Income management: a lot of pain for little gain?


UPDATED November 30, 9.21am.


“A substantial proportion of people who are subject to Compulsory Income Management appear to be competent in managing their finances, are not subject to financial harassment, and live in families where alcohol, drugs and gambling are not seen as major problems.
“Compulsory Income Management is a blanket measure which applies irrespective of the circumstances of the individual, and exemptions are difficult to obtain, particularly for Indigenous people. Thus there appears to be a large number of people subject to Compulsory Income Management who are unlikely to benefit from this measure, and for whom the restrictions of income management can create unnecessary frustrations and challenges.
“Just over a third of Indigenous and around a quarter of non-Indigenous people subject to Compulsory Income Management report that they wish to stay on income management.”
So concludes the just-released first report, Evaluating New Income Management in the Northern Territory.  A second report will follow in 2014 and will include an economic evaluation of the program, answering the question, “Does income management provide value for money by comparison with other interventions?” According to the report’s authors, “FaHCSIA have sought to have this undertaken in the later stages of the evaluation when they consider there will be a better appreciation of the full costs of program implementation as well as the breakdown of costs between establishment and operation.”
The research team of eight was led by Professor Ilan Katz from the Social Policy Research Centre of the University of New South Wales.
Is it discriminatory?
The report looked at whether the measure has been implemented in a non-discriminatory manner. It did not find “any active and overt discrimination in the implementation of NIM in the Northern Territory, and there was no evidence produced that Centrelink staff tend to be prejudiced or discriminatory”.
However, while its impact on the non-Indigenous population as a whole is “marginal”, a “substantial proportion” of Indigenous people in the NT are affected. Says the report: “About 90 per cent of people subject to income management are Indigenous (virtually every person on Voluntary Income Management, Vulnerable Income Management and Child Protection Income Management is Indigenous) and Indigenous people are much less likely to apply for, or be granted, an exemption. In addition … there seems to be little substantive
support available to people who need to prepare cases to prove their applications for exemptions.”
Further, according to the report, “an overwhelming majority of both Indigenous and non-Indigenous people on income management had a sense, at some time or another, of being treated unfairly by being income managed, with many of these describing the program as being discriminatory. In particular, many Indigenous people subject to income management described the policy as being racist.”
At the same time, “Indigenous people, especially those in NTER areas, were more likely to be positive about aspects of income management than their non-Indigenous counterparts”.
Interestingly, the report says that “there do not appear to be significant gender differences in perceptions of income management, although women are perhaps somewhat more positive about the measure than men”.

Has it changed behaviours?
The report has had limited success in being able to answer the question of “changes in spending patterns, food and alcohol consumption, school attendance and harassment”, hoped-for outcomes of the measure.
Says the report: “The most important data for answering this question will be the population level data, especially for the Indigenous population who are most affected by income management. In general, this data is not yet available for 2011 and so it is not possible to answer this question at a population level as yet.
“Data on spending of income managed funds is not available in a form which allows actual patterns of expenditure to be examined. Only data that relates to the proportion of income which is managed is available.
“The specific effects of income management on school attendance are difficult to measure as we do not have data that links school attendance and income management. However, the effects appear to be rather limited. If school attendance outcomes are assessed by the number of exemptions granted as a result of meeting the school attendance criteria, then the impact has been marginal, as only a relatively small proportion of those with children have been granted such exemptions. This is particularly the case for the Indigenous population.
“While in the survey, as noted earlier, a large proportion of Indigenous participants reported higher levels of school attendance in their community since the inception of income management, there is no clear evidence of such a change in attendance to the end of 2011. This finding is in line with the NTER evaluation which found similar positive perceptions but no overall increase in the level of school attendance reported in the administrative data.”
Reducing harassment of individuals for cash was another aim of income management. The report has found some evidence of a reduction but says “the problem remains significant, including for people who have been on income management for an extended period under the NTER”.
Elsewhere, the report says: “From the evidence we have collected it appears that income management seldom in itself motivates people to develop the skills to manage their finances (where these are lacking), obtain paid employment or parent more adequately. There is little evidence that it is bringing about the behavioural change necessary to generate the intended long-term effects. The program logic […] indicates that income management is only one of a range of interventions which are necessary to change behaviour, and the evaluation has found that many of those subject to income management have not accessed appropriate services or interventions which, according to the program logic, are necessary to facilitate longer term change.”
The report also notes that it can be difficult to detect the effect of income management specifically when there have been multiple interventions and areas of improvement. For example, in relation to alcohol consumption, it is “very difficult to disaggregate the effects of income management from the many other initiatives in the Northern Territory, and improved policing of alcohol restrictions was cited by some survey participants as a positive”.
An important finding of the report “at this stage” is that compulsory income management is applied to “a substantial number of people who appear neither to require, nor to gain any benefit from, the program”.
“This is not without cost, both to the individual and to government. In many cases those subject to income management have a sense of unfairness at being subject to income management and find it embarrassing, humiliating and in some cases de-motivating.
“The data collected from Centrelink staff and those subject to income management reveals that there was a common view that the compulsory application of income management was not necessary and in many cases poorly targeted.”
The Australian Government, which commissioned the report, announced a number of changes to income management today.


  1. I wish to share an event I witnessed in our local Coles fruit and veg section. There were three Indigenous ladies [maybe in their 40’s and 50’s,ie, not young girls], with shopping trollies containing some fresh fruit and veg………good thing you say, I agree. A neatly dressed elderly Indigenous gentleman sidles up to one of the Indigenous ladies, speaks to her and she responds by lowering and shaking her head. Indigenous gentleman moves on to next Indigenous lady , speaks to her and she lowers and shakes her head also. Indigenous gentleman approaches third Indigenous lady and after speaking to her she also lowers her shaking head. He then went and stationed himself at the entrance of the supermarket,looking out the door.
    Now, I did not hear the words spoken and I know that what I say now are only my assumptions but I have no reason to think otherwise. I stood and watched carefully what happened.
    I believe the elderly gentleman was humbugging and because the ladies didn’t have cash on them, only the Basics Card they were able to say NO.
    I believe this aspect of income management has not been properly addressed. Meaning, that it is the ONLY way Indigenous women can say no to the humbuggers.
    And I believe too that researchers from interstate, do not give enough creedence to the strong cultural imperative to ‘share’ what you have. It is not a reciprical society anymore; it has degenerated into a humbugging society, where the strong hold sway.
    When we first came to town in ’84, we never saw an Aboriginal person in our supermarkets, after income management came into being that changed. Surely that counts as a good thing.


Please enter your comment!
Please enter your name here