Cashless welfare card program costs $70m

·3-min read

Putting some of Australia's welfare recipients on cashless debit cards to restrict their spending is costing taxpayers $70 million.

The Morrison government tried to make the controversial cards permanent last year but failed to get enough support in parliament.

The scheme was instead extended for another two years.

Department of Social Services officials have on Thursday revealed Indue, the private company in charge of the cards, will received $26 million for the extension.

It takes the total cost of the scheme to $70 million, covering 2015 to 2022.

Welfare recipients in the South Australian region of Ceduna, the East Kimberley and Goldfields in Western Australia, and Bundaberg and Hervey Bay in Queensland are on the cards.

The money also goes towards transferring welfare recipients in the Northern Territory and the Cape York onto the Indue cards.

Although they have been extended until December next year, Department of Social Services senior official Liz Hefren-Webb expects it to keep going.

"The legislation for the cashless debit card goes to 31st December 2022 so at least until then, but beyond that, likely," she said when asked about the card's future in the NT.

Welfare recipients in the NT have been on another spending management card for more than a decade.

Instead of being forced onto the new system they can opt to go on it, as five of almost 25,000 have done in the first three days of being able to.

The cards freeze 80 per cent of Centrelink payments so the money can only be spent on essential items.

It prohibits people from spending money on alcohol, drugs and gambling.

Social Services Minister Anne Ruston confirmed to the hearing some flagged welfare changes have been kicked down the road while she focuses on pandemic measures.

One policy not being prioritised is doubling the liquid asset wait time to up to six months, for an expected saving of $173 million over four years.

It would have meant people applying for JobSeeker who have more than $18,000 would have to wait 26 weeks before receiving a payment.

Another policy - which the government struggled to have enough support in parliament for - was drug testing welfare recipients.

It has not been revoked as government policy but is not being progressed.

Welfare officials rely on economic projections from Treasury in relation to the number of people who are expected to be unemployed and might need support.

Treasury estimates 100,000 to 150,000 people on JobKeeper will lose their jobs when the payment ends next week.

Department of Social Services officials said 37,000 people were receiving both the wage subsidy and the JobSeeker unemployment support payment at the end of February.

The number of people relying on JobSeeker has reduced slightly so far this year, from 1.32 million in January to 1.17 million as of last week.

The JobSeeker payment was boosted during the height of the coronavirus pandemic, but the increase has gradually been tapered down.

The long-term rate is now about $44 a day for a single person with no children, which critics say is not enough.