CALL TO STOP COMPULSORY INCOME QUARANTINING

Call to stop compulsory income quarantining

ADELE HORIN, SMH.

February 8, 2010

THE government's plan to roll out compulsory income management across Australia for long-term welfare recipients, including sole parents and young people, is based on flimsy and contradictory evidence from the Northern Territory intervention and should be stopped, the nation's peak welfare organisation says.

In a stinging attack, the Australian Council of Social Service says extension of the scheme across the country to quarantine 50 to 70 per cent of the income of welfare recipients would prove expensive, intrusive and unnecessary.

Clare Martin, the chief executive officer of ACOSS, said: ''The government is presuming whole categories of Australians are irresponsible with the small income they get, when there is no evidence for that. This will waste money on administration when it could go to target assistance to those who need it.''

The government has introduced three bills to address the racial discriminatory aspects of the Coalition's intervention in the Northern Territory, to bring in new income quarantine measures, exclude recipients such as age and disability pensioners who are presently affected, and to roll out the scheme beyond the territory.

It is considered one of the most significant shifts in the history of social security policy, and involves the government declaring certain communities ''disadvantaged'' and imposing income management on particular groups of welfare recipients who normally live there.

In a submission to the Senate inquiry into the legislation, ACOSS says it is concerned a national roll-out is proposed despite the ''weak and conflicting evidence'' from Northern Territory indigenous communities.

ACOSS says measures that, if well-targeted, might suit a few would be imposed on many, subjecting them to humiliation and discrimination. Compulsory income management would create ''a perception that long-term[welfare] recipients are unable or unwilling to manage their very limited finances''.

The groups affected include people who have been on a Newstart Allowance or Parenting Payment or Special Benefit for more than a year in the past two; ''disengaged'' youth in receipt of a payment for more than 13 of the past 26 weeks; people deemed ''vulnerable'' to financial crisis, domestic violence or economic abuse; and where there are child protection concerns.

ACOSS understand the scheme will first be rolled out across the Northern Territory by mid-2011, and then, after evaluation, across the country. Affected welfare recipients, including mature-age long-term unemployed, would have to use a card in order to spend half of their payments on allowed items, and would be limited to shopping in designated stores. ACOSS says this has major implications for consumer choice and retail competition.

The government argues the measure would reduce spending on alcohol, cigarettes, gambling and porn, and would ''encourage socially responsible behaviour''.

ACOSS says the aim of social security policy is to reduce poverty, and it should not to used to effect ''broader social or behaviour change''.

It says restricted-use payment schemes, such as income management, are much more expensive to administer than cash payments because of the need for electronic payment systems, store licensing schemes and significantly increased client contact with government agencies.

ACOSS says the annual administrative cost of expanding the scheme across the Northern Territory is $4400 per person, and funds would be better spent on services.