Ideas@TheCentre
DSP reform under Labor hits the brakes
The Rudd-Gillard Labor government is famous for its policy failures, but one of the few bright spots on its report card has been its reforms to the Disability Support Pension (DSP).
In every budget since 2009, the government has introduced substantial changes to the way eligibility for the DSP is assessed. A DSP claimant’s continuing incapacity to work is now more rigorously tested, and the impairment tables for assessing eligibility for the DSP have been revised. These reforms are already showing results, with the total number of people on DSP falling by about 2,000 since the beginning of the year.
From July, all DSP recipients under the age of 35 who have some work capacity will be required to attend participation interviews to develop work participation plans.
Unlike in previous years, substantial reforms to the DSP were missing from the 2012-13 Budget. Here are some ideas for further reform.
At present, it is possible for a multi-millionaire (or billionaire) to receive the DSP. Anyone assessed as being permanently blind is exempt from income and assets tests. People with disabilities such as cerebral palsy or quadriplegia are not eligible for this exemption. The DSP’s income and assets test should apply to all recipients regardless of disability. The exemption for the permanently blind is inequitable and unfair and should be abolished.
Attendance at the proposed participation interviews to develop participation plans is compulsory. These plans will address the disability support pensioners’ barriers to work and can include developing literacy or numeracy skills or drug rehabilitation. But compliance with the participation plans is not compulsory, which is absurd. Recipients who do not comply with their participation plans should face sanctions.
While the majority of DSP applicants are now going through rigorous testing of their ability to work, those who have an obvious and severe (aka ‘manifest’) inability to work as a result of their disability can fast track onto the DSP. This fast track is restricted to a handful of conditions, including terminal illness, category 4 HIV/AIDS, nursing home level of care, and people with an intellectual disability and an IQ of less than 70. There are thousands of people with an obvious and severe disability currently on the DSP who do not meet the criteria for manifest eligibility. This is one area that is ripe for further reform leading to administrative efficiencies and savings.
These suggestions are by no means exhaustive but they are a good starting point for the government to introduce the next generation of reforms to the DSP.
Andrew Baker is a Policy Analyst at The Centre for Independent Studies. More details on DSP reform can be found in reports by CIS researcher Jessica Brown.
