No Blowout of Disability Support Pension Costs - NFP
2 November 2015 at 4:30 pm
The number of people receiving Disability Support Pensions in Australia is in decline and so there is no blowout occurring despite media claims to the contrary, according to the CEO of peak body, National Disability Services, Ken Baker.
“The number of DSP recipients is falling; so is the proportion in work,” Baker told Pro Bono Australia News.
“Despite claims in The Australian newspaper that the Disability Support Pension (DSP) ‘has reached an unsustainable point’, the number of DSP recipients has actually declined over the past year. In June 2014, 830,454 people were in receipt of DSP; in June 2015, this had fallen to 814,391,” he said.
“Between 2013 and 2014, the number of DSP recipients did increase by 8,716, but over the past four years, DSP recipients have declined despite general population growth. In June 2011, there were 818,850 DSP recipients.
“The front page headline said 'Disability burden hits $17 billion a year'. The actual cost of DSP in 2014-15 was $16.54 billion, an increase of 2.7 per cent on the previous year. The rate of increase of DSP outlays should flatten as the fall in DSP numbers takes effect. DSP is indexed at a higher rate than NewStart.
“The Senate blocked a 2014 Budget measure to reduce the indexation rate of pensions from 2017.”
Baker said the decline in the DSP population reflected several policy changes introduced over the past four years, including new Disability Impairment Tables; participation (work activity) requirements for DSP recipients under 35 years who have an assessed work capacity; and Centrelink-nominated doctors undertaking medical reviews.
“The underlying problem is not DSP growth, but employment. An indication is the low proportion of DSP recipients who have any income from employment. In 2011, this was only 8.5 per cent; by 2015, it had fallen to 8.2 per cent. Meanwhile, the proportion of Australians with disability in employment remains static,” he said.
Baker said the Department of Social Services is developing proposals for a new approach to disability employment, with the release of a discussion paper expected this month.
“This is a promising development. If the Government wants to contain the growth in DSP outlays, it should focus on expanding employment opportunities for people with disability, strengthening disability employment support, and reducing disincentives arising from the interaction of income support rules and wages,” he said.
“It is not progress to squeeze people off DSP if all that happens is they they go on to Newstart. It is progress if they can find and sustain a job so the government needs to focus its efforts and ingenuity on getting people with disability into work.
“I am sure that the Not for Profit sector would be only too willing to assist with that, in working out how best to support people with disability to get and hold jobs.
“I think if you go back to the McClure report, a very ambitious and far reaching report on welfare reform, three quarters of that was on the way we can create more employment opportunities and support more pathways to jobs for more people and not much of that has been taken up by Government.”
Former Disabilities Minister, Mitch Fifield, weighed in on the issues of Disability Support Pension when questioned by media, saying that the Government spends a billion dollars each year to help people into work through the Disability Employment Service program, the disability equivalent of Job Services Australia.
“Now that has a high failure rate, and that’s why we’re reviewing that in the lead up to the current contract expiry,” Minister Fifield said.
However, Baker said he did not accept that it has a high failure rate.
“I think that’s an unfair characterisation. That’s not to say that things couldn’t be done better but one of the great restrictions on that program is there about 900 pages of rules that apply to the programs so that all the things that we know are good in best practice provision such as flexibility responding to individuality of job seeks all of that is heavily restricted by heavily prescriptive program which just has layers and layers of red tape,” he said.
“We have to get rid of a lot of that to allow service providers to apply their expertise and be flexible and we have to allow people who have disability who want to work, to put more weight on their preferences, career aspirations and their choices.”