Navigating the cashless welfare card system is hard for these medical students. They can’t imagine how other people manage

The federal government is inviting organisations in cashless welfare card zones to set up employment hubs, but there are ongoing concerns about the system’s design.

A $30 million pool of grant funding has been announced to set up the hubs, which would offer assistance with job seeking, training and financial management for those on the card.

Last week the City of Kalgoorlie-Boulder in the West Australian Goldfields said it would be the first to set up a hub.

The cashless welfare card is in operation in Ceduna, East Kimberley, Kalgoorlie, Bundaberg and Hervey Bay.

Trials first began more than five years ago.

Federal Social Services Minister Anne Ruston said it would encourage those on the card to find work.

“The cashless debit card has provided practical support for people to stabilise their lives, but now that they are we want to make sure that we’re supporting them into work,” she said.

She said engagement with the hubs would be optional.

“It’s not a compulsory mechanism, but we would be very keen to encourage people who are on unemployment benefits to avail themselves of this opportunity to make themselves job-ready,” Ms Ruston said.

Minderoo gives tick of approval

Mining billionaire Andrew Forrest put forward the concept of the card to the federal government in 2014 as one of the recommendations of his Creating Parity report.

Louise Olney leads the Building Community initiative at Dr Forrest’s philanthropic organisation, the Minderoo Foundation.

“We’re really pleased to see the grants open for communities to make their applications and think this is a great step in supporting these communities and their participation in the cashless debit card,” Ms Olney said.

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She said the organisation was hearing positive reports about the card’s impact.

“We hear from women and the role that they play in supporting their families and the impacts for children — in particular, those kids who are able to go to school having had breakfast and families that have enough for the essentials of life,” Ms Olney said.

She said the grants could provide crucial wrap around services for those receiving their benefits through the card.

“These grants are aimed at greater economic participation and I think that it’s important to appreciate that it is not the silver bullet, but it’s a really important part in supporting families and children,” Ms Olney said.

Medical students placed on the card

But not everyone agrees that the program is going smoothly.

All welfare recipients in locations where the card is operational are placed onto the system.

That includes medical students like Sara El-Gamil on year-long placements in rural or regional communities.

“I used to work maybe 10 to 20 hours a week to support myself prior to moving to Kalgoorlie,” she said.

“But now while we’re here, we’re on prac full-time hours and we don’t get paid for any of it.

She said being put on the card felt disempowering and she imagined that feeling would be even worse for more disadvantaged people.

“To be told that, you’re studying and you’re working full-time hours, and then there’s this government support, but then at the same time, you’re not a valued member of society,” Ms El-Gamil said.

She said there had been occasions when the system had blocked payments for everyday spending.

“You get anxiety sometimes, using the card in random places, because you’re like, ‘Is it going to work? Is it going to decline? Are they going to accept the card?'” Ms El-Gamil said.

Eighty per cent of the 25-year-old’s Youth Allowance income goes directly onto the card.

She said that meant she had to take on credit card debt to ensure payments go through.

“I have all this money that I’ve used up on my credit card and I only get about $100 from Centerlink each fortnight to be able to try and pay it off,” Ms El-Gamil said.

Devma Desilva is also studying medicine in Kalgoorlie.

She said the card has made budgeting harder.

“I wasn’t able to save, I wasn’t able to allocate the money and do all the things that I’d set up earlier,” Ms Desilva said.

Criticism of catch-all system

The Social Services Minister said those who did not have problematic spending habits could apply to move off the card, but Ms El-Gamil said that was not an easy process.

“You have to prove to them that you aren’t a criminal and you haven’t had criminal charges against you,” she said.

Ms Desilva has also tried to get off the card and agreed that navigating the system was difficult.

“I can’t imagine how someone who is struggling with other things in their life would cope with that stress,” the 21-year-old said.

University of Western Australia finance professor Raymond Da Silva Rosa said the creation of employment hubs would be a positive step.

“If there’s a group of people who don’t have jobs and there are jobs available, we could do a bit more work in combining the two,” he said.

But he said the government should have created a more tailored system for the card, as opposed to blanket approach, which was administratively cheaper to implement.

“When you have to proactively identify those who need help there’s a bit more work involved,” Dr Da Silva Rosa said.

“But I think the extra work involved will be more than offset by the benefits, whereas if you have an opt-out system then you’ll definitely breed resentment and it’s less likely to be successful.”

Ms Desilva said the system was poorly designed.

“It’s captured such a big audience of people and if you did a little bit more background research on all these people, you’d probably find a large proportion of them don’t need to be on the Indue card,” Ms Desilva said.

“It’s pretty disempowering, really, to be put on this card and told this is how you can spend your money when you don’t have a problem doing that.”