Ugur Nedim

The healthy welfare card – a necessary evil?

Image: AAP

Ugur Nedim details the Abbott Government’s plan to roll out a “healthy welfare card” scheme and questions whether such a scheme will actually benefit the underprivileged.


There has been much discussion in the media about how to effectively manage welfare payments, with conservative columnists and radio-hosts accusing welfare recipients of “blowing money on alcohol, drugs and gambling.” Those personalities will be happy to hear that the Federal Government has now announced a trial to roll out cashless welfare cards in communities notorious for high rates of drug and alcohol abuse.

The health welfare card

The concept of a cashless welfare card was put forth by mining magnate Andrew Forrest, who currently serves as a non-executive chairman of Fortescue Metals. Mr Forrest was commissioned to prepare a report into the ways in which Australia can work to eliminate the disparity between white and Indigenous Australians, using his personal experiences with Aboriginal communities and passion for change as a platform for his recommendations. Forrest recommended the implementation of a card to help welfare recipients manage their income and expenses. It aims to facilitate spending on items that “sustain and support a healthy lifestyle for the recipients and any children of those recipients.”

How would the card work?

The scheme would see welfare payments deposited into a savings account, which is accessed using the healthy welfare card. Instead of allowing people to withdraw cash, as is currently the case, the card would be accepted by major retailers and financial institutions to pay for essential costs such as rent, food, clothing and utilities. Non-essential items such as alcohol, gift cards and gambling services would be blocked on the card. According to Mr Forrest, $20 billion worth of welfare money is spent on illicit drugs each year.  While the card was initially targeted towards disadvantaged Aboriginal communities, the government has indicated that it could be rolled out incrementally to a broader class of welfare recipients. The government has fallen short of confirming that all welfare recipients would be issued with the card, with Social Services Minister Scott Morrison stating that “There is no suggestion at this stage that that card will have mainstream application.” He says that it would be used as “a key tool to target particular areas of disadvantage.”

Mr Forrest hopes that the healthy welfare card will also address issues associated with organised crime and family violence. While police have suggested that organised crime and drug syndicates may attempt to “subvert the new system in order to retain the revenues they get from the current system,” those behind the healthy welfare card say that it presents a valuable opportunity to reduce criminal activity.

It is expected that the rollout of the card will be complemented by new technologies and law enforcement provisions intended to address fraudulent activities of individuals attempting to obtain payments for illicit goods through the system. According to Mr Forrest, this will allow law enforcement agencies to “potentially remove the hundreds of millions of dollars from the market that provides the lifeblood of organised crime.” Politicians also hope that the card will, in turn, help to reduce the family violence associated with illicit drug use, with some suggesting that drug and alcohol abuse is linked to domestic assaults.

Facilitators of the rollout will be equipped to deal with any bumps in the road towards healthier living, with the government promising additional police and support services to aid those dealing with long-term alcoholism and drug addiction.

Critics of welfare card benefits

There are many who are sceptical about the assumed benefits of the healthy welfare card.   The Greens have voiced their concerns over the proposal, with party leader Christine Milne suggesting that it was “offensive” for wealthy white Australians to tell disadvantaged and vulnerable people how to manage their income. This criticism has been supported by many who suggest that the model is paternalistic and stigmatising. Others have cast doubts over the effectiveness of income management models, saying that they are unsupported by factual evidence.

In fact, a document obtained from the Parliamentary Library highlights the limited benefits of such schemes, with a review of existing income management schemes in the Northern Territory, Queensland and Western Australia finding that “positive changes had been uneven and fragile.”  The document also notes the findings of a 2013 evaluation of income management schemes in the NT, which found that “it is applied in blanket fashion to a large number of people who are able to manage their money and who report that they do not have problems related to alcohol, drugs or gambling,” and that “considerable feelings of disempowerment and unfairness” were felt by those under the scheme.

Notably, it found that there was “little evidence to date that income management is resulting in widespread behaviour change, either with respect to building an ability to effectively manage money or in building ‘socially responsible behaviour’ beyond the direct impact of limiting the amount that can be spent on some items.”

But these facts are unlikely to deter politicians, who have plans to roll out the card in selected communities later this year.


Ugur Nedim

Ugur Nedim is an Accredited Criminal Law Specialist and the Principal of Sydney Criminal Lawyers, a leading Sydney Law Firm that specialises in Criminal Law and Traffic cases.

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  1. Jen Beck said:

    Do politicians who will vote for a welfare card have any idea of what they’ll be getting themselves into?
    They will be followed and challenged about it day and night, legally, by those opposed to the measure.
    Connectivity is, fortunately, not as one-way street and can sometimes work against governments as well as for them.
    Do these people really want a network of objectors communicating their whereabouts to one another, following them, and never giving them a moment’s peace?
    Wherever they may be, in their favourite flash restaurant or pub, at a concert, or just doing their shopping, they’ll have droves of people non-violently approaching them and chastising them for voting for this measure.
    It will never end.

  2. Mark Spurgeon said:

    I have some questions about timing and publicity in relation to the planned rollout of this card.
    The Forrest Report was released about a year ago and this article doesn’t really have any new developments in the area since then.
    What was the purpose of writing it at all?
    I have a theory that this is the calm before the storm. There has been relatively little in the media about this in 2015 so far, but this is because when the plan is announced, it won’t come as a complete shock.
    That plan is for this card system to be set up in the second half of this year for some welfare recipients- “selected communities”.That much is indicated in the article.
    Ugur Nedim mustn’t want to go into the exact way it’s being planned, if he knows, which he seems to. Consider that most of the article is just a rehash of what has already been reported, and then the bombshell-“selected communities later this year.”
    That’s why the Police Commissioners around the country have been informed of a possible rise in petty crime, as described in the article.
    It’s July. What happens in July? The Premieres Conference, that’s what.
    The plan is to thrash it out there, on the quiet, and then set the legislation down in Parliament before the summer break.
    It’s a breathtakingly arrogant and dishonest attitude to show towards the Australian people.
    What passes for a debate is a flurry of controversy 12-18 months ago, done in order to soften us up, and now the legislation is almost imminent and there’s been nothing about it from Abbott and co.
    Back to the Premieres Conference, unless I’ve mucked up somehow, it’s very hard to find anything about the exact dates on which it is being held this year.
    That contributes to a highly unfortunate impression of secrecy.
    I’m sure if you contacted some government department or other, they’d be able to tell you exactly when the Premieres Conference is being held, but that’s not good enough.

  3. Jen Beck said:

    I see there’s a campaign on Twitter to explain to Jean-Claude Juncker, current president of the EU Commission, why Greeks are tired of austerity measures after he got up in the European Parliament and expressed surprise at the lack of support for these measures amongst the Greek population.
    That gives me an idea.
    If Tony Abbott, Joe Hockey, Marise Payne, Sussan Ley or any other of the numbskulls in the government want to force welfare recipients to have a card that leaves a trail of every single purchase they make on it, perhaps those worthies could have a card, too.
    Makes sense to me-they’re on the public payroll as well as Centrelink “clients”-Andrew Forrest, too.
    Surely it’s in the taxpayers’ interest to know that the money we give them isn’t being spent irresponsibly or even criminally? Politicians do have form with both of those things. It seems unfair to generalise but it goes both ways-if you want to generalise about all welfare recipients, or a class of welfare recipients, why not generalise about politicians and their cronies?
    What could be fairer?
    I concede that Tony and co. will be forced to leave every single thing they buy, from undies to toilet paper to tampons or any other items of a personal nature on the data trial, but if they’re taking a goodly chunk of my money, I want to see that that money doesn’t get wasted on overseas junkets or expensive cars.
    Making all public payments to politicians and those who do their dirty work like Andrew Forrest payable only on a card, would in fact only begin to address the disparity in power between these people and welfare recipients. This is because Tony and friends have ample means to use other funds including trail-free cash even if they were made to use only a card for their government paychecks.
    It would be a start, however,
    See how those scum like it.

  4. Mark Spurgeon said:

    Who is this Andrew Forrest person?
    Okay, it’s explained in the article who he is technically, but what I mean is, What is there about this individual that makes him more qualified to speak on the issue of welfare cards than some poor old drunk lying in the gutter?
    He’s a crawler who was picked by the govt to review the welfare system in order to provide an excuse to impose cards on welfare recipients. The disparity between indigenous and non-indigenous (“white” as described in the report) will be used as an excuse to force payments for some welfare recipients to be made only on a card. This will be the bridgehead for expansion to the rest of the Australian population eventually.
    The link provided to the Commonwealth discussion paper shows this. But it will only take some sort of financial upheaval and they too will be made to use a card in order to spend their benefits.
    Once people are used to THAT, it’ll be the turn of the rest of us the recession after that.
    I’m sure Forrest realises the direction in which it will head if compulsory cards for any group are insufficiently opposed.
    I’m sure the govt. would love to know what everyone is doing even more than they already do and to be able to pull the plug on “troublemakers” in a way they just can’t do if people are using cash.
    Maybe it’s a case of Forrest the Fascist along with Tony Abbott?
    I doubt the Greens’ resistance to this is more than token because they’re politicians, too.
    They want this as much as Labor or the Coalition because they’re corporate sell-outs as much as any of the others.
    I detect tacit support for this from the title of this article which has the sub-heading “A necessary evil?”
    The implied answer, clearly enough, is yes.
    I disagree.

  5. Graeme Condely said:

    if you are living on rich white peoples money just perhaps those taxpayers should have a say in how its spent .can we just wring our hands and let things drift on like they have for 200 years ??

  6. Davey said:

    I see nothing bad about this proposal. If you are living on welfare you should not be able to buy smokos or alcohol. They should be considered luxury items. If you are barely scraping by, and you are using my hard-earned tax dollars I am happy for you to spend it on petrol, vegetables or clothes to go to a job interview in but lets face it, so many welfare recipients are not spending it on those things.

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