Greek Government to Curb Cash Use of Welfare Recipients

The Greek government has announced plans to move welfare recipients away from cash, mandating that at least half of their benefits must be spent through electronic transactions.

Newspaper Kathimerini reports that officials have stated a shift to cashless payments will ‘cut down on tax evasion’ since cash can be spent anonymously. Cashless transactions can be tracked, creating a profile of each welfare recipient showing how they are spending the money they receive.

As observed during the Australian government’s recent experiments with cashless welfare, cash provides financial empowerment for those on benefits. It enables them to purchase second-hand within their local communities and buy competitively-priced products at cash-only markets. It is also a valued budgeting tool, with many people finding its physical nature beneficial for visualising and managing their essential and non-essential purchases.

Privacy and personal autonomy are also jeopardised by cashless welfare, since transactions are not only tracked but also controllable, should authorities so choose. In Australia, welfare money was ringfenced on payment cards that were only usable in certain shops, and also limited what their owners were allowed to purchase.

The stated goals of Australia’s intervention were to ‘support recipients in better managing their finances and encourage socially responsible behaviour.’ Researchers from four universities examining the scheme found it caused ‘an overwhelming number of negative experiences’ as people were shamed and stigmatised. The cards were a very visible mark that a person was receiving benefits, and the limitations they placed on personal choice damaged both self-esteem and financial management.

The system was scrapped after a change in Australia’s government, so there is hope that feedback from Greek welfare recipients may also lead to a course adjustment, allowing people to spend their money as they choose, including decisions on whether to buy goods using cash or cashless options.