Income Management in the Northern Territory

The Australian Government today announced improvements to the delivery of income management in the Northern Territory, in response to findings from an interim evaluation report.

Income management helps families ensure their welfare payments are spent in the best interests of children. It ensures that money is available for life essentials, and provides a tool to stabilise people’s circumstances and ease immediate financial stress.

The interim report by the Australian National University, Australian Institute of Family Studies and the Social Policy Research Centre at the University of New South Wales found that among Indigenous people on income management in the Northern Territory, there was a statistically significant perception of an improvement in their ability to afford food.

It also found that income management may make a contribution to improving wellbeing for some, particularly those who have difficulties in managing their finances or are subject to financial harassment.

This report builds on the independent Northern Territory Emergency Response Evaluation Report 2011 which found that income management was supported by many people in communities who believed it was bringing about positive outcomes, especially for children.

It also builds on findings from the Longitudinal Study of Indigenous Children, which showed that the majority of respondents who were on income management thought that it had led to positive changes in communities.

The new model of income management has been operating in the Northern Territory since 2010. The model is non-discriminatory and targeted to long-term income support recipients of working age, people referred to income management by Northern Territory child protection authorities, people assessed by Centrelink social workers as being vulnerable, and people who volunteer for income management.

Since July 2012 income management is also applied to people referred for income management by the Northern Territory Alcohol and Other Drugs Tribunal.

The report has identified some areas where income management could operate more effectively, including clearer exemption processes for people who are on compulsory income management and better targeted money management courses.

In response, the Government is making changes to improve the delivery of income management in the Northern Territory.

These changes will apply from 1 July 2013 and will include ensuring parents on compulsory income management have a clearer pathway to apply for an exemption.

Under the new arrangements, parents will receive more regular reminders from Centrelink about their responsibilities and the requirements they need to satisfy to qualify for an exemption, such as ensuring that their child has regular health checks, is immunised, and attends school.

The Government will also strengthen the relationship between money management services and Centrelink, to ensure people on income management are receiving help to build their financial literacy, including budgeting, banking, savings and awareness of the risks of payday loans.

To ensure vulnerable young people are assisted to better manage their income support payments, the Government is also introducing additional triggers for automatic inclusion on income management under the vulnerable measure.

Income management will also apply to:

• people aged under 16 years granted the Special Benefit by a social worker or those aged 16 and over granted the Unreasonable to Live at Home payment by a social worker; and
• people under the age of 25 who receive crisis payment due to prison release, and who live in a location which offers the vulnerable measure of income management.

Under these new triggers, people will be placed on income management for 12 months, with a social worker reviewing the person’s situation at the end of those 12 months.

If a social worker assesses that income management is not appropriate for a particular customer, they can be taken off income management within the 12 months.

The model of income management operating in the Northern Territory is different to the model operating in Western Australia and other areas of disadvantage around Australia.

These models will be evaluated separately to the Northern Territory to help inform future policy decisions.

The Government will receive the final evaluation report of income management in the Northern Territory in 2014.

A copy of the interim report can be found at http://www.fahcsia.gov.au/node/17196/