Finance

Australia’s unemployed facing controversial cashless welfare cards again

Unemployed people in a handful of areas across Australia face the prospect of being shunted onto cashless welfare cards.

Entry to the controversial scheme has been paused for the past year, given the huge influx of people left unemployed throughout the coronavirus pandemic.

But the federal government has decided to resume the program for people seeking income support.

“Now that the number of Australians coming on to social security payments has returned to pre-pandemic levels it is appropriate to lift the pause,” Social Services Minister Anne Ruston said on Wednesday.

Ruston said the government would implement a staggered approach to shifting new entrants onto the long-running trial scheme.

Social Services Minister Anne Ruston has restarted the rollout of the cashless welfare card scheme. Credit: AAP

The cashless debit cards quarantine up to 80 per cent of welfare payments so the money cannot be spent on alcohol or gambling.

The supposed benefits of the cards are hotly contested.

What is the Cashless Debit Card?

The following information has been provided by the Australian Government Department of Social Services.

The Australian Government is considering the best possible ways to support people, families and communities in places where high levels of welfare dependence co-exist with high levels of social harm.

The objective of the Cashless Debit Card is to ensure that welfare payments are spent in responsible and meaningful ways and not spent on products and activities that contribute to social harm.

The Cashless Debit Card Cashless Debit Card looks and operates like a regular bank card, except it cannot be used to buy alcohol or gambling products, some gift cards or to withdraw cash.

As part of the Cashless Debit Card program, you’ll receive an interest bearing, fee free account which is where a portion of your income support payments will be deposited. You can use internet banking and make contactless payments through the Cashless Debit Card.

Unemployed people in a handful of areas across Australia face the prospect of being shunted onto cashless welfare cards.
Unemployed people in a handful of areas across Australia face the prospect of being shunted onto cashless welfare cards.

Credit: 7NEWS

Cashless card controversy

Thousands of welfare recipients will be on cashless welfare cards for the next two years after the Morrison government failed in its bid in December last year to make the scheme permanent.

An altered bill passed the lower house after a lengthy late-night Senate sitting where the government changed its plan with the help of Centre Alliance.

The cost remains secret as the cards are run by a private company.

Labor’s social services spokeswoman Linda Burney said the government had underestimated community resistance and resentment of the plan.

“Continuing this policy is a massive mistake,” she told parliament at the time.

SENATE ESTIMATES
Anne Ruston says about 25,000 people in the NT can switch to using the Cashless Debit Card. Credit: AAP

Labor supports income management if it’s voluntary but opposes the mandatory nature of the scheme.

Australia’s top Indigenous, human rights and welfare groups are dismayed the “discriminatory and punitive” cards will continue.

“The CDC is dehumanising and attempts, unsuccessfully, to treat the symptoms of colonialism and dispossession,” Amnesty International Indigenous rights campaigner Nolan Hunter said in December.

“What we need from government is to trust Aboriginal and Torres Strait Islanders to know what’s best for us and to support us in community-led solutions.”

What you can and can’t use the cashless welfare card for.
What you can and can’t use the cashless welfare card for. Credit: Department of Social Services

Government minister Keith Pitt’s Queensland electorate covers communities using the cards.

He said it’s tough but necessary, using anecdotal evidence to argue the program helps ensure money is spent on rent and food.

As part of the last-minute changes, more than 20,000 people in the Northern Territory and Cape York can volunteer to move onto the card from another income management scheme.

The controversial program appeared on track to be scrapped in December when independent Senator Rex Patrick signalled he would vote against it.

REX PATRICK CROSSBENCH PRESSER
Senator Rex Patrick criticised the Coalition for pointing to an unreleased report about its effectiveness in stopping welfare recipients from drinking, gambling or using drugs. Credit: AAP

But Centre Alliance’s Stirling Griff helped pave the way for the amended version to pass 34-33 in the upper house, by dodging the vote.

He had promised to oppose the original bill and his lower house colleague Rebekha Sharkie voted against it.

Welfare recipients in Ceduna in South Australia, the East Kimberley and Goldfields in Western Australia, and Bundaberg and Hervey Bay in Queensland are on the cards.

Ruston revealed the majority of people on the cards in WA and SA were Indigenous.

Labor and Greens senators labelled the program racist in a series of scathing speeches.

Senator Jacqui Lambie spoke through tears as she reflected on living in poverty on welfare and loved ones struggling with drug addiction.

The Tasmanian independent, who opposed the bill, despaired the government had not taken any action to improve the scheme after starting trials.

The first trial sites started in early 2016, meaning some people could be on the card for almost seven years when the new expiry is reached.

Patrick criticised the coalition for pointing to an unreleased report about its effectiveness in stopping welfare recipients from drinking, gambling or using drugs.

Where can the Cashless Debit Card be used?

The following information has been provided by the Australian Government Department of Social Services.

The Cashless Debit Card looks and operates like any other bank card, and can be used in stores that have an eftpos machine. It can be used:

  • in most stores that accepts eftpos for products and services other than cash, alcohol or gambling
  • to shop at approved online stores
  • to pay bills and make recurring payments (such as mortgages or school fees paid in instalments)
  • for online banking – with an app for both Android and Apple devices

It cannot be used to:

  • buy alcohol
  • gamble
  • buy some gift cards
  • withdraw cash

Cashless Welfare Card locations

  • Northern Territory
  • East Kimberley and the Goldfields in Western Australia
  • Bundaberg, Hervey Bay, Cape York and Doomadgee in Queensland
  • Ceduna in South Australia

Cashless Debit Card extended to NT

Ruston earlier in March said the upgraded card would give participants more choice over where and how they shop.

“We know the BasicsCard has limitations,” she said.

“This is why we are working to ensure the Cashless Debit Card is accepted at almost one million EFTPOS terminals nationwide compared with the BasicsCard which only allows participants to shop at about 17,000 merchants.”

The minister said the Cashless Debit Card also allowed users to shop and pay bills online, use contactless purchasing, set recurring deductions and make transfers to other accounts.

“Cashless welfare is not about controlling where welfare payments are spent but seeks to limit the amount of taxpayer-funded social security which is used for alcohol and gambling products,” Ruston said.

“We know this program helps limit the ability for problem consumption to cause social harm for individuals, their families and communities.”

As well as those in the NT, the extended scheme also allowed income management participants in Cape York, Queensland, to switch to the Cashless Debit Card from Wednesday and allowed for people in Bundaberg and Hervey Bay to volunteer for the program.

But when the legislation passed, Labor’s social services spokeswoman Linda Burney said the government had underestimated community resistance and resentment of the plan.

“Continuing this policy is a massive mistake,” she told parliament at the time.

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