Cashless welfare cards welcomed by communities, Ruston says, as she flags expansion of controversial spending restrictions

Expanding the controversial cashless welfare card to more communities with more spending restrictions will help tackle financial mismanagement, the Morrison Government says.

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Restricting where welfare recipients can spend their money could play a significant role in addressing financial mismanagement, the federal minister responsible for payments says.

In the Federal Government’s strongest statement yet on the issue, Social Services Minister Anne Ruston said the country needed to have a conversation about expanding the cashless welfare card across the country.

Previously the cashless debit card had been trialled in areas deemed to have high levels of disadvantage – including Ceduna in South Australia.

Welfare recipients using the card, known as Indue, have 80 per cent of their payment placed on it while 20 per cent goes into their bank account.

The card, which has had some critics in trial areas, can be used in hundreds of outlets.

But the card cannot be used to buy alcohol or gamble.

Minister for Social Services Anne Ruston says communities so far subject to cashless welfare cards appreciate them. Picture: Rohan Thomson/Getty Images

Senator Ruston said today the cards had proved to have strong results in teaching people how to manage their money – a claim disputed by the SA Council of Social Service.

“When you speak to people on the ground, actually participating on the trial, there are really positive stories coming out of these communities,” Senator Ruston said.

“This card, because of technology, is now able to provide a broad financial and budgeting tool assistance to people.”

Senator Ruston wants the public to have a “conversation” about a broader roll out of the card.

“I think the conversation that we need to have is about the value and advantages of the card,” Senator Ruston said.

“I think initially there was a view that the card was about dealing with gambling, drug and alcohol related issues but we have seen … that it has become a financial budgeting tool.”

SACOSS chief executive Ross Womersley said the card was “expensive to implement, stigmatising a nasty invasion of privacy”.

“It’s a cute way for the Morrison Government to avoid dealing with the real issue – the need to raise the rate of Newstart by at least $95 per week,” Mr Womersley said.

“These cards … make it harder for people to buy from op-shops, buy second-hand furniture, rent in shared accommodation or to provide children with money for school activities”.