Australia trialling product-level blocking tech for cashless welfare cards

The pilot run by DXC Technologies sees flags coded into point of sale devices that block the sale of some products on that type of payment method, but only once the purchaser swipes their Cashless Debit Card.
Written by Asha Barbaschow, Contributor

The Australian government in 2016 introduced the trial of a welfare quarantining system, via a Cashless Debit Card (CDC), that aimed to govern how those in receipt of welfare spend the money, with the idea being to prevent the sale of alcohol, cigarettes, and some gift cards and block the funds from being used on activities such as gambling.

80% of the recipient's funds are placed on the CDC, which is managed by Indue, with the remaining 20% to be paid into a bank account.

"The Australian government is considering the best possible ways to support people, families, and communities in places where high levels of welfare dependence co-exist with high levels of social harm," the government explains.

"The Cashless Debit Card is testing whether reducing the amount of cash available in a community will reduce the overall harm caused by welfare-fuelled alcohol, gambling, and drug misuse."

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There are currently 12,150 participants in the CDC trials across Bundaberg and Hervey Bay, the East Kimberley, Ceduna, and Goldfields regions, the Department of Social Services revealed during Senate Estimates on Thursday night.

In Ceduna, the Goldfields, and the East Kimberley regions, the program applies to all people who receive a working age welfare payment, with the exception of the age pension and veterans' pension recipients. However, people who receive these two payments can volunteer to participate. People who earn money from other sources, such as paid work, are also able to volunteer.

In the Bundaberg and Hervey Bay region, the program applies to people aged 35 and under who receive newstart, youth allowance, or both the single and partnered iterations of the parenting payment. Those in the Bundaberg and Hervey Bay region are not able to volunteer to participate in the program.

The Social Security (Administration) Amendment (Income Management and Cashless Welfare) Act 2019 allows the trials until 30 June 2020.

To date, the government has spent a little over AU$50 million on the trial.

There have been a number of issues raised by the idea of the CDC, however. Many feel they would be disadvantaged by its Australia-wide rollout, with some feeling that the scheme places unreasonable restrictions on spending, making it more difficult to save, or flee domestic abuse.

Speaking on Thursday, Minister for Families and Social Services Anne Ruston said she was open to a conversation with the nation about further use of the CDC as a welfare measure, despite Greens Senator Rachel Siewert highlighting the many concerns the concept gives rise to.

"I think we should start having a conversation, start talking to Australians, both those that are on the card and those that pay the taxes that fund welfare, I think we should have a conversation about the broader application of different ways and different supports that we can give people on welfare," she said.

The minister and departmental representatives, including secretary Kathryn Campbell, were asked that due to them "talking so favourably about it", whether they might like to be moved onto the CDC themselves.

"I think there's a number of reasons we talk about some of the benefits of the CDC," Campbell said in response.

See also: Why Australia is quickly developing a technology-based human rights problem (TechRepublic)

The CDC is currently accepted at around 900,000 merchants and there are a number of those that have been blocked, including 18+ establishments such as breweries, bottleshops, and TABs.

The government in December kicked off a AU$3.4 million pilot of product-level blocking with tech vendor DXC Technology.

The pilot is aimed specifically at assisting small businesses. Major retailers such as Woolworths, Coles, and Australia Post already automatically block purchases.  

Known as product level blocking, the business' PIN pad would recognise when a CDC is being used and automatically decline the transaction if the shopping basket includes restricted products. This is only at the end of the transaction, however. 

As department spokespeople confirmed, these blocks can be overridden by the retailer, so the onus is on them to not let someone with a cashless debit use the funds for booze.

"Generally, product-level blocking involves upgrading a merchant's pin-pad and POS system to automatically identify CDC and block the sale of restricted items," Department of Social Services spokesperson Ben Peoples told senators.

"It does this by upgrading the point of sale system so it can scan a customer's basket for restricted items and if any restricted items are present, the pin-pad will decline the payment request. We're working with pin-pad providers and point of sale system providers on the best way for those restricted items to be identified, but generally, the approach that seems to work best is the classification of products into different departments, which many merchants already do."

During the period spanning August 2016 through October 2019, there were 12 outages preventing the use of the CDC. There was also a Telstra outage that affected all Eftpos terminals, not just the CDC, which prevented people on the trial from accessing their funds.

"One of the issues we are examining is whether there could be greater support for internet connectivity in communities," department spokesperson Liz Hefren-Webb said.

"The greater functionality of the card allows people to better manage their accounts online, they can use it for online shopping and the like and therefore connectivity is much more important to allow people to use the full-functionality of the card," Ruston added.

The government has also pushed plans from extending the trial into the Northern Territory and Cape York from April to July 1. It has committed AU$17.5 million to transitioning people from the current Basics Card to the CDC, providing legislation passes.

The Basics Card has half of an individual's welfare payments and is touted as helping those on "income management" to manage their money. It is accepted at around 15,500 stores and businesses, but not everywhere, so card users sometimes have to travel to inconvenient locations just to use it.

"The CDC is more freely accepted at a number of merchants, around 900,000 merchants, the Basics Card is accepted in around 16,000 Australia-wide," Selena Pattrick from the Department of Social Services explained.

"There are some differences in the restricted items and for the CDC; it is able to be used online as opposed to Basics Card, which is not."

The department said there are currently 25,231 recipients on income management that will be transitioned to the CDC.

"Unless we spend a lot of time trialling something like this, you'd be critical of me for not being thorough," Ruston said.

Ruston and Campbell were also probed on Centrelink's Online Compliance Intervention (OCI) -- robo-debt -- initiative, who claimed public interest immunity on many of the questions asked during Thursday night's estimates hearing.


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