Compulsory Income Management in the Northern Territory – evaluating its impact

Abstract

Australia has been experimenting with constraining the ways in which welfare recipients can spend their income support payments, limiting their ability to access cash and purchase some products. The policy objectives include to reduce spending on alcohol, gambling, pornography and tobacco in favour of meeting ‘basic’ family needs, especially for children, to limit the scope for financial harassment, encourage pro‐social behaviours, and build financial capabilities. In the logic of the programs these outcomes are expected to be manifest at the individual, family and community levels. The policy has primarily impacted on Indigenous Australians as a result of its geographic targeting, although a recent report has recommended a more stringent version of the program be introduced universally to all welfare recipients other than the aged. The largest of these experiments is ‘New Income Management’ in the Northern Territory, which has had more than 35,000 participants since its introduction in 2010. This article reports on the key findings of the major independent evaluation of New Income Management commissioned by the Australian Government.

“Moved on”? An exploratory study of the Cashless Debit Card and Indigenous mobility

“…More immediately relevant are studies of income management in the Northern Territory. Bray et al (, 54–55) found no evidence of Indigenous out‐migration from the Northern Territory as a result of the introduction of New Income Management. However, Cobb‐Clark et al (), examining the drop in school attendance that accompanied the introduction of income management, surmised that “the disruption caused by missing payments resulted in children being absent from school as they travelled with their parents to Centrelink offices in regional centres to sort out their benefits” (p. 32).…”

Should Love Conquer Evidence in Policy‐Making? Challenges in Implementing Random Drug‐Testing of Welfare Recipients in Australia

“…Conversely, research suggests it is likely to adversely affect both the wellbeing and the employment prospects of those tested and generate significant flow‐on costs in terms of testing, enforcement, treatment, crime, emergency relief, housing stress, mental health, and further stigma of the long‐term unemployed in the job market (Australian National Council on Drugs ; Bray et al. ; Buckmaster and Ey ; Ezard ; Lintzeris ; Reynolds ; Trimingham and Vumbaca ; Whiteford ; Wodak ). Random drug‐testing will not distinguish the problematic drug use the government is ostensibly targeting with this policy from sporadic or occasional use of drugs and alcohol (Wodak ), putting further pressure on already stretched services and holding citizens in receipt of unemployment benefits to standards of behaviour that are not imposed on citizens in receipt of other forms of income support.…”

Income management in New Zealand and Australia: Differently framed but similarly problematic for Indigenous peoples

“…Despite the report's focus on sexual violence, it highlighted a range of associated problems facing Indigenous communities in the Northern Territory, a large self-governing territory within the Commonwealth of Australia containing 1% of the total Australian population but over one-quarter of the Indigenous population, living mostly in remote locations (Bray et al, 2014).…”

“…State and territory agencies are also able to refer benefit recipients to compulsory income management regardless of where they live, preventing benefit recipients escaping income management by changing residence. Targeted income management measures for those placed in the 'child protection' or 'vulnerable' categories were also rolled out in several 'disadvantaged' areas around Australia and 'voluntary' income management became possible (Bray et al, 2014).…”

“…Yet proof of these matters is undeniably difficult for Indigenous people living in remote communities, where 'limited opportunities for study or part-time work' mean that 'the prospect of exemption based on learning or earning is illusory'. Indeed, Bray et al (2014) found both lower rates of application and higher rejection rates for exemptions amongst Indigenous peoples, resulting in their on average spending 97.1 out of 124.5 weeks on income support under income management compared to 34 out of 54.7 weeks receiving income support amongst non-Indigenous people.…”