Cashless Welfare Cards in Australia Bring Out Woes

In order to have a check and ensure citizens manage their accounts and operations well especially in regions where social harm is a growing cause, the federal government introduced the cashless welfare card across regions in Australia.

The card has been under trial to see if it is an effective way to battle ongoing addiction, gambling and alcohol related problem. The cashless card works like a debit card except it cannot be used to buy alcohol, or in gambling and drugs. It also cannot be used for cash. With the idea to curb the prevalence of violence and crime related to these, the card received royal assent on 5 April 2019 called the Social Security (Administration) Amendment (Income Management and Cashless Welfare) the card operates in East Kimberley, Ceduna and Goldfields regions until 30 June 2020. This aligns with the Bundaberg and Hervey Bay region, which was previously legislated until 30 June 2020. Further, On 12 August 2019, the Act expanded the exit criteria to take into account a person’s ability to manage their affairs generally, including their financial affairs.

However, in spite of the government’s supporting and encouraging the card use by those struggling with financial woes and limited use cap on it, the reaction from social services and people using the card has not been encouraging. There is also limited research to verify the success of its application. In 2018, a by the Australian National Audit Office found the government’s data on the initial trials was unconvincing.

The report said it was “difficult to conclude” if there had been a reduction in social harm because of the “lack of robustness in data collection”.

Social services and card users are bringing up concerns related to the stigma attached socially and financially in using the card. Hervey Bay’s Kathryn Wilkes, who has campaigned against the card for years, said they had made it hard for people to do everyday things. “We’ve had people who have had the card hacked, all sorts of problems. There’s a lot of stigma, a lot of backlash. The worst is kids being bullied in school. I’ve got one 15-year-old boy who is being bullied. They’re saying his parents have a ‘crackhead card,” she said. Jobs are also at risk due to this emerging issue in open usage of the card, considering unemployment is a major concern for them.

ACOSS director of policy Jacqueline Phillips said the card was unnecessary. “Cashless debit is unnecessary, expensive, stigmatizing and impractical, making it harder for people to buy second-hand goods. This can compound the sense of shame many people feel about being unemployed, when they are doing all they can to find paid work in today’s competitive job market, with one job available for every eight people looking,” she said.