Cashless Welfare Card Effectiveness Questioned by New Report

The government’s approach to monitoring and evaluating its controversial cashless welfare card trial is inadequate, an auditor-general report says, leaving its effectiveness unknown and renewing calls for it to be scrapped.

But Minister for Social Services Dan Tehan said the government remained committed to the trial, which he described as an important element to help Australians “escape welfare dependency”.   

The report criticised the Department of Social Services (DSS) for “a lack of robustness in data collection” when evaluating the welfare trial.

“The Department of Social Services largely established appropriate arrangements to implement the cashless debit card trial, however, its approach to monitoring and evaluation was inadequate,” the report said.

“As a consequence, it is difficult to conclude whether there had been a reduction in social harm and whether the card was a lower-cost welfare quarantining approach.”

While DSS regularly reported on performance aspects of the trial to the social services minister, the evidence supporting some of its advice was lacking, the report said.

The auditor-general also revealed that ORIMA Research, who were chosen to evaluate the trial in 2017, did not use all relevant data available to measure the trial’s impact.  

“Social Services advised the minister, after the conclusion of the 12 month trial, that ORIMA’s costs were greater than originally contracted and ORIMA did not use all relevant data to measure the impact of the trial, despite this being part of the agreed Evaluation Framework,” the report said.

The cashless welfare card – which locks 80 per cent of welfare payments onto a debit card and cannot be used to withdraw cash or be spent on alcohol or gambling – has been trialled in East Kimberley in Western Australia and Ceduna in South Australia since 2016.

In February this year, legislation passed expanding the scheme to WA’s Goldfields region.

Minister Tehan said the card was making a real difference in the communities.

“People are using the cards to pay for every day essential items such as food, clothing and energy bills instead of spending welfare money on alcohol, drugs and gambling,” Tehan said.

He said that DSS accepted all recommendations from the report, including the appointment of a chief evaluator, the implementation of a new Data Monitoring Strategy, and improved risk management.

In wake of the report, the Australian Council of Social Service urged the government to cease the trials.

Acting ACOSS CEO Edwina MacDonald said: “[The] report shows that the evaluation was deeply flawed, failing to provide the evidence that the cashless debit card improves people’s lives.”

"It's a tragedy that people and communities are being subjected to the trials without reliable evidence that restricting access to cash reduces social harm related to addiction" – @edwinamacdonald https://t.co/tFp566E5qG pic.twitter.com/zJhiyy7TcE

— ACOSS (@ACOSS) July 18, 2018

Greens Senator Rachel Siewert, a long-time critic of the trials, said she was not surprised by the auditor-general’s findings.

“It is not shocking to read that ORIMA did not use all the relevant data to measure the impact of the trial. I pointed out clearly at the time that the evaluation was flawed and missing basic information such as police statistics from the trial areas,” Siewert said.

“The cashless welfare card trials should be put to an end… I urge the Labor Party and crossbench to support my disallowance motion that would stop the trials in Ceduna, the Goldfields and the East Kimberley in their tracks.”

While the Labor Party had supported an extension of trials in Ceduna and East Kimberley, they resisted the government’s plans to expand the trial to further sites.

Acting shadow social services minister Linda Burney said the report confirmed Labor’s long-standing concerns about the trials.

“The purpose of the trials is to determine whether the card works, and the government has failed this fundamental policy test,” Burney said.