Ideas@TheCentre

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Bipartisan agreement to defeat dependency

Jessica Brown | 30 April 2010
True bipartisan agreement is rare. But it seems we have just that over the issue of Disability Support Pension (DSP). Both Labor and the Coalition tightened eligibility criteria for DSP. Both argue not only that we can’t afford to have an ever-growing chunk of the working-age population permanently on welfare but also that many people who would otherwise be on DSP personally benefit greatly from work.

But the conviction that it is politically difficult to move some of the existing 750,000 disability pensioners back into work also seems to be a bipartisan one.

The result is a system that applies different rules to different recipients. Anyone who applied for DSP after the Howard government announced its Welfare to Work reforms in 2006 was rejected if they could work 15 hours or more a week.

This had an immediate impact on the rate of DSP growth, which halved in the space of one year.

But anyone who has been on DSP since before the reforms – about 600,000 people – can keep their payment until they are assessed as being able to work 30 hours a week.

This means that two people with the same ability to work can be assessed differently depending on what year they applied.

About 1% of disability support pensioners leave the payment for a job each year. Waiting for the number of DSP recipients to fall naturally will take decades.

Applying the 15-hour rule consistently to all DSP recipients would undoubtedly result in a large number being reassessed as able to work and moved onto Newstart allowance.

Of course, any move to reduce DSP numbers must be matched by both a greater effort to help people with a disability to find work and a greater effort to ensure there are jobs available, or the reform will simply result in many disability pensioners joining the ranks of the long-term unemployed.

But successfully reducing the number of people reliant on DSP will pay dividends for both the wider community and the individuals.

Jessica Brown is a Policy Analyst at the Centre for Independent Studies. Her report Defeating Dependency: Moving Disability Support Pensioners into Jobs is released today.