Income management accounts—improving access

10.122 Payment amounts subject to income management are paid into a separate, notional, account held by welfare recipients called ‘income management accounts’.^[190] In order to access funds in their income management account, a welfare recipient may be issued with a stored value card, vouchers, or receive other payments or credits for use in purchasing goods and services.^[191] The focus of this section is on stored PIN-protected stored value cards called ‘BasicsCards’ that may be used at approved merchants, and restricted and unrestricted direct payments.^[192] Stored value cards, vouchers or other payments or credits may not be used to purchase excluded goods or services, which include alcoholic beverages, tobacco products, pornographic material and gambling services.^[193]

10.123 The ALRC considers that to reflect the underlying principles of accessibility and self-agency articulated in Chapter 2 of this Report, at the very minimum it is necessary to ensure that victims of family violence are able to access and control their income management account—whether through a BasicsCard, voucher or other form of payment or credit. In particular, the limited definition of ‘priority needs’ is contrary to these principles and poses particular difficulties for victims of family violence. The ALRC therefore recommends that the Australian Government should amend the definition of ‘priority needs’ in s 123TH of the Social Security (Administration) Act 1999 to include travel or other crisis needs for people experiencing family violence. In light of difficulties with the income management account system and BasicsCards, the ALRC also suggests that the Government should review the existence and operation of these in the course of any introduction of an opt-in and opt-out income management model.

Difficulties with the account system and BasicsCards

10.124 There are a number of difficulties faced by welfare recipients in accessing funds in their income management account. These difficulties are exacerbated in rural and remote areas and, in many cases, where a welfare recipient is experiencing family violence.

General difficulties

10.125 In the course of an Inquiry by the Senate Standing Committe on Community Affairs into proposed welfare reform legislation in 2010, the NWRN identified a range of general difficulties and unintended consequences arising in the context of income management, including in relation to the account system. These included:

• difficulties accessing funds while interstate;
• delays in the transfer of funds; and
• assessment and reassessment of priority needs by Centrelink which can be time consuming, invasive and demeaning, because the recipient must seek permission to purchase goods and services not defined as priority needs.^[194]

10.126 Such concerns were repeated in this Inquiry.^[195] In addition, in the course of this Inquiry many stakeholders raised additional issues with respect to the operation of BasicsCard, including:

• general lack of understanding or information about the operation of the system;^[196]
• difficulties in obtaining account balances, specifically due to limited access to appropriate balance reading facilities and technology—‘inability to readily access an account balance has obvious implications for victims of family violence, particularly those who require immediate and urgent access to funds’;^[197]
• reduced choice and convenience in purchasing goods and services due to limited BasicsCard merchants—impacting on, for example, ability to purchase traditional medicines or foods that meet ‘cultural dietary needs at better prices than those on offer in major supermarkets’;^[198]
• impact on cultural resource sharing practices involving monetary contributions—for example, for Indigenous communities during ‘sorry business’ where cash is contributed to the deceased’s family;^[199]

10.127 A quote from an Indigenous woman in Alice Springs provided in the Equality Rights Alliance’s submission captures some of these difficulties:

Basic Card no good. Hard to remember PIN. Don’t understand how it works. Hard to understand how much money. People in shops not nice, no good, if not enough money to pay for food. Where the money goes, I don’t know.^[200]

Definition of ‘priority needs’

10.128 ‘Priority needs’ under s 123TH of the Social Security (Administration) Act 1999 include:

• food and non-alcoholic beverages;
• clothing and footwear;
• basic personal hygiene items;
• housing, utilities and basic household items;
• health;
• child care and development;
• education, training and employment-related items; and
• public transport services and the maintenance, acquisition and repair of a car, motorbike or bicycle where used wholly or partly for purposes in connection with the above needs.

10.129 To the extent that a welfare recipient’s reasonably foreseeable priority needs have been met, they can seek access to unspent funds for other purposes, except for obtaining an excluded good or service.^[201] However, where there are unspent funds, and to the extent not already possible, s 123TH should be amended to provide for access to funds for the purposes of travel in order to leave a violent relationship, or to fund other needs arising in circumstances of crisis where a recipient is experiencing family violence. This approach was largely supported by stakeholders.^[202] 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 ‘may limit a victim’s ability to travel or find alternative accommodation’.^[203]

10.130 DHS noted in its submission that s 123TH already lists public transport services and the acquisition, repair, maintenance or operation of car, motorbike or bike as priority needs.^[204] However, as highlighted by the Equality Rights Alliance, ‘not all service stations accept BasicsCard, and women do not always have the capacity to check which service stations on their route accept BasicsCard before they need to leave home’.^[205] Similarly, the Indigenous Law Centre emphasised that current arrangements, including the BasicsCard

may inhibit the ability of women in a violent relationship to leave the situation due to restrictions on funds to purchase petrol or to cover other expenses necessary to escape violent situations including funds for temporary accommodation particularly on weekends.^[206]

10.131 National Legal Aid provided a useful case study illustrating the difficulties arising from the current restrictions for a person fleeing family violence:

Case Study

R was a 24 year old woman born to an Aboriginal mother. R lived with her mum in a town camp in Central Australia. R had a three year old toddler (J) to N. R was on parenting payments and was compulsorily income managed under the 2007 Northern Territory Emergency Response measures. R and N had broken up when J was 11 months old.

N had become increasingly jealous of R and seriously physically assaulted her on several occasions. At one stage he hurt her so badly that she had to stay in hospital for three nights. He also stalked her and sent her extremely disturbing text messages from public payphones. Several complex court matters including breaches of Domestic Violence Orders, major indictable offences and Family Court matters resulted from N’s actions. He was imprisoned as a result of the offences.

One day R’s family members warned her that N was about to be released from prison. R decided that she needed leave the Northern Territory with J urgently as she was convinced that N would find her and kill her. A domestic violence support agency worked to find R a place in a secure women’s shelter in another State. So urgent was the matter that no consideration was given to the effect of moving interstate on her income managed social security benefits.

R arrived at her secure location and discovered that she could not use her Basics Card at the shops. It took several days of liaising with Centrelink to reverse her income management. R was frightened to tell Centrelink about her exact circumstances as she was still worried that N might find out what she had been saying.

The funds in her income management account were not automatically released, but paid out in instalments over several weeks. During that time R found it very difficult to buy her groceries and the other items needed to set up her new life. She felt significant shame when she tried to buy some new clothes from a shop and her Basics Card did not work. She couldn’t buy phone credit to call her mother which was distressing for her. The workers at the shelter did not know anything about income management and couldn’t assist her.^[207]

10.132 The Ombudsman observed that the extension of the definition of priority needs to include travel or other crisis needs ‘is in keeping with the broader objectives of IM as detailed in s 123TB of the Social Security (Administration) Act 1999’.^[208]

10.133 The ALRC does not make a specific recommendation in relation to BasicsCard, as the ALRC anticipates that if an opt-in and opt-out voluntary IM system is developed in line with Recommendation 10–2, then the BasicsCards will be reviewed in due course as part of that implementation process. However, the ALRC does recommend that the Australian Government amend the definition of ‘priority needs’ to include travel and other crisis needs for people experiencing family violence.

Other issues

Making of restricted and unrestricted direct transfers

10.134 In the course of the Inquiry, some stakeholders expressed the view that restricted and unrestricted direct transfers should be made in circumstances where a welfare recipient is experiencing family violence in order to allow improved access to funds. For example, CAALAS suggested that rather than using such transfers as a ‘means of last resort’, they should be utilised to ‘facilitate the immediate transfer of income managed funds to a person’s bank account or in cash in situations of crisis’.^[209] The ALRC suggests that this matter could be considered in the course of any Government moves to introduce an opt-in and opt-out voluntary IM system.

Residual funds

10.135 In the case of a deceased welfare recipient, several issues arise in relation to disbursement of the balance of their income management account. There are a number of ways in which the residual amount of the deceased’s account can be paid.^[210] For welfare recipients who die without a will (intestate), or who have not identified a person to administer and distribute the residual funds in their income management account, the funds may remain in the person’s account.^[211]

10.136 However, in such circumstances, the disbursement of the deceased’s funds may provide ongoing safety and protection to their children or other family members.^[212]

10.137 Where possible, disbursement of the balance of an income management account held by a deceased welfare recipient should be paid to their surviving children, particularly in circumstances involving family violence. The ALRC considers that a review of the relevant laws and processes in respect of disbursement of income management accounts, including nominee authority and will arrangements, may assist in ensuring this occurs.