Appendix A: Earlier initiatives, background to the development of new income management

Since 2007, the Australian Government has been progressively developing a national reform agenda in relation to welfare recipients in disadvantaged regions and in relation to dysfunctional families and communities. Measures implemented include:

• Income Management in the Northern Territory Emergency Response (NTER)
• Child Protection Scheme of Income Management (CPSIM)6
• Voluntary Income Management (VIM)
• Cape York Welfare Reform (CYWR)
• Improving School Enrolment and Attendance through Welfare Reform Measure (SEAM).

Each measure uses a combination of different tools to achieve its goals, including income management or increased conditionality on the receipt of income support. These measures are briefly described in the remainder of this section.

A1. Income management in the Northern Territory

Income management was first introduced as in the NT as part of the Northern Territory Emergency Response (NTER), announced in June 2007, to promote socially responsible behaviour and help protect children. Legislation was passed in August 2007 to enable income management.

The initial roll-out of income management only affected people (Indigenous and non-Indigenous) who received income-support payments and who lived in 73 prescribed communities, their associated outstations and 10 town camp regions of the Northern Territory.

Under the NTER model of income management, half of people’s welfare payments were set aside for the priority needs of individuals, children and their families. Income-managed funds must have been directed towards agreed priority needs and services such as food, rent and utilities. Income-managed funds could not be used to purchase excluded items such as alcohol, tobacco, pornography or gambling products.

The objective of the NTER income management measure was to ensure that:

• money paid by the government for the benefit of children is directed to the priority needs of children
• women, the elderly and other vulnerable community members are provided with better financial security and
• the amount of cash in communities is reduced to help counter substance abuse, gambling and other anti-social behaviours that can lead to child abuse and community dysfunction.

A2. Child protection scheme of income management (CPSIM)

The Commonwealth and Western Australian Governments are working together to implement a trial of CPSIM in Western Australia. A bilateral agreement supports this trial. Under this initiative, the Western Australian Department of Child Protection has the option of requesting that Centrelink manage an individual's income support and family payments in cases where poor use of existing financial resources is wholly or partially contributing to child neglect or other barriers the individual may be facing.

The Commonwealth Government has responsibility for income support and family payments and is therefore able to link certain conditions to these payments; however broader responsibility for child protection remains with the Western Australian Government.

CPSIM was implemented in specific Western Australian locations from November 2008 and has been progressively rolled out to the Kimberley region, and particular Department for Child Protection districts of metropolitan Perth.

As in the Northern Territory, income management involves Centrelink directing income support and family payments to meet priority needs such as food, clothing and housing. Income managed funds cannot be used to purchase alcohol, tobacco, pornography or gambling products.

Support services are offered to assist those on income management and include financial management services provided through FaHCSIA and Parent Support services provided through the Department of Child Protection. Appendix B provides an overview of current evaluation activities of this measure.

A3. Voluntary income management measure (VIM)

VIM was implemented in conjunction with CPSIM in Western Australia in late 2008. This initiative allows income support recipients in particular districts in metropolitan Perth and the Kimberly region to volunteer for income management to assist them to meet their priority needs and learn tools to help manage their finances for themselves and/or their family in the long term.

Individuals who are placed on VIM also receive a referral to financial counselling or financial education services funded by FaHCSIA. Appendix B provides an overview of current evaluation activities of this measure.

A4. Cape York welfare reform (CYWR)

A different approach to welfare is being trialled in the Cape York communities of Aurukun, Coen, Hope Vale, and Mossman Gorge and associated outstations. Cape York Welfare Reform is a partnership between the four communities, the Australian Government, the Queensland Government and the Cape York Institute for Policy and Leadership. The reforms, which will run from 1 July 2008 to 31 December 2011, aim to create incentives for individuals to engage in the real economy, reduce passivity and re-establish positive social norms.

Under the reforms, an independent statutory body called the Family Responsibilities Commission (FRC) has been established to help rebuild social norms in the four Cape York Welfare Reform communities. Components include referring individuals to support services and possibly to income management. Fifteen programs covering housing, education, social responsibility and economic opportunity are being rolled out as part of the reforms. Appendix B provides an overview of current evaluation activities of this measure.

A5. Improving school enrolment and attendance through welfare reform measure (SEAM)

SEAM aims to increase the enrolment and regular attendance at school of school-age children whose parents are receiving a schooling requirement payment7 by placing conditions on the parents' receipt of such payments to ensure their children are enrolled at and attending school on a regular basis. Parents who do not comply may have their schooling requirement payment suspended until they do comply. Other payments such as FTB and CCB continue to be paid during a SEAM suspension period.

SEAM does not reduce the primary responsibility of state and territory education authorities to respond to truancy issues. Rather, it is intended to provide an additional tool to help resolve intractable cases of no enrolment or poor attendance. SEAM includes a pathway to parenting resources for those parents who need assistance through Centrelink support and referrals to relevant services.

SEAM responds to the finding that an estimated 20,000 Australian children of compulsory school age are not enrolled in school, with many others not attending regularly. SEAM encourages parents to ensure that their children are enrolled at and regularly attending school by linking enrolment and attendance to parents' welfare payments. SEAM uses possible suspension of income support payments, supported by a case management approach, to encourage responsible parental behaviour. In extreme cases income support payments may be cancelled, but this is expected to be a very rare occurrence.

SEAM trials commenced from the beginning of the 2009 school year in six locations in the Northern Territory: Katherine, Katherine Town Camps, Tiwi Islands, Hermannsburg, Wadeye and Wallace Rockhole. The Department of Education, Employment and Workplace Relations (DEEWR) has the responsibility for evaluating this measure.

6. As part of the Australian Government’s commitment to improving outcomes for vulnerable and disadvantaged Australians, the Child Protection Scheme for Income Management (CPSIM) in Western Australia has been extended for a further year. Voluntary Income Management (VIM) is also offered in WA. Under the new income management measure in NT, the CPSIM is referred to as the Child Protection Measure (CPM). This reflects the subtle differences between the two compulsory measures designed to help Child Protection Authorities in WA and NT to help vulnerable families.
7. Schooling requirement payments are defined in section 124D of the SS(Admin)Act. They include social security benefits and pensions as defined in section 23 of the SSAct as well as 3 payments under the Veteran’s Entitlement Act 1986 (VEA).