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Brief on income management changes by Eva Cox

Eva Cox, Women for Wik

Document: WEL - Income Management 15-3-10

2 June 2010

The non-evidence based policy is almost here. Note that they are evaluating the 'trial NT expansion' before extending it nationally, which confirms they lack confidence that it works!!!

However, if Rudd loses, this will apply very soon to all Australia, if he wins it will start in the NT and be expanded to designated areas later. As they ignore the current negative evidence, am not convinced they will accept further evidence of its failure.

The Bill is still in the senate but they have already put out the draft details of implementation. These are bad and scary: inability to manage on a benefit is enough to qualify and who could at current rates?

Proving good parenthood to gain an exemption is onerous and almost impossibly prescriptive. I would not have qualified when I was on a parenting payment decades ago. For example: must have a budget, show bills are paid on time, and lots of other detail.

This program will cause widespread fear and distress for many. It is likely to cause serious problems for those with minor disabilities, recent immigrants/refugees, and the many who do not deal well with centrelink or authority.

It is expensive and will unnecessarily increase the difficulties of many more than it assists. It hasn't worked in the 73 comunity, I have a summmary report on the lack of evidence that there is a net benefit!!!.

New income management

On 25 November 2009, the Government announced that it was introducing a new, non-discriminatory model of income management to replace the model now operating in prescribed areas of the Northern Territory (NT).

Legislation for the new model is currently before the Parliament.

Subject to the passage of legislation, this model will commence from July 2010, and will initially cover the whole of the NT. It is expected that most people will have been transitioned from the old model to the new model by 31 December 2010.

The operation of new income management will be carefully evaluated. The first evaluation progress report is expected in 2011/12. The other income management trials currently underway in Western Australia and Queensland will also continue to be evaluated. Future implementation elsewhere in Australia will be informed by the evidence gained from this evaluation activity.

Exposure drafts of the policy can be accessed the policy outlines for the new model of income management

Comments on the exposure drafts can be provided by 22 June 2010 to [email protected] or posted to:

Welfare Payments Reform Branch
PO Box 7576, Canberra Business Centre
ACT, 2610

Representatives from non-government organisations including peak body and advocacy groups are also invited to attend a briefing session on the exposure drafts. The consultations will take place in Darwin, Alice Springs, Sydney and Canberra during June 2010. For more information please contact: [email protected]

Who is covered?

Under the Government's proposal, people will be subject to income management under this model if they are:

Disengaged youth, aged from 15 to 24 years and have been in receipt of one of the following 'trigger payments' for at least 13 out of the last 26 weeks:

a.. Youth Allowance
b.. Newstart Allowance
c.. Special Benefit
d.. Parenting Payment.

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Long-term welfare recipients aged 25 and above (and younger than Age Pension age) and have been in receipt of one of the following 'trigger payments' for at least 52 out of the past 104 weeks:

a.. Youth Allowance
b.. Newstart Allowance
c.. Special Benefit
d.. Parenting Payment.

People subject to income management under the disengaged youth and long-term welfare recipient categories will be able to seek exemptions from Centrelink

Referred by child protection authorities if the child protection worker deems that income management might contribute to improved outcomes for children at risk. This measure of income management will allow for 70 per cent of an individual's welfare payments to be subject to income management. This measure will apply at the discretion of a State or Territory child protection worker.

Vulnerable welfare payment recipients, as assessed by a Centrelink Social Worker, to be experiencing issues such as financial hardship, domestic violence or economic abuse.

These latter two measures will not be eligible for exemption pathways, despite having access to ongoing reviews and to appeal rights. Individuals referred by child protection authorities and Centrelink social workers will be subject to income management if they are in receipt of the following payments:

a.. Youth Allowance
b.. Newstart Allowance
c.. Parenting Payment
d.. Sickness Allowance
e.. Special Benefit
f..  Partner Allowance
g.. Austudy
h.. Mature Age Allowance
i..  Parenting Allowance
j..  Widow Allowance
k..  Widow B Pension
l..  ABSTUDY that includes an amount identified as Living Allowance
m.. Age Pension
n.. Disability Support Pension
o.. Wife Pension
p.. Carer Payment
q.. Bereavement Allowance
r.. Special Needs Pension
s.. DVA Service Pension or Income Support Supplement
t..  Defence Force Income Support Allowance (DFISA).

Centrelink will contact individuals that will be subject to the new model of income management.

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Exemptions from income management

People subject to income management under the disengaged youth and long-term welfare recipient categories will be able to seek an exemption from income management if they meet certain criteria.

a.. For people with school-aged children, the criteria will relate to adequate school   attendance, or satisfactory progress at a schooling alternative

b.. For people with dependent children younger than school age, the criteria will relate to responsible parenting - for example, a record of up-to-date immunisation, and attendance at child care or parenting classes

c.. For people without children, the exemption criteria will relate to engagement through work or study or other approved activities.

More information about exemption criteria is outlined in new income management Questions and Answers.

Voluntary Income Management

Voluntary Income Management will become available in the NT when the new model is rolled out. For people who volunteer, there will be an incentive payment of $250 for each continuous six months of income management completed. The rate of income to be managed is 50 per cent and the period of participation in Voluntary Income Management will be a minimum of 13 weeks. Voluntary Income Management will be available to eligible welfare payments recipients, i.e. if they are in receipt of a specified trigger payment and as long as they are not already (or subsequently) subject to one of the compulsory measures of income management. The incentive payment will also be available to voluntary income management customers in Western Australia.

Money management and financial counselling support services

Money management and financial counselling support services will help people who are income managed and others in the community to develop the skills to appropriately use their income support payments. It is not compulsory for people to go to one of these services, but it is encouraged because they provide a range of support that can help people avoid or resolve financial difficulties and put in place good ways to manage their money. Services are delivered by community organisations and include crisis support, financial counselling, advocacy and budgeting and money management education.

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Matched Savings Payment

People subject to compulsory income management who complete an approved money management course and demonstrate a personal savings pattern may be eligible to claim a Matched Savings Payment. This payment will be up to $500. People may only claim the payment once. The matched savings payment will also be available to individuals referred to income management by child protection authorities in Western Australia

Rates of income management

Disengaged youth, long term welfare payment recipients and individuals deemed vulnerable by Centrelink social workers will have 50 per cent of regular installment payments income managed. This rate will also apply to those who volunteer to be income managed. People referred for income management by child protection authorities will have 70 per cent of their regular installment payments income managed. For all customers, 100 per cent of advance payments, lump sum payments, and Baby Bonus installments will be income managed.

Accessing income managed funds

The methods of accessing income managed funds will not change. For many people, the most convenient way to access their income management funds will be through the BasicsCard, a PIN protected card which operates using the existing EFTPOS network, and can be used at a broad range of merchants. However, there is a range of other ways to access income managed funds - Centrelink will discuss these with customers at their initial income management interview.

Payments subject to income management

Once a person is subject to income management, the following payments will be subject to income management:

a.. All trigger payments listed above
b.. Family Tax Benefit
c.. Baby Bonus
d.. Maternity Immunisation Allowance
e.. Carer Allowance
f.. Child Disability Allowance
g.. Mobility Allowance
h.. Pensioner Education Supplement
i.. Double Orphan Pension
j.. Social Security and DVA Telephone Allowance
k.. Utilities Allowance
l.. a payment under the Assistance for Isolated Children Scheme relating to Homelands Learning Centre students
m.. ABSTUDY that includes an amount identified as Pensioner Education Supplement
n.. Social Security and DVA Bereavement Payment, or
o.. Advance payments of most social security benefits, pensions and allowances, and some DVA service or income support payments and supplements.

Related information

New Income Management Questions and Answers

Major welfare reforms to protect children and strengthen families

Policy Statement: Landmark Reform to the Welfare System, Reinstatement of the Racial Discrimination Act, and Strengthening of the Northern Territory Emergency Response


Briefing on the legislation for the extension of

income quarantining to welfare recipients across Australia

There is legislation in front of the senate that, if passed, will massively change the nature of the Australian income security system. It requires wide debate and scrutiny as the bills will impose new levels of control on vulnerable people throughout Australia.

The package of bills includes: Social Security and Other Legislation Amendment (Welfare Reform and Reinstatement of Racial Discrimination Act) Bill 2009, Families, Housing, Community Services and Indigenous Affairs and Other Legislation Amendment (2009 Measures) Bill 2009, Families, Housing, Community Services and Indigenous Affairs and Other Legislation Amendment (Restoration of Racial Discrimination Act) Bill 2009. These bills cover a range of issues but the focus of this document is the power to extend the main provisions of the NT emergency income management regimes to all Australian recipients of certain payments. As this will no longer discriminate racially it is coupled with reinstatement of the Racial Discrimination Act.

The Greens and Opposition have referred the Bills to the Senate Community Affairs Committee for very different reasons: The Greens because they believe the RDA reinstatement should not be conditional on accepting the IM extension, and their belief that IM should be voluntary, the Opposition because they feel the changes water down what they introduced as part of their NT emergency measures.

There is considerable concern in those sectors of the community who are aware of the problems about both the effects of the existing scheme and the extension. They question the evidence of the claimed benefits so far and raise the need for more valid evidence to be used in assessing of the implications of the change. Those potentially affected are the most vulnerable long term unemployed, sole parents and young people whose rights are too often under threat and require further interest and action.

Almost all the submissions received recommended against the changes and for the unconditional reinstatement of the Racial Discrimination Act.

The following is a summary of the most common recommendations in submissions to the senate committee on the legislation.

  1. The imposition of compulsory category defined income management is a massive shift in the nature of our social security system and needs wide discussion before any changes are made.
  2. The legislation on extending IM generally must be withdrawn, as the evidence of the costs and consequences have not been appropriately considered.
  3. The government's commitment to reinstate the RDA has to be immediately and separately undertaken.
  4. The current income management system in the prescribed NT areas should be replaced by a voluntary system, with communities having the capacity to request they retain it, if they feel it will benefit them.


Reasons given for the above:

  1. The changes are problematic as there is no compelling evidence that compulsory universal income management does improve the lives of most of those included, and there are indications that it could be destructive.
  2. The costs per capita in the NT for administration are estimated at $80 plus per week per recipient, and stand in contrast to the need for funds for wrap around services that would benefit recipients more.
  3. Financial counselling and other services are likely to be more effective than income control.
  4. There has been no formal government consultation with organisations that represent some of the specific groups who will be negatively affected: disability groups, women's groups and those representing refugees and immigrant communities and many people on be on Newstart, sole parent payments and youth allowance.
  5. The legislation allows the government to extend the system Australia wide, not just the NT, without the need to return to parliament.
  6. Except for the reinstatement of the Racial Discrimination Act, the legislation to change the system has been clearly supported by only one (the NT Government) of the 81 plus or so diverse submissions received so far (16.2.2010) by the Senate Inquiry. Almost all the rest clearly opposed the changes, a few were equivocal or unclear.


Who will be affected and when?

The legislation is open ended as confirmed by evidence given by FAHCSIA at the first Senate Community Affairs committee hearing (4.2.10). While the Government's stated intention is to extend Income Management to the rest of the NT on July 1 for 12 months, the legislation allows a roll out to anywhere in Australia with no further need for Parliamentary approval. (Italics indicate quote from Hansard.)

There are basically five categories where people would be subject to income management that are set out in the legislation. It is basically people under 25 on the main activity tested payments-youth allowance, Newstart and parenting payments. Those under 25 would need to be on payment for 13 out of 26 weeks and those over 25 on the same payment types for 52 out of the previous 104 weeks. It is a slightly earlier intervention for youth than for those over 25.

Under the current income management scheme, which goes for another 12 months, for the first six months of that period there will be an RDA suspension still in place, but for the last six months there will not be. On 31 December 2010 the RDA will be reinstated for all measures, but the transition for income management has a six-month period beyond that.

Numbers currently being covered in identified areas are about 14,000, estimate for NT may be 20,000. No figures are available for the rest of Australia.

The Senate Inquiry into Social Security and Other Legislation Amendment
(Welfare Reform and Reinstatement of Racial Discrimination Act) Bill 2009 and the Families, Housing, Community Services and Indigenous Affairs and Other Legislation Amendment (2009 Measures) Bill 2009 along with the Families, Housing, Community Services and Indigenous Affairs and Other Legislation Amendment (Restoration of Racial Discrimination Act) Bill 2009 received 81 submissions and has held and planned only s NT and ACT hearings. The organisations and individuals are listed in an appendix to show the breadth of the groups that fail to support the bills on the one hand and the gaps that indicate a lack of awareness of some groups to be affected.

There are two women's groups, two sole parent groups, one refugee group, lots of legal groups, some Indigenous groups including some NT people, about seven major welfare agencies. Given the breadth of future possible effects this shows that few people outside those involved in NT issues are aware of the changes that could deeply affect them. This is not an adequate representative consultation on such a major change. There was little publicity about the Inquiry, just an announcement that was picked up by a few groups and networks.

The evidence to support such as major change?

There is no clear evidence that there have been consistent and measurable benefits from the income management program. A close examination of the reported consultation process below suggests it cannot be trusted to adequately reflect the views of those communities affected by the Intervention. An examination of the data available, at best, suggests that while there have been some benefits, the causes for these are by no means clear. Income management's negative consequences have been ignored or overlooked. A proper evaluation would have been designed to look at possible harm as well as benefits, and this did not.

In December, Indigenous Affairs Minister Jenny Macklin's statement on the legislation said a report from the Australian Institute of Health & Welfare (AIHW) added "to existing evidence that demonstrates that income management is meeting the government's objectives of ensuring payments intended to benefit children are being used for that purpose".

There is little or no support from nearly all (80/81) submissions made so far for the conclusions drawn by the Government. Apart from the NT government, that claims to be a partner with the Federal government, no one clearly supports the extension of the income management system per se. Many groups express both concern at the data used and the effects on many recipients.

The AIHW report casts serious doubts on validity and reliability of the data used and its interpretation by the Government despite its being quoted to make the case by the Government. It was based on supplied government data, that AIHW originally refused to collect because of potential ethical issues.

At a Senate Estimates hearing last week, (AAP report) Director Penny Allbon said:

"In our report we made strong comments about the limitations of the evidence," Dr Allbon told a Senate estimates hearing on Wednesday. "Indeed, the report states the research would "sit towards the bottom of an evidence hierarchy".

"There was a limited amount of quantitative data on which to base the evaluation findings ... (and) client interviews included only a relatively small number of clients (76), from four locations, who were not randomly selected".

As 16,000 people are income managed from 73 communities this data was obviously inadequate. The other data claimed to support the government's case comes mainly from the FAHCSIA consultation process. While this was an attempt to consult, the processes of using known public servants to run the sessions obviously limited the free flow of discussion. Examination of some tier 2 sessions' transcripts showed that the bureaucrats and local Indigenous staff explained to the locals the benefits they had gained so far and intentions of the government to extend these, before asking for feedback. This mode of ‘consultation' is very unlikely to create a free flow of information and ideas as the process gives the control over subject matter and its interpretation to government representatives. For example, the FAHCSIA reports claimed there was support for extending the system generally. But in the published reports the nearest comments were ‘if you are doing it to us, do it to everyone' which is hardly Indigenous endorsement for rolling out the program universally, rather than anger at race discrimination.

Even the supposedly independent report from consultants CIRCA, who had done other work in the area for FAHCSIA, outlined many difficulties met in the processes. It confirmed that the consultation process did what FAHCSIA wanted it to do, ie followed the set process, but failed to report if the locals were happy with the process.

The Government report of findings conflicts with their own NTER Review chaired by Peter Yu. This was independent and recommended that IM be made voluntary, because it was not seen as fair. This conflict between the evidence raises serious questions about the validity of the government's interpretation of the results and the policy derived from it.


Some comments on extending the scope of IM

Sole parent union

However blanket imposition of income management to welfare recipients regardless of individual's capacity increases discrimination, rather than lessens it. Providing exemptions from income management for those who can prove they are responsible, is not only insulting and discriminatory, but it reverses the entire basis of our legal and justice system. This legislation starts from an assumption that welfare recipients are unfit and improper people purely because of their lack of paid employment.

The Prime Minister has acknowledged that he would find it difficult to manage on an aged pension. That sole parents not only manage on this income for themselves, but also to raise their children should be taken as a testament of their capacity, rather than an indication of their need to be controlled. This legislation is a return to the 1930s style treatment of welfare recipients, and the "susso". It is regressive, insulting, unnecessary, and there is no evidence that it works.

Jon Altman CAEPR ANU

There is no evidence, either from Australia or overseas, that punishing and demeaning the poor and the vulnerable, and in the case of the NT Intervention the ethnically different, through draconian measures like income management makes a difference. Indeed, first-hand experience I have had in NT prescribed communities suggests that if anything such measures have resulted in community disempowerment and demoralisation...... The policy intent to normalise Aboriginal people could have some perverse outcomes and this is of great concern. For example, in the USA, sociologist Loic Wacquant in Punishing the Poor (Duke University Press, 2009) has made a persuasive case that the escalating rate of imprisonment of the poor and the black in the USA has been linked to welfare reform influenced by neoliberalism principles that began during the Clinton era.

4. Gaps in the evidence base - now and future?

The transcript of the first ACT hearing of evidence showed that FAHCSIA staff spent considerable time seeking evidence to support the changes, but were left with no more than had been included in the lukewarm AIHW report, which also complained that there was no prior data to compare with. Despite statements that the extension of IM to the NT generally by June 30, would be evaluated, the following exchange casts serious doubts on how well this would be done.

Senator Siewert -Can you provide some of the evidence that you have just been talking about that relates, for example, to single parents and that vulnerability?

Senator FURNER-Just on that point, can we get some indication from you what might be the criteria or what might be the evidence in respect to rolling it out outside the NT and will you be doing comparisons based on other trials for that to be the benchmark for expansion?

Mr Sandison-......The government have said that they will take into account information and evaluation results for further consideration in relation to doing anything outside of the Northern Territory. (Discussion on lack of data from Cape York or WA trials.)

Senator SIEWERT-So where is the evaluation? Do you have an evaluation framework already?... I am asking a serious question here. You know I have been very critical of the lack of evaluation framework for the current trials, and we still do not have an evaluation of the process in WA. It has been, quite frankly, haphazard. You do not have any baseline data and you have very little quantitative data......So where is the evaluation framework? This is a massive social experiment. Where is the evaluation framework? Will the framework be peer reviewed? Will the evaluation be peer reviewed?

Mr Sandison-We would be preparing a framework before the end of June this year.

This suggests further inevitable evidence deficits.

If this situation concerns you, please express that concern:

  • To your local member
  • In any group or political party
  • To the media
  • To Cabinet members.
  • To people of influence and power



Submissions received by the Senate Committee as at 16 February 2010 in posting order:

Oliver, Mr Andrew; Nicholls, Ms Anthea; Northern Territory Council of Social Service (NTCOSS) YMICC of The Religious Society of Friends (Quakers) in Australia; Las Casas Dominican Centre;, National Council of Churches in Australia (NATSIEC); Settlement Council of Australia; Law Institute of Victoria; Community Child Care; The Religious Society of Friends (Quakers), Regional Victoria; Billings, Dr Peter and Cassimatis, Dr Anthony; Nura Gili Indigenous Programs, University of New South Wales; Western Australian Council of Social Service (WACOSS); Pensioners and Superannuants Association; ANGLICARE Sydney; St Vincent de Paul Society National Council of Australia; Australian Council of Social Service (ACOSS); Human Rights Law Resource Centre; Amnesty International Australia; Carers Australia; Office of the Privacy Commissioner; Public Interest Law Clearing House (PILCH); Australian Indigenous Communications Association (AICA); Reconciliation Australia; Annetts, Mr Jo;, Merckenschlager, Mr Max; Egan, Sr Patricia; Aboriginal Catholic Social Services (ACSS); Family Relationship Services Australia (FRSA); Federation of Community Legal Centres (Vic) Inc (FCLC); National Association of Prevention of Child Abuse and Neglect (NAPCAN); Small, Ms Paulin; Anglicare, Australia; Women's International League for Peace and Freedom (WILPF); Paterson, Ms Jane; Intervention Rollback Action Group (IRAG); Healy, Dr Joan, Chester; Ms Leonie Nampijinpa; Heysen, Ms Kerry; Ryan, Ms Genevieve; Edge, Ms Jennifer; Lynn, Ms Joan; Radman, Ms; Patricia, Leahy:; Dr Micheal, van Ruth; Sr Katrina, Rich; Ms Bianca, White; Ms Pilawuk, Madigan; Sr Michele, McMahon Mr John; Altman, Professor Jon; Michele Harris spokesperson for group of concerned Australians; National Association of Community Legal Centres (NACLC); Australian Youth Affairs Coalition (AYAC);, National Council of Single Mothers and their Children Inc, Tangentyere Council; Central Australian Youth Link-Up Service (CAYLUS); Victorian Council for Civil Liberties; Jumbunna Indigenous House of Learning, University of Technology, Sydney; ANU National Centre for Indigenous Studies; ANU College of Law; Aboriginal Medical Services Alliance Northern Territory (AMSANT); Australians for Native Title and Reconciliation (ANTaR); Central Land Council (CLC); The Fred Hollows Foundation; Catholic Social Services Australia; Good Shepherd Youth and Family Service;, Australian Council of Trade Unions (ACTU); Indigenous Committee, Brotherhood of St Laurence; Sole Parents' Union; North Australian Aboriginal Justice Agency (NAAJA); Law Society Northern Territory; Women's Electoral Lobby; Distaff Associates Australia; The Salvation Army Australia Southern Territory; Regulatory Institutions Network (RegNet); Central Australian Aboriginal Legal Aid Service (CAALAS); Northern Territory Legal Aid Commission; Australian Human Rights Commission (AHRC); National Welfare Rights Network; Judge, Ms Celia; Australian Financial Counselling and Credit Reform Association (AFCCRA); Laynhapuy Homelands Association; Northern Land Council; Department of the Chief Minister (Northern Territory); Law Council of Australia, Australian Domestic and Family Violence Clearinghouse, Women's Refuge Movement Working Party, Oxfam Australia, Stop the Intervention Collective Sydney (STICS), Sydney Centre for International Law, Faculty of Law, Reconciliation for Western Sydney, Finter, Ms Deidre, UnitingCare Australia for links to all the above submissions

[email protected] - for the Towards a More Civil Society Roundtable


Reproduced with the kind permission of Eva Cox.

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