Abstract: This paper reports on the results of the t1rst year of a four-year study of the relationship between indigenous people and the welfare system in two communities: Kuranda in North Queensland and Yuendumu in Central Australia. The work has been conducted by a group of researchers at the Centre for Aboriginal Economic Policy Research at the Australian National University and partially funded by the Commonwealth Department of Family and Community Services (DFACS). The broad objective of the research has been to document the nature and extent of the relationship between indigenous people and the welfare system and to draw out the implications for family welfare policy and for the delivery of welfare services. A fuller discussion of the methodology and results is available in the monograph Indigenous Families and the Welfare System: Two Community Case Studies edited by Diane Smith (2000). The research has adopted two broad approaches. One approach is based on aggregate data from the Population Census and from administrative sources. The other approach is field-based including interviews with welfare recipients and key individuals in the communities such as those working in education, health, housing and finance. The success of the t1eldbased research has been highly dependent on the support of the local community and the use of indigenous field assisl1mts to facilitate the interviewing.