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Compulsory income management

Last updated

1 July 2022

What is compulsory income management?

Since 1 July 2012, some welfare recipients living in ‘declared areas’ have been subject to compulsory income management.

Income management refers to an arrangement where a portion of a person’s welfare payment is income managed and directed towards their ‘priority needs’ (s 123TH Social Security (Administration) Act 1999 (Cth) (‘SSA Act’)).

This means a welfare recipient loses the choice to spend a percentage of their Centrelink payment on things other than the goods and services deemed to be priorities by the Australian Government.

Priority needs include food, clothing, health items, education and training, child care, housing, household utilities, public transport and acquisition, repair and maintenance of a motor vehicle.

A welfare recipient is given a Basics Card, which can be used to pay for priority needs. The Basics Card can be only used at approved stores and businesses through the EFTPOS system. The Basics Card cannot be used to buy alcoholic products, tobacco products, pornography, gambling products and services or homebrew kits and concentrates. It also does not allow a welfare recipient to withdraw cash from EFTPOS terminals or from ATMs.

Centrelink contacts those who are to be subject to income management.

Declared areas

The following areas are declared areas for the purposes of compulsory income management (s 123TFA SSA Act):

  • New South Wales: Bankstown;
  • Northern Territory: the whole territory;
  • Queensland: Aurukun, Cape York, Coen, Doomadgee, Hope Vale, Livingstone, Logan, Mossman and Rockhampton;
  • South Australia: the APY Lands, Greater Adelaide and Playford;
  • Western Australia: Kimberley region, NG Lands, Peel region and metropolitan Perth;
  • Victoria: Greater Shepparton.

People may be affected differently in different areas.

Not everyone who lives in a declared area is subject to compulsory income management.

Who may be affected in Victoria?

To be subject to compulsory income management in Victoria, a person must live in the Greater Shepparton area.

They must also be receiving a payment from Centrelink or from the Australian Government Department of Veterans’ Affairs (DVA).

They also have to be referred to the compulsory income management program by a social worker or a child protection authority.

Alternatively, such a person can be subject to income management if they are a young person who is not a full-time student or apprentice and:

  • has been granted the Unreasonable to Live at Home Payment; or
  • is aged under 16 and have been granted the Special Benefit Payment; or
  • is aged under 25 and have been released from prison and have been given the Crisis Payment in the last 13 weeks.

A person can also volunteer to have their Centrelink payments be income managed.

Exemptions and appeals

People who are subject to compulsory income management have the right to apply for an exemption.

The exemptions available depend on whether the welfare recipient is the main carer of a school-age child (ss 123UGB–123UGG SSA Act). If a person is exempt, income management stops for 12 months, unless their circumstances change.

People who are subject to compulsory income management also have the right to appeal the decision to manage their income to the Administrative Appeals Tribunal (the appeals process is explained in ‘Administrative Appeals Tribunal’ in ‘Social security appeals‘.) 

If a child protection agency has recommended a person be subject to compulsory income management, that decision should first be appealed to the child protection agency that made the recommendation. 

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