This is part of the full submission by Welfare Rights on the tables.
1. Introduction
The National Welfare Rights Network (NWRN) welcomes this opportunity to provide comment on Schedule 3 of the Social Security and Other Legislation Amendment Bill 2011 on the revised impairment tables which were released on 30 July 2011 and related issues.
The impairment tables have not been significantly updated since 1993, though some modifications took place in 1997. The Bill, should it be passed in its current form, will have major implications for our existing income support system. The Bill will see the impairment tables removed from the Act, enabling the relevant Minister in future to revise or replace the tables through a Ministerial determination (Disallowable Instrument). NWRN opposes this aspect of the Bill.
The tables play a major role in determinations related to eligibility for the Disability Support Pension (DSP). The initial outcomes of the trials on the application of the new tables indicate that between 36 to 45 per cent of existing successful claimants would fail in any future claim for DSP.
Given the major implications for individuals denied the DSP, decisions to make dramatic changes as suggested with inadequate time for rigorous scrutiny is dangerous. The potentially adverse consequences for individuals include being placed onto the Newstart Allowance, which is a third less than the rate of the pension, and potentially facing activity obligations which cannot be fulfilled. In the latter case, financial penalties may well be applied. Existing concerns with the DSP assessment and Job Capacity Assessment process of long-standing are likely to be exacerbated by a rush to make major changes to the system. If a balanced approach is not achieved, the consequences could be disastrous for many people with disabilities, their families and carers.
NWRN fully supports the right of people with disability to work and applauds the Government’s objective of assisting people into work. However, it is important that people who are unable to work are not adversely affected. The NWRN has made a number of public statements to this effect.
In our experience people with disability do want to work, but only 54 per cent of people with disability in Australia are in paid employment. Many people with disability are let down by an unwillingness, even on the part of large public and private sector employing bodies, to tailor employment and workplace conditions to accommodate the disability. Employers may be under-estimating the productivity output of people with disability and over-estimating the potential for insurance risks.
Government too has shown less leadership than it should in this area, with the number of people with a disability employed in the Australian Public Service dropping from 6.6 per cent in 1986 to just 3.1 per cent in 2010. The Federal Disability Commissioner Graeme Innes, generally an opponent of targets, has called for stronger action to fix this policy failure and supports the introduction of targets or quotas to address the decline in the employment of people with disabilities in the public service.
In the recent period there has been a deliberate and concerted attempt to misinform the Australian public by suggesting that the numbers of people receiving the Disability Support Pension have reached a crisis point. The point behind this messaging about DSP grants being “out of control” is to foster a climate and appetite for major reductions in the numbers of people eligible for the DSP and reducing future entitlements for people with disabilities.
The recent Productivity Commission report into Disability Care and Support summed up the range of DSP policies in the recent Federal Budgets as ‘intended to promote the social and economic participation of people with disabilities (and to save money)’.
The published data and facts about the DSP do not show that it is ‘out of control’. For example, the Department of Families, Housing, Community Services and Indigenous Affairs stated in its submission to the Productivity Commission that: ‘The number of individuals receiving the DSP is growing slowly’. The growth is due to four factors: overall population growth; Australia’s ageing population; substantial growth in the number of older women receiving the DSP because of the reduction in other social security payments under previous governments, and a growth in the proportion of young people aged 16-17 receiving the DSP.
NWRN has not undertaken a detailed assessment of particular proposed ratings in this submission. We have attempted to place the revised impairment tables in the context of other imminent and mooted changes to the DSP as well as in the context of the social security system overall.
2. Major concerns – a summary
Below we briefly highlight the main concerns that stem from the current Bill.
• Arguments for removing the Impairment Tables from the Act and placing them into a Disallowable Instrument are weak and the recommendation from the Advisory Review for 5 yearly reviews of the Tables can be done without removing the Tables from the legislation.
• Significant numbers of people who are denied the DSP will be placed onto Newstart Allowance, which is $128 a week less than the pension, has a much harsher income test and taper withdrawal rate and is inferior to the DSP in many ways (for example, there is no eligibility for the Pensioner Education Supplement and the Liquid Assets Waiting Period applies).
• There are major questions with the current quality and accuracy of Job Capacity Assessments (JCA) which are likely to be exacerbated by the proposals. A 2010 DEEWR survey reported that 50 per cent of Disability Employment Services expressed a ‘lack of confidence in JCA assessments of work capacity’.
• Current DSP recipients will be assessed under the new Tables at their next medical review. At this stage, it seems that 38 per cent of these current recipients will lose eligibility when review under the harsher Tables. Manifest cases (around 5 per cent), were excluded from the sample. A more wholesale application of medical reviews such as is currently occurring in the United Kingdom could leave many people destitute trying to survive on the much lower Newstart Allowance after many years out of the workforce.
• Rejections of claims for the DSP stemming from the revised impairment tables and the 3 September 2011 changes to the DSP would be expected to result in a significant increase in the number of people seeking appeals. Currently DSP related appeals account for one in four reviews at the Social Security Appeals Tribunal (SSAT). Should the current proposals become law, increased pressure will be placed on an already stretched and under-resourced Centrelink review and appeal process and will translate to extra demand for assistance at the SSAT, the Administrative Appeals Tribunal, Legal Aid and also the Commonwealth Ombudsman. There will also be increased pressure on inadequately funded information and advice services provided by members of the NWRN.
• People with significant disabilities on Newstart or Youth Allowance will struggle to meet activity requirements and will be confronted by an increasingly complex, punitive and harsh compliance regime.
• Concern over the reduction in impairment ratings scale to a maximum of 30 points, which may limit choices of medical practitioners and assessors. Practitioners may tend to moderate an assessment that, on the current larger scale Tables, would have achieved a higher rating of impairment.
• Sufficient numbers of employment service providers may be poorly equipped to assist and provide appropriate levels of support for increasing numbers of people with serious disabilities, including mental health conditions and other chronic and episodic conditions.
• Concerns that the 5 and 10 point ratings criteria are under-rated across a range of Tables. Concerns for individuals with 15 points as they are likely to face major difficulties in the employment services system. The removal of existing ‘miscellaneous’ Tables 20 and 21 will significantly limit options for many people with co-morbidities, which can be degenerative and ongoing. This change will particularly affect, by way of example, those people experiencing serious constant pain, fatigue, and people undergoing cancer treatment or with terminal illnesses.
3. A realistic, workable approach to disability and employment
The difficulties experienced by people with disabilities in traversing a complicated and stressful assessment process to secure an adequate income is often compounded by a labour market which fails to consider or be responsive to the ‘real life’ experiences of people with disabilities. The new tables are said to be a significant improvement because of the focus on functionality, and ‘on what a person can do, as opposed to what they cannot.’ In fact, the focus on ‘ability’ has long been a fundamental tenet of the assessment process, especially since 2006. Assessments that disregard the impacts of a person’s medical condition may undermine users’ confidence in the system leading to negative outcomes.
Another feature of the existing assessment process that creates unease and difficulties for people is that individuals own ‘lived experiences’ are given no weight in the assessment. What this means in particular, amongst many things, is that the situation of the local labour market is not considered relevant nor are their own real job prospects.
The modernisation of the impairment tables, in relation to the use of hearing aids, for example, makes sense, though it is unlikely that their use would have been a critical factor in the granting of DSP claims.
Until the real experiences of people with disability are properly accounted for in the assessment, the processes for granting DSP will continue to be problematic. This is particularly so if the main motivation behind these proposals is on reducing the numbers of people on the DSP rather than increasing the employment of people with disabilities.
The failures of the labour market if not properly addressed will mean that people with disabilities, met with in our view an unfair system, will further spiral into social disadvantage and exclusion. A realistic, fair and workable approach to employment for people with disabilities is one that takes into account the conditions of the economic and labour markets, a focus on assisting rather than restricting the rules, and addressing the barriers, inequities and deficiencies in the current system.
4. Some facts about the Disability Support Pension in Australia
Before proceeding to explore some of these issues in greater detail it is useful to obtain a clearer understanding of the situation in which many people with disability find themselves. We have also assembled some comparative information with respect to the Disability Support Pension and Newstart Allowance. We do so to highlight the potentially negative consequences which may arise for people who are moved onto Newstart Allowance. The payment gap between the pension and the allowance and associated work disincentives are key issues which must be addressed in order to remove the participation roadblocks which confront people with disabilities.
• The share of working age population on DSP was around one in every 20 people in 2010, roughly equivalent to enrolment in disability pension programs in other Organisation for Economic Co-operation and Development countries.
• Very few DSP recipients receive any income from employment, with just 9.2 per cent reporting employment earnings at June 2010. Fewer still are engaged in looking for work, with just 0.8 per cent of people on the DSP (around 6,600 of 807,000) using Job Services Australia.
• There are currently about 112,000 people with disabilities on Newstart Allowance (Partial Capacity) as a result of the 2006 ‘welfare to work’ policies. They are required to look for work for 30 hours a fortnight and generally must look for six jobs a fortnight (as opposed to 10 jobs under Newstart Allowance activity requirements). People who are assessed with a ‘partial capacity to work’ will be entitled to the Pensioner Concession Card (PCC). (It is unclear what proportions of current or future recipients who are assessed under the new tables will have a ‘partial capacity to work’. It would be expected that most would qualify for a PCC, though this needs clarification).
• Around 80 per cent of DSP recipients are on the full pension (as very few have income above the $150 per fortnight that reduces payments).
• Around 7 per cent of current recipients leave the payment each year, with around 2 per cent leaving payment altogether due to employment, but often cycle on and off the DSP.
• Over 20 per cent of DSP recipients live in public housing, with a high proportion living on their own. In total, 101,372 single people and 22,876 couples lived in public housing as at December 2010. Public housing tenants are amongst some of the most disadvantaged and socially isolated members of the community.
www.welfarerights.org.au/pages/policypapers.aspx19-Mar-12 Social Security and Other Legislation Amendment
