Chapter 4

Assessing qualification for the disability support pension

4.1 As outlined in chapter 1, schedule 3 of the Bill would make changes to the assessment for eligibility for the disability support pension (DSP) by requiring claimants to provide evidence that they have actively participated in a program of support. These changes were first announced in the 2011 Federal Budget.[1] In the 2011-12 Budget, implementation of this measure was brought forward from 1 January 2012 to 3 September 2011:

The intent of changes to the assessment arrangements for Disability Support Pension (DSP) contained in Schedule 3 of the Bill is to help Australians with disability into work wherever possible, while continuing to provide an essential safety net for people unable to support themselves.[2]

4.2 At present, to qualify for the DSP a person must have a physical, intellectual or psychiatric impairment of 20 points or more under the impairment tables (in the Social Security Act 1991) and a continuing inability to work.[3] A person is determined to have a "continuing inability to work" if:

(a) the impairment is of itself sufficient to prevent the person from doing any work independently of a program of support within the next 2 years; and

(b) either:

(i) the impairment is of itself sufficient to prevent the person from undertaking a training activity during the next 2 years; or

(ii) if the impairment does not prevent the person from undertaking a training activity—such activity is unlikely (because of the impairment) to enable the person to do any work independently of a program of support within the next 2 years.[4]

4.3 Under the current DSP arrangements, a person's inability to work can be assessed before the person has investigated alternative employment options or assistance from employment services, or sought retraining or rehabilitation:

This means that assessments of a person's inability to work, for the purposes of Disability Support Pension, can occur without the person having tested whether the help available could find them suitable work.[5]

4.4 Currently around 45 per cent of DSP applicants apply for the payment without having previously participated in any employment or rehabilitation service.[6]

4.5 The Bill would change the work capacity assessment so that people applying for the DSP would be required to have actively participated in a program of support to find employment through an open employment service or vocational rehabilitation, and provide evidence of such.[7] The criteria for determining "actively participated" would be defined in regulations to the Bill.[8]

4.6 The Bill defines "program of support" as a program that:

(a) is designed to assist persons to prepare for, find or maintain work; and

(b) either:

(i) is funded (wholly or partly) by the Commonwealth, or

(ii) is of a type that the Secretary considers is similar to a program that is designed to assist persons to prepare for, find or maintain work and that is funded (wholly or partly) by the Commonwealth.[9]

4.7 The requirement to have actively participated in a program of support does not apply to people with a severe impairment 'such as those who are clearly unable to work and are fast-tracked to ensure they receive financial support more quickly'.[10]

4.8 The Bill defines a severe impairment as:

A person's impairment is a severe impairment if the person's impairment is of 20 points or more under the Impairment Tables, of which 20 points or more are under a single Impairment Table.[11]

4.9 The requirement to demonstrate future work capacity as outlined in schedule 3 of the Bill would commence on 3 September 2011.

4.10 It is the government's intention that the changes to the work capacity assessment:

...will provide faster, more sustainable support for people with severe disabilities, while referring others with the potential to work to employment services including Job Services Australia and Disability Employment Services.[12]

Issues regarding assessing qualification for the DSP

4.11 A number of submitters and witnesses expressed concerns regarding the new requirement for people to have actively participated in a program of support in order to assess whether they have a continued incapacity for work and are therefore eligible for the DSP.

4.12 The concerns raised during the course of the inquiry included:

the appropriateness of the future capacity for work test for people with a disability, including putting people with a disability on the Newstart allowance rather than the DSP;
the definition of a severe impairment and the requirement for a severe impairment to be scored as an impairment of 20 points from a single impairment table;
the implementation date of 3 September 2011; and
the lack of detail about what constitutes a program of support.

Appropriateness of the future work capacity test

4.13 Some submitters, for example the Australian Council of Social Service (ACOSS) and the Australian Federation of Disability Organisations (AFDO), questioned the appropriateness of the future work capacity test, and putting people with a disability on the Newstart allowance, as a mechanism to get people with a disability into work.[13]

4.14 ACOSS, while supportive of moves to assist DSP recipients into work,[14] believed the purpose of the changes was to stop entries to the DSP and described this as 'misconceived'.[15] Mr Davidson went on:

The objective should be to assist more people with disabilities on income support to reduce their reliance on income support. When the welfare to work policy was introduced in 2006, with the same objective of reducing the numbers on the DSP payment, the main impact of that policy was to shift more people with disabilities onto Newstart. There are now over 90,000 people with a partial work capacity on the Newstart payment. So the difference for them is that they are on a lower payment. The difference is not that we have found them employment. Really, our goal should be to find people employment so that they do not need to rely on income support. This one-eyed focus on a single payment is, in our view, misconstrued.[16]

4.15 ACOSS was particularly critical of DSP claimants being shifted to the Newstart allowance because 'the alternative payment (Newstart Allowance) is at least $128 per week less than the pension':[17]

At $237 per week for a single adult, the Newstart Allowance is inadequate to pay for the essentials of life. Given that most people with disabilities face additional costs (for example, transport or medications), and will incur additional costs while participating in a 'program of support' (for example travel costs), it is likely that many applicants would struggle financially until such time as they either secure employment or are granted a pension.[18]

4.16 In addition, ACOSS was concerned about delays associated with assessing an individual's future work capacity and government payments made to that individual in the interim. ACOSS believed there was a risk that people who may ultimately meet the eligibility requirements for the DSP may forego income support payments whilst they wait for Centrelink to assess their capacity to work:

We understand that it is not the Government's intention to substantially delay access to the pension, and that 18 months is likely to be the maximum wait. However, the Bill offers no explicit protection against lengthy delays in assessing a DSP claim. If the maximum wait is 18 months, a single adult who ultimately meets the eligibility requirements for DSP could forego up to $10,000 in income support if the Bill is passed. As far as we can ascertain, the Bill does not provide for back-payment of DSP entitlements to the date of the original claim. In our view, this is inequitable and sets a bad precedent in social security law. If a DSP claim was delayed for 18 months while Centrelink waited for a medical report, the applicant would clearly have cause for complaint.[19]

4.17 The Australian Federation of Disability Organisations (AFDO) was ideologically opposed to the future capacity for work requirements because in their view it created a situation where people with a disability were 'being set up to fail' by 'being obliged to look for work in order to receive some sort of payment from government'.[20]

4.18 Ms Leah Hobson, National Policy Officer, expressed AFDO's opposition to schedule 3 of the Bill and argued the measure was an attempt by government to move people from one support payment (the DSP) to a lower allowance (Newstart).[21] Ms Hobson went on:

We are also concerned that placing some people with disability who have some work capacity onto Newstart has some inherent problems. People with disability often face higher costs of living because of their disability. That might be because of things that would seem obvious to you or me, like the need to take more taxis or the need to pay for more medications. But it is also things that might not be considered as disability-specific if you looked at them on the surface, such as somebody who has problems regulating their body temperature and needs to have heating and cooling systems running all the time, so they have higher utility bills. For those people, having $128 a week less is going to be a considerable problem. It is also true that some schemes specifically set up to help people with disability, such as travel pass programs that allow for concession passes, sometimes require that people have access to the Disability Support Pension specifically, in order to be eligible to get access to those programs.[22]

4.19 The National Welfare Rights Network (NWRN) shared the concerns of ACOSS and AFDO. The NWRN questioned the appropriateness of the Newstart allowance for people with a disability, and was critical of potential delays in payment of the DSP, and payment of the Newstart allowance instead in the interim, while an individual's future capacity for work is assessed.[23] Further, the NWRN believed the future work capacity test would establish:

...a mandatory requirement that a person try and fail prior to qualification, especially in situations where it is apparent that this failure is overwhelmingly likely to be the case.[24]

4.20 In response to claims about delaying payment of the DSP, Mr Nick Hartland, Group Manager, Disability and Carers Group, Department of Families, Housing, Community Service and Indigenous Affairs (FaHCSIA) offered the following explanation about the rejection of a DSP claim and alternative income support payments:

The measure is not about that. The measure is about eligibility for DSP. What it means is that people will have to provide evidence that they have investigated alternative employment options or sought assistance from an employment service before they are granted DSP. So, at that point they are not eligible for DSP. Under this measure people who do not have this evidence will have their DSP claim rejected. That does not involve deferring a DSP claim or suspending a claim process. It is a rejection of a claim. If their claim for DSP is rejected, it is likely they will be granted Newstart or another income support payment.[25]

4.21 The committee recognises that many people with a disability want to work but face considerable barriers to do so. The committee also acknowledges that stakeholders in the disability sector, including some who participated in this inquiry, share the government's goal to encourage and assist people with a disability to participate in the workforce. The committee acknowledges there is a range of views on the specific steps needed, but sees the measure outlined in schedule 3 of the Bill as a mechanism to assist in achieving this goal.

Definition of a severe impairment

4.22 As discussed earlier, the Bill defines a severe impairment as an impairment 'of 20 points or more under the Impairment Tables, of which 20 points or more are under a single Impairment Table'.[26] Individuals with a severe impairment so defined are exempt from the requirement to demonstrate their participation in a program of support in order to qualify for the DSP.[27]

4.23 Various submitters took issue with the definition of a severe impairment, particularly the requirement that 20 points or more come from a single impairment table.[28]

4.24 The Mental Health Council of Australia (MHCA) were opposed to the definition of a severe impairment in the Bill on the basis that:

A person with a mental disorder can have reduced level of functioning, however, when a person has two or more disorders, even if the disorders are only judged as 'mildly' or moderately' impairing on their own. This is because regardless of how the co-occurring disorders develop, they often maintain each other. This can result in severely limited levels of functioning for the individual experiencing them.

...

Section 6, after subsection 94(3)(b) currently states "A person's impairment is a severe impairment if the person's impairment is of 20 points or more under the Impairment Tables, of which 20 points or more are under a single Impairment Table". It further states in Example 3 that "if a person's impairment is of 20 points under the Impairment Tables, made up of 10 points each under two separate Impairment Tables, the person does not have a severe impairment". This means that a person with co-occurring disorders will not be classified as having a severe impairment, unless one or both of the disorders are individually assessed as causing a severe impairment to the person. Again, this does not take into account the cumulative effect of co-occurring disorders.[29]

4.25 The MHCA were not only worried about those with co-occurring impairments but also the capacity of people with an episodic condition to comply with the requirement to participate in a program of support. Mr Quinlan explained:

...the point that can become confusing between an episodic illness and what could appear, symptomatically, to be noncompliance with regard to attendance at appointments and so on is another are where there is vulnerability, because it may take some time for the system to realise that there is, in fact, an episodic manifestation of illness rather than systematic noncompliance...one of the questions that need to be asked is whether or not the person is or is not taking part in programs or employment-that type of thing. Are the questions going to be asked as to why they are not, or will it simply be a matter of assuming that if there is a cross against their name they did no fulfil X, Y or Z?[30]

4.26 ACOSS and the NWRN were similarly concerned by the 20 points from a single impairment table requirement[31] and the impact this might have on individuals with 'multiple impairments which when taken together make it impossible for them to participate in a program'.[32] The NWRN believed such people could 'be denied access to the DSP' and 'be left struggling with employment services systems that may be unfamiliar in dealing with people with such conditions'.[33]

4.27 The MHCA proposed that '[m]ore discretion to be given to the assessors to decide a person’s overall level of impairment and or functioning, rather than being restricted to a single table rating'.[34]

4.28 In the context of the definition of a severe impairment, Mr Ken Baker, Chief Executive, National Disability Services (NDS) raised the government's current review of the DSP impairment tables.[35] The review was established as a result of a 2009-10 Federal Budget measure and is being conducted by an advisory committee, in consultation with medical and allied health professionals as well as disability stakeholders.[36] The terms of reference for the review are to:

update the impairment tables to ensure they are consistent with contemporary medical and rehabilitation practices;
introduce consistent consideration of the use of aids and equipment in the measurement of impairment;
re-assess the appropriateness of definitions contained in the introduction to the DSP impairment tables, with particular regard to the assessment of people with intermittent psychiatric conditions;
re-examine the descriptors in the impairment tables to ensure that a score of 20 points aligns with an inability to work 15 or more hours per week in the open-labour market at or above award wages without the need for ongoing support;
re-design the impairment tables to focus more on ability; and
ensure that the impairment tables can be used by both allied health professionals and medical officers.[37]

4.29 The updated impairment tables arising from the review are due for introduction on 1 January 2012.[38]

4.30 Mr Baker was concerned that:

...although the review of the disability impairment tables has considered how scores across tables may be combined, its terms of reference have not allowed it to consider the situation where gaining 20 points through one table produces a very different outcome for the person than a score of 20 through a combination of tables. So that scenario, which is at the centre of this section of the Bill, has not been considered through that review of the disability impairment tables. So I would say it may be reasonable or it may not be reasonable to have that distinction between severe disability and other more moderate forms of disability, but it has not properly been tested by the experts that are part of that review of the impairment tables as far as I am aware.[39]

4.31 FaHCSIA clarified the 20 points for a severe impairment requirement, explaining that DSP applicants were not required to have 20 points from a single impairment table in order to qualify for the DSP but rather that those people with 20 points from a single impairment table would be exempt from the requirement to demonstrate their active participation in a program of support:

It is not clear to us from some of the submissions that we have seen whether there is a misunderstanding that all new DSP applicants will be required to achieve 20 points under one impairment table in order to qualify for DSP. That is not the case. The clause about 20 points under one table is a way of ensuring that people with a very severe disability are not referred to services where it is unlikely that there will be any benefit. In designing this measure, we wanted to avoid people who have a very severe disability having to prove their work capacity in this manner.[40]

4.32 FaHCSIA confirmed that people who do not meet the definition of a severe impairment and fail to demonstrate their continued incapacity to work would be ineligible for the DSP:

If they do not have 20 points on one table the next part of qualification for DSP is meeting that continuing inability to work test. So that will be applied, but if it is a person who is caught in this measure, who does not have evidence that they cannot have their capacity built, they will be denied DSP, possibly granted another income support payment and then referred an employment service.[41]

4.33 However, the measure does not introduce any new participation requirements. Departmental officials also outlined various exemptions available to individuals who do not meet the definition of a severe impairment by achieving 20 points from a single impairment table:

...if you are a DSP applicant and you have 20 points combined from a number of tables and you have evidence that you cannot be assisted by program assistance, you will still be eligible for DSP.[42]

4.34 And:

There are actually a couple of groups excluded in a similar manner. So the 'severe' one was one that we needed to put into the legislation, but if you have already been through an employment services and it has not assisted you, then you will not be asked to go again, as we said. If your application is on the basis of one of the manifest conditions in DSP, again we take those conditions as being evidence in and of themselves that you are not able to work on a continuing basis for more than 15 hours a week. Again, this would not apply to that group. As I said, the legislation adds a third group that would not be affected, which is those who have 20 points on one table.[43]

4.35 In addition, if it becomes clear before a person has completed that they will be unable to work more than 15 hours a week in the next two years, for instance because of an undiagnosed medical condition, they will be able to lodge a fresh claim. This may be on the recommendation of the employment service provider or the person's treating health professional.

4.36 In assessing a fresh claim for DSP, the Job Capacity Assessor will consider the person's program participation history as well as any new medical evidence provided. Where a person's program participation history verifies that they have attempted to participate in a program of support (eg. for six months) but this could not help them, the person will ordinarily be considered to have evidence of a continuing inability to work for at least 15 hours per week for the next two years.

4.37 The committee welcomes FaHCSIA's clarification of the definition of a severe impairment and the department's advice regarding the other circumstances in which an individual would be exempt from the requirement to participate in a program of support.

4.38 The committee believes the exemptions outlined by FaHCSIA should provide appropriate safeguards to ensure those who should clearly be eligible for the DSP are not required to meet the future capacity for work test. However, the committee acknowledges the concern of stakeholders in this area. Committee members will be closely monitoring the effects of these provisions, including through future Senate estimates hearings.

Recommendation 1

4.39 The committee recommends that an Advisory Group engaging community organisations be established to work with government on the implementation of the DSP changes.

Implementation date

4.40 The implementation date of 3 September 2011 for the new work capacity requirement, as well as the different implementation dates for the DSP work capacity arrangements and the updated impairment tables (1 January 2012), were raised during the course of the inquiry.

4.41 Most submitters and witnesses flagged their displeasure and concern regarding the very limited time they had to consider the Bill, and the short period of time for the committee's inquiry into the Bill.[44] AFDO's view summarised these concerns:

In terms of this particular piece of legislation, you mentioned earlier the very tight time lines that everybody is facing with this legislation—we are very concerned about that. The community sector in general has limited capacity to respond to these sorts of things in such a short time frame, and we are particularly concerned that organisations of and for people with disabilities are not being consulted appropriately with regard to the implementation of this bill. In terms of rollout, as well, you are looking at a maximum of several months before these measures come into place, and that does not allow for Centrelink staff and others to have time to be as well trained and as well versed in what the appropriate steps are to respond to the needs of people with disability.[45]

4.42 With respect to the different implementation dates for the new work capacity arrangements in the Bill and the updated impairment tables, ACOSS were of the opinion it made 'no sense at all' and 'would make much more sense to roll out both measures at the same time'.[46]

4.43 The MHCA and AFDO concurred, with AFDO emphasising the lack of information available to stakeholders in order to consider the impact of the Bill on the yet to be released updated impairment tables:

The current review of the impairment tables have not been made public...So, when we are talking about assessing a person's severe disability under the proposed legislation here, we cannot make any comment as to whether that is going to be an appropriate measure or too medically focussed...[47]

4.44 FaHCSIA confirmed the government had brought forward the implementation date for the future work capacity test but not the updated impairment tables.[48] Mr Hartland advised the updated impairment tables were still being considered by the advisory committee and that the advisory committee's final report was 'very close':

At that point it will be provided to the minister, and it will be in the hands of the government as to when they would like to release the committee's report and the draft tables. They are mindful of the need to consult on the tables, so we would be expecting to be asked to talk to groups and for them to be released quite soon, but it is in the government's hands as to when the tables and the report are released.[49]

4.45 The committee is pleased the government intends to release the draft updated impairment tables for consultation with stakeholders. The committee believes the release of the draft impairment tables sooner rather than later, and preferably prior to 3 September 2011, would be beneficial. The public release of the draft impairment tables prior to the implementation date for schedule 3 of the Bill would address uncertainty among some stakeholders regarding the impact of the Bill on people with a severe disability.

Definition of a program of support

4.46 The Bill requires people who are applying for the DSP to provide evidence of their continued capacity (or incapacity) to work by participating in a program of support. A "program of support" is defined as a program that:

(a) is designed to assist persons to prepare for, find or maintain work; and

(b) either:

(i) is funded (wholly or partly) by the Commonwealth, or

4.47 Some witnesses were unhappy with this definition on the basis that it did not make clear exactly what comprised a program of support.[51] For example, Mr Baker of NDS stated:

I think there needs to be more detail about many of the questions you have asked—about what participation in a program of support means, how long it is required, how the subsequent decisions are made for someone who has not succeeded and when those decisions are made.[52]

4.48 Mr Andrew Hatch, Section Manager, Disability and Carers Payment Policy Branch, FaHCSIA advised the committee:

A program of support includes all of the different programs. It could be the two types of DES, it could be Job Services Australia or it could be a similar service funded through a state or territory. We are including things like workers compensation, return to work programs and other types of insurance things.

...

They are all programs of support but 'independent' means they are not there with you forever more; they are just working with you and then put you into a job.[53]

4.49 With respect to a list of specific programs, Mr Hatch went on:

We are still drafting and developing it. Because it will be in the instrument we want to make sure that we have actually listed all of those programs that look very much like a Commonwealth-funded employment service. We want to make sure that we work out which are the ones that provide those elements of support, and tailoring it to the person's disability, versus the more mainstream...Employment services. Part of what we are trying to do is make sure that it is not just 'I have registered for a pop-up message on a job website, and that was my program of support' versus somebody who was working with the person, providing vocational counselling, looking at training opportunities and programs for them, and looking at transferrable skills—more a program of assistance than just straight job seeking.[54]

4.50 The committee notes the definition of a "program of support" in the Bill does not provide specific detail regarding the types of programs that might be approved. The committee suggests, however, that this is appropriate to ensure there is sufficient flexibility in the system to provide a variety of programs of support which meet the needs of people with all types of disability.

Navigation: Previous Page | Contents | Next Page