Media Releases
Henry Review Must Target Disability Pension, Says CIS Report
The Henry Review should seize the opportunity to move Disability Support Pension (DSP) reform out of the ‘too hard’ basket, says a report released by The Centre for Independent Studies (CIS) this week.
In Defeating Dependency: Moving Disability Support Pensioners into Jobs, Jessica Brown, policy analyst with the CIS argues that the focus of reform efforts should be on encouraging some of the 750,000 existing disability support pensioners back into work.
‘About one in twenty working age Australians now rely on a disability pension, a figure that has doubled since the mid-1980s,’ says Brown.
‘Two thirds of DSP recipients have what could be considered moderate or mild disabilities, but less than 10% work and only 1% leave welfare each year for a job.’
There is growing acceptance that simply consigning people with a disability to a life of dependency is damaging for both the individual and the community. DSP now costs taxpayers more than $8.5billion each year – twice the cost of unemployment benefits.
However, not all disability pensioners can be reasonably expected to work. Reforms must improve the incentive for people with mild or manageable disabilities to work, without undermining the safety-net for people with more severe disabilities for whom work is not an option.
‘Policymakers must ensure that they don’t simply move people off a disability pension and onto the unemployment rolls.’
New requirements for disability pensioners to look for part time job if they could work for 15 hours a week had an immediate impact, halving the number of new entrants in one year.
But these changes only applied to new applicants and did not affect existing DSP recipients.
‘If the 600,000 disability pensioners still subject to the old system were instead subject to these new rules, many would be reassessed as ‘able to work’ and the number of people relying on DSP would shrink.’
Jessica Brown is a Policy Analyst at The Centre for Independent Studies. She is available for comment.
An embargoed copy of the report is available at http://www.cis.org.au/issue_analysis/IA120/IA120.pdf
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