Four reasons why cashless ‘welfare’ card trial must stop

Associate Professor Ruth Phillips argues against a program that limits what people can buy with welfare payments. The program has just been extended by two years.
Wyndham, East Kimberley - one of the trial sites.

Wyndham, East Kimberley – one of the trial sites.

The government’s controversial cashless debit card, known as the cashless welfare card, restricts what welfare recipients can purchase – notably, it limits alcohol and gambling-related products and services. After being trialled for three to four years at several sites across the country, largely with low socio-economic, Indigenous populations, the government has just announced a two-year trial extension.

Associate Professor Ruth Phillips, a social policy expert from the University of Sydney School of Education and Social Work, argues it should be scrapped altogether.

1. It is anti-welfare

The card is one part of a suite of anti-welfare impositions by LNP governments on people who are welfare dependent, along with the mutual obligations model that punishes recipients by ceasing payments, the ‘Robodebt’ scandal, the long-term failure to raise unemployment benefits (apart from the temporary COVID-19 crisis increase) that keeps it as a below the poverty line existence, and the proposed drug-testing regime. The cashless debit card is the most severe means of surveillance over the daily lives of people, as it controls how 80 percent of their benefits are spent. Research has found that the cashless debit card is stigmatising, diminishes individual agency and criminalises any use of the card outside its strict guidelines.

2. It is punitive

The card is applied punitively and is extremely hard to get out of. Once placed on the card, regardless of where you go, you have to stay on the card unless you can ‘demonstrate responsible management of your affairs (including financial affairs)’. If you live in one of the targeted communities you can only avoid being placed on the card with a ‘wellbeing exemption’ if being in the program would seriously risk your ‘mental, physical or emotional wellbeing’. These are value-laden conditionalities.

3. It is costly

Indue Ltd, is the Australian company that runs the program that costs the federal government $10,000 per year per recipient for administrative costs. This amounted to a total cost of the existing trials of $18.9 million and is consistent with the government’s privatisation and marketisation agenda.

4. It is ineffective

Based on information from the recent $2 million government-commissioned University of Adelaide report, the program is not an effective nor a comprehensive control of drug, alcohol and gambling abuse in the Goldfields region of WA. Evaluations of other sites conducted over the last few years of the trials suggest similar results.

Ruth Phillips is an Associate Professor in Social Work and Policy Studies. Prior to entering academia, she was the principal policy officer in the Western Australia Department for Community Services (now the Department of Communities).

Hero image: Bundaberg, Queensland – one of the trial sites. Credit: Bundaberg Regional Council.

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