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Article Article February 8th, 2017

From welfare to wellbeing: how communities are counting on the cashless debit card

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The ‘Healthy Welfare Card’ aims to tackle welfare-fuelled alcohol, drug and gambling

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The initial outcomes from the twin trial communities are broadly positive

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It's not a panacea to every problem but local leaders remain supportive of the initiative

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Ensuring that welfare payments are spent wisely and on basic human essentials is a priority for any government. With resources scarce, the last thing you want is for this money to be frittered away on things like gambling or alcohol abuse, for example. So, what can be done?

The Australian government is trialling a new approach involving a cashless debit card, or ‘Healthy Welfare Card'. Alan Tudge, the Australian Minister for Human Services, has championed development of the card from the outset and his excitement about its potential - and early results - is palpable.

"The objective is to reduce the social harm caused by welfare fuelled alcohol, drug and gambling abuse and, to date, the trials have gone as well as we could have possibly hoped," he says. "The card looks and operates like any other normal Visa debit card and you can purchase anything and the only difference is it doesn't work when buying alcohol or when gambling, and you can't take cash out from it. I'm very satisfied with the results to date"

Rooted in the communities

So, what prompted this initiative? Did it stem from a think tank or originate within the halls of central government? Actually, in large part it was fuelled by the realisation that welfare payments in parts of Australia are leading to huge amounts of alcohol, drug and gambling consumption, negatively impacting both the individuals and well as the broader community. "We know in the Northern Territory, at least two thirds of the assaults against women are connected to alcohol, and nearly all of that alcohol has been paid for with the welfare dollar," points out Tudge. "You see this at the acute level in remote indigenous communities, but it is not an indigenous issue - it is a welfare issue."

The proposal for a new debit card that limited welfare recipients' payment options was first put forward in a report on indigenous employment levels by Andrew Forrest about 18 months ago. "I worked very closely with him on that report and we wanted to trial that idea to see if it would work," adds Tudge. "I said at the get-go we wanted a trial in two or three communities chosen based on two criteria: one being a place where there is demonstrable harm caused by welfare abuse; and the other being a willingness of the leaders in those communities to participate."

Tudge and his team then embarked on a process of deciding where the trials could place and, after discussions with local leaders in five different regions, identified Ceduna (in South Australia) and East Kimberley (in the northern tip of Western Australia). "In each of those communities, there are very significant social harms. In East Kimberley the best estimate we have for the hospitalisation rates for assaults is 68 times the national average, nearly all of which would be caused by alcohol. And in addition, domestic violence rates are off the charts and child neglect rates are off the charts. It is not too dissimilar in Ceduna, maybe not quite as acute as East Kimberley, but still quite a significant issue."

Trial and improvements

The twin trials - both lasting 12 months - began in March and April 2016. Under the scheme, anybody who is on a working age income support payment has 80% of all welfare support payments placed onto their card, with the other 20% going into their regular bank account. Tudge, though, is keen to stress that the card is only one element of the approach.

"The card is the most visible aspect of the trial, but it is only one of three components of it," he explains. "There are some highly targeted services which have been added on and there is also a regional leadership group. Those three things actually work together like a tripod and I think that particularly the first and the third have been the most critical in terms of the success to date. But I think some of the targeted services have been important as well, because they are there to support people to get off their addictions and to help with money management. The services are also important in terms of giving the reassurance to people that they weren't going cold turkey without any structured support."

When asked to identify the lessons learned from the trials, he highlights the importance of having local leaders on board from the outset. "The local leadership group in each of these communities have been involved in every single little decision - in terms of the design of the card, what colour it is, the percentage that is placed on the card, how we deal with internet purchases and so on. They have been involved in every single decision and if they strongly objected to something we would not proceed with it. I think when you've got that leadership, you've got the trust between government and that leadership, it is amazing what you can achieve together."

How's it gone so far?

Although Tudge is keen to avoid placing too much emphasis on early results - "I've been in and around this space long enough that sometimes these things can start off very well and then they can decline over time" - there is no doubt that the initial outcomes are broadly positive.

"One of the more stark figures is that there has been a 30% drop in local poker machine revenue in Ceduna," he recounts. "Bear in mind only about a quarter of all adults have this cashless welfare card and yet poker machine revenue has dropped by a third, which just goes to show how much welfare money was going from people's bank accounts straight into those poker machines.

"We will have a full independent evaluation done at the end of the 12 months but we already know that the incidences of public drunkenness are down. As the head of the major hospital in Kununurra, East Kimberley, says there has been a massive reduction in the number of presentations to the emergency room from alcohol related issues. There are also strong anecdotal reports that more food is being consumed and there is less public drunkenness. We haven't gotten enough crime trend data to assess what is happening there but we hope that at least some of the domestic violence rates and some of the assault rates and other crimes against the person will drop. That is our hope."

Although the feedback from recipients has so far been less positive, Tudge understands that it can take time to adjust. "There has been a mixed reaction," he concedes. "Some are very happy to be on it, often women as they have money which is protected from, particularly amongst indigenous communities a cultural practice which is called 'humbugging', where effectively there is almost a requirement to hand over money if a person asks for it. Some people are unhappy - alcoholics, for example, are never going to be happy about reducing their intake."

However, such issues have not been enough to dissuade the local community leaders to rethink their support. "The community leadership in each of these places is almost across the board is supportive," points out Tudge. "I was up in the East Kimberley at the end of 2016 and almost every single community leader was saying 'yes, this is working'. It isn't perfect, not the panacea to all of the problems, but yes it is having a significant impact and this is from the church leaders, ambulance drivers, indigenous leaders, supermarket owners, police, hospital directors and other service support leaders."

With such a strong foundation of support in place, it should come as no surprise that Tudge is now considering where and how the trials may be rolled out further - such as mirroring New Zealand's use of the scheme for under-18s, for example. And while there is no sense of complacency creeping in, Tudge is already proud of what has been achieved.

"I don't want to get too far ahead of myself in terms of final impact of the trials," he concludes. "But I would say this; you go into Parliament and you give up a lot by doing it. You go in there to make a difference in people's lives and I think this is making a difference."



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