NATIONAL SETTLEMENT POLICY NETWORK TELECONFERENCE. Income management: How will it affect refugee and migrant communities? REPORT.

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1 1 NATIONAL SETTLEMENT POLICY NETWORK TELECONFERENCE Income management: How will it affect refugee and migrant communities? TELECONFERENCE REPORT June 2012 The National Settlement Policy Network (SPN) is a joint initiative of the Refugee Council of Australia (RCOA) and the Settlement Council of Australia (SCOA) to enable our members (organisational and individual) to participate in planning joint advocacy on settlement issues. RCOA and SCOA co-host quarterly National Settlement Policy Network teleconferences that focus on specific themes. The teleconferences provide an opportunity for members to hear from guest speakers with expertise in particular areas of settlement policy, raise issues of concern and share ideas for ways forward. The SPN teleconference held on Wednesday 23 May 2012 provided an opportunity for settlement service providers and refugee and migrant communities to hear more about the new Place Based Income Management (PBIM) policy that will come into effect on 1 July 2012 in the local government areas of Playford (SA), Shepparton (Vic), Bankstown (NSW) and Logan and Rockhampton (Qld), as well as to raise concerns about how this new policy may impact local refugee and migrant communities. Hubs were set up in the five pilot PBIM locations as well as in Darwin, Perth, Canberra, Melbourne, Sydney and Hobart. Presenters were: Susan Cartwright, National Manager, Deduction and Confirmation Services Branch, Indigenous Regional and Remote Servicing Division, Department of Human Services (DHS). Liz Hefren-Webb, Branch Manager, Welfare Payments Reform, Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA). Violet Roumeliotis (VR), Chief Executive Officer, Settlement Services International (SSI). BACKGROUND From 1 July 2012, Centrelink welfare recipients who are identified under particular categories in the five pilot PBIM locations will either be voluntarily or compulsorily placed on income management. For those who are placed on income management, between 50% and 70% of their Centrelink payment will be allocated in a non-cash form to account for priority goods and services such as food, rent and utilities. Income managed funds can also be directed towards a BasicsCard for purchases in approved stores. Income managed funds cannot be used to purchase items such as gambling goods, alcohol, pornography and tobacco.

2 Some key points about income management outlined by presenters Liz Hefren-Webb (FaHCISA) and Susan Cartwright (DHS) included: Income management is an issue with diverse and strongly-held views. FaHCSIA and DHS are aware of this. Income management operates in different ways in different locations partly this is about different communities and different circumstances, but also this helps build an evidence base of how different models can work effectively with different groups of people i.e. in the NT there is a broadbased scheme of income management (four different streams); Only three streams will be operating in the PBIM sites. Income management will be applied to customers if they (a) volunteer, (b) are referred by local child protection authority, or (c) are assessed by Centrelink social worker as requiring and being able to benefit from income management. The objective of income management is to help people meet their priority needs, such as food, rent, pay bills and meet medical costs. It works by diverting a proportion of a person s income directly to those needs. Income managed money cannot be spent on excluded items such as: tobacco, alcohol, pornographic services or gambling products. DHS/FaHCSIA don t know how many people will be on income management in each location because it operates through referral and this depends on the professional judgement of Centrelink social workers and child protection staff and it also depends on how many people volunteer. There is sometimes talk about 1,000 people in each location being subject to income management. This number used as the basis for building a budget for this measure, but it doesn t mean there need to be 1,000 people on income management. It is anticipated it will be a very small proportion of welfare recipients. If someone has been referred DHS for income management, Centrelink will contact them via a letter explaining what income management is, schedule a face-to-face appointment and provide information about appeal rights. The letter will be translated. Phone calls will be made to people who have indicated that English is not their chosen language. At appointments, Centrelink staff will spend time explaining what income management is, identifying what a person s priority needs are, what options they have to allocate their income managed funds, what they can t use income managed funds for and outline their appeal rights. A referral will also be made to financial counselling service. If a person is interested, the Centrelink officer will explain the BasicsCard an EFTPOS-type card that can be used in approved stores. Interviews will be with an interpreter if required. It is expected these interviews will take about an hour. DHS have established Zone Income Management Coordinators and Income Management Coordinators in each of the PBIM sites who have been out in the community. DHS encourage services to get in touch with these coordinators if services would like more details about how and what is being implemented. Account Managers have also been engaging with merchants to sign them up to allow customers to spend money at stores; this is an ongoing process. (Contact list of Zone Income Management Coordinators and Government Action Leaders in each of the five pilot locations is included at the end of this report.) DHS is training all staff on income management and housing authority and child protection officers on the policy. Details about the policy have been summarised in a background paper available here: DISCUSSION The following challenges and concerns were raised during the teleconference by presenters and participants. Issues are grouped by theme and, where known, by the hub location. to the identified issues and concerns by speakers from FaHCSIA and DHS are also included. 2

3 The effectiveness of the policy A lot of resources are being channelled into this policy that could be more effectively directed into addressing problems (e.g. housing, employment, parenting, mental health, drug and alcohol abuse) at a local level that have a long-term focus. There is little evidence of the effectiveness of income management as a good public policy. Indeed, there is evidence that it does not work. (VR) People on Centrelink welfare payments are living below the poverty line; there needs to be focus on addressing this as an issue to support people to get work and be able to make full contributions to society. (VR) There exists no convincing evidence that the PBIM will work, especially when it comes to gambling which is one of the targeted problems i.e. there is no evidence from Northern Territory that income management has reduced gambling revenue. The policy misses out on important issues such as mental health, suicide, self-esteem and community cohesiveness. (Bankstown) There is little known of the implications the scheme will have on people. Many of the issues and concerns raised have not been appropriately addressed and these should be properly assessed before the PBIM is fully implemented. (Rockhampton) Income management in the Northern Territory doesn t provide the solutions to the problems for which someone was referred for income management to begin with. It creates more problems. African refugees come with trauma and a lot of other issues and this policy does not help them overcome this trauma. Service providers don t see how it is helping and don t understand why it is going to be implemented all over the country. There is no evidence that it works and it will work in the future. (Darwin) There has been a lot of support for income management from child protection workers In Western Australia who have been using it for a while. As much as we want people to build skills and be able to parent well on their own, for a small number of families this is not happening and current services are not getting to that outcome. Child protection workers see income management as an additional tool. Some older Indigenous women have also expressed the view that it helps them to protect their money from their families. There is a $2.1 million evaluation that will be undertaken on PBIM so there will be an opportunity to assess the evidence base. Limitation of individual rights and freedoms Settlement Services International has been an active member of the Say No to Income Management in Bankstown or Anywhere Coalition. The Coalition believes that income management takes away people s rights to manage their own destinies. Governments and local communities should be working together in a respectful way to solve problems. Income management only provides a short-term solution to complex problems. There is a need for a humane not punitive system that draws on the expertise of local agencies. (VR) The policy asks public servants to make decisions that control a significant part of an individual s life how much they can spend and where they can spend it. This is the wrong focus; we should not be asking our public servants to make such decisions. (VR) Income management assumes that people are unwilling or unable to manage their finances. There is no evidence to support this. The scheme and the BasicsCard not only limits individual freedoms, but can be considered humiliating. There are testimonials from the Northern Territory that people have been put into separate lines; that there is stigma and it is undignified. (VR) Income management was implemented without proper consultation; it is an imposition on people and takes away the possibility of someone controlling their own finances. It should be the choice and right of the individual how they use their own money. Income management takes away this right and disempowers people. (Darwin) 3

4 4 Refugee settlement is about empowerment; this policy works against that. (Sydney) Decision-making processes What training measures are in place for Centrelink social workers who are making decisions? Would it be the final decision of the senior practitioner at the child protection service to refer someone for income management? Can these guidelines be made available to services working with CALD clients to guide them through this? (Logan) How will vulnerability be measured? A lot of clients are new in the country and are extremely vulnerable. (Rockhampton) Ethical social work is about strengthening and empowering clients. Income management can be seen to be in conflict with social workers ethical/professional obligations. (Canberra) Training and guidelines for child protection decision are the policy of that state child protection authority. We can ask them to make it publicly available when they have been finalised. In NT and WA it is a senior practitioner who has to sign off on the decision to refer someone. For the vulnerable measure, there is a legislative instrument that sets out the circumstances or the principles that Centrelink social workers need to follow. Centrelink staff are provided training and refresher training a number of times throughout the year. Staff have an e-reference (online guide) that will provide guidance to customer service officers in making a decision. Centrelink also have a quality assurance process that has been implemented so that decisions that are made by staff are reviewed by senior staff to ensure that staff are adhering to the policy and guidelines and are making decisions based on all of the circumstances that the customer has at the particular time. To be considered under the vulnerable measure, a Centrelink social worker will do a complete assessment with the person. They will look at four measures of vulnerability: (1) financial hardship, (2) if they are being financially exploited, (3) self care or (4) at risk of homelessness. Income management will only be applied if it is deemed appropriate there are other tools or options for the social worker to assist the customer with. E.g. Centerpay, referral to external organisations, etc. If a person presents at a Centrelink office as vulnerable, it does not mean they will be automatically income managed. Customers who are placed on income management have the right of appeal if they don t think they should have it applied to them through Centrelink or the child protection authority. Centrelink social workers have to weigh up these ethical questions a debate that social workers should be having. Some think there is no conflict because it is about child protection. Remittances The practice of sending remittances to family and relatives overseas is important; people make savings however they can (e.g. choosing not to eat meat) so that they can send money overseas. This is linked to feelings of guilt as survivors who are living in industrialised well-off countries like Australia. There are concerns that practices such as remitting money overseas will bring people to the attention of being referred to income management. (VR) Income management will have a large impact on the financial responsibilities many clients have to persons in their home country that they provide care for (e.g. family members who are sick). Some people arrive with huge debts that they have to repay. (Logan) Refugees are not wasting money but saving it to send as remittances. (Rockhampton) Persons under the PBIM will have 50-70% of their income restricted to priory needs such as food and rent. Income managed money cannot be remitted because remittances are not considered a

5 priority need, but the remaining 30-50% of the income can be used towards practices such as remitting money overseas. Cash economies Many locations such as Bankstown have a large cash-based economy which would struggle under the implementation. Housing would be severely affected as many rely on informal agreements and have no formal lease agreements with landlords. PBIM does not allow cash payments which would restrict people s ability to pay rent in cash and therefore also their choice of living arrangements. (Bankstown) While 50% of income will be discretionary, a lot of refugee families pool their money together and this could take that away from them. (Rockhampton) Many communities operate largely within a cash culture (e.g. in Africa, the whole place is a cash economy) and people s life skills about managing money is not necessarily about having this card or that card to make non-cash forms of payments. There are a lot of cultural assumptions and practices that go along with non-cash type transactions and these are often not strong in people from refugee backgrounds. (Sydney) Informal arrangements do present a challenge but it has been working in metro Perth and Darwin where there are similar cash economies. Centrelink is doing their outmost to make this work. If it becomes an issue for a customer Centrelink will work on each case with the person to facilitate something that works on an individual level e.g. looking into statutory declarations. Centrelink don t know how much of an issue this will be but staff will address issues as they arise. Allocation of income managed money While it is true that people can identify where they want to direct their money (e.g. to get preferred stores to accept BasicsCard or arrange direct payments), this is an enormous burden on individuals to communicate consistently with Centrelink about where they are going to shop and puts an enormous strain on already strained lives. (Bankstown) Customers on income management would still have between 50-30% of their payment as cash. The potential impact on small businesses The policy won t work in urban environments and works against all of the principles of free enterprise. It is anti-competitive. As much as DHS will try to bring in small businesses, service providers know that small businesses in areas like Bankstown and Logan operate with signs that say no EFTPOS cash only. They are the economy and heart of soul of local communities. This policy gives more opportunities to larger retail outlets. (VR) This policy could lead to opportunities for large retailers and limit the possibility for clients to have a choice of where to buy their food and other household products. It could possibly affect their ability to make the most cost-effective choices and buy culturally appropriate foods. It will make it harder for people to budget effectively. (VR) DHS will work with each customer looking at their specific needs. DHS Local Income Management Coordinators will be in constant conversation with the community looking into feedback from the stores and customers on how the BasicsCard is used and ways of making it more effective for the user, for example, by linking new stores to the system. 5

6 Discrimination There is a lot of confusion about the different models of income management (Northern Territory and PBIM). It is inherently a discriminatory/racist policy i.e. one targeting Indigenous community, the other urban centres. (Bankstown) Evidence of segregation in shops due to the use of the BasicsCard with separate queue systems in place in Northern Territory. While DHS may respond to this and it may not be in the policy, it is a structural feature of the policy that it creates a second class of people that are unable to look after themselves and shopkeepers respond to this accordingly; enacting these ideas e.g. questioning the priority of purchases and having BasicsCard users wait while others are served first. It enables discrimination and makes users feel marked and ashamed of using the BasicsCard, not being able to conceal that they are being income managed. (Bankstown) Reports of separate queuing systems in stores are, on the whole, anecdotal. If DHS hear of this practice happening, they will act on this and merchants or stores will be approached i.e. it should not be happening. The BasicsCard is an EFTPOS card. There is no reason why a customer would need to disclose which card they are using and/or what products they are buying with the card. Mobility and displacement The introduction of income management in the Northern Territory in 2007 had huge implications for the displacement of Indigenous communities. What implications will PBIM have on displacement of communities in these local areas? (Bankstown) People will move away from locations where this is implemented. In the Northern Territory many refugees were not able to cope and decided to move away. Additionally people choose not to move to areas which are under income management. (Logan) Service providers are concerned that they are hearing from people who are saying they might move out of the area even before it is implemented. (Playford) What happens when people move, will they still be subjected to income management in the new location? (Darwin) If people move from an area where they have been placed on income management to an area where this not implemented FaHCSIA are looking at how they will be supported. People who move from the Northern Territory are no longer subject to income management. 6 Income management and refugee settlement Some newly arrived refugees have to go through significant cultural shift when they first arrive in Australia. For example, parenting practices can be very different and this can bring them to the attention of child protection authorities. Some of the biggest challenges for newly arrived refugees are financial problems in the early stages of settlement; if income management is applied to them early on, it s going to be a big problem. (Logan) For new arrivals, they are facing so many issues. Income management would create a lot of other problems for clients e.g. financial counselling while they are settling. It is going to create a lot of stress and work for settlement services. (Playford) Cultural competency of financial counselling services PBIM seems to demand high-level culturally competent social workers and financial counsellors who can give budgeting expertise. In some ways, these things are already happening. Is the

7 Government planning on resourcing already existing financial counsellors that are working with refugee communities or create a whole new system? (Rockhampton) There are extra resources being given to financial counselling services part of that funding agreement is that they provide proper culturally sensitive and appropriate services to the community in which they are operating. RESOURCES Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) (URL). Building Australia s future workforce - Targeted locations income management, web.htm Department of Human Services (URL). Income Management Information for individuals, RCOA (2012). Income management: Impacts on refugee and humanitarian entrants, RCOA (7 September 2010). Letter to Dr Jeff Harmer, Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs on Compulsory Income Management Scheme, RCOA (2012). Community views on post-arrival settlement support, Section 5.2 Income management, 7

8 8 Queensland Zone Income Management Coordinator and Government Action Leader Contact List Logan Katherine Davie Ellen Ferris Rockhampton Bernie Jackson Deborah Sear (07) (07) (07) (07) NSW Bankstown Simone Payne Mile Musovski (02) (02) VIC Shepparton Marianne Van Der Vorm Mark Georgiou (03) (03) SA Playford Annie White Karen Zola (04) (08)