The welfare revolution that has passed disability pensioners by

Yet despite the growing difference between DSP and unemployment benefits being a hot issue at last week's tax forum, Ken Henry's recommendations continue to gather dust.

Since 2008, new applicants for Britain's Employment and Support Allowance have been streamed into one of three groups based on their capacity for work. Britons with mild disabilities must now engage with a 'Pathways to Work' program; those with more profound disabilities are exempt from the new requirements. Existing Incapacity Benefit recipients are gradually being moved to the new payment. While the program is still in its infancy, it is already showing good signs of success.

Back in Australia, the Gillard government is doing a lot of good work to reduce the number of people going onto DSP, but there are two big issues it is yet to address: What do we do with people already on DSP who could be looking for work? And how do we eliminate the incentive to get on DSP and the disincentive to get off the pension?

The success of welfare reforms over the past few decades in Australia and overseas is the result of a combination of strict conditions and mutual obligations, providing appropriate help to jobseekers to find work, and creating strong financial incentives to move from welfare into work. Using these tools, Australian governments have successfully tackled high rates of unemployment and moved vast numbers of single parents into the labour market. Only by applying the same tools will government be able to successfully increase the number of people with disabilities in work.