Sharp Decline in People Accessing Disability Support Pension

Tougher compliance measures have led to a sharp decline in people accessing the Disability Support Pension, with the Department of Human Services revealing almost 75 per cent of claims for the scheme were rejected in 2016-17.

The Parliamentary Budget Office (PBO) released a report on Tuesday examining the factors underlying a recent decline in DSP expenditure, with new DSP participants declining from a peak of almost 89,000 in 2009-10 to around 32,000 in 2016-17.

It found that tougher eligibility requirements introduced by the Gillard government in 2012 had led to the decline.

“The main driver of the slowdown in DSP expenditure has been policy measures which have focused on stemming the flow of people onto the payment,” the report said.

“In particular, new compliance and assessment measures, which applied from 1 January 2012, have led to a sharp decline in the number of people being assessed as being eligible for the payment.”

DHS also revealed in response to a Budget Estimates question, that almost 75 per cent of applications for the DSP were rejected in 2016-17.

“In the 2016-17 financial year, the department assessed over 97,000 claims for Disability Support Pension (DSP). Of these, approximately 27,000 were granted and 70,000 were rejected,” DHS said.  

As a result, current projections for expenditure in 2027–28 have been lowered by $4.8 billion compared to 2017–18 budget projections.

73% of all DSP applications were rejected last financial year.

Around a quarter of Newstart recipients have some form of #disability.

Something has to change.#dignityNOTpoverty pic.twitter.com/4Dat4vY9Yy

— Anti-Poverty Network SA (@AntiPovertyN_SA) February 14, 2018

Minister for Social Services Dan Tehan, told Pro Bono News that the government welcomed the reduction of people on the DSP.

“The government has introduced a number of important reforms to control DSP spending and target payments to those people who need it most,” Tehan said.

“The measures implemented by the government are working. As at September 2017, the number of recipients on DSP reduced to around 759,000 recipients, down from a peak of 833,000 recipients in March 2014.”

But the CEO of the Australian Federation of Disability Organisations (AFDO) Ross Joyce, said a reduction in DSP participants was not necessarily a good thing.

“My concern is that there seems to be a notion that with the numbers [of people on the DSP] lessening, it equates to people with disability ending up in mainstream employment, but that isn’t [supported] by the figures for people with disability in employment,” Joyce told Pro Bono News.

“Those figures actually haven’t moved in the last 30 years.”

The PBO report also highlighted a change in the composition of new DSP recipients representing “a key shift in the dynamics of the payment”.

Broadly, an increasing share of participants are presenting with psychological conditions rather than physical disabilities.

“In 2001–02, recipients with musculoskeletal conditions accounted for around 40 per cent of new DSP recipients. This fell to 11 per cent in 2016–17,” the report said.

“Over the same time period, the share of new recipients with psychological conditions increased from 25 per cent to 33 per cent, and the share with intellectual conditions increased from 6 per cent to 17 per cent.”

Because an increasing proportion of new DSP recipients are under 40 and have psychological and intellectual conditions, the report warned that “an increasing proportion of new recipients are more likely to stay on the payment for a longer period”.

“As most recipients with these conditions remain on the payment until they receive the age pension, this younger cohort could remain on the payment for over 20 years,” the PBO said.

“Around a decade ago, in contrast, the average period of receiving the payment was around 10 years. This structural change will contribute to growth in DSP expenditure over the longer term as the total number of recipients will remain larger than would have otherwise been the case.”

However Tehan denied that the increased share of recipients with psychological conditions was a concern.

“Since the introduction of the revised impairment tables in 2012 the number of people granted DSP on application for psychological/psychiatric conditions per year has roughly halved,” he said.

The social services minister also said the government wanted to restrict people from accessing the DSP solely on the basis of drug or alcohol dependency, to “keep the focus on employment”.

“In the 2017-18 budget, the government announced its intention to tighten the assessment criteria for the DSP to ensure no one qualifies for the DSP solely on the basis of drug or alcohol dependency without demonstrating a permanent functional impairment,” Tehan said.

“We did this to keep the focus on employment and added an additional measure so job seekers can now count drug or alcohol addiction treatment towards their annual activity requirements. Getting treatment for a drug or alcohol problem can help people get a job.”

Joyce said this plan sounded good in theory but he expressed concerns about the effect on those who could not shake their addiction.

“It’s great if it actually works. What we don’t know is how far these programs go and what level they cut back on potential support to some of the people currently there,” he said.

“The other worrying part is [thinking about] people who may not be able to necessarily curb addiction… and what happens if this is the case.”

The Australian Council of Social Service (ACOSS) said lower spending on the DSP hid the increasing number of people on unemployment payments with a limited capacity to work.

Successful claims for the Disability Support Pension have dropped from almost 64% in 2010 to 25% in 2016. If these people cannot find work, they'll likely be on Newstart, which is $174 per week less than the pension. pic.twitter.com/ZovXwgfrPW

— ACOSS (@ACOSS) February 21, 2018

ACOSS CEO Dr Cassandra Goldie stated that the drop in successful applications for the DSP resulted in large quantities of people with a disability being forced onto the Newstart Allowance and receiving $170 per week less.

“Almost one third of people on Newstart Allowance have a partial capacity to work,” Goldie said.

“A partial capacity means a person, because of illness or disability, is defined by Centrelink as only able to work between zero and 30 hours per week. Yet they are forced onto Newstart Allowance, a lower rate of payment than DSP, and must compete with other jobseekers who have full capacity to work.”

Goldie added that people could appeal a decision denying them DSP – with a strong chance of success – but often needed assistance from community legal centres.

“How many people are out there who have been denied DSP but are living with the wrong decision and haven’t appealed it?” she said.

“Our social security system should ensure that people get the right support they are entitled to.

“We must ensure people who need the DSP receive it.  And we must do better in terms of employing people with a disability.”

Australian Greens Senator Rachel Siewert said the slowdown in DSP expenditure should not be seen as a positive thing by the federal government.

“Rather than focusing on driving down DSP rates, we should be focusing on revenue raising measures so that those with disability don’t have to desperately defend their right to receive support,” Siewert said.

Joyce said he believed the current eligibility criteria for the DSP was too tough, and hoped AFDO could work through the issue with Tehan.

“Currently we are looking at a policy from our perspective on the DSP and we want to put a paper forward on that. Certainly we thought the [2012] criteria was too restrictive and did tighten it up too much from our viewpoint and the viewpoint of our membership,” he said.

“We think there’s a need to continue with ongoing support for people that require DSP payments and that we need to seriously look at what are the impacts of that.

“We certainly realise that Minister Tehan is new to the role and getting into it. And we are looking forward to having a productive relationship with the new minister and working these and other issues through in a collaborative way.”