So the Turnbull Government wants to quarantine your Centrelink income & family assistance payments? Time to read the fine print

A limited compulsory income management scheme was introduced by the Howard Government in 2007.

Its aim was to reduce discretionary disposable income by quarantining 50 per cent of all Australian Government income support and family assistance payments. 

Over time it was expanded to include individuals and/or certain communities in all eight states and territories and the financial vehicle for delivery was the Basics Card.

As of 25 March 2016 there were a total of 26,508 individuals nation-wide whose income was quarantined in the income management scheme and only 20.66 per cent had entered the scheme ‘voluntarily’.

An est. 20,941 people in the scheme identified as indigenous.

Of the total nation-wide figure 79.93 per cent were persons living in the Northern Territory and only an est. 2,755 (13 per cent) of those Territorians on income management were not classed as indigenous.

In October 2016 Prime Minster Malcolm Bligh Turnbull announced that the Healthy Welfare Card – the latest version of cashless debit card income management being trialled – will probably be introduced for all income support and family assistance recipients across Australia, at this stage with the exception of those on Age and Veterans’ Affairs pensions¹.

This version quarantines 80 per cent of fortnightly or other periodic cash transfer payments made to a person receiving income support or family assistance. It also quarantines 100 per cent of any lumpsum payment.

There will be few exemptions available for those who attempt to opt out of the scheme.

Given that there is: 

significant restriction on how this card can be used²,

inadequate consumer protection for card holders,

poor monthly statement record keeping in comparison with an ordinary bank account,

no monthly interest payable on any balance remaining in a welfare restricted account - unlike an ordinary bank account,

no guarantee that the entire account balance will be fully accessible to a card holder, 

no direct debiting allowed³, and

no procedure identified for retrieval/transfer to executor of an account balance on death of a cardholder,

it may be wise to read up on the fine print in advance of full implementation being announced by the Turnbull Government.

Here are the current conditions published by Indue Ltd⁴ which operates this cashless debit card:

Indue: Debit Card Account Conditions of Use  (PDF 84 pages)

Footnote:

1. According to the DSS Guide to Social Security Law, 8.7.2.30 Trigger Payment (Cashless Debit Card Trial), April 2017:

The trigger payments are:

a payment under the scheme known as ABSTUDY that includes an amount identified as living allowance,

austudy payment,

benefit PP (partnered),

BVA, so long as the recipient has not reached pension age,

carer payment,

disability support pension,

newstart allowance,

PgA (other than non-benefit allowance),

partner allowance,

pension PP (single),

sickness allowance,

special benefit,

widow allowance,

widow B pension,

wife pension,

youth allowance.

2. 8.7.6.40 Welfare Restricted Bank Accounts

3. Existing Centrepay deduction/s appear to be subtracted from a Centrelink fortnightly income support payment before the balance is split between the new welfare restricted bank account (80 per cent) and the original unrestricted bank account (20 percent).

4. Indue has been providing income management services to the federal government since at least 2009. The Department of Human Services awarded an 8.6 million contract to Indue Limited covering 1-Jul-2015 to 30-Jun-2017 for Income Management Card Services and a contract worth $840,000 for the period 1-Jan-2017 to 31-Dec-2017 supplying business administration services in the form of Benefits Cards.