Welfare recipients of all races will be forced to have their money managed by Centrelink unless they can demonstrate personal responsibility, under dramatic changes proposed by Families Minister Jenny Macklin.
The move is a sweeping extension of rules applied to indigenous people in the Northern Territory as part of the Howard government's emergency intervention of 2007.
Ms Macklin wants to restore the operation of the Racial Discrimination Act, which was suspended in the intervention to apply the tough welfare scheme only to Aborigines. To keep the tough rules for indigenous communities, she has extended them to non-indigenous people.
Under the federal plan, an estimated 20,000 people in the NT will be subject to the new race-blind income management system from next July.
But the minister would have the power to impose the same rules in other disadvantaged communities across the nation, potentially applying it to hundreds of thousands of people.
The rules would apply to people who had been on welfare for one year - or just three months for those aged under 25. Centrelink and child protection agencies could also refer others deemed in need of help managing money.
But they would be able to seek an exemption if they study full time or work, or if they are parents whose children are fully immunised and attend school regularly, with no more than five days' absence per term without an acceptable explanation.
Under the changes, half of fortnightly payments and all of any lump sums would be quarantined into a welfare account. Recipients could draw on those funds using a BasicsCard to buy essentials such as food or nappies.
''We are determined to remove the limitations that have applied to the application of the Racial Discrimination Act,'' Ms Macklin said last night.
''And we are implementing these major welfare reforms because we think it is important that people's welfare payments are used in the interests of children and families. We want to make sure that we support people that need help with managing their money.''
The scheme will not apply to anyone on the age pension, after an outcry from pensioners affected by the NT intervention who had spent a lifetime paying taxes.
Of the 20,000 people expected to fall under the rules in the first six months, about 2000 will be voluntary. They will be eligible to claim a $250 incentive payment for every six months of voluntary participation.
Those on compulsory income management will also qualify for a matched savings payment of up to $500 from taxpayers if they save for at least 13 weeks.
The overhaul will cost $350 million over four years.
In other changes to the intervention, alcohol restrictions will be amended with local management plans, and laws forcing stores to keep a record of takeaway alcohol sales worth more than $100 will be scrapped.
Pornography restrictions would remain in place, as will the contentious five-year leases that the government imposed on traditional land owners before starting upgrades on homes and buildings. But it plans to move towards a system of voluntary leases from 2012.
Special powers for the Australian Crime Commission to investigate alleged child abuse would be retained.
Indigenous Social Justice Commissioner Tom Calma welcomed moves to restore anti-discrimination laws.
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