Ideas@TheCentre
The holy grail of welfare reform
Since the mid-1990s, Australia has been at the forefront of a global revolution in the way welfare payments are designed. In the past, being on welfare amounted to collecting a dole cheque. Now recipients must meet strict conditions – ‘mutual obligations’ – to receive income support.
This revolution has largely passed disability pensioners by. The number of people on unemployment benefits has fallen precipitously since its mid-1990s peak, and single parents are returning to the workforce in droves. Yet the number of people on Disability Support Pension (DSP) – currently more than 800,000 – continues to climb.
The government has introduced a series of reforms that have led to a reduction in the number of people going onto DSP but are yet to address two big issues: What do we do with people already on DSP who could be looking for work? How do we eliminate the incentive to get on DSP and the disincentive to get off the pension?
From 2012, young disability pensioners with some capacity to work will be required to attend quarterly interviews with Centrelink officers and develop their own participation plans. This is a good step in the right direction. The federal government is correct to target those DSP recipients who will be most likely to gain employment.
But there will be no requirement for these young people to stick to their participation plans. So long as they dutifully attend the interview, their return-to-work plans can gather dust.
Lawrence Mead neatly noted many years ago that a combination of both ‘help and hassle’ is needed to move people from welfare into work. Our disability pensioners are not being given much of either.
Jessica Brown is a Research Fellow at The Centre for Independent Studies. Her report Working Towards Self-Reliance: Three Lessons for Disability Pension Reform was released this week.
