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.

Question 5–3 In what ways, if any, does the review process for qualification for the Disability Support Pension create barriers to mature age participation in the workforce or other productive work? For example, does the lack of information about how Disability Support Pensioners are selected for review act as a disincentive to work?

[131] FaHCSIA, Characteristics of Disability Support Pension Recipients June 2011 (2011), 10.

[132] Ibid.

[133] However, from 1 July 2012, DSP recipients under age 35, with a work capacity of at least eight hours per week, are required to attend regular interviews with Centrelink to develop participation plans to help build their capacity to work: Social Security Act 1991 (Cth) ss 94(1)(da), 94A.

[134] Ibid s 94. A person must also be at least 16 years of age and meet residence requirements.

[135] The Tables and the rules to be complied with in applying them are found in Social Security (Tables for the Assessment of Work-related Impairment for Disability Support Pension) Determination 2011 .

[136]Social Security Act 1991 (Cth) s 94(1)(a), 94(1)(b).

[137] Ibid s 94(1)(c)(i), 94(2), 94(5). Alternatively, the person must be participating in the supported wage system: Social Security Act 1991 (Cth) s 94(1)(c)(ii). Persons whose start date for payment was before 11 May 2005 must have had a continuing inability to work 30 hours or more per week: FaHCSIA, Guide to Social Security Law (2012) <www.fahcsia.gov.au/guides_acts> at 30 August 2012, [].

[138] A person’s impairment is severe if it rates 20 points or more under the Impairment Tables, of which 20 points or more are under a single Impairment Table: Social Security Act 1991 (Cth) s 94(3B).

[139] Ibid s 94(2)(aa). A person who is assessed as being permanently blind is automatically qualified for a Disability Support Pension, and do not have to demonstrate a continuing inability to work: Social Security Act 1991 (Cth) s 95; FaHCSIA, Guide to Social Security Law (2012) <www.fahcsia.gov.au/guides_acts> at 30 August 2012, [].

[140] Senate Community Affairs Committee—Parliament of Australia, 2012–13 Budget Estimates Hearings Families, Housing, Community Services and Indigenous Affairs Portfolio: Answers to Estimates Questions on Notice, Question 354 (FaHCSIA) (24 July 2012).

[141]Social Security Act 1991 (Cth) s 96(2).

[142] FaHCSIA, Guide to Social Security Law (2012) <www.fahcsia.gov.au/guides_acts> at 30 August 2012, [].

[143]Social Security (Administration) Act 1999 (Cth) s 97A; FaHCSIA, Guide to Social Security Law (2012) <www.fahcsia.gov.au/guides_acts> at 30 August 2012, [8.2.2], [].

[144] National Welfare Rights Network, Submission 50.

[145] Ibid.

[146] Ibid.

[147] FaHCSIA, Guide to Social Security Law (2012) <www.fahcsia.gov.au/guides_acts> at 30 August 2012, [].

[148] Ibid, [].

[149] Ibid, [6.5].

[150] Senate Community Affairs Committee–Parliament of Australia, Social Security and Other Legislation Amendment Bill 2011 – Schedule 3 (Disability Support Pension Impairment Tables): Responses to Questions on Notice (FaHCSIA) (12 September 2011).

[151] FaHCSIA, Guide to Social Security Law (2012) <www.fahcsia.gov.au/guides_acts> at 30 August 2012, [3.6.3].

[152] Ibid, [3.6.3].

[153] Taylor Fry, Analysis of the Testing of Draft Impairment Tables (2011), 1.

[154] Senate Community Affairs Legislation Committee, Disability Impairment Tables: Provisions of Schedule 3 of the Social Security and Other Legislation Amendment Bill 2011 (2011), 19.