Proposed changes to welfare payments

Caitilin Punshon
Summary 
A new report suggests making big changes to Centrelink payments. The report has a strong employment focus and recommends that people on welfare payments be encouraged to work as much as they are able. However, it is not always easy for people with a disability to find work. Sometimes employers do not want to hire people with a disability. It would be good if the review results in better support and opportunities for people. The government is asking people to let them know what they think of the review. You can make comments and submissions about it until 8 August.
Posted by: 
Caitilin Punshon on 08/07/2014
A man is sitting at a table being interviewed by a woman. In the background are other one-on-one interviews.
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The report has an employment focus.

A recent review of Australia's welfare system is proposing major changes to income support payments. If adopted, these changes will significantly affect some people receiving the disability support pension and carer payment among others.

A stronger employment focus

The findings of the review have been released in an interim report called A new system for better employment and social outcomes. It was written by Patrick McClure, former chief executive officer of Mission Australia. Four principles guide the recommendations for reform in the report. They are:

  • a simpler and sustainable income support structure
  • strengthening individual and family capacity
  • engaging with employers
  • building community capacity.

The review aims to give the income support system a stronger employment focus. It encourages all people to work as much as they are able. As a result, one of the biggest changes the report proposes is reducing the number of welfare payment types from 20 to just four. These would be:

  • a tiered working age payment
  • a disability support pension
  • a child payment
  • an age pension.

Changes to income support

Under this new system, the disability support pension would be available only to those with a permanent impairment and no capacity to work. All other people with a disability who need income support would be eligible for a working age payment. This includes people with mental illness. Carers would also receive a working age payment. There would be no other specific income support for them. The report suggests people could receive different levels of the payment according to their circumstances. Even so, it is expected this will be probably be less than the amount they currently get.

Other initiatives are also outlined in the report. One of these is income management, where Centrelink controls people's payments for them. Another is called mutual obligation and requires people to undertake certain activities in return for income.

The job problem

The report has worried many people with disability. Welfare and other advocacy organisations are also concerned. Many of the organisations support a focus on employment. However, as former Disability Discrimination Commissioner Graeme Innes has said, The problem is not with welfare; the problem is that there aren't jobs for people with disabilities.

The interim report mentions the need for employers to be more willing to make jobs available for disadvantaged or vulnerable groups. But it provides little detail about how this will happen. Many businesses remain reluctant to employ people with disability. This is especially true for those with unpredictable or episodic conditions whose reliability as workers may be questioned. As always, stigma is still an issue.

Not necessarily better off

There are many details and implications to consider in this report. The proposed changes are likely to affect every person currently receiving a welfare payment in Australia. Ideally, the outcome will be better support and genuine opportunities for people. Yet if the intention is to cut costs, the consequences could be less money for people on welfare payments.

Patrick McClure has admitted that people may not necessarily be better off if his recommendations are accepted. According to Graeme Innes, 45 per cent of people with disability in Australia are already living in poverty. It is hard to imagine how this number might decline if the review's recommendations are accepted.

Have your say

A brief consultation period on A new system for better employment and social outcomes has begun. People have until 5pm on 8 August 2014 to make a comment or submission on the review's findings. The full interim report can be found online. Accessible English and audio versions are also available. A final report is due later this year.

A New System for Better Employment and Social Outcomes – Full version of the interim report

A New System for Better Employment and Social Outcomes – Accessible English

Make a comment or submission on the review

Readers comments (2)

We are being told the proposed changes to the disability support pension are incentives for those receiving the DSP to find work. Everyone I know who gets a disability pension is trying hard to work to their full capacity or if they can increase their income and rely less on the DSP. The author of the report Patrick McClure says, "People may not necessarily be better off." It's clear if their benefits are cut significantly as is being proposed they won't be better off. There are many people with some capacity to work who still face incredible difficulties just doing the shopping, cooking and cleaning. Some of us can't drive a car so we need to be close to shops and public transport this means paying expensive rent. From my experience there are almost always other expenses associated with having a disability. I am very lucky that I have a little extra income and people in my life to help me without them I would be dreading the proposed changes to the DSP. I believe if the proposed changes are put in place many people on the DSP will struggle to survive.

Thank you for your comment, Peter. I agree with everything you said. I think things are going to get more difficult for people with disability unless and until government, business and the community get a genuine understanding of what life with disability is like and make a serious commitment to improving opportunities for all. We'll have to wait until later in the year to find out what the implications of these proposed changes may be. Until then we can live in hope... I guess...

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