Australian Social Work ISSN: 0312-407X (Print) 1447-0748 (Online) Journal homepage: http://www.tandfonline.com/loi/rasw20 Compulsory Income Management: A Critical Examination of the Emergence of Conditional Welfare in Australia Philip Mendes To cite this article: Philip Mendes (2013) Compulsory Income Management: A Critical Examination of the Emergence of Conditional Welfare in Australia, Australian Social Work, 66:4, 495-510, DOI: 10.1080/0312407X.2012.708763 To link to this article: http://dx.doi.org/10.1080/0312407X.2012.708763 Published online: 16 Oct 2012. Submit your article to this journal Article views: 5405 View related articles Citing articles: 8 View citing articles Full Terms & Conditions of access and use can be found at http://www.tandfonline.com/action/journalInformation?journalCode=rasw20 Download by: [University of Wollongong] Date: 21 March 2017, At: 22:39 Australian Social Work, 2013 Vol. 66, No. 4, 495Á510, http://dx.doi.org/10.1080/0312407X.2012.708763 Compulsory Income Management: A Critical Examination of the Emergence of Conditional Welfare in Australia Philip Mendes* Department of Social Work, Monash University, Melbourne, Victoria, Australia Abstract The introduction of compulsory income management by the then Coalition Government in 2007 signalled the increasing policy influence of individualistic as opposed to structural explanations of social disadvantage. Using key policy and evaluation literature, this article critically examines the principal arguments for and against compulsory income management. Specific questions are raised about the top-down and coercive nature of compulsory income management, the lack of supporting empirical evidence, and its apparent discrimination against Australians who are Indigenous or reliant on income security payments, or both. Some conclusions are drawn about the potential for more effective policy solutions that would involve a genuine partnership with disadvantaged communities. Keywords: Child Abuse; Indigenous Issues; Social Policy Compulsory income management (CIM) is the quarantining of a set percentage of income security payments*usually somewhere between 50% and 70%*into a special account for the exclusive purchase of essential household items such as food, rent, clothing, and energy bills. Income managed funds cannot be used for prohibited items such as drugs, alcohol, cigarettes, gambling, and pornography (Australian Council of Social Service [ACOSS], 2010a; Australian Institute of Health and Welfare [AIHW], 2010). This article argues that the introduction of CIM by the Coalition Government in June 2007, and its continuation by the succeeding Labor Party Government, represents a fundamental shift in Australian income security policy from structural to individualistic explanations of social disadvantage. Individualistic or behaviourist interpretations of social disadvantage tend to assume that people are poor or unemployed because of behavioural characteristics such as incompetence or immorality or laziness. This view reflects the influence of neoliberal philosophy, which favours minimum government interference with free market outcomes. Neoliberals believe the government should act to motivate and *Correspondence to: Associate Professor Philip Mendes, Director Social Inclusion and Social Policy Research Centre, Department of Social Work, Monash University, 51 Argyle Road, Kew, Victoria 3101, Australia. E-mail: [email protected] Accepted 23 May 2012 # 2013 Australian Association of Social Workers 496 P. Mendes discipline welfare recipients, and reintegrate them with mainstream social values and morality, such as self-reliance and the work ethic. Income security should shift from being a right or entitlement to a privilege. Welfare-reliant individuals should be pressured to choose employment over welfare (Billings, 2010; Murphy, Murray, Chalmers, Martin, & Marston, 2011). As we shall see, these objectives appear to be broadly reflected in the CIM scheme, which aims to promote personal responsibility and the work ethic, and discourage passive reliance on welfare payments (Macklin, 2010). In contrast, those who favour a structuralist approach to disadvantage, which is associated with social democratic philosophy, believe that social rights, including income security, should be guaranteed outside the operations of the labour market (Esping-Andersen, 1990; Goodin, Headey, Muffels, & Dirven, 1999; Mendes, 2008). Structuralists generally also recognise that individual behaviour and agency can influence social outcomes. Many would acknowledge that some welfare consumers engage in antisocial and self-destructive behaviour that does not improve their life situations. But they also argue that many poor Australians are heavily constrained by their limited life opportunities compared to others (Saunders, 2005). They believe that structural factors, such as social and economic deprivation and inequality, are significant influences on the prevalence of poverty, and that blaming the poor for their plight reflects a lack of compassion and is unlikely to improve their prospects. They note in particular that some individuals may need a long, long time before they have recovered sufficiently from past traumas to access training or employment (Murphy et al., 2011). Consequently, the structuralist definition of the causes of social problems leads to entirely different solutions from those posed by behaviourists. For example, they would recommend that governments take action to improve access to affordable housing and education, create jobs, promote a fairer distribution of wealth and income, and generally facilitate the social and economic empowerment of the poor, including specific holistic measures to address Indigenous disadvantage (Mendes, 2008). This individualÁstructural divide arguably lies at the centre of contemporary debates about the future of the welfare state. Some writers argue that welfare policy analysis needs to transcend the binary approach to individual and structural factors. This argument is presented most convincingly by Young (2011) who acknowledged that social structures cause injustice, and that both rich and poor can behave irresponsibly. Nevertheless, she argued that it is still important to critically examine the choices and actions of individuals in response to social disadvantage. Some use their individual agency to act responsibly, and some do not. These arguments are useful in regards to CIM and the particular challenges it poses to social work for two reasons. First, they remind us of the importance of assessing the actual capacity and attitudes of individual income security recipients, rather than universally labelling all members of particular groups as dysfunctional. To be sure, control or coercion may sometimes be required to protect individual clients or their children or families from harm (Healy, 2005). Second, they fit comfortably with the reality of social work practice, which involves Australian Social Work 497 addressing both individual and structural issues via what is called the person in the environment perspective (Connolly & Harms, 2012). We will return to the particular implications for social workers in Centrelink in a latter section. Historically, many welfare systems included or excluded recipients on the basis of judgements about behaviour, morality, and race. However, since approximately World War II, most advanced welfare states have placed recipients in income security categories according to relatively objective eligibility criteria such as joblessness, sickness, disability, sole parenthood, and old age. For example, formal eligibility restrictions on Indigenous Australians were removed in 1966 (Billings, 2010). The specific philosophical aims of income security varied from country to country but it was generally viewed as a means of reducing poverty and inequality generated by the free market. However, recent decades have seen increasing conditionality with benefits tied to requirements around work and personal responsibility (King & Ross, 2010). The Northern Territory Emergency Response and Further Income Management Initiatives The Australian welfare state has traditionally provided an entitlement to income support to those unable to work due to limited skills, illness, disability, sole parenthood, and old age. However, policy changes over the last three decades have introduced far greater conditionality into the income security system. For example, the Labor Government’s 1986Á1988 Social Security Review headed by Bettina Cass introduced contractual agreements linking unemployment payments to labour market participation (Mendes, 2008). The Coalition Government, which ruled Australia from 1996Á2007, was strongly influenced by neoliberal philosophy, and imposed increasing obligations on income support recipients. Particular manifestations included compulsory mutual obliga- tions on jobseekers such as the Work for the Dole scheme and requirements to seek up to 10 jobs each fortnight, and significant breaches and associated heavy fines for those who failed to meet these requirements. Influenced by the report of the earlier Reference Group on Welfare Reform headed by Patrick McClure, the 2005 Welfare to Work Bill also extended many of these requirements from the unemployed to new recipients of the Disability Support Pension and Parenting Payment (Billings, 2010; Mendes, 2008). These initiatives per se did not limit the basic entitlements of Australian income security recipients. However, from time to time, Coalition