Welfare quarantining: safeguarding children or welfare reform by stealth?

Submitted by amielouisewilliams on Fri, 13/05/2011 - 9:04am

Inclusion’s Australia associate, Emily Crawford, writes for Indus Delta about the Australian policy known as Welfare Quarantining. In essence, this is a controversial policy which seeks to control Aboriginal Australians' use of their welfare benefits. It was introduced in the Northern Territory in 2007.

A controversial policy controlling Aboriginal Australians' use of their welfare benefits was introduced in the Northern Territory in 2007. As part of a wider response to extreme social issues in Aboriginal communities, the income management policy quarantines 50% of Indigenous claimants' benefits, restricting those monies to be spent on priority items such as food, rent and utility bills under the supervision of Centrelink, the government social security agency. The goal of income management is to improve child health and wellbeing and reduce abuse and family violence, largely caused by abuse of alcohol, by restricting individuals' ability to spend benefits on harmful items and increasing the amount spent on daily necessities.

Welfare quarantining raises two key questions for policy makers and practitioners:

Does income management work? Does it achieve the desired socially good outcomes?
Is it justifiable to use such profoundly interventionist means to achieve these ends? Does the state's legitimate role in safeguarding child wellbeing outweigh individuals' right to autonomy?

The policy has expanded from 73 specific communities and now applies across the Northern Territory. It has also been picked up by some politicians for potential implementation across the mainstream claimant population. Thus a third question arises: is income management beneficial for all claimants and their children or is this simply welfare reform by stealth?

The Intervention

The catalyst for the introduction of income management was the findings of theLittle Children Are Sacred report into child sexual abuse in remote Aboriginal communities in the Northern Territory. The report found this to be an endemic problem and strongly urged that it "be designated as an issue of urgent national significance”[1]. In response, and only one week later, the then conservative Howard Government launched the Northern Territory Emergency Response, also known as The Intervention. It affected more than 70 per cent of the estimated Aboriginal population in the Northern Territory[2]. Welfare quarantining was a key strand in a multi faceted response that included health, police, employment and housing, as well as a predominantly Aboriginal army corps providing logistics support.

Income management

The welfare quarantining element of The Intervention is hugely controversial. At the time, it applied only to Indigenous people - indeed the Government suspended the Racial Discrimination Act to enable the policy to go ahead. It was compulsory for all claimants in those 73 communities regardless of individual capacity to manage personal finances, parenting skills or even whether the claimant has children. It involved a level of control over the lives and decisions made by claimants never seen since the introduction of the modern social security system. For some, it also had uncomfortable echoes of past paternalistic approaches to Aboriginal welfare.

The aims of income management within The Intervention were to:

ensure that part of certain welfare payments are directed to meet the priority needs of the person, their partner, their children and other dependents;
reduce the amount of cash available in communities in which substance abuse, gambling and other anti-social behaviours are problems that can lead to child abuse and community dysfunction;
provide better financial security to women and elderly community members who are vulnerable to humbugging (harassment for money);
promote socially responsible behaviour, particularly in relation to the care of children.[3]

Income managed funds cannot be spent on excluded items, in particular alcohol, cigarettes, gambling or pornography.

Implementation issues

Initially, income managed funds could be spent by allocating the money to a specified local store licenced by Centrelink, by using a voucher issued by Centrelink for a specified larger shop (eg supermarkets), or as a direct deduction to pay for utilities and regular expenses. In late 2008 the Basics Card was introduced to allow claimants more flexibility on where to spend income managed funds.

The introduction of income management involved major changes to people's daily affairs and roll out began only two months after the announcement of the policy. It is not surprising, then, that a number of implementation issues arose.

There was considerable confusion about how the system worked, what could and could not be purchased and why money was being 'taken away';
Communication has been criticised, a particular issue given a significant proportion of clients do not have strong English language skills;
There was some lack of engagement with the programme, particularly amongst those hostile to it due to complaints of lack of consultation and racial discrimination;
The programme was seen as bureaucratic. A high degree of manual administration was required by both Centrelink and the individual to allocate funds;
Time lags between benefits pay day, Centrelink allocating funds and being able to purchase goods in store caused frustration and embarrassment;
Intensive support was required from Centrelink staff to support stores operating in remote communities applying for a licence;
Retailers not part of the store card system were concerned about the impact on their trade;
Items not sold at the participating retailers (eg furniture, white goods) must be individually approved by Centrelink.[4]

Does welfare quarantining work?

The evidence in support of The Intervention's model of income management is weak and conflicting.

At first glance, income management appears to have been somewhat successful. The Australian Institute of Health and Welfare (AIHW) in its meta analysis found some positive results:

“More than half of the parents interviewed reported their children were eating more, weighed more and were healthier...More than half of clients reported that there was less gambling, less drinking and alcohol abuse and less ‘humbugging’ (harassment for money by relatives). Three-quarters of clients reported spending more on food, with half buying more fruit and vegetables.”[5].

The debate in the media has also highlighted women's reports of positive impacts relating to their increased ability to control family budgets and reduced humbugging.

Methodological issues

However, there are some methodological flaws that significantly undermine the strength of the claimed outcomes[6], in particular the fact that there were no baseline data on spending patterns against which to measure. Further, despite the many thousands of individuals affected, the evaluation relied primarily on the perceptions of small samples of self-selected interviewees (76) and focus group participants (167), store traders (66) and government officials about whether behaviour had changed. Indeed, the AIHW conceded that:

“The research conducted (point-in-time descriptive surveys and qualitative research) sit towards the bottom of an evidence hierarchy. A major problem was the absence of baseline data...The overall evidence about the effectiveness of income management was still not strong”. (pvi)

An illustration of this dilemma can be seen in the reported change in banned cigarette sales: while the majority of store operators reported that cigarette sales were unchanged, more than half the clients surveyed reported spending less on cigarettes[7].

Tracking impact

One study did quantitatively track spending patterns before and after The Intervention in 10 remote Aboriginal community stores. The Menzies School of Health Research found that income management appeared to have no effect on total store sales, food and drink sales, tobacco sales and fruit and vegetable sales. Aboriginal health services have also recorded increased anaemia rates, suggesting little improvement to diets through changed spending and eating patterns[8].

Crucially, the Menzies researchers report that, “income management may not affect people’s spending overall. These findings challenge a central tenet of income management — that people’s spending habits will be modified in a positive way with mandatory restrictions on expenditure alone”[9].

The demon drink

Equally important as increasing focus on priority needs like healthy food, income management also sought to restrict access to items that can lead to abuse and violence, in particular alcohol. On this point the evidence is not hugely robust.

Many remote Aboriginal communities are already dry by choice (ie alcohol is banned or very restricted). Income management was intended to reduce the level of cash available to spend on alcohol. The evidence gathered by the AIHW evaluation found perceptions of reduced alcohol abuse, but these were inconclusive and inconsistent. Interestingly, there has been some debate that an unintended consequence of welfare quarantining has been to shift the problem of alcohol abuse into the larger towns, rather than solve it[10].

While there are some reported improvements as a result of income management, the balance sheet is equivocal. One social services director commented "Has income management been any good as a strategy for [ensuring] less money misdirected towards drugs, alcohol and gambling? The answer is yes. Has this been enough to address a decline in community safety and improve child protection? No."[11]

"You can't eat rights": autonomy versus safeguarding

Compulsory, blanket welfare quarantining for all Aboriginal people in certain areas is a remarkably draconian measure. In implementing this strongly interventionist approach, the Government invoked the fact that the severity and risk of abuse to children was so high and so urgent it warranted such rapid, top-down, authoritative action.

For some, Aboriginal and non-Aboriginal, The Intervention was seen as the state legitimately protecting the rights of children and women. The ends justified the means given the urgency of the situation where vulnerable children were at risk and they 'can't eat rights'. Bess Price is a high profile Indigenous community worker in favour:

“At the time it needed to take place. It was an emergency because our people were suffering and it was so bad out there... I am for the intervention because I've seen progress. I've seen women who now have voices... It had to happen immediately because our children were suffering and they have rights as well”[12].

Other commentators criticised The Intervention as “paternalistic and top-down rather than a collaborative approach that seeks to include Aboriginal people in the outcomes”[13]. Strong objections were made in particular to the suspension of the Racial Discrimination Act, contravening Aboriginal people's human rights in the name of their own empowerment. Critics also pointed to The Intervention failing to build on known evidence of what works in this context.

This fundamental conflict of philosophy has not been, and perhaps cannot be, resolved.

All or nothing? Alternative models of income management

The controversy The Intervention attracted has largely been avoided in Cape York, far north Queensland, and Western Australia where income management is practised quite differently.

In Cape York, income management can be one mechanism applied as part of wide ranging welfare reform and community building programmes. The key difference is that compulsory income management is only activated as a consequence of specific concerns and is ordered by a Family Responsibilities Commission, an independent statutory body consisting of a legally qualified commissioner and six local Aboriginal commissioners for each of the four Cape York welfare reform communities that have chosen to participate in the scheme[14].

In Western Australia compulsory income management has been trialled as a child protection tool. Child protection case managers can refer parents to Centrelink for set periods of income management for the benefit of the individual and their children[15]. Families can also nominate for voluntary income management. On the back of positive findings from the evaluation, the trials have been extended through to 2012 and across an expanded geography.

Mainstreaming income management

The Labour Government elected in late 2007 reinstalled the Racial Discrimination Act but rejected an independent review's recommendation to remove the compulsory element of quarantining. To avoid contravening the RDA, the scope of income management was expanded to encompass both Indigenous and non-Indigenous claimants across the whole Northern Territory if:

they are 15-24 and have been on unemployment, parenting or disability benefits for three of the last six months;
are aged 25+ and claimed unemployment, parenting or disability benefits for one of the last two years;
they are a deemed “vulnerable” by a Centrelink social worker; or
they have been referred by child protection authorities.[16].

Claimants may apply to be exempt by providing evidence of responsible parenting and financial management skills.

This is a significant step towards mainstreaming income management for the social security claimant population as a whole. National roll out has been mooted, but awaits the findings of a detailed evaluation review.

It also has bipartisan support, with the Leader of the Opposition strongly in favour of blanket welfare quarantining for claimants:

“If it's right and proper for long-term unemployed beneficiaries in the Territory to have their welfare income automatically quarantined why isn't it right and proper for this to happen right around the country?... I think taxpayers have a right to expect that the money they provide to welfare recipients is being appropriately used.”[17]

Welfare reform by stealth?

The process of normalising very high levels of control over claimaints' lives has lead to the suspicion that, rather than being a child protection intervention, income management is a tool for welfare reform by stealth. Compulsory welfare quarantining was justified as a response to an emergency situation. Since its expansion to all benefit claimants in the Northern Territory, it has been discussed in the context of tackling welfare dependency.

Policy is never developed in a political vacuum. Australia currently has technically full employment, a skills shortage, growing Disability Support Pension rolls, a Prime Minister of a minority government with a long record of commitment to employment as an inherent social and individual good and a Budget under pressure due to natural disasters. Welfare reform has already been flagged as a theme for the 2011-12 Budget.

There are consist reports of dissatisfaction with the restrictions on their autonomy by those subject to compulsory welfare quarantining, as well as feelings of shame at being branded bad parents or leading chaotic lives. The lack of autonomy and shame will, it has been suggested, encourage many claimants to move off benefits and into work instead.

There is a lack of convincing evidence about the effectiveness of welfare quarantining as a child protection measure and heated debate over whether such a draconian intervention is justifiable. Given this, the place of income management in future welfare policy must respond to rigorous evaluation and consider alternative models as well as being shaped by the political realities of the day.

[1] http://www.inquirysaac.nt.gov.au/(p7)

[2] http://www.fahcsia.gov.au/about/publicationsarticles/research/occasional/Documents/op34/OP34.pdf(p1)

[3] http://www.fahcsia.gov.au/about/publicationsarticles/research/occasional/Documents/op34/OP34.pdf(p2)

[4] http://www.fahcsia.gov.au/about/publicationsarticles/research/occasional/Documents/op34/OP34.pdf(p33-34)

http://www.abc.net.au/rn/backgroundbriefing/stories/2008/2416248.htm

http://www.aph.gov.au/hansard/senate/commttee/S12764.pdf

[5] http://www.fahcsia.gov.au/about/publicationsarticles/research/occasional/Documents/op34/OP34.pdf(pvii)

[6] http://news.smh.com.au/breaking-news-national/income-management-put-under-the-microscope-20110201-1ac9y.html

[7] http://www.fahcsia.gov.au/about/publicationsarticles/research/occasional/Documents/op34/OP34.pdf (pvii)

[8] http://www.abc.net.au/rn/backgroundbriefing/stories/2008/2416248.htm

[9] http://www.mja.com.au/public/issues/192_10_170510/bri10090_fm.html

[10] http://www.smh.com.au/opinion/society-and-culture/rebuilding-trust-with-indigenous-communities-the-first-step-20110321-1c3bu.html