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Labor says the Coalition has a plan to expand the cashless debit card to age pensioners. Is there any evidence?

From humble beginnings, a campaign driven by Labor MPs has grown, implying the Coalition has a plan to expand the cashless debit card to age pensioners. Is there any evidence, or is it a scare campaign? (RMIT ABC Fact check)

Spurious claims are appearing about what each major party would do in government should it win the coming election. This article is part of a series on scare campaigns: their origins, how they are being spread, and how the claims stack up against the stated commitments of the parties.

With a federal election fast approaching, several Labor MPs, including Justine Elliot and Julian Hill, have used the parliament, interviews and social media advertising worth thousands of dollars to warn of an alleged Coalition plan to extend its cashless debit card program to all age pensioners.

But the Minister for Social Services, Anne Ruston, has strenuously denied the claim, accusing Labor of "rewriting history".

So, what evidence are the Labor MPs relying on? Is their claim legitimate or does it amount to a scare campaign?

What is the cashless debit card?

The card is used as a form of "income management" that restricts the way money is spent by welfare recipients. It is often referred to by groups campaigning against it as the "Indue card", named after the company that provides the payments infrastructure.

People directed to take part in the Commonwealth program — or who volunteer to take part — are issued with a card that functions in a similar way to regular bank-issued debit cards. However, the card cannot be used to purchase certain items such as alcohol, gambling products and some gift cards, or to withdraw cash.

The percentage of welfare payments that are quarantined on the card varies between jurisdictions and ranges between 50 per cent and 80 per cent. The rest of the person's welfare payment is deposited as normal into their nominated bank account.

The Department of Social Services introduced the card on a trial basis in 2016 in several regional locations across SA, WA, QLD and the NT to "ensure that welfare payments are spent in responsible and meaningful ways and not spent on products and activities that contribute to social harm".

Amendments to the act passed in 2020 made several significant changes including lifting existing trial participation caps and entrenching the program on an "ongoing basis".

A proportion of a participant's welfare payments are quarantined on the card, which cannot be used to by alcohol or gamble. (ABC Goldfields: Isabel Moussalli)

The origin of the campaign

In May last year, speculation on Twitter that the cashless debit card would be extended to age pensioners started gaining traction.

In a screenshot published on a prominent campaigner's Twitter account, an anonymous poster claimed to have had a conversation about the card in relation to “the elderly” with a staff member in the office of Minister for Regional Health, David Gillespie.

A few days later, the same image was shared on the official Facebook page of Labor MP Julian Hill.

By early June, slicker campaign images could be found on the Facebook page of his colleague, MP Justine Elliot, warning pensioners about a Morrison Government plan to transition them to the cashless debit card.

Ms Elliot also appeared on Newcastle Live Radio, claiming the plan was part of a broader privatisation agenda saying: "This is about the Government wanting to privatise welfare."

On June 17, 2021, the matter was raised in parliament by Ms Elliot along with Shadow Assistant Minister for Western Australia Patrick Gorman and other Labor backbenchers.

"Pensioners right across the country know this Prime Minister wants to expand the program and force all pensioners onto the card," Ms Elliot told the House.

But across the aisle, the assertion was categorically denied by the Assistant Minister for Youth and Employment Services, Luke Howarth, who called on Labor to "end their campaign of lies and fear mongering".

"It is completely false to claim that this government has a plan to force pensioners onto the cashless debit card," he said.

In December 2021, the claim also surfaced in state politics, with Queensland Labor MP Brittany Lauga telling the state's parliament the federal government would "force all pensioners to use the card".

Ms Lauga later formally withdrew the comment and apologised if she had "unintentionally misled the House".

The campaign spread

Fact Check's analysis of Facebook parent company Meta's advertising library reveals the extent of Labor's paid advertising campaign across Facebook and Instagram warning about an extension of the cashless debit card program to age pensioners.

Throughout 2021, Meta's data suggests the advertisements across the accounts of 16 Labor MPs and candidates were viewed 367,000 to 460,000 times.

In June, the federal parliamentary Labor Party also established the "Protecting Pensioners Taskforce", chaired by Ms Elliot.

Facebook page in the name of the task force was also established with posts making frequent reference to supposed Coalition plans to extend the cashless debit card to pensioners.

While some of the content posted to the page is clearly branded as Labor campaign material, other information is presented in a less transparent way, including an image of a "news" article, which appears appearing to depict a story slamming a Coalition plan to "expand the cashless debit card to include all pensioners". 

Anne Kruger, the Australia-Pacific director of First Draft News, a not-for-profit organisation that researches online misinformation, told Fact Check the image appeareds to be an attempt to use visual cues to tap into the legitimacy offered by a genuine news source.

Dr Kruger told Fact Check the content image did not appear to be a genuine published news story but consisted of "quotes taken out of context" and a stock image.

Professor Axel Bruns, of the Digital Media Research Centre at the Queensland University of Technology, noted that despite the image lacking the hallmarks of a genuine news article, such as a page folio or byline, it would likely be seen as a legitimate news source by some social media users.

"We should not be confident that Australian social media users generally have the skills to tell trustworthy from untrustworthy information," he said in an email.

The task force's Facebook page also provided a link to a website that encourages users to share unsubstantiated memes on Facebook which imply the government plans extending the use of the cashless debit card.

An example of a meme which appeared on now-defunct website nocashlesspension.com. (Supplied)

When asked whether the website represented official Labor campaign material, a spokesman on behalf of Ms Elliot told Fact Check the website "shares various images, posts and links that followers may find useful" but was "not necessarily connected to the page".

When Fact Check put questions to Ms Elliot about the website, it was still viewable online, but has since been taken offline.

During a previous investigation into political ads, experts told Fact Check there were no catch-all federal laws to prevent lies in political advertising.

While the Commonwealth Electoral Act prohibits misleading political advertising, this only applies in relation to the vote-casting process.

Adding to the confusion, researchers at First Draft told Fact Check their media monitoring of the issue showed Labor appeared to be using the term "pension" and "age pension" interchangeably, despite clear distinctions between types of pensions and their relationship to the cashless debit card scheme.

Meanwhile, Ms Elliot provided a 14-point checklist of evidence to Fact Check in support of her claims about the wider use of the cashless debit card. The list has also been published on her website.

The evidence provided by Labor relies broadly on three elements: comments made by Senator Ruston and other Coalition colleagues, the screenshot alleging a leak from Mr Gillespie's office and recent legislative amendments relating to the card.

Statements on the record

Senator Ruston has clearly indicated she believes there is a case for the card to be used more broadly beyond the trial sites.

In a February 2020 news conference, the minister said that despite an initial "strong view" the card should only be used to address social harm, developments in technology had shown the card could also be used as "a financial budgeting tool so that people on low incomes can manage their budget".

"There is a broader application for the whole community and something that we would like to have a conversation with them about," she said.

Similar comments supporting an expansion of the card have been made by other senior members of the Coalition, including Prime Minister Scott Morrison, who reportedly said the results from the trial were "commending [the card] for wider application".

However, the statements referenced in Ms Elliot's list fall short of confirming this would apply to age pensioners.

Indeed, Senator Ruston clearly stated a position in parliament and in the media that the card would not be extended to age pensioners.

A spokeswoman for Ms Ruston told Fact Check: "The Government has consistently stated that it has never — and will never — have a plan to force age pensioners onto the cashless debit card."

Dr Kruger told Fact Check that media monitoring undertaken by First Draft revealed that a lack of transparency over the Coalition's broader intentions regarding the card — beyond age pensioners — had rendered the program an easy target for misinformation.

"The confusion and absence of clear information around who is included in an expanded rollout [of the cashless debit card] make it a policy point ripe for mis- and disinformation to spread," she said in a statement.

Similarly, a senior lecturer in the Griffith Law School, Shelley Bielefeld, told Fact Check: "This is a program where there has been considerable 'function creep' over a number of years with numerous legislative expansions to original trial sites and the addition of new program sites."

The alleged leak from a minister's office

As for the screenshot alleging that the plan to extend the use of the card had been accidentally disclosed by a Coalition staffer, a spokesman on behalf of Dr Gillespie told Fact Check: "Ms Elliot is clearly relying on false information."

"We are aware of the Facebook post which is not an accurate reflection of the conversation between the staff member in our office and the author of the post," he said.

The Social Security Act

Labor has shared widely a screenshot in its campaign material of the Social Security (Administration) Amendment (Continuation of Cashless Welfare) Bill 2020, along with Ms Elliot's checklist, suggesting the material proves the Government plans to move pensioners onto the card.

This screenshot of the legislation has been shared by Labor in a misleading way. (Justine Elliot MP)

While the legislation does, indeed, reference the age pension as an eligible "program participant", Labor's campaign material fails to take into account several key factors.

Dr Bielefeld told Fact Check the powers in the section and sub-paragraph pictured only related to specific jurisdictions — not to the broader public.

"Section 24PGD(1)(a) applies where the person's usual place of residence is, becomes or was within the Cape York area," she said.

"Section 124PGE(1)(a), again, is tied to a specific jurisdiction, the Northern Territory."

Also, in the latter's case, Dr Bielefeld told Fact Check the legislation does not contain general powers for pensioners to be compelled to use the card — only to opt-in voluntarily.

As such, the power in the amendment to force age pensioners to use the card is limited to remote communities in Cape York, Queensland. Further, pensioners in these communities can only be directed to use the card on the recommendation of the Family Responsibilities Commission (FRC), an Indigenous-led statutory body independent of government.

Dr Bielefeld added that age pensioners who formerly lived in Cape York and were directed to use the card by the FRC, and who later relocated to the Northern Territory, could be required to continue using the card.

According to the Department of Social Services, there were a total of 24 age pensioners using the Cashless Debit Card across all sites as of January 31. Of those, seven people had voluntarily opted into the program in the Goldfields, East Kimberley, Ceduna and Hinkler regions.

The remaining 17 participants resided in communities on Cape York and had been placed on the program after receiving written notice from the FRC.

"[Department] data does not distinguish whether participants in Cape York fall under the Voluntary Income Management or the Conditional Income Management streams, which are used by the FRC," a spokeswoman said.

"However, information produced by the FRC indicates only one person on the age pension has been placed on to the program under the Conditional Income Management stream."

Income management in Cape York

The "basics card" was used in Cape York before the cashless debit card was introduced. (ABC News)

The use of the cashless debit card in Cape York is part of a longer-term practice of "income management" in the region, where a portion of a person's welfare payment is quarantined and restricted to the purchase of essential goods and services.

Income management was introduced in 2007 by the Howard government and was supported and extended under successive Rudd and Gillard Labor governments.

Prior to the cashless debit card, the "basics card", which fulfilled a similar function, was used in Cape York.

Is the card effective?

The Government argues the cashless debit card is effective in reducing social harm.

But critics such as the Australian Council of Social Services have labelled the program "discriminatory, paternalistic and intrusive" and as "lacking credible evidence" justifying its continuation.

The government commissioned two evaluations of the scheme. The first, conducted by Orima Research reported positive findings in relation to a reduction in alcohol consumption at the trial sites.

However, this was later denounced by the Australian National Audit Office, which pointed to "a lack of robustness in data".

second report, undertaken by the University of Adelaide, also reported "consistent and clear evidence" alcohol consumption was down but qualified the finding by adding: "It was not possible to attribute these changes to the [cashless debit card] alone".

Across almost all other metrics — including illicit drug use, financial planning and money management, child welfare and family wellbeing, and health and wellbeing generally — the findings were mixed or inconclusive.

The deputy executive dean of the University of Queensland's Faculty of Humanities and Social Sciences, Greg Marston, who co-authored an independent assessment of the use of income management in Australia, told Fact Check there was "little evidence" to support the notion that the card was effective in reducing social harm, adding that his own research had found "no clear link" between income management and the reduction of crime in the trial locations.

Researchers at Monash University who evaluated the impact of the card between 2017 and 2020 reached a similar conclusion finding no evidence of a reduction in gambling, intoxicant abuse, crime or emergency department presentations in the trial sites.

The bottom line

Expanding the cashless debit card system to age pensioners is not currently part of the Coalition's official policy platform, nor was Fact Check able to find any evidence to suggest it plans to do so.

Principal researcher: Sonam Thomas


Editor’s note (May 3, 2022): This article has been updated to better describe the nature of the anonymous post which Labor used in its campaign. It does not change the findings of the article.

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