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Policy report

Income management (IM) was introduced in Australia in 2007 as part of the former Australian Government’s Northern Territory Emergency Response (NTER). It has since been expanded to include young people and other groups considered ‘welfare dependent’ under trials in several states and territories. IM quarantines a proportion of social security payments, including income support payments such as Australia’s Newstart Allowance and Family Tax Benefits. Money in a special account cannot be withdrawn as cash, and cannot be used to purchase prohibited goods and services such as alcohol, illicit drugs, gambling products and pornography. Policy specifics vary, but the proportion of income payments quarantined is generally 50%-80%.

In Australia, IM was officially introduced to help protect children from abuse and neglect, and women from financial and physical violence in the Northern Territory. The policy targeted Aboriginal communities. Since its introduction, decreasing so-called ‘welfare dependence’ and increasing employment participation have also often been cited as social and economic goals of IM (Deloitte Access Economics 2015; Mendes 2013; Mendes, Waugh and Flynn 2014). While successive Federal Governments have claimed success in meeting these varied goals, it is not possible to determine from existing evaluations whether reported social benefits have been due to IM or other programs and factors. Further, existing evaluations have raised significant concerns regarding the capacity of IM policies to meet their stated objectives and there have been a range of issues identified with implementation problems and the material and non-material effects of the policy. Despite these concerns, IM continues to be expanded to additional geographical areas across Australia (Cox 2015; Humpage 2016; Mendes 2018; Bielefeld 2014, 2015, 2018a).

The inconclusive evidence-base for compulsory IM schemes suggest that an independent study is well overdue. In particular, more research is needed into social security recipients’ lived experiences of IM, as the voices of those directly impacted by these policies have frequently been lost or ignored in the debate about the costs and benefits of IM. It is important to distinguish between compulsory income management (CIM) and voluntary income management (VIM) for the purpose of this report, as participants in both the compulsory and the voluntary schemes participated in the study. The differences in their experience of IM is one of the issues explored in the report.

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