Afterpay delays as Ramsey slams cashless welfare card axing

Labor has rushed through a landmark bill to end the Morrison Government’s cashless welfare policy. But there are early warnings of new roadblocks.

Thousands of people using buy now, pay later services with their cashless debit cards have bogged down the federal government’s attempts to scrap the controversial welfare scheme.

The revelation comes as Labor clears the first hurdle in abolishing the scheme by passing a flagship bill in the lower house on Wednesday morning.

It was met with fierce opposition from Liberal MP Rowan Ramsey, whose Grey electorate covers Ceduna – one of the card’s key trial locations.

He accused Social Services Minister Amanda Rishworth of ignoring the card’s benefits in the coastal SA town and its role in combating alcohol abuse.

Mr Ramsey criticised Ms Rishworth for advocating financial counselling during a recent community meeting in Ceduna.

“I suspect it will not make a great difference; alcoholics and drug addicts aren’t particularly interested in financial counselling – but I wish her luck,” he told parliament.

Grey MP Rowan Ramsey, whose electorate covers Ceduna, opposed Labor’s bill.

Ms Rishworth revealed on Wednesday there was a “significant number of participants” who had signed up to buy now, pay later services like Afterpay with their cashless debit cards.

“A number of deductions that participants have connected to their card means that you can’t just close the card overnight,” she said.

“What you need to do is work with individual participants to work out their final arrangements to ensure that when the card ends, that they’re not caught up in any unusual financial arrangements that leads to them incurring fees or debts.”

The Advertiser understands more than half of the program’s 17,322 participants are signed up to buy now, pay later services.

There are 700 cashless debit card users, including more than 500 First Nations people in Ceduna on SA’s West Coast.

An Afterpay spokeswoman confirmed it will help the federal government wind up the card by the end of the year and ensure its users “are not inconvenienced by this change”.

“Importantly, Afterpay purchases are repaid within a six-to-eight week period,” she said.

Leader of the House Tony Burke used newly acquired powers to declare Ms Rishworth’s bill “urgent” on Tuesday night, forcibly shortening debate to just 10 minutes of speaking time per MP.

Social Services Minister Amanda Rishworth says the card stigmatises welfare recipients and makes their lives harder. Picture: NCA NewsWire / Gary Ramage

After passing 86-56, the bill will go before the Senate for further debate.

Labor’s bill seeks to abolish the “ideological” cashless debit card and allow participants to transition to other forms of voluntary income management at the end of this year.

The controversial system prevents participating welfare recipients from withdrawing cash or spending money on alcohol and gambling.

Ms Rishworth has argued the system “stigmatises” people and makes their lives harder because they can’t access the cash economy.

Mayo MP Rebekha Sharkie, who voted against Labor’s bill, raised concerns about “third generation welfare dependent Australians” and said the card had the potential to break the cycle.

[e-mail]