Briefing: Cashless Debit Card (CDC) Extended Rollout 2021

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Background to the CDC and Income Management programs

Compulsory income quarantining in Australia commenced in 2007 as a measure targeting Aboriginal communities in the Northern Territory, as part of the Federal Government’s Intervention. It has since been increasingly used in various formats by successive federal governments to micro-manage where and how people spend their Centrelink entitlements. It involves limiting the percentage of specified Centrelink payments a person may receive as cash in their chosen bank account, with the balance (generally between 50 and 80%) quarantined to a separate account. Restrictions are imposed on where and how the quarantined funds can be spent.

Since its inception, compulsory income quarantining has disproportionately impacted Aboriginal and Torres Strait Islander people. 

Government rationale is that compulsory income quarantining is designed to reduce social harms associated with alcohol and other drug use, and gambling. However, multiple studies and evaluations have failed to find any conclusive evidence that compulsory income quarantining achieves this goal.

Compulsory income quarantining is currently imposed via two separate schemes: Income Management and Cashless Welfare. These schemes are more commonly known by reference to the debit cards associated with their operation – the BasicsCard is used to administer the Income Management scheme set out in Part 3B of the Social Security (Administration) Act 1999 (Cth); and the Cashless Debit Card (CDC) is used to administer the Cashless Welfare arrangements contained in Part 3D of that Act – referred to in this paper as the CDC program.

Both schemes operate by:

  • limiting cash withdrawals of fortnightly Centrelink entitlements to a specified percentage; and
  • restricting the use of quarantined income  to purchase excluded goods such as alcohol.

The Income Management and CDC program card systems operate in different ways. Some differences in how the CDC and BasicsCard systems work are the result of different legislation and policy decisions; others are the result of differences in technology.

Both the CDC and the BasicsCard are provided by the same company, Indue.

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