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Eva Cox

The lack of evidence for the benefits of Income Management

Eva Cox - Research Fellow Jumbunna  - [email protected]                          October 2011


Income Management (IM) is to start in five new places from July 2012. The ‘pilot' version is a mix of voluntary income management (VIM) and compulsory income management (CIM) imposed on some benefit recipients by Centrelink staff decisions. The Government promotes both forms as beneficial and there is some stories of Centrelink staff pressuring clients to sign on to VIM, mixing the possibility of accruing a $250.bonus after 6 months rather than having CIM imposed if defined ‘vulnerable'. The indicators of vulnerability include ‘poor financial management' eg late payment of bills rent etc which are endemic in the urban communities selected, because benefit income is grossly inadequate to meet living costs. The list also includes ‘subject to financial pressure from others' including partner violence,. that is seen as putting the women at risk in an Australian Law Reform Commission paper (see below). ‘Vulnerability' as a category does not include child protection clients or those not sending their children to school. Seriously addicted people can be covered by existing other provisions.

The Minister claims proven benefits for CIM, therefore justifying its expansion but there is no serious evidence that CIM has benefits for IM participants and some indications of possible harm. There is no statistical evidence of better health or school attendance and current NT figures on crime, child abuse, substance use or other data. As the program is now four years old, the lack of evidence is significant.

Jumbunna has been looking closely at the quality of evidence that the Government quotes for their. claims that people want CIM. Other studies suggest people mostly do not want to have it imposed on them (eg ERA below) but do not oppose VIM being available for those who freely agree to it. Some communities may decide democratically to have it imposed. Therefore, extending compulsory income management by locations, or using it where it is not part of a professional case plan, cannot be justified on the basis of local views, outcome research data or cost benefits.

This is the view of almost all major welfare agencies, most Aboriginal health and local community organisations as well as independent research groups, with one notable exception, the NPY women's group. The near consensus is that genuinely voluntary IM should be made available and compulsion only used where there is evidence of substantial self-harm or families at serious risk of harm.

The documents offering evidence

The following list includes reports offered by FAHHCSIA officers as ‘evidence' of the benefits of IM, with our brief comments and reports. We also list reports with alternative views on the claimed benefits.[1]

1. Evaluation of the Child Protection and Voluntary Measure of income management -


This is the report most often quoted by Government as ‘proof' that IM works. The report was assessed by the WA Council of Social Services which expressed the following doubts about its claims:

Whilst there is great value in recording client perceptions, the report lacks factual information and evidence of behavioural change. ...Whilst this initial evaluation provides focus and initial qualitative data, it fails to answer many questions, and raises further questions about the effectiveness of the government's income management programs in the longer term. Furthermore, there are enough doubts around the rigour of the research, such as sampling error, attribution, and satisfaction survey methodology that the Council cautions very strongly against relying on it as a basis to formulate new, or validate existing, public policy. (Our bold.)

2.  Final Stores Post Licensing Monitoring Report 2009

This survey of the stores reports the opinions of the store staff but includes no data on sales to support these views. As there have been Government pressures to improve stock and store management and other related programs, CIM may not be the cause of access to more healthy food. These results also do not tally with the Menzies study covered below. The stores also benefit from IM cards restricting access to other outlets, so have a vested interest in its continuing.

3. Evaluation of Income Management in the Northern Territory by the Australian Institute of Health and Welfare

The AIHW report compiles surveys done by others. Their conclusions do not state there are clear benefits of CIM, and express some doubts ‘There were mixed views about the benefits of income management' . Note that again the numbers of interviewed people was very small! The report stated under the heading ‘Improving the evidence on income management' that:' The strength of research evidence is, however, constrained by the methodology used and the quality of the research. The types of studies used for the evaluation do not rank highly on standard evidence hierarchies and there were some issues with quality. The evidence available for the evaluation was therefore not strong'.. .

4. Report on the Response (NTER) Redesign Consultations

This document reported that many consultations had supported maintaining compulsory income management, but it offered no details on how this was assessed. The initial discussion paper offered only 2 versions of CIM as the option to be discussed. The Government had already decided this before the consultation. Interestingly, the report did acknowledge that there was a ‘a divergence of views about future options for income management, with discussion ranging beyond the two options outlined in the Discussion Paper. ......There were also many calls for income management to be applied only on a voluntary basis. But this did not change the decision. The listed Report on the NTER Redesign only deals with the methodology of consultations, not with its issues.

The following reports are not quoted by the Government as they offer alternative views of the impact of CIM and its benefits. Most offer better quality data than the ones they do quote above.

The Australian Law Reform Commission Discussion Paper on Family Violence questions the value of current income management for those who suffer domestic violence, one of the ‘vulnerability' criteria.

The Equal Rights Alliance (ERA) survey on Women's Experience of Income Management in the Northern Territory reports the views of 180 women involved in the program and shows a large majority of women would prefer not to be on IM. Most also report feeling shamed.

This finding echoes the earlier findings of the Indigenous Doctors Association study finding which also recorded that feelings of shame outweighed possible benefits of the BasicsCard.

ERA also found the BasicsCard did not really change the food they bought which is similar to the responses documented by the Menzies Research study of some shops which uses longitudinal data to show no change to food purchasing after IM was introduced.

The Income Management program, in all its forms, is a classic Canberra devised project with little local input or influence. A report from the Productivity Commission says top-down types of programs don't work in Indigenous and presumably other communities as policy needs local engagement to work

Maybe this limited process is another explanation of why Income management does not work!


[1] The current Journal of Indigenous Policy no 12, October 2011, published by Jumbunna, examines the listed evidence in detail and includes other submissions on the IM policy. Available through UTS .

Reproduced with the kind permission of Eva Cox.