Welfare conditionality, where income support payments are tied to prescribed activities or alternatively good behaviour, has intensified in recent years. The toughest form of conditional welfare is arguably compulsory income management (IM), which involves the quarantining of between 50 and 90 per cent of a participant’s benefit payment for spending on food, rent, and other essential items in order to reduce substance abuse, and enhance socially responsible behaviour particularly around the care of children. This qualitative study examines the views of IM participants and community stakeholders in the BasicsCard sites of Greater Shepparton and Playford. Findings are presented regarding practical experiences of IM, including financial management; the socio-emotional impacts of IM; and whether IM has addressed key program objectives. It is concluded that the social harms of IM outweigh any perceived benefits and may particularly disadvantage already vulnerable groups such as women and Indigenous Australians. IMPLICATIONS Compulsory IM contains significant hidden harms, including social stigma and shame, and does not seem to be an effective means of addressing chronic social problems. A voluntary targeted IM scheme may have more utility, particularly if allied with a suite of complementary holistic support services.