Accounts and BasicsCard

13.103 Under income management, payments to particular welfare recipients are held in separate, notional, accounts called ‘income management accounts’.^[122] A welfare recipient under income management may be issued with a stored value card, vouchers or receive other approved payments.^[123] Stored value cards called ‘BasicsCards’, may be used at community stores and other approved outlets. Stored value cards, vouchers or approved payments may not be used to purchase excluded goods and services, which include alcoholic beverages, tobacco products, pornographic material and gambling.^[124]

13.104 Concerns have been raised, however, about unintended consequences of the income management account system—including for people experiencing family violence. Problems have been identified in relation to:

• obtaining access to money for travelling interstate;

• delays in the transfer of needed funds;

• increased cost of goods and services through the use of the BasicsCard because of the lack of community stores or merchants;

• limits placed on daily expenditure using the BasicsCard are problematic during a crisis of family violence;

• restricted access to account balances because of inadequate facilities and technology; and

• assessment and reassessment of priority needs by Centrelink and at the approved store, which can be time consuming, invasive and demeaning, because the recipient must seek permission to purchase goods and services not covered by the priority needs list.^[125]

13.105 Under income management, access to welfare payments for other goods and services is made subject to rules that determine when welfare recipients are granted access to their money and what payments may be spent on.^[126] These are called ‘Restricted or Unrestricted Direct Payments’.^[127] With respect to a restricted payment, the welfare recipient must demonstrate a genuine need and meet the priority needs list.^[128] Subject to Centrelink approval, the unrestricted payment may allow access to part or, in some certain circumstances, all of the welfare recipient’s income-managed funds.^[129]

13.106 In a crisis situation for people experiencing family violence, welfare recipients require Centrelink approval for a direct transfer of funds from an income management account to the person’s personal bank account and under Compulsory IM the ‘Restricted Direct Payments’^[130] are difficult to obtain, in times of crisis, for victims of family violence.

13.107 The social security system has been described as ‘requiring a micro examination of every aspect of a recipient’s financial circumstances that exceeds the rigours of applying for a bank loan’.^[131] Under income management, welfare recipients who receive quarantined payments have minimal control over their income and are scrutinised on all expenditures or intended purchases—for example, in advance payments for whitegoods. Access to funds to an income management account is based on narrow criteria that do not take into account the ‘totality of a person’s circumstances’.^[132]

13.108 The decision-making principles under social security law, as referred to earlier, may not be flexible enough to assist victims of family violence to leave their residence or community, or to take other urgent steps to avoid violence. Access to resources to cover an immediate departure is likely to be limited by the use of the BasicsCard. Moreover, travel or other crisis needs where a person has to escape family violence may not amount to a priority need.^[133]

13.109 It has also been observed that the restrictions of the BasicsCard may affect cultural sharing practices—for example, for Indigenous communities during ‘sorry business’, and where cash is contributed to the deceased’s family.^[134] Where family members have experienced family violence, an inability to contribute an amount of cash may exacerbate their vulnerability to the pressures of immediate and extended family, especially where family violence already exists; these socio-cultural practices can apply to other groups.

13.110 In addition, for remote, discrete and rural communities, geographical isolation combined with the lack of transport and accommodation may inhibit access to a person’s income management account funds or use of the BasicsCard; and also the ability to attend Centrelink for an emergency payment.

13.111 Other access issues for the use and operation of the BasicsCard include limited operating locations (the location where the BasicsCard can be read—described as ‘kiosks’). In addition, there are privacy concerns for using the BasicsCard, for example, there is no anonymity for people carrying the card, especially in communities where privacy concerns exist and where the perpetrator and the victim/s reside in lowly populated areas.

13.112 In the case of a deceased welfare recipient, there are other issues for residual funds left in an income management account.^[135] The Guide to Social Security Law sets out how the deceased’s account is disbursed and to whom.^[136] For welfare recipients who die without a will (intestate), or who have not identified a person to administer and distribute their residual funds in the income management account, the funds may remain in the person’s account.^[137]

13.113 For example, where the victim’s surviving family and children are identified to Centrelink as payment nominees, the disbursement of the deceased’s funds can provide ongoing safety and protection; the surviving children or dependants are to be prioritised under principles for ‘the best interests of the children’.^[138] The report by the Australian Domestic and Family Violence Clearinghouse (ADFVC) identified that abuse continues post-separation, and beyond the acts of violence to the surviving children:

Relationship abuse can generate physical and mental trauma for women and their children, often extending well beyond the cessation of the abusive behaviour.^[139]

Submissions and consultations

13.114 In the Social Security Issues Paper, the ALRC asked about changes that could be made to law or practice relating to the administration of income management accounts to assist welfare recipients who are victims of family violence. In particular, the ALRC asked whether there were alternatives to stored value cards such as the BasicsCard, that may provide additional flexibility or portability, where a person needs to escape family violence and possible changes to ‘priority needs’ for the purposes of the income management regime.^[140]

13.115 Stakeholders identified a range of problems with the BasicsCard—particularly the lack of flexibility and difficulties of access.

Inflexibility

13.116 CAALAS, for example, submitted that, for people experiencing family violence, the ability to manage and control their payments is vital and any restriction on the use of a person’s social security payment could directly affect their safety including access to travel, finding new accommodation, and protecting their children or dependants.^[141] CAALAS therefore recommended that travel and crisis needs should be included in the ‘priority needs’ provision of the Social Security (Administration) Act for the purposes of income management.^[142]

13.117 As NAAJA pointed out, although income-managed funds are not able to be spent on ‘excluded goods’ under the legislation, there is no additional restriction on what the remaining managed monies may be spent on—for example, the balance could be spent on DVDs.^[143]

Access issues

13.118 Many stakeholders raised additional issues that continue to make the use and specific operation of the BasicsCard system ineffective, including:

• obtaining an account balance and being denied by failed systems;^[144]

• limited access due to poor internet service;^[145]

• limited access to balance readers as they are only in certain locations and often offline;^[146]

• limited or no access due to poor mobile reception;^[147]

• limited card access and ineffective use results in welfare recipient being unable to meet ‘priority needs’;^[148]

• limited literacy and numeracy skills of the recipient impacts on card use;

• limited or no access to permanent Centrelink offices and the Indigenous Call Centre (ICC) in remote and rural regions;^[149] and

• the use of the BasicsCard may demean, humiliate and control persons experiencing family violence.^[150]

13.119 CAALAS submitted that a more accessible process is required to obtain the balance from the BasicsCard, by an ATM receipt or by the printed record on the end of a store receipt.^[151] CAALAS also suggested that Unrestricted Direct Payments should be utilised by Centrelink in relation to people experiencing family violence,^[152] as this method provides an improved access to funds. CAALAS expressed the view that:

Changes to the income management regime would facilitate the immediate transfer of income managed funds to a person’s bank account or in cash in situations of crisis.^[153]

ALRC’s views

13.120 The use and operation of the BasicsCard reveals a series of significant problems that directly affect the welfare recipient in accessing their income management account. These problems are magnified when they occur in rural or remote areas of Australia, and for people experiencing family violence in times of crisis or who need to flee violence to protect their safety and that of their children. In light of the many serious issues raised by stakeholders the ALRC considers that welfare recipients need to have access to their income managed funds by the transfer of funds into their personal account.

13.121 Although the ALRC does not make a proposal on the BasicsCard, the ALRC anticipates that if a fully flexible and voluntary income management system is introduced then the BasicsCard will be reviewed in due course.

13.122 The ALRC considers that a number of changes with respect to the access of income management accounts would provide support for, and therefore improve the safety of, victims of family violence. These also include ensuring the residual funds from the deceased victim’s income management account are disbursed to their children, waiving the waiting period for crisis payments, and ensuring that the BasicsCard is fully accessible for people experiencing family violence.

13.123 In the ALRCs view, given the complex environment of family violence it is imperative that people experiencing family violence should have unfettered access to their welfare payments for travel and crisis needs, and on this basis the law should be amended to recognise travel and crisis needs as priority needs.