Politics

Thousands rejected from receiving disability pensions, report says

Feb 21, 2018

Disability pension handouts have dropped hugely.

The number of people receiving the Disability Support Pension (DSP) has dropped dramatically due to government crackdowns and stricter policies, it has been revealed.

The pension is handed out to Australians living with “a permanent physical, intellectual or psychiatric condition” that stops them from working. There are currently around 760,000 recipients, and the pension fund cost a staggering $16.3billion in the past year – making it one of the biggest pools of federal government spending.

However, the past few years have shown a huge drop in the amount of people actually receiving the handouts – with the number of recipients down from 89,000 in 2009-10, to less than 32,000 in the last financial year, according to a recent report released by the Parliamentary Budget Office (PBO).

In light of the lower numbers, the office has now cut its medium-term projections for public outlays on the pension, and according to the report, if this trend continues the government could save $4.8billion over the next decade.

Spending on the DSP soared by 8.7 per cent in the years immediately after the global financial crisis, but the past five years has seen annual spending grow by just 0.2 per cent.

“Our current projections for expenditure in 2027–28 are $4.8billion lower than our 2017–18 Budget projections. Over the medium term, we are projecting that DSP expenditure will average 1.0 per cent annual real growth, which would see recipients as a proportion of the working‑age population continue to drift lower,” the report states.

According to the report, the drop of recipients is down to the previous Labor government’s changes to the eligibility criteria, and new Job Capacity Assessment in 2012 – which meant applicants had to prove they were unable to work for more than 15 hours a week, as well as undergoing a medical assessment. It essentially means it’s now harder to qualify.

However, while the proportion of recipients with physical disabilities has decreased, the number with mental disabilities has risen.

Social services minister Dan Tehan said in a statement to Starts at 60 that the government is now “delivering a more simplified welfare system that is focused on getting people into work”.

He added: “Changes to the Disability Support Pension have focused on encouraging people to seek work, as well as strengthening the assessment of medical conditions. Under Labor the number of working-age Australians dependent on welfare increased by 250,000.

“Under the Coalition the number of working-age Australians dependent on welfare has reduced by 140,000, taking it to 15.1 per cent of the working age population – the lowest proportion it’s been at in at least 25 years. The rate of growth of job seeker income support has gone from 13.5 per cent under Labor to 3.5 per cent under the Coalition.”

The news is likely to get a mixed response, with many people celebrating the savings that will be made from the cuts – while others will be outraged by the tighter criteria applicants now have to meet to be eligible, should they suffer from a disability or impairment that affects their life.