Duncan Smith proposes smart cards for benefit claimants [+video]
Benefit claimants will be given smart cards to restrict their spending on alcohol and drugs, said Iain Duncan Smith at the Tory conference last week.
Work and Pensions Secretary Iain Duncan Smith wants to hand benefit claimants an Oyster-style card which can only be used in certain shops for food, clothes and household essentials.
Mr Duncan Smith hopes to draw up a scheme modelled on welfare reforms in Australia, where benefit credit cards have been successful.
The cabinet minister told the audience at the Conservative Party Conference fringe event in Birmingham: “I am certainly looking at that at the moment. I can’t say I will do it. But we are going through it in some detail.”
The proposals would require a change in legislation because it is currently illegal for ministers to determine what benefits cash is spent on.
Mr Duncan Smith said, “There would be some legislative issues about allowing us to say you cannot spend your money exactly where you like under certain conditions.”
Mr Duncan Smith said the card system would work better than food stamps, which are handed out in some American states, as these can be swapped for drugs on the black market.
“In America right now, I know [..] a lot of the vouchers are traded for cash. Low cash value. So you sell [the vouchers] for cash and you still go and use it on drugs,” Mr Duncan Smith said.
In Australia, the credit card scheme has only recently been rolled out nationwide after being tested in Queensland and the Northern Territories.
Thousands of claimants in Australia are now given electronic ‘Basic Cards’ which allow them to purchase ‘priority’ items such as food, housing, clothing, healthcare and education.
Money is electronically placed on the card once a fortnight, when people received their benfit paymenets. No more than A$1,500 can be spent per day. But if money is not spent, it can be built up as savings.
Mr Duncan Smith said the government is looking at the scheme “in some detail.”
The Secretary of State spoke about other issues at the conference fringe event, including the UK's relationship with Europe, welfare reform, the coalition partnership and Boris Johnson.