Announcement date
24 September 2022
Link to announcement
Empowering communities with the abolition of the cashless debit card program | Department of Social Services Ministers (dss.gov.au)
Problem being addressed
There are two programs in operation that restrict what people can purchase with their welfare payments - the Cashless Debit Card (CDC) program and Income Management (IM) program. Both CDC and IM programs have an objective to restrict the purchase of items such as alcohol and gambling products so that participants prioritise expenditure on essential expenses such as rent, food and utilities. Since their inception, the policy landscape in Australia has changed considerably. Frameworks established between the Commonwealth and State and Territory governments have seen the development of new national and community level initiatives to address the effects of drug and alcohol misuse, and reduce domestic, family and sexual violence. Subsequent evaluations have established that the CDC and IM programs have produced mixed results in achieving their intended objectives.
Proposal
The Australian Government (the Government) has committed to abolish the CDC program and reform IM. The Government will deliver a staged approach with the first stage being exiting people off the CDC program shortly after the passage of legislation. Participants will be given an alternative to quarantine their income support payments for essential items if that is what they want to do. Those who volunteer will be provided with card technology that provides more functions such as tap and go and BPAY which will provide a better service than the current BasicsCard. Further reforms to IM, such as, future card technology, a national expansion or roll out of further community-based models, are considered at a high level in this document but are still subject to further consultation and decisions by government. This RIS was drafted to inform decisions of Government at a point in time. As a result the RIS may not always reflect the actual final policy as agreed by Government.
Assessed RIS outcome
Adequate
Assessment comments
To be assessed as good practice under the Guide, the RIS would have benefitted from deeper analysis to appraise the Government's investment in the new program given there are potential downside risks to voluntary participation levels, and more detail as to how participants will be supported to transition off the Cashless Debit Card program within short timeframes. The OBPR also notes that the approach to co-designing support services makes it difficult to determine the social and economic impacts of these services at this stage given precise design is yet to occur. In addition, the monitoring and evaluation plan could be more articulate, which may have downstream implications for the Department's ability to collect evidence to inform future policy changes.
Regulatory burden
The RIS estimates an average annual regulatory cost saving of $21.5 million over 10 years.
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