Commonwealth to trial limited cashless welfare card

The Australian government will trial a new cashless welfare card to stop welfare recipients from spending money on drugs, alcohol, and gambling, saying it could help reduce rates of domestic violence.

The trial of the Healthy Welfare Card will begin at the end of the year, with the Coalition targeting disadvantaged indigenous and non-indigenous communities.

The cards would operate like an ordinary Visa or Eftpos debit card, and could be used on anything except to buy alcohol or to gamble.

Meanwhile, the cash available would be limited in an attempt to stop the money being used to purchase drugs.

Parliamentary Secretary to the Prime Minister Alan Tudge said the Healthy Welfare Card could have a dramatic impact on the rates of attacks and violence on women.

"The rates of violence in some of the high-welfare communities is completely unacceptable," he said.

"We want to trial this card because we believe it could have an impact on reducing the assaults and reducing violence in the community."

According to Tudge, the Healthy Welfare Card will operate alongside the BasicsCard during the trial.

The BasicsCard was introduced approximately three years ago under the government's efforts to assist families with income management. It allows users to make Eftpos card payments using managed income money on all goods except drugs, alcohol, and gambling. It currently operates primarily in the Northern Territory, and is used by over 20,000 people.

Tudge hinted that there may be the potential for it to replace the BasicsCard if the trial is successful, but further decisions will be made after the trials.

"It is an expensive card to operate. It's not connected to the financial services platforms, and it's quite restrictive for many people as well," he said.

But Minister for Social Services Scott Morrison said there is no plan for the card to have "mainstream application".

"It's there as a key tool to target particular areas of disadvantage," he told reporters in Sydney.

The Greens described the card as "patronising and paternalistic", and called for the trials to be abandoned.

"These tough love methods do not resolve complex issues," Senator Rachel Siewert said in a statement. "They have not worked in the past and will not work now."

The Healthy Welfare Card is a recommendation of mining magnate Andrew "Twiggy" Forrest.

According to Forrest's controversial review of indigenous employment, individuals will benefit from "a stable financial environment where regular bills and rent are paid on time and there is food on the table, allowing them to concentrate on other concerns including returning to work and raising and educating their children".

Forrest also suggested that a welfare benefits app should be developed to act as a virtual account on a prepaid basis that could be adopted into the Healthy Welfare system. He said there is also potential for the app to become a product scanner for checkout purposes, using near-field communication (NFC) payments.

The Healthy Welfare Card is part of the federal government's broader aim to help the indigenous community. Last Friday, the government committed to creating 20,000 jobs as part of its employment parity initiative, designed to support the private sector in employing indigenous people.

With AAP