Rishworth said the government wanted to give people the choice to move off the Basics Card – which quarantines 50 per cent of a person’s welfare payments and can only be used at stores approved by the federal government – as quickly as possible.

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“The time frame of implementation will be subject to the passage of legislation,” she said in a statement.

“I’ll be working with my colleagues as well as Services Australia to ensure this can occur as soon as possible.”

The minister’s comments suggest there is unease with the pace at which Services Australia may be able to implement the change.

The advice comes as almost 4000 NT residents on the cashless debit card – which quarantines up to 80 per cent of their welfare payments – will move to the new Smart Card from Monday, fulfilling a key election commitment of Labor to abolish the card.

Opposition social services spokesman Michael Sukkar said Labor’s removal of the cashless debit card was in “absolute disarray”.

“Now we see the government unable to meet their own promised timeline to transition those on the Basics Card,” he said.

“The only decent thing for Labor to do now, is to reinstate the compulsory cashless debit card and admit its grave error.”

Australian Council for Social Service social security program director Charmaine Crowe said the abolition of the cashless debit card was welcome, but urged the government to outline how it planned to move people off the Basics Card.

She said given that stores had to apply to the government to accept the Basics Card, it was an extremely stigmatising income management tool for welfare recipients.

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“The fundamental problem with the Basics Card is that over 22,000 people, most of whom are Aboriginal people in the Northern Territory, are subjected to it compulsorily,” she said.

“We urge the government to adopt a voluntary model, particularly when there is evidence that voluntary models are far more effective in achieving positive outcomes.”

Labor promised throughout last year’s election to abolish compulsory income management, but plans to switch welfare recipients in the NT to a voluntary card have been ruled out for the rest of 2023.

The new Smart Card will quarantine 50 per cent of people’s income and the customer contact will be managed directly through Services Australia, although the back-end operations will be managed by the same company which oversaw the cashless debit card, Indue.

Restrictions on spending will remain, with people unable to buy products such as tobacco, pornography, alcohol and gambling.

Under the bill to be introduced to parliament, all new welfare recipients subject to income management will be directed onto the Smart Card, as a way of phasing out the Basics Card. The card was first given to First Nations people in remote communities under the Coalition government’s 2007 NT intervention.

Griffith Law School senior lecturer Shelley Bielefeld said the government should clarify when it planned to move to a voluntary model.

“I have seen far too much harm caused to too many people over too many years through compulsory restrictions under the Basics Card and the Cashless Debit Card to be in favour of any repeat of those program dynamics,” she said.

“I am concerned about the media and political commentary in Alice Springs and how that may shape law and policy directions.”

Australian National University associate professor Elise Klein said there was “no evidence base to support ongoing compulsory income management in the NT”.

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