The BasicsCard, used to manage quarantined welfare payments for those living under the NT intervention. Compulsory income management will be rolled out into five disadvantaged centres around Australia from next year.
NATIONAL: Income management is a disempowering control measure and there is little evidence it is helping people in the Northern Territory manage their money, an independent evaluation has found.
In a scathing interim report, two leading universities say the program operates more as “a means of control” than as a way to build an ability to effectively manage money.
“There is little evidence to date that income management is resulting in widespread behaviour change,” the report says.
“It does not in itself motivate people to develop the skills to manage their finances in the longer term.”
There are many people subject to compulsory income management who are unlikely to benefit from the measure, and for whom the restrictions create unnecessary frustrations and challenges, the report says.
There is little support available to help people present cases to be exempted, it says.
Indigenous Affairs Minister Jenny Macklin announced on Thursday the federal government would be making exemption processes clearer.
The changes would apply from July 1, 2013 and involve Centrelink staff giving parents reminders about requirements for exemptions – regular child health checks, immunisation and school attendance.
The federal government will also ramp up money management services on offer to help increase financial literacy.
Income management has been used in NT Aboriginal communities since 2007.
Laws were passed in June to expand income management for people on welfare to trial sites at Bankstown (NSW), Playford (South Australia), Shepparton (Victoria), and Rockhampton and Logan (Queensland).
Under the arrangement, 50 to 70 percent of people’s welfare payments are quarantined on a BasicsCard that can be used only at Centrelink-approved stores on certain items.
In October 2011, there were more than 16,000 people in the Northern Territory on income management, including almost 12,000 on compulsory income management.
Overall, 91 percent of people on income management are Aboriginal.
The report says the system has failed to stop the practice known as humbugging, which has been used by government to justify welfare quarantines.
“Basicscards are used for currency in card games and gambled,” the report says.
The report quotes people on Basicscards saying they have difficulty paying for flights to attend funerals and frequently miss out on attending sporting matches and other social events, such as the Darwin Show, that do not accept the card.
The evaluation by the Australian National University and University of NSW did not look at whether income management was providing value for money.
A final evaluation is due in 2014.
Australian Greens senator Rachel Siewert said Ms Macklin was misusing the evaluation to “justify the continuation and expansion of the flawed policy.”