The cashless welfare card is a form of compulsory income management, which restricts how a person can spend their income support payment. Since 2007, the Federal Government has implemented a range of different forms of income management. These have varied in terms of whether they are compulsory or voluntary, the portion of payments that are income managed, and who is targeted.

Most forms of income management quarantine between 50 and 100 per cent of income support payments on the BasicsCard, which is a debit card that can only be used at approved outlets for approved purchases, and cannot be used to withdraw cash.

The cashless welfare card differs from the BasicsCard in that it is meant to be useable at all retailers (except those that sell alcohol or gambling products), rather than just government-approved stores. This means the cashless welfare card cannot be used at outlets that sell a mix of excluded and non-excluded goods, such as hotels, bistros and supermarkets that sell alcohol, or retailers that sell gift cards that can be used to purchase alcohol or gambling products.