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Income management now targeting vulnerable yo. . .

Income management now targeting vulnerable young people

By Paula Grogan.
Published on the VCOSS Voice on 11 July 2013.

The recent extension of income management to certain groups of vulnerable young people has somewhat slipped under the radar here in Victoria. Given that Shepparton is one of the trial sites for income management, these changes will have a very real impact on young people and community sector organisations in the Shepparton region. VCOSS believes these impacts need to be closely monitored and any concerns must be addressed by the Commonwealth Government.

It is also critically important for the community sector across Victoria to be aware of the ‘creep’ of income management as the legislation enables the Government to expand the program further.

Income management involves a percentage of social security payments being withheld from individuals. The determined amount of money is then quarantined in an income management account to pay for ‘priority needs’ such as housing, food, utility costs, education and health costs. People receive a ‘basics card’ which can only be used at certain retail outlets to purchase certain goods.

The roll of out of Income Management began in July 2012 and Greater Shepparton is one of five trial sites in Australia. Prior to July 1, income management applied to three groups of people:

  • People referred for income management by state child protection authorities; or
  • People assessed by a Centrelink social worker as being vulnerable to financial crisis, which could include people referred by state housing authorities because they are at risk of homelessness due to rental arrears; or
  • People who volunteer for income management.

From July 1 2013, income management has been expanded, in the relevant regions, to compulsorily include:

  • Young people (15-24) who are granted the Unreasonable To Live At Home (UTLAH) rate of payment by a Centrelink social worker;
  • Young people who are under the age of 16 and are granted a Special Benefit payment by a Centrelink social worker; and
  • Young people who are under the age of 25 and receive a crisis payment after release from prison.

Fifty per cent of the person’s income support and family assistance payments will be income managed. After 12 months, a Centrelink social worker will review the person’s situation.

Agencies in the Shepparton region have already expressed concern about this extension. VCOSS is particularly concerned that the mandatory nature of the change provides organisations no flexibility to take into account the actual financial capacities and needs of the individual young people involved and to tailor supports accordingly and ensure appropriate services are available.

There are a number of government-commissioned evaluations of income management and community sector reviews of the impact of income management in different communities (see links below). VCOSS is concerned that the program has been extended even though there is currently no definitive evidence to indicate that income management results in improved health and wellbeing outcomes for children, young people and families or that it leads to stronger financial management skills for those involved. Importantly, income management does not address the complex structural issues which promote the disadvantage experienced by participants. Indeed, a recent Parliamentary Services briefing concludes that ‘thus far, the evidence provided for or against income management is inconclusive’ (Is income management working?L Buckmaster and C Ey, pg 2).

VCOSS is continuing to work with community sector organisations in the Shepparton region to monitor the implementation and impact of these changes and the roll out of income management more generally.

Related information

Evaluation of income management in the Northern Territory – FAHCSIA
Northern Territory Emergency Response Evaluation Report – 2008
Evaluation of the Child Protection Scheme of Income Management and Voluntary Income Management Measures in Western Australia – FAHCSIA
Implementation Review of the Family Responsibilities Commission – FAHCSIA
Northern Territory Emergency Response Evaluation Report – 2011
Evaluating New Income Management in the Northern Territory: First Evaluation Report – July 2012
Cape York Welfare Reform Evaluation – 2012
ACOSS Sumission to NT Emergency Response Review – 2008


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