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On being income managed

Jessie Pangas

Manna Matters May 2012


As the mother of a two and a half year old, on a low income with my partner, I am eligible to receive a Parenting Payment from Centrelink, our Australian Department of Human Services.  As a family we highly value living simply on a low income with a budget we manage carefully, as well as working hard in a holistic way – i.e. not just in paid employment.  This Parenting Payment has been of great benefit to us in allowing me to care for our son in keeping with our lifestyle values, while working in a voluntary capacity where I can. So you can imagine my surprise when I received a letter from Centrelink informing me that I was to be compulsorily income managed.

What an odd experience!  I found myself looking over my own shoulder, not quite sure how to react.  My ego was of course immediately affronted.  What do you mean you don’t think I can manage my own finances? Who gives you the right to decide that? And, how do you decide that? The fact is, I am quite proud of the way I manage my finances,  and do not care for anyone else to interfere with that.  But then of course, I am receiving a payment from the Government, so is it their right to decide what I do with it?  Or, is it my right to receive that payment because in this country we have committed to a decent income for all and value the work that parents do in looking after their children?

There is one more thing – I am white, middle-class and educated.  I am not used to being told what to do and I do not like it.  It just so happens that my family and I have recently relocated to a remote indigenous community and consequently are living in an area where income management is compulsory.  So, if my indigenous neighbours must be income managed then why shouldn’t I?

In 2007 income management, amongst other measures, was introduced as part of the Federal Government’s Northern Territory Emergency Response (NTER or more commonly known as the Intervention), targeting all Commonwealth income recipients in 73 Northern Territory indigenous communities, quarantining half of their payments, specifying what the money was not to be used for and where it could be spent.

The purpose?  Supposedly to help families better manage their money and look after their children.  The inherent assumption? That indigenous income recipients cannot manage money or their families. How insulting, paternalistic, racist – and just annoying.

The outcome?  Official studies show no clear evidence of the program’s benefits outweighing the possible harm.  For example, the Menzies Health Research Unit’s thorough statistical study of purchases pre and post the introduction of income management in a group of stores showed no statistical evidence of better purchasing patterns after implementation.  Apart from making people’s finances significantly more complicated, the primary outcome I can see has been to make people feel less empowered and less in control of their lives – something that can only have negative consequences.  I do not see any evidence that it has influenced people’s spending habits, just as it has not affected mine.  People know what they need and want to buy and so they continue to do so, navigating the system accordingly, eg using the 50% of funds that is income managed to buy their food and pay bills, and if they chose to do so, spending the rest on those things they aren’t allowed to buy through income management – cigarettes, gambling, sharing directly with family, etc.  It is in effect taking away responsibility from people in making choices about what they do with their income and how they manage their responsibilities. Surely this only increases dependency on welfare systems?

I am also aware that the sharing of the Basics cards, (an EFTPOS type card only accepted in income management approved stores,) is very common and therefore does not prevent the “humbugging” – a term I had never heard used so commonly before moving here, used to refer to the ongoing requests for money from relatives and friends – that the Government seems to think such a problem.  People live in extended family groups here and they share their resources.  Forcing people to have an extra account with an extra card does not change this.

For myself, my options were to accept income management and apply for a Basics card, which is accepted at all services and shops in this community (the options being so limited anyway), or not accept the payment and try to live off a reduced income whilst we raise our children.

Last week, however, I discovered that it is possible to apply for an exemption from income management. All I had to do was participate in a phone interview consisting of questions such as : “Do I have problems with people asking me for money all the time?” “Do I pay my bills on time?” “Do I save money and put aside money for big bills?” “Do I have a mortgage?” “Do I have any debts or have I had to apply for any urgent payments or loans from Centrelink?”  All of these I answered verbally with no further evidence required to verify my answers.  The only documentation I had to provide was a medical certificate of attendance for my son, presumably to show that I take him to the doctor and he is not neglected (if he was of school age I would have needed to provide a record of attendance). What a humiliating process for anyone to have to go through.

I am now exempt from income management for 12 months and must then reapply. I have since learnt, however, that only about 10% of people who apply for exemption are granted it, highlighting my awareness that it was the colour of my skin and upbringing in the dominant culture that made it so easy for me, further confirmed by the embarrassment conveyed by Centrelink staff who I dealt with at the awkwardness of the situation.  Moreover, there is a bribe of a $250 bonus every six months to encourage people to stay on income management voluntarily, which I was offered and refused.

The Government has chosen to further extend the program to what it defines as “appropriate target areas” with higher than average numbers of Commonwealth income recipients. Consequently, the Government now has the power to apply income management anywhere in Australia and from 2012 it will be applied in five new areas in NSW, Queensland, Victoria and South Australia at a cost of $4000 per recipient per year in staff and administration (based on costs in the N.T.).

Why have there been so few objections to this? Is it because it doesn’t affect us?  I admit that it has been very uncomfortable for me to recognise my own increased interest and indignation at the policy since its imposition on myself.  Or, is it our lack of knowledge and understanding that causes us not to act?

I think there is also a general sense that we, in the dominant culture, do not really know what is going on in indigenous communities, which is understandable as most of the information we receive is filtered through Government channels and the media, leaving us uncertain as to how to respond.  We are told that child, domestic and drug abuse in indigenous communities is rife, that communities are falling apart, that something must be done! For sure, there is gross inequality and disempowerment in indigenous communities but one thing I can tell you, continuing to further disempower people is never the answer.

As dominant culture Australians we must not continue to support policies and programs that continue to disempower indigenous communities, however well-intentioned they may be.  We need to ask ourselves – are indigenous people gaining control over their lives through this? Are they being empowered? Or does the power remain with those in the dominant culture?

Jessie Pangas joined the AHED team in Galiwin’ku in July 2011. This article has been re-produced from the ‘Why Warriors’ blog.