United Kingdom

Budget welfare crackdown as cashless Centrelink card tackles on dole spending

Thousands of Australians will be forced to use the cashless Centrelink debit card under a huge expansion of the scheme in the federal Budget.

Immigrants will also be barred from accessing most kinds of welfare for four years after they are granted residency in Australia. 

Cashless debit cards have been trialled since 2016 in East Kimberley and Goldfields in Western Australia, Ceduna in South Australia, and the Bundaberg-Hervey Bay region of Queensland.

Under the controversial scheme, 80 per cent of welfare recipients' Centrelink payment goes directly on to the card rather than into their bank account, restricting spending to essential items.

The cards cannot be used to buy alcohol or cigarettes, or be used for any kind of gambling as they are supposed to be spent on essentials.

Pictured: People queue to enter Centrelink at the start of the Covid-19 pandemic, amid mass unemployment

 Under the scheme, a further 25,000 people will not be allowed to buy alcohol with the cashless Centrelink card (stock image)

Treasurer Josh Frydenberg unveiled a plan on Tuesday to make the scheme permanent in the four trial locations, while extending it to 25,000 people in the Northern Territory and Cape York.

The budget also revealed a $30 million package to upskill people at the first four trial sites, including a jobs fund to boost employment opportunities.

Funding will also go towards improving drug and alcohol rehabilitation services in the cashless debit card sites.

Lawford Benning, executive chairman of indigenous organisation MG Corporation in the East Kimberley, said local leaders were blindsided by the decision to make the card permanent.

'We all want to be equally consulted or have that opportunity to play a part in making our community safe… this got sprung upon us,' he told the ABC.

'I've learned now and I believe it is a punitive model that is enforced, I believe, on vulnerable people.'

But Ian Trust, executive chairman of Aboriginal services group Wunan Foundation, said the move was necessary to escape the 'safety net' of welfare into employment.

Pictured: Treasurer Josh Frydenberg handing down the 20221-22 budget on Tuesday evening

Funding will also go towards improving drug and alcohol rehabilitation services in the cashless debit card sites. Pictured: The cashless debit card

He told the ABC that locals need more incentives to take up short-term work like fruit picking to transition from the welfare system.

Mr Frydenberg also announced new migrants to Australia who are granted residency from January 1, 2022, will be forced to wait four years to access family tax benefits, paid parental leave, and carers payments.

Under the current system, migrants can immediately access family tax benefit A, wait one year for family tax benefit B, and access paid parental and carers leave after two years. 

The measure is projected to impact 13,200 people and about 45,000 families during the budget year, and will save about $460.2 million from 2022 until 2025. 

Pictured: People queuing to get Centrelink benefits amid mass unemployment during the Covid-19 pandemic

People who are granted residency prior to January next year will be exempt from the changes.

Due to international travel restrictions, Australia will focus on granting residency to migrants already in the country, including partners and families. 

A further $464.7million will be directed to increasing the capacity of offshore detention facilities, such as Christmas Island, to remove unlawful no-citizens from the country.

According to the Guardian, about $278.2million will be spent on upgrades across the network to boost its capacity from 1,000 people to 1,500 - the average number of people in detention. 

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