— About 2600 young people were forced onto income management from July 1.
— 50% of their payment is withheld and credited to a BasicsCard that can be used only at specific stores.
— Income management affects people living in the NT, Bankstown in New South Wales; Logan and Rockhampton in Queensland; Playford in South Australia; and Shepparton in Victoria.
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Young people are being targeted under the federal government’s income management scheme.
Income management has operated in the Northern Territory since 2007. It means that, for people receiving welfare payments, 50% of their payment is distributed to them via a BasicsCard that can only be used to buy certain items at approved stores.
In July last year, the policy was expanded to Bankstown in New South Wales; Logan and Rockhampton in Queensland; Playford in South Australia; and Shepparton in Victoria.
Now, although the trials have produced no evidence proving the policy helps welfare recipients or their children, the policy is being expanded to include two new youth-based categories.
This includes young people aged 13 to 21 who live in one of these designated areas and are either deemed unable to live at home by Centrelink or are people under the age of 25 who apply for a crisis payment after leaving prison.
These categories are compulsory — affected welfare recipients will be forced onto income management against their wishes — and join the child protection and vulnerable recipient categories of compulsory income management.
Alarmingly, these categories also appear to be automatic. Whereas the child protection and vulnerable recipient categories allow Centrelink social workers to exercise their discretion and make judgements on a case-by-case, this flexibility is not granted for these youth categories.
The federal government claims these new categories target young people who, by the very nature of their circumstances, are at-risk. But more often than not, these are people at-risk for reasons that have little to do with financial incompetence or mismanagement.
For example, young people exiting prison have limited support networks and experience discrimination in gaining employment and housing. It is unclear how quarantining their welfare payments will assist them.
For at-risk young people leaving prison or living away from home, this heavy-handed response is no substitute for livable welfare payments, sufficient public housing and well-funded community youth services.
One possible reason for these new categories being automatic is the very low number of people on income management in the five sites.
Despite the federal government budgeting for 1000 income management clients in each site a year, figures are modest after one year, ranging from 53 in Rockhampton to 161 in Shepparton, the only site with more than 100 clients (as of May 17).
This extension of income management indicates an alarming pattern that has long been predicted by critics.
The Australian Council of Social Services (ACOSS) expressed concern about this policy in January last year in a submission to the Senate Community Affairs Committee. It said: “the government is extending income management as a generic response to the complex problems afflicting poor communities, in the absence of hard evidence that it is cost effective.
“The legislation discriminates directly against people on low incomes who are the recipients of income support payments, and indirectly against Indigenous Australians, since the majority of those affected by compulsory income management are Indigenous people.”
Another example of income management becoming the default response to a particular issue faced by low-income people is the Housing Payment Deduction Scheme (HPDS), which passed federal parliament last month.
This policy — which is income management by another name — gives Centrelink the power to deduct up to 35% of the payments to welfare recipients in public housing who are $400 or more behind in their rent, or more than four weeks behind and owing at least $100.
The federal government claims HPDS will tackle homelessness by ensuring tenants do not fall so far behind in their rent that they are forced out of public housing.
But there are other ways of achieving this goal. Shelter SA has suggested funds allocated for the scheme instead be used to provide more financial counselling. One advantage of financial counselling is that it can build the capabilities of low-income people, something that Centrelink control of welfare payments of struggling tenants does not.
Another alternative to income management is Centrepay, which is not only voluntary but online, making the program far more cost-effective, not to mention convenient for welfare recipients. For tenants with intellectual disabilities who need assistance with their finances, the Guardianship Boards operating in different states are more democratic and flexible.
The new changes were met with protests on July 1. In Bankstown, opponents of income management held an action outside Centrelink.
In Playford, community group Stop Income Management in Playford protested at the office of Wakefield MP Nick Champion. Champion not only strongly supports income management but lobbied Kevin Rudd and Wayne Swan in 2010 to make Playford an income management site.
There have been hints the next expansion of income management is likely to target refugees, according to plans suggested by the Coalition and backed by Labor.
Coalition immigration spokesperson Scott Morrison proposed the plan, reported in The Daily Telegraph on June 3, which would include refugees having part of their payments delivered as vouchers for accommodation and food — even less flexible than the BasicsCard — as well as being forced into a work for the dole scheme.
Like the expansion of income management to young people, the targeting of asylum seekers allows both Liberal and Labor to exploit widespread prejudices against refugees — especially those refugees surviving on welfare payments.
By targeting a small group with little political power, income management can once again be extended without provoking a backlash.
These extensions, while only affecting modest numbers of people, help reinforce a victim-blaming culture. It shifts attention away from government policies that contribute to disadvantage and poverty and the problems stemming from these conditions.
Alternatively, a government that was serious about improving the lives of welfare recipients would raise welfare payments to a livable level. The Newstart allowance has not been raised in real terms since 1994 (and asylum seekers on bridging visas are only entitled to 89% of the Newstart Allowance), despite a campaign by ACOSS for a $50 a week increase in the lead up to the recent federal budget.
Other urgent priorities would include reversing the chronic underfunding of community services, such as anti-addiction programs, financial counselling, support programs for young parents and children, and turning around the shortage of public housing.