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National

Future of income management unclear as the end of the cashless debit card draws near

Welfare recipients have mixed views about making income management voluntary. (Isabel Moussalli - ABC News)

Legislation to scrap the controversial cashless debit card program looks set to become one of the first bills debated by the new parliament, as the federal government pushes ahead with delivering its election commitments. 

While it raises questions for thousands of people on the card, another form of income management in the Northern Territory — affecting more people — could also end shortly: the Basics Card. 

So, what does all of this mean for people in communities, who have long had their welfare managed? 

Remote NT communities like Santa Teresa in Central Australia have been subjected to income management since 2007. (ABC News: Greg Nelson)

What's happening with cashless welfare?

The cashless debit card trial quarantines up to 80 per cent of a person's welfare payments, and cannot be used to buy alcohol, gamble or withdraw cash. 

More than 17,000 people are on the card — many of whom are Indigenous — in South Australia, Western Australia, Queensland, and the Northern Territory.

A damning Australian National Audit Office (ANAO) report into the performance of the trial, published in June, found the Morrison government failed to demonstrate the program was working, despite operating trials for more than five years. 

Legislation to end it has been passed in the House of Representatives, and will be considered by the Senate in September. 

If Labor's bill is passed in the Senate, the cashless debit card will soon no longer be compulsory at sites across Australia, leaving it up to communities to choose whether income management will continue in some form. 

The Basics Card is limited because it can only be used at approved businesses. (ABC News: Emilia Terzon)

So, where does the Basics Card fit in?

The Basics Card is another form of income management currently in place, which was brought in during the NT Intervention, then expanded in 2010.

It quarantines welfare payments of more than 22,000 people in the Northern Territory. 

While it's similar to the cashless debit card, it quarantines 50 per cent of welfare recipients' money, and can only be used at approved stores. 

Before the election, Labor said it would be scrapped, making welfare management voluntary if it won. 

However, it has since walked back on that promise. 

Federal Social Services Minister Amanda Rishworth last month said more consultation was needed before changing the Basics Card. 

"We want to work with communities in the Northern Territory, about what the future of that type of income management looks like," she said.

Do people want income management to stay?

Income management has received mixed reviews by those subjected to it. 

Phillip Goodman, leader of the 15 Mile community in Palmerston, said the Basics Card helped vulnerable people spend their money more wisely. 

Phillip Goodman says the card has helped people in his community. (ABC News: Che Chorley)

"The ones that gamble, they're gonna be gambling away their money or drinking it away," he said.

"In my community, that's what I'm afraid [of], that's the reason why I want this Basics Card to stay.

"It's a safe thing to keep for financial and even bills, you pay your bills on time and everything, register your car, pay your bills and power bills and everything."

However, others have expressed frustration over the limitations of the Basics Card — which does not allow users to buy second-hand items online or withdraw enough cash to spend at cash-only produce market — and the stigma and shame cashless welfare brings. 

Member for Lingiari Marion Scrymgour said the important thing was to give people a choice.

"It's not government coming in and intervening and saying, 'we're going to take away your right to make decisions for yourself and your family'," she said.

Marion Scrymgour says there is little evidence to support the cashless debit card program. (ABC News: Hamish Harty)

'Recipe for disaster'

Country Liberal Senator Jacinta Nampijinpa Price said making income management voluntary in the Northern Territory as alcohol bans lift in some communities could backfire.

She said some welfare recipients might face pressure from family members to hand over their money to spend on alcohol.

"If you've got family members who are struggling with alcohol addiction, with gambling problems, that demand on you to hand over everything you own to feed their addiction is huge," she said.

Jacinta Price says alcohol-fuelled violence may arise from changes to income management measures. (ABC News)

"It is not about empowering people.

"This is about, again, taking away the rights of the vulnerable and prioritising the rights of those who perpetrate violence, who'd like to be able to have access to alcohol to feed their alcohol addiction, who are quite regularly involved with the justice system because of their lifestyles."

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