A review of the government’s controversial cashless welfare card found the program contributes to feelings of stigma, shame and embarrassment, while providing some reduction in alcohol use and gambling.

Key points:

  • The review found alcohol use had reduced in communities where the card had been introduced, but that couldn’t be attributed to the CDC alone
  • It found that a majority of participants would prefer to opt out of the program, and reported feelings of “embarrassment and shame”
  • Critics of the program have said it is racist and disproportionately impacts Indigenous Australians

Under the Cashless Debit Card (CDC) program, 80 per cent of an individual’s welfare payments are quarantined on a card that cannot be used to purchase alcohol or gambling products.

In December, trials of the program were extended for another two years, after the Federal Government failed to win support to make the scheme permanent in some communities.

Critics have labelled the program as racist and the Opposition argued the program was racially discriminatory because it disproportionately impacted Indigenous Australians.

The report conducted by the University of Adelaide, and commissioned by the Federal Department of Social Services, looked at how the program had impacted participants in the communities of Ceduna, SA and the East Kimberly and Goldfields in WA, where the card has been trialled.

Another trial site, Bundaberg and Hervey Bay, was not included in the assessment.

Most of the research was conducted in 2019.

It found clear evidence that alcohol use had reduced in those communities since the card was introduced, but said that couldn’t be attributed to the CDC alone.

“They can be attributed, however, to the full complement of relevant policies in the trial areas,” the report said.

Then-human services minister Alan Tudge holding a cashless welfare card outside Centrelink in Kalgoorlie, WA in 2017.(ABC News: Eliza Laschon)

The researchers found short-term evidence that the CDC helped reduce gambling, with positive impacts in family and social life.

There were mixed findings on improvements to child welfare, family wellbeing and health.

“We find strong evidence in both directions [positive and negative],” lead researcher Professor Kostas Mavromaras said.

“The scales often lean towards the negative, but not always.

Across the board, a majority of participants reported “feelings of discrimination, embarrassment, shame and unfairness” from being on the card.

“When asked about the card in general terms, a very large majority simply say they want off it,” Professor Mavromaras said.

“The qualitative and quantitative data both highlighted that feelings of discrimination, embarrassment, shame and unfairness as a result of being on the Card were reported across all trial sites by a majority of CDC participants.”

A majority of stakeholder organisations want the program to continue.(ABC News: Natalie Whiting)

Professor Mavromaras added the majority of stakeholder organisations — such as employment services, CDC local partners or shopfronts, advocates and Indigenous-run organisations — wanted the CDC to “continue in some form”.

When it came to whether the CDC contributed to a decrease in illicit drug use, the report was inconclusive.

They found some participants were still finding workarounds to buy drugs.

“There’s ice here. My nephew’s on it … the dealers sell it to them for the Indue (the cashless welfare card),” a quote from an interview included in the report said.

The report did find that safety had improved, except in the Goldfields where a “sizeable minority of CDC participants reported negatively on safety changes”.

The report also found that while some aspects of the card had improved over time, there was no “evidence either that the CDC is improving outcomes as it matures, or that the CDC participants are getting more used to it, or that they dislike it less, after they have been on it for longer”.