Australia’s cashless debit card to become voluntary from 4 October, Labor says

People on the cashless debit card will be able to leave the program from early October after legislation to abolish the mandatory income management program was delayed due to the death of Queen Elizabeth II.

The Albanese government announced the updated timeline late Friday, along with the details of a new "enhanced" card which people who choose to remain on the income management program will be able to use. They also announced $67m in additional social supports for communities transitioning off the card.

The enhanced card will allow access to more merchants, online shopping and Bpay, and will be delivered by Services Australia instead of a private company.

The social services minister, Amanda Rishworth, said there would be an 18-month consultation process with affected communities "to decide what the future of income management looks like", but said Labor would not agree to demands from the Greens to scrap all forms of income management.

"This package will deliver real solutions for those communities who were subject to the cashless debit card trial and provide choice and long-term certainty into the future," Rishworth said.

"We've heard from communities about what they need and these measures deliver on that."

The government pledged at the election to abolish the cashless debit card, a system that quarantines a percentage of a participant's income on a bankcard that can't be used to buy alcohol or tobacco, or withdraw cash.

Income management, which had been mandatory for more than 17,000 people on the program, will become voluntary in Ceduna, East Kimberley, Goldfields and Bundaberg-Hervey Bay. The BasicsCard, another income management tool used by thousands of welfare recipients in the Northern Territory, remains in place.

The legislation was set to pass the Senate last week, allowing participants to opt out from 19 September, but was delayed due to the Queen's death.

When parliament sits on Monday, the government will seek to amend its own bill to insert nearly $50m for extra drug and alcohol treatment programs in cashless debit card trial sites, $17m for community employment initiatives, and the continuation of support services linked to the program, such as community buses.

People who choose to remain in the program will switch to the enhanced card from July next year. People in Cape York and the Northern Territory, where the cashless debit card is not being abolished, will automatically transfer to the enhanced program.

"Crucially, under the changes, all income management will be delivered by Services Australia. Individuals will no longer be required to deal with a private company for customer support functions," Rishworth said.

Services Australia will also offer additional staffing support for communities transitioning, including social and financial workers.

Pending the legislation's passage next week, participants in sites where the card is ending will be able to opt out of the program from 4 October.

Forty-four support services linked to the card program in trial sites will be extended, such as community buses and youth programs, while some other new support services like digital or financial literacy services and domestic violence programs will be funded after consultation with affected communities.

Rishworth and the assistant social services minister, Justine Elliot, said they had visited all six cashless debit card communities since taking office.

"Entrenched disadvantage must be tackled by adequate support that addresses the causes of that underlying disadvantage and build capacity," the minister for Indigenous Australians, Linda Burney, said.

She added the government would keep consulting with local communities about the future of income management.

The Greens, Pocock and the Jacqui Lambie Network have voiced support for the cashless debit card's abolition.