Controversial cashless welfare scheme to be scrapped in weeks

Thousands of Australians will soon be free to manage their own money after a move to scrap a controversial program.

Thousands of Australians will be transitioned off cashless debit cards, with the government moving to scrap the controversial scheme.

From September 19, participants will be able to opt out of the scheme that quarantines up to 80 per cent of welfare payments into a restricted bank account.

It was designed to prevent cash withdrawals or spending on certain items such as alcohol and gambling.

Legislation to dump the program will be introduced to parliament on Wednesday.

More than 17,300 welfare recipients who have a cashless card will have the option to remain on the program voluntarily.

The controversial program quarantined much of people’s welfare payments.

Social Services Minister Amanda Rishworth said the legislation was the product of meaningful community consultation.

“We have listened to First Nations community leaders, service providers and cashless debit card participants in these communities – and we have heard them loud and clear,” she said.

“The cashless debit card stigmatises and it often makes participants’ lives more difficult because they cannot access the cash economy.”

Ms Rishworth said the government would continue to consult with affected communities to explore the future of Income Management and other supports that they may need.

Established by the Coalition in 2016, the card was pitched as a fix to social problems in particular communities.

The card’s abolition was a key election promise from Labor. Picture: Sam Ruttyn

The card was trialled across Ceduna, South Australia and East Kimberley and the Goldfields in Western Australia, and Bundaberg and Hervey Bay in Queensland.

More recently it was expanded into the Northern Territory and Cape York.

Last month, the Auditor-General found the former Morrison government had not demonstrated the scheme was working despite running trials over the last five years.

It was the final nail in the coffin for the contentious program, which Labor had vowed to scrap if it was elected.

Originally published as Controversial cashless welfare scheme to be scrapped in weeks