Prepay: disciplining the global poor
This post continues my exploration of the shifting UK policy landscape impacting on the poor and the jobless that I began with my post about prepay [read it here]. It places the debate within a global context :
The Australian Basics Card, the scheme that Ian Duncan Smith originally explored as a potential model for the UK, provides a management template for the future of welfare, globally and is illuminating in its genesis. The Conservative Howard Government introduced compulsory income management to many Aboriginal communities in 2007 through the Northern Territory Emergency Response (NTER) legislation The NTER needed the suspension of the Racial Discrimination Act 1975 to enable implementation. The scheme was extended into metropolitan areas in 2012.
The assumption behind the scheme is that welfare recipients require help with budgeting. Claimants judged to make problematic use of their welfare funds are referred into the system, and receive targeted interventions, with mandatory sanctions. Between 50-70% of people’s welfare payments are ‘quarantined’ for ‘essential needs’, users of the Basics Card have to negotiate with CentreLink (the managing agency) in order to pay bills using these ‘quarantined’ funds, the remainder available as cash. The Australian system also encourages voluntary self-referral, to emphasise its supportive element rather than its punitive aspects, although referral ‘out’ has been identified as an issue. The Australian Women’s Equality Rights Alliance carried out a survey amongst women on the income management programme in the Northern Territories and found that a majority of the women they interviewed wanted to exit the system but mechanisms to do this were missing; once in the system, no voluntary exist seems possible. The comment thread on DrumOpinion indicates the research not only reflected researchers’ own observations from experience working in remote communities, but also captured the sharp divisions amongst people about the uses and impact of income management on communities.
Many of the criticisms of the Australian Basics Card focus on the role of CentreLink as gatekeepers who are accused of inefficient management of payments and of making subjective judgements about claimants’ situations. The extensive list of government-approved retailers who accept the Basics card, overwhelmingly chains and supermarkets, is also an issue. The integration of large retail networks into the scheme removes card users’ freedom to make their own choices by ‘shopping around’ for alternatives in local markets and shops. Some shops are reported to operate Basics Card-only queues. A key criticism is that the use of a prepayment card removes a large degree of choice and that decisions are made for, not by, people receiving benefits.
Most people placed on income management programmes and therefore Basics Card users, are Aboriginal. The Australian debate is embedded in entrenched and serious social problems amongst the aboriginal communities, especially violence against women over access to social security funds. Interventions such as income management are criticised for their failure to engage with communities, marginalised over generations, and the imposition of solutions designed and applied by outside agencies not local, community-led groups. Critics argue that solutions need to be co-produced and given time to work. However, by dealing with these problems via a smartcard, individual and collective experience of structural inequality such as racism, lack of access to training and education, poor housing and health provision can be dismissed as individual failings; the solution, better budgeting skills and technical management of payments.
Unlike Britain, prepay systems in the US have been developed exclusively for the distribution of state benefits and not for social care or similar uses, and are used to sanction and quarantine spending for all welfare claimants. All 50 states have used electronic benefit transfer cards (EBT) since 2002, when paper cheques and food stamps were phased out. The system polices benefit recipients’ spending: Supplemental Nutrition Assistance Programme (SNAP) and Temporary Assistance to Needy Families (TANF) payments can’t be used for alcohol or for pet food, although the detail of what can or cannot be bought using these cards varies and is applied inconsistently across the country. Claimants are subject to the vagaries of their State legislatures’ current prohibitions, some outlaw fizzy drinks, others don’t. What is common is that separating ‘legitimate’ and illegitimate’ goods happens at the till, and is mainly a task for supermarket checkout workers.
The postwar consensus around welfare was predicated on the assumption that those who needed welfare support and met the criteria had the same rights to spend their money as the rest of the population. The shift from entitlement through need as well as contributions, to policing of spending by the state, is a major shift in welfare policy, globally. The underlining narrative, repeated like a Greek chorus, is the assumption of financial incompetence, failed parenting and bad work ethos on the part of the global poor. Income management systems, imposed control over spending and other social and work ‘behaviours’, is part of a punitive disciplining process. The structural reasons underpinning poverty and disadvantage have been dismissed in favour of policy regimes that blame individuals for their own joblessness, poor housing and general disadvantage. Shifting the blame for poverty from governments and society to individuals removes the need to address structural inequality and provides justification for redistribution of public resources through privatisation of the systems designed to simultaneously support and police the poor.