Separating fact from fiction in the disability support pension debate

On 9 March 2011 The Australian ran a story titled “No incentive for jobseekers to get off disability pension”. Last week the Press Council held that this headline was an opinion, and not a fact substantiated by evidence. It is also an oxymoron, because somebody who is seeking a job has, by definition, an incentive to stop receiving welfare: a job.

The article, which was about the difference between the payment levels of Newstart and the Disability Support Pension (DSP), was summarised by the newspaper in terms of an assumption that DSP recipients are seeking to avoid employment by receiving a “lucrative” pension. The Press Council also held that the DSP is not lucrative.

It is unfortunately not unusual for the media to make claims that the DSP is “out-of-control,” and to be followed by a torrent of comments about whinging bludgers and “disability-welfare scammers”.

There is a distinct lack of hard data in such debates, and claims like the one above about DSP recipients appear to escape scrutiny, effectively acting as a dogwhistle about the integrity of DSP claimants.

But is the DSP actually increasing at all? Budget Review papers state that “no other income support program has seen this level of sustained increase,” but Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) data disproves this. While the DSP population has increased by 163 per cent since 1995, the Carer Payment population has increased by 580 per cent in the same period.

FaHCSIA statements about slow growth cite four contributing factors: Overall population growth; Australia’s ageing population; the reduction in other social security payments to older women; a growth in the proportion of young people aged 16-17 receiving the payment; and an inaccessibility of services for people with a disability. Others suggest additional factors include: improved identification of disabilities such as mental illness; lower mortality rates after accidents; a decline in number of low-skilled job; a lack of employer support for people with disabilities; incentives for receiving DSP rather than Newstart and economic downturn. In this context, causation is far from clear. What does the data tell us?

Population Growth and ageing

A review of available data reveals the reverse to be true. While the Australian population grew by roughly 13 per cent between 1995 and 2005,the number of recipients of all welfare payments (including aged, disability, parenting, Austudy, Newstart etc.) increased by only 4 per cent.

Australians are less critical of welfare payments if we believe that we could be in the same situation ourselves;it is rare to hear criticisms of the Aged Pension. Over half of DSP recipients are over the age of 50, with the largest increase in those over 55. As Australians live longer, and the population ages, for the majority of older Australians workforce participation has increased, and welfare dependence decreased from 38 per cent to 17 per cent.

For the minority, DSP increases are indicated by a combination of age related factors: the rate of disability increases with age and with older people who are more likely to have one or more activity restricting impairments. The most common reason for ceasing to claim the DSP is death, or transfer to an aged pension.

Older women and social security

More women receive pensions than men, reflecting longevity, interrupted workforce participation, lower incomes and fewer assets. In 1998, the main defining characteristics of DSP recipients were single males who had left school early and had a trade qualification, but the gender balance of the DSP is rapidly changing.