Income management started on 1 July 2012 as part of a trial of new approaches to tackle entrenched disadvantage in the Building Australia’s Future Workforce package.
Other measures that form a part of the trial include new participation requirements and supports for young parents and jobless families to help them finish their education, get ready for work, and make sure their children are ready for school.
The Better Futures, Local Solutions initiative within the Building Australia’s Future Workforce package is being run in 10 disadvantaged locations:
- Bankstown, Shellharbour and Wyong (New South Wales)
- Logan and Rockhampton (Queensland)
- Playford (South Australia)
- Greater Shepparton and Hume (Victoria)
- Burnie (Tasmania)
- Kwinana (Western Australia)
A targeted model of income management has been introduced in five of the ten locations:
- Bankstown (New South Wales)
- Logan (Queensland)
- Rockhampton (Queensland)
- Playford (South Australia)
- Greater Shepparton (Victoria)
Why these locations?
These sites were chosen based on a number of factors including unemployment levels, youth unemployment, skills gaps, the numbers of people receiving welfare payments, and the length of time people have been on income support payments.
Who does it apply to?
Income management in the trial locations is similar to what’s operating in Western Australia.
In the trial sites, income management will apply 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.
What criteria do state governments use to refer people to income management?
Referral criteria for the child protection measure is determined by each state, according to their internal policies and procedures, and may differ in each site. All child protection authorities will discuss the implications of referral to child protection income management with their clients; some states will incorporate the decision to participate in income management into the persons agreed case planning. .
In some sites, state housing authorities can refer a person in rental arrears and at risk of eviction to a Centrelink Social Worker for consideration of income management under the vulnerable measure. The referral criteria that a state housing authority uses is determined by each state, and may differ in each site.
For more information about referrals from state governments to income management in these sites, please contact your local child protection or housing authority.
How does it work?
Income management does not change the amount of payment a person receives. It just changes the way that they receive part of their payment. People participating in income management receive the balance of their payments in the usual way.
Income management works by ensuring that part of the person’s payment is allocated to pay for priority items such as food, housing, clothing, utilities, education and medical care. Centrelink assists people on income management to identify their expenses and helps them adjust their allocations as required.
Income management limits expenditure of income support payments on excluded items, including alcohol, tobacco, pornography, gambling goods and activities. There is no restriction on how a person can use the proportion of their payments that are not income managed.
What percentage of a person’s Centrelink payment/s is income managed?
For people who volunteer for income management or who are referred by a Centrelink social worker, fifty per cent of their welfare payments are set aside for basic necessities.
Under child protection income management, seventy per cent of parents' welfare payments are set aside for necessities such as food, housing, utilities, clothing and medical care.
How can people spend their money?
People can spend their income managed funds in the following ways:
- by allocating money to the BasicsCard, which can be spent at various stores for items such as food, clothing, petrol, health and hygiene products
- asking Centrelink to make payments from their income management account for regular expenses such as rent and bills, school meals programs and payments to community stores
- asking Centrelink to make one-off payments to stores
- if their priority needs have been met, allocate income managed funds to items that are not priority needs (as long as they are not excluded items). This means people can plan ahead to buy larger items such as motor vehicles or whitegoods with their income managed funds.
Income managed funds cannot be used to purchase excluded goods, including alcohol, home brew kits, home brew concentrates, tobacco products, pornographic material and gambling goods and activities.
What other support services do people receive?
People who are participating in income management will be offered a free and confidential referral to Financial Management Program services, for financial counselling and money management skills training.
The Government has provided over $12 million to boost Financial Management Program services in these five locations.
Communities for Children services, part of the Australian Government’s Family Support Program, are also available in the sites to provide parenting and early childhood support.
Incentives are also available for each measure of income management.
What other changes are being introduced in the 10 Better Futures, Local Solutions locations?
The Government has also introduced additional welfare changes in all 10 Better Futures, Local Solutions locations. These changes are aimed at supporting young parents and parents in jobless families to prepare to enter or return to the workforce, and boosting child wellbeing and functioning of families with young children in some of the most disadvantaged locations in the country.
More than 80 per cent of young parents leave school early without gaining Year 12 or equivalent qualifications increasing the risk of being on income support for a long time. The Helping Young Parents measure commenced on 1 January 2012, and will assist young parents to finish their education to help them get a good job, and build a better future for their children.
To help break the cycle of disadvantage, young parents living in the 10 locations who are on Parenting Payment, do not have Year 12 or an equivalent qualification and have a youngest child under six years will be required to develop an individually tailored Participation Plan focussed on them completing Year 12 or an equivalent qualification.
From 1 July 2012, jobless families also have new requirements to help them prepare for a return to the workforce and make sure their children are ready for school.
Parents are eligible for the measure if they are receiving Parenting Payment with a child five years of age or under, and have been receiving income support for two years or more or are under 23 years old and not working or studying, and live in one of the ten locations. As part of the measure, parents will meet regularly with DHS to discuss their child/ren’s development and develop an individualised Participation Plan to help them get ready for work.
Currently, parents on Parenting Payment don’t have any participation requirements until their youngest child is six years old, which means they can be out of the workforce for an extended period of time. Parents with young children are assisted to undertake study, training and access early childhood services – to make sure that when their child is old enough, they are ready to get a good job and their children are ready to start school.
Young parents and jobless families will get more support than ever before, including extra training places, employment assistance and parenting support. The Government will also meet almost 100 per cent of child care costs if parents want to access child care for work, study or training while participating in these measures.
The Helping Young Parents and Jobless Families measures are supported by new and enhanced Communities for Children services.
For more information:
- go to humanservices.gov.au
- talk to your local Centrelink Income Management Contact Officer
- call the Income Management Line (for clients only) on 132 594.