Len Jaffit

Senior Technical Specialist, Social Security Law, Victoria Legal Aid

Rehana Chowdhry

Lawyer, Victoria Legal Aid

Tim Noonan

Lawyer, Victoria Legal Aid

Julie Riva

Lawyer, Victoria Legal Aid

Oympia Sarrinikolaou

Lawyer, Victoria Legal Aid

Compulsory income management

Last updated

1 July 2021

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 percentage of a person’s payment from Centrelink is set aside; this part of the payment can only be spent on ‘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.

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.

Who may be affected in Victoria?

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

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

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

Or, you are a young person who is not a full-time student or apprentice and:

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

You can volunteer to have your 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 you are exempt, income management stops for 12 months, unless your 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. 

In Victoria, in some circumstances, the decision to manage a person’s income can be reviewed by the Victorian Civil and Administrative Tribunal.

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