The Cashless Debit Card for welfare recipients is now moving towards the end of the second month of its 12-month trial in the towns of Ceduna, SA, and Kununurra, WA. How is it going so far?

Where did the idea of the cashless card come from?

In 2014, iron ore magnate Andrew “Twiggy” Forrest released The Forest Review: Creating Parity. The report focused on education and jobs for indigenous Australians. One recommendation from the review was to introduce a Healthy Welfare Card to “give people the capacity to stabilise their financial arrangements to ensure secure housing, payment of regular bills and food on the table”. The idea was people would be encouraged to join the workforce if they had access to limited cash.

Throughout his time at Fortescue, Forrest has been dedicated to indigenous employment, using the company’s Vocational Training and Employment Centre to help prepare indigenous people for work in the mines.

What is the idea behind the Cashless Debit Card?

In order to reduce the amount of harm to communities, the Department of Social Services (DSS) wants to introduce the cashless system “in locations where high levels of welfare dependence exist alongside high levels of harm related to drug and alcohol abuse”. The user is restricted from buying alcohol and cannot withdraw money for drugs or gambling. The standard amount of cash received in the recipient’s bank account is 20% of his or her welfare payment. The other 80% is placed on the debit card.

Is it only for indigenous Australians?

No. Even though the idea for the card came from a report focused on indigenous Australians, the Cashless Debit Card is for all welfare recipients, excluding seniors. This includes people from 16 to 64 on payments such as Newstart, Disability Support Pension, Carer, Widow, Austudy and Abstudy.

Is this the same as the BasicsCard?

No. The BasicsCard was introduced into the Northern Territory in 2007 during the intervention as part of a policy of income management. This scheme aimed to prevent specifically indigenous Australians from spending their welfare money on alcohol, tobacco, pornography, gambling and junk food. If a welfare recipient travels outside of an income-managed area, the Department of Human Services needed to be contacted to ensure access to money while away. The BasicsCard could only be used in approved outlets.

Is the Cashless Debit Card accepted everywhere?

The Cashless Debit Card operates like a bank card and is accepted anywhere with Eftpos machines.

How much does the trial cost?

Indue, an authorised deposit-taking institution has been paid $9.6 million (excl. GST) for the trial period. This amount pays for subcontracting to local partners to provide on-the-ground support, including help with card activation, balance checking, demonstrating how to use the Indue online portal/mobile app and distributing emergency replacement cards.

What are the objections to the Cashless Debit Card?

The original outcry over the card was the belief it discriminated indigenous people.

Opponents to the cashless welfare card are also concerned their personal information is in the hands of a private company, Indue. The terms and conditions of using the card state the company collects all particulars and unique identifiers and provides this information to third parties.

Kununurra resident Daniel Taylor went on hunger strike after the DSS failed to answer his concerns about privacy. “They’ve got our social security number, all of our personal information, they’ve got it now,” Taylor told Crikey.

The DSS confirms Indue must adhere to the Australian Privacy Principles, as described in the Privacy Act. “Neither the government nor Indue can see what items are being purchased using the cashless debit card. The government and Indue are also prohibited from selling any personal information,” DSS said.

Community panels — designed to process recipients’ public applications for an increase in the cash percentage of their payment — are also a privacy issue. In a Senate hearing last October, the Office of the Australian Information Commissioner stated “it is important to note the potential for an individual to be embarrassed or discriminated against as a result of the mishandling of this information, particularly in small regional or remote communities”.

The other concern, as stated by the Parliamentary Joint Committee on Human Rights, is the interference with personal autonomy. As recipients only get 20% of their payment in cash, shopping at places like community markets is restricted. There is also limited access to cheaper ways of buying goods, such as op shops, and Ebay is not an accepted online retailer.

There is also concern of discrimination and stigma based on financial situation. Taylor described it as a “war on people on welfare”.

“Before we could go to the shop and people wouldn’t know you were on welfare payments or anything. Now with this new card, people take one look at it and they know. People treat you differently,” Taylor said.

What problems have the trial encountered?

Added fees due to credit required to be selected for payment. Minimum spend charges in some businesses also exist. The DSS says it is “engaging with local merchants … and [are] asking these merchants to waive these requirements and surcharges”.

When in a place with no Eftpos machine, it takes 24 hours to have money transferred to a regular account. “You have to ring up Indue then they have to ring the department to get approval. We’re allowed to get $50 extra a week transferred if we need it,” Taylor said.

Issues of card services going down and ability to pay bills online have also been problems raised.

Has the trial been successful so far?

Ceduna mayor Allan Suter says it is achieving outstanding results. “It has had a very significant effect on the drug trade and in fact, one dealer left town because he simply lost the backbone of his business,” Suter said.

In terms of alcohol, it’s a consistent story. “It’s quite common to see people grossly affected by alcohol pretty much every day in the streets, and that is no longer the case,” Suter said.

There was also a 30% reduction in turnover of pokie machines only one month into the trial being rolled out.

More food is now bought rather than spent on newly banned items. “One of our close-by Aboriginal communities had been getting one food delivery every 14 days, they now need two food deliveries per week,” Suter said.

The mayor believes “the negative response is coming from a group who are self-interested … desperately searching for reasons to object.”

Peter Fray

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