The federal government has been called upon to resort to stronger measures for getting people off the Disability Support Pension (DSP) and into the workforce.
The government responding to the increasing number of DSP recipients, estimated to be around 780,000, the medical test for determining a person’s ability to work will be tightened.
Scheduled to come into effect from 2012, the government expects the new test to result in 6500 fewer recipients.
Fast tracking the claims of those eligible for the pension, those who are not will be streamed out of the system earlier. As well, recipients living permanently overseas, but who return to Australia every 13 weeks just to retain their pension, will not be allowed to do so anymore.
The changes will reduce the rising number of DSP recipients that have tripled since the 1980s, costing taxpayers around $8.5 billion a year.
However, research from conservative think-tank The Centre for Independent Studies suggests, alternative strategies are needed as the new measures will only have a limited effect.
Policy analyst Jessica Brown recommends applying the 15-hour work rule to all DSP recipients, introduced by the former Howard government’s Welfare to Work scheme.
From 2006 onwards, new DSP recipients were required to prove their inability to work for 15 hours a week, down from 30 hours a week, to be eligible for the pension.
While, these changes lowered the rate of new DSP recipients, existing recipients were not encouraged to rejoin the workforce, as the changes were not applicable to them. Brown in the paper ‘Defeating Dependency: Moving Disability Support Pensioners into Jobs’, says the 15-hour rule should apply retrospectively, as waiting for the natural rate of attrition to bring down the number of DSP pensioners will take decades.
She writes that tightening DSP entry requirements may be a step in the right direction, however, they are not enough and it only seems fair and equitable that not only new applicants but existing recipients should also be subjected to stricter work tests and the same rules.