11.1.1.10 Background to Income Management

Background

Income management was initially introduced as part of the NTER in prescribed areas of the Northern Territory (NT), including 73 remote NT communities, associated outstations and 10 town camp regions to address high levels of alcohol and substance abuse that were linked to the child safety issues described in the Little Children are Sacred Report. Income management was designed to assist in improving people's lives, in particular for families and children, by encouraging welfare payments to be used responsibly for key priority needs, such as housing and food, and to ensure less money is available to spend on alcohol, drugs, cigarettes and pornography. Income management also aimed to protect vulnerable people from financial exploitation, including the practice known as 'humbugging' in some NT communities. The scheme works by directing a proportion of a person's income support and family assistance payments to the purchase of priority items, such as food, clothing and rent.

Legislation for a new model of income management took effect from 1 July 2010.

Income management currently applies in:

• the Northern Territory,
• Cape York, Queensland, and
• designated areas of Western Australia,

• Playford (South Australia),
• Greater Shepparton (Victoria),
• Bankstown (New South Wales),
• Rockhampton (Queensland), and
• Logan (Queensland).

Income management:

• redirects a proportion of income support and family assistance payments, and 100% of lump sum payments of eligible income support recipients, to facilitate the expenditure of money on life essentials and in the best interests of children,
• offers evidence-based exemptions to people who are covered by compulsory income management measures(excluding those covered under the Child Protection, Vulnerable Welfare Payment Recipient or the Cape York Measures) who demonstrate responsible parenting and financial stability, and to young people and long-term unemployed who take personal initiative through participation in education or training,
• offers matched savings incentives and access to financial management support services and training for people who wish to improve their budgeting and savings skills, and
• offers people the opportunity to volunteer to have their income support and family assistance payments income managed, with financial incentives for each 6 months they participate in the scheme.

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Last reviewed: 10 August 2012