EXPLANATORY STATEMENT
Social Security (Administration) Act 1999
Social Security (Administration) (Welfare Restricted Bank Account) Determination 2016
Purpose
In accordance with section 124PP of the Social Security (Administration) Act 1999 (the Act), this Determination determines a kind of bank account to be maintained by a trial participant or voluntary participant for the receipt of restrictable payments for the purposes of the debit card trial. This Determination also prescribes terms and conditions relating to the establishment, ongoing maintenance and closure of the bank account.
Background
The debit card trial will test the concept of cashless welfare arrangements by disbursing particular welfare payments to a restricted bank account, accessed by a debit card which does not allow cash withdrawals.
The trial will test whether significantly reducing access to discretionary cash, by placing a significant proportion of a person’s welfare payments into a restricted bank account, can reduce the habitual abuse and associated community level harm resulting from alcohol, gambling and drugs. It will also test whether cashless welfare arrangements are more effective when community bodies are involved.
The trial will be conducted in up to three locations, selected on the basis of community support, high levels of welfare dependence and where gambling, alcohol and/or drug abuse are causing unacceptable levels of harm within the community.
To test the concept effectively, a default 80 per cent of payments received by trial participants receiving a triggering working age welfare payment, such as Newstart Allowance, will be placed in the restricted bank account.
Subsection 124PP(1) of the Act provides that the Secretary may, by legislative instrument, determine a kind of bank account to be maintained by a trial participant or voluntary participant in the debit card trial. Subsection 124PP(2) provides that the legislative instrument determining a kind of bank account may also prescribe terms and conditions relating to the establishment, ongoing maintenance and closure of the bank account. This Determination is made for the purposes of section 124PP.
Commencement
The Determination commences on the day after it is registered on the Federal Register of Legislation.
Consultation
The Government has undertaken an extensive consultation process leading up to implementation of the trial. Initial community consultations in the two trial locations of Ceduna and East Kimberley were undertaken to better understand local needs and gauge interest in the trial. Advice was also sought from community members about identification of local and cultural protocol and preferred entry points for community discussion. This consultation process provided Government with valuable feedback into the issues faced by the community. Consultation has been conducted with all levels of the community including merchants, community leaders, people in scope for the trial and the general community.
Consultations in Ceduna and East Kimberley will extend through to implementation of the trial and beyond to ensure the community is prepared and has all necessary information and support for the trial. Consultation with the Department of Prime Minister and Cabinet and the Department of Human Services have also informed the development of this Determination.
Additionally, intensive consultations with Indue Limited have been undertaken which have informed the development of this Determination. These consultations will continue throughout the trial.
Regulation Impact Statement (RIS)
This Determination is not regulatory in nature, will have minimal impact on business activity and will have no, or minimal, compliance costs or competition impact.
Explanation of the provisions
Section 1 states the name of the Determination.
Section 2 provides that the Determination commences on the day after registration on the Federal Register of Legislation.
Section 3 provides that the Determination ceases on 30 June 2018. This will ensure the Determination ceases when the debit card trial ceases
Section 4 provides definitions for terms that are used in the Determination.
Section 5 provides for the kind of bank account to be maintained by a trial participant or voluntary participant for the receipt of restrictable payments during the debit card trial. The bank account is a debit card account established with Indue Limited. Indue Limited provides financial payment products and settlement services and has been engaged by the Commonwealth to provide welfare restricted bank accounts for the receipt of restrictable payments by trial participants and voluntary participants for the purposes of the debit card trial.
Section 6 provides for the terms and conditions of a welfare restricted bank account. The terms and conditions are set out in Schedule 1 to the Determination.
Schedule 1 sets out terms and conditions relating to the establishment, ongoing maintenance and closure of a welfare restricted bank account for the purposes of subsection 124PP(2) of the Act.
Schedule 1 is not intended to exclude other terms and conditions from being applied by the provider of a welfare restricted bank account. The bank account provided by Indue Limited may be subject to other terms and conditions that are similar in nature to the terms and conditions of any regular bank account. Schedule 1 sets out the terms and conditions that are particular to a welfare restricted bank account. Trial participants and voluntary participants in the debit card trial should obtain the full set of terms and conditions for their welfare restricted bank account from Indue Limited.
Single name
The welfare restricted bank account can only be opened in a single name and operated by the sole holder of the account. This means that it will not be possible for the account to be opened in joint names and no-one other than the holder will be able to operate the account.
Debit card provided
A debit card will be provided to the holder of a welfare restricted bank account. The debit card is a key feature of the trial of cashless welfare arrangements and a trial participant or voluntary participant will be able to use that card to purchase goods and services.
Depositing of cash
Any amount of cash can be deposited into a welfare restricted bank account. This term makes it clear that a trial participant, a voluntary participant or a third party, not just the Department of Human Services, can deposit money into a welfare restricted bank account.
No withdrawal of cash
Cash cannot be withdrawn from a welfare restricted bank account, whether through the use of a debit card attached to the account or by other methods of withdrawal.
Systems in place to prevent purchase of alcoholic beverages or gambling
Systems are in place which, so far as possible, prevent money in a welfare restricted bank account, and a debit card attached to that account, being used to purchase alcoholic beverages and gambling. These systems also apply to the purchase of gift cards, store cards or vouchers where those cards or vouchers allow for the purchase of alcoholic beverages or gambling. Gambling is defined in Schedule 1 to the Act to mean a service provided to a person in the capacity of a customer of a gambling service (within the meaning of the Interactive Gambling Act 2001).
Systems in place to prevent transferring of money
Systems are in place which, so far as possible, prevent a trial participant or voluntary participant transferring money from a welfare restricted bank account to another bank account that is not a welfare restricted bank account. There is an exception where the money is transferred for the purpose of enabling the trial participant or voluntary participant to purchase goods or services that are not alcoholic beverages or gambling.
Purchasing goods or services over the telephone or internet
In general, it will not be possible for a debit card attached to a welfare restricted bank account to be used to purchase goods or services over the telephone or internet. However, systems may be developed which will allow such a debit card to be used for particular transactions over the telephone or internet where it is established that the particular transaction does not involve the purchase of alcoholic beverages or gambling.
No fees
Fees will not be charged by Indue Limited in relation to depositing money into a welfare restricted bank account, or in relation to providing an initial debit card.
No interest
Interest will not be charged by Indue Limited on balances in a welfare restricted bank account that are less than zero. Interest will not be paid on balances in a welfare restricted bank account.
Closure of account
A welfare restricted bank account provided to a person may be closed during the trial period only if the person is not a trial participant. The trial period is the period of 1 February 2016 to 30 June 2018, as mentioned in section 124PF of the Act. It would defeat the purpose of the debit card trial if a trial participant, or any other person, could unilaterally close an account during the trial while the person is a trial participant.
There will not be any restrictions on a voluntary participant closing a welfare restricted bank account during the debit card trial.
No automatic drawing or withdrawal of monies by a third party
It will not be possible to use the welfare restricted bank account in an arrangement involving automatic drawing or withdrawal of monies by a third party which is based on BSB and account number. This is because when money is automatically drawn on the basis of BSB and account number, it is not possible to ensure money is not being spent on alcoholic beverages or gambling. Participants can still set up automatic direct debits using their card number.
Limitations on spending and transfer of amounts
Limitations will be placed on the amounts a trial participant or voluntary participant can spend using a debit card attached to a welfare restricted bank account. Limitations will also be placed on the amounts a particular holder of a welfare restricted bank account can transfer out of his or her account. It is anticipated that a welfare restricted bank account will be limited to allowing only a ‘housing payment’ of up to a certain amount per week and an ‘other expenses’ payment of up to a certain amount per week. Individual limits will also be imposed on the amounts a particular holder of a welfare restricted bank account can transfer out of his or her account. This means it will be possible to set individual limits on individual trial participant’s use of their account.
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the
Human Rights (Parliamentary Scrutiny) Act 2011
SOCIAL SECURITY (ADMINISTRATION) (WELFARE RESTRICTED BANK ACCOUNT) DETERMINATION 2016
This Determination is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Legislative Instrument
The debit card trial will test the concept of cashless welfare arrangements by disbursing particular welfare payments to a restricted bank account, accessed by a debit card which does not allow cash withdrawals.
The trial will test whether significantly reducing access to discretionary cash, by placing a significant proportion of a person’s welfare payments into a restricted bank account, can reduce the habitual abuse and associated community level harm resulting from alcohol, gambling and drugs. It will also test whether cashless welfare arrangements are more effective when community bodies are involved.
The trial will be conducted in up to three locations, selected on the basis of community support, high levels of welfare dependence and where gambling, alcohol and/or drug abuse are causing unacceptable levels of harm within the community.
To test the concept effectively, a default 80 per cent of payments received by trial participants receiving a triggering working age welfare payment, such as Newstart Allowance, will be placed in the restricted bank account.
Subsection 124PP(1) of the Social Security (Administration) Act 1999 (the Act) provides that the Secretary may, by legislative instrument, determine a kind of bank account to be maintained by a trial participant or voluntary participant in the debit card trial. Subsection 124PP(2) provides that the legislative instrument determining a kind of bank account may also prescribe terms and conditions relating to the establishment, ongoing maintenance and closure of the bank account. This Determination is made for the purposes of section 124PP.
Human rights implications
Objectives
The Objectives of Part 3D of the Act and this Determination are to:
(a) reduce the amount of certain restrictable payments available to be spent on alcoholic beverages and gambling; and
(b) determine whether such a reduction decreases violence or harm in the debit card trial areas of Ceduna and Surrounding Region and East Kimberley; and
(c) determine whether such arrangements are more effective when community bodies are involved; and
(d) encourage socially responsible behaviour.
In other words, the debit card trial has the objective of reducing immediate hardship and deprivation, reducing violence and harm, encouraging socially responsible behaviour, and reducing the likelihood that welfare payment recipients will be subject to harassment and abuse in relation to their welfare payments.[1]
In Ceduna and Surrounding Region and East Kimberley trial areas, there is clear evidence of the harm caused by alcohol. For instance, according to Western Australia Police data, in 2013-14 in Western Australia there were 1,456 offences against the person for every 100,000 people. The East Kimberley region had offence rates against the person 4.5 times that of Western Australia overall.[2] In 2012-13, there were 100 reported incidents of family violence per 1,000 people in the Kimberley, as compared to the next highest of rate of family violence which was 43 per 1,000.[3]
General Safeguards
A number of general safeguards which help protect human rights have been incorporated in the debit card trial. First, the roll-out of the trial in trial areas has been subject to an extensive consultation process.
Second, in accordance with section 124PK of the Act, community bodies will have the power to give the Secretary a written direction to vary the percentage of funds that a person has restricted, subject to that person’s agreement. This will provide an ongoing mechanism to ensure there is flexibility to treat individual cases differently.
Third, the trial of cashless welfare arrangements will be subject to an independent, comprehensive evaluation which will consider the impacts of limiting the amount of welfare funds that may contribute to community level harm. The evaluation will use both quantitative and qualitative information to explore perceived and measurable social change in trial communities.
Finally, subsection 124PF(1) of the Act specifies the trial will commence on 1 February 2016 and end on 30 June 2018. The policy intention is that the trial will only run for 12 months in each trial area. The clause acts as an appropriate and effective safeguard, as Parliament must amend the Act to continue the trial beyond 30 June 2018.
The right to a private life
Article 17 of the International Covenant on Civil and Political Rights (ICCPR) sets out the right to a private life. It prohibits arbitrary or unlawful interferences with an individual’s privacy, family, correspondence or home.
The debit card trial seeks to achieve the legitimate objective of reducing immediate hardship and deprivation, reducing violence and harm, encouraging socially responsible behavior, and reducing the likelihood that welfare payment recipients will be subject to harassment and abuse in relation to their welfare payments.
In order to achieve these objectives, the trial will place 80 per cent of restrictable payments received by a person into a restricted bank account. Funds held in this bank account will not be able to be withdrawn as cash and systems are in place to prevent those funds being used to purchase alcoholic beverages or gambling. There is a clear rational connection between these objectives and any limitations on the right to a private life: the restrictions on the purchase of alcohol, illegal drugs and gambling by trial participants in the trial areas are designed to reduce alcohol fuelled violence and harm, and encourage socially responsible behaviour.
This Determination determines the kind of bank account that must be maintained by a trial participant or voluntary participant in the debit card trial. In doing this, the Determination may limit the right to a private life. This limitation on a person’s right to a private life is reasonable and proportionate given the extensive harm caused by alcohol and gambling in the trial areas as discussed above under the section titled ‘Objectives’. The limitations are also directly related to limiting such harm given the provision of a particular kind of bank account as described in this Determination is essential to the ability to block certain transactions such as the purchase of products including alcoholic beverages, gambling or gift cards that could provide access to cash, alcoholic beverages or gambling.
The right to privacy
Article 17 of the ICCPR also sets out the right to privacy. This Determination determines the kind of bank account that will be provided to a trial participant or voluntary participant in the debit card trial. It also stipulates that various systems are in place to ensure the bank account will not allow the purchase of products including alcoholic beverages, gambling or gift cards that could provide access to cash, alcoholic beverages or gambling. These systems may require the provider of the bank account to have systems in place which monitor the transactions of trial participants to ensure, as far as possible, that such purchases are not made. Even if these systems did not require such monitoring, prudential obligations on the provider of the bank account as an authorised deposit-taking institution would require this monitoring. Any such monitoring would arguably engage the right to privacy.
This Determination seeks to achieve a legitimate objective and is necessary for the trial to operate effectively and to be evaluated. In order to ensure the bank account does not allow the purchase of products including alcoholic beverages, gambling or gift cards that could provide access to cash, alcoholic beverages or gambling, and to limit fraudulent transactions, the provider of the bank account will need systems in place to monitor transactions.
Section 124PN of the Act allows the disclosure of information about a person to the Secretary by an officer or employee of a financial institution (Indue) if the person is a trial or voluntary participant and the information is relevant to the debit card trial. It also seeks to achieve a legitimate objective and is necessary for the trial to operate effectively and to be evaluated. In order to establish bank accounts for trial participants, the Department of Human Services (DHS) will need to transfer customer information to Indue. Indue will then need to provide new account details back to DHS. While the trial is operating, Indue will need to transfer information about trial participants (its customers) to the Department of Social Services (DSS). DSS will use this information to evaluate the trial. Without providing customer information to Indue, new accounts cannot be set up and so the trial could not proceed.
Section 124PN does not provide a blanket authorisation for the disclosure of personal information by Government, or Indue. It only allows the sharing of information that is necessary for the trial to be implemented and evaluated. This means there are still safeguards in place to protect individual privacy. Both Government and Indue Limited will be required to act in accordance with privacy laws, more generally, and the Australian Privacy Principles (APPs). APPs set out strict rules around how personal information can be used and disclosed. For example, APP 7 provides that unless certain exceptions apply, an organisation must not use or disclose personal information for the purposes of direct marketing. Notably, Government will not be able to see what people are purchasing.
Any limitation on a person’s right to privacy is reasonable and proportionate given the extensive harm caused by alcohol in the Trial Area as discussed above under the section titled ‘Objectives’. There are also effective community safeguards over the extent of the restrictions imposed.
The right to an adequate standard of living
Article 11(1) of the International Covenant on Economic, Social and Cultural Rights (ICESCR) states that everyone has the right to ‘an adequate standard of living for himself and his family, including adequate food, clothing and housing, and to the continuous improvement of living conditions’ and that ‘appropriate steps’ be taken to ‘ensure realisation of this right’. Further to this, article 11(2) of the ICESCR states that ‘measures, including specific programmes,’ should be taken in ‘recognising the fundamental right of everyone to be free from hunger’.
In providing that various systems are in place to prevent, as far as possible, a welfare restricted bank account being used to purchase alcoholic beverages, gambling or gift cards that could provide access to alcohol, gambling or cash this Determination will promote the right to an adequate standard of living. It will mean that people will be able to use restricted funds to access any goods and services with the exception of alcoholic beverages and gambling, with the aim of reducing abuse of these goods and services and associated harm and violence. This Determination will not have the effect of restricting access to essential needs required to maintain an adequate standard of living as the bank account can still be used like a normal bank account with the exception of the specific systems in place that amount to restrictions. The card will look and operate like a normal bank card and will work at all shops, except those selling alcoholic beverages and gambling, and cannot be used to withdraw cash. In fact, by restricting the amount of welfare payments that can be spent on alcoholic beverages and gambling, it will ensure more money is available for maintaining an adequate standard of living. Access to some discretionary cash will be available to ensure that people can still participate in cash economies to purchase items which contribute to an adequate standard of living.
The rights of equality and non-discrimination
The rights of equality and non-discrimination are provided for in several of the seven core international human rights treaties to which Australia is a party, most relevantly the International Covenant on Civil and Political Rights and the Convention on the Elimination of All Forms of Racial Discrimination (the CERD). In particular, article 5 of the CERD requires parties ‘to prohibit and eliminate racial discrimination in all its forms and to guarantee the right of everyone, without distinction as a to race, colour or national or ethnic origin, to equality before the law’, notably in the enjoyment of ‘the right to…social security and social services’ (article 5(e)(iv)).
Discrimination is impermissible differential treatment among persons or groups that result in a person or a group being treated less favourably than others, based on a prohibited ground for discrimination, such as race. However, the UN Human Rights Committee has recognised that ‘not every differentiation of treatment will constitute discrimination, if the criteria for such differentiation are reasonable and objective, and if the aim is to achieve a purpose which is legitimate under the Covenant’.
The rights to equality and non-discrimination are not directly limited by this Determination. This is because, as set out in this Determination, anyone who is a trial participant will be provided with the same kind of bank account. This Determination is not targeted at people of a particular race, gender or cultural characteristic but to all trial participants and voluntary participants.
While this Determination does not directly limit the rights to equality and non-discrimination, it may indirectly limit these rights. In both trial areas, Indigenous people will make up a substantial majority of the total income support payment population who will become trial participants and be affected by this Determination.
It is acknowledged that Indigenous Australians comprise a large proportion of those likely to become trial participants and be affected by this Determination. However, the trial areas have been chosen based on objective criteria, ‘such as high levels of welfare dependence and community harm, as well as the outcomes of comprehensive consultation with prospective communities.’[4] These criteria clearly relate to the legitimate objectives of this Determination. In turn, this Determination affects only those in the trial regions and those who volunteer for the trial. Therefore, there is a rational connection between any limitation on the right to social security and the objectives of this Determination.
Finally, given the objectives of the Act and this Determination and the scale of unacceptable harm in trial areas as discussed above in the section titled ‘Objectives’, any limitation on the right to equality and non-discrimination is reasonable and proportionate.
The right to self-determination
Article 1 of the ICESCR states that ‘all peoples have the right of self-determination. By virtue of that right they freely determine their political status and freely pursue their economic, social and cultural development’.
It may appear that the right to self-determination of peoples is limited by this Determination. However, any such limitation of this right is reasonable and proportionate given the extensive harm caused by alcohol and gambling in the trial areas as discussed above under the section titled ‘Objectives’. Any limitation of this right is also directly related to limiting such harm given the restrictions in this Determination are being placed on the execution of transactions at businesses that sell certain products including alcoholic beverages, gambling services or gift cards that could provide access to alcohol, gambling or cash.
Conclusion
This Determination is compatible with human rights. This Determination is necessary to establish a trial of cashless welfare arrangements which will advance the protection of human rights by ensuring that income support payments are spent in the best interests of welfare payment recipients and their dependents. To the extent that they may limit human rights, those limitations are reasonable, necessary and proportionate to achieving the legitimate objective of reducing immediate hardship and deprivation, reducing violence and harm, encouraging socially responsible behaviour, and reducing the likelihood that welfare payment recipients will be subject to harassment and abuse in relation to their welfare payments.
Roslyn Baxter, Group Manager, Families Group, as a delegate of the Secretary of the Department of Social Services
[1] Social Services Legislation Amendment (Debit Card Trial) Bill 2015, Explanatory Memorandum, Statement of Compatibility, p. 4.
[2] Western Australia Police, Crime Statistics, available at https://www.police.wa.gov.au/Crime/Statistics accessed 20/02/2016.
[3] Western Australia Department of Child Protection and Family Support, Western Australia’s Family & Domestic Violence Prevention Strategy to 2022, Achievement Report to 2013 (2013).
[4] Social Services Legislation Amendment (Debit Card Trial) Bill 2015, Explanatory Memorandum, Statement of Compatibility, p. 3.