8.7.6.40 Welfare Restricted Bank Accounts

Summary

In accordance with the SS(Admin)Act section 124PP, the Secretary of DSS may determine a kind of bank account to be maintained by a trial participant or voluntary participant. Schedule 8 to the Social Security (Administration) (Trial - Declinable Transactions and Welfare Restricted Bank Account) Determination 2018 sets out the terms and conditions that are particular to a welfare restricted bank account. Trial participants and voluntary participants in the Cashless Debit Card trial should obtain the full set of terms and conditions for their welfare restricted bank account from the financial institution.

Single name

The welfare restricted bank account can only be opened in a single name and operated by the sole holder of the account. This means that it will not be possible for the account to be opened in joint names and no one other than the holder will be able to operate the account.

Debit card provided

A debit card will be provided to the holder of a welfare restricted bank account. The debit card is a key feature of the trial of cashless welfare arrangements and a trial participant or voluntary participant will be able to use that card to purchase goods and services.

Depositing of cash

Any amount of cash can be deposited into a welfare restricted bank account. This term makes it clear that a trial participant, a voluntary participant or a third party, not just DHS, can deposit money into a welfare restricted bank account.

No withdrawal of cash

Cash cannot be withdrawn from a welfare restricted bank account, whether through the use of a debit card attached to the account or by other methods of withdrawal.

Systems in place to prevent purchase of alcoholic beverages or gambling

Systems are in place which, so far as practicable, prevent money in a welfare restricted bank account, and a debit card attached to that account, being used to purchase alcoholic beverages and gambling. These systems also apply to the purchase of gift cards, store cards or vouchers where those cards or vouchers allow for the purchase of alcoholic beverages or gambling. Gambling is defined in SS(Admin)Act Schedule 1 to mean a service provided to a person in the capacity of a customer of a gambling service (within the meaning of the Interactive Gambling Act 2001).

Systems in place to prevent transferring of money

Systems are in place which, so far as possible, prevent a trial participant or voluntary participant transferring money from a welfare restricted bank account to another bank account that is not a welfare restricted bank account. There is an exception where the money is transferred for the purpose of enabling the trial participant or voluntary participant to purchase goods or services that are not alcoholic beverages or gambling.

Purchasing goods or services over the telephone or internet

In general, it will not be possible for a debit card attached to a welfare restricted bank account to be used to purchase goods or services over the telephone or internet. However, the Cashless Debit Card can be used for particular transactions over the telephone or internet where it is established that the particular transaction does not involve the purchase of alcoholic beverages or gambling.

No fees

Fees will not be charged by the financial institution in relation to depositing money into a welfare restricted bank account, or in relation to providing an initial debit card.

No interest

Interest will not be charged by the financial institution on balances in a welfare restricted bank account that are less than zero. Interest will not be paid on balances in a welfare restricted bank account.

Closure of account

A welfare restricted bank account provided to a person may be closed during the trial period only if the person is not a trial participant. The trial period is the period of 1 February 2016 to 30 June 2019, for Ceduna, East Kimberley and Goldfields, and to 30 June 2020 for Bundaberg and Hervey Bay, as mentioned in SS(Admin)Act section 124PF. It would defeat the purpose of the Cashless Debit Card trial if a trial participant, or any other person, could unilaterally close an account during the trial while the person is a trial participant.

There will not be any restrictions on a voluntary participant closing a welfare restricted bank account during the debit card trial.

No automatic drawing or withdrawal of monies by a third party

It will not be possible to use the welfare restricted bank account in an arrangement involving automatic drawing or withdrawal of monies by a third party which is based on BSB and account number. This is because when money is automatically drawn on the basis of BSB and account number, it is not possible to ensure money is not being spent on alcoholic beverages or gambling. Participants can still set up automatic direct debits using their card number.

Limitations on spending & transfer of amounts

Limitations will be placed on the amounts a trial participant or voluntary participant can spend using a debit card attached to a welfare restricted bank account. Limitations will also be placed on the amounts a particular holder of a welfare restricted bank account can transfer out of his or her account. The welfare restricted bank account will be limited to allowing only a 'housing payment' of up to a certain amount per week and an 'other expenses' payment of up to a certain amount per week. Individual limits will also be imposed on the amounts a particular holder of a welfare restricted bank account can transfer out of his or her account. This means it will be possible to set individual limits on individual trial participant's use of their account.

Further information

Further information related to the features of welfare restricted bank accounts may be found on Cashless Debit Card page on the DSS website or on Debit Card Trial page on the Indue website.

Last reviewed: 4 February 2019