Can income management help at risk children?

Compulsory income management has been sharply criticised as unhelpful and demeaning for welfare recipients. But should we oppose all forms of compulsory income management? Or should we make an exception for what is known as child protection income management?

For much of the community and welfare sector this is an awkward dilemma.

It is especially awkward for those campaigning against “trials” of the controversial policy. The “trials” are taking place in Bankstown in New South Wales, Logan and Rockhampton in Queensland, Playford in South Australia and Shepparton in Victoria.

Compulsory income management in the Northern Territory is imposed on broad categories of recipients — those on Youth Allowance for more than six months and those on Newstart or the Parenting Payment for more than 12 months. But the income management “trials” in other states apply to smaller groups.

For now, the federal government has limited compulsory income management to those Centrelink deems “vulnerable” or those with dependents deemed at risk of “abuse” or “neglect” by state government child-protection services.

The government has chosen categories of recipients unlikely to attract much public attention or sympathy. This may allow the “trials” to escape the criticism and scrutiny they deserve, and make it easier for the government to extend compulsory income management to other locations and welfare recipients.

This is especially the case with child protection income management. It allows Prime Minister Julia Gillard to portray opponents as indifferent towards the welfare of children suffering abuse or neglect. Although the “protect the children” argument is powerful, it is not decisive.

In fact, child protection income management is problematic and should be opposed for many of the same reasons other forms of compulsory income management are opposed.

In April last year, the Western Australian Council of Social Service (WACOSS) analysed federal government-commissioned research into child protection income management in WA. It said the policy was not nearly as effective as its supporters claim.

Collected evidence was anecdotal, and the sample size of surveyed clients was small. Most of those surveyed reported that child protection income management had made their lives better, but there was no measurement of objective indicators of child wellbeing, such as spending patterns or health indicators (like medical records).

WACOSS noted that those surveyed were often mothers at risk of losing their children or seeking reunification with their children. This could have potentially skewed results towards positive responses — along with the fact that respondents were paid $50.

As the surveys were voluntary, it is likely those with humiliating and negative experiences of child protection income management would not have bothered taking part, further skewing results.

Moreover, it is very unclear whether the perceived benefits of child protection income management were because recipients had 70% of their payments put on a Basics Card, or because of the strong case management and support services provided to affected families.

There is no evidence of long-term changes for clients. In fact, evidence suggests child protection income management recipients were less likely to undertake financial management courses provided by Centrelink, reasoning that because at least half of their payments were being “managed” by Centrelink, they did not require such programs.

Might child protection income management make recipients more dependent than before, stifling their motivation to develop financial management skills? According to 55% of surveyed financial counsellors, the answer is yes.

WACOSS also noted very low rates of participation in financial counselling (20%) for people affected by child protection income management.

One community organisation surveyed expressed the concern that when recipients exit the child protection income management system, “they will not have improved personal decision-making, goal setting, or financial literacy at all and will be worse off than before they went on the program due to prolonged dependency on the system”.

The high cost is another big issue. Child protection income management system in WA cost $65,000 per family, per year. If you think how much investments of $65,000 per family could achieve it is doubtful income management is the best way to spend this money.

Governments chronically underfund what the Australian Association of Social Workers calls “wrap-around” services, such as alcohol, drug and gambling addiction programs, along with health and post-natal health services. In South Australia, 44 financial counsellor positions have been lost over the past two years.

We would achieve better results for vulnerable families by devoting public resources to these services instead. The WA Social Inclusion board noted that “the greatest success stories” are those that incorporate holistic approaches. Whereas compulsory income management, due to the limited support services it offers, remains a narrow, punitive approach.

Protecting children must be an essential goal for any humane society. But that does not require us to let the Gillard government off the hook for expensive, heavy-handed policies that lack evidence they work.

This is especially the case when alternative and more effective policies are routinely neglected.

Compulsory income management represents an extreme shift for the Australian welfare system, undermining the 70-year legal principle that recipients have the right to control their welfare payments.

The onus should be on the federal government to demonstrate that the policies are justified. With child protection income management, as with other forms of compulsory income management, the government has failed to do this.

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