Is Income Management Working? Parliamentary Library Analysis

An analysis of the Federal Government’s controversial Income Management Scheme has found that any positive changes delivered so far have been ‘uneven and fragile’.

Overall, the analysis highlights the absence of adequate evidence to prove the effectiveness or otherwise of the scheme.

Researchers, Luke Buckmaster and Carol Ey from the Federal Parliamentary Library Social Policy Section have produced a Background Note called, Is income management working?, which provides a guide to the evidence about the efficacy of income management.

The authors say that much of the debate surrounding income management of welfare payments has related to the question of evidence and the question of whether income management is really working.

Income management, also known as ‘welfare quarantining’, refers to a policy under which a percentage of the welfare payments of certain people are set aside to be spent only on ‘priority goods and services’ such as food, housing, clothing, education and health care.

Introduced by the Howard Government in 2007 as part of the legislation for the Northern Territory Emergency Response (NTER), income management has been criticised by some as paternalist and stigmatising.

At the time, income management schemes were also established as part of the Cape York Welfare Reform Trial for situations of child neglect and non- enrolment and/or non-attendance at school.

In addition to these compulsory income management schemes, provisions were also introduced for people to have their income managed voluntarily. Since then, the Rudd and Gillard Governments have expanded the scheme so that it now applies throughout the Northern Territory and other designated ‘disadvantaged areas’ throughout Australia.

The authors say from their analysis, there is an absence of adequate data related to the effectiveness or otherwise of income management, noting there are very few studies available that have attempted to directly measure the impact of income management separately from other policy interventions.

The Background Note also summarises the available evidence in relation to the operation of income management in the three areas in which it currently operates: the Northern Territory, Queensland and Western Australia.

It says that in none of these locations is there unambiguous evidence for or against the effectiveness of income management.

“The overall picture is one in which positive changes have been uneven and fragile. On the other hand, there is no clear evidence that income management is responsible for a worsening of the situation in areas in which it operates.

The Background Note concludes that it may be that the evidence in relation to income management will only become clearer over the long term, especially given the structural nature of the social problems involved.

The Background Note concludes that, thus far, the evidence provided for or against income management is inconclusive. At best, the evidence has only partially clarified particular aspects of a complex situation.

Is Income Management Working? can be found here. 

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