There is no evidence that compulsory income management has any widespread or sustained benefits – either at the individual, family or community level. This is despite a decade of various forms of income management in different parts of Australia.
The Government claims the card will reduce the effects of “welfare-fuelled alcohol, drug and gambling abuse” and “assist people to break the cycle of welfare dependency by stabilising their lives and helping them into employment”. They have also claimed that the card reduces domestic violence and crime and improves the welfare of children and families.
Existing evidence, however, shows that compulsory income management:
- does not result in widespread or sustained benefits – either to the individual or to their community;
- leads to no discernible improvements in employment outcomes;
- is poorly targeted;
- is not cost-effective;
- can result in strong negative experiences (e.g. social stigmatisation and exclusion, financial hardship, increased stress, financial harassment, discrimination); and,
- can damage financial management skills.
The most comprehensive evaluation of income management could not find "any substantive evidence of the program having significant changes relative to its key policy objectives, including changing people's behaviours". This evaluation found no evidence of changes in spending patterns; no evidence of improved financial wellbeing; no evidence of improvement in community wellbeing, including for children; and evidence of the kind of learned helplessness that flows from making people dependent on the decisions of others. The review found that, "rather than building capacity and independence, for many the program has acted to make people more dependent on welfare".
A 2016 review of income management programs, undertaken by the University of NSW, concluded:
No evaluation has found that compulsory forms of income management [IM] have resulted in medium or long-term behavioural change at the individual or community level… In addition, there is evidence of unintended negative consequences of IM, particularly compulsory forms of IM.
A review of the multiple evaluations of income management, undertaken by the Centre for Aboriginal Economic Policy Research in 2016, also found no conclusive evidence of benefit. It indicated the most effective schemes were voluntary and target people with high-needs as part of a holistic set of services. Further, it noted consistent evidence that “compulsory income management can diminish financial management skills and increase dependency on the welfare system”.