There are too many people slacking off on the Disability Support Pension (DSP). That is what you might believe if you listen to talkback radio. There are more people on the DSP in NSW than all the Aussies wounded in wars, a Sydney newspaper recently proclaimed. The article implied that an increasing number of "bludgers" are causing the DSP numbers to spiral out of control. But the evidence suggests otherwise.
Numbers on the DSP
The Department of Social Services (DSS) issues yearly reports on the Characteristics of Disability Support Pension Recipients. The last report states there were 821,738 disability support pensioners in June 2013. A table in the report shows the number of recipients of the Invalid Pension and then the DSP. Since 1974 the number of recipients grew by an average 4.4 per cent per year. But in the last decade the average increase more than halved to two per cent per year.
Common sense says that population increases will cause increases in the number of people receiving the DSP. According to the Australian Bureau of Statistics, the average population growth for much of the last decade was 1.7 per cent. But a 1.7 per cent rise in population does not automatically cause a 1.7 per cent increase in people on the DSP. This is because only people of working age can qualify for the DSP. There are many other causes of increasing DSP numbers.
Disability employment rate
The primary reason why people are on the DSP is due to their disability making it hard or impossible to find work. Australia has one of the lowest rates of employment of people with disabilities in the developed world. A table in a Productivity Commission report, Disability and Care, shows only 39.8 per cent of people with disabilities have jobs in Australia. Australia comes in at number 21 out of the 29 listed countries. An analysis of the data suggests Australia needs to increase its disability employment rate to 44.8 per cent to reach the average of the listed countries.
Age and the DSP
The chances of a person receiving a DSP increase greatly with their age. The DSS says over half of DSP recipients are over 50 years old. The Australian population is getting older as a whole, so more people with disabilities are to be expected. It is also harder for older people with disabilities to find work. The Productivity Commission says employers are less inclined to employ people with a disability who are older and low-skilled. Jobs for older and unskilled people with disabilities are becoming rarer.
Gender and the DSP
The Productivity Commission says women are a major factor in the current increase in the number of disability pensioners. From 2004 – 2005 to 2009 – 2010, 85 per cent of the growth in DSP recipients were female. The DSS report says a gradual increase in the age that women can claim the Age Pension is one of the reasons more females received the DSP. The age women could claim the Age Pension progressively rose from 60 in 1994 to 65 in July 2013. The DSS also says abolishing the Wife Pension, the Widow Pension and the Partner Allowance increased the number of women claiming the DSP.
The DSS report says 127,173 claims for the DSP were processed from June 2012 to 2013. Of those only 55,092 or 43.3 per cent were granted, so 72,081 were rejected. The grant rate has fallen from 63.0 per cent in 2006 – 2007 to 43.3 per cent.
Fraud and the DSP
The Productivity Commission report says there have been few convictions of fraud involving the DSP. Only 0.2 per cent of people on the DSP have stopped receiving it because of non-compliance. The commission concludes, "it appears that most people on the DSP have significant impairments that genuinely affect their employment prospects".
So the next time you hear someone complain about all the "bludgers" on the DSP causing its numbers to explode, hit them with a few facts. Tell them the rate of growth in disability pensioners is decreasing and more people are having their claims rejected. Tell them the reason for the growth in numbers is due to the increasing and aging population, employers not employing people with disabilities, and women having to wait longer for the Age Pension. And tell them that very few people have been convicted of defrauding the Disability Support Pension.