Cashless welfare card ‘a success’: report
Cashless welfare cards will now be implemented permanently in the two regions, subject to six-monthly reviews.
The government will also look to expand the program to other areas.
But the report by ORIMA Research, to be released today, also shows some recipients have been hacking the system to get cash.
Under the scheme, first flagged by businessman and philanthropist Andrew Forrest in 2014, welfare recipients receive 80 per cent of their payment on a cashless debit card, which can’t be used to buy alcohol or gamble.
The other 20 per cent goes into their bank account.
The report found there had been “a couple of examples of suspected prostitution” to obtain cash and instances of merchants “overcharging for a product or services and then refunding the difference in cash,” ABC reports.
There had also been reports of more “humbugging” or pestering family or friends for money.
But the report concluded the trial had been effective in decreasing alcohol consumption, drug use and gambling and met the medium-term goals for related harms.
Human Services Minister Alan Tudge said the card was not a panacea but it had led to obvious improvements in the trial communities.
“Inevitably, people would prefer to have fewer restrictions than more restrictions, particularly if you are an alcoholic, but the evaluation and the data shows that it is having a positive net impact on reducing alcoholism, gambling and illicit substance abuse,” Mr Tudge said.
“The rights of the community, of the children and of elderly citizens to live in a safe community are equally important as the rights of welfare recipients.”
Nearly a quarter of people using the card reported less alcohol and drug use in their communities, and 27 per cent reported a drop in gambling.
Card users who said they were drinkers before the trial began also reported a 25 per cent drop in binge drinking.
Almost a third of users reported being able to better care for their children and save more money.
About 41 per cent of community members not on welfare reported less drinking in their area since the trial began and 46 per cent said it had made life in the area better.
However, about half of the card users reported the card made their lives worse.
Many users also experienced problems with the card, although the report suggested a lot of errors were down to merchants not understanding the system.
About 86 per cent of declined transactions between April and September were due to user errors or because there was not enough money left in the card user’s account.
The report found reductions in alcohol consumption, illegal drug use and gambling have been “largely driven by the impact of the debit card quarantining mechanism and not by the additional services provided.”
Minister Tudge said there has been no decisions on whether to expand the trials to new sites.
Labor leader Bill Shorten said the opposition had been open to trialling the cards in Ceduna and the East Kimberley but needed to examine the results.
“We were certainly very concerned, in particular to see what we could do to reduce the scourge of alcohol abuse, but we are reserving judgment until we fully study the results (of the review),” he told reporters in Melbourne.
Greens senator Rachel Siewert said the extension would come as a shock to many who were told they would only be on the card for a year.
“The report released today shows that half of the participants felt the card made their life worse,” she said.
The evaluation was largely based on perceptions for the first three months. “It is not the full year and should not be used to justify extending the trial,” Senator Siewert said.