Compulsory Income Management - Evaluating Its Impact

Abstract

Australia has been experimenting with constraining the ways in which welfare recipients can spend their income support payments, essentially limiting their ability to access cash and requiring half of the payment to be spent on ‘basics’. The policy objectives were to reduce spending on alcohol and tobacco in favour of meeting ‘basic’ family needs, especially for children, limit the scope for financial harassment, encourage pro-social behaviours and build financial capabilities. The policy has primarily impacted on Indigenous Australians as a result of its geographic targeting, although a recent report has recommended a more stringent version of the program be introduced universally to all welfare recipients other than the aged. The largest of these experiments is ‘New Income Management’ in the Northern Territory, which has had more than 35,000 participants. This paper reports on the key findings of a major independent evaluation of New Income Management.