Canberra has plans to open issuance of cashless welfare debit cards

Canberra has plans to open issuance of cashless welfare debit cards
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The Australian government in 2016 introduced the trial of a welfare quarantining system, via a cashless debit card (CDC), that aimed to govern how those in receipt of welfare spent the money, with the idea being to prevent the sale of alcohol, cigarettes, and some gift cards, and block the funds from being used on activities such as gambling.

80% of the recipient’s funds are placed on the CDC, which is managed by Indue, with the remaining 20% to be paid into a bank account.

As of early March, there were 12,150 participants in the CDC trials across Bundaberg and Hervey Bay, the East Kimberley, Ceduna, and Goldfields regions, with the government saying it had plans to extend the trial into the Northern Territory and Cape York.

Services Australia is charged with oversight of the initiative, and as the agency was inundated with a new wave of welfare payments in the wake of the COVID-19 outbreak, the government announced it would place a temporary pause on transitioning new participants onto the CDC.

Since then, it has quietly made the decision to make the trial permanent.

Facing Senate Estimates last week, the Department of Social Services was asked if making the card permanent meant Indue was given another contract to continue the scheme.

“Our intent would be, once the legislation has passed, to commence the procurement process,” deputy secretary Liz Hefren-Webb said.

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She also revealed there was a CDC technology working group, which includes the likes of ANZ Bank, the Commonwealth Bank of Australia, National Australia Bank, and Westpac, as well as Coles, Woolworths, Metcash, Eftpos, and Australia Post.

“The working group was established to progress technology solutions to consider future options for the cashless debit card, it had a significant focus on expanding product-level blocking … and it also discussed options that could involve multiple different financial institutions issuing cashless debit cards and linked accounts,” added welfare quarantining acting branch manager Ben Peoples.

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The CDC is currently accepted at around 90,000 merchants and there are a number of those that have been blocked, including 18+ establishments such as breweries, bottleshops, and TABs.

The government in December kicked off a AU$3.4 million pilot of product-level blocking with tech vendor DXC Technology. The pilot is aimed specifically at assisting small businesses. Major retailers such as Woolworths, Coles, and Australia Post already automatically block purchases.  

Peoples said the blocking trial would continue until 31 December.

Hefren-Webb said the intention would be to expand the card issuing beyond Indue and to other financial institutions.

“The intent of the multi-issuer work, is so that if I bank with a particular bank and I’m on the cashless debit card I can have my cashless debit card supplied by that bank just as I have my other cards supplied by that bank so that there would be multiple different cards that use this technology … their card would just look like all their other cards from their bank,” she said.

Department representatives said the decision to make it permanent in the trial sites was to alleviate uncertainty in community leaders.

“There was certainly feedback from leaders, for example in Ceduna, the kind of notion of it as a trial, given it had been a trial for a number of years now, they felt it would be beneficial if it was no longer considered a trial … if it was considered an ongoing feature of the welfare system,” Hefren-Webb said.

“There wasn’t a formal process where we consulted on ‘should the card become permanent?’, what I’m saying is in the process of consulting over the last year or so … this issue has been canvassed.”

There have been a number of issues raised by those considered “participants” of the CDC. Many feel they would be disadvantaged by its Australia-wide rollout, with some feeling that the scheme places unreasonable restrictions on spending, making it more difficult to save, or flee from domestic abuse.

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Hefren-Webb admitted a few community groups weren’t supportive of permanency, including the Coalition of Peaks, which is a representative body comprised of around 50 Aboriginal and Torres Strait Islander community-controlled peak organisations that have joined forces to partner with the Australian government on closing the gap initiatives.

Minister for Employment, Skills, Small and Family Business Michaelia Cash reckons, however, the government decided to make it permanent because there were community groups that supported it. Hefren-Webb agreed.

Senators have asked for the names of those supportive of the card, with Australian Greens Senator Rachel Siewert demanding that “if people are standing up for this thing, they should be putting their names to it, they are speaking on behalf of the community”.

“The ramifications of being on this card are devastating,” Siewart added.

Secretary of the Department of Social Services Kathryn Campbell said she has heard from those on the card that it has “improved their lives”.

The decision to make the CDC permanent was made as part of the 2020 federal Budget, announced on October 6. But Labor Senator Malarndirri McCarthy expressed concern that the decision was made before Minister for Families and Social Services Anne Ruston got a hold of a report from Adelaide University that was evaluating whether the card was in fact working efficiently in the trial sites.

The report was priced at AU$2.5 million.

According to Campbell, the department saw the final summary report, but not the “quantitative and qualitative supplements”.

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