Compulsory cashless welfare programs harm women and children

With the recent announcement by the Coalition Government to expand the use of the Cashless Debit Card (CDC) to more people on income support, it is continuing to be positioned as a positive intervention, providing people who need it most with a ‘financial literacy tool.’ With approximately 2.3 million people receiving some form of income support, there is currently great interest in how the Card, as well as other forms of cashless welfare, are experienced by those who have been subjected to these policies. Today’s important piece by researchers Zoe Staines (@Zoettes), Greg Marston, Philip Mendes, Shelley Bielefeld and Michelle Peterie (@MichPeterie) draw on their ground-breaking independent report into experiences and impacts of cashless welfare to explain how women and children are adversely affected.

Cashless welfare transfers continue to be implemented under Australia’s various income management programs. These programs involve the redirection of a portion (typically 50–80%) of an individual’s social security income onto a cashless welfare card (BasicsCard or Cashless Debit Card) so that it cannot be used to purchase prohibited items like alcohol or gambling products, or withdrawn as cash.

The policy was introduced in 2007 under the Northern Territory Emergency Response and has since been expanded across multiple sites in Australia. By 31 January 2020, 37,015 people were participating. Ninety-one per cent had been placed compulsorily on the program, while only 9% had volunteered.[i]

Although the policy specifics vary slightly across different sites, the underlying logic has remained consistent. As the Hon Alan Tudge (MP) described, the primary aims of cashless welfare are to reduce “welfare fuelled alcohol, gambling and drug abuse, particularly against women and children”.[ii] Indeed, women are disproportionately impacted by cashless welfare schemes because they are more likely to be primary carers for children and are thus subject to participation triggers involving child welfare.[iii] However, there is growing evidence that the policy is failing in its objective to protect women and children.

New and independent research confirms that cashless welfare programs harm those who are most vulnerable. Photo by Nandhu Kumar from Pexels

Our study into cashless welfare, funded by the Australian Research Council, involved 114 in-depth interviews in four cashless welfare sites as well as a mixed-methods survey of 199 people across Australia.[iv] We found that there are benefits for a minority of individuals placed on cashless welfare — particularly for some who are experiencing significant challenges with drugs and alcohol, or who have otherwise volunteered to participate in the scheme. However, the large majority of our interviewees and 87% of our survey respondents said they did not see any positives from being on cashless welfare. Instead, it posed multiple challenges and had harmful effects, especially for women and children.

False assumptions and stigma

Many of our research participants described the acute stigma they felt using cashless welfare cards. This primarily flowed from assumptions that they were heavy gamblers or users of alcohol and drugs. Yet our survey indicated these stereotypes were inaccurate: the large majority of respondents reported they didn’t experience challenges with alcohol (87% reported no issue), drugs (95% reported no issue) or gambling (91% reported no issue) prior to being put on the cards, which is also consistent with other research findings.[v] Nevertheless, many participants — including single mothers working hard to support their families — were still treated with disdain by some in their communities:

Instantly people think I’m a dole bludger, alcoholic, druggy and the list goes on. Little do they know I never seen myself becoming a single mother of two young children, but I am trying my hardest through university to obtain a degree so I can get off welfare and support my family… (30-year-old female)

A total of 84% of our survey respondents said they felt stigma or shame when paying for goods using cashless welfare cards. Many female respondents reported that, as a result, they had seen a decline in their own mental health, as well as that of their children.

It is really stressful… it has been a big part in putting me on depression medication… I no longer have control of my money. (60-year-old female)

Decline in mental health of myself AND my children. (32-year-old female)

Others grappled with how they saw themselves, compared with how they were treated under the policy as ‘failed subjects’ and mere spectators to defining their own needs.[vi] For instance, one respondent stated:

I raised two beautiful girls as a widow but now I am told I cannot manage my money. (62-year-old female)

For the large majority of those in our study, the core challenge was not managing money; indeed, many women and mothers were excellent at budgeting since they had to make ends meet with very small incomes. Rather, many found they did not have enough income to cater for basic needs in the first place — a situation that was exacerbated by cashless welfare, often with negative flow-on effects for children.

Providing for children

For many research participants, having substantially less access to cash meant they were unable to provide for their children in ways that they had previously done. For instance:  

My children now feel we are poor as we can no longer take them to local fun fairs etc. as a small treat. (35-year-old female)

School excursions are cash only. The fair and Christmas parade activities are predominantly cash only. I have 4 children and 20% [discretionary cash] doesn’t get us far. (29-year-old female)

Being unable to participate in these activities was socially isolating for both women and children, having adverse impacts on their mental and social wellbeing. One respondent described feeling particularly ashamed when her “children had to sit and watch all the other kids going on cash only rides and activities at the community festival…” (32-year-old female). In other cases, lack of access to cash meant families were unable to purchase cheaper second-hand furniture and instead had to go without:

Not being able to buy second hand beds for my children. They slept in my bed and on the couch. (44-year-old female) 

Even more disturbingly, glitches in the administration of the Cashless Debit Card often meant that routine payments, such as rent, were not being made on time. Even though such problems were beyond the participants’ control, they could result in formal rental breaches and have implications for security of housing. One 60-year-old female participant told us, “I fear being homeless”.   

The sense of being pushed away from social security and into the formal economy was also seen as counterproductive by some, and broadly representative of a gross undervaluing of the ‘informal’ care work involved in raising children. As one mother stated:  

It’s really hard when you’re a mum and they say, oh well, you can work as well. But I’m doing a full-time study course and working and then doing all sport and school and homework. Yeah, it’s too much for one person, for me to do… (Female interviewee in Hinkler, Queensland)

Moreover, some women feared that, if they did not comply with compulsory cashless welfare policies, they may have their children removed by child welfare authorities. This had prevented some women from reaching out to receive other forms of social support for themselves and their children. One stakeholder explained:

[Clients told us] If I don’t do this, I’m going to lose my kids. I reckon I’m doing well with my money, but Centrelink says I’m not… There was for a period, I believe, some people who didn’t want to come and get food assistance because they were concerned that if they did, then all the agencies had a connection to Centrelink and we’d dob them in for not being able to feed their kids. (Stakeholder in Playford, South Australia)

These findings directly contradict a core policy objective of cashless welfare, which is to ensure families can better provide for their children.[vii] Worryingly, they also indicate that some women may be less likely to pursue other forms of much-needed support for themselves and their families — a theme that has also been documented elsewhere with regard to domestic violence services.[viii]

Domestic violence

Some interviewees reported that cashless welfare had increased family pressures and contributed to domestic violence. For instance, a stakeholder in Playford (South Australia) remarked:

… I would think that putting the BasicsCard in place for women, who are in a violent relationship or an abusive relationship, it probably initially and it may continuously increase their lack of safety… because of the frustration from the other partner.  While the policy intent is that it increases safety, what’s the evidence? (Stakeholder in Playford, South Australia)

An interviewee in Playford who was on cashless welfare supported this, explaining:

Me and my partner fought constantly about it… Just the fact that there was only so much that the BasicsCard could cover and the little bit that was left had to cover all these bills and it wasn’t stretching. 

Another female interviewee also indicated that a lack of access to cash can make it difficult to leave a violent relationship. Reflecting on her own situation as someone who had previously escaped a violent spouse, she remarked:

I think it’s definitely a problem for people that are escaping that situation… It’s hard enough to leave a situation with that, with all those emotions and the fear. Then you’ve got the fear of just being put on a new card where you have no cash and you have to try and afford all these brand new things to move in — to have stuff for your kids or just you… (Female interviewee in Hinkler, Queensland)

Even in situations where alcohol or drug use had contributed to domestic violence, most said those subjected to cashless welfare found workarounds that meant they were still able to access these prohibited items. Indeed, 44% of our survey respondents said they had circumvented compulsory cashless welfare at some point, echoing results from earlier studies.[ix]

To help women and children, funding should be redirected towards genuine support

While cashless welfare is frequently justified on the basis of protecting women and children, our findings add to a mounting body of evidence demonstrating that women and children are harmed by these policies. Not only are these policies harmful, they also represent a significant opportunity cost; the billions spent to administer cashless welfare could instead be redirected to meaningfully improve the lives of women and children.

In a country where women continue to be disproportionately subject to intimate partner violence — where an average of one woman is murdered by a current or former partner each week — and where children continue to be victims of abuse and neglect, it is baffling that scarce funding is being directed away from early intervention and social support for these issues, and towards strengthening punitive welfare policies that show few if any positive impacts.[x] Simply raising the rate of social security payments or improving access to affordable child care would also have dramatic positive effects for women and children, yet policymakers continue to direct their energies elsewhere.        

Our research, in combination with a broader growing evidence base, indicates that if policymakers are genuinely interested in supporting healthier and happier communities, as well as protecting the rights, health and wellbeing of women and children, then compulsory cashless welfare is the wrong approach. It is not only a distraction from these other fundamental needs, but is also regressive, punishing the very people it is supposedly designed to protect.    

This analysis draws from Marston, G., Mendes, P., Bielefeld, S., Peterie, M., Staines, Z. & Roche, S. (2020). Hidden Costs: An Independent Study into Income Management in Australia. University of Queensland. A summary of the report was published in The Conversation.

This post is part of the Women's Policy Action Tank initiative to analyse government policy using a gendered lens. View our other policy analysis pieces here.

References

[i] This includes 24,866 people on the BasicsCard (3,382 or 14% of whom are voluntary) and 12,149 people on the Cashless Debit Card (none of whom are voluntary) as at 31 January 2020. Department of Social Services (DSS). (2020). Cashless Debit Card Data Summary February 2020. DSS: Canberra; DSS. (2020). Income Management Program Data Summary February 2020. DSS: Canberra.

[ii] Tudge, A. (2015). In Hansard, House of Representatives Social Security Legislation Amendment (Debit Card Trial) Bill 2015, Second reading speech. Parliament of Australia: Canberra, p. 8803.

[iii] Bray, R., Gray, M., Hand, K. and Katz, I. (2014). Evaluating new income management in the Northern Territory – final evaluation report. Social Policy Research Centre, UNSW: Sydney.

Orima Research. (2017). Cashless Debit Card trial evaluation: wave 1 interim evaluation report. Department of Social Services: Canberra. 

[iv] Marston, G., Mendes, P., Bielefeld, S., Peterie, M., Staines, Z. and Roche, S. (2020). Hidden costs: an independent study into income management in Australia. The University of Queensland, Monash University and Griffith University: Brisbane.

[v] Bray, R., Gray, M., Hand, K., Breadbury, B., Eastman, C. and Katz, I. (2012). Evaluating New IM in the NT: first evaluation report. Australian National University and Australian Institute of Family Studies: Canberra, pp. 185-186.  

[vi] Sennett, R. (2003). Respect in a world of inequality. WW Norton: New York.

[vii] Macklin, J. (2012). Press release: Helping vulnerable families in disadvantaged communities across Australia, 1 July. Parliament of Australia: Canberra; Tudge, A. (2015). Ibid.

[viii] Equality Rights Alliance (2011). Women’s experience of income management in the Northern Territory. Equality Rights Alliance: Canberra, p. 35.

[ix] For example, see: Bray et al. (2012). Ibid., p. 88; Bray et al. (2014). Ibid.

[x] Bryant, W., and Bricknell, S. (2017). Homicide in Australia. Australian Institute of Criminology: Canberra.; Australian Institute of Family Studies (AIFS). (2017). Child abuse and neglect statistics. AIFS: Canberra; White Ribbon. (2020). Domestic violence statistics. Available: https://www.whiteribbon.org.au/understand-domestic-violence/facts-violence-women/domestic-violence-statistics/   

Posted by @SusanMaury @GoodAdvocacy