11.1.14.30 Principal carer exemptions from income management - financial vulnerability test

Financial vulnerability

As well as demonstrating suitable care and education of children in their care, principal carers of school-aged or under school-aged children must exhibit no indicators of financial vulnerability during the 12-month period ending immediately before the test time in order to be granted an exemption from income management.

A number of indicators should be considered to build an overall picture of a person's financial circumstances, to assess whether they are able to meet their priority needs and those of their family, to manage their money, and to be safe from financial exploitation in the absence of income management. The delegate should consider any evidence that the indicators exist and, where relevant, review and discuss each factor with the person. Each factor may or may not indicate financial vulnerability, depending on the discussion with the person. Some factors will not be relevant to the person, or the delegate may have no evidence about a particular factor. It is not expected that the delegate will cover all the possible discussion points listed. The delegate will document the discussion with the person and balance the factors, to make a decision as to whether there were indicators of financial vulnerability in the previous 12 months.

Decision-making principles

The principles for determining that there were no indicators of financial vulnerability in relation to a person during the previous 12 months are:

a person has been applying appropriate resources to meet their priority needs and the priority needs of their family
a person has been using money management strategies (such as stable payment patterns and budgeting practices) to manage their financial resources, and it is likely the person will continue to do so in the future
a person had control over their money and was not subject to financial exploitation
a person did not regularly require urgent funds to pay for foreseeable costs, and did not frequently change their income support pay dates. Consideration must be given to the reasons for seeking the urgent payments or changing the payment dates.

Definitions

For the purposes of the assessment:

financial exploitation: where a person is subject to undue pressure, harassment, violence, abuse, deception or exploitation for resources by another person or people, including other family members and community members
priority needs: for the purposes of income management, priority needs are those defined in SS(Admin)Act section 123TH.

Act reference: SS(Admin)Act section 123TH Priority needs

Guidelines for assessing financial vulnerability

The delegate needs to be satisfied that the person had, over the last 12 months, shown no signs of financial vulnerability, with regard to the considerations set out below.

Note: These considerations are intended to create an overall impression of a person's financial circumstances, and no set weight should be attributed to each. Each factor should be considered, and those that are relevant taken into account. The considerations should not be treated as a checklist and the discussion points do not necessarily indicate that a person is financially vulnerable. The questions are designed to identify whether a person has faced any significant financial challenges and whether they have been able to manage their money to effectively deal with those challenges or should be considered financially vulnerable as a result.

Factor	Discussion points with person	Evidence
Principle: Person has been applying appropriate resources to meet their priority needs, and the priority needs of their family.
Income management allocations	If income management allocations were regularly changed, what was the reason for this? If the allocations were never changed, why not? Is the person meeting their priority needs and the priority needs of their family with their income managed funds, and did they direct discretionary income to these priority needs? Will the person be able to manage their money to meet these priority needs without income management? How does the person intend to meet these priority needs without income management? Does the person intend to continue to pay for the priority needs that were being paid for with income managed funds or do they intend to stop paying for these things? If so, why?	Are or were there regular allocations in place for a variety of priority needs? How are/were the person's priority needs being met? How are/were the priority needs of a person's family being met?
Principle: Person had control over their money and was not subject to financial exploitation.
Financial exploitation	Does the person have a password protected or a restricted access record? If so, why? Has the person had money taken from their account without their permission? Does the person find it difficult to say no to some family members or others when asked for money? Does the person need to hide money or have secret money? Is the person having trouble meeting their priority needs or making their money last from one payment to the next because they are making purchases for other people or giving other people their money? Have third parties been contacting Centrelink regarding the person? If so, why? Has this been at the request of the person? Was the person aware that third parties had been contacting Centrelink? Have these issues been resolved, or are they ongoing?	Password protected Centrelink record Restricted access record Evidence of restricted contact from third parties Evidence of financial exploitation
Principle: Person uses money management strategies to manage their financial resources, and is likely to continue to do so in the future.
Use of Centrepay	Has the person used Centrepay? If Centrepay arrangements have been started and then stopped, what was the reason for this? Has the person enquired about Centrepay but found that the third party organisation is not registered? Is the person aware of Centrepay options? If the person has not used Centrepay is this because they were able to pay their bills on time without it? Is it likely that the person will remain on Centrepay, or elect to go onto Centrepay in the future?	Current or previous DHS arrangements Length of time using Centrepay arrangements Evidence of frequent changes to Centrepay - ons and offs
Approved money management courses	Has the person completed a course to learn or update financial skills? Did the person develop a personal budget as a result of attending this course? Did the person stick to the budget or achieve any financial goals (significant purchases e.g. white goods, saving money for a specific purpose etc.) as a result of attending the course?	Evidence of completion of a course
Demonstrated budgeting and savings	Does the person have a good idea about their expenses and how much income they have each week/fortnight? Does the person have a budget? Is it likely the person will remain on this budget in the future? Does the person have any financial goals and a plan for achieving them? Does the person have any regular payments set up outside of Centrepay or income management - such as direct credit instalments or payment of utilities? Has the person been evicted for not paying rent in the last 12 months? If so, how did this come about? Has the person had a service or utility disconnected in the last 12 months? If so, how did this come about? Has the person used lay-by to purchase any significant items (e.g. white goods) in the last 12 months? How does the person plan to pay for large bills like car registration or winter gas/electricity bills? Does the person have unpaid fines or significant debts?	Evidence of budgeting activity
BasicsCard declined transactions (incurred at the fault of the person)	Has the person had a high number of declined transactions? If yes, why? Does the person have the ability to easily check their BasicsCard balance? How does the person typically plan to pay for groceries each week/fortnight? Is money set aside or does the person spend what is left on their card? When the person goes shopping, do they have a good idea about what they need and how much it's going to cost? When the person has insufficient funds to purchase all the things they want, how do they decide what to buy and what to put back (are essential food items being covered)?	Evidence of high number of declined transactions (incurred at the fault of the person)
BasicsCards use	Did the person need a replacement BasicsCard? If yes, why? Has the person given their personal identification number (PIN) to anyone else and had money taken from their account without their permission? Does the person use book-up and leave their card at the shop? Do people take and use their card without their permission?	Evidence of frequent replacement BasicsCards
Principle: Person did not regularly require urgent funds to pay for foreseeable costs, and did not frequently change their income support pay dates.
Urgent payments	Is there a pattern suggesting that the person is applying for urgent payments for the same things each time - late rent, utility bills, public transport costs etc.? Did the urgent funds applications relate to expenditure that the person could have foreseen and planned for? If the urgent payment applications have been rejected, what were the reasons?	Urgent payment applications that have been granted or rejected in the last 12 months
Change of payday code	What are the reasons for the change in income support pay dates?	Evidence of frequent payday code changes

The delegate is able to make an assessment and undertake a review by telephone. If documentary evidence is required (i.e. evidence of attendance at a money management course), it is the responsibility of the person requesting the exemption to provide this evidence to Centrelink.

Example: Costas is receiving PP and is income managed under the Long-term Welfare Payment Recipient Measure. He applies for an exemption from income management and the delegate applies the financial vulnerability test. Costas informs the delegate that he does not know how to set a budget, and that he often forgets to pay his bills. He also states that he hasn't thought about how he would meet his family and his own priority needs without income management. Costas has also lost his BasicsCard a number of times and had to get a replacement. Based on this information, the delegate determines that Costas is financially vulnerable and does not grant him an exemption.