Explanatory Memorandum
(Circulated by the authority of the Minister for Social Services, the Hon Scott Morrison MP)Outline
The Bill will amend the social security law to enable a trial phase of new cashless welfare arrangements in response to a key recommendation from Mr Andrew Forrest's Review of Indigenous Jobs and Training.
The purpose of the trial is to test the concept of cashless welfare arrangements by disbursing particular welfare payments to a restricted bank account, accessed by a debit card which does not allow cash withdrawals. The trial will test whether significantly reducing access to discretionary cash, by placing a significant proportion of a person's welfare payments into a restricted bank account, can reduce the habitual abuse and associated harm resulting from alcohol, gambling and illegal drugs. It will also test whether cashless welfare arrangements are more effective when community bodies are involved.
The trial will be conducted in up to three locations. These locations will be selected on the basis of high levels of welfare dependence and where gambling, alcohol and/or drug abuse are causing unacceptable levels of harm within the community.
To test effectively the concept of the Forrest recommendation, 80 per cent of payments received by people on a working age welfare payment, such as newstart allowance, will be placed in a restricted bank account. A person will not be able to use the debit card linked to the restricted account to access cash or purchase gambling products/services, alcohol or illegal drugs.
Recognising that we do not live in a cashless society and that people need cash for minor expenses such as children's lunch money or bus fares, the remaining 20 per cent of payments will be available for use at the person's discretion.
In trial locations, the debit card will work as similarly as possible to any other bank card. The trial will seek to ensure the card works at all existing terminals and shops, except those exclusively selling restricted products, as well as online where possible. The only difference will be that the debit card will not allow the purchase of alcohol and gambling products or cash withdrawals.
Financial impact statement
The funding associated with this Bill is not for publication as negotiations with potential commercial providers are yet to be finalised.