One of the quandaries of labour market developments in Australia over the past several decades has been the rise and rise in the numbers receiving the Disability Support Pension. These numbers have been stubbornly resistant to improving labour markets, although as the chart below demonstrates, there has been some levelling off in the proportion of the working age population on the DSP.
Proportion of working age population
receiving selected income support pensions
There are a number of interesting features of the DSP trends:
• While more men than women receive the DSP, there has been a surge in the number of women receiving the DSP
• The type of disability for which recipients qualify for the DSP has become increasingly tilted towards the less severe end of the spectrum
• Stress/mental disorders have become much more common as the reason for DSP receipt
While there are reasons to have expected some increase in the numbers on the DSP – ageing population, chronic diseases – the reality is that the increase in the numbers on the DSP have been much higher than would have been expected on the basis of a rise in the real incidence of disability in the community.
Moreover, various efforts by governments to clamp down on the claiming of DSP – both of carrot and stick varieties – have been largely unsuccessful. For instance, former Prime Minister John Howard altered the work test to make it more difficult for claimants to receive the DSP.
But incentives at the coalface operate against the success of these attempts to curb the uptake of this benefit. For instance, the medical profession has little motivation to refuse their patients’ attempts to receive the DSP. Similarly, many Centrelink staff find it difficult to deal with these cases.
Of course, the spur for claimants is (1) the higher rate of payment relative to NewStart and (2) the lack of a work test.
Even though DSP recipients can work quite a few hours per week without penalty, very few do, perhaps because they fear for their on-going status as ‘disabled’. The overwhelming pattern is years on the DSP, followed by the take up of the Aged Pension.
This area poses an important policy challenge.
How can you prove sombody does not have a bad back (the bastion of workers compensation & lawyers for many years) or is not severely depressed?
Is not this trend echoing that of the UK when great numbers became ‘ depressed’ etc. when it had a commercial advantage
john malpas
20 Apr 10 at 10:52 am
What’s the difference in weekly payment between unemployment benefits and the disability pension? I imagine if you’re suffering from “Mediterranean Flu” you don’t have to front up to Centrelink once a week either.
Infidel Tiger
20 Apr 10 at 11:03 am
It is a big scam in Australia. I used to believe a lot of it could be explained by aging etc., but after I dug up the Hong Kong figures (which you can find here, I found out that Australians are about 5 and half times more likely to be on a DSP, despite the HK population being older. Thus there is a lot of unemploment being passed off as sickness.
conrad
20 Apr 10 at 11:54 am
My brother had both depression and severe aspergers syndrome.
I was able to help him out only by serendipity and that I was wealthy.
I do know both problems are more easily diagnosed these days than when I was growing up so I am not surprised to hear that mental disorders is becoming more common.
How does Australia in this area compare relative to other OECD counties?
Ded Peate
20 Apr 10 at 12:02 pm
Some people with mental illnesses or drug or alcohol problems may not be able to work. But I don’t think people who are ‘merely’ depressed are better off by sitting at home.
Sleetmute
20 Apr 10 at 12:09 pm
Over 20 years ago, I did an analysis of the numbers on disability pensions and the results were staggering. At that time, there was a requirement that recipients have a certified 85% incapacity for work.
When the Whitlam recession hit in the early 70s the numbers exploded. Below is a little of what I wrote about the issue at the time.
“In July 1972 there were 77000 males and 62000 females on the invalid pension. In ten years prior to 1972 the number of males exceeded females by an average of about 23% with numbers in both genders increasing by 32%. In July 1986 the numbers of males had increased by 261% to 201000 while at the same time females had increased by only 19% to 73000. During this period the qualification of 85% incapacity remained unchanged.
What possible explanation could there be for firstly such a huge increase overall and secondly the extraordinary change in the gender distribution? As the level of unemployment has increased so has the number of males claiming the invalid pension. No such situation relates to females. Unemployment has risen significantly for females during this time but the rise in those claiming invalid pensions has been minuscule by comparison. If unemployment and not incapacity has caused the increase why have females not acted as the males have. The answer lies in the fact that the supporting parents benefit and the widows pension are almost exclusively made up of females (322000 females compared to 10000 males) and females are using these benefits as an alternative.
From the above it is quite clear that a large proportion of invalid pensioners could not qualify under the 85% incapacity requirement. Assuming, in the unlikely event, that all female invalid pensioners are bona fide the number of males should be about 23% more or about 90000. There would appear to be about 111000 invalid pensioners too many. This comprises 40% of current numbers and costs $670 million.”
Since then, the 85% incapacity requirement was consigned to oblivion and the numbers continue to escalate. As economic conditions improved the rate of increase flattened out. Under the Howard government some token efforts were taken to curb the numbers but these programs largely benefited the bureaucrats administering them while the costs continued to escalate.
This pension very conveniently hides the real level of unemployment and is a fiscal scandal of monumental proportions.
Apart from ripping off taxpayers the government is clearly hiding the real level of unemployment. The Treasurer states that there is no more room for expenditure cuts. This scandal sticks out like a sore thumb but the Treasurer chooses to ignore it. When next you see newspaper reports of invalid pensioners convicted of armed robbery or serious assault consider that they have been certified by the Commonwealth Medical Officer as 85% incapacitated.
amortiser
20 Apr 10 at 12:46 pm
1.
The bods are slowly but surely getting closer to a physical test for depression. Neuro imaging shows some promise here but the catch is the cost, very expensive. Except in severe depression the evidence suggests that just leaving them sitting at home is about the worse thing you can do.
2.
There has been a “back office” policy of shunting the “unemployable” off to the DSP. The trend has been longstanding and in part explains the rise of DSP numbers in Australia.
3.
Bad backs are a mixed bag. I have one old friend who has a major problem with his neck that causes great pain yet he keeps working. Many others would stop. We are becoming too soft, lacking resilience.
John H.
20 Apr 10 at 1:51 pm
A number of my customers are on DSP. One of the more usual lurks is being unable to read/write. Somehow this ends up classes as a disability to great to enable work.
These same customers still show the ability to text/use computors/read contracts. So poor academic ability = DSP.
thefrolickingmole
20 Apr 10 at 2:34 pm
The growth in the number of women on DSP can in large part be attributed to changes in other welfare payments. Specific payments for widows have been phased out, and the retirement age for women has increased. This means that many older (60+) women who would have been going on these payments are now on DSP.
Centrelink publishes data about the number of people on DSP who fit into broad categories of disability, but this doesn’t really tell us much about the severity of their disability. A musculo-skeletal condition could range from being profoundly incapacitated to having a sore back.
ABS data does suggest that DSP recipients have more severe disabilities than other people with disabilities generally. But the work rates of DSP recipients are so much lower that they cannot be explained by this reason alone.
The Howard government’s 2006 reforms did have some success in slowing the rate of entry onto DSP, but not as much success as they had in reducing the number of people on Parenting Payment (for more info see my paper on this for the CIS – http://www.cis.org.au/issue_analysis/IA117/IA117.pdf)
The Rudd government has also quietly announced some measures to tighten eligibility requirements, but these don’t take effect until mid-year.
However, the problem with both of these reforms is that they only target new applicants. There has been no real attempt to move existing recipients back into the workforce. A forthcoming CIS report will address this.
It is also worth noting that DSP recipients can now return to their payment at any time within 2 years after leaving, so the disincentive to look for work for fear of losing their status as ‘disabled’ has been removed.
Jessica Brown
20 Apr 10 at 3:08 pm
I have personal experience here as someone who was on a DSP from about 2002 until late 2009. I had just finished my law degree and was suffering from increasing social anxiety and was initially on NewStart allowance. I would have to keep applying for jobs I knew I couldn’t perform so my psychiatrist kept giving letters that would exempt me from the work-search requirement for six weeks – then after that period I would get another six week exemption etc. Finally Centrelink said that I would need to go on the DSP as I couldn’t just keep getting six-weekly exemptions.
I had a psychiatrist at the time who really didn’t want to force me to do much so I was on that DSP for several years, trying different medications, hoping that one would miraculously cure my social anxiety, but none actually did. The psychiatrist I was seeing got very sick and retired and I was put onto another one, the same one I continue to see to this day.
The new psychiatrist let me stay as I was for another year or so (I really did at the time enjoy the lack of working as the law degree really exhausted me psychologically) until he started getting more concerned about my lack of progress. I had private health insurance so I was able to afford a Social Anxiety course at the Melbourne Clinic, something Centrelink did not fund nor even encourage me to do. I had also by this point sought out CSR, again of my own choice and not because of anything Centrelink had done.
The social anxiety course had an incredibly positive effect on me and I no longer wanted to be unemployed. It was around 2006 and I started voluntarily attending meetings with CRS who I heard were very good at helping people. I got a few work placements – one at RMIT Library and the other I found myself at Whittlesea Community Legal Service. The RMIT thing lasted a few months and got me even more hopeful I’d get work. The WCLS thing lasted over a year.
Finally I got a job at Coles doing stacking shelves but the employer here was a joke and didn’t take me seriously, so I was never given shifts. I kept going on like this until 2008. This was when I was out of the blue given a call about a job at my local Coles Express, one I knew I wouldn’t get.
I went to the interview and did pretty well and got the job. So for the last 16 months I’ve been working there and it’s completely ‘cured’ me of my social anxiety.
Centrelink allowed me to earn a part of my DSP pension whilst still working part-time but after a year they reassessed me and determined I was no longer ‘disabled.’ They cut my pension which really severely affected my income but it was a blessing in disguise. Since then I’ve been well enough to now to think about applying for some extra work, and maybe one day utilise my law degree.
The thing is that getting involved with CSR, doing the social anxiety course, applying for jobs with Coles, and ongoing treatment from a psychologist and psychiatrist, these were all my own efforts, and efforts that got me where I am today. It seems that most people who were in my position back then are in the same position today. I had to do everything to get myself off the pension and back working. I think I’m only a tiny fraction of those who are on the DSP, yet I believe that most could get off it if they followed a similar method to the one I used.
TJW
20 Apr 10 at 3:32 pm
Thanks for your frank story TJW.
It seems to me a matter of incentives – and in many cases help. People still are quite rational and able to work out the tradeoffs between working and pensions.
Some might be outright frauds but most are people simply using the rules in a logical fashion.
So we need to change the rules.
ken n
20 Apr 10 at 6:06 pm
It’s a tricky one. As a society we want to show compassion to the disabled; but we don’t want to create a welfare vortex that many fall into but from which few ever climb out.
daddy dave
20 Apr 10 at 7:09 pm
“Even though DSP recipients can work quite a few hours per week without penalty, very few do, perhaps because they fear for their on-going status as ‘disabled’.”
Or perhaps because of their ongoing status as disabled? I suspect this was just sloppy writing, but you’d want to be careful in a situation like this not to tar with such a broad brush without at least mentioning that poeple exist who are genuinely unable to work.
FDB
20 Apr 10 at 7:16 pm
I believe DSP is tax free income as opposed to unemployment benefits and most welfare which is treated as taxable income.
TerjeP (say tay-a)
20 Apr 10 at 8:10 pm
FDB – Of course there are many people terribly disabled and they should be cared for.
Then, as in most things, there is a spectrum of disability. The argument is whether the cutoff line abovce which there should be social support is to low on that spectrum.
After work injuries, for example, rehabilitation experts say that the person should get back to work at some level as soon as possible, for their own long term benefit. The DSP does not encourage this.
ken n
20 Apr 10 at 9:49 pm
[...] Crack down on the ever-increasing rates of people on Disability Support Pension; [...]
Under 30? No Dole For You « Thoughts on Freedom
21 Apr 10 at 9:23 am
Thanks TJW for telling your side. A lot of people are quick to say that some DSP illnesses are “all in their mind”. Yes, that is exactly where the illness is and I think it is twice as disabling because your mates can’t sign the cast on your leg. No one can get a handle on what’s wrong with you when its mental illness.
Mount Isa Miner
21 Apr 10 at 10:47 am
TJW, thanks for sharing your story and congratulations on working your way through your problems. I guess we will never know what would have happened if you had been forced to remain on NewStart or even booted off welfare completely early on. You say that your psychiatrist initially gave you letters exempting you from the NewStart work search test because you were required to apply for jobs you knew you couldn’t perform. Were these law jobs or stacking shelves at Coles? Maybe you would have been capable of doing something menial back then, particularly if you had been given no choice. I had a friend who developed anxiety and depression two years ago and he remains on anti-depressants. His (public sector) employer has been generous enough to keep him on full pay while he spent a few months at home and then over a year turning up most days but doing next to nothing. He’s a fair bit better now and functioning at work okay. Part of my reaction to his predicament might be about my own feelings of frustration and helplessness at the time, but I can’t help feeling that the time his employer gave him off didn’t do him any favours. Two or three weeks might have been enough before the drugs kicked in enough for him to get him going on some filing.
Sleetmute
21 Apr 10 at 12:48 pm
As somebody who has been on the DSP for 4 years now (not something I’m exactly proud of and which I delayed applying for as long as possible) for relatively severe, treatment-resistant, but episodic, mental illness, the big disincentive a lot of DSP recipients face is the fear of losing the DSP if they access employment assistance.
Currently, I if went down to Centrelink to try to access the JobNetwork (or whatever bullshittery it is now called) I must go through another Job Capacity Assessment.
The Job Capacity Assessment is often conducted by either Centrelink staff with little or no expertise or by some other kind of social worker. Most often, the result of the JCA is pretty arbitrary, and depends more on the personality, ideology or sympathy of the assessor you happen to be assigned to, rather than your actual degree of employment impediment your condition objectively imposes.
If you do “too well” on this assessment, then you instantly lose the DSP and go onto NewStart (i.e. the dole).
For me, that means going from ~$700 per fortnight to ~$400 a fortnight.
It is simply not viable nor rational for me to do so.
Unfortunately, as one (of probably the majority of “psychiatric” DSP recipients) with an episodic condition, the JCA poses a massive (and one could assume, deliberate) barrier to trying to re-enter the work force.
There are periods of time in which I probably could gain employment. The duration and timing of these periods are pretty much random. But the overwhelming rigidness of the system (plus the workforce generally, eg min. wage, High EMTRs, but that is a rant for another time) prevents many like me from doing so.
Due to the way the JobNetwork is structured, many of the places that could probably help me are unwilling to do so because their funding is contingent upon a JCA. I have even offered to pay my own way, but being dependent upon the government trough (and being de facto pseudo-quangos) they refuse.
Eliminating the minimum wage, and introducing a LDP 30/30-esque Negative Income Tax, scraping awards, lowering the cost of employment, plus other labour market deregulation would greatly help people, with often marginal employment prospects (at least in the short term), more than the current system.
Unfortunately, there are too many entrenched vested interests (unions, the government itself, certain political parties) in the way. It is in their interest that the lumpen proles are kept in their place.
And the supposed “conservative” party simply wants to extend the goodies to its own base, based on their own paternalistic fantasies.
Like most Big Government benevolence (don’t get me started on Medicare), the Australian welfare state not only fails, but inevitably hurts those it declares itself to be helping.
It’s never about them, it’s about political power, the next auction election and soothing middle class guilt.
Sadly, it is so entrenched, I don’t see it changing anytime soon.
– long time lurker, first time poster.
Marginal Utility
22 Apr 10 at 1:10 am
Excellent comment, Marginal Utility. A similar issue is under discussion at our place:
http://skepticlawyer.com.au/2010/04/21/vince-cable-bought-my-vote/
skepticlawyer
22 Apr 10 at 8:14 am
Great comment MU.
IMO the minimum wage is perhaps the worst law on the books. The real dark side of the welfare state is revealed when individuals are denied the right of productive employment out of some misguided concern that they might find low wage employment demeaning or exploitative. Can’t trust the poor and the sick to know what’s good for them can we?
asf
22 Apr 10 at 9:17 am
By chance, this has has just hit the news: ‘Disability support pensioner who posed as policeman to “torture” student he felt was overcharging for Chinese replica mobile phones is jailed’.
I myself recently went on the DSP because the reactive depression I had developed from outside circumstances became more and more locked in – probably because it got more and more entrenched from my not being able to find work compatible with my previous limited ability. To put it in perspective, I did manage to find some work doing a research paper, which went slowly at first but has been bogged down about two weeks from completion for months now – though at least now it is inching forward again.
Rather than a Negative Income Tax or directly similar, I have long advocated a loosely similar Negative Payroll Tax with a different point of impact which would be faster acting and would combine with employers’ tax bills, and as a result wouldn’t need funding; it would help GDP as well as unemployment (feedback would be welcome there). Also, see here for a less technical description.
P.M.Lawrence
24 Apr 10 at 11:53 am
The rise and rise of the fraud that is psychiatry is what’s fuelling the ‘mental illness’ DSP bandwagon.
If this society cares about decreasing those on the disability welfare rolls, it would think very carefully about shining some scrutiny on the lies psychiatry pushes to the young people that become ensnared in the system.
Harlot King
29 Apr 10 at 4:23 pm
Ive just been granted a DSP after a year of chronis illness and trying to hold down a job I had been doing for 9 years. Thank god for the DSP as I was in no way able to live in the newstart allowance . Now I can have upcoming surgey and recover without the stress of keepin my job .
Though most days I seem ok many days are spent in pain or on my bum due to vertigo.
I agree that those who get the DSP for addictions should not be getting it as those I have seen use the sxtra money to fuel their addictions ….as for back pain thats a hard one how do you know what pain a person is in when the physical evidence isnt there,,not every one is bunging it on.
jusdeb
12 May 10 at 2:56 pm
The arjee-barjee of welfare always generates more heat than light.
At sixty-one and after dealing with 50 years of very unsuccessful efforts at being ‘normal’ and dealing with PTSD, chronic depression and Asperger’s Syndrome I finally succumbed to applying for the DSP.
I can understand people rorting the system; it always happens. I can understand people being angry about that. But I’m thankful that so much of the social anxiety that plagues me is able to be eased to a tolerable level by way of the DSP. I am very, very grateful.
For me it means I can eat a bit better and get into accomodation where I can shower and have a toilet to use when necessary. Yes, I’m grateful. Praise God.
Robin
17 May 10 at 7:54 pm
Dear ken n, (see post above), I have a work related disability, I was bullied at work (I was a clinician in the public mental health sector) and developed reactive depression, I didn’t even take a sick day, I took pills instead. I went back to work and the bullying continued in various different jobs all around Australia. Now I have major depression, chronic major depression and I will never have a good day because I kept going back to work with my work related injury, easy meat for those psychopaths that lurk in management. The workplace is a toxic, violent place for people who are considered different. I have no income, I would rather kill myself than return to any workplace.
Twylite
21 Jun 10 at 1:48 pm
For the overwhelming majority of recipients, the DSP is vital support.
Nobody would deny a person with an obvious and incurable physical disability support in the form of the DSP. Likewise, a person mental illness, be it short or long term; is entitled to the DSP.
The jump is the number of claims for the DSP relating to mental illness correlates with the increased demand placed on mental health services in general. Society increasingly acknowledges that it is in its benefit to acknowledge and support those with mental illness. Ideally we would treat individuals before, during and after going onto the DSP. But our economy has finite resources.
I spent approximately a decade in full time employment, punctuated by four stays in hospital relating to my illness, often against my own will. I never applied for any form of Centrelink assistance during that time. I finally applied for a DSP.
The DSP has allowed me to complete a TAFE Diploma and commence University study. I tell no one of my psychiatric disorder. I am grateful, but not proud to receive a DSP. My pyschiatrist provides valued and ongoing therapy.
I regard the the DSP as a case of the government investmenting in my future; allowing me to help myself. I am not able to combine paid work and study.
$350 a week is a pretty mean existence. It only just gets a person through financially.
True, in the medium term, those that are on the DSP need incentives to study or find meaningful work.
The notion that psychiatry is a fraud (see “Harlot King”) is a misnomer. An honest psychiatrist will admit that their’s is the only field of medicine that is half-science and half-art form. But exponential advances have been made drug-therapy, ECT, and counselling in the few decades. Some people remain incurable or have a chronic illness (it is not as simple a popping an antibiotic for a cold).
Marcus
4 Jul 10 at 12:10 pm
I have a chronic illness which I have had since 6 years of age (am now 57). Being determined NEVER to admit to my illness I’ve battled on as best I could. In my 20′s I could not work for a period of 5 years, but Centrelink then meant just putting in my form. When I was able to return to work, I did temporary work, when it became too much I left work, went on to Newstart for a rest, then back to work when I was able. My circumstances have changed – you cannot live on the Newstart allowance long term (at least with any dignity), plus you are now expected to look for work etc. I have been on the DSP since 2008 after being asked to leave a position I held for just under two years. I should not have stayed in that job but Centrelink rules and minimum living expenses meant I had to. I would still like to work full time so that I could save some money for the bad times, but am scared to – I don’t trust Centrelink not to change the rules (even the 2 year rule does not cater to chronic illness) and I wouldn’t be able to live on Newstart. They just don’t understand what it means to have a chronic illness.
Robyn
14 Jan 11 at 1:45 pm
Well i was on newstart for a few years and the job networks workskil) did not even send me out for one interview. So i rang Deewr and put in complaint after complaint about the lack of support from the Jobnetworks, but nothing was done so i decided that it would be better if i jumped onto the Support Pension. The reasons were that i would be left alone from the Jobnetworks, I would get more money. I was once a keen jobseeker but after years of been negleted by the Jobnetworks and Deewr i had no choice but to except that i wasent going to get a job.
Jack
18 Jan 11 at 2:51 pm
As a recipient of the DSP I would just like people to know how a person on the DSP who says to Centerlink that they want to work is treated.
First I was sent to an interview to have my job capacity assessed. The woman was really rude and put me down repeatedly. I walked out of Centerlink feeling like crying, she made me not want to try. I was sent with a letter saying I had no job history to NOVA employment who sat me down and asked me what I ‘realistically’ thought I could do.
Both places ignored the fact that my disability is physical, not mental. I am not stupid. In fact, despite multiple hospitalizations and nearly dying several times I have a range of qualifications completed. NOVA encouraged me to apply for receptionist positions and started pushing me to apply for full time positions. When I raised my physical issues and concerns about committing to too many hours and then failing I was told not to make ‘excuses’. There was no acceptance of the fact that my medical condition would impact on my work capacity. This made no sense to me.
I now have a job trial and I am going to have to negotiate with a business owner about hours. I am hoping this will be the job which moves me away from the DSP.
Then I noticed the next issue, as soon as I was offered the trial I began to feel more stressed than I did when going for the interview, feeling like I had physical cramps, unable to concentrate or sit still. I started worrying about not having a safety net. I am really scared that I will fail and also lose my pension. (I don’t think this is a realistic worry but it doesn’t stop me obsessing.)
When thinking about the mental issues people on the DSP might have, the mindset that being on a pension creates even in those who have no mental condition is ignored. If you want people to work, the government needs to help people like me, who want to work and are having these issues.
Getting people at Centerlink not to treat DSP recipients who want to work like they are sh*t would help too.
A
12 Feb 11 at 9:11 am