Dissenting Report
By Senator Rachel Siewert
INTRODUCTION
This Bill contains five budget measures, two of which are of
great concern to me. While the aim of the Government to bring the budget into
surplus is commendable, this shouldn’t happen at the expense of vulnerable
Australians. Both Schedule 2 and Schedule 3 make savings at the expense of low
income families and people with disabilities.
This is particularly concerning considering the rushed
nature of this Inquiry. There are serious implications for people on low income
and this Bill has been pushed through without adequate time for proper
consideration of the detail.
PAUSING THE INDEXATION OF FTB A AND B SUPPLEMENTS
Freezing the indexation of these supplements could create
financial hardship for low-income families. Although this indexation may in
theory only amount to the loss of a few dollars a week, it is a significant
amount for low income and single parent families. There are over 629,000
recipients of FTB on income support who will be negatively affected by this
measure. The supplements were initially designed to deal with Family Tax
Benefit debt, but they are now an essential part of the budget planning of
low-income families. Evidence given by the Australian Council of Social Service
(ACOSS) confirms this:
People whose families are living on, for example, less than
$30,000 a year, which includes many families on income support payments, need
every dollar they can get. They particularly struggle with bulky expenses such
as car registration, fridges breaking down, having to move house, which
frequently happens if you rent privately, and finding the bond. These
unavoidable expenses often come as lump sums and the feedback we have received
from members is that people find those supplements particularly useful to meet
those kinds of expenses and also to repay the debts that they have incurred to
meet those expenses in the past including, for example, Centrelink debts. [1]
The freezing of indexation of supplements, combined with
other measures such as changes to the parenting payment grandfathered welfare
to work provisions, has a cumulative impact on low income families. It is
concerning to me that the Government has not done an analysis on what the total
cumulative impact of these measures would be. I have asked for such assessment
during both Budget Estimates and this Inquiry.
We therefore believe these measures should not proceed in a
way that causes adverse impacts on low income families.
INCREASED REQUIREMENTS FOR QUALIFICATION FOR DSP
My greatest concerns with this legislation relate to
Schedule 3, which requires people with disabilities to prove their incapacity
to work by participating in training or work related activities ('program of
support') before they are eligible for DSP. This is deeply problematic for a
number of reasons:
Classification of severe impairment
Individuals who are assessed to have a severe impairment
which prevents them from working are not required to complete a program of
support. However, the method for determining severe impairment does not account
for co-morbidity or cumulative conditions. To be judged to have a severe
impairment a person must be assigned an impairment rating of 20 points or more
under a single impairment table. 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 rate above 20 under a single table. This is concerning as
the impact of co-occurring disorders can be very severe. Frank Quinlan,
CEO of the Mental Health Council of Australia, provided the following evidence
on this issue:
Several Australian and international studies have shown that
people with disabilities such as mental disorders and substance abuse disorders
will usually have co-occurring disorders, and a person with co-occurring
disorders is likely to have greatly exacerbated negative impacts. A person with
two or more moderate level disorders occurring across the tables when combined
could result in a total equivalent of a severe impairment, when you combine
substance, mental and physical disorders. The current amendment does not allow
for cumulative totals across the tables and therefore does not take account of
co-occurring disorders.[2]
Under the proposed legislation, people suffering from
co-occurring disorders who are not judged to have a severe impairment will not
be put straight on to DSP. They will most likely be placed on Newstart and yet
be unable to meet the requirements of participation in a program of support. It
was not made clear by either FaHCSIA or DEEWR what would happen to people in
this situation and how long they would be caught in this situation.
Another issue identified during the Inquiry, is that the
legislation doesn't appear to give any discretion to assessors when qualifying
people to go straight on DSP. Ability to work is dependent not only on the
different disabilities an individual has but on their environment and the level
of support available. As. Leah Hobson, National Policy Officer for Australian
Federation of Disability Organisations writes:
For instance, a person living in a country area may be deemed
capable of physically getting up and going to work each day and perhaps
fulfilling an office job. But, for somebody with a physical disability, there
may be a shortage of personal attendant carers in that area such that the
person is not able to get out of bed before business hours start because the
carers simply will not be available at those times. There may be a lack of
public transport for that person. It is about a whole range of factors for each
person which are not necessarily taken into account, even during job capacity
assessments.[3]
It is therefore important that assessors be able to take
these factors into consideration when making their determination.
It is also of concern that the method of determining severe
disability does not adequately take into consideration the episodic nature of
some disabilities such as mental illness and substance abuse disorders.
Episodic symptoms can often be misinterpreted as non-compliance. If a person is
assessed when they are functioning at a high level and are not deemed severely
impaired, it is unclear what will happen if they later down the line become
unwell and are not able to participate in the program of support. According to
evidence given at the hearing, there has been no information provided about a
right of appeal or to be reassessed.. It was also uncertain what would happen
to a person's application for DSP if they gained employment and then lost it
due to their disability – would they be put back on Newstart or potentially be
subject to a penalty period for non-compliance?
Finally, it is important to note that it is has been very
difficult to fully evaluate concerns relating to the impairment tables when not
only are the tables not completed yet, but the progress of the current review has
not been made public.
The speed with which this Bill is being pushed through
indicates the bringing forward of the start date is clearly only a cost-savings
measure, designed to cut $49 million out of the budget and makes little sense
when the very tables designed to be used in implementing the measure have not
even been completed.
Lack of clarity in the
qualification process
There is a great deal of ambiguity in this legislation. In
particular, it is unclear what is the maximum amount of time a person could
wait before being reassessed for disability support. Although DEEWR gave
evidence that 'the longest programs probably do go for 18 months', considering
the impact of these measures on people with disabilities such ambiguity in
unacceptable. There is no time limit in the legislation and length of
participation would appear to be at the discretion of the Government. In fact,
there is little detail at all on how this process would work in practice, and
too much is left to legislative instruments considering the potential impact of
the Bill.
For example, there is insufficient explanation of what the
program of support would entail. As Leah Hobson, National Policy Officer for
the Australian Federation of Disability Organisations writes:
I think there is another concern there in terms of the
definition of a program of support being at ministerial discretion because, in
the first instance, we do not actually know what that definition of a program
of support is beyond something very broad. But, secondly, it is very easy for
ministers to change those sorts of requirements on an ad hoc basis if it is not
in the legislation. So something like that would certainly be an improvement.[4]
Some more details on the content of the program were
provided by FaHCSIA at the hearing, but again the parameters are not in the
legislation.
Adverse impact on people with
disabilities
Consistent numbers could not be provided by FaHCSIA on how
many people would be eventually placed on DSP after initially being rejected.
During the hearing the Department stated that of the 6000 people rejected
between September 2011 and January 2012, 3400 of them will eventually be placed
on DSP. This equates to over half of applicants who should be on DSP and are
put on Newstart to save money.. Figures provided later by the Department
differed, without clear justification. However, even the revised figures showed
by 2014, over one third of yearly applicants would eventually end up on DSP.
Essentially this Bill unnecessarily subjects people with
disabilities to financial hardship for an extended period of time. It is a cost
saving measure designed to keep them off DSP and make them try to survive on
Newstart. ACOSS writes:
...since the alternative payment (Newstart Allowance) is at
least $128 per week less than the pension, the Bill would deprive the majority
of applicants (those with low employment prospects who still have an ongoing
need for income support) of additional income to help them meet their basic
living expenses. 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.[5]
People placed on Newstart instead of DSP are subject to a
double disadvantage. Not only do they receive $128 a week less, but they are
also subject to a higher taper rate. This barrier to work is ironic considering
the Government’s aim is to encourage people with disabilities to engage in the
workforce. It is interesting to note the Government has, in other measures,
addressed this barrier by lowering the taper rate for those on DSP. How this
Bill, which puts more people onto lower payments and higher taper rates will
further their aim is unclear.
Considering that at least one third of applicants will
eventually be placed on DSP, it seems as if this legislation is setting many up
to fail. 18 months of trying and not succeeding in training or work related
activity could be extremely damaging to already vulnerable people and seems
unnecessarily cruel. As one witness pointed out, even people who do end up on
DSP are going to be discouraged from working because they were forced to look
for work under pressured and inappropriate circumstances. The Australian
Federation of Disability Organisations pointed out that subjecting people
inappropriately to these programs of support could lead to further
disengagement:
I think it becomes a cumulative set of issues for people.
Maybe you are dealing with housing issues, maybe you are dealing with substance
abuse issues, maybe you are dealing with just having come out of prison... Then
you are trying to gather all of those aspects of your life together. Then you
have the additional financial pressure of having $128 a week less and the
additional pressure on your organisational skills and your energy levels to
actually go and meet those compliance rules by going to whatever your program
of support is—whether that is an hour a week or three or four days a week, we
do not actually know. So it can provide a whole set of new potential pressure
points for people so that they are not actually dealing with some of those
other issues in their lives as well, I think.[6]
Role of providers
Yet another area of ambiguity in this Bill is the role of
Job Service Providers. It is unclear whether Providers will be required to
contribute to the DSP qualification assessment and what the nature of this
contribution might be. This is an important issue, if providers become
'gatekeepers' for the DSP it could impact on their relationship with their
clients and their willingness to disclose information. However, if Providers do
not give input it is unclear how Job Capacity Assessors would make an informed
decision on the client's ability to participate in the program of support.
The increased workload is concerning considering that
funding per client, in real terms, is decreasing. Evidence given by Ken Baker,
Chief Executive of National Disability Services, indicates funding per client
is decreasing:
The latest figures I have, which are from the 2011 report on
government services, show that funding per open employment service user for the
disability employment services program fell, in real terms, from $4,108 in
2003-04 to $3,621 in 2008-09. Funding per client has not increased since then,
and although the 2011 budget projects increased funding for disability
employment services, all of that funding is for an expansion of clientele. None
of it is for increased fees or outcome payments for clients. So that will mean
a continued reduction in real terms for funding per client, during a period in
which a new cohort of clients will engage with those services, some of whom
will not want to be there.[7]
Job assessment process
It is also unclear how and when reassessment for DSP will
take place and I have ongoing concerns about the assessment process. There is
ambiguity around how long people will be on programs of support, what criteria
will be used to assess if and when people will be reassessed to go on DSP and
what role the job services provider will play in that decision.
Multiple submissions stressed that a great deal of skill is
needed to make such assessments. The importance of highly specialised staff was
stressed. Peter Davidson, Senior Policy Officer from ACOSS noted:
By and large, we do not think the JSA providers have
sufficient resources to assist people with disabilities in this category of
applicants for DSP. We would be very disappointed if most of them ended up in
the JSA system rather than in the specialist disability streams. Secondly, many
need vocational training.[8]
Time
Finally, the rushed nature of this Inquiry has made it
impossible to properly deal with the complexity of issues before us. It is
clear it has been pushed forward to save $49.7 million, at the cost of people
with disabilities.
There has been very little time for community organisations
to express their opinion or suggest amendments and no time for them to consult
with people with disabilities.
There has also been little time for the Department of
consult with community organisations on the Bill. Many witnesses providing
evidence at the Inquiry noted that the Government had not engaged them in any
kind of consultative process.
Furthermore, many witnesses have raised concerns at the
early start date of this measure. Not only will Centrelink and employment
service providers have to redesign their systems but staff will have to be
properly trained to respond to the needs of people with disabilities.
CONCLUSION
These budget measures have serious implications for vulnerable
Australians – both low income families and people with disabilities. While I
acknowledge the value of supporting people with disabilities to work if they
are able, leaving people on Newstart for 18 months is unfair.
Given the potential impact of this Bill and the rushed
nature of proceedings I have serious concerns about supporting schedules 2 and
3 of the legislation.
Recommendation 1
That the Bill be divided and Schedule 3 (assessing
qualification for disability support pension) and Schedule 2, item 2
(indexation of FTB supplements) be removed from the Bill at this time.
Senator Rachel Siewert
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