Disability Support Pension

5.74 Disability Support Pension (DSP) recipients are numerically the most populous group of working age income support recipients. At June 2011, there were 818,850 recipients of DSP.^[131] Of these, 67.5% were aged 45 years or over; 65% aged 45–64; and 2.5% aged 65 years and over.^[132]

5.75 Uncertainty about the possible effect of workforce participation on qualification for DSP may act as a disincentive for recipients of the payment, the majority of whom are mature age. The ALRC invites stakeholder comment about the process of review of qualification for DSP.

Disability Support Pension and work

5.76 DSP provides income support on the basis of a person being unable to undertake substantial employment because of his or her disability. It is not generally subject to participation obligations.^[133]

5.77 To qualify for DSP a person must generally have a ‘continuing inability to work’ due to permanent physical, intellectual or psychiatric impairment.^[134]

5.78 The severity of impairment to a person’s work functioning is rated by reference to ‘Impairment Tables’.^[135] New entrants to the DSP must have an impairment rating of 20 points or more.^[136]

5.79 To have a continuing inability to work, new entrants to the DSP must be unable to work at least 15 hours per week independently of a program of support, or be re-skilled for such work, within the next two years.^[137] A person whose impairment is not severe^[138] must also have participated in a program of support.^[139]

5.80 Comparatively few DSP recipients receive employment income. At May 2012, 70,243 recipients (less than 10%) had income from employment.^[140] Recent changes to the DSP are aimed at promoting workforce participation among recipients.

• From 1 July 2012, all DSP recipients can work up to 30 hours per week without affecting their qualification for the payment.^[141] Previously, recipients of DSP granted on or after 11 May 2005 could only work up to 15 hours a week before their payment was suspended or cancelled.^[142]

• Return-to-work ‘suspension’ provisions allow DSP recipients who are no longer eligible for the payment due to earnings from work to return to the payment within two years if they later cease work or reduce their earnings below the income test limit.^[143]

5.81 NWRN welcomed the change allowing DSP recipients to work up to 30 hours per week, noting that it will ‘provide a greater incentive to work and work for longer periods’.^[144] However, NWRN argued that recipients of DSP receive mixed messages about the effect of workforce participation on their continued qualification for payment. NWRN stated that ‘from the individual’s perspective, from what they hear and read, the aim of the Government is to get them off the DSP—and thus many respond with fear and anxiety’.^[145]

5.82 NWRN submitted that DSP recipients are concerned that any increase in their workforce participation will trigger a review of their eligibility for the payment.^[146] A range of reviews may apply to DSP recipients.

5.83 A DSP recipient may be subject to a ‘Service Update Review’, which may assess a person’s medical circumstances, income and assets, earnings and other relevant personal circumstances.^[147]

5.84 A person may also be selected for a ‘manual medical/work capacity review’. The Guide to Social Security Law directs that this review should occur when a Centrelink customer service adviser is not convinced that a person remains qualified for DSP (for example, because the customer service adviser discovers that the recipient is working).^[148]

5.85 Centrelink also conducts ‘profiling reviews’ of DSP recipients, selectively identifying and reviewing certain recipients.^[149] FaHCSIA has stated that its practice is not to make public the parameters used to select a person for review, but that ‘employment predictors by themselves are not enough to select a pensioner’.^[150]

5.86 All reviews of a person’s qualification for DSP will use the current Impairment Tables to assess the level of impairment.^[151] These Tables were reviewed in 2011 and revised Tables took effect from 1 January 2012.^[152] Analysis carried out for FaHCSIA on the use of the new Impairment Tables suggested that 36–45% of existing successful claimants would fail in a claim under the new Tables.^[153] This has led to concern about the possible impact of review upon qualification for DSP.^[154]

5.87 While accepting that it is appropriate that there should be some mechanism for review of a person’s continued qualification for DSP, the ALRC considers that the lack of clarity around the circumstances of review may be acting as a disincentive to increased workforce participation. The ALRC therefore seeks stakeholder comment on the DSP review process and its effect on mature age DSP recipients’ workforce participation.