INCOME MANAGEMENT IN THE NORTHERN TERRITORY

INCOME MANAGEMENT IN THE NORTHERN TERRITORY

Contents WHAT IS INCOME MANAGEMENT?... 1 HOW DO I ACCESS AND SPEND INCOME MANAGED MONEY?... 2 GETTING ACCESS TO INCOME MANAGED MONEY... 3 WHO WILL BE INCOME MANAGED?... 6 EXEMPTIONS... 9 REVIEWS AND APPEALS... 12 ANSWERS TO COMMON QUESTIONS ABOUT INCOME MANAGEMENT... 13 FOR FURTHER HELP & ADVICE... 18

ACKNOWLEDGEMENTS This publication is a project of Darwin Community Legal Service Inc, funded by the Commonwealth Attorney-General s Department. Special thanks to Jennifer Scott and Melanie Robinson for their tireless efforts and expertise in drafting this booklet. 2012 Darwin Community Legal Service Inc. This publication is copyright. Non-profit organisations can reproduce parts of this booklet as long as the original meaning is retained and proper acknowledgment is given. All other persons and organisations wanting to reproduce material from this booklet should obtain permission from Darwin Community Legal Service Inc. Free copies are available from DCLS. Electronic copies can be downloaded at www.dcls.org.au Image and design: James Carter, Big Picture Graphic Art, Darwin NT. Printing: Star Printers, Darwin, NT.

WHAT IS INCOME MANAGEMENT? Income management was first introduced in the Northern Territory in 2007 by the Federal Government as part of the Northern Territory Emergency Response (NTER), commonly known as the intervention. Initially, income management applied to everyone who lived in prescribed Aboriginal communities and received Centrelink payments. Since August 2010, a new system of income management has been put in place in the Northern Territory. Now, anyone who lives in the NT and receives Centrelink payments can be income managed if they fall under one of the four categories described below. If you are income managed, 50% - 70% of your Centrelink payments are controlled by Centrelink by way of an income management account. The rest of your Centrelink payment goes straight into your bank account as normal. The money that is controlled by Centrelink in your income management account is allocated for the priority needs of you, your partner and your children. You and Centrelink decide how this money is spent and Centrelink will organise the payments. You cannot normally get cash from your income management account. You are not able to buy excluded goods with income managed money. Excluded goods include alcohol, home-brew kits, tobacco, gambling products or pornography. 1

HOW DO I ACCESS AND SPEND INCOME MANAGED MONEY? There are various ways of using your income managed money. Even though the Centrelink worker has the power to decide how income managed funds are spent, you are entitled to have a say in these decisions. You may request the funds be spent on certain things but a Centrelink worker will have the final say in these decisions. Priority needs Centrelink wants you to spend income managed money on what it calls the priority needs of you and your family. Priority needs are: food and non-alcoholic drinks clothes and shoes bills (gas, electricity, water, garbage collection, fixed phone) housing (rent, repairs, loan repayment) items for the house items for hygiene rates items for health child care education and training things you need for work cars or bikes toys public transport funeral expenses However, there is no rule to say that you must use your income managed money for these things. The only rule is that you cannot buy the excluded goods (alcohol, tobacco, pornography, gambling products or home-brew kits) with income managed money. 2

GETTING ACCESS TO INCOME MANAGED MONEY You can have an amount of income managed money put onto a BasicsCard. The amount that is put on the BasicsCard on each Centrelink pay date will be decided between you and a Centrelink worker. The BasicsCard is a green card and works in the same way as a debit/credit card. Your name will be on the card and you will have a pin number. You cannot withdraw cash from a BasicsCard. You can only use a BasicsCard in stores that accept the card. You cannot use the BasicsCard to buy the excluded goods (alcohol, home-brew kits, tobacco, pornography or gambling products). You do not have to have a BasicsCard if you do not want one. The other options for using income managed money are explained later in this booklet. 3

Vouchers Centrelink can issue vouchers for certain stores. Centrelink can do this if you do not have a BasicsCard. Vouchers can also be useful if you are going interstate because fewer stores accept the BasicsCard outside the Northern Territory. Expense payments Centrelink can pay your bills or money you owe by making payments directly from your income management account to a person, organisation or company. This payment can happen on a single occasion or on a regular basis. Crediting of an account Centrelink can put your income managed money into an account at a store - for example, a community store. You can then use the money in the store account to buy goods and services that may be specified by Centrelink. Transfers to account Centrelink can transfer income managed money to your, or another person s, account at a bank. This must be used to pay for goods and services that may be specified by Centrelink. This transfer can also pay for any bank account fees and charges. This method of using income managed money can be used to cover payments already being taken out of bank accounts, for example car repayment direct debits. Centrelink can specify what these transfers to an account should cover. Centrelink will not make a transfer to an account if it thinks that it will allow you to buy excluded goods. Restricted direct payments Centrelink can pay out income managed money by cash, cheque, or into your bank account if you need to pay for something in cash. The cash cannot be used to buy any excluded goods. 4

Unrestricted debits If there is money left in your income managed account, and you have met your and your family s priority needs and will continue to do so, you can ask for your income managed money to be paid as an unrestricted debit payment. Centrelink cannot control how this money is spent if it is paid to you. Centrelink has the power to do this under sections 123 YA and 123 YO of the Social Security (Administration) Act. Setting up these payment methods To organise any of the above payments, you need to go to a Centrelink office, or phone the income management number - 132 594. How much money is on my BasicsCard or in my income managed account? To find out how much money is on your BasicsCard or what is happening with income managed money, you can: call 1800 057 111 (you can only receive a BasicsCard balance from this number; calling this number is free when you use a landline but costs money from mobiles) call 132 594 for all income management information go to a Centrelink office Check online at centrelink.gov.au (you need to sign up to do this) You should also receive a statement by post every three months. 5

WHO WILL BE INCOME MANAGED? There are four categories that Centrelink uses to decide if someone should be income managed. If you meet the criteria under one of the four categories you will be income managed. Disengaged youth You will be deemed to be a disengaged youth if: you are between 15 and 25 years old; and you have been receiving Newstart, Youth Allowance, Parenting Payments or Special Benefit payments for three months out of the last six months. Long term welfare payment recipient You will be deemed to be a long-term welfare payment recipient if: you are over 25 years old; and you have been receiving Newstart, Youth Allowance, Parenting Payments or Special Benefit payments for one year out of the last two years. 6

Vulnerable welfare payment recipient A Centrelink social worker may deem you to be a vulnerable welfare payment recipient if: you are any age and on any Centrelink payment; and the social worker thinks you are vulnerable because of financial problems, homelessness, or alcohol, drugs, gambling or mental health problems. In the NT the vulnerable measure will apply automatically to: 1) Young people granted Unreasonable to Live at Home (UTLAH) rate 2) Young people under 16 who are granted Special Benefit 3) Young people under 25 who are granted a crisis payment due to prison release. People on Vulnerable Welfare Income Management have their circumstances reviewed by a Centrelink Social Worker after 12 months. Child protection income management A child protection worker from the Department of Children and Families can tell Centrelink to income manage you if: they think you will manage your Centrelink payments better on income management; and they have a case open regarding your children; or you are a young person leaving care. People who are income managed under the child protection category have 70% of Centrelink payments income managed. 7

Voluntary income management If you want to be income managed, you can ask Centrelink to income manage your payments (ie if you do not fall under one of the categories above). To do this, you can enter into a voluntary income management agreement with Centrelink. You must stay on voluntary income management for three months if you chose it. If you stay on voluntary income management for six months, Centrelink will pay an extra $250 in your income management account. Matched Savings Scheme If Centrelink decides that you will be income managed and you have not volunteered for income management, you can participate in the matched savings scheme. Under this scheme, Centrelink will match the money you have saved in your bank account up to the value of $500. To receive a matched payment you must complete a money management course and save an amount of money over 13 weeks or more. If you want to do this, ask Centrelink for details. What if you do not want to be income managed? First you need to know what category of income management you fall under. If you are a disengaged youth or a long term welfare payment recipient you can apply to Centrelink for an exemption. If you are a vulnerable welfare payment recipient you can ask Centrelink to reconsider your circumstances. You can request a social worker review at any time, but if you request a second review at a later time, you need to wait 90 days from your last request. Normal appeal rights apply see page 12. If you are on child protection income management you can ask the Department of Children and Families to review the decision (see reviews and appeals section). 8

EXEMPTIONS If you are income managed because Centrelink considers you a disengaged youth or a long term welfare payment recipient you can ask for an exemption (i.e. not to be income managed). To be exempt you need to meet the requirements below. An exemption lasts for one year. You can apply for an exemption whenever you want. Even if you do not get an exemption the first time, you can make further applications for an exemption. What you need to show to get an exemption depends on whether you have dependent children. 9

No dependent children You can get an exemption if one of the following applies: you are a full-time student on youth allowance you are a new apprentice in the last year you have worked 15 hours a week for at least 26 weeks. Dependent children If you have dependent children, to get an exemption you need to show Centrelink two things: 1. that you have not been financially vulnerable in the last 12 months; and 2. that your children meet health and education requirements. Centrelink will assess whether you are financially stable by asking you questions in a phone interview. Centrelink will ask many questions to find out things like whether you are harassed for money, whether you manage to meet your needs and those of your family, and how you manage your money. Then you have to meet health and education requirements relating to your children. The things you have to show will depend on whether your child has reached school age. Children below school age If your children are not yet at school, you need to show that your children have had vaccinations and health checkups. If your child is three years old or more, you have to show that they participate in engagement related activities like playgroup, crèche or child care. 10

Children of school age If your children are of school age, you need to show Centrelink that they are enrolled at a school and have had no more than five unexplained absences in each of the last two school terms. An unexplained absence could be one period, a half-day, or a full day. To ensure that a child s absence is marked as explained you must tell the school the reason for any absence, even if it s just one period or a half-day. Centrelink may obtain the school attendance records from the Department of Education when you request an exemption. Even if you do not get an exemption because your child has too many un-notified attendances, it may be worth applying again for an exemption after the end of the next school term. The school attendance requirements do not apply if you home school your child, or your child does an approved activity instead of school. Only one parent or carer can obtain an exemption on the basis of having dependent children. This will be the parent or carer who Centrelink has on record as the main carer. Request for reconsideration If you are income managed because Centrelink calls you a vulnerable welfare payment recipient you can ask for your personal circumstances to be reconsidered by a Centrelink social worker. You can make this request at any time. Centrelink will stop income-managing you if they think you are no longer vulnerable. If you are unsuccessful you can ask for another reconsideration after 90 days. 11

REVIEWS AND APPEALS If you think Centrelink made an incorrect decision, you can ask for a review of the decision. For example, you can challenge the following types of Centrelink decisions: the decision to income-manage you the decision to refuse an exemption or reconsideration request decisions made about your income management payments. If you want to challenge a decision, the following review and appeals process exists: 1. Tell Centrelink that you don t agree with the decision and would like it reviewed. 2. If the decision is not changed a more senior Centrelink person called an authorised review officer can review the decision. 3. If the authorised review officer does not change the decision and you are still unhappy, you can challenge Centrelink at the Social Security Appeals Tribunal. For advice on reviews and appealing ask at your local legal centre (see getting help at the end of this booklet). The Northern Territory s Department of Children and Families Review Child protection income management If you are income managed under the child protection category, the Department of Children and Families will have made the decision, and not Centrelink. To challenge this decision you have to go through the following review and appeals process: 1. First request the Department of Children and Families to review its decision. This request must be made within 20 days of the decision. A reviewing officer will make a fresh decision, which may or may not be the same decision as before. 2. If you are still unhappy after a review, you can then appeal to the Department of Children and Families. You should make your appeal within 20 days of receiving the review that you are unhappy about. Senior officers at the Department of Children and Families will conduct the appeal and decide whether the decision to income-manage you is correct. 12

ANSWERS TO COMMON QUESTIONS ABOUT INCOME MANAGEMENT What should I do when I receive the first letter about income management? Is income management used only in the Northern Territory? You should contact Centrelink when you receive this letter so that you have time to ask for an exemption or choose how you would like your income management account to work. If you don t contact Centrelink within 28 days from the date of this letter, Centrelink will automatically put you on income management via a BasicsCard. If this happens, you will only receive half of your Centrelink payments in cash. Income management is used throughout the Northern Territory and in limited cases in Western Australia and Queensland. The Federal Government intends to extend some aspects of income management to other parts of Australia in 2012. I am in the Vulnerable Welfare Payment Recipient category. How long will I stay on income management? What if I want to travel? You will remain on income management until one of the following happens: 1) You stop being in one of the income management categories 2) A social worker reviews your circumstances and recommends that income management is no longer required 3) In the case of prison release crisis payment 12 months after the payment is received. If you leave the Northern Territory for a short period, you need to arrange with Centrelink how you can spend your income managed money when you are away. At the moment, income management is widely used only in the Northern Territory and a few other small areas interstate, so you may have problems buying the things you need. 13

What happens when Centrelink sends money to my payees? Centrelink will tell people or companies who receive money from your income management account that the money is from your income management account and must not be given back to you. I have no problems managing my money why am I being income managed? The legislation that applies to income management is very strict. If you live in the Northern Territory and fall under certain criteria then you will be income managed. Centrelink will not consider arguments like I can manage my money and have no problems organising my household budget or I do not drink, smoke or gamble anyway. The only way you can stop being income managed is by getting an exemption or a reconsideration of your circumstances. What if I do not want the BasicsCard? You do not have to have the BasicsCard if you do not want it. Some people choose to direct their income managed money towards payment of their rent and bills instead of shopping with a BasicsCard. 14

What if I move? If you are income managed because you volunteered, you have the right to exit income management after three months has expired. If you are income managed in the vulnerable category you can ask for a reassessment. Otherwise, income management continues until you either obtain an exemption or get a decision that income management no longer applies to you. What if I do not understand the unauthorised absences on my child s school report? Many parents have been surprised at how many unauthorised absences appear on their child s school report. If you believe there are mistakes, you can query the absence report with the school. Even if you cannot get an income management exemption because your child had too many unauthorised absences in the last two school terms, you can reapply for an exemption after the next full school term is over. Ensure that you always tell the school when your child is absent, even if it is just for one teaching period, and keep your own records. What if I do not take my child to playgroup but my child does a lot of other things? Centrelink wants to see that your children engage with other children at pre-school, playgroup or other activities that promote the child s social, emotional, mental and physical development. You need to give Centrelink as much evidence as you can that the child does some kind of organised activity with other children on a regular basis. For example, free activities at the library, sporting activities, or playing regularly with other children. 15

Will I be successful if I challenge Centrelink on their decision to income-manage me? Income management legislation is very strict. Once you fall under the income management criteria Centrelink has no choice but to income-manage you. The exemption criteria used for people without dependent children are not flexible, and if you do not meet the requirements, it is unlikely Centrelink will change its mind. You should seek advice if you are considering challenging a Centrelink decision. What if my rent/bills have not been paid by Centrelink? There is a lot of scope for confusion in this area. If you think Centrelink should be paying a bill or your rent for you, you need to check that this has been paid every fortnight. If you think Centrelink has made a mistake you need to follow this up with Centrelink. What if I want cash to pay for things I need like fuel, airfares, school activities etc? Centrelink has the power to pay out from your income management account if you need to pay for something that can only be bought with cash. Ask Centrelink for a restricted direct payment or unrestricted debit to help you in this instance. 16

The following table is a useful summary of why you are being income managed and what your rights are : Long Term Welfare Payment Recipient Disengaged Youth Vulnerable Welfare Payment Recipient Child Protection Category Vulnerable Welfare Payment Recipient (Youth Allowance) Vulnerable Welfare Payment Recipient (Youth Prison Release) 25 + years old, on: Newstart Youth Allowance Parenting Payments Special Benefits for 1 year out of the last 2 years. 15-25 years old, on: Newstart Youth Allowance Parenting Payments Special Benefits for 3 months out of the last 6 months. Any age and on any Centrelink payment. Centrelink thinks you are vulnerable because of financial problems, homelessness, alcohol, drugs, gambling or mental health problems. The Department of Children and Families has a case open regarding your children and thinks you will manage your finances better if you are income managed. You are a young person leaving care and the Department of Children and Families thinks income management will help you. Youth Allowance Recipients granted UTLAH (Unreasonable to Live at Home) rate People under 16 years granted Special Benefit. People aged under 25 years who are granted a crisis payment due to prison release. 1. You can apply for an exemption. 2. You can access Centrelink review and appeal mechanism. 1. You can apply for an exemption. 2. You can access Centrelink review and appeal mechanism. 1. You can ask Centrelink to reconsider its decision to classify you as vulnerable. 2. You can access Centrelink review and appeal mechanism. 1. You can ask the Department of Children and Families to review its decision. 2. You can appeal against the review to the Department of Children and Families 1. You can ask a Centrelink social worker to review your circumstances 2. You can access Centrelink review and appeal mechanism. 1. Your income management will stop 12 months after you received the crisis payment. For more information For BasicsCard balances Ph: 1800 057 111 For other income management information Ph: 132 594 Department Of Children And Families 87 Mitchell Street, Darwin Ph: 8999 2400 17

For Further Help & Advice DARWIN Darwin Community Legal Service Ph: 1800 812 953 or 8982 111 Northern Territory Legal Aid Commission Free Information Line: 1800 019 343 (NT wide service) Darwin: 8999 3000 Palmerston: 8999 4750 Katherine: 8973 8704 Tennant Creek: 8962 4362 Alice Springs: 8951 5377 Top End Women s Legal Service Ph: 1800 234 441 or 8982 3000 North Australian Aboriginal Justice Agency (NAAJA) Ph: 1800 898 251 or 8982 5100 KATHERINE Katherine Women s Information Legal Service Ph: 1800 620 108 or 8972 1712 NAAJA Katherine Ph: 1800 897 728 or 8972 5000 ALICE SPRINGS Central Australian Women s Legal Service Ph: 1800 684 055 or 8952 4055 Central Australian Aboriginal Legal Aid Ph: 1800 636 079 or 8950 9300 NHULUNBUY NAAJA Nhulunbuy Ph: 1800 022 823 or 8939 2300 18

Disclaimer: The material contained in this booklet is a general guide only and should not be relied on as a substitute for legal advice. No responsibility is accepted for any loss or damage suffered by any person acting upon or relying on information contained in it or omitted from it. For individual legal advice, please contact the Welfare Rights Centre in your local area. The information contained in this booklet is current as at July 2012.

For further information contact Darwin Community Legal Service Freecall: 1800 812 953 8 Manton St Darwin NT GPO Box 3180 Darwin NT 0801 P: (08) 8982 1111 F: (08) 8982 1112 E: info@dcls.org.au www.dcls.org.au