure realisation of this right". Further to this,
article 11(2) of the ICESCR states that "measures, including specific programmes,"
should be taken in "recognising the fundamental right of everyone to be free from
hunger".
The CDC program does not limit the right to an adequate standard of living for
affected people. Under the CDC program, people are able to use restricted funds to
access any goods and services with the exception of alcohol and gambling products,
or 'cash-like' products that could be used to obtain alcoholic beverages or gambling,
with the aim of reducing abuse of these goods and services and associated harm
and violence. The CDC program does not restrict a person's access to the essential
goods and services required to maintain an adequate standard of living. Access to
some discretionary cash is available to ensure that people can still participate in
cash economies to purchase items that contribute to an adequate standard of living.
The rights of children
By ensuring that a portion of welfare payments is available to cover essential goods
and services, welfare quarantining through the use of a CDC can improve living
conditions for the children of welfare recipients. An independent evaluation
conducted by ORIMA Research and published in September 2017 found that the
CDC program had a considerable positive impact in the communities where it has
operated. The evaluation concluded that the program was effective in reducing
alcohol consumption and gambling and was suggestive of a reduction in the use of
illegal drugs. The evaluation also found there was some evidence of a
consequential reduction in violence and harm related to alcohol consumption, illegal
drug use and gambling. The evaluation found several widespread spill-over benefits,
including 40 per cent of the participants surveyed being better able to look after their
children and 45 per cent being better able to save money. There was also a
decrease in requests for emergency food relief and financial assistance in Ceduna
and merchants reported increased purchases of baby food, clothing and other goods
for children.
In 2018, the Department commissioned the Future of Employment and Skills
Research Centre (FES) at the University of Adelaide to undertake an independent
baseline data collection to allow an assessment of the conditions in the Goldfields
region around the time of the rollout of the CDC program. Many of the respondents
who took part in the baseline data collection reported that positive impacts relating
to improvements in child welfare and wellbeing were starting to be observed. Many
improvements in child wellbeing were considered by stakeholders and participants
to be related to changes in the spending patterns of some CDC participants.
Respondents reported more children being suitably clothed in and out of school and
children in the region having an increase in the provision of food, improved access to
toys such as bikes and scooters and better general health and hygiene.
36
Statement of compatibility with human rights
Therefore, measures used to restrict payment spent on alcohol, drugs and gambling
by each participant on the CDC program can be used to advance the right of children
to the highest attainable standard of health and the right of children to adequate
standards of living (articles 24, 26 and 27 of the Convention on the Rights of the
Child, respectively).
Conclusion
The Bill is compatible with human rights. The continuation of the CDC program as
an ongoing measure and the transition of participants from IM to the CDC program
will advance the protection of human rights by ensuring that welfare payments are
spent in the best interests of welfare recipients and their dependents by restricting
spending on alcohol, drugs and gambling.
The measures are reasonable, necessary and proportionate to achieving the
objectives of the welfare quarantining measures. The CDC program aims to reduce
the amount of funds available to be spend on alcoholic beverages, gambling and
illegal drugs, support program participants and voluntary participants with their
budgeting strategies, and encourage socially responsible behaviour.
37
REGULATION IMPACT STATEMENT
Executive Summary
The Australian Government is committed to maintaining a strong welfare system that
operates as a safety net while reducing social harm in communities with high levels
of welfare dependency, and supporting people, families and communities to achieve
positive outcomes.
The Government aims to achieve this commitment through programs such as the
Cashless Debit Card.
Prior to the introduction of the Cashless Debit Card, the Government introduced the
Income Management program in 2007, which was designed to help identified
individuals, their families and wider cohorts to budget and direct their welfare
payments to priority needs, such as food, housing, electricity and education.
Comparatively, the objective of the Cashless Debit Card is to limit the amount of
welfare payment available as cash with the aim to reduce the overall social harm
caused by welfare-fuelled drug and alcohol misuse and problem gambling. The
Cashless Debit Card is also designed as a helpful budgeting and financial
management tool, which aims to help participants stabilise their circumstances and
ensure they have money available to meet essential expenses.
The Government's broader welfare reform agenda ensures that a social security
safety net continues to be there for people who need it most, when they need it. The
Cashless Debit Card builds from Income Management and has undergone
considerable refinement since its first implementation, in order to ensure it reflects
feedback from communities and the experience of participants, and continues to
address the policy problem in a cost effective manner.
The policy problem is serious and complex, and requires a coordinated response.
Support from all levels of government is essential in promoting positive social norms
and building a culture of opportunity and personal responsibility for people with the
capacity to provide for themselves and their children.
Table of Contents
Executive Summary .................................................................................................... i
1. BACKGROUND ..................................................................................................... 1
1.1 The Government's welfare reform agenda ............................................................ 1
1.2 Welfare reform policies ...................................................................................... 2
1.2.1 Income Management .................................................................................... 2
1.2.2 The Northern Territory Emergency Response .................................................. 4
1.2.3 Cashless Debit Card .................................................................................... 5
1.2.4 Income Management and the Cashless Debit Card .......................................... 6
1.2.5 Participants ................................................................................................. 8
1.2.6 Payment split .............................................................................................. 8
1.2.7 Legislation and implementation of the Cashless Debit Card ............................... 8
1.2.8 Consultation to further expand the Cashless Debit Card ................................. 12
1.3 Programme Monitoring and Enhancements ........................................................ 13
1.3.1 Monitoring circumvention activity and program integrity .................................. 13
1.3.2 Cashless Debit Card program monitoring strategy .......................................... 13
1.3.3 Technological enhancements to the Cashless Debit Card ............................... 14
1.3.4 Product Level Blocking ............................................................................... 14
1.3.5 Stand-in processing ................................................................................... 14
2. THE POLICY PROBLEM ...................................................................................... 15
2.1 Welfare Dependence ....................................................................................... 15
2.2 Social harm in Australia ................................................................................... 16
2.2.1 Alcohol and Drug Misuse ............................................................................ 16
2.2.2 Problem Gambling ..................................................................................... 18
2.3 Need for Continued Action ............................................................................... 19
3. THE ROLE OF GOVERNMENT ............................................................................. 21
3.1 Acknowledging limitations on what the Government can achieve ........................... 21
3.1.1 Other contributions to social harm ................................................................ 21
3.1.2 Attributing results to the Cashless Debit Card ................................................ 22
4. POLICY OPTIONS ............................................................................................... 22
4.1 Option One: Allow the Cashless Debit Card to expire in current sites ..................... 22
4.2 Option Two: Continue the Cashless Debit Card program as an ongoing measure in
current sites, including Northern Territory and Cape York and invest in improving
technology ........................................................................................................... 23
4.3 Option Three: Expand the Cashless Debit Card to new locations and extend the
duration of the program ......................................................................................... 24
ii
5. IMPACT ANALYSIS ............................................................................................. 24
5.1 Option One: Allow the Cashless Debit Card to expire in current sites ..................... 24
5.2 Option Two: Continue the Cashless Debit Card Program as an ongoing measure in
current sites, including Northern Territory and Cape York, and invest in improving
technology ........................................................................................................... 28
5.3 Option Three: Expand the Cashless Debit Card to new locations and extend the
duration of the program ......................................................................................... 33
5.4 Discounted option ........................................................................................... 34
Expand Income Management into new locations .................................................... 34
6. CONSULTATION ................................................................................................. 35
6.1 Purpose and objectives of consultation .............................................................. 35
6.2 Type of consultation ........................................................................................ 36
6.3 Consultation Process ....................................................................................... 36
6.4 Summary of consultation to date ....................................................................... 38
6.4.1 Consultation in current sites and engagement in the Northern Territory and Cape
York ................................................................................................................. 38
6.4.2 Communities consulted with but did not proceed as expansion sites ................. 40
6.4.3 Technology Consultation ............................................................................ 42
6.5 Findings from consultation and how it affected final decision making process .......... 43
6.6 Ongoing and future consultation ........................................................................ 46
7. RECOMMENDED OPTION ................................................................................... 48
8. IMPLEMENTATION ............................................................................................. 49
ATTACHMENT A .................................................................................................... 51
ATTACHMENT B .................................................................................................... 54
Social Security Amendment (Debit Card Trial) Act 2015 .......................................... 54
Social Services Legislation Amendment (Cashless Debit Card) Act 2017 .................. 54
Social Services Legislation Amendment (Cashless Debit Card Trial Expansion) Act 2018
....................................................................................................................... 55
Social Security (Administration) Amendment (Income Management and Cashless
Welfare) Act 2019 .............................................................................................. 55
Social Security (Administration) Amendment (Income Management to Cashless Debit
Card Transition) Bill 2019 ................................................................................... 56
ATTACHMENT C .................................................................................................... 58
ORIMA Research evaluation ............................................................................... 58
University of Adelaide's Second Impact Evaluation ................................................ 60
The Australian National Audit Office's report, The Implementation and Performance of
the Cashless Debit Card Trial .............................................................................. 61
iii
1. BACKGROUND
This Regulation Impact Statement (Statement) has been prepared by the
Department of Social Services (the department), regarding proposed changes to
the delivery of welfare payments in Australia.
1.1 The Government's welfare reform agenda
The Australian Government seeks to maintain a strong welfare system that
operates as a safety net, while reducing social harm in communities with high
levels of welfare dependency, and supporting people, families and communities to
achieve positive outcomes. The Government currently delivers two programs to
deliver this commitment, Income Management and the Cashless Debit Card.
Maintaining a welfare system that operates as a safety net supports Australians
who are most in need and encourages people to build the skills, knowledge and
experience required to find work. This approach focusses on providing people
with the right supports at the right time, increases a person's chance of getting
and keeping a job, reduces the risk of intergenerational welfare dependency, and
ensures that the Government continues to deliver cost-effective welfare support to
those in need.
The AIHW report, Australia's welfare 2019: in brief, stated that in 2017-18 the
Australian and state/territory governments spent nearly $161 billion on welfare
services and support.1 Between 2001-02 and 2017-18, Australian welfare
spending in real terms (adjusted for inflation) grew faster than the population, with
the per-person spend rising from $5,287 to $6,482. The proportion of people 15
years and older in long-term unemployment (i.e. having been unemployed for 52
weeks or more) also rose from 15 per cent in 2009 to 25 per cent in 2018. 2 This
highlights the need to ensure welfare is meeting its objectives in a cost effective
manner.
Both Income Management and the Cashless Debit Card involve restrictions on
what welfare recipients can spend their welfare payment on to support better
outcomes for communities, families and individuals. These programs also aim to
drive changes in behaviour, at the individual, family and community levels. This
agenda is focused on ensuring welfare payments are not misused in a manner
that is responsible for, or contributes to, social harm underpinned by high levels of
alcohol, drug and gambling consumption.
1
Australian Institute for Health and Welfare, Australia's welfare 2019: in brief,
https://www.aihw.gov.au/getmedia/795385cc-6493-45c9-b341-7ddf6006d518/aihw-aus-
227.pdf.aspx?inline=true
2
Australian Institute for Health and Welfare, Australia's welfare 2019: in brief.
1
1.2 Welfare reform policies
1.2.1 Income Management
Income Management was first introduced in the Northern Territory in 2007 as part
of the Northern Territory Emergency Response (NTER). The NTER was
authorised under the Northern Territory National Emergency Response Act 2007
as a response to the first recommendation of the Little Children Are Sacred
report. It has since been progressively implemented to a range of locations across
Australia. The Government selects Income Management sites based on certa in
criteria, including:
high levels of antisocial behaviour, including violence and alcohol
consumption;
following a consultation period at the request of a community; and
in response to a recommendation of an inquiry or inquest.
Income Management aims to reduce hardship by directing between 50 and 90 per
cent of a welfare payment to the priority needs of participants and their family and
other dependents. Income Management is used primarily as a budgeting tool;
participants who have been identified as particularly vulnerable receive intensive
face-to-face support from Services Australia (formerly the Department of Human
Services) to ensure their welfare payment is being directed to essentials, such as
food, housing, electricity and education. Income managed funds are unable to be
spent on alcohol, gambling, tobacco and related products, and pornography, and
are unable to be withdrawn as cash.
Income Management participants can be provided with a BasicsCard to access
their income managed funds. The BasicsCard is PIN-protected card that operates
through the existing eftpos infrastructure, and can be used at approved
BasicsCard merchants. It provides a secure way for participants to spend their
income managed funds while preventing participants from purchasing restricted
items or withdrawing cash.
Under Part 3B of the Social Security (Administration) Act 1999, the key objectives
of Income Management are to:
reduce immediate hardship and deprivation by directing welfare payments
to the priority needs of recipients, their partner, children and other
dependents;
help participants to budget so that they can meet their priority needs;
reduce the amount of discretionary income available for alcohol, gambling,
tobacco and pornography;
reduce the likelihood that welfare payment recipients will be subject to
harassment and abuse in relation to their payments; and
encourage socially responsible behaviour, particularly in the care and
education of children.
Building on the experience of Income Management as part of the NTER, Income
Management has been expanded to new locations through different measures
since 2007. The different measures allow the Government to tailor the program to
best suit the needs of an individual, their family and their wider community.
2
Between 2008 and 2015, different Income Management measures were
introduced to locations in Western Australia, Queensland, the Northern Territory,
South Australia, New South Wales and Victoria. This was in response to a range
of reasons, including State Coroner's reports, high unemployment rates,
community interest and wider legislative reforms. A detailed table of the
expansion of the different Income Management measures is at Attachment A.
The Government has commissioned seven evaluations of Income Management,
the findings of which have supported the development of Income Management in
its current form. 3 These evaluations have indicated improvements for Income
Management participants and their families, including:
protection against financial harassment, including unreasonable or
excessive demands from family and community members to provide money
or other goods;
ability to stabilise financial circumstances;
housing stability; and
improved health and wellbeing outcomes for children.
However, Income Management is also 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.
Australian communities are continuing to experience the serious effects of social
harm caused by drug and alcohol misuse and problem gambling, as well as long-
term welfare dependence.
3
Australian Department of Social Services, Income Management Evaluations,
https://www.dss.gov.au/families-and-children-programmes-services-welfare-conditionality-income-
management/income-management-evaluations
3
1.2.2 The Northern Territory Emergency Response
On 8 August 2006, the Northern Territory Government established a Board of
Inquiry into the Protection of Aboriginal Children from Sexual Abuse to investigate
reports of child sexual abuse in the Northern Territory and suggest possible
solutions. The resulting report, Little Children Are Sacred, was published on 30
April 2007.4 The report contained 97 recommendations to the Northern Territory
Chief Minister, including designating the issue of child protection as one of urgent
national significance by both the Australian and Northern Territory governments,
and improving policies around:
education and school attendance;
coordination with Family and Child Services;
alcohol management and reduction of alcohol-related harm;
illicit substance abuse;
employment opportunities;
housing, in particular overcrowding;
pornography; and
gambling.
In response to the findings and recommendations from Little Children are Sacred,
the Government introduced Income Management in 2007 as part of the Northern
Territory Emergency Response (NTER), authorised under the Northern Territory
National Emergency Response Act 2007. Income Management was one of a raft
of policies across the areas of service coordination, law and order, family support,
employment, health, education, and housing and land reform that the NTER
delivered.
The Act facilitated Income Management for welfare payment recipients in 73
prescribed Aboriginal communities and town camps, with 50 per cent of a
person's welfare payment income managed and reserved for priority needs to
support that person and their family, in particular any children.
A review conducted by the Government, titled the Northern Territory Emergency
Response: One Year On, identified that within one year of Income Management
being introduced into the Northern Territory, more than 90 per cent of income
managed funds had been spent on priority needs by more than 13,300
participants.5
The NTER board was appointed to conduct an independent review of the NTER
measures which was released on 13 October 2008. The Board found the benefits
of Income Management were increasingly being experienced by participants. The
Government formally responded to the review in May 2009 with the release of
Future directions for the Northern Territory Emergency Response: a discussion
paper.
4
Northern Territory Government, Little Children Are Sacred,
http://www.inquirysaac.nt.gov.au/pdf/bipacsa_final_report.pdf
5
Australian Government, Northern Territory Emergency Response: One Year On,
https://www.dss.gov.au/sites/default/files/documents/05_2012/nter_review.pdf
4
The discussion paper set out a number of proposals of how NTER measures
should be continued and community views were being sought when evaluation
was being completed. The Government's view in the paper stated that Income
Management should be continued as it was helping children, improving families
financial security and community safety by minimising the amount of money
available to purchase alcohol and gambling.
1.2.3 Cashless Debit Card
In 2014 The Forrest Review: Creating Parity was published which made 27
recommendations around Indigenous education, welfare reform, housing and
training and employment opportunities. 6 The Forrest Review noted that while
Income Management had been successful in helping people stabilise their
financial circumstances and protecting vulnerable people from harm, it was
becoming too complex and costly to sustain. A recommendation in the report was
to replace Income Management with a Healthy Welfare Card.
The Government accepted the recommendations of the Forrest Review around
improving Income Management.
The Review identified the challenges of ensuring Australia's welfare system was
used to build healthy lifestyles and support people make the best choices for
themselves and their families - particularly their children.
A lack of financial understanding was identified as a key contributor to ongoing
poverty and exclusion from economic participation. The Review also identified
that the use of welfare funds on alcohol or gambling can further exacerbate
problems and directly lead to social harm and poor community outcomes.
To address the policy problem identified, the department undertook consultation
with representatives from business and industry, the community sector,
community leaders, and all levels of government on the issue. These
consultations resulted in the development of the Cashless Debit Card, which
aligned with community and industry expectations and capabilities.
The Cashless Debit Card first commenced in Ceduna, South Australia, on
15 March 2016, and has since been expanded to the East Kimberley and
Goldfields regions, Western Australia, and Bundaberg and Hervey Bay region,
Queensland.
The objective of the Cashless Debit Card is to limit the amount of welfare
payment available as cash with an aim to reduce the overall harm caused by
welfare-fuelled drug and alcohol misuse and problem gambling. The Cashless
Debit Card can also assist participants as a helpful financial management tool to
provide them with assistance to budget better for their circumstances. Under the
Cashless Debit Card, 80 per cent of a participant's welfare payment is placed on
a Visa debit card that operates like a regular bank card, except it cannot be used
to purchase alcohol, gambling products and open loop gift cards, and it cannot be
used to withdraw cash.
6
The Minderoo Foundation, The Forrest Review: Creating Parity,
https://cdn.minderoo.com.au/content/uploads/2019/02/05183022/3838 -Forrest-Review-Update-Full-Report-
Complete-PDF-PRO1-p.pdf
5
Legislative authority for the Cashless Debit Card is established under Part 3D of
the Social Security (Administration) Act 1999. The objectives of the Cashless
Debit Card include to:
reduce the amount of certain welfare payments available to be spent on
alcohol, gambling products and illicit drugs;
support program participants with their budgeting strategies; and
encourage socially responsible behaviour.
The card, currently provided by Indue Ltd., supports a range of flexible payment
options, including online transfers, BPAY, online shopping and recurring
deductions. The card can be used at almost all merchants with Visa or eftpos
facilities and has very little impact on participants who already spend their money
responsibly.
In Ceduna, the East Kimberley and the Goldfields, the card applies to all people
on a working-age welfare payment, and in Bundaberg and Hervey Bay, it applies
to those aged 35 years and under on Parenting Payment (Partnered), Parenting
Payment (Single), JobSeeker Payment (formerly Newstart Allowance) and Youth
Allowance (Job seeker). The four sites are currently legislated until 31 December
2020.
Cashless Debit Card sites are selected based on a number of factors, including:
community interest, support, readiness and willingness;
high levels of disadvantage and welfare dependence; and
high levels of social harm caused by drug and alcohol use and gambling.
1.2.4 Income Management and the Cashless Debit Card
Income Management is targeted towards vulnerable individuals, while the
Cashless Debit Card restricts the amount of cash in a community with the aim to
reduce the overall social harm caused by welfare-fuelled alcohol, gambling and
drug misuse at the individual and community level.
Income Management is designed to help identified individuals, their families and
wider cohorts to budget and direct their welfare payments to priority needs, such
as food, housing, electricity and education. Comparatively, the purpose of the
Cashless Debit Card is to reduce social harm in identified communities caused by
alcohol and drug abuse and problem gambling, through limiting the amount of
welfare payment available as cash in that community. In order to achieve the
different objectives whilst addressing the policy problem, the two programs are
different in both policy and operation.
The introduction of Product Level Blocking (PLB) is a key improvement for the
Cashless Debit Card. Current merchant management involves blocking entire
merchants that sell restricted items, blocking specific PIN pads or entering into
agreements with merchants to manually identify the Cashless Debit Card and
block specific products. PLB uses a merchant's point-of-sale (POS) system and
the PIN pad to identify restricted items in a basket and block the purchase of
individual products with a Cashless Debit Card. Using this new technology, the
merchant staff do not need to know what type of card the customer is using for
payment and they also do not need to know which of their products are restricted.
This improves the shopping experience for the cardholder, opens up opportunities
6
for participants to shop at more businesses, reduces stigma and simplifies
operations for the merchant.
The main difference between policy intentions of the two programs is that Income
Management is focussed on directing participants to the purchase of essential
needs, whereas the Cashless Debit Card is focussed on minimising exposure to
goods that cause community-level harm. Key operational and policy differences
between Income Management and the Cashless Debit Card are summarised in
Table 1.
Table 1: Policy and operational differences between Income Management and the
Cashless Debit Card
Feature Income Management Cashless Debit Card
Policy Directing expenditure towards Providing budgeting support and
Objectives priority needs and helping restricting expenditure on harmful
participants budget so they can good to reduce the social harm
meet their priority needs. caused by these goods.
Merchant Merchants are automatically Merchants are automatically
Management excluded unless they enter into an included unless they sell a
agreement with Services Australia. restricted item. Manual management
All merchants require manual and compliance agreements are
management and ongoing only required for mixed merchants
compliance checks. (those selling restricted and non-
restricted goods).
Operational Accepted at around 17,000 Accepted at over 900,000 terminals.
merchants. Can only be used at Flexible payment options including
approved merchants and not for online transfers, BPAY, online
online shopping or bank transfers. shopping, recurring deductions
Restricted Alcohol, tobacco and tobacco Alcohol, gambling products, cash-
Goods products, pornography, gambling like products, or to withdraw cash
products, or to withdraw cash
Interest No interest accrued Interest at standard industry rates
Technology Works by blocking entire PLB technology will block the
merchants, unless they've entered purchase of a particular item
an agreement.
Participant Services Australia initially provides Can access banking services via an
Support one on one support with each online portal, a mobile app and a
participant in order to identify their telephone hotline, provided by
basic needs and those of their Indue. Services Australia provides
family, and set up the appropriate face-to-face support, online
payment deductions. Can assess servicing and a hotline.
ongoing support from Services
7
Australia through a range of
channels.
1.2.5 Participants
People become Income Management participants either through automatic
criteria, similar to the Cashless Debit Card, or via referral. People are placed onto
Income Management under the Disengaged Youth, Long-term Welfare Recipient
and Vulnerable Welfare Recipient - Youth measures due to automatic criteria,
such as age and time on payment.
People are referred onto Income Management under the Cape York, Child
Protection, Supporting People at Risk and Vulnerable Welfare Payment Recipient
measures by a social worker or other authorised body. People can also volunteer
to be placed on Income Management. See Attachment A for more information on
the different measures and their eligibility criteria.
Similar to some Income Management measures, all Cashless Debit Card
participants are placed onto the card using automatic age, welfare payment and
location criteria. Once placed onto the card, a person will remain on the Cashless
Debit Card so long as they continue to meet the eligibility criteria, even if they
move outside the boundaries of a Cashless Debit Card site. People can also
volunteer to be placed on the Cashless Debit Card. The use of automatic criteria
for Cashless Debit Card participants enables the Government to deliver a cost -
effective welfare reform agenda while ensuring that the policy problem has the
best chance of being addressed.
1.2.6 Payment split
The different Income Management measures have different payment splits, with
anywhere from 50 to 90 per cent of a participant's welfare payment being pla ced
on their BasicsCard. The multiple payment splits are a result of policy targeting of
the separate measures and have been informed by community consultation.
Continuing to implement the eight Income Management measures with five
payment splits contributes to the costliness and complexity of the program.
Currently, Cashless Debit Card participants have 80 per cent of their welfare
payment placed onto their Cashless Debit Card. As with the participant criteria,
simplifying it across locations and cohorts results in a greater likelihood of the
policy problem being addressed while delivering on the Government's
commitment for sustainable and responsible welfare.
The transition of Income Management participants in the Northern Territory and
Cape York region to the Cashless Debit Card will be consistent with the payment
split under Income Management. This maintains the policy settings of Income
Management introduced in 2012 as part of the Stronger Futures in the Northern
Territory policy.
1.2.7 Legislation and implementation of the Cashless Debit Card
Indue, the card provider, engages local partners to assist participants with
practical enquiries and support, such as card activations, online account set up,
paying bills and arranging housing and other transfer limits. Engaging established
8
and trusted local organisations as local partners allows participants to receive
targeted assistance and helps facilitate the ongoing partnership between the
Government and community leaders.
Community panels were also established in Ceduna, Kununurra and Wyndham so
that Cashless Debit Card participants could apply to reduce the percentage of
their welfare payment placed onto the card and thus have greater access to cash.
The department worked closely with the community leaders to develop the
guidelines and membership of the panels, in line with each community's identified
objectives and agreed-upon social norms. The community panel model allows
community leaders to be involved in the delivery of the program, in the same
manner as the models of local partners, consultation and co-design.
The Cashless Debit Card has undergone evaluation and review, which has
informed legislative amendments and further refined the program. Table 2
provides a summary of the evaluation done to date and the major findings,
additional details can be found in Attachment C. A high-level summary of the
legislation and various amendments is in Table 3, further details can be found in
Attachment B.
Table 2: Summary of evaluation and findings of the Cashless Debit Card
Evaluation Key Date Key Findings
ORIMA The final The Final Evaluation Report findings included:
Cashless Debit evaluation of those who drank alcohol before the Cashless
Card Trial report was Debit Card program started, 41 per cent said they
Evaluation - released on were drinking alcohol less often, up from 25 per
Final 1 September cent reported in the Wave 1 Interim Evaluation
Evaluation 2017 Report;
Report of those who said they were using illicit drugs
before the program started, 48 per cent reported
using less, up from 24 per cent reported in the
Wave 1 Interim Evaluation Report;
of participants who said they gambled before the
program started, 48 per cent reported gambling
less, up from 32 per cent reported in the Wave 1
Interim Evaluation Report;
of people with caring responsibilities surveyed, 40
per cent reported being able to better care for their
children since the program started, and 39 per cent
reported being more involved in homework and
school; and
45 per cent of participants reported being able to
save more money than before being a participant,
up from 31 per cent reported in the Wave 1 Interim
Evaluation Report.
The Australian On 17 July The report made six recommendations which the
National Audit 2018, the department agreed to and the department has undertaken
Office's report, Australian action to improve practices in relation to the Cashless
The National Audit Debit Card program.
9
Evaluation Key Date Key Findings
Implementation Office (ANAO)
and tabled its
Performance of report, titled
the Cashless The
Debit Card TrialImplementation
and
Performance of
the Cashless
Debit Card
Trial in
Parliament
The Cashless Published on Several early positive impacts were already being
Debit Card 21 February observed, with many stakeholder and participant
Baseline Data 2019. respondents reporting that:
Collection in the Cashless Debit Card seemed to be having a
the Goldfields positive effect on the prevalence and severity of
Region: crime, family violence and antisocial behaviour;
Qualitative communities seemed quieter and safer;
Findings levels of substance abuse, alcohol-related
Report antisocial behaviour and crime appeared to have
reduced;
Future of the provision of food, clothes and toys to the
Employment children of participants had increased;
and Skills spending patterns of some participants were
Research changing, with less money spent on alcohol and
Centre (FES) at more on food, bills and household items; and
the University
levels of financial literacy and management were
of Adelaide,
improving for some participants, including the
draft Second
ability to budget and save.
Impact
Early findings from the Draft Second Impact Evaluation
Evaluation
indicate:
25 per cent (of those who drink alcohol) reported
they have reduced the amount they drink at any
one time, since the introduction of the Cashless
Debit Card, and 22 per cent reported they have
reduced the frequency of drinking;
Overall, 9 per cent reported the Cashless Debit
Card had helped decrease the use of illicit drugs
for themselves, 10 per cent for their family and 14
per cent for their community; and
Around 21 per cent of Cashless Debit Card
participants reported a change in gambling
behaviours for themselves or the people around
them. The qualitative evidence found that cash
previously used for gambling had been redirected
to essentials such as food.
10
Table 3: Summary of legislation related to the Cashless Debit Card
Legislation Key Date Objectives
Social Security Royal Established the original Cashless Debit Card trial with:
Amendment Assent three trial sites;
(Debit Card received a trial period of 1 February 2016 to 30 June 2018; and
Trial) Act 2015 12 a maximum of 10,000 participants.
November
2015
Social Services Royal The Act allowed for:
Legislation Assent an end date of 30 June 2019 for three Cashless Debit
Amendment received Card sites;
(Cashless Debit 20 the creation of the Goldfields site; and
Card) Act 2017 February the power to define future trial site be moved to primary
2018 legislation.
Social Services Royal The Act:
Legislation Assent Established Bundaberg and Hervey Bay as the fourth
Amendment received Cashless Debit Card trial site;
(Cashless Debit 21 established an end date for the Bundaberg and Hervey
Card Trial September Bay site of 30 June 2020;
Expansion) Act 2018 increased the maximum of trial participants to 15,000;
2018 created an exception from Part IV of the Competition
and Consumer Act 2010 to allow for product-level
blocking; and
restricted cash-like products, including open-loop gift
cards.
Social Security Royal The Act:
(Administration) Assent Made the department Secretary the decision-maker for
Amendment received all exit applications, regardless of where Cashless
(Income 12 August Debit Card participants live;
Management 2019 broadened the exit criteria to take into account a
and Cashless person's ability to manage their affairs generally,
Welfare) Act including financial affairs;
2019 clarified that the exit applications must be made in a
form approved by the Secretary; and
expanded the wellbeing exemption provisions to
ensure they apply across all regions.
Social Security Not yet The Bill proposes to:
(Administration) passed Establish the Northern Territory and Cape York as
Amendment Cashless Debit Card sites
(Income transition Income Management participants onto the
Management to card from mid-2020
Cashless Debit extend the end date of all Cashless Debit Card sites to
Card Transition) 30 June 2021 and establish an end date for the trial in
Bill 2019 Cape York to 31 December 2021, to align with existing
funding arrangements;
remove the cap on the number of Cashless Debit Card
11
Legislation Key Date Objectives
participants;
remove the exclusion to allow people in Bundaberg
and Hervey Bay to voluntarily participate in the trial;
improve information-sharing provisions to streamline
the exit pathway; and
amend the provision requiring an independent review
of an evaluation, to avoid duplicating existing
processes.
1.2.8 Consultation to further expand the Cashless Debit Card
As part of the 2018-19 Mid-Year Economic and Fiscal Outlook (MYEFO), the
Government allocated funds for a possible expansion of the Cashless Debit Card
in mid-2019. The department undertook consultation with communities that
expressed an interest in learning more about the card and how it may support
their communities.
In July 2018, the Government announced a Regional Deal for the Barkly region,
Northern Territory. Initial discussions raised the potential of including the
Cashless Debit Card as part of the Regional Deal, subject to community support.
Between August 2018 and April 2019, the department conducted more than 40
meetings and feedback sessions across the Barkly region with key stakeholders,
including leaders, communities, local organisations and peak bodies.
The Government consulted with other communities on a potential expansion of
the Cashless Debit Card, and continued to engage with the communities of the
Barkly region to identify solutions to the social harm they were experiencing,
including a potential trial of the card.
In the 2019-20 Budget, the Government announced that Income Management
participants in the Northern Territory and Cape York, Queensland would transition
to the Cashless Debit Card from April 2020. The Government built on initial
consultations held in the Barkly region in 2018 to engage with Income
Management recipients in the Northern Territory and Cape York on the transition
onto the Cashless Debit Card.
These sites were chosen to transition from Income Management to the Cash less
Debit Card to provide the improved technology and better experience of the
Cashless Debit Card.
The transition to the Cashless Debit Card in the Northern Territory and Cape York
will provide welfare recipients living in these locations with the benefits of the
Cashless Debit Card, which include a range of flexible payment options, fewer
restrictions on participants and merchants, and significant, sustained
improvements in communities.
12
1.3 Programme Monitoring and Enhancements
1.3.1 Monitoring circumvention activity and program integrity
The Government is aware that some Cashless Debit Card participants undertake
circumvention activities, also known as workarounds. Circumvention activities
usually relate to the purchasing of restricted items or increasing access to cash
from merchants or individuals.
The department monitors administrative data through its program monitoring
strategy (more detail at 1.3.2) and identifies and mitigates circumvention activity
as it arises. When the data indicates potentially circumventive behaviour, the
department analyses this to determine the best action to address the issue.
Monitoring circumvention activity is critical to ensure that cash continues to be
limited in Cashless Debit Card communities to maintain the policy intent and
address the policy problem.
With further enhancements to the technology, managing circumvention behaviour
has become easier and more effective. The PLB pilot reduces the number of
circumvention avenues by automatically blocking at the product level rather than
the merchant level. This means that Cashless Debit Card participants will not be
restricted in where they shop, but will only be restricted from purchasing alcohol,
gambling or cash-like products.
1.3.2 Cashless Debit Card program monitoring strategy
In response to the ANAO report, the department developed the Cashless Debit
Card program monitoring strategy to improve visibility of the program, and how it
is being implemented across all sites. The strategy utilises administrative data to
provide assurance that the program is operating as intended, and that people are
using their cards regularly. The strategy makes use of operational data already
collected, payment and participant data from Services Australia, and transaction
data from the card provider, Indue.
A function of the program monitoring strategy is community engagement. The
department regularly meets with local leaders in each site, through either
established forums or purpose-built meetings, to share and discuss the Cashless
Debit Card data. These meetings also enable leaders to provide the department
with a more holistic understanding of the card's impact on their community and
discuss current concerns.
Partnerships developed through the sharing of data and local knowledge between
leaders and the department is a key way in which solutions to the policy problem
continue to be examined as the operating environment evolves.
13
1.3.3 Technological enhancements to the Cashless Debit Card
The Cashless Debit Card has been continually upgraded and refined since its first
introduction to Ceduna in 2016, making it look and operate like a standard
banking product while still addressing the policy problem. These were the result
of feedback from participants with improvements in the available technology
including:
upgrading the card to a dial VISA-eftpos card;
enabling ATM balance checks;
enabling direct debits using a participant's BSB and account number;
amending the process for online shopping to replicate that of regular
shopping, i.e., blocking restricted merchants rather than approving
unrestricted merchants; and
allowing a participant to save BPAY and account details online.
1.3.4 Product Level Blocking
PLB provides a new technology solution to the blocking of restricted items under
the Cashless Debit Card. The current process involves blocking entire merchants
that sell restricted items, blocking specific PIN pads or entering into agreements
with merchants to manually identify the Cashless Debit Card and block specific
products. In comparison, PLB introduces a technology solution that allows
individual restricted items to be automatically blocked through changes to a
merchant's POS system and PIN pad.
Once PLB is implemented, a merchant's POS system checks customers'
shopping for restricted items. If no restricted items are present, the transaction
continues as normal regardless of the payment method. If any restricted items are
in the basket, and a Cashless Debit Card is presented for payment, then the PIN
pad will cancel the transaction. The POS system will offer options to complete the
transaction, including accepting an alternative payment, removing the restricted
items and paying with a Cashless Debit Card, or cancelling the sale.
PLB is a crucial element to addressing the policy problem, as it reduces stigma,
limits the potential for circumvention, increases shopping options for participants
and facilitates easy operation of the card for both participants and merchants.
The department is currently undertaking a PLB pilot with selected small and
medium merchants and is engaging with major national merchants to implement
their own PLB solutions.
1.3.5 Stand-in processing
In November 2019, stand-in processing (STIP) went live on Cashless Debit Card
accounts. STIP enables Cashless Debit Card participants to continue to make
card-based transactions in the event that the current card provider, Indue, has a
system outage. This ensures that participants are not disadvantaged by a lack of
access to cash in the event of an Indue system outage.
14
2. THE POLICY PROBLEM
Evidence suggests that there is a relationship between the consumption of
alcohol, drugs and gambling and the receipt of welfare payments in Australia.
In defining the policy problem, it is essential to consider the sustained impacts of
intergenerational welfare dependency and social harm in Australia on individuals,
families and communities, as well as the significant social and economic costs
associated with these issues.
2.1 Welfare Dependence
Current evidence suggests that long-term welfare dependence, including
intergenerational welfare dependence, is detrimental to Australian families and
exposes them to a cycle of limited opportunities and harmful behaviours.
The department's 2018 Valuation Report 7 includes the level of parental welfare
dependence as an indicator of estimated lifetime cost of welfare. This report
found that a person's reliance on welfare is impacted by the time during their
childhood that their parent relied on welfare. The report also found that people
who were in receipt of a studying, parenting or disability support welfare payment
and had high levels of parental welfare dependence were associated with higher
lifetime costs. Furthermore, 20 to 25 year olds in receipt of a working-age welfare
payment with high levels of parental welfare dependence tended to have high
levels of welfare dependence in their own right.
In 2018, the House of Representatives Select Committee on Intergenerational
Welfare Dependence examined the reasons for welfare dependence. The
Committee published its final report in February 2019, entitled Living on the Edge:
Inquiry into Intergenerational Welfare Dependence. 8 The report stated that by 25
years old 90 per cent of people, who experienced very high levels of parental
welfare dependence in childhood, will have interacted with the welfare system
themselves.
Additionally, evidence suggests that long-term welfare dependence, including
intergenerational welfare dependence, is detrimental to Australian families and
results in significantly worse health and wellbeing. Intergenerational welfare
dependence has been linked with poorer health, learning and cognitive outcomes.
The use of alcohol and other drugs is one risk factor associated with socio -
economic disadvantage. 9 Intergenerational welfare also increase the economic
cost of welfare programs.
7
Australian Department of Social Services, 2018 Valuation Report, https://www.dss.gov.au/review-of-
australias-welfare-system-australian-priority-investment-approach-to-welfare/2018-valuation-report
8
Australian House of Representatives Select Committee on Intergenerational Welfare Dependence, Living
on the Edge,
https://www.aph.gov.au/Parliamentary_Business/Committees/House/Former_Committees/Intergenerational
_Welfare_Dependence/IGWD/Final_Report
9
Australian House of Representatives Select Committee on Intergenerational Welfare Dependence, Living
on the Edge.
15
2.2 Social harm in Australia
The impacts of drug and alcohol misuse and problem gambling are widespread,
with serious consequences for families, children and communities. Drug and
alcohol misuse and problem gambling costs Australia tens of billions of dollars
every year. This includes costs to the health system and justice system, and costs
associated with productivity loss, household financial events and, in some cases,
premature mortality. The estimated social cost for opioid and cannabis use was
$20 billion in 2015-16, while alcohol misuse costed the Australian economy about
$14 billion in 2010. 10
In addition to this, gambling also costs the Australian economy over $4 billion per
year.11 The use of taxpayers' money, through welfare payments, to fund this harm
does not support the intentions of social security support.
2.2.1 Alcohol and Drug Misuse
Welfare dependency and drug and alcohol misuse continue to impact life
outcomes for welfare recipients and communities. Alcohol is a contributing factor
in an estimated 65 per cent of all domestic and family violence incidents and an
estimated 47 per cent of child abuse cases. 12 Additionally, the highest number of
Australian alcohol-induced deaths in two decades was recorded in 2017. 13
Similarly, the number of drug-related hospital separations rose from 116,778 in
2013-2014 to 136,156 in 2017-2018.14
The 2016 National Drug Strategy Household Survey (NDSH Survey) found that
unemployment is strongly linked to greater levels of risky alcohol and illicit drug
intake. In addition, the Household and Income Labour Dynamics in Australia
(HILDA) found that, on average, gamblers who lived in low-income households
spent 10 per cent of their total disposable income on gambling compared with one
per cent in high-income households. 15
The National Drug Strategy 2017-2026 notes that disadvantaged communities
have a higher risk of experiencing disproportionate harms associated with alcohol
and drug use.16 A study undertaken by the University of Newcastle in 2013
examined the prevalence of high-risk health behaviours among a disadvantaged
population, the majority of whom were welfare-dependent. 17
10
Australian Institute of Health and Welfare, Alcohol, tobacco and other drugs in Australia,
https://www.aihw.gov.au/reports/alcohol/alcohol-tobacco-other-drugs-australia/contents/introduction
11
Australian Treasury, Productivity Commission Report into Gambling,
https://ministers.treasury.gov.au/ministers/nick-sherry-2009/media-releases/productivity-commission-report-
gambling
12
Foundation for Alcohol Research and Education (FARE), The hidden harm; Alcohol's impact on children
and families, https://fare.org.au/the-hidden-harm-alcohols-impact-on-children-and-families/
13
AIHW, Alcohol, tobacco and other drugs in Australia.
14
AIHW, Alcohol, tobacco and other drugs in Australia.
15
AIFS, Gambling in Australia: findings from wave 15 of the HILDA Survey .
16
Department of Health, 2017. The National Drug Strategy 2017 - 2026.
http://health.gov.au/sites/default/files/national-drug-strategy-2017-2026_1.pdf
17
Kiely, K., et al. 2013 "The contribution of financial hardship, socioeconomic position and
physical health to mental health problems among welfare recipients," Australian and New
Zealand Journal of Public Health, 37 (6).
16
The study found that 51.4 per cent of participants drank alcohol at risky levels
compared to 17.4 per cent for the general Australian population. This identifies a
need to address problem gambling and alcohol and drug misuse in areas where
welfare dependency is high.
Drug and alcohol misuse and problem gambling are pervasive issues that impact
the most vulnerable in a community. Alcohol and drug abuse is associated with
increased risky and criminal behaviours, physical assault, mental health issues,
and chronic disease, injury and premature death. Problem gambling can lead to
significant negative impacts on individuals and families including food stress,
housing instability and poorer psychological wellbeing.
Mental health issues are closely associated with drug use. The NDSH Survey
found an increase in mental health diagnosis and treatment linked with drug use
for meth/amphetamines, cannabis, ecstasy and cocaine users. Additionally, high
and very high psychological distress rates for drug users increased from 17.5 per
cent in 2013 to 22 per cent in 2016 indicating a growing problem in Australian
society.18
Drug and alcohol misuse plays a key role in risky and criminal behaviours and
use is disproportionally overrepresented within the criminal justice system. In
2019, 45 per cent of drug-using respondents reported engaging in criminal
activity, with the most common offences including drug dealing and property
crime according to the Ecstasy and related Drugs Reporting System (EDRS) and
the Illicit Drugs Reporting System (IDRS). The EDRS and IDRS also found that
11 per cent and 34 per cent, respectively, of respondents reported being arrested
in the past year.19 The Australian Bureau of Statistics (ABS) has noted that crime
rates are interrelated with social factors such as low income, high unemployment
and high levels of drug use. Reducing the amount of cash available in
communities aims to limit access to drugs and improves financial stability, which
contributes to a reduction in crime levels.
Alcohol and other substances are also major contributing factors in incidents of
physical assault. Of those who have experienced an incident of physical assault
from a male perpetrator, 61 per cent of men and 49 per cent of women believed
that alcohol or another substance was a key contributing factor to their most
recent incident, according to the Australian Bureau of Statistics' 2016 Personal
Safety Survey. This association was similar for physical assault perpetrated by
females with 46 per cent of males and 45 per cent of females believing alcohol or
another substance contributed to their most recent incident. Furthermore, the
NDSH Survey found that 22 per cent of Australians had experienced verbal or
physical abuse, or been afraid of someone under the influence of alcohol in
2016.20
18
AIHW, National Drug Strategy Household Survey 2016.
19
AIHW, Alcohol, tobacco and other drugs in Australia.
20
AIHW, National Drug Strategy Household Survey 2016.
17
2.2.2 Problem Gambling
Australia has the highest per capita gambling losses in the world. In a survey by
the Australian Gambling Research Centre (AGRC), it was found that Australians
lost approximately $22 billion to legal gambling. AGRC also found that gamblers
in areas of higher social disadvantage lose more money to gambling to those in
areas of lower social disadvantage. This suggests that gambling further
entrenches inequality into already socially disadvantaged Australian communities.
This is supported by Wave 15 of the Household and Income Labour Dynamics in
Australia (HILDA), which found that, on average, gamblers who lived in low-
income households spent 10 per cent of their total disposable income on
gambling, compared with one per cent in high-income households. 21
The Wave 15 Survey also found that while problem gamblers represented
17 per cent of all regular gamblers, they represented nearly half of all
expenditure.22 This particularly concerning as unemployed respondents, including
those either looking and not looking for work comprised 31.5 per cent of all
problem gamblers in the Wave 15 Survey.
Gambling has direct and significant negative impacts on household finances.
Gamblers often report the following consequences of their gambling:
accruing debts from credit cards and short-term loans;
borrowing from friends and family;
being forced to sell possessions; and
engaging in criminal activity in order to generate enough income.
Other consequences of gambling include food stress, housing instability, reduced
work performance and job loss. Additionally, the AGRC report described a recent
study that found that for every problem gambler, an average of six others are
directly affected.23
Gambling not only has a major impact on the financial circumstances of people, it
also contributes to poorer psychological wellbeing of gamblers themselves and
those around them. One in ten problem gamblers reported having contemplated
suicide because of gambling according to the Australian Bureau of Statistics
(ABS)24.
The ABS also found that accessibility to gambling services such as poker and
gambling machines is directly related to the prevalence of problem gambling.
If the problem remains unchallenged, taxpayer-funded welfare payments will
continue to fund social harm, instead of providing a strong social welfare safety
net and driving positive change within communities.
21
AIFS, Gambling in Australia: findings from wave 15 of the HILDA Survey .
22
Australian Institute of Family Studies, Gambling activity in Australia: findings from wave 15 of the
Household, Income and Labour Dynamics in Australia (HILDA) Survey,
https://aifs.gov.au/agrc/sites/default/files/publication-documents/rr-gambling_activity_in_australia_0.pdf
23
AGRC, Gambling in Suburban Australia.
24
Australia Bureau of Statistics, Gambling in Australia
https://www.abs.gov.au/Ausstats/abs@.nsf/0/99d3b5096368c2e9ca2569de002842b7
18
2.3 Need for Continued Action
The Cashless Debit Card sites all experience significant rates of social harm,
unemployment and intergenerational welfare. For example, the Bundaberg and
Hervey Bay region has the second highest youth unemployment rate in
Queensland at 28.7 per cent, with many now experiencing intergenerational
welfare dependence.
The Goldfields region was selected based on the support of community leaders
for its introduction and a demonstrable need identified. For example, Western
Australian Police data indicated the domestic and non-domestic assault rate in
the Goldfields is more than twice the state average. Alcohol is a factor in two
thirds of all domestic assaults (2009-13) and half of all non-domestic assaults.
Alcohol-related hospitalisations and deaths are 25 per cent higher than the
Western Australia state average in 2007-11.
Across Australia, alcohol and drug misuse continue to be a significant issue which
requires continued action. Evidence shows that across Australia there has been
little change in the proportion of people drinking at risky levels. In 2019, 1 in 4
people drank at a risky level on a single occasion at least monthly, while about 1
in 6 (16.8%) exceeded the lifetime risk guideline. 25 This remains stable with the
results from the same survey in 2016.
More people were also victims of an illicit drug-related incident in 2019, compared
to 2016, with reports of verbal and physical abuse both increasing. 26
These concerns were also identified in the first two regions the Cashless Debit
Card, the Ceduna region and the East Kimberley region.
The 2017 evaluation found widespread local concern about high levels of alcohol
consumption and, to a lesser extent, illicit drug use and gambling activity. 27 These
were commonly identified in relation to:
- The health of adults and children in the communities (e.g. a range of
injuries and longer-term health issues such as anxiety, depression, cancer,
high blood pressure and Foetal Alcohol Syndrome).
- Safety and security (e.g. domestic and family violence, sexual violence,
assaults and harassment/intimidation).
- Financial problems (e.g. inability to pay fines, inability to fund basic living
expenses for items such as food, clothing, rent and utilities).
- Social problems such as family arguments/disputes,
unemployment/underemployment and humbugging.
- Inability to secure stable housing.
- Living in overcrowded housing conditions.
- Adverse impacts on the wellbeing of children as a result of poor
parenting/neglect of family responsibilities and lack of engagement (e.g.
25
AIHW, National Drug Strategy Household Survey 2019
26
AIHW, National Drug Strategy Household Survey 2019
27
ORIMA Research, Cashless Debit Card Trial Evaluation - Final Evaluation Report,
https://www.dss.gov.au/sites/default/files/documents/10_2018/cashless-debit-card-trial-final-evaluation-
report_2.pdf
19
lower school attendance and engagement, poor educational outcomes and
poor nutrition).
20
Data shows that while the rates of social harm are remaining stable or increasing
across Australia, the rates of social harm in Cashless Debit Card sites is either
decreasing or increasing at a significantly lower rate. In the Goldfields region
between 2016-17 and 2018-19 financial years, the incidence of all offences
decreased by 26.56% while the state total has only reduced by 3.65% 28.
The Cashless Debit Card is an important tool that operates alongside other
federal, state and local reforms to address the devastating impacts of alcohol and
drug misuse, and problem gambling. While early results demonstrate that the
Cashless Debit Card is working, the continuation of the Cashless Debit Card is
essential to ensure the positive results are not reversed.
3. THE ROLE OF GOVERNMENT
The Government's role is to provide a welfare system that operates as a safety
net, supporting Australians who are most in need and encouraging people to build
the skills, knowledge and experience required to find work. This approach
focusses on providing people, and their families and children, with the right
supports at the right time, seeks to increase a person's chance of getting and
keeping a job, reduce the risk of intergenerational welfare dependency, and
ensure that welfare recipients are meeting the essential needs of children
individuals and families.
Stabilising a person's circumstances through limiting exposure to harmful goods
can increase their chance of finding training or employment, and thus reduce the
risk of entrenching welfare dependence within their family.
3.1 Acknowledging limitations on what the Government can
achieve
3.1.1 Other contributions to social harm
As demonstrated in section 2.2, there is evidence to suggest that there is a
relationship between drug and alcohol misuse and problem gambling, and the
receipt of welfare payments. However, people who do not receive welfare can
also contribute to social harm caused by the abuse of harmful goods. Clear
policies to reduce the amount of non-welfare income spent on harmful goods that
operate alongside the Government's welfare reform agenda, will maximise the
chance for meaningful positive change in communities.
The Cashless Debit Card currently operates in discrete locations, and applies to
certain welfare payment recipients who permanently reside in these locations.
Visitors, including transient populations, are not subject to the Cashless Debit
Card policy parameters and therefore can spend their money, including all of their
welfare payment, on alcohol and gambling products, and withdraw it as cash to
spend on illicit goods. Cooperation with state and local governments is essential
to ensure the impacts of this is minimised and communities remain supported to
achieve outcomes.
28
WA Crime Statistics
https://www.police.wa.gov.au/Crime/CrimeStatistics#/
21
3.1.2 Attributing results to the Cashless Debit Card
Social harm caused by drug and alcohol misuse and problem gambling can be
entrenched in some communities, which means that significant and long-lasting
positive change may be years in the making. Evaluations and reviews ensure that
changes in communities are captured and evaluated within the relevant context.
Some communities with serious social issues, such as very high levels of alcohol
abuse and related crime and violence, may have multiple federal, state and local
interventions to address the issue. This can be an effective approach, as it
engages at-risk individuals through a number of channels, and maximises the use
of local knowledge and expertise.
The Cashless Debit Card is one of a suite of policies and programs that
collectively aim to improve outcomes for people and families, including their
children. These policies and programs, individually and collectively, impact the
outcomes in the areas they operate and are considered in attributing success to
particular measures.
Evaluations include both qualitative and quantitative research methods to ensure
a breadth of analysis to deliver their findings and the baseline report is able to
identify changes over time and inform policy decisions about the operations of the
program.
4. POLICY OPTIONS
4.1 Option One: Allow the Cashless Debit Card to expire in
current sites
Under current legislation, the Cashless Debit Card in the four current sites of
Ceduna, the East Kimberley, the Goldfields region, and Bundaberg and Hervey
Bay will expire after 31 December 2020.
Option One involves the cessation of the Cashless Debit Card in all locations and
will result in Income Management continuing in Northern Territory, Cape York and
other Place based Income Management sites.
Legislation would be required to extend the operation of Income Management in
the Cape York region of Queensland. Legislative amendments are not required to
support the continuation of other Income Management sites, as they have no
legislated end date.
As Ceduna, the East Kimberly and Goldfields Cashless Debit Card sites were
formerly Income Management locations, these communities would return to
Income Management arrangements consistent with Part 3B of the Social Security
(Administration) Act 1999. This would involve current Cashless Debit Card
participants ceasing their current arrangements, cancelling current deductions
and having to establish new payment arrangements under Income Management.
Returning to Income Management in these site would require considerable
resourcing from Services Australia.
22
Under this option, based on figures prior to the rollout of the Cashless Debit Card
in these sites, of the total of 12,194 participants as at September 2020, only
approximately 370 participants would be anticipated to return to Income
Management. This includes an assumption that previous volunteers would choose
to return to volunteer Income Management to continue to access the financial
management support it offers.
However, as the return to Income Management would only capture a limited
number of participants, the majority of participants in these sites and all
participants in Bundaberg and Hervey Bay would cease to have access to the
financial management support provided by either Income Management or the
Cashless Debit Card.
4.2 Option Two: Continue the Cashless Debit Card program as
an ongoing measure in current sites, including Northern
Territory and Cape York and invest in improving technology
Option Two would require legislative amendments to establish the Cashless Debit
Card program as an ongoing measure in the existing sites of Ceduna, the East
Kimberley, the Goldfields region and Bundaberg and Hervey Bay, as well as the
Northern Territory and Cape York region. This option will provide certainty for
communities and responds to calls from community leaders to make the Cashless
Debit Card an ongoing program.
It would continue existing Cashless Debit Card policies and practices for current
participants and would place new, eligible income support payment recipients in
these regions onto the Cashless Debit Card.
Current service delivery arrangements would also continue, with Services
Australia providing face to face support for Cashless Debit Card participants,
including through a Hotline, and a card provider providing banking support to
participants.
This option would also allow the Government to invest in, and undertake, work on
future technology improvements to create a better user experience for Cashless
Debit Card participants and businesses.
Key stakeholders and community leaders in existing sites have consistently and
publicly expressed support for the program in their communities. Continuing the
Cashless Debit Card as an ongoing program directly responds to calls from
community leaders asking that the Government deliver certainty to their
communities by making the program ongoing. Continuing the Cashless Debit
Card as an ongoing program also demonstrates that the Government remains
committed to communities whose leaders nominated their communities for the
Cashless Debit Card.
Option 2 ensures welfare payments in these communities continue to be spent in
a socially responsible way and allows participants to continue to benefit from the
budgeting support the program offers.
23
4.3 Option Three: Expand the Cashless Debit Card to new
locations and extend the duration of the program
Option Three would involve introducing new legislation to expand the trial of the
Cashless Debit Card to new sites and extend the operation of existing sites. For
any expansion of the Cashless Debit Card, the Government would undertake
consultation with various Australian communities and scoping activities to identify
one or more appropriate new sites for expansion.
This option does not require that a potential expansion site have a specific
geographical or demographic profile, nor cohort size. As with existing sites,
potential expansion locations would be considered on a case-by-case basis and
would take into account community interest and need. Any expansion of the
Cashless Debit Card would be preceded by extensive consultation with various
communities along with in depth location scoping activities. Potential locations for
expansion could be based on requests from communities and their respective
leaders and key stakeholders or may be selected by geographic locations based
on community characteristics such as socio-economic conditions and
unemployment rates.
The department would then consolidate the consultation findings with scoping
results and undertake a comprehensive assessment to determine which locations
meet the Cashless Debit Card site selection criteria. The selected sites could be
an urban, regional, rural or remote community or a combination to reflect the
findings that emerge from consultation and scoping.
Subsequent to the passage of legislation, the department would undertake a
period of intensive consultation and implementation, which would require
sufficient resourcing.
Option Three would also seek to continue to invest in improving the technology
associated with the Cashless Debit Card to maximise the experience for
participants and merchants.
5. IMPACT ANALYSIS
5.1 Option One: Allow the Cashless Debit Card to expire in
current sites
Option One would allow the majority of individuals in existing sites to access their
full welfare payment as cash with most Cashless Debit Card participants no
longer being on a welfare quarantining measure, and communities will experience
a sudden increase in cash. The cessation of the Cashless Debit Card would apply
to the existing sites of Ceduna, the East Kimberley, the Goldfields and Bundaberg
and Hervey Bay.
24
Under this option, Income Management would continue in the Northern Territory
and Place-based Income Management locations. Income Management in these
regions would continue to operate under existing arrangements, that is, the same
measures and referral mechanisms would apply and eligible welfare payment
recipients would be placed onto Income Management. Current service delivery
and operational arrangements would also continue for all participants remaining
on Income Management. Table 4 outlines how Income Management would
continue under Option One.
If the Cashless Debit Card expires it is crucial Income Management continues in
the Cape York region as without a substitute welfare reform program in place, it
could lead to increased risk of financial hardship, financial exploitation, failure to
undertake reasonable self-care or homelessness.
The evaluations undertaken on the Cashless Debit Card have shown the card has
been effective at meeting its program objectives. As such, Option One would
result in a reversal of the positive results the Cashless Debit Card has been
achieving with communities likely to experience an increase in alcohol and drug
abuse, problem gambling and welfare dependence. This may also lead to
antisocial behaviour, reduced child wellbeing and poor financial management
outcomes, as well as an increased demand for support services.
Participants would have to alter their banking arrangements before
31 December 2020 and potentially take steps to minimise the impact of the
resulting exposure to harmful goods on themselves and their family. There is a
risk participants will have insufficient time to establish new payment
arrangements for critical needs, such as rent, utilities and other bills. Disruptions
to scheduled payments and bills may result in late fines or dishonour fees and
lead to an increased risk of debt for participants. Other impacts may include:
increased likelihood of entrenching welfare dependence within their family;
increased difficulty managing their money; and
increased exposure to financial harassment, including unreasonable or
excessive demands from family or community members to provide money
or goods.
Local support services would need to be increased to offer support for people
transitioning off the card, including drug and alcohol services and financial
capability services. This will ensure participants continue to have access to
support and direct funds to essentials items and continue to develop budgeting
skills. The current four sites were chosen in part to community willingness and
interest, and Option One may cost the Government its relationships with
community leaders.
The continuation of Income Management in the Northern Territory and Cape York
region would involve increased costs and complexity in program management,
while also preventing participants from accessing the improved technology,
flexibility and user experience offered by the Cashless Debit Card.
Due to the nature of the program set up and implementation, the Cashless Debit
Card becomes more cost-effective with each rollout. The cost of the Cashless
Debit Card rollout in the most recent site, the Bundaberg and Hervey Bay region
25
in Queensland, being approximately $820 per annum per head based on the
card's maximum contract value.
For further comparison Income Management in the 2018-19 financial year totalled
$76.383 million, while the total cost of Cashless Debit Card was $79.754 million
from 2015-16 to the end of 2019-20 financial year Given the early success the
evidence has produced to date, Option One would have a higher per-head cost
for less benefit than if the program were allowed to continue
Table 5 shows the average annual regulatory burden costs that are associate with
Option One. This has been calculated using the following assumptions. There are
fewer than 16,000 merchants that accept the BasicsCard. Under Income
Management, it is assumed it will take each merchant on average 30 minutes to
fill in the BasicsCard Merchant application form (a one-off regulatory cost) and
each merchant will have approximately one hour of compliance costs per year,
this includes training staff, record keeping and compliance reviews as required.
Any delay costs associated with the time taken for Services Australia to assess
and grant applications has not been calculated, as generally only 50 per cent of a
person's welfare payment is restricted under Income Management, meaning the
delay cost to the merchant is minimal.
Under this option, there would be significant additional costs to Government, as
well as an increased regulatory burden for individuals and participants, resulting
from the cessation of the Cashless Debit Card and the return to Income
Management as the single model of welfare quarantining. It would increase the
cost of frontline services that would have increased presentations due to the
increased access to alcohol, drugs and gambling products. This option also
requires action by officers of state agencies, such as child protection officers, in
making referrals to Income Management. As identified by the Forrest Review, the
expansion of Income Management is unsustainable given the resourcing impacts
to support the delivery of this program, contributing to the reasoning why Option
One is not recommended.
Table 4: Program arrangements under option One
Location Program arrangements under option One
Ceduna and surrounds, Majority of participants will cease to be on any model of
SA welfare quarantining, with a small number participants
(such as those who may be referred by Child protection
East Kimberley, WA workers) returning to Income Management. This will lead
to a significant increase in cash available in these
communities, impacting the positive results seen since
Goldfields, WA the implementation of the Cashless Debit Card.
All participants will cease to have access to the financial
Bundaberg and Hervey management support offered by the Cashless Debit Card
Bay, Qld or Income Management. This will lead to a significant
increase in cash available in these communities,
26
Location Program arrangements under option One
impacting the positive results seen since the
implementation of the Cashless Debit Card.
Current Income Management arrangements will continue
and these participants will not have access to the
Northern Territory
improved technology and user experience that the
Cashless Debit Card offers.
Legislation will be required to extend the operation of
Income Management in Cape York to 30 June 2021, in
line with the funding agreement with the Family
Cape York, Qld
Responsibilities Commission. These participants will not
have access to the improved technology and user
experience that the Cashless Debit Card offers.
Logan, Rockhampton and These sites are not impacted by Option One.
Doomadgee Qld
Place-based Income Management will continue in these
sites in line with existing arrangements.
Metropolitan Perth, the
Kimberley region, the
Ngaanyatjarra Lands and
Kiwirrkurra community,
WA
The Anangu Pitjantjatjara
Yankunytjatjara Lands,
Playford and Greater
Adelaide, SA
Bankstown, NSW
Greater Shepparton, Vic
Table 5: Average annual regulatory burden costs
Change in Business Community Individuals Total
costs organisations change in
cost
($ million)
Total, by $1.188 $0.0 $0.0 $1.188
sector
27
5.2 Option Two: Continue the Cashless Debit Card Program as
an ongoing measure in current sites, including Northern
Territory and Cape York, and invest in improving technology
Currently, the Cashless Debit Card operates as a trial program and requires
legislative approval to continue each year. This creates a sense of uncertainty
around the future of the program for Cashless Debit Card participants,
communities and merchants. This limits the capacity for Government to improve
the user experience for Cashless Debit Card participants.
Option Two would establish the Cashless Debit Card program as an ongoing
measure in the existing sites of Ceduna, the East Kimberley, the Goldfields region
and Bundaberg and Hervey Bay, as well as the Northern Territory and Cape York
region, following the transition from Income Management in those areas.
An ongoing measure will ensure continuity of impactful support for the current
communities. Future evaluation and data monitoring activities will further
strengthen the evidence base and guarantee that participants, their families and
the wider community continue to receive ongoing support. This option would not
require Cashless Debit Card participants in the existing sites to undertake any
further action and they would continue to be part of the program.
Option Two addresses the policy problem by ensuring that communities with an
already identified need for support receive the best possible chance of achieving
positive outcomes at the community level. This will continue to provide these
communities with essential support to reduce alcohol, drug misuse and gambling
and provide budgeting skills to participants.
The extent of social impacts likely to be experienced under Option Two is outlined
in the findings from the ORIMA Research, and Cashless Debit Card program
data. These show the Cashless Debit Card is meeting the program objectives
and is contributing to a reduction in alcohol and drug abuse and gambling within
the program sites. In addition, early findings of the FES Draft Second Impact
Evaluation also show a reduction in alcohol and gambling within the program
sites.
The Cashless Debit Card has shown to be an effective budgeting tool which has
helped participants direct spending towards priority needs. Since the rollout of the
Cashless Debit Card program commenced in March 2016, data shows that 56%
of the $409.4 million in income support payment direct deposited into participant's
accounts have been spent on priority good and services. The Cashless Debit
Card has also supported participants to build savings, with the payment of
interest on funds held in their Cashless Debit Card accounts. Program data
shows that 14% of participants have been able to hold $500 or more in their
accounts, with approximately 500 of those being single parents.
28
The first impact evaluation found that the Cashless Debit Card has had a
"considerable positive impact" in the two trial communities of Ceduna and the
East Kimberley.
Key findings from the report include:
- Alcohol - of participants who reported that they do drink alcohol, 41 per
cent of participants reported drinking alcohol less frequently, while 37 per
cent of participants reported binge drinking less frequently.
- Gambling - of participants who reported they do gamble, 48 per cent of
participants reported gambling less.
- Drug use - of participants who reported using illegal drugs before the
program commenced, 48 per cent reported using illegal drugs less often.
The evaluation also found "widespread spill-over benefits" from the card:
- 45 per cent of trial participants have been better able to save money
- Feedback that there had been a decrease in requests for emergency food
relief and financial assistance in Ceduna
- Merchant reports of increased purchases of baby items, food, clothing,
shoes, toys and other goods for children
- Considerable observable evidence being cited by many community leaders
and stakeholders of a reduction in crime, violence and harmful behaviours
over the duration of the trial.
While the FES Draft Second Impact Evaluation has not been finalised, survey
responses saw that 21% of Cashless Debit Card participants reported a positive
change in gambling behaviours, in which 34% said the Cashless Debit Card has
helped with gambling in relation to themselves, 43% in relation to family, 38% in
relation to friends and 59% in relation to where they live.
The early findings of the FES Draft Second Impact Evaluation also indicated that
25% of survey respondents (who reported they drink alcohol) reported reducing
the amount they drink at any one time since being on the Cashless Debit Card.
The rate of reduction in alcohol consumption indicated in these survey results
exceeds the national figures for reduction of alcohol consumption, supporting that
the Cashless Debit Card is having a significant impact.
This early findings from the FES Draft Second Impact Evaluation state that 45 per
cent of participants surveyed reported the card had improved things for
themselves and their family (either sometimes, most, or all of the time). Notably,
improvements were felt most by Cashless Debit Card participants surveyed in
Ceduna, at 57 per cent, followed by East Kimberley at 50 per cent and the
Goldfields at 40 per cent.
Of the surveys responses provided, 45% of respondents reported the Cashless
Debit Card had improved things for themselves and their family (either
'sometimes', 'most of the time', or 'all of the time').
29
In addition, crime data shows that total number of offences in the Goldfields
region between 2016-17 and 2019-20 financial years, decreased by 26.56% while
Western Australia as a whole only saw a 3.65% reduction 29. Similar patterns can
be seen in other sites, for example in Ceduna the incidence of family and
domestic abuse and offences 'against the person' have decreased by 19% and
15% respectively, while the state totals have decreased by 2% and 5%
respectively.30
While there is substantial evidence to support that the Cashless Debit Card is
addressing the policy problem, the 2017 evaluation found that some Cashless
Debit Card participants reported they felt stigma and a sense of shame
associated with having a Cashless Debit Card. 31 These findings have continued
in the early results from the Draft Second Impact Evaluation as feelings of
discrimination, embarrassment, shame, and unfairness as a result of being on the
card were experienced by participants. However, this feedback has been
recognised and continual improvements have been made to the Cashless Debit
Card to ensure it looks and functions like any other debit card. For example, as of
29 July 2020, contactless cards became available to participants. Participants
have the choice to order a new contactless card or keep their existing contact -
only card until it expires. This is a positive next step for ongoing improvements for
the card to be like any other bank card, and reduce perceived stigma.
Qualitative interviews undertaken as part of the FES Draft Second Impact
Evaluation indicated that both participants and stakeholders reports that the
Cashless Debit Card was encouraging spending on essential items, while some
interview respondents indicating the Cashless Debit Card was helping
participants to budget their finances better.
However, some survey respondents also reported no change as a result of being
on the Cashless Debit Card. These results indicate that while the Cashless Debit
Card is working to support some participants with managing their finances, further
work can be done to improve the function of the Cashless Debit Card as a
budgeting tool.
29
WA Crime Statistics
https://www.police.wa.gov.au/Crime/CrimeStatistics#/
30
https://data.sa.gov.au/data/dataset/crime-statistics
31
ORIMA Research, Cashless Debit Card Trial Evaluation - Final Evaluation Report,
https://www.dss.gov.au/sites/default/files/documents/10_2018/cashless-debit-card-trial-final-evaluation-
report_2.pdf
30
Continuing the Cashless Debit Card as ongoing measure will also lead to a
continued limitation on participant's ability to determine how and where they
access and spend their social security payments. However, in contrast with other
measures, the Cashless Debit Card has been designed to have minimal impact
on participants who already spend their funds responsibly. Given the ability for
participants to exit the Cashless Debit Card where they can demonstrate they are
reasonably and responsible managing their affairs, including their financial fairs,
or where being on the program poses as a serious risk to their physical, mental or
emotional wellbeing the impact of this limitation is proportionate. The
proportionate nature of the limitations is further demonstrated when balanced with
the important role the Cashless Debit Card has in contributing to the safety of
participants, their families and communities.
In addition to the benefits of social harm reduction, the Cashless Debit Card also
presents a significant reduction in costs to Government when compared to the
costs associated with administering Income Management, with the cost of the
Cashless Debit Card rollout in the most recent site, the Bundaberg and Hervey
Bay region in Queensland, being approximately $820 per annum per head based
on the card's maximum contract value. While the benefits of the program in
reducing social harm and providing budgeting support to participants are difficult
to quantify from an economic perspective, the impact on reducing the amount of
welfare payments that can be used to contribute to drug and alcohol misuse
which is demonstrated in the evaluation results and program data is significant.
Option Two ensures that those on the Cashless Debit Card are in the best
position to be able to seek and take up employment and education opportunities.
It also gives the public confidence in the delivery of welfare payments and that
public funds are being spent in an appropriate and meaningful way. The wider
community will continue to benefit indirectly from the Cashless Debit Card, as it is
anticipated that the early results of safer communities, decreased rates of
alcohol-fuelled violence, and decreased rates of antisocial behaviour, will
continue.
Option Two ensures the continued budgeting support provided by the Cashless
Debit Card and the continuation of support services associated with the Cashless
Debit Card. This is supported through evaluations which have found both
stakeholders and Cashless Debit Card participants reported the Cashless Debit
Card was prioritising, and therefore encouraging, greater spending on essential
items such as food, bills, clothes household goods and fuel.
31
The continuation of the Cashless Debit Card as an ongoing measure would send
a strong signal to financial institutions of the Government's commitment to the
program. It would provide necessary assurances and encourage continued
investment by the financial sector to co-design technical solutions to improve user
experience for participants and merchants. It is anticipated that improved
technology will result in:
a more effective and efficient method of mitigating circumvention and
merchant management;
greater choice and flexibility for participants;
reduction in genuine perceptions of stigma; and
more effective monitoring and data collection
more competition to drive cost efficiencies
Table 6 shows the average annual regulatory burden costs associated with
Option Two. This has been calculated using the following assumptions. The
Cashless Debit Card has a regulatory burden cost on mixed merchants and little
impact on other business, as the card is automatically accepted at other
merchants. There are over 400 mixed merchants across all sites, including the
Northern Territory and Cape York region. It is assumed it will take each mixed
merchant approximate 15 minutes to fill in the Mixed Merchant Application form (a
one-off regulatory cost) and that each mixed merchant will have roughly one hour
of compliance costs per year, this includes training staff, record keeping and
compliance reviews as required.
There are over 45 businesses that the department will consult with regularly as
part of the PLB technology trial. It is estimated this will come at a regulatory cost
of one and a half hours per month for each merchant.
As the Cashless Debit Card impacts a smaller number of businesses and is a less
intensive program compared to Income Management, the regulatory burden cost
on businesses is less in the Northern Territory and Cape York region. The
regulatory cost of Option Two is reduced as the regulatory burden of continuing
the administration of Income Management in the Northern Territory and Cape
York region is more than the regulatory burden on businesses in existing
Cashless Debit Card sites. This will result in an average annual regulatory saving
for businesses.
Table 6: Average annual regulatory burden costs
Change in Business Community Individuals Total
costs organisations change in
cost
($ million)
Total, by ($1.101) $0.0 $0.0 ($1.101)
sector
32
5.3 Option Three: Expand the Cashless Debit Card to new
locations and extend the duration of the program
Option Three would involve introducing new legislation to implement the Cashless
Debit Card in new sites and extend the duration of existing sites. Several
communities across Australia have expressed a strong interest in the Cashless
Debit Card program due to the positive results experienced in existing sites and in
expanding to other areas these communities can be given the opportunity to be
involved in the program.
Subsequent to the identification of one or more sites and the passage of
legislation, the department would undertake a period of intensive consultation and
implementation, which would require sufficient resourcing, including funding.
Option Three would result in more communities utilising the Cashless Debit Card
to tackle issues relating to high levels of alcohol and drug abuse, problem
gambling and welfare dependence and ensures that welfare recipients in these
communities are in the position to take up employment and education
opportunities.
While initially Option Three would involve intensive periods of consultation and
subsequent implementation, as the Government has rolled out the Cashless Debit
Card to new locations, eventually the program would operate in a business as
usual manner, similar to how it operates in current sites.
Option Three may involve expanding the Cashless Debit Card through the
transition of all Income Management participants in all Income Management
locations. This would acknowledge that Income Management is not sufficient to
solely address the policy problem, and that further action is required to address
social harm in communities across Australia.
Option Three would not require Cashless Debit Card participants in current sites
to undertake any further action. New participants in future sites would be required
to activate their Cashless Debit Card accounts, which includes altering banking
arrangements. Participants in future sites would become subject to the
restrictions of the program, however any cost involved will likely be outweighed by
the individual, family and community level benefits of the card.
The extent of social impacts likely to be experienced under Option Three is
similar to the outcomes highlighted in Option Two and these social impacts will be
experienced by more communities under Option Three. Option Three also gives
the public confidence in the delivery of welfare payments and that public funds
are being used in a responsible and meaningful manner.
As this option continues the Cashless Debit Card as a trial, this creates
uncertainty for participants and businesses in both existing and future sites. This
may limit businesses from investing in the Cashless Debit Card technology. As
shown in Option Two, investing in technology is necessary for improving the user
experience of the Cashless Debit Card.
Ultimately, while this option is likely to continue the results which can be identified
in existing sites as discussed under Option Two and expand these benefits to
more communities, prior to the further development of technology, this option will
33
create additional costs and continue the uncertainty around the future of the
program.
Table 7 shows the average annual regulatory burden costs associated with
Option Three. This has been calculated using the following assumptions. An
assumption of an additional 45 mixed merchants will be required to enter into
mixed merchant agreements with the expansion of the Cashless Debit Card. This
is based on the proportion of mixed merchants to participants across the four
initial sites. These new merchants would be required to engage with the
department, for approximately an hour, prior to entering into a mixed merchant
agreement.
In this option, there would be over 400 mixed merchants and it is assumed that
each of these merchants will have annual compliance costs associated with
training staff, compliance reviews and record keeping.
It has been assumed that the average number of businesses within the
technology improvement trial will remain the same as option two. Therefore, there
would be 45 businesses that the department would regularly consult with who will
each have a regulatory burden cost of one and a half hours per month.
The total regulatory cost is the upfront cost for the 45 new mixed merchants, as
well as the ongoing associated costs for mixed merchants in the current four sites
and the Northern Territory and Cape York region. It also includes the regulatory
cost on businesses involved in technology improvements. The regulatory burden
is reduced by the decrease in regulatory burden compared to continuing the
administration of Income Management, resulting in an average annual regulatory
saving for businesses
Table 7: Average annual regulatory burden costs
Change in Business Community Individuals Total
costs organisations change in
cost
($ million)
Total, by ($1.066) $0.0 $0.0 ($1.066)
sector
5.4 Discounted option
Expand Income Management into new locations
As presented in this document, Income Management is a costly and complex
program to run, that requires the Government to provide significant support to
participants and merchants. Due to the complexity of the separate measures,
including personalised targeting, different placement criteria and payment splits,
Income Management is a largely incoherent policy that has a limited ability to
create change within communities.
34
Additionally, technology associated with Income Management has not advanced
as much as the Cashless Debit Card, which increases the burden on participants
and merchants. It limits the number of merchants who can accept the BasicsCard,
which limits the options for where Income Management participants can purchase
essential items.
6. CONSULTATION
The Government is committed to engaging with communities on the Cashless
Debit Card to ensure that Cashless Debit Card sites have access to clear and
accurate information. The department consults with a range of audiences,
including community leaders, representative groups, stakeholders and directly
with participants. This includes conducting community information sessions,
engaging with local service providers and ensuring communication tools are
provided in-language. The department maintains partnerships in current sites to
provide a forum to discuss the impact of the card, circumstances in the wider
community and resolve any issues as they arise. The department builds on
lessons learned in previous sites to refine approaches to engagement and
communication in new sites, while acknowledging that different communities
require different approaches.
6.1 Purpose and objectives of consultation
The Cashless Debit Card has been developed in close consultation with local
community leaders, local and state/territory government agencies, other Australia
Government agencies and key stakeholders including participants. Initial
consultation and engagement is an opportunity to gain community support for the
Cashless Debit Card. Consultation provides the department, as well as
community members, with the opportunity to discuss and build understanding of
the particular issues facing those communities and identify how the Cashless
Debit Card may assist to address these issues.
Objectives
All consultation and engagement for the Cashless Debit Card has been in line
with the following objectives:
acknowledge that local communities have the best understanding of the
issues they are facing, and the ways to solve these issues;
take an open and collaborative approach that prioritises listening;
be culturally appropriate and respectful;
be targeted to ensure all stakeholders understand the intent and objectives
of the Cashless Debit Card, including why the Cashless Debit Card may be
implemented in a particular community;
share information and data held by the department about a particular
community (including existing services, demographics and social harm
data) to support communities to find local solutions to the issues they are
facing and empower them to negotiate with government;
35
take into account the needs of people with disability, people from culturally
and linguistically diverse (CALD) backgrounds and Indigenous Australians;
understand the complexities of community leadership and not limit
consultation to those holding formal leadership positions. Diverse forms of
leadership could include Indigenous elders, native title owners, respected
community members or informal representatives of particular groups within
the community;
be gender-balanced and seek out the voices of women and their children,
particularly where there is high male representation in community
leadership roles;
take a collaborative, cross-agency approach to ensure the Cashless Debit
Card program connects to the work being done by other Commonwealth
and state and territory governments;
build trust with community leaders and members and aim to involve
consistent faces and people.
6.2 Type of consultation
The Cashless Debit Card has used a variety of consultation methods. The type of
consultation and the format it was carried out has been tailored to the appropriate
target audience. Full public consultation was undertaken with community
members in proposed expansion sites in the form of community information
session. These were open to the public to attend. Targeted consultation has been
undertaken with key stakeholders including merchants, banks, POS providers and
community leaders. Post-decision consultation has been carried out by the
department in Northern Territory and Cape York with communities that are
affected by the Income Management to Cashless Debit Card transition bill.
6.3 Consultation Process
The department has established a consultation framework to streamline the
consultation process. The protocols are designed to create transparency and
consensus across the consultation process and to enable the Government to
clearly demonstrate community support for the Cashless Debit Card to Parliament
and the wider community. This includes a governance plan, consistent
consultation reporting and stakeholder identification and engagement.
Governance
Before the Department begins a consultation process in a new location, there is a
written governance plan that includes the following details:
timeframe of the initial, pre-announcement consultation period
number of meetings that reflects the community's size
initial stakeholder mapping and
format for consultation reporting.
Reporting
Consultation reports have a consistent format, so that different consultation
processes can be easily compared. The frequency of reporting updates is agreed
before the consultation process begins.
36
Internal consultation reports should be the primary reporting focus during the
consultation period. They contain information such as:
with whom the department met
what organisation they represent
what stakeholder group the organisation represents e.g. state government,
peak body
which departmental representatives were present
where the meeting took place
what was discussed
any action items or next steps and
an indicator of the individual's and/or the organisation's support for the
program.
External consultation reports are designed to be used for Senate Estimates or
other public hearings. They contain information such as:
how many meetings the department has had in the location;
how many people attended these meetings; and
what stakeholder groups the department has met with.
Stakeholders
Identifying and approaching appropriate stakeholders is essential to a successful
consultation process with the Cashless Debit Card. Local departmental staff and
other government agencies with a presence in the location have provided
information on local politics, key stakeholders, previous government engagement
and current government programs. This information will enable departmental staff
to identify local leaders and other key stakeholders to be consulted.
The Department engaged Indigenous Liaison Officers to guide a consultation
process in a location with a high Indigenous population.
Three Tiered Engagement Process
To date, the engagement process in the Northern Territory and Cape York region
in relation to the Income Management to Cashless Debit Card transition has been
delivered by a three-tiered process. This is outlined in Table 8.
Table 8: Engagement process
Tier Audience Purpose
Tier One Community Information sessions for participants
information sessions directly affected by the transition from
Income Management to the Cashless
Debit Card.
Tier Two Key Stakeholder High-level stakeholders and
engagement organisations who have a vested interest
in the transition from Income
37
Management to the Cashless Debit Card.
Engagement occurs with senior levels of
representative bodies, Land Councils and
Indigenous organisations
Tier Three Stakeholder Engagement with stakeholders in a
engagement community who are interested in the
transition from Income Management to
the Cashless Debit Card.
Engagement to date has included significant community information sessions. In
anticipation of legislation passing, the department has been conducting
engagement sessions with Income Management recipients and stakeholders in
the Northern Territory and Cape York region.
6.4 Summary of consultation to date
6.4.1 Consultation in current sites and engagement in the Northern
Territory and Cape York
Cashless Debit Card trial locations were selected based on a range of factors,
including community interest, support, readiness and willingness; high levels of
disadvantage and welfare dependence; and high levels of social harm caused by
drug and alcohol misuse and problem gambling. These communities sought a
stronger tool to address drug, alcohol and gambling issues at the community
level. Table 9 provides a high-level summary of the consultation undertaken in
Cashless Debit Card sites, including the Northern Territory and Cape York.
Table 9: Summary of consultation in Cashless Debit Card sites and the Northern
Territory and Cape York
Location Consultation Number Who Format
Dates
Ceduna April 2015 - Approximately Indigenous leaders (incl. Face to face
and March 2016 300 Aboriginal corporations), meetings (round
surrounds, consultation local government, service table or one on
SA sessions held, providers, state one meetings),
over 1,000 government, local teleconference.
people merchants and the
consulted. general public.
East April 2015 - 110 Community members, Face to face
Kimberley, September consultation Indigenous leaders, meetings (round
WA 2016 sessions. service providers, police, table or one on
and local and state one meetings),
government agencies. teleconference.
38
Location Consultation Number Who Format
Dates
Goldfields May 2017 - Over 270 Community members Formal and
region, September consultation (church leaders, business informal
WA 2017 sessions. owners, general public), community
service providers (health, information
family & child support and sessions, one on
financial counselling), one meetings
business sector and written
(Chamber of Commerce consultation
& local merchants),
community sector, local
government, and other
Commonwealth
Government agencies.
Bundaberg May 2017 - 220 Community members, One on one and
and December consultation service providers, all round table
Hervey 2017 sessions prior levels of government, meetings.
Bay, QLD to trial emergency relief and
establishment. housing services.
Northern October 2019 83 information Land Councils and other One on one
Territory - March sessions to Aboriginal corporations, meetings, round
and Cape 2020 over 70 local providers and table, large and
York, QLD communities, councils, community small community
engaged groups, police, state and information
nearly 3,500 territory government sessions.
community departments.
members and
met with over
120
stakeholders
and local
organisations.
39
In addition to conducting community information sessions, the department utilises
a range of tools to convey key messages on the Income Management to
Cashless Debit Card transition, particularly for those participants where English is
a second (or more) language:
the department seeks advice from local stakeholders on the requirement
for interpreters. Where necessary, the services of the Aboriginal Interpreter
Service, local community volunteers or NIAA Indigenous Engagement
officers are sought to support the community information sessions;
between October 2019 and March 2020 the department advertised across
three print locations and 14 radio stations, playing around 2,500
advertisements;
the Aboriginal Interpreter Services translated key Income Management to
Cashless Debit Card messages into 18 languages as an audio tool for use
in community information sessions;
a range of fact sheets have been developed and housed on the
department's website, with detailed fact sheets translated into 14
languages.
a mapping tool for use by stakeholders and participants to understand the
detailed differences between the Income Management to Cashless Debit
Card service offered; and
a production company has been contracted to develop a suite of
multimedia products to articulate the differences in the Income
Management to Cashless Debit Card service office.
Community engagement has been on hold since 6 March 2020, when the
Northern Territory Government announced the closure of remote communities
to non-essential services and interstate travel was restricted due to the COVID-19
pandemic.
6.4.2 Communities consulted with but did not proceed as expansion
sites
Port Hedland
In January 2017, Port Hedland Mayor Camilo Blanco raised the possibility of
implementing the Cashless Debit Card in the town of Port Hedland, Western
Australia. Mayor Blanco claimed that Port Hedland was experiencing high levels
of antisocial behaviour due to alcohol abuse.
The department undertook consultation within the community, including attending
a Port Hedland Council Meeting, to gauge community interest and support for the
Cashless Debit Card, and to discuss how the card would work to help address
social issues. After several months of consultation, in which people were given
the opportunity to learn about how the Cashless Debit Card would work in their
community, the Port Hedland Council voted against supporting the introduction of
the Cashless Debit Card and it was decided, in consideration with other factors,
that it would not be introduced to Port Hedland .
40
Tennant Creek
Commencing August 2018, the department held meetings with key Tennant Creek
community leaders and organisations to provide initial information about the
Cashless Debit Card and seek guidance about the most appropriate way to
consult with the broader community. These consultations were to consider the
Barkly region as a potential fifth Cashless Debit Card trial site.
On 8 February 2019, meetings were held with key stakeholders to elicit support
for facilitating information sessions directly with grass-roots communities in the
week beginning 18 February 2019. The department received support for the
consultation process and stakeholders offered logistical support to facilitate
community sessions. Between 18 and 22 February 2019, the department
commenced Cashless Debit Card community information sessions across the
Barkly Region, Northern Territory. Departmental representatives from National
Office and the Northern Territory State Office, led by Indigenous staff, worked in
collaboration with Services Australia representatives (formally Department of
Human Services) to co-ordinate and facilitate each information session.
Information sessions focused on providing communities with an understanding of
the Cashless Debit Card product, how the Cashless Debit Card operates, what
the Cashless Debit Card can be used to purchase and how the Cashless Debit
Card is different in policy and function to the BascisCard.
Through the information sessions, there was a clear directive to ensure
communities were well informed about the Cashless Debit Card, involved in any
decision making process and are provided sufficient time to caucus and digest the
information provided. A broad cross-section of the community was reflected at
each session including equal representation of male and female community
members across a range of age demographics. Communication materials
including factsheets, posters and information cards were available at each
Information Session and were disseminated.
Between 11 and 15 March 2019, the department commenced Cashless Debit
Card community feedback sessions with communities across the Barkly region,
Northern Territory. Feedback sessions typically ran for two hours and were
primarily aimed at providing community members with an opportunity to share
their feedback on the Cashless Debit Card, give an insight into whether they
believe the card would benefit their community and express their preference for
either the BasicsCard or the Cashless Debit Card. The sessions also allowed
community members to voice their concerns and seek clarification on the
Cashless Debit Card policy and function.
The department conducted a total of 17 sessions including both information and
feedback consultations with over 960 community members:
Tennant Creek (six sessions, approximately 545 attendees)
Elliot (two sessions, approximately 100 attendees)
Canteen Creek (one session, approximately 20 attendees)
Epenarra (Wutunugurra) (two sessions, approximately 65 attendees)
Ampilatwatja (two sessions, approximately 75 attendees)
Ali Curung (two sessions, approximately 85 attendees)
Alpurrurulam (two sessions, approximately 75 attendees)
41
6.4.3 Technology Consultation
In order to position the Cashless Debit Card for future functionality expansion,
technological enhancements are required. These enhancements will improve the
user experience for Cashless Debit Card participants and merchants, and allow
for analysis of the costs, risks, benefits and scalability of the program. The
technological enhancements include PLB and improvements to the Cashless
Debit Card user experience.
Critical to the success of scaling up the Cashless Debit Card, technology
consultation has been undertaken to:
ensure the Cashless Debit Card can operate as much like a standard
banking product as possible;
understand and limit opportunities for circumvention;
support merchants via automated identification of restricted products; and
improve the Cashless Debit Card user experience.
Consultation has been undertaken with mixed merchant stakeholders and those
stakeholders who will assist to implement technological advancements, such as:
financial institutions, including acquirers and issuers, POS providers,
payment integrators and PIN Pad manufacturers;
large corporate merchants (to implement PLB within their own POS
environment), merchant networks e.g. franchises, and small to medium
mixed merchants; and
small and medium mixed merchants.
42
Consultation has contributed to Cashless Debit Card technology initiatives
including:
transition from proof-of-concept of PLB to trial;
the possibility of cloud-based automated PLB; and
possibility of improvements to end-user experience.
6.5 Findings from consultation and how it affected final
decision making process
Consultation has been essential to tailor the program to meet each community's
needs to address issues of social harm. Consultation has led to significant
changes in policy development of the Cashless Debit Card Program, while
feedback from participants and their communities has also led to improvements to
the function of the card and how it is delivered.
The Cashless Debit Card has developed over time in response to feedback and
will continue to do so through ongoing consultation. Some of the key findings from
community and stakeholder consultation is listed below, including how this has
affected the Governments final decision-making process.
Ceduna region and the East Kimberley region
Consultation with stakeholders and community members was overall positive,
with many people stating they felt the card would be beneficial in their community.
Some individuals expressed concern about being placed on the card if they didn't
drink or gamble, however they were often understanding of the community wide
approach of the card in order to reduce social harm.
Community consultation in Ceduna and the East Kimberley resulted in the
establishment of the community panel, comprised of local leaders. The
community panel was involved in the co-design process and determines key
aspects of the program in this region, giving the community greater autonomy.
Welfare recipients can apply to the community panel to reduce the percentage of
payment going onto their Cashless Debit Card account, giving them greater
access to cash.
Goldfields region
Many community members discussed the issue of alcohol and drug misuse, and
associated violence within their community, and felt the Cashless Debit Card
could be beneficial in addressing these issues. Based on consultation with
stakeholders, the community identified they did not wish to have a community
panel established in this region.
Building on lessons learned during the initial rollout, the department held both
formal and informal community information sessions. The different types of
sessions allowed the department to consult with different cohorts in settings that
maximised engagement. The intensive consultation prior to rollout enabled the
department to allay concerns and clarify misconceptions about the card.
43
Feedback from consultations was that providers needed to work better together to
support vulnerable people. The department has worked closely with the
community to ensure the right mix of services is in place to support them. This
feedback has resulted in increased funding for support services. The department
continually works with local stakeholders and Leaders to identify appropriate
funding opportunities for the community.
Bundaberg and Hervey Bay region
Two Community Reference Groups of experts from a broad range of backgrounds
were formed in the Bundaberg and Hervey Bay region. These Groups work
collaboratively with the Government to provide advice on the operation of the
program. From consultation with stakeholders in this region, the local community
identified that high youth unemployment and intergenerational welfare
dependency was of great concern. To address this, the Cashless Debit Card
program has been altered to target a younger cohort of 35 years and under, who
will benefit most from the program.
Northern Territory and Cape York
Feedback from community members at engagement sessions conducted between
October 2018 and March 2020 is typically mixed, however the majority of
discussions with departmental staff remains positive. The primary theme
emerging through departmental engagement session in the Northern Territory and
Cape York is that, once participants become aware of the technology
improvements and the increased functionality the Cashless Debit Card offers, a
number of participants across the Northern Territory and Cape York indicated
they would welcome the introduction of the Cashless Debit Card over the
BasicsCard. In the Cape York region, participants have been positive about the
transition from the BasicsCard to the Cashless Debit Card, with other community
members seeking advice from the department on the process to volunteer to be
on the Cashless Debit Card. Table 10 summarises the key themes emerging from
engagement with participants and stakeholders in the Northern Territory and
Cape York.
44
Table 10: Key themes emerging from participant and stakeholder feedback
Participant feedback Stakeholder feedback
Positive toward increased functionality and Perceived lack of evidence about
usability of the Cashless Debit Card. the benefits of compulsory welfare
management.
Positive towards the rate of payment placed on the An opposition to mandatory welfare
card remaining the same. quarantining, which dates back to
the introduction of Income
Management in 2007.
Mixed reaction to tobacco. Some participants are Concern in regard to tobacco being
happy they would be able to purchase tobacco, an allowable purchase on the
while others feel the inclusion of tobacco may see Cashless Debit Card.
participants redirecting money currently spent on
essential items such as food towards smoking.
Most concerns from participants relate to the A misconception that the Cashless
transition and how it will impact on them. This Debit Card is targeted at Indigenous
includes requesting details on when transition will people.
occur in their communities, how they will receive
and activate their card and what supports will be
available to assist in this process.
Positive toward the new design of the Cashless Improvements to ensure the
Debit Card, which reduces the stigma of the Cashless Debit Card looks and
identifiable BasicsCard. operates like a regular bank card.
Feedback from participants and stakeholders continues to inform the Australian
Government's approach to the proposed transition to the Cashless Debit Card in
the Northern Territory and Cape York region. An example of this is in existing
Cashless Debit Card trail sites the quarantined portion of a person's welfare onto
the Cashless Debit Card is 80 per cent, which was negotiated with community
leaders at the commencement of the trail. After listening to feedback from
participants and stakeholders through community feedback sessions in Barkly
region, the Government has kept the percentage of payments placed on the card
at 50 per cent, which is in line with current Income Management arrangement in
the Northern Territory.
Consistent with culturally appropriate engagement principles, the department
seeks advice from communities on scheduling of visits. The department works
with communities to reschedule where sorry business, unforeseen community
events and weather conditions impact on engagement.
Card Functionality
The functionality of the Cashless Debit Card has been subject to regular
feedback, with the department committed to ensuring that it looks and operates
like any other debit card. Feedback on the card has included the design and
function, such as being unable to use Contactless payment during the COVID-19
pandemic. In response, the card was redesigned to look like any other debit card
and contactless was made available for those who wanted this functionality.
Feedback has also been received around the requirement for participant's to
maintain accounts with two different financial institutions while on the Cashless
Debit Card. The Government is exploring the feasibility of having multiple card
45
issuers providing a Cashless Debit Card product through the program. Allowing
multiple issuers will give participants to have more choice in whom their issuer is
with, and may enable participants to have both their Cashless Debit Card and
regular bank account with the same provider.
Technology
Feedback from technology stakeholder engagement has shown there is an
appetite for PLB implementation and investment from financial institutions and
merchants, along with positive reviews for work to improve the user experience
for Cashless Debit Card participants. Stakeholder engagement has assisted with
harnessing existing technologies to expand merchant base, understanding ways
of addressing circumvention activities and has aided in understanding needs and
requirements of both participants and stakeholders.
Stakeholder feedback from consultation sessions has led to key department
decisions of the technology enhancements of the program. Consultations have
also laid way for the decision to move from proof of concept to trial of PLB; and to
phase two of an automated cloud-based PLB mechanism.
Certainty
A consistent focus emerging in feedback from participants, communities and
other key stakeholders is the lack of certainty around the Cashless Debit Card,
due to a number of short-term legislative extensions and the time-limited nature of
the trial. In removing the trial parameters and establishing the Cashless Debit
Card as an ongoing program as is the recommended option, this feedback will be
addressed and participants and their communities will have certainty around the
Government's commitment to the program.
Restricted Items
While tobacco is a restricted item under Income Management, it is not restricted
under the Cashless Debit Card given the focus of the Cashless Debit Card on
addressing community-wide social harm caused by alcohol, drugs and gambling
products.
This issue has been raised in community information sessions in the Northern
Territory with some stakeholders and participants concerned that the removal of
the restriction on tobacco will impact on communities. While expenditure on
tobacco will be monitored, Cashless Debit Card policy has not been changed to
apply a more restrictive product to Northern Territory participants only.
6.6 Ongoing and future consultation
Formal community engagement commenced by the department in early October
2019, through to mid-December, when the engagement schedule took a planned
pause in acknowledgement of the wet season and in respect of traditional cultural
business occurring at that time of year. Engagement sessions resumed in late
January 2020 and continued until March, when communities announced their
closure to visitors and interstate travel was restricted due to the COVID-19
pandemic.
46
Consistent with culturally appropriate engagement principles, the department will
also seek advice from communities on scheduling of future engagement, taking
into account any health and safety concerns they may have.
In addition, stakeholder consultation is constantly occurring as part of the PLB
trial to ensure operations are running smoothly. Table 11 outlines the
stakeholders the department regularly consults with and how often.
Table 11: Ongoing stakeholder engagement with the department
Stakeholder
Card Issuer
Indue
Primary
DXC
eftpos
A range of payments industry stakeholders, including Point of Sale
(POS) Providers, Payment Integrators and PIN Pad Manufacturers
Numerous organisations, including several small businesses
Acquirers
ANZ
Commonwealth Bank
NAB
Suncorp
Tyro
Westpac
Large Corporate Merchants
Woolworths
Coles
ALDI
47
Australia Post
Euro Garages
Caltex
Ampol
Liberty Fuels
United Petroleum
Reject Shop
Best and Less
Metro Petroleum
Numerous other merchants
Merchant Networks
Metcash
Small to Medium Mixed Merchants
Numerous
7. RECOMMENDED OPTION
The recommended option is to continue the Cashless Debit Card as an ongoing
measure in current sites, including Northern Territory and Cape York, and
improve technology (Option Two). It is anticipated that this will be the lowest cost
option that continues the benefits of the Cashless Debit Card and will provide the
greatest regulatory cost reduction. This option would provide certainty to
participants in the current sites and would sustain the positive impacts of the
program. Consultation with community leaders has also demonstrated support for
the Cashless Debit Card.
Option Two ensures there is time to invest in improving technology and also
provides stakeholders, such as banks, with confidence that there is value in
investing in the technology improvements. By investing in technology, the user
experience of the Cashless Debit Card will continue to improve and it will reduce
some of the burden placed on the participant and merchants. This option also
provides the benefit of allowing the time for long term outcomes of the card, such
as social change, to be realised.
48
This option also gives the public confidence in the delivery of welfare payment
and that public funds are being used in an appropriate manner.
Findings from the evaluations, particularly around reduced alcohol use and
gambling, demonstrate that the Cashless Debit Card is successfully meeting its
objectives. This supports implementing the Cashless Debit Card as an ongoing
measure.
The first impact evaluation found that the Cashless Debit Card has had a
"considerable positive impact" in the two trial communities of Ceduna and the
East Kimberley.
It concluded that the Cashless Debit Card trial "has been effective in reducing
alcohol consumption and gambling in both trial sites and [is] also suggestive of a
reduction in the use of illegal drugs" and "that there is some evidence that there
has been a consequential reduction in violence and harm related to alcohol
consumption, illegal drug use and gambling".
Early findings from the Draft Second Impact Evaluation include:
The quantitative survey of Cashless Debit Card participants found 25 per
cent (of those who drink alcohol) reported they have reduced the amount
they drink at any one time, since the introduction of the Cashless Debit
Card, and 22 per cent reported they have reduced the number of times
frequency they are drinking
Overall, 9 per cent reported the Cashless Debit Card had helped decrease
the use of illicit drugs for themselves, 10 per cent for their family, 9 per cent
for their friends and 14 per cent for their community.
Around 21 per cent of Cashless Debit Card participants reported a change
in gambling behaviours for themselves or the people around them. Around
20 per cent of Cashless Debit Card participants noted reductions in
gambling for themselves or the people around them. The qualitative
evidence found that cash previously used for gambling had been redirected
to essentials such as food.
Overall, establishing the Cashless Debit Card as an ongoing measure and
investing in technology will provide the highest net benefit. It provides participants
and stakeholders with certainty and allows time to see the positive outcomes of
the card to eventuate. It also ensures there is time and investment into
technology improvements, which will reduce any ongoing burden of the card for
participants and merchants.
8. IMPLEMENTATION
Continuing the Cashless Debit Card as an ongoing measure will require the
passage of legislation. There is the risk that the legislation to establish the
program as an ongoing measure will not receive passage in Parliament. If this
occurs, legislative amendments and funding will need to be sought each year to
support the continuation of the program, creating uncertainty around the future of
the program for Cashless Debit Card participants, communities, stakeholders and
other financial institutions.
49
As the Cashless Debit Card already exists as a trial, current participants and
merchants will not be required to do anything additional with the implementation
of an ongoing measure.
The current PLB pilot will continue under the preferred option. This will involve
ongoing engagement with the current businesses in the pilot. At the completion of
the pilot, it is expected that PLB will be rolled out to businesses outside of the
pilot. The department will engage with any affected business, as required, to
ensure the technology is rolled out effective. There is a risk that business may not
wish to use the new technology. This will be mitigated through engagement,
which will allow the department to explain to businesses the benefits of rolling out
this technology.
The department will continue to work closely with community leaders and
merchants, and also monitor the available data, to ensure the positive impacts of
the program continue to be realised and to mitigate any issues.
As announced in the 2019 Budget, FES at the University of Adelaide was funded
by the department to undertake baseline data collections in the Goldfields and
Bundaberg and Hervey Bay regions. FES was also funded to complete an
evaluation report on the outcomes of the Cashless Debit Card in East Kimberley,
Ceduna and surrounds and the Goldfields.
The outcomes of evaluation, along with available administrative data, will be used
to inform future decisions of the Cashless Debit Card.
50
ATTACHMENT A
Income Management 2008 to 2015
Income Management measure Expansion
2008 - 2009
Child Protection Introduced Child Protection and
Voluntary Income Management
Individuals referred by child protection measures to Cannington, in Perth, and
caseworker if that caseworker believes the Kimberley region, Western
a child in their care is at risk of neglect. Australia, in response to the Western
70-30 payment split. Australian State Coroner's report into
the deaths of 22 people from the
Voluntary Kimberley region.
Individuals volunteer through the Expanded Income Management to the
department. remainder of metropolitan Perth.
50-50 payment split.
Cape York Introduced Income Management to the
Cape York, Queensland, communities
Individuals referred by the Family of Aurukun, Coen, Hope Vale and
Responsibilities Commission (FRC) if Mossman Gorge, as part of the Cape
the individual is failing to uphold York Welfare Reform package.
positive community norms.
60-40, 75-25 or 90-10 payment split, at
discretion of FRC.
2010
Child Protection, Voluntary Introduced New Income Management,
which repealed the compulsory model
Disengaged Youth that applied to all welfare payment
Individuals, aged 15 to 24 years old, recipients in the Northern Territory and
are placed onto this measure if they introduced the following measures:
have received a welfare payment for Disengaged Youth;
more than 13 out of the last 26 weeks.
Long-term Welfare Payment
50-50 payment split. Recipient;
Vulnerable Welfare Payment
Long-term Welfare Payment Recipient Recipient;
Individuals, aged 25 years and above, Child Protection; and
but below Age Pension age, are placed Voluntary.
onto this measure if have they received
a welfare payment for more than 52 of
51
Income Management measure Expansion
the last 104 weeks.
50-50 payment split.
Vulnerable Welfare Payment Recipient
Individuals referred by a Centrelink
social worker.
50-50 payment split.
2011 - 2012
Place-based Income Management Introduced Place-based Income
Management to five Local Government
Child Protection, Voluntary and Areas (LGA), chosen due to high
Vulnerable Welfare Payment Recipient. unemployment rates and an
overreliance on welfare payments:
Playford, South Australia;
Bankstown, New South Wales;
Logan, Queensland;
Rockhampton, Queensland; and
Greater Shepparton, Victoria.
Expanded Place-based Income
Management to the Anangu
Pitjantjatjara Yankunytjatjara (APY)
Lands, South Australia, at the
community's request.
Supporting People At Risk Introduced the Supporting People at
Risk measure to the Northern Territory
Complementing the Banned Drinkers' and authorised the Northern Territory
Register, individuals are referred by a Alcohol Mandatory Treatment Tribunal
state or territory statutory body. as the referring body.
70-30 payment split.
2013
Place-based Income Management Expanded Place-based Income
Management to Laverton and the
Ngaanyatjarra (Ng) Lands in Western
Australia, following community
consultations.
52
Income Management measure Expansion
2014 - 2015
Place-based Income Management Expanded to Ceduna after multiple
requests from the mayor and other local
peak bodies.
Child Protection and Voluntary Introduced to the Greater Adelaide
region following a recommendation
from the South Australian State
Coroner's inquest into the death of
Chloe Lee Valentine.
Cape York Expanded to Doomadgee, Queensland.
53
ATTACHMENT B
Legislation
Social Security Amendment (Debit Card Trial) Act 2015
The Social Security Amendment (Debit Card Trial) Act 2015 received Royal
Assent on 12 November 2015 and established the original Cashless Debit Card
trial with:
three trial sites;
a trial period of 1 February 2016 to 30 June 2018; and
a maximum of 10,000 participants.
The Cashless Debit Card was rolled out to Ceduna and surrounds on 15 March
2016 and the East Kimberley on 26 April 2016.
Social Services Legislation Amendment (Cashless Debit Card) Act
2017
The Social Services Legislation Amendment (Cashless Debit Card) Bill 2017 was
introduced to Parliament on 17 August 2017. The Bill proposed to repeal section
124PF of the Social Security (Administration) Act, which specified that the
Cashless Debit Card:
could be trialled in a maximum of three discrete sites;
include no more than 10,000 participants; and
end on 30 June 2018.
This amendment supported greater flexibility to extend and expand the Cashless
Debit Card, while maintaining legislative safeguards.
The Bill was referred to the Senate Community Affairs Legislation Committee for
inquiry and report. The Committee held public hearings in Kalgoorlie, Western
Australia and Canberra, Australian Capital Territory and received 172 written
submissions from a range of different stakeholders. During this time, the fourth
site of Bundaberg and Hervey Bay, Queensland was announced. The Bill would
support the creation of both the Goldfields and Bundaberg and Hervey Bay sites
through disallowable instrument.
The Committee published its majority report on 6 December 2017, in which it
recommended that the Bill be passed.
The Social Services Legislation Amendment (Cashless Debit Card) Act 2018
received Royal Assent on 20 February 2018. As a result of the Committee's
inquiry and further stakeholder consultation, the Government amended the Act to
allow:
an end date of 30 June 2019 for three Cashless Debit Card sites;
the creation of the Goldfields site; and
the power to define future trial site be moved to primary legislation.
54
Social Services Legislation Amendment (Cashless Debit Card Trial
Expansion) Act 2018
The Social Services Legislation Amendment (Cashless Debit Card Trial
Expansion) Bill 2018 was introduced to Parliament on 30 May 2018. The Bill
aimed to:
establish Bundaberg and Hervey Bay as the fourth Cashless Debit Card
trial site;
establish an end date for the Bundaberg and Hervey Bay site of 30 June
2020;
increase the maximum of trial participants to 15,000;
create an exception from Part IV of the Competition and Consumer Act
2010 to allow for product-level blocking; and
restrict cash-like products, including open-loop gift cards.
The Bill was referred to the Senate Community Affairs Legislation Committee for
inquiry and report. The Committee held a hearing in Canberra and received 108
written submissions. The Committee recommended the Bill be passed.
The Social Services Legislation Amendment (Cashless Debit Card Trial
Expansion) Act 2018 received Royal Assent on 21 September 2018.
In addition to the amendments outlined in the Bill, the Act also sought to:
move the content of the Social Security (Administration) (Trial of Cashless
Welfare Arrangements) Determination 2018 into primary legislation,
including determining participant criteria and the payment split;
move uncontentious powers, such as the power to authorise a community
panel, into notifiable instrument; and
include a non-government amendment for an independent review of an
evaluation.
Social Security (Administration) Amendment (Income Management
and Cashless Welfare) Act 2019
On 25 July 2019, the Government introduced the Social Security (Administration)
Amendment (Cashless Welfare) Bill 2019 to Parliament to amend the exit
pathway introduced in the Social Security (Administration) Amendment (Income
Management and Cashless Welfare) Act 2019.
These amendments came about after the department held consultations in all
sites and identified concerns held by key stakeholders with the exit pathway as
set out in the Act. The new Bill was designed to:
make the department Secretary the decision-maker for all exit applications,
regardless of where Cashless Debit Card participants live;
broaden the exit criteria to take into account a person's ability to manage
their affairs generally, including financial affairs;
clarify that the exit applications must be made in a form approved by the
Secretary; and
expand the wellbeing exemption provisions to ensure they apply across all
regions.
55
The amendments were designed to remove the practical difficulties of
implementing the exit process. The pathway mainly uses information currently
available to Services Australia, and the participant may be required to provide
additional information in some circumstances. This is not onerous to the
participant and ensures the department has sufficient information to make an
informed decision.
The Social Security (Administration) Amendment (Cashless Welfare) Act 2019
received Royal Assent on 12 August 2019.
Enabling some participants within a Cashless Debit Card site to exit the program
through an exit pathway has the potential to undermine the program's objective of
limiting the amount of welfare payment available as cash with the aim to reduce
the overall harm caused by welfare-fuelled drug and alcohol misuse and problem
gambling. This risk, however, is mitigated through the government amendments
brought forward in the Social Security (Administration) Amendment (Cashless
Welfare) Act 2019, which ensures that exited participants are not contributing to
the harms that the Cashless Debit Card program aims to address. The Act also
ensures that if an exited participant begins to behave in a way that contributes to
their community's social harm, a social or community worker can refer them back
onto the Cashless Debit Card.
The Government and the department continue to engage in close partnerships in
the Cashless Debit Card sites, including through the data sharing partnerships
developed under the program monitoring strategy. These relationships, coupled
with the Government's ongoing commitment to evaluation, will ensure that any
future decision making will be informed by a clear understanding of the impact of
the exit pathway on the program's ability to address the policy problem.
Social Security (Administration) Amendment (Income Management to
Cashless Debit Card Transition) Bill 2019
On 11 September 2019, the Government introduced the Social Security
(Administration) Amendment (Income Management to Cashless Debit Card
Transition) Bill 2019 to Parliament. The Bill sought to minimise the serious
impacts of drug and alcohol misuse and problem gambling in Australian
communities with high levels of welfare dependence. It also signals the changing
technological environment of cashless welfare, and acknowledges that the
Cashless Debit Card, having been continually refined and updated since its first
introduction in 2016, provides a more cost-effective, sophisticated and functional
product, underpinned by a coherent and effective policy.
The primary objective of the Bill is to establish the Northern Territory and Cape
York as Cashless Debit Card sites and transition Income Management
participants onto the card.
56
However, the Bill also has a number of other aims, including:
extend the end date of all Cashless Debit Card sites to 30 June 2021 and
establish an end date for the trial in Cape York to 31 December 2021, to
align with existing funding arrangements;
remove the cap on the number of Cashless Debit Card participants;
remove the exclusion to allow people in Bundaberg and Hervey Bay to
voluntarily participate in the trial;
improve information-sharing provisions to streamline the exit pathway; and
amend the provision requiring an independent review of an evaluation, to
avoid duplicating existing processes.
The Bill was referred to the Senate Legislation Committee on Community Affairs
for inquiry and report. The Committee held hearings in Alice Springs and Darwin,
Northern Territory, and Canberra, and received 110 written submissions. A key
issue raised across the hearings and submissions was the ministerial power to
increase the percentage placed onto the card, up to 100 percent, for a community
at that community's request. This power is consistent with Income Management
policy introduced in 2010 by the Social Security and Other Legislation
Amendment (Welfare Reform and Reinstatement of Racial Discrimination Act) Act
2010.
The Committee recommended that the Bill be passed on the condition that the
department clarified the ministerial power to increase a community's rate of
payment on the card and the process by which a community could request such
an increase.
Upon further consultation with stakeholders, the Government moved the following
amendments to further ensure a smooth, successful transition:
amend the ministerial power to increase the portion of a person's payment
placed onto the card to a maximum of 80 per cent for Northern Territory
participants;
exclude Age Pension recipients from being compulsory Cashless Debit
Card participants in the Northern Territory; and
establish a power to terminate Voluntary Income Management agreements
in the Northern Territory.
Amending the power to allow communities that wish to increase percentage of a
person's payment placed onto the Cashless Debit Card to a maximum of 80 per
cent is consistent with arrangements for existing Cashless Debit Card sites. The
Minister will only exercise this power following a request from the community. The
Act does not define what a community is to ensure there is flexibility to respond to
the views and circumstances of different communities. For example, some
communities may prefer to use a local Aboriginal corporation, local government
organisation or other representative body to act on behalf of the community in
making such a request. Allowing communities to engage with the Government
through the lens of genuine partnership maximises the chance for achieving
positive outcomes for individuals and families.
57
ATTACHMENT C
Evaluation and Audit
ORIMA Research evaluation
The Government commissioned ORIMA Research to undertake three
independent evaluations of the Ceduna and East Kimberley Cashless Debit Card
sites. The first report in this series was published in July 2016 titled the
Evaluation of the Cashless Debit Card Trial - Initial Conditions Report. 32 It
identified a clear need for intervention by the Government to assist the
communities of Ceduna and the East Kimberley in striving for better outcomes for
people and families. The Report found that the majority of stakeholders in both
sites reported serious concerns with drug and alcohol misuse and problem
gambling and reported that these issues had deteriorated in the last five to 10
years. In particular, stakeholders interviewed reported that:
"excessive alcohol consumption was at crisis point", and was having
negative impacts on all levels of the community; and
the effects of widespread and serious drug and alcohol misuse and
problem gambling has led to:
o high levels of crime and violence;
o the erosion of a sense of safety and security within the community;
o mental and physical health issues in adults and children;
o financial issues;
o social problems, including family disputes and unemployment;
o housing instability and overcrowding; and
o poor child wellbeing due to parental and family neglect, and lack of
engagement.
In February 2017, the second evaluation report by ORIMA Research was
published. This report, the Cashless Debit Card Trial Evaluation - Wave 1 Interim
Evaluation Report33 is based on data collected in the first 6 months of the trail.
The final evaluation of the Ceduna and East Kimberley sites was conducted and
published on 1 September 2017, titled Cashless Debit Card Trial Evaluation -
Final Evaluation Report. The Final Evaluation Report found that the Cashless
Debit Card had a "considerable positive impact" in Ceduna and the East
Kimberley. It was concluded that the Cashless Debit Card "has been effective in
reducing alcohol consumption and gambling in both sites and [is] also suggestive
of a reduction in the use of illegal drugs", and that there is "some evidence that
there has been a consequential reduction in violence and harm related to alcohol
consumption, illegal drug use and gambling." 34
32
ORIMA Research, Evaluation on the Cashless Debit Card Trial - Initial Conditions Report,
https://minister.servicesaustralia.gov.au/sites/default/files/cdc-initial-conditions-
report.pdf?acsf_files_redirect
33
ORIMA Research, Cashless Debit Card Trial Evaluation - Wave 1 Interim Evaluation Report,
https://www.dss.gov.au/sites/default/files/documents/03_2017/final_cdct_evaluation_ -
_wave_1_interim_evaluation_report_9_february_2017.pdf
34
ORIMA Research, Cashless Debit Card Trial Evaluation - Final Evaluation Report,
https://www.dss.gov.au/sites/default/files/documents/10_2018/cashless-debit-card-trial-final-evaluation-
report_2.pdf
58
The Final Evaluation Report findings included:
of those who drank alcohol before the Cashless Debit Card program
started, 41 per cent said they were drinking alcohol less often, up from 25
per cent reported in the Wave 1 Interim Evaluation Report;
of those who said they were using illicit drugs before the program started,
48 per cent reported using less, up from 24 per cent reported in the Wave 1
Interim Evaluation Report;
of participants who said they gambled before the program started, 48 per
cent reported gambling less, up from 32 per cent reported in the Wave 1
Interim Evaluation Report;
of people with caring responsibilities surveyed, 40 per cent reported being
able to better care for their children since the program started, and 39 per
cent reported being more involved in homework and school; and
45 per cent of participants reported being able to save more money than
before being a participant, up from 31 per cent reported in the Wave 1
Interim Evaluation Report.
The report also identified some issues with the Cashless Debit Card, which were
mainly related to complications/limitations experience by some on the card. This
included being unable to transfer money to children away at boarding school or
being unable to make purchases at predominately cashed-based settings (for
example, fairs, 'second hand' markets, swimming pools and canteens). There was
a significant decrease in participants reporting these issues in the Final
Evaluation Report (33 per cent), compared to Wave 1 Interim Evaluation Report
(49 per cent), indicating that issues with the card decreased overtime.
Where participants are having difficulties, the department can increase the default
$200 transfer limit to support demonstrated needs, such as to transfer more
money to children at boarding school. In addition, there is also the option for
participants to withdraw more than 20 per cent of their welfare payment as cash if
situations arise where additional cash is required, for example purchasing large
items.
Many of these complications and limitations of the Cashless Debit Card have
been rectified overtime as a result of greater familiarity with the card and the
continued development of policy and technology, as well as education and
assistance provided through the department, Indue Ltd. and local partners. The
department is committed to further evaluation and consultation with participants
on the Cashless Debit Card to ensure any issues are addressed and rectified.
The report also identified that a small proportion of participants felt they were
being 'penalised' and/or 'discriminated' against by being forced to participate.
These participants reported that they felt there was a stigma and sense of shame
associated with having a Cashless Debit Card. In the Final Evaluation Report,
only four per cent of participants explicitly raised 'stigma' or 'shame' associated
with the card, down from six per cent in the Wave 1 Interim Evaluation Report. In
the Final Evaluation Report, six per cent of participants also mentioned a lack of
freedom and/or concerns about their rights.
59
University of Adelaide's Second Impact Evaluation
On 15 May 2018, the Government announced an independent Second Impact
Evaluation to assess the ongoing impact of the Cashless Debit Card in the three
sites of Ceduna, the East Kimberley and the Goldfields. Undertaken by the Future
of Employment and Skills Research Centre (FES) at the University of Adelaide,
the Second Impact Evaluation, and involves qualitative interviews, a quantitative
survey and administrative data.
FES also undertook baseline data collections in the Goldfields and Bundaberg
and Hervey Bay sites, with the Cashless Debit Card Baseline Data Collection in
the Goldfields Region: Qualitative Findings Report released on 21 February 2019.
The Baseline Report identified significant, widespread social, welfare and
economic issues in the region prior to the introduction of the Cashless Debit Card,
including issues relating to alcohol and drug use, and associated crime, violence
and impacts on child health and wellbeing.
Although the card had only been implemented for a few months, several early
positive impacts were already being observed, with many stakeholder and
participant respondents reporting that:
the Cashless Debit Card seemed to be having a positive effect on the
prevalence and severity of crime, family violence and antisocial behaviour;
communities seemed quieter and safer;
levels of substance abuse, alcohol-related antisocial behaviour and crime
appeared to have reduced;
the provision of food, clothes and toys to the children of participants had
increased;
spending patterns of some participants were changing, with less money
spent on alcohol and more on food, bills and household items; and
levels of financial literacy and management were improving for some
participants, including the ability to budget and save.
Early findings from the FES Draft Second Impact Evaluation also found:
The quantitative survey of Cashless Debit Card participants found 25 per
cent (of those who drink alcohol) reported they have reduced the amount
they drink at any one time, since the introduction of the Cashless Debit
Card, and 22 per cent reported they have reduced the number of times
they drink
Overall, 9 per cent reported the Cashless Debit Card had helped decrease
the use of illicit drugs for themselves, 10 per cent for their family, 9 per cent
for their friends and 14 per cent for their community.
Around 20 per cent of Cashless Debit Card participants noted reductions in
gambling for themselves or the people around them. The qualitative evidence
found that for some participants cash previously used for gambling had been
redirected to essentials such as food.
60
The Australian National Audit Office's report, The Implementation
and Performance of the Cashless Debit Card Trial
On 17 July 2018, the Australian National Audit Office (ANAO) tabled its report,
titled The Implementation and Performance of the Cashless Debit Card Trial in
Parliament.35 The ANAO audit assessed the department's implementation and
evaluation of the Cashless Debit Card in Ceduna and the East Kimberley.
The ANAO report made six recommendations in the areas of risk management,
contract management, procurement practices, and evaluation and monitoring
activities.
The department agreed to all six recommendations, and has undertaken action
to improve practices in relation to the Cashless Debit Card program.
The ANAO report made several specific criticisms about how ORIMA Research
undertook the impact evaluation of the Cashless Debit Card in Ceduna and the
East Kimberley. While the Government supports the process and outcome of the
evaluation by ORIMA Research, it does accept ANAO's comment, which included
criticisms around a lack of analysis of Commonwealth administrative data, no
collection of baseline data and unmet interview targets.
In response, the Government announced a Second Impact Evaluation, to be
undertaken by the FES at the University of Adelaide that will build on th e results
of the ORIMA Research evaluation and take into account the ANAO
recommendations.
Following criticism that the Cashless Debit Card may cause stigma, the
Government has redesigned the card with the Indue logo removed from the front,
so it looks like a generic silver card. The updated technology of the Cashless
Debit Card further reduces stigma as it allows users to purchase items from
mixed-merchant stores without having to line up in separate queues to use the
card, as was the case with the BasicsCard.
Circulated by the authority of the Minister for Families and Social Services,
Senator the Hon Anne Ruston
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Australian National Audit Office, The Implementation and Performance of the Cashless Debit Card Trial ,
https://www.anao.gov.au/work/performance-audit/implementation-and-performance-cashless-debit-card-trial
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