Couple of interesting comments.
Reforms to Disability Support Pension: Why and how and why?Posted on January 3, 2014
Touted substantial reforms to the Disability Support Pension (DSP) have apparently been “hosed down” by the PM’s office in the last few days after a late December float by Finance Minister Mathias Cormann and Social Services Minister Kevin Andrews.
I’d really wonder what is the wisdom in releasing the outline of a policy as Cormann and Andrews did on December 22 if you were going to go soft on it after bugger-all response (for obvious reasons) a week later. Isn’t the idea to drop the bomb when no one’s looking so you can get away with it? They’ve got plenty of reason to be hesitant, Abbott himself is on video on Insiders on the Sunday before the 2013 election saying there will be “no changes to pensions”.
But this possible backdown is far from a firm one. Only David Ellery from the Canberra Times has reported this backing off, but in the softest terms known to science:
There is a review currently under way but there are no recommendations before the government to make changes to the [disability support] pension at this time… When recommendations are made [by the reviewers] the government will respond to them … but it will be keeping all of its [election] commitments.
Decisive! Looks like another handball to the Commission of Audit, which is looking more and more like some semi-official window dressing to shove through budget cuts.
Onto the meat of the issue, but I want to make clear I’m going to be very careful here not to make this piece a soft one about a lack of compassion. If you want to read an article about how governments are heartless for considering cutting welfare, there are others out there. This isn’t one of those.
The policy change on the table, although still fuzzy, is separating DSP recipients into two groups, ‘long-term’ and ‘short-term/young’.
Currently, DSP is the opposite of NewStart, in that it is very difficult to get on but very easy to stay on. People in the long-term group would continue to receive the DSP as normal with almost no auditing, but younger recipients (probably <40) and those with more temporary conditions would be subject to more frequent reassessments with the aim to shift them off DSP and back into work.
Note: short-term in this context is almost certainly misleading. With the current rules, you can’t even get on the DSP unless your condition won’t change for two years. In an income support context, that’s not short-term. But moving on.
The concern is not necessarily over categorising DSP recipients, but how the government is supposed to save money by doing it. Treasurer Joe Hockey, Andrews and Cormann have all individually expressed disappointment not at levels of workforce participation of people with disabilities, but at the sheer number of people receiving DSP or the cost of paying for it. Alarm bells should be gently echoing at the very least.
This is Hockey, in an interview on 2GB, flatly stating how many people there are on the DSP as an argument to reconsider sustainability.
And Andrews on as reported in The Australian:
It’s a matter of ensuring we have a system of welfare that is sustainable and fair.
This is Cormann on Sky News:
[DSP is] one of the fast growing areas of government expenditure
Cormann’s troubles me the most; it’s the whack-a-mole approach to budgeting.
Let’s take a step back. Is the list of DSP recipients growing and if so, why?
It’s definitely growing, and fast. This is the trend graph, courtesy of the Department of Social Services:
The green growth line is confusing. Focus on the growth of recipients. Between 2002 and 2012 growth was just shy of 20%. Wow! But while our population was growing by 13%. That’s still quite a large increase. Why?
Well, sidebar. Blog is a dirty word, but the government’s Parliamentary Library blog FlagPost is excellent. I’m trying not to use their web design as a measure of their legitimacy, but hey, those who live in glass houses shouldn’t write stones. Unfortunately the Australian Economic Review report they are summarising is not publicly available, but if I find a copy and need to edit this, I will.
The main drivers are familiar ones. Growing population and ageing population. Oh. Ho hum.
I think there may be a secondary (tertiary?) argument that we are seeing increasing acceptance of mental illness as a form of disability. The category finally overtook muscular-skeletal disability as the most common disability among DSP recipients in 2011, and presuming static rates of mental illness, either growing diagnoses or growing acceptance in DSP applications seem likely. But my evidence for this point is pretty limited.
A point to remember is that just because we are seeing growth, doesn’t mean we’re seeing too much growth. It is very easy to say “the number of DSP recipients is growing too fast, we must be making it too easy”. But your starting point isn’t inherently ‘right’ or ‘balanced’.
The aim of welfare reform is always the same: move people off social security and into work. Great aim. But do you do it with carrots or sticks? Or in this context, with case managers or audits?
The Gillard Government introduced a case manager-type scheme specifically to target DSP recipients under 35, in 2012. It introduced “participation plans” for young DSP recipients with a high work capacity (compared to other DSP recipients), of infrequent but regular progress meetings if they were not in any study, training or work. Unfortunately, the scheme has only been in place for 18 months, too soon to be able to judge the data. Critics would call it a fiddle. That’s probably fair. But we may be about to see how audits will work.
To finish, I want to reiterate the persuasive argument for trying to improve workforce participation rates among people with disabilities is there, just not being made to justify the Coalition’s plan. And that makes me deeply suspicious that it is not their focus.
Hats off to Paul Donoghue for finding the real issue in a timely piece for the ABC in early December:
About 18 per cent of Australians have a disability, but Australia ranks almost at the bottom for workforce participation of the disabled among OECD nations…
A 2011 study by Access Economics found that closing the gap in labour market participation between people with a disability and those without by a third would add $43 billion to the nation’s GDP over the next decade.
I’d love a conversation with the starting point of these two stats. Too bad we’re not having one.
lackingps.wordpress.com/2014/01/03/dspreforms/Thursday 2nd January 2014
Jobs – not Newtart – are “the key to disability pension reform”by Alan Thornhill
Jobs not Newstart the key to disability pension reform, according to experts in this field.
The following article, prepared by three of them, for the National Times, is reproduced below.
It was written by Dr Cassandra Goldie, CEO Australian Council of Social Service, Ms Maree O’Halloran, Director National Welfare Rights Network and Mr Craig Wallace, President People With Disability Australia.
The Abbott Government’s proposed overhaul of the Disability Support Pension has caused significant anxiety for many who live with a disability and at the worst time of the year.
Once again, media reporting suggests that we have a crisis, with too many people on the payment who should not be there, likely because they are malingerers or worse, fraudsters.
The facts tell a very different truth. There are a number of drivers of the total number of people on the DSP numbers but none have anything to do with people being either bludgers or cheats.
As Government reports confirm, the rise in those accessing the DSP over the last decade is due to a combination of our ageing and increasing population, the rise in the age pension eligibility age for women, improved survival rates following traumatic health conditions, better disclosure of people who have a mental illness, the closing off of other payments such as the widows allowance, and crucially, sadly, a significant reduction in the employment rates of people with disability partly due to structural changes in the labour market.
In the last two years however, we have in fact seen a reduction in the rate of successful new grants of DSP cases due to further tightening of the eligibility criteria. Only those who have had medical confirmation that they are unable to perform a minimum of 15 hours of work per week for at least two years can now be considered. Due in part to these measures there has been a 1.2 percent decline in the number of people accessing the DSP.
As Paralympics gold medallist, Kurt Fearnley laid out in his Australia Day speech earlier this year, unemployed people with a disability live in or near poverty; this is more than double the OECD average of 22 per cent. Australia ranks 21st out of 29 OECD countries in employment participation rates for those with a disability. Worse, we rank 27th out of 27 in terms of the correlation between disability and poverty.
Yet, in flagging this review, Minister for Social Services, Kevin Andrews has failed to rule out moving disability pension recipients across to the inadequate Newstart unemployment allowance. The net result of such a change would see a reduction in income of $155 per week, placing even greater pressure on people who are already facing multiple barriers to getting a job.
The focus of reform should not be on how to move people off the disability pension. Instead, it should be on how to get people into ongoing employment while ensuring those unable to get paid work can lead a decent dignified life with adequate income support. This is our social contract.
Both Government and private enterprise can and should do more to increase employment opportunities for Australians with a disability. In the Australian Public Service for example, employment of people with disabilities has more than halved from 6 percentage points in the early nineties to just 2.9 percent. The latest State of the Service report showed that the public service is losing three times as many people with disabilities as it is hiring, as numbers in the service hit a 20-year low.
The Abbott Government cannot afford to repeat the mistakes made by former Governments of both political persuasions, where welfare reform involved little more than shifting vulnerable people onto lower payments, including people with disability and single parents, while failing to tackle the barriers to improving employment outcomes. This is one of the major reasons why poverty is on the rise.
The Abbott Government should put politics aside and look at expanding the former Government’s disability employment reforms. This includes the adoption of a policy approach that prioritises the long-term economic benefits associated with increasing workforce participation among people with a disability who are able to work over any potential short-term desire to reduce expenditure by shifting vulnerable people on to significantly lower welfare payments.
Rarely in public policy do occasions exist where both the economic and moral imperatives neatly align. This is such an occasion.
People with disabilities desperately want to be independent and to benefit from the dignity of paid work. The country needs more people in the workforce. The big reform we need in disability support is to provide these job opportunities.
The last thing we need is to plunge people further into poverty by cutting their payments.
privatebriefing.com.au/2014/01/02/jobs-not-newtart-are-the-key-to-disability-pension-reform/
