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Post by Banjo on Dec 19, 2014 11:41:50 GMT 7
WELFARE WRITES A blog published by the Welfare Rights Centre NSW More social security measures flagged in the MYEFOBy welfarerightscentre on December 18, 2014 • ( Leave a comment ) The government has flagged more changes to social security and family assistance law and administration in the government’s 2014-2015 Mid-Year Economic and Fiscal Outlook (MYEFO). There is a list here. The main new measures are: A revised assessment process for disability support pension claims from 1 January 2015; Abolition of payment of the disability support pension to certain persons confined in a psychiatric institution; Extension of the proposed freeze on family tax benefit rates for an additional year; and Extension of the proposed freeze of eligibility thresholds for income support payments (except for pensions) for an additional year. Revised assessment process for disability support pension claimsUnder current arrangements, a person claiming disability support pension (DSP) is given a Department of Human Services medical report form for their treating doctor(s) to complete. The information on this form, and any other supporting evidence (such as primary reports and test results), are taken into account by a DHS decision-maker, a Job Capacity Assessor, when determining eligibility for the disability support pension. From 1 January 2015, the government proposes to change the existing assessment process for DSP by having doctors employed by DHS undertake the assessment, dispensing with the treating doctor’s report. The new process is to be called a Disability Medical Assessment (DMA). Legislation is not required to implement this administrative change. The measure will be implemented progressively, as a tender process to engage doctors is necessary. The government intends to implement the measure fully by 1 July 2015. Between 1 January and 1 July 2015, the new process will be applied to new DSP claims by people 35 and under, living in metropolitan areas. They will be requested to submit existing medical records with their claims, but not the DHS medical report. It appears that they will still be assessed by a DHS Job Capacity Assessor, but some will also be referred for assessment by a DHS employed doctor. More detail is needed before conclusions can be drawn about this proposal, but I think this could be a positive change for some people. One of the problems many people who call this Centre face is collecting sufficient evidence to support a DSP claim, including getting their treating doctors to complete the DSP form. These problems can be greater for disadvantaged people. For example, people in rural and remote areas who have to travel further to see doctors, especially specialists, and low-income people who may move a lot or experience periods of homelessness and therefore have more difficulty establishing long-term relationships with doctors. Many doctors are reluctant to complete the form, or complete it hastily and do not provide sufficient information which may affect the DHS decision-makers assessment of the evidence. For example, the DHS medical report asks: Within the next 2 years the effect of this condition on the patient’s ability to function is expected to: Resolve Significantly improve Slightly improve Fluctuate Remain unchanged Deteriorate Uncertain It then asks for details. Often doctors tick “uncertain” and provide no details. What the doctor sometimes means turns out to be “I don’t know, anything could happen, but realistically this patient’s health is not going to get better”, but Centrelink decision-makers reject the person’s claim on the basis that their condition has not stabilised and they might get better. This new process might avoid some of those problems, which disproportionately affect the most vulnerable, by focussing on an assessment of primary medical records by a doctor who will be involved in assessing many DSP claims. Abolition of disability support pension for certain people confined in psychiatric institutionsGenerally, a person who is in gaol cannot be paid a social security payment. This includes situations such as where a person is imprisoned after being refused bail before trial, is imprisoned following conviction and where a person is in psychiatric confinement following conviction for a criminal offence. There is an exception where a person has been charged with a criminal offence and, as a result, is in psychiatric confinement but undergoing a course of rehabilitation. This includes persons found unfit to stand trail due to mental impairment or not guilty for the same reason. The government proposes to realise savings of $29.5 million over four years by removing this exception. The policy of social security law in relation to payments to persons in imprisonment or psychiatric confinement has generally been to restrict their eligibility for payments, with the general trajectory being towards making the restrictions broader over time (there is a summary of the legislative history by the Full Court of the Federal Court here). The back and forth changes in policy in this area over time, and the absence of explanation for the changes that put in place the current rules, make it difficult to discern a consistent rationale. The government’s justification in the MYEFO documents is that this is about equalising the treatment of persons in gaol and persons in psychiatric confinement. It says that “[t]his will ensure the same social security treatment of people in the criminal justice system whether they reside in a psychiatric or penal institution”. It seems to me that the idea here is something along the lines that both are being provided with material support by the State criminal justice systems (housing, food etc), and so neither should receive Commonwealth income support. There is a logic to this, but the concern I have about this is that equalising the treatment of two classes of person is only fair if there are no relevant distinctions between them. There is, of course, one very significant different between the two classes of person whose treatment is to be equalised by this measure – those in psychiatric confinement because of a mental impairment are a class of person whom it was not appropriate to find criminally responsible for their actions. If, in part, the policy in this area has been that persons convicted of an offence have forfeited various rights and privileges (eg the right to vote in some cases), including the right to income support, then that should be only be applied to persons capable of being criminally responsible for their actions. It is to be hoped, also, that the government has consulted with professionals involved in the treatment of people in psychiatric detention and sought feedback on whether this measure could have any adverse impact on levels of compliance with rehabilitation and treatment programs or the integration of people later released back into the community.
Extension of the proposed freeze on family tax benefit ratesIn the original budget, the government proposed to freeze rates of payment for family tax benefit part A and part B for two years from 1 July 2014. As discussed on this blog here, the government then split its budget measures relating to social security and family assistance among four separate bills. When it did this, it retained this proposal but changed the start date for the freeze on payment rates to 1 July 2015. The bill containing this measure is currently before the Senate. The MYEFO’s reference to a one year extension to the payment freeze seems to be to this amendment. This is another example of the kind of unfair and incoherent tinkering at the edges that this government has engaged in. There is an increasing consensus that major structural reform is necessary in our tax and transfer system. Finding bits and pieces of savings here and there simply reflects the ongoing failure of this government to address major structural problems in a coherent and principled way. More specifically, freezing rates of payment is unfair and regressive. It reduces the adequacy of the family assistance scheme and inevitably has the harshest impact on the most vulnerable families. The family assistance scheme is in need of review and reform – in a principled and structured way. The Henry Tax review provided a clear and useful template for doing so. It is just a matter of political interest and will. Extension of the proposed freeze on eligibility thresholds for income support payments (except pensions)The May budget, and the four bills the social security budget measures were later split into, contain a range of measures aimed at saving money by freezing the income and asset test thresholds at which payments are reduced or cut-out entirely, for example, the freezing of income test free areas for parenting payment single, family tax benefit, student payments and working age allowances such as newstart allowance for three years. The start date for these measures was originally 1 July 2014, later amended to 1 July 2015. The bill enacting these measures is stalled in the Senate. The MYEFO’s reference to a one year extension to the payment freeze seems to be to this. Freezing means testing thresholds reduces the level at which income from work, for example, begins to affect a person’s rate of payment. It reduces the incentive to work and increases the effective marginal tax rates experienced by someone transitioning into work. This is another example of a counter-productive measure which undermines the government’s stated aims of moving people off social security and into work, while doing nothing to address the major structural problems for the budget. Matthew Butt, Principal solicitor, Welfare Rights Centre welfarewrites.org/2014/12/18/more-social-security-measures-flagged-in-the-myefo/
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Post by muggins on Dec 19, 2014 14:03:23 GMT 7
"Legislation is not required to implement this administrative change"
The Gov is targeting the low hanging fruit because of the problems they are currently having introducing new legislation.
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Post by Banjo on Feb 14, 2015 7:59:46 GMT 7
Changes to the medical assessment process for disability support pension claimsPosted on February 12, 2015 In the 2014-2015 Mid-Year Economic and Fiscal Outlook (MYEFO) the government announced that it is rolling out a new process for the medical assessment of disability support pension claims. At present the new process applies to disability support pension claims by persons 35 or under who live in a capital city. From 1 July 2015 it will apply to all new disability support pension claims (except for those made by persons found to manifestly qualify for the disability support pension).
The former process for assessing disability support pension claims The disability support pension provides income support for people who have a disability and are unable to work for 15 hours or more per week. To qualify for the disability support pension, a person must be assessed as having a physical, intellectual or psychiatric impairment of at least 20 points under a classification system called the “impairment tables“. They must also be found to have a “continuing inability to work” because of an impairment. The Department of Human Services/Centrelink administers a process for determining whether a person meets these medical criteria for the disability support pension. Under the current process, when a person claims, or indicates to Centrelink that they intend to claim, the disability support pension they are issued with a medical report form to give to their treating doctor. The report asks the doctor a range of questions about their patient’s medical conditions, for example, when it was diagnosed, any current and/or future treatment planned and its impact on them. Importantly, these questions are designed to elicit the treating doctor’s opinion about matters which are relevant to determining whether the person meets the medical criteria for the disability support pension; that is, they are not simply factual questions about the person’s medical condition as such. For example, an impairment rating of more than 0 points may only be assigned to a condition which is expected to persist for at least two years, even if any planned additional treatment is undertaken. The current form asks questions about the doctor’s opinion of the future progression of the condition in order to enable a Centrelink officer to make an informed decision about whether this condition is met. Once a person lodges their disability support pension claim and medical reports, in most cases (unless the person is found to be manifestly eligible for the disability support pension) they are required to attend a job capacity assessment. At this assessment, an allied health or health professional employed by Centrelink assesses the person’s capacity to work and medical qualification for the disability support pension using the medical evidence supplied by the person. The new process for assessing disability support pension claimsThe medical report form will no longer be used by Centrelink to help in the assessment of disability support pension claims. A person claiming the disability support pension will be asked to provide existing medical evidence relating to their medical conditions, for example, x-rays, reports prepared for workers compensation claims or specialist reports. They will still be referred to a job capacity assessment. However, in some cases, the person will be referred to a further assessment, called a “disability medical assessment”, with a doctor contracted by the government for this purpose (a “government-contracted doctor”). The doctor will provide a report to the Centrelink officer, presumably the officer with overall responsibility for determining the claim (including other eligibility criteria, such as residence, income and assets). The Department of Human Services website does not say which claimants will be selected for a second assessment. However, the Department of Social Services recently updated its policy about this process and it makes it clear that a second assessment will be used where the job capacity assessment report expresses the view that the person meets the medical criteria for the disability support pension. This means that the new disability medical assessment process will be applied to people who are found to be medically qualified by the job capacity assessor. Under the previous process, where other qualification criteria have been met, those people would have been granted the disability support pension. They must now go through a second assessment process. Presumably, if the government-contracted doctor disagrees with the job capacity assessor, their claim will be rejected. CommentChanges to the process for assessing medical eligibility for the disability support pension may be made administratively, and do not require legislative change. The basic principle for assessing the administrative process for determining medical eligibility for the disability support pension should be accuracy of decision-making. In other words, the aim should be to design an administrative process which ensures that of the people who lodge disability support pension claims, the payment is granted to those who do meet the medical (and other) criteria and, conversely, the payment is not granted to those who are not qualified. These changes do not result in a process which is designed with this aim in mind. The new process is apparently aimed only at a perceived problem of false positives; that is, granting the disability support pension to a person who is not in fact medically qualified for it. This appears from the fact that it has now become clear that the new disability medical assessment will only be used when a job capacity assessor determines that a person is medically qualified for the disability support pension. The government has not provided any evidence that there is a large number of mistakes made by job capacity assessors incorrectly determining that person is medically eligible for the disability support pension. In fact what evidence there is strongly suggests that this is not the case. For example, evidence provided as part of the Senate estimates process shows that 12,018 reviews of the continuing eligibility of recipients of the disability support pension were conducted by Centrelink in the 2011-2012 year and these resulted in 135 cancellations. This does not mean that in all of those 135 cases the person was granted the disability support pension in error. In some cases, the person may have been granted the disability support pension correctly but their medical conditions had improved since that time. Even if it were correct to say that each of those 135 cases was an example of error, you would have an error rate of only a little more than 1%. When this change was first announced, I commented that it could be a positive change if the new process was used to provide a more thorough assessment of cases where it was thought that a person may be qualified for the disability support pension, but the job capacity assessor was uncertain after reviewing the evidence they had presented. I suggested that this could address the problem I, and other welfare rights workers, see regularly, namely that certain disadvantaged and vulnerable populations may have trouble obtaining sufficient evidence about their medical conditions due to disadvantage in access to health care and health care professionals, such as Indigenous populations, and people in rural and remote areas. But this process does nothing to address this problem (the problem of false negatives, where people who are in fact qualified for the disability support pension have their claims rejected), because it is focussed solely on the perceived problem of false positives (for which there is no evidence). As in the case of false positives, there is no way to directly measure the scale of the problem of false negatives. But appeal statistics can provide some sense of the problem. For example, in the six months from 1 July 2013 to 31 December 2013, Centrelink finalised 59,618 internal reviews in relation to disability support pension claims, and the original decision was set aside in 26% of cases. It is likely that the majority, but not all, of these reviews would have concerned medical eligibility. In short, what evidence there is suggests that the number of incorrect rejections far exceeds the number of incorrect grants. Resolving these matters through the appeals system is costly, time consuming and stressful for the person involved. Job capacity assessors can still refer cases they are unsure about to the Health Professional Advisory Unit, which is a unit within the Department of Human Services made up of health professionals who provide support and advice to assessors. But it is worth comparing the scale of this unit with what will happen with the new process when it is fully implemented. The Health Professional Advisory Unit deals with less than 4000 cases per year. But the new government-contracted doctors are supposed to deal with all cases where the job capacity assessor decides the person is medically eligible. We can get a sense of the numbers involved because the job capacity assessor’s decision used to result in the person qualifying for the disability support pension (if they meet the other criteria as well). For example, between June 2012 and June 2013 there were 127,173 disability support pension claims processed, with 55,092 grants. A large majority of those grants would have involved a favourable job capacity assessment (leaving aside manifest cases). Under the new process, a government-contracted doctor will review those cases, presumably tens of thousands of the each year. This will involve a significant cost to the tax payer, presumably in the form of payments under contract to large corporate providers of health services who will tender to provide the necessary health professionals. The abolition of the Centrelink medical report also runs counter to the fundamental aim of decision-making accuracy. A job capacity assessor will now be presented with whatever primary medical evidence the claimant happens to have. However, this evidence will ordinarily not have been prepared with a disability support pension claim in mind and so may not deal with all the issues that need to be covered to determine disability support pension eligibility. How is the job capacity assessor, who will meet the person once for about an hour, and who in my experience rarely if ever contacts their doctors directly, to fill the gaps in the evidence? I suspect the answer is that the job capacity assessor will be unable to fill gaps in the evidence, and the result will that the person’s claim is rejected. As reasons are not given when a disability support pension claim is rejected, the person will have to try to figure out what the gaps where, possibly by appealing to try to elicit reasons for the decision. These problems will fall even heavier on those people who already suffer disadvantage in relation to accessing health services – people in rural and remote areas, Indigenous populations, people in financial hardship. In short, I think this change may increase the inaccuracy of disability support pension decision-making. It must also raise questions about the new medical assessment process if it leads to an increased rate of rejection of disability support pension claims, when the evidence from past medical reviews suggests few people are found to be incorrectly receiving their payment. Matthew Butt, Principal lawyer, Welfare Rights Centre welfarewrites.org/2015/02/12/changes-to-the-medical-assessment-process-for-disability-support-pension-claims/
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Post by Banjo on Feb 21, 2015 8:12:49 GMT 7
Reduction in deeming rates and indexation of the pension
by Welfare Rights Centre
The Minister for Social Services, Scott Morrison, recently announced a reduction in the deeming rates from 20 March. He said that on average part pensioners would be $3.20 per fortnight better off. He said that this was a response to decreasing rates of return on investments for pensioners. More generally, he said that it showed that the government has "a plan to support pensioners deal with rising costs of living and changing economic circumstances". When pressed, in an ABC interview, about how the claim to be supporting pensioners sits with the government's plan to change the indexing of the pension, he responded that "CPI increases have been higher than the other benchmark to date, in terms of the changes that have been made".
This post looks at the change to the deeming rates in the context of the government's proposal to change the indexation of pensions.
Most social security payments are means tested, and may be affected by a person's income or assets. Deeming is used to assess income from financial investments such as savings accounts, term deposits, shares, managed investments and superannuation investments if a person is over age pension age. The deeming rate assumes that financial investments earn a set rate of return or income, which is then applied when determining a person's rate of payment. The actual return or income the person earns is disregarded.
Currently, the deeming rates are 2% for financial assets up to $48,000 for single recipients, $79,600 for pensioner couples (at least one person in receipt of a pension) and $39,800 for non-pensioner couples (neither person receiving a pension). A rate of 3.5% applies to amounts over those thresholds.
The thresholds at which the higher deeming rate applies are indexed in line with CPI every July, while the deemed income rate is determined by the responsible Minister. It is generally adjusted in line with rates of return for investments in the market.
From 20 March, the lower deeming rate will reduce from 2% to 1.75%, and the higher rate will reduce from 3.5% to 3.25%.
Reducing the deeming rates can increase a person's rate of pension because it reduces the amount of income they are assessed as receiving. However, generally a person needs to have a significant amount of other assets before a change in the deeming rate affects their rate of payment.
Minister Morrison did not mention that the government still has a bill before Parliament which, among other things, would reduce the thresholds to $30,000 for a single person, $50,000 for a pensioner couple and $25,000 for a non-pensioner couple from 20 September 2017 (as well as pause indexation of those thresholds for three years from 1 July 2017). Reducing the threshold at which the higher deeming rate applies increases the amount of assessable income for a person with financial investments over that threshold. This may offset any benefit from lower deeming rates.
It is also very important to recognise that the majority of pensioners have very low levels of assets (excluding their home) and private income. Changes to the deeming rates have little or no impact on their rate of pension.
There may be more recent statistics, but in 2008 the Department of Social Services reported that more than half of all pensioners have less than $30,000 in total assets (excluding the family home) and over half have less than $20 a week of private income. I do not think that the current profile of pensioners is likely to be significantly different. Assuming this to be the case, then for the more than half of all pensioners with total assets less than $30,000 and little or no private income, the change in the deeming rate will make no difference to their rate of pension. The deemed return on assets under $30,000 is too small to affect their rate of payment because it is less than the income free threshold for all income support payments.
In other words, the main factor which determines the income level of a pensioner is their basic rate of pension and how it is indexed over time, as this is their sole source of income. As noted in the ABC interview, the government is still proposing to change the formula according to which the pension is indexed.
Currently pensions are indexed differently from other payments. They are indexed by the greater of CPI or the Pensioner and Beneficiary Living Cost Index (PBLCI). They are then benchmarked to a set percentage of Male Total Average Weekly Earnings (MTAWE), and brought up to that benchmark if indexation has left the rate lower.
Other income support payments, such as the Newstart Allowance, are indexed but only in line with CPI changes.
The government proposes to change indexation arrangements for pensions so that they are adjusted in line with CPI only from 20 September 2017 (in the same bill as changes to the deeming thresholds).
There is a good overview of what this change would mean for pensions in the Parliamentary Library's bills digest about the current proposal here. Essentially, while indexation to CPI should preserve the "real" value of the pension over time, it is budgeted to lead to lower increases over time - on current projections, a single pensioner is $10/fortnight worse off one year after the measure commences. The loss of benchmarking removes a measure intended to maintain pensioners standard of living relative to the rest of the population.
It is not clear, therefore, what Minister Morrison means when he says that "CPI increases have been higher than the other benchmark to date, in terms of the changes that have been made". He appears to be referring to the past, but according to the Parliamentary Library (relying on the Harmer review report) of the 23 indexation movements up to 2009, 15 changes were driven by the MTAWE benchmark and 8 by CPI. The Parliamentary Library also reports that four of the eleven most recent pension increases were driven by the PBLCI.
The accuracy of Minister Morrison's comment may depend on which time period he is referring to. In any case, it seems beside the point as this proposal is projected to result in savings because indexation to CPI will lead to smaller increases than the current indexation formula.
Given the reliance of pensioners on their pension as their sole source of income, it is the adequacy of their pensions over time which determines whether they are being supported to deal with rising costs of living and changing economic circumstances.
Matthew Butt, Principal lawyer, Welfare Rights Centre
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Post by immiadvice on Feb 21, 2015 8:52:36 GMT 7
I would think having a doctor analyze the medical records is preferable to a regular JCA. It used to be a complaint of a few that the JCA would over rule the doctors reports without the qualifications to do so. Now that cannot happen. Presumably if a centrelink doctor disagrees with a submitted report they will have to give written reasons. No doctor is going to risk their career if they are wrong. They will have to disclose all paperwork on request and for any appeals.
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Post by scallywag on Feb 21, 2015 9:51:11 GMT 7
I would think having a doctor analyze the medical records is preferable to a regular JCA. It used to be a complaint of a few that the JCA would over rule the doctors reports without the qualifications to do so. Now that cannot happen. Presumably if a centrelink doctor disagrees with a submitted report they will have to give written reasons. No doctor is going to risk their career if they are wrong. They will have to disclose all paperwork on request and for any appeals. It appears that they will still be assessed by a DHS Job Capacity Assessor, but some will also be referred for assessment by a DHS employed doctor Read more: dspoverseas.proboards.com/thread/3670/welfare-writes#ixzz3SLJSs81h JCA's already consult clink doctors and that's how they override your doctor's opinion. One of my Job capacity assessments was referred to a clink doctor and that doctor was listed on my assessment as my treating doctor despite me never having any contact with her. The info she used was supplied to her by the assessor.
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Post by Banjo on Mar 2, 2015 20:03:05 GMT 7
Inequity in access to mental health services and the disability support pension
WELFARE WRITES 9:52 AM (10 hours ago) Inequity in access to mental health services and the disability support pension by Welfare Rights Centre
The ABC reports that a major study by researchers at Monash University has found significant inequity in access to mental health services for poor people in cities, as well as rural and remote areas. People were more likely to be treated for mental health problems by a general practitioner or a general psychologist, rather than a clinical psychologist or psychiatrist.
This is disgraceful state of affairs from a public health perspective. This is a short post highlighting the flow on impact of inequitable access to health services on the fairness of the social security system.
The Monash University research is important. It confirms what welfare rights lawyers at this Centre, and others, have known for a long time, namely that disadvantaged people claiming the disability support pension may fail to qualify because of an inability to access appropriate services and therefore obtain medical evidence acceptable to Centrelink of their medical conditions. The impact of inequitable access to medical services is particularly salient in the area of mental health and in communities, such as rural and remote Indigenous communities.
To qualify for the disability support pension because of a mental health condition, the law requires evidence from a clinical psychologist or psychiatrist. No amount of evidence from a general practitioner or registered psychologist is sufficient. The inequitable impact on disadvantaged people of requiring certain kinds of evidence is one very good reason why social security law should not (and generally does not) require any particular kind of evidence in order to establish qualification for payments, or in relation to other decisions.
This inequitable impact is compounded by the new medical assessment process for the disability support pension, which I discussed in an earlier post. Under this new process, Centrelink is getting rid of its existing medical report form, which asks a person's treating doctor a range of questions relevant to assessing their medical eligibility for the disability support pension. At the same time, the government is going to contract businesses to provide medical assessment services, but these will only be used in order to second guess positive assessments by Centrelink's own assessors. It will not be used to provide additional medical assessment for people whose eligibility for the pension may be unclear, based on the information they initially provided.
Making these changes to the disability support pension assessment process only compounds the impact of inequitable access to medical services, especially mental health services, for disadvantaged people. The fundamental problem is that this new process has been designed with the wrong objective. Its objective is to reduce the number of people receiving the disability support pension. The real aim should be to ensure that people receive the right payment for their circumstances and a correct decision from Centrelink.
Matthew Butt, Principal lawyer, Welfare Rights Centre
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Post by Denis-NFA on Mar 3, 2015 20:43:05 GMT 7
Inequity in access to mental health services and the disability support pensionWELFARE WRITES The ABC reports that a major study by researchers at Monash University has found significant inequity in access to mental health services for poor people in cities, as well as rural and remote areas. People were more likely to be treated for mental health problems by a general practitioner or a general psychologist, rather than a clinical psychologist or psychiatrist. This is disgraceful state of affairs from a public health perspective. Matthew Butt, Principal lawyer, Welfare Rights Centre Thanks BanjoHe is a very sharp bloke.
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Post by Banjo on Mar 10, 2015 15:41:27 GMT 7
Responses to the 2015 Intergenerational report and the government’s pension proposals Posted on 10 March 2015
In a recent post I discussed the critical significance of indexation arrangements for the standard of living of the majority of pensioners, who have no private income or substantial assets (apart from their home).
The release of the 2015 Intergenerational Report has prompted further discussion of about the pension.
As discussed in the earlier post, the age pension (as well as the disability support pension and carer payment) is indexed to the higher of increases in the Consumer Price Index (CPI) or the Pensioner and Beneficiary Living Cost Index (PBLCI). It is then benchmarked to a percentage of Male Total Average Weekly Earnings (MTAWE), if indexation has left it below that level. Parenting payment single is also benchmarked to MTAWE.
Broadly, the purpose of indexation is to ensure that income support payments keep their real value over time, with PBLCI an attempt to measure the impact of price changes on households reliant on income support more accurately than CPI. The purpose of benchmarking is to ensure adequacy of payments and maintain the standard of living of income support recipients relative to the rest of the community.
One of the biggest savings measures in the 2014-2015 budget was a proposal to change the indexation of pensions to link it to increases in CPI only. This saves money because over time prices are projected to grow slower than wages. This bill, as well as a bill to remove benchmarking for the Parenting Payment Single and link it to CPI only, are both still before Parliament. This would bring indexation of these payments into line with the indexation of working age payments, including newstart allowance for the unemployed, and family assistance payments.
The Intergenerational Report 2015 looks at various future scenarios for the budget out to 2055, including a scenario based on passage of these bills.
Peter Whiteford, a Professor at the Crawford School of Public Policy at the Australian National University, has written an excellent analysis of what this would mean for income support recipients in The Conversation.
He points out that were these bills passed and then continued out to 2055, the age pension (and other pensions) would fall to about 16% of average wages (on the report’s assumptions), compared to the current total package of pension plus supplements which are at about 31% of MTAWE for a single person. Under current arrangements, a single person on newstart allowance would fall from 19% of MTAWE to about 10.5% by 2054-2055. Family payments, whose indexation was changed by the previous Labor government, would nearly halve relative to wages for the lowest-income families.
In short, implementation of this measure and continuation of current indexation arrangements for other payments would lead to long term budget savings only by significantly increasing inequality of income within the Australian community. As Professor Whiteford points out, because the Australian income support system is already more tightly means-tested and targeted to those on the lowest incomes than any other rich country, then any change to the rate of payment of these payments has a correspondingly significant impact on income inequality.
Rafal Nomchik, a Senior Research Fellow at the ARC Centre of Excellence in Population Ageing Research at the University of New South Wales, in another excellent article in the Conversation responding to the Intergenerational Report, has also focussed on the issue of expenditure on the age pension.
He points out that the proposal to index the pension to prices is, in effect, a proposal to cut benefits. It is therefore the more inequitable of a range of reform options available to the government because it has the biggest impact on those pensioners and others who are the poorest.
He also points out that there are policy alternatives which could realise savings but impact only on wealthier households. These essentially require changes to the means test. One option is including the value of the family home above a certain threshold in the assets test. The Commonwealth Parliamentary Library has recently published an excellent post on the history of the Pension Loans Scheme and renewed proposals to modify it to allow pensioners affected by such a change to access the equity in their home as an income stream.
Other alternatives involve increasing the withdrawal rate and lowering the thresholds for the income and assets tests.
All these proposals are worth considering because they at least attempt to realise savings from wealthier households, in contrast to the regressive proposals of the current government.
The government’s proposals are not only inequitable and regressive, they are short sighted. They do not really amount to the kind of fundamental structural reform which is needed, but really just seek to put off to a future day the kind of difficult and political risky choices that involves. For one thing, the government continues to ignore the ever increasing number of experts saying there needs to be fundamental reform of government revenue and tax arrangements.
But, more hopefully in a sense, I do not think the Australian community will actually tolerate the inequality and poverty likely to result from these changes. In other words, it is likely that a future government would have to raise payment rates again and then actually engage in the kind of difficult, but important, structural reform this government is avoiding.
Matthew Butt, Principal lawyer, Welfare Rights Centre Share this:
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Post by Banjo on Mar 26, 2015 17:51:23 GMT 7
The McClure report on family and youth payments by Welfare Rights Centre
The final report of the McClure review into the income support and family assistance system is now available. It recommends major changes to that system, including significant changes to support for people with a disability.
This post is about the report’s recommendations with respect to payments to families and young people and in particular, the recommendation to raise the minimum age at which a person can receive payments in their own right to 22 and, in effect, abolish youth payments.
Under this proposal, in most cases a family payment, paid per child, called the “Child and Youth Payment”, will be the main form of support for families with dependent children or young people up to age 22. It appears that the report is, in effect, proposing to abolish the current system of specific youth payments, as a young person under 22 would be ineligible to receive payments in their own right and once 22 they would be eligible for one of the proposed working age income support payments.
The report envisages limited exceptions to this payment structure for young people under 22 who are independent, apparently referring to the limited circumstances under the current law when a young person under the general age of independence can be treated as independent. It does not say what payments would be available to independent young people under 22, but presumably it is one of the proposed working age payments. The report does not say whether the rate of payment to an independent young person under 22 would be the same as the general rate for those 22 and over.
It seems to me that the report gives three reasons for these changes. First, it refers to the need to reduce the complexity of the current system of family and youth payments, which includes “optimum payment combinations changing with family circumstances” and “families facing multiple means tests to determine their capacity to support children on different payments”. Second, and more specifically, it relies on statistics suggesting that a majority of young people under 22 live at home to support setting the age of access to payments at 22. Third, it refers to general community expectations about the extent to which families should support young people while the finish education and enter the workforce.
The current system of family and youth payments
Family payments – family tax benefit
Currently, family assistance payments are the main form of assistance for families with children up to age 18, or until they finish secondary school. The main payment is family tax benefit part A, which is a per child payment. Family tax benefit part B is also paid to single parent families and two parent families where one parent is on a low income or not working. These are supplementary payments intended to cover the direct costs of children and are therefore paid in addition to primary income support payments to low income families.
As a supplementary payment, the rate of payment of family tax benefit part A per child is generally lower than the rate of income support payments. The means testing is considerably more generous than for income support payments, so that many families whose income makes them ineligible for income support still receive some family tax benefit payments.
Youth payments – youth allowance and disability support pension
In most cases, young people cannot receive payments in their own right until they are 18 and finish secondary school. Youth allowance is the main form of assistance for young people from 18. In most cases, young people move onto adult income support payments at 22, unless they are in full-time study in which case they remain eligible for youth allowance until they turn 24.
As an income support payment, rates of youth allowance are higher than family payments. But in most cases they are considerably lower than adult income support payments, based on the expectation that young people will receive financial support from their families and have lower needs.
Young people can also receive the disability support pension from 16 (although generally at a lower rate until age 21, unless they have children). It is also possible to be paid carer payment, but in practice this is only from age 18 and even then rare.
Independence
Currently, the general age of independence is 22. Generally, if they are under 22 and therefore dependent, youth allowance recipients are subject to parental means testing (in addition to a personal income test) and generally receive much lower rates of payment. If 22 and over and therefore independent, youth allowance recipients are not subject to parental means testing and are paid much higher rates of payment (although generally still lower than adult payments). This only applies to full-time students, as young people who are not in full-time study move onto adult payments from 22 anyway.
There are very limited circumstances in which independence can be established under 22. A young person under 22 classified as independent is not subject to parental means testing and is paid at a higher rate, and is also entitled to receive payments in their own right even if under 18 (the minimum age is 15).
There are some cases where independence can be established automatically, such as for young people who have been in state care or whose parents are imprisoned. But there are also a large number of young people who leave home at a young age due to high levels of family conflict and my experience in these cases is that it is very difficult to establish independence. The difficulty in establishing independence in these cases is the result of two main factors. First, the legal test for independence is very restrictive, as it requires the demonstration of “extreme” family breakdown, violence or risk of serious harm to the young person if they remain in the home. Quite high levels of family conflict have been found to fall short of this level. Second, it can be very difficult to obtain sufficient evidence to show that the test is met, as the relevant events and circumstances take place in the home and are often not reported by young people. These difficulties are compounded by the challenges of maintaining the trust and engagement of vulnerable young people, often from very difficult family backgrounds.
Young people can also receive the disability support pension from 16 (although generally at a lower rate until age 21, unless they have children) or (rarely) carer payment (in practice, from 18), if they meet the eligibility requirements for these payments.
Background to the current system
The current system of payments was only put in place quite recently by progressively changing the minimum and maximum ages at which family tax benefit and youth allowance become available.
Before those changes, family tax benefit was available for dependent children up to 24, while youth allowance was generally available from 16. This created a complex system where some families had a difficult choice about which payment was better for them once their child turned 16. For low income families, youth allowance was the main form of support, due to the tighter means test for youth allowance. For higher income families family tax benefit was payable, but at a reduced rate of payment. As the payments had different rates, income testing arrangements, definitions of income and periods of assessment of family income the choice between payments could be very difficult for some families and which payment was better could change over time (for example, where parental income fluctuated).
The changes which put in place the current system removed that complex choice and the attendant risk that families would miss out on their correct entitlements. Although young people under 18 could still access youth allowance in limited circumstances (or disability support pension), families were not faced with a choice, as the entitlement to an alternative payment to family tax benefit was determined by the young person’s circumstances, not family income.
By lowering the maximum age for family tax benefit purposes, youth allowance was made the main form of income support for low income families with dependent young people after secondary school. As a result of the stricter income test for youth allowance, some families with dependent children over 18 and higher incomes lost some assistance from family tax benefit as a result.
Comment
The McClure report, in effect, recommends extending the family payments system back to families with dependent young people who have finished secondary school. But it is important to recognise that this proposal would also take youth allowance away from young people from low income families. This is different from the system before 2010, which extended family payments to families with children over 18, but made youth allowance available at higher rates than family payments to young people from low income families.
In assessing this proposal it seems reasonable to assume that the McClure report does not mean to disturb some of the basic architecture of the family payments system, including more generous means testing but lower rates of payment than the income support system. It certainly gives no indication it is proposing this.
Making this assumption, what this proposal does is reverses the cuts to family assistance to some families with higher incomes and dependent children over 18 which took place from 2010. This extends some extra assistance with the costs of children to more families, many still on relatively modest incomes.
But at the same time, by closing off youth allowance before age 22 so that low income families with dependent children receive family payments only, the level of assistance to low income families could be reduced, on the assumption that family payments continue to be paid at lower rates than income support payments.
In my view, any proposal in this area should be tested against the primary aim of the Australian income support system, which is providing adequate support to those in need. How the McClure report’s proposal does in relation to this objective is very difficult to assess, as it is so abstract. But it is concerning to see family payments replace income support payments to young people from low income families, given that income support payments are paid at higher rates. If this proposal were to go ahead, the basic rates, means test and taper rates for family payments would have to be set to ensure adequate levels of payment to young people from low income households.
I am also concerned about the proposal to bar young people getting payments in their own right until 22. For a start, I do not find the McClure report’s reasons for this proposal convincing. In my view, the report exaggerates the complexity of the current system. This is not to say that the current system is not complex. But its references to the complex choices facing families are more apt to describe the situation which the current system replaced, where families with young people 16 and over did face complex choices, with the best option determined primarily by family income. But that is not the current situation where most families have no choice as to what payment to receive, and youth allowance is available for young people under 18 based on the young person’s circumstances, not parental income. There is complexity there, but it is similar in nature to the complexity that will result from the McClure report’s own system of supplements and add-ons for families – in other words, it results from attempts to recognise relevant differences in the circumstances of some families.
I also do not think that statistics about when young people tend to leave home are necessarily are basis for determining the age at which payments are accessible. For one thing, the report treats this as a fact around which the income support system should be built. But it seems equally likely to me that the number of young people living away from home is, in fact, partly a product of that system. Currently, young people do not receive payments in their own right sufficient to support themselves independently until 22 – so unsurprisingly to me, there is a big shift in the number of young people who leave home at that age.
The McClure report also relies on expectations about family support for young people. Those expectations are important, but it seems to me that the McClure report is wrong to assume that they support any position on what age young people should be able to access payments in their own right. The current system, for example, acknowledges that community expectation as the basis for the age at which parental means testing ceases, rather than the age at which the young person can receive payments in their own right.
As well as being unconvinced about the reasons for the proposal, I also have concerns about it. Generally, I think the age at which a young person should be able to access payments in their own right should be the age at which the community recognises that they are more independent in their decisions and lives, and less reliant on parents for day to day needs. Although it did not say much about this, it seems to me that this is the basic principle that the Henry Tax Review drew on in recommending that the general age of access to youth allowance be 18 (with independence and an end to parental means testing at 21).
I also have concerns based on the experience I referred to earlier of the difficulties in establishing independence for young people under current social security law. At present, a young person from a low income family (on income support) who leaves home due to family conflict or other problems at home can at least receive the lower dependent rate of youth allowance without the need to establish “extreme family breakdown”. Inadequate as the dependent rate of youth allowance is, it provides some income and independence. Under the McClure report’s recommendation, youth allowance will be generally closed off to young people and that same young person will need to establish “extreme family breakdown” or one of the other limited grounds of independence to be paid an income support payment at all. This is very troubling, as I think it risks some of those young people staying at home or being placed in a very vulnerable situation if they leave home.
There are problems with the current system of family payments and youth allowance, including the fact that youth allowance, like newstart allowance, is increasingly inadequate. The Henry Tax Review identified many of these problems, and is a good starting point. But these reforms would be incremental and leave the basic architecture of the system in place. I am not convinced that the McClure report has made an effective case for the far more significant change it proposes.
Matthew Butt, Principal lawyer, Welfare Rights Centre
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Post by Banjo on Mar 26, 2015 17:57:05 GMT 7
Bill to restrict income support payments to people in psychiatric confinement by Welfare Rights Centre
Yesterday the government introduced a bill to abolish income support payments for persons undergoing a course of rehabilitation when in psychiatric confinement after being charged with a criminal offence. This was a savings measure announced in the 2014-2015 Mid-Year Economic and Fiscal Outlook (MYEFO), where it was anticipated to save $29.5 million over four years.
As described in the MYEFO documents, the measure would have abolished income support payments for any person in psychiatric confinement, whether undergoing a course of rehabilitation or not.
The bill is narrower. From 1 July 2015, it will abolish income support payments to persons undergoing psychiatric confinement, if they have been charged with a serious offence, regardless of whether they are undergoing a course of rehabilitation or not. It also allows payments to a person who was in psychiatric confinement but is in “a period of integration back into the community”.
Despite the fact that the bill is narrower, the government says it will realise exactly the same amount of savings. It does not explain how this is so, although it may be correct because the majority of people in psychiatric confinement are there because of serious offences. Still, it is surprising given that there are apparently a number of persons, especially Indigenous Australians in rural and remote areas, who have been detained for offences which are not serious because they are intellectually disabled or severely mentally ill, but there is nowhere else for them to go.
The current situation
Generally, a person in prison (whether before or after conviction) is ineligible for an income support payment. A person in psychiatric confinement after being charged with a criminal offence is also ineligible for an income support payment, unless undertaking a course of rehabilitation. A person may be in psychiatric confinement following charge if, for example, they are being assessed for fitness to stand trial, have been found unfit to stand trial, or have been found not guilty by reason of mental impairment. This may be the result of severe mental illness, brain damage or intellectual disability.
In Franks v Secretary, Department of Family and Community Services, the Full Federal Court said that a person is undergoing a course of rehabilitation if they are undertaking activities that form part of a planned series of activities aimed at improving the person’s physical, mental or social functioning.
The explanatory memorandum to the government’s new bill characterises the Federal Court’s conclusion as a “broad” interpretation. This is a tendentious description which is not really appropriate for an explanatory memorandum. I would think that most people would think that the above definition of “course of rehabilitation” is simply common sense.
As criminal justice and psychiatric institutions are State and Territory responsibilities, those governments bear the cost of providing for people in psychiatric confinement. It appears, however, that where a person continues to receive an income support payment – normally, disability support pension – these governments have been charging them a “fee for service”; in reality, using the income support payment to subsidise their costs.
The bill
The bill provides that a person in psychiatric confinement after being charged with a serious criminal offence is ineligible for the disability support pension or other income support payments while in psychiatric confinement, whether undertaking a course of rehabilitation or not. This includes days when the person is not in the psychiatric institution, unless those days are part of a period of integration back into the community (see below).
This means that the exception which allows persons in psychiatric confinement to receive income support payments continues, but only for those charged with a non-serious offence.
The government’s basic justification for this removal of income support in the explanatory memorandum accompanying the bill is that the people affected will have their basic needs (eg food, clothing, shelter) met by State or Territory governments responsible for psychiatric institutions.
The bill defines a serious offence to include murder, attempted murder, manslaughter, rape, attempted rape, or other offences punishable by life in prison or a sentence of at least 7 years, if the offence involves loss of life or serious risk of loss of life, serious injury or serious risk of injury to a person or serious damage to property where this endangers the safety of a person.
The bill also creates a new exception to the rule preventing payments to persons in psychiatric confinement by providing that if the person is in “a period of integration back into the community” they are taken to no longer be in psychiatric confinement and can receive payments. What constitutes such a period is a matter left to the responsible Minister to determine by legislative instrument.
It appears that this new exception is intended to recognise that persons in psychiatric confinement typically have a period in which, although still in confinement, they are progressively assisted to re-enter the community and need income to help them with the costs of living and provide some independence.
The explanatory memorandum envisages that the legislative instrument will base this on relevant factors, including the number of nights the person spends outside the psychiatric institution.
Comment
In an earlier post, I raised two main problems with this measure when it was proposed in the MYEFO.
First, the measure was justified on the grounds of consistent treatment of all persons who were involuntarily confined in prison or psychiatric institutions and therefore having their basic needs met by the State and Territory governments responsible for the institutions they were confined in. I pointed out that this failed to take into account the fact that there was a fundamental distinction between the two groups, namely that those in psychiatric confinement were not morally or legally culpable due to severe mental illness, brain damage or intellectual disability.
This bill does nothing to address this concern. If anything the bill is even more morally arbitrary than the original measure. It now makes a completely arbitrary distinction between persons convicted of serious and non-serious offences, with those convicted of non-serious offences still able to be paid an income support payment if undertaking a course of rehabilitation. This is disgraceful law-making. Whether the person committed a serious or non-serious offence, they have been found not to be culpable by reason of severe mental illness, brain damage or intellectual disability. The nature of the offence is irrelevant. The bill effectively seeks to re-introduce an element of moralising judgment which has no place in this area. Further, you would think that supporting a person through a course of rehabilitation if they have committed a serious offence is more important to the community than if they have committed a non-serious offence, and yet the bill seems to take the opposite view.
The second concern I raised was that there did not seem to be evidence of consultation with experts working with people in psychiatric confinement about the impact of this measure. There is still no evidence that I am aware of any consultation with mental health experts or State and Territory governments.
It seems to be the case that State and Territory governments have been using the person’s income support payment to subsidise the cost of these institutions by charging them a “fee”. I do not think this is a rational way for the Commonwealth and the States and Territories to co-operate in relation to funding psychiatric institutions and ensuring adequate and appropriate services and support for those confined in them. But nor is suddenly removing $29.5 million from the budgets for those institutions without any apparent consultation or consideration of the impact on the vulnerable people reliant on them to meet their basic needs and, hopefully, help them to re-enter the community successfully. The South Australian health department has been quoted in media reports as saying that this will “impact on the quality of care for the majority of our forensic patients and increase the burden on the South Australian health system”.
Mental health experts have also raised concerns about the importance of income support in helping people in psychiatric confinement successfully re-enter the community, including impacting on their ability to maintain stable housing. This bill may go some way to addressing those concerns by continuing payment to persons charged with non-serious offences and allowing for payment to persons charged with serious offences during a period of integration back into the community.
I also have a number of specific concerns with the bill.
Limiting payment to persons even when outside the institution
This bill prevents payment to persons in psychiatric confinement after being charged with a serious criminal offence, even on days when that person is not in psychiatric confinement.
This contrasts with the position for a person found guilty of a criminal offence and serving their sentence by way of periodic detention. In that case, the person is not paid an income support payment only for the days actually in detention.
In the absence of a legitimate reason for treating persons with severe mental illness, brain damage or intellectual disability who have not been found guilty of an offence less beneficially than people on periodic detention, this bill amounts to unjustifiable discrimination on the basis of disability.
Definition of serious offence
Even if there were thought to be a legitimate policy objective in limiting payments only persons in psychiatric confinement because of a serious offence, the definition of serious offence is too broad.
Proposed s 9F(b)(iii) extends the definition of serious offence to an offence punishable by at least 7 years in prison involving serious damage to property “in circumstances endangering the safety of a person”. There are problems with this definition. First, it may include offences involving damage to property where the only danger was to the person undergoing psychiatric confinement, because the definition refers to danger to any person, not another person. Second, the definition potentially picks up offences which are not in the same range of seriousness as the other offences covered by this provision. A person who causes serious damage to property while suffering a severe mental illness may endanger other people (by setting a fire, for example), but this may not have been something they were even aware of. This is very different from the other offences which are encompassed by the definition, such as murder or rape.
Retrospective effect
The new bill applies to persons who have already been charged with a serious offence or are already undergoing a period of psychiatric confinement as at 1 July 2015. Its justification for this is that it ensures consistent treatment of people in the same circumstances.
The justification for the retrospective operation of this law is inadequate. Major changes to social security law affecting qualification for payment have traditionally “grandfathered” current recipients, protecting them from the change, because of concern that the impact on them will be unfair if they have ordered their affairs on the basis of the previous rules. I do not see why the severely mentally ill do not get the benefit of that principle. It seems perfectly possible that this may have an adverse impact on particular individuals. For example, a person who is receiving income support while undergoing a staged and carefully managed return to the community under the current rules, relying on that income for some of their needs and to give them some independence, may suddenly find their payments stop on 1 July, disrupting the process of rehabilitation for them.
This bill is arbitrary, discriminatory and continues this government's attempts to realise miniscule amounts of savings from the most vulnerable, while avoiding difficult structural reform. It should not proceed in its current form.
Matthew Butt, Principal lawyer, Welfare Rights Centre
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Post by dinky on Mar 27, 2015 0:17:28 GMT 7
The new bill applies to persons who have already been charged with a serious offence ?
<<<<<<<<<<<<<< Yes well it is one thing for a person to be charged with an Offence ... however it is quite another to be found guilty of said offence
Every person is innocent until proven Guilty ..... And that is Law
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Post by immiadvice on Mar 27, 2015 22:03:49 GMT 7
The new bill applies to persons who have already been charged with a serious offence ? <<<<<<<<<<<<<< Yes well it is one thing for a person to be charged with an Offence ... however it is quite another to be found guilty of said offence Every person is innocent until proven Guilty ..... And that is Law The new bill is in regards to people that have been found not guilty by reason if mental incompetence (ie. insanity). They can then be held under supervision in a hospital. Without this bill, they'd be entitled to continue to receive welfare even though they are being detained much like a prison sentence. This bill is fair.
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Post by dinky on Mar 27, 2015 23:39:35 GMT 7
Yes well they may have been found not guilty by reason of mental incompetence (ie. insanity )
However I am sure if someone from CL interviews them they will find there capable of 8 hours a week work .......And there is signs of improvement in the next 5 years
And capable of working in a call center
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Post by Denis-NFA on Mar 28, 2015 4:00:01 GMT 7
Yes well they may have been found not guilty by reason of mental incompetence (ie. insanity ) However I am sure if someone from CL interviews them they will find there capable of 8 hours a week work .......And there is signs of improvement in the next 5 years And capable of working in a call center LOL.. Forgive me dinkyI would add maybe they are or become politicians.
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