- D1. Keeping People with Capacity Better Engaged
- D2. Improving Assistance and Work Capacity
- D3. Recognising the Capacity of Mature Age People
- D4. Restricting Activity Test Exemptions for Newstart Allowance and Youth Allowance Recipients
- D5. Improving Centrelink Assessments of Work Capacity with Re-training
- D6. Improving the Quality of Medical Assessments for Conditions Likely to Change
D1. Keeping People with Capacity Better Engaged
1 July 2003 and ongoing
Disability Support Pension (DSP) qualification criteria will change so that DSP is only paid to people with a very restricted capacity to work. People who can work at least 15 hours a week at award wages within two years of assessment will no longer qualify for DSP.
The change will apply to all new DSP claimants and most existing DSP customers at the time of DSP review. DSP recipients with severe disabilities and clearly no work capacity, and those within five years of Age Pension age, will not be reviewed under the new rules. Existing customers will be assessed under the new rules within five years of implementation of these changes.
It is expected that most people who will no longer qualify for DSP will receive, or remain on, Newstart Allowance (NSA). An additional $4.8 million will be provided for around 4,600 extra Job Network places over three years to assist this group.
Over the past decade the number of people receiving DSP has continued to grow and is now over 650,000. Disability pension growth throughout the 1990s was higher in Australia than for any other OECD country.
Many people with disabilities, who receive DSP, could improve their financial circumstances through part-time work. Currently such participation is voluntary and less than ten per cent of DSP customers report earnings, the lowest rate of any OECD country.
Restricting DSP to people who cannot work at least 15 hours a week at award wages instead of the existing 30 hour limit is consistent with modern labour market trends towards increased part-time and casual employment. The change will encourage people with disabilities to make the most of these opportunities where they have the capacity for substantial part-time work.
Total Government Funding: Net save of $28.2 million over four years
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D2. Improving Assistance and Work Capacity
1 July 2003 and ongoing – Disability Support Pension (DSP) changes
1 July 2003 and ongoing – Funded places in Job Network, Personal Support Program and education and training
1 March 2004 and ongoing – Disability employment service and rehabilitation places
Changes to DSP rules outlined in Keeping People with Capacity Better Engaged (see D1) will be complemented by allowing Centrelink to consider whether a broader range of interventions could improve a person's work capacity when determining their eligibility for DSP.
The Government will create over 68,000 extra places in rehabilitation, specialist disability employment assistance, the Job Network, the Language Literacy and Numeracy Program and the Personal Support Program to improve the work capacity of people claiming or receiving DSP. Additional funding of $252 million will be provided for these services over three years, including $33 million for the states/territories for mainstream vocational education and training places.
Most people who will not qualify for DSP will qualify for, or remain on, Newstart Allowance (NSA). These customers will be required to participate in interventions that will improve their capacity to work. Personal Advisers will link the customers to suitable interventions or services and will help to develop a participation plan. The intervention will form part of Preparing for Work Agreements.
The income support changes will apply to all new DSP claimants and most existing DSP customers at the time of DSP review. DSP recipients who are severely disabled and clearly have no work capacity, and those within five years of Age Pension age, will not be reviewed under the new rules. Other existing DSP customers will be assessed under the new rules within five years of implementation of the changes.
Current DSP provisions effectively enable people with disabilities to withdraw from the labour market. There is evidence that the work capacity of people with disabilities can be improved through a broader range of effective program interventions, including specialist services such as rehabilitation.
DSP will continue to provide financial support for people with disabilities who have limited capacity for economic participation, while ensuring that those with greater capacity remain active in the labour market.
Total Government Funding: Net save of $288.9 million over four years
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D3. Recognising the Capacity of Mature Age People
1 July 2003 and ongoing
When a person aged 55 years and over is assessed for Disability Support Pension (DSP) local labour market conditions will no longer be considered.
Existing DSP recipients 55 years of age and over will not be reviewed on the basis of this change alone. However, those who have their qualification reviewed will be subject to the change and have their work capacity assessed under the new rules.
Most people who will not be eligible for DSP as a result of this change will be granted, or remain on, Newstart Allowance (NSA). They will have obligations to undertake activities focussed on helping them into paid employment.
Additional funding of $0.8 million will be provided for around 800 extra Job Network places over three years to assist this group.
For those aged under 55 years, DSP eligibility criteria already disregards local labour market conditions and only considers the individual's medical impairment and assessed work capacity.
About one third of new DSP payments are made to applicants 55 years of age and over. Currently for applicants 55 and over, consideration of local labour market conditions allows DSP to be used as an 'early retirement' option by older unemployed people. Given the ageing of the population, it is important to signal an expectation that older workers remain active in the labour force, consistent with their work capacity.
The change is designed to promote greater levels of economic participation through work focussed activities for the 55 and over age group.
Total Government Funding: Net save of $10.4 million over four years
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D4. Restricting Activity Test Exemptions for Newstart Allowance and Youth Allowance Recipients
20 September 2003 and ongoing
The Social Security Act 1991 will be amended so that job seekers who are incapacitated for work but who can still undertake other appropriate activities will not be completely exempt from the activity test. Where appropriate, they will be referred to services that will improve their employability and future job prospects, such as rehabilitation.
The changes are important in delivering a clear message that disability or incapacity does not necessarily mean a person cannot participate economically or socially.
Under Australians Working Together changes due to be implemented in September 2002, there will be greater focus on a job seeker's capacity to participate, rather than focus on their incapacity, through better assessment of their circumstances.
Better assessment provides greater scope for Centrelink to seek advice from both in-house specialist staff and external agencies with expertise in assessing people's capacity to participate.
Changing the legislation will further ensure that Centrelink and job seekers focus on the job seeker's capacity to participate in appropriate activities. When fully introduced, the change will broaden Centrelink's role when exploring participation options and appropriate interventions with customers.
Total Government Funding: Nil cost
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D5. Improving Centrelink Assessments of Work Capacity with Re-training
20 September 2002 and ongoing
New guidelines will be developed so that Centrelink staff can better assess the work capacity of people applying for Disability Support Pension (DSP) and to assess work capacity when existing DSP payments are reviewed. The guidelines will provide information on how mainstream training can help customers with transferable skills to find alternative employment paths.
Information on appropriate training courses will also be available to Centrelink staff through improved links to the TAFE sector, including through liaison with Disability Coordination Officers (to be implemented in July 2002 as part of the Australians Working Together package announced in the 2001–02 Budget).
In assessing whether a person is unable to work for DSP purposes, Centrelink currently considers whether the person's impairment would prevent them from undertaking mainstream training (training not designed specifically for people with disabilities) that could be expected to improve their work ability within the next two years. More effective application of this current provision will identify more people with disabilities who could benefit from such training and thereby return to work.
The change will complement the new emphasis on improving the work capacity of potential and existing DSP customers by ensuring a broader range of interventions are considered by Centrelink.
Total Government Funding: Net save of $5.2 million over four years
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D6. Improving the Quality of Medical Assessments for Conditions Likely to Change
20 September 2002 and ongoing
New instructions will be developed for Medical Assessment Service Providers who assess customers' medical qualification for Disability Support Pension (DSP). The instructions will clarify circumstances in which it is not appropriate to assign an impairment rating for a condition that is likely to improve with scheduled medical treatment. The instructions will assist in cases where the person has chosen to undergo medical treatment that can be expected to improve the person's condition and where it is highly likely that they will receive this treatment within a two-year period.
Instructions for Medical Assessment Service Providers will be developed in consultation with medical assessors contracted by Centrelink. The change is intended to ensure that people who can improve their work ability following medical treatment should remain on, or be granted, payments with stronger links to the labour market (such as Newstart Allowance).
Examples of relevant cases include people who could substantially regain good health through hip or knee reconstructive surgery or people doing pain management courses. No person will be denied DSP on the basis that they elected not to undergo an invasive surgical procedure.