Cashless Debit Card: Economic and Ethical Analysis of Welfare Payments

This essay analyzes the Australian government's cashless debit card program within the context of welfare payments. It examines the economic rationale behind the program, including the shift from direct cash transfers to restricted spending through cashless debit cards. The essay explores the ethical frameworks, particularly deontology and consequentialism, used to evaluate the program, discussing arguments for and against its implementation. It delves into the ethical issues surrounding income management, individual choice, and the potential violation of beneficiaries' rights. The analysis considers the impact of the program on social welfare, individual spending habits, and the potential for both positive and negative consequences. The essay also covers the program's restriction on certain purchases and its implications for both the beneficiaries and the market.

Running head: WELFARE PAYMENTS PROGRAMME
Welfare Payments Programme
Name of the Student
Name of the University
Author Note

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Table of Contents
Response to question 1...............................................................................................................2
Economic view on the welfare payment distribution.............................................................2
Welfare payment in kind is inferior to cash...........................................................................2
Response to question 2...............................................................................................................3
The ethical framework of the cashless welfare payments programme..................................3
Effect of using the cashless debit card...................................................................................4
Response to question 3...............................................................................................................4
The ethical framework of the programme and related issues................................................4
Response to question 4...............................................................................................................5
Arguments for and against the cashless debit card programme.............................................5
Response to question 5...............................................................................................................6
Economic and ethical view on income management.............................................................6
Cashless welfare payments causing violation of ethics.........................................................7
Bibliography...............................................................................................................................9

2WELFARE PAYMENTS PROGRAMME
Response to question 1
Economic view on the welfare payment distribution
The Australian Government has taken the policy to distribute the welfare payments in
the form of a cashless debit card instead of direct transfer to the account of the beneficiary.
The government make welfare payments for the purchase of essential goods. However, it is
evident that people in many cases use it to purchase products like alcohol, pornographic
video CDs and indulge in gambling. Hence, it is necessary to restrict such expenditures to
avoid the misuse of welfare payments. Thus, the government used cashless debit card mode
to transfer the welfare payments. It enables the government to restrict the purchase of the
products that are discouraged under the scheme of welfare payments1. The card providing
corporations, program the cards in a specific way that they cannot be used during the
purchase of restricted products. Therefore, cashless debit card mode is an effective policy of
welfare payments to increase the welfare of the people.
Welfare payment in kind is inferior to cash
The welfare payments can be made in two ways, one is in kind, and the other is in
cash. There is a popular argument in economics that welfare payment distribution in cash is
better than in kind. For example, if a welfare payment of $1000 is given to a financially weak
person in kind, then the bundle would be fixed and might not fulfil the need of the person.
However, if the welfare payment was made in cash then the person could spend the money as
per wish and satisfaction would be greater. Although the cashless debit card programme, in
1 Bielefeld, Shelley. "Cashless Welfare Transfers for ‘Vulnerable’Welfare Recipients: Law,
Ethics and Vulnerability." Feminist Legal Studies 26, no. 1 (2018): 1-23.

3WELFARE PAYMENTS PROGRAMME
this case, does not choose a fixed bundle. It restricts the people from spending the money on
products such as addictive goods, porn and luxury goods2. Hence, with a cashless debit card,
people can buy any necessary products like grocery, medicine and education; therefore, in the
programme, the bundle is only restricted but not fixed.
Response to question 2
The ethical framework of the cashless welfare payments programme
Deontology is the framework of ethics on which the concerned programme is based. It
suggests that every action should be morally correct and must not hurt others interest3.
Suppose, an action made by a person does not consider its effect on others, and if the
consequences influence others adversely, then the action should be considered as unethical.
Therefore, taking the case of expenditure made on alcohol and gambling with the money
received under the welfare payments scheme to explain the ethical framework in the given
context. Hence, if a person has spent the welfare payments money to buy alcohol, then the
person is depriving its family. This is because the money could have used to purchase grocery
or education for children. Thus, such a purchase affect others adversely which should not
occur as per the welfare scheme. Thus, the concerned programme is conceptualised under the
discussed ethical framework to remove the depriving features.
2 Greenacre, Luke, and Skye Akbar. "The impact of payment method on shopping behaviour
among lowincome consumers." Journal of Retailing and Consumer Services 47 (2019): 87-
93.
3 Dougherty, T., 2013. Agent-neutral deontology. Philosophical Studies, 163(2), pp.527-537.

4WELFARE PAYMENTS PROGRAMME
Effect of using the cashless debit card
The cashless debit card programme introduced by Australia in 2016 to distribute
welfare payments, emphasised on the encouragement of purchase of necessary products
related to education, health and grocery. The distribution of welfare payments will be done in
the ratio of 80:20, 80% will be added in cashless debit card and the remaining 20% will be
transferred directly to beneficiaries account. Thus, people will be able to spend 20% of the
payments as per their wish and the remaining 80% they have to spend to purchase said
necessary products. However, the bundle for a cashless debit card is not fixed; people can
buy any bundle they wish. Thus, the programme is a mixture of cash and kind distribution. It
only restricts the spending on alcohol, gambling and other similar products. Hence, the
programme is conceptualised to increase social welfare, and people are not deprived in this
case.
Response to question 3
The ethical framework of the programme and related issues
The Duty and Rule-Based Ethics framework have been used while conceptualising
cashless debit card programme. Hence it faces similar arguments as the ethical framework
faces. In the programme of welfare payment distribution through cashless debit card the
payment is made in the ratio 80:20, 80% via card and 20% transferred to account directly.
Thus, people can spend some amount of money to purchase bad products like alcohol. The
programme also does not consider other needs of the people as it only covers education,
health and grocery. Many people do not intend to consume bad products but have different
needs than the products encourage under the programme. Hence, people become immoral or
unethical for not meeting the families’ basic need, even after not indulging into bad

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products4. The programme also hampers the market for other products, which are not bad
products but get discouraged, as they are not considered in the programme.
Response to question 4
Arguments for and against the cashless debit card programme
Welfare payments through cashless debit card have an impact on both individuals’ life
and social welfare. The opposing ethical framework, in this case, is consequentialism. It
states that the wrongdoing or right doing should be based on individuals’ judgement5.
Consequences are based on the outcome of conduct in contrary to deontology, the base of the
cashless debit card programme. Thus, as per consequentialism, the programme is unethical. It
assumes that the beneficiaries will definitely consume bad products and thus taking the
precautionary measure to avoid any bad expenses. Hence, the government has decided the
outcome and consequences by itself and implementing programmes to achieve that pre-
decided outcome. Therefore, it opposes the theory of consequentialism, and that is why it
should be considered as an ethical breach.
The product in another way has a positive effect on the society as it helps drug addicts
to come out of their addiction6. It makes the beneficiaries who may indulge in bad products
purchase more responsible towards family and society as a whole. It also discourages youth
4 Bielefeld, Shelley, and Fleur Beaupert. "The Cashless Debit Card and rights of persons with
disabilities." Alternative Law Journal (2019): 1037969X19831768.
5 Ahlstrom-Vij, K. and Dunn, J., 2014. A defence of epistemic consequentialism. The
Philosophical Quarterly, 64(257), pp.541-551.
6 Hunt, Janet. "The Cashless Debit Card Trial Evaluation: A Short Review." (2018).

6WELFARE PAYMENTS PROGRAMME
from indulging into such products. Hence, there will be positive social welfare. Apart from
this, the programme will reduce the consumption of bad products. As a result, the sales of
those products eventually decrease, manufacturers of such products will be forced to shut
down, and the country will be free of addictive products in future. Hence, without enforcing
any law against such bad products, they will be abolished. Therefore, the measure taken to
restrict consumption of addictive products through cashless debit card delivers a positive
outcome that brings a favourable consequence for the society.
Response to question 5
Economic and ethical view on income management
The welfare payments distribution through cashless credit card generates significant
problems as it interferes in the individual choice and restricts in several ways7. It hampers the
independence of the people, interferes in the choice of consumption, and tracks the purchase
and consumption details. This decision completely violates the ethics of society. Everyone
should have the freedom to spend income at his or her own will8. The government should not
enforce income management; it should be a matter of choice as deprivation of individual
choice is not welcome in a free country. Moreover, there should be a balance in the
responsibility of citizens, government and parents. The government can organise awareness
regarding income management instead of enforcing law or policies to do it. However,
justification of income management can be understood through instances like the intervention
7 Barnhill, A., 2015. Choice, Respect and Value: The Ethics of Healthy Eating Policy. Wake
Forest JL & Pol'y, 5, p.1.
8 Lawson, R.A., Murphy, R.H. and Williamson, C.R., 2016. The relationship between
income, economic freedom, and BMI. Public health, 134, pp.18-25.

7WELFARE PAYMENTS PROGRAMME
of social organisations to create awareness regarding management of income and controlling
expenditure on products considered as bad for health and society such as drugs, pornography
and gambling9. These are the cases where income management is necessary to achieve social
harmony. Hence, enforcement of income management is essential and appropriate in these
cases. Thus, income management through cashless credit card programme in this context is
justifiable as it restricts consumption of addictive products10. The policies of government if
increase the positive social welfare then such policies are always welcome and sometimes
indulgences in drugs and addictive products cannot be controlled by lenient policy control.
Thus, strict policies like income management are necessary to remove such social evils.
Cashless welfare payments causing violation of ethics
There is a severe ethical issue when people's right of choice is interfered by some
enforced rule and compromises income spending11. In this case, the cashless debit card
programme is applicable for all beneficiaries irrespective of individuals’ choice of spending.
Thus, it can be argued that the programme is intending to put every beneficiary in the same
category when considering the choice of spending regarding addictive products and family
welfare. Hence, it will make the beneficiary feel that the government does not trust its citizen
9 Elkind, E., Lackner, M. and Peters, D., 2016, July. Preference Restrictions in Computational
Social Choice: Recent Progress. In IJCAI (Vol. 16, pp. 4062-4065).
10 Mendes, P., 2017. Community as a ‘spray-on solution’: a case study of community
engagement within the income management programme in Australia. Community
Development Journal, 53(2), pp.210-227.
11 Olson, J.G., McFerran, B., Morales, A.C. and Dahl, D.W., 2016. Wealth and welfare:
Divergent moral reactions to ethical consumer choices. Journal of Consumer
Research, 42(6), pp.879-896.

8WELFARE PAYMENTS PROGRAMME
regarding fair and unfair choices. Thus, beneficiaries while accepting welfare payments
might feel injustice. This is because they are not going to do any wrong thing with the
payment and use it for the important and necessary purpose only12. Some might feel that
accepting such welfare payments will disrupt their social status and may not take welfare
payment. Therefore, the rule of the cashless credit card should not be applied on all.
12 Hart, C.L., 2017. Viewing addiction as a brain disease promotes social injustice. Nat Hum
Behav, 1, p.0055.

9WELFARE PAYMENTS PROGRAMME
Bibliography
Ahlstrom-Vij, K. and Dunn, J., 2014. A defence of epistemic consequentialism. The
Philosophical Quarterly, 64(257), pp.541-551.
Barnhill, A., 2015. Choice, Respect and Value: The Ethics of Healthy Eating Policy. Wake
Forest JL & Pol'y, 5, p.1.
Bielefeld, Shelley, and Fleur Beaupert. "The Cashless Debit Card and rights of persons with
disabilities." Alternative Law Journal (2019): 1037969X19831768.
Bielefeld, Shelley. "Cashless Welfare Transfers for ‘Vulnerable’Welfare Recipients: Law,
Ethics and Vulnerability." Feminist Legal Studies 26, no. 1 (2018): 1-23.
Dougherty, T., 2013. Agent-neutral deontology. Philosophical Studies, 163(2), pp.527-537.
Elkind, E., Lackner, M. and Peters, D., 2016, July. Preference Restrictions in Computational
Social Choice: Recent Progress. In IJCAI (Vol. 16, pp. 4062-4065).
Greenacre, Luke, and Skye Akbar. "The impact of payment method on shopping behaviour
among low income consumers." Journal of Retailing and Consumer Services 47 (2019): 87-
93.
Hart, C.L., 2017. Viewing addiction as a brain disease promotes social injustice. Nat Hum
Behav, 1, p.0055.
Hunt, Janet. "The Cashless Debit Card Trial Evaluation: A Short Review." (2018).
Lawson, R.A., Murphy, R.H. and Williamson, C.R., 2016. The relationship between income,
economic freedom, and BMI. Public health, 134, pp.18-25.

10WELFARE PAYMENTS PROGRAMME
Mendes, P., 2017. Community as a ‘spray-on solution’: a case study of community
engagement within the income management programme in Australia. Community
Development Journal, 53(2), pp.210-227.
Olson, J.G., McFerran, B., Morales, A.C. and Dahl, D.W., 2016. Wealth and welfare:
Divergent moral reactions to ethical consumer choices. Journal of Consumer
Research, 42(6), pp.879-896.