2. Terms of reference
2.2 Frequency of payments, including the efficacy of lump sum versus ongoing support
2.1 Appropriate levels of income support and allowances, including the base rate of the pension, with reference to the stated purpose of the payment
Chapter 1 noted that providing a basic standard of living for those not able to support themselves is a key principle of the income support system. Every citizen should be able to meet their basic needs and participate in Australian society.
The benchmarking of pension payments to 25 per cent of the MTAWE links pension rates to community living standards. In effect the provisions operate as an adequacy benchmark. Chapter 3 illustrates how this approach has driven real increases in pension rates.
The first terms of reference poses the question: do the current rates and the 25 per cent of MTAWE benchmark meet the objectives of the system?
This issue is particularly important for those who are wholly reliant on income support and do not have private income and assets to assist with cost of living pressures, for example:
- some people with disability may be dependent on Disability Support Pension for most of their adult lives
- carers of children with disability who, because of their caring responsibilities, may not have the opportunity to work for many years and build up assets
- people with disrupted work histories may not have been able to save for their retirement or purchase a home.
Chapter 3 provides data on private income and asset levels for a number of income support groups.
These settings are significant for people who have to rely on income support for long periods. Chapter 3 also provides information on income support durations and movement between payments. The average durations of current recipients on income support is 13.1 years for Age Pension, 10.8 years for Disability Support Pension and 7.6 years for Carer Payment recipients. The proportion of new maximum rate Age Pensioners who come from another income support payment is extremely high: 82.9 per cent for men and 89.6 per cent for women.
This section discusses data on a range of fixed and relative adequacy benchmarks and measures, including information on comparative rates of real income growth, replacement rates, international comparisons, budget standards, relative income measures, and outcome measures of stress and hardship. Also included are data on price changes for different groups.
Care needs to be taken in interpreting these benchmarks and measures.
There is no one way to determine whether a benchmark like 25 per cent of MTAWE is set at the right level. There is a need to look to a range of measures to judge whether current payment rates are appropriate.
Equally no one benchmark can definitively set a level at which an income support payment is adequate for all needs and all people. While the measures are useful guides, it does not follow, for example, that every person below 25 per cent of the MTAWE, or a relevant budget standard, has inadequate income for their needs.
2.1.1 Rates of income growth
Chapter 3 shows that the real value of the support paid to pensioners and families with children has increased over time, and the question arises as to how this compares with the experience of the wider community.
Chart 3 presents a number of comparisons of relative growth in real disposable income over the past decade. It draws from multiple sources, including surveys and estimated after tax earnings of a person on various levels of income. It shows:
- an Age Pensioner with no income other than the Age Pension had, on average, a real increase of just over two per cent per year
- there is a wide variety of outcomes for different groups—wage earners in the bottom half of the earnings distribution experienced lower real income growth than Age Pensioners wholly reliant on income support, while a couple with two children on average wages experienced higher real growth.
Chart 3. Comparison of real rates of income growth over the past decade
2.1.2 Replacement rates
Three such replacement rates are in Chart 4 and Chart 5. These show the single allowance and single pension rate respectively as a proportion of the net income of a single worker on the minimum wage, MTAWE and earning the median of full-time non managerial employees' wage (as reported in the ABS Employee Earnings and Hours survey).
Chart 4 and Chart 5 show, for example, that the replacement rate for a single allowee as at 1 January was 45.9 per cent of the net earnings of a minimum wage worker and the Age Pension was 61 per cent. These different results reflect the different policy rationales behind pension and allowance payments, as noted in Chapter 1.
Chart 4. Replacement rates – single allowee
Chart 5. Replacement rates – single pensioner
2.1.3 International comparisons
Replacement rates can also be compared across countries.
When compared with other countries, Australia's transfer system provides working aged families and individuals with a higher replacement rate of income in periods of sustained unemployment or other joblessness than the equivalent social assistance component of most other OECD countries (although short-term income related insurance type payments in some countries are higher).
Chart 6. OECD – social assistance as a proportion of household income
As these replacement rates are based upon allowance rates only, the actual assistance and replacement rates of a high proportion of income support recipients will be higher as they are eligible for pension rates of assistance rather than allowance rates.
Australia's replacement rates for retirement incomes are not as high relative to other countries, many of which operate contributory earnings related public pension schemes; however, the sustainability of many of these systems is questionable. Chart 7 compares replacement rates relative to the net earnings of a worker on 50 per cent and 100 per cent of the OECD defined national Average Production Worker wage.
Chart 7. OECD – retirement income systems net replacement rates for a worker on 50 per cent and 100 per cent of average earnings
Australia's results will change in the future as superannuation assets build and feed into increased private retirement incomes. Nevertheless, the results indicate that Australia, out of the 30 countries surveyed, has the 12th highest replacement rate for low-income workers but because of the more limited level of superannuation assets built up by current retirees the country is ranked less highly at higher earnings levels. The net replacement rates for a worker on 50 and 100 per cent of average full time earnings in Australia in 2035 are expected to be 91 and 65 per cent respectively.
2.1.4 Budget standards
Budget standards involve developing detailed household budgets specifying the items a household needs to buy to achieve a defined standard of living and therefore can be used to identify the disposable income needed to obtain that standard of living. As with all approaches to measuring adequacy, these standards have strengths and weaknesses and are subject to considerable debate on whether they represent appropriate levels of living and can realistically reflect the diversity of living arrangements and trade-offs that households make.2
The Social Policy Research Centre at the University of New South Wales developed budget standards in the mid-1990s. These included some 600 individual products derived from research on household expenditure. Budgets were developed for two levels:
- a median living standard, described as the 'situation of a household whose living standard falls somewhere around the median standard of living experienced within the Australian community as a whole'
- a low-cost budget, described as 'a level of living which may require frugal and careful management of resources but would still allow social and economic participation consistent with community standards and enable the individual to fulfil community expectations in the workplace, at home and in the community'.
Chart 8 presents an update of the basic budget for aged single and couple households in a range of housing tenures using CPI. In effect, the cost of the basket of goods in the original standards has been adjusted to account for detailed price changes but the products in the original budget standards have not been adjusted for any change in community living standards.3
The results are shown in terms of the value of the pension for the particular household types as a proportion of the budget for that household type (for example, in March 2008 it is estimated that a single private renter on the Age Pension received 93 per cent of the low-cost budget standard from their Age Pension and Rent Assistance).
As illustrated in Chart 8, the Age Pension has increased relative to the budgets over the past decade. In March 2008, the Age Pension rate for single homeowners and single renters was below the relevant budget standard, and the rates for all couple household types were above the standard.
Chart 8. Age Pension as a percentage of budget standards
2.1.5 Relative income measures
Sometimes labelled 'poverty lines', relative income measures show the percentage of a population with incomes less than a proportion of an average or median household. A commonly used measure is 50 per cent of median household income (adjusted for household size). In much public debate, all households below the 'poverty line' are assumed to have inadequate income. However, care needs to be taken in interpreting relative income measures. 4
Not everyone below a relative line will have too little income to achieve a basic standard of living. Relative income definitions of poverty are quite poor at identifying households that actually experience hardship and financial stress.
Because they use relative disposable income, these measures ignore the extent to which support for low-income households may be provided through non-cash transfers such as services.
Also, a relative benchmark often moves with changes in the distribution of income in the broader population rather than real increases or decreases in the disposable income of people on low incomes.
Chart 9 shows two approaches to such measures. The first uses the income of a household with 50 per cent of the household median income in 1994–95 to establish a poverty line which is maintained in real terms by adjusting for price inflation ('real' measure). The second tracks the proportion of the population with disposable incomes of less than 50 per cent of the median household income over time—that is, the 1996 results use the 1996 median household ('relative' measure). The chart shows three rates for each of the approaches: Persons, the proportion of the total population who live in households with an income below the low income line; Elderly, the proportion of people aged 65 years and over who live in households with incomes below the low income line; and Child, the proportion of children under the age of 15 years who live in low-income households.
The two approaches show divergent results. Using the constant real line there has been a marked decline in the incidence of low incomes across the population. Real increases in income support and wages have, in effect, moved many households above the poverty line that was set using 1994–95 median household income. In contrast, if a purely relative approach is taken there has been an increase in the poverty rate for the population as a whole. In 2005-06 it is estimated that 11.1 per cent of the population lived in households with less than 50 per cent of the 2005-06 equivalised disposable income of the median household, and 3.8 per cent lived in households with incomes below the 1995-96 benchmark adjusted to 2005-06 dollars. For the elderly the rates were 23.4 per cent under the relative measure and 4.6 per cent using the real benchmark, and for children 10.7 per cent and 3.2 per cent.
Chart 9. Relative and real low income measures
(Proportion living in households with equivalised disposable incomes below 50 per cent median equivalised disposable income, relative and real measures)
As noted above, this approach only considers current cash incomes rather than the wider set of resources available to households. An important component omitted is the benefits homeowners gain from owning their homes and not paying rent, along with the subsidies provided to public housing tenants. Taking these into account, using FaHCSIA estimates results in a fall in the relative measure in 2005–06 to 6.1 per cent5. For some household types the change is even more dramatic: for single persons over 65 years the rate drops from 47.4 per cent to 7.0 per cent, and for couples in this age group it drops from 19.0 per cent to 4.8 per cent.
The broad picture these data present is similar to that seen in considering the relative growth of income for different household types. Low-income households have maintained or increased their incomes in real terms, but for many the rate of increase has been lower than that for other groups in the community.
2.1.6 Financial stress indicators
The Household Income and Labour Dynamics in Australia (HILDA) survey found that Australian households, including pensioner and allowee households, when asked, do not generally nominate themselves as poor. Most are satisfied, although a significant group consider they are 'just getting along' (50.1 per cent of households relying on income support for 90 per cent of their income).
Self-reported rates of financial stress (for example, could not pay electricity, gas or telephone bills on time; could not pay the mortgage or rent on time; asked for financial help from friends or family) or hardship (for example, pawned or sold something; went without meals; was unable to heat the home; and asked for help from welfare/community organisations) are also low, although with some significant pockets of multiple stress and hardship. For example, a recent study by Edwards et al (2008) found that carers experienced financial hardship at around double the rate of the general population. Chart 10 illustrates the levels of stress reported by households with more than 50 per cent of their income from transfer payments.
Chart 10. Transfer reliant households: incidence of financial stress, 2006
While providing some insight into the adequacy of payments, the incidence of poor outcomes reflects a much wider set of factors. These include the full range of resources such as wealth and access to services, and personal characteristics, competencies and behaviours. While a certain level of income appears to be more than adequate for some households and individuals, others, despite being in similar situations, may find it inadequate.
This highlights that decisions on the adequacy of income support need to account for the role services play in meeting specific needs, especially for those who due to health or other reasons would otherwise face high costs.
2.1.7 Singles and couples
The difference between the single and couple rates of pension also has an important effect on the adequacy of payment for specific groups. As noted in Chapter 1, the single-couple rate reflects the fact that a single person living alone usually does not have the economies of sharing household expenses commonly experienced by a couple. The single rate of pension is currently 60 per cent of the combined couple rate.
Chart 11 shows how the single-couple ratio in Australia compares with the relativities in other major OECD countries, which fall into a range from 57 per cent to 75 per cent, but somewhat below the average value of 62.9 per cent (the median value across these countries is 62 per cent).
Chart 11. International comparison of single–couple relativities
FaHCSIA analysis using a range of data including the ABS Household Expenditure Survey, HILDA and budget standards has sought to estimate 'equivalences' between couple and single person households using 14 different approaches. These included the relative incidence of financial stress and more econometrically based approaches using shares of food expenditure and types of private consumption. These measures of equivalence ranged from 0.6 to 0.79.
It should also be noted that this type of analysis only considers the relativities between household types – that is, a single person household compared with a couple only household. Other types of household have different relative needs – for example, a single person living with others compared with a couple living together. While the gains from this type of sharing may not be as great as those obtained by a member of a couple, the costs are likely to be substantially below those of a person living by themselves. Typically, the relative income required by a single renter living alone is higher than that required by a couple renting.
These comparisons of single-couple equivalences are consistent with the analysis of a range of measures in earlier sections of this report, including the budget standards approach, relative income distribution and the incidence of stress, which suggest that outcomes for those single pensioners living by themselves are somewhat lower than those reported by couples.
2.1.8 Maintaining adequacy over time
In addition to the level at which payments are struck, the basis on which they are adjusted over time contributes to their adequacy.
The CPI's goal is to provide a broad measure of inflation in the household sector. As an aggregate measure, it records the impact of price changes on the total quantum of consumption across the sector6. As a general measure of price inflation, the CPI does not reflect the impact of costs for particular households and indeed is more heavily weighted by the consumption patterns of higher income households, who contribute the greater weighting of their purchases. As a result, where households have a different pattern of consumption to the average of the population, changes in the specific costs they encounter may not be appropriately reflected by the CPI. To overcome this, the ABS has developed a number of Analytical Living Cost Indexes which account for the specific purchases made by different household types7.
Chart 12 compares one of these analytical indexes—the Age Pensioners index—with the CPI, showing the trends in both measures of price increase and the difference between them.
Chart 12. CPI and Age Pension Analytical Living Cost Index
Over the 27 years for which the two indexes are available, the two measures of prices have varied at particular times. Over the whole period, the cumulative difference has been relatively small. The measure of prices for Age Pensioners has increased by 237.3 per cent compared with 229.5 per cent for the CPI. Over the past five years, while the CPI has increased by 14.5 per cent the price index for Age Pensioners has increased by 15.8 per cent.
In addition to the longer standing Age Pensioner Analytical Living Cost Index (ALCI), ABS has also developed more recent indexes for 'Other Government Transfer Recipient', 'Self-Funded Retiree' and 'Employee' households. Over the past five years, some ALCIs have increased more rapidly than both the CPI and the Age Pensioner ALCI. The Employee ALCI increased by 18.0 per cent and the Other Government Transfer Recipient ALCI increased by 16.6 per cent. The Self-Funded Retiree ALCI grew by 14.4 per cent over the period, which was less than the growth of the CPI and the Age Pensioner index.
If it were possible to further breakdown the Other Government Transfer Recipient group (something that is not currently able to be done because of the small sample size) it is likely that more specific subgroups of pensioners and allowees would have faced cost increases either above or below this average.
Of course, any measure of price change, whether it is the CPI, the Age Pensioner ALCI or any other measure, will not describe the actual price changes faced by a household. Such measures still assess price changes in an average basket of goods with average expenditure weights applied to the categories of items in the basket. There will always be a significant number of households with expenditure weights that mean they face higher or lower than average price changes over any time period.
2.2 Frequency of payments, including the efficacy of lump sum versus ongoing support
Most Australian income support payments are paid on a fortnightly basis, reflecting the role of these payments in providing individuals and families with the money they need for their day-to-day living costs. However:
- some payments (for example, Telephone Allowance and Utilities Allowance) are made quarterly
- annual lump sums in the family payments system help moderate debts resulting from reconciling family income estimates with taxable income
- regular bonuses are intended to help with larger lump sum costs
- ad hoc bonuses have been paid annually to allow pensioners and some allowees to benefit from productivity gains in the economy as a whole.
Chapter 1 showed that different income support recipients get different packages of income support.
From the perspective of the individual pensioner or allowee, the frequency of payments and balance of lump sum and ongoing support are important because of how this affects the capacity to manage regular recurrent costs and less regular or unplanned lump sum costs. In addition to the quarterly and annual payments listed above, it should be noted that pensioners and allowees can get advances of their payments that they then repay. They can also use Centrepay to make regular payments to cover expenses such as utility bills and can use electronic banking to make direct payments from their accounts to help manage their finances.
Since annual and large quarterly payments are a relatively new component of the income support system, no research is available on customer preferences. However, information is available on people's access to cash reserves and/or credit that would allow people to meet planned and unplanned lumpy expenditure. This gives an insight into the need for mechanisms within the income support system to give people the flexibility to balance different types of expenditure.
2.2.1 Ability to raise funds in an emergency
Data is available on whether pensioners think that they have the ability to meet emergency needs. The 2003–04 Household Expenditure Survey asked households whether they could raise $2,000 in a week for an emergency. As the person's reliance on income support increases, their capacity to raise funds in an emergency decreases. Table 2 examines payment recipients by type of payment and proportion of household income that the payment constitutes, and the proportion of households that could not raise $2,000 in an emergency. For example, of all households relying on the Age Pension for 90 per cent or more of their income, 18.1 per cent said they could not raise $2,000 in an emergency. This increased to 50.9 per cent for the equivalent Disability Support Pension population.
| Proportion of household income derived from transfers | ||||
|---|---|---|---|---|
| Under 50 per cent | 50 to under 90 per cent | 90 per cent and over | Total | |
| Age | 6.1 | 2.3 | 18.1 | 11.4 |
| DSP | 15.2 | 18.4 | 50.9 | 35.2 |
| DVA | 3.5 | 4.3 | 8.2 | 5.5 |
| Parenting | 26.0 | 41.5 | 67.6 | 45.4 |
| Newstart/student | 20.7 | 38.2 | 45.4 | 31.3 |
| Other income support | 11.8 | 20.1 | 44.4 | 24.3 |
| All Households | 8.9 | 18.5 | 33.5 | 14.3 |
The main source households would use to raise funds in an emergency is private savings. Among Age Pension households highly reliant on income support who said they could raise $2,000 in an emergency, 68.8 per cent said they could do so from savings. For the comparable Disability Support Pension households, around half said they could access savings for this purpose.
2.2.2 Access to cash savings
Most income support reliant households have relatively few assets (although, as Chapter 3 describes, there are some comparatively wealthy households). This is even more marked when cash savings, which are an important source of liquid assets, are considered.
Most of the almost two million income support recipients living in households reliant upon transfers for more than 90 per cent of household income report they have savings under $1,000.
Amongst these highly welfare reliant households, Age Pensioners—along with those on DVA payments—have higher levels of savings and much lower proportions reporting very low savings (Chart 13).
Chart 13. Highly reliant income support recipients: value of bank accounts, 2005–06
2.2.3 Credit cards
The main form of non-housing consumer credit used by Australians is credit cards. The Reserve Bank of Australia reports there are some 12.9 million credit card accounts in Australia with balances of $39.3 billion.
Many consumers, however, do not hold a credit card either because they do not want to use one or because they have not been able to obtain one. This may be due to their credit history or because their circumstances are not considered by lending institutions to offer sufficient assurance of their ability to meet their obligations.
The majority of people on income support (52.7 per cent) who live in households mainly reliant upon transfers as their main source of income do not have a credit card. This proportion varies between types of income support and with the extent of reliance upon income support (Table 3). Overall, the more reliant a household is on income support the less likely people are to have a credit card.
| Proportion of household income derived from transfers | Total | ||||
|---|---|---|---|---|---|
| Under 10% | 10-<50% | 50-<90% | 90% and over | ||
| Age Pension and related | 9.2% | 27.1% | 40.8% | 56.6% | 45.4% |
| DSP | 14.7% | 29.6% | 39.5% | 68.0% | 50.6% |
| Carer Payment | 0.0% | 12.0% | 36.5% | 57.7% | 42.2% |
| Parenting Payment Single | 10.6% | 39.4% | 52.3% | 68.5% | 53.9% |
| NSA and working age | 16.5% | 33.6% | 43.3% | 50.5% | 40.7% |
| Austudy/Abstudy/YA | 8.4% | 29.6% | 52.3% | 65.8% | 34.5% |
| Other family payments | 13.5% | 21.7% | 51.1% | 52.5% | 19.4% |
| Other | 11.5% | 29.1% | 27.5% | 60.1% | 33.6% |
2.3 Structure and payment of concessions or other entitlements that would improve the financial circumstances and security of carers and older Australians
Chapter 1 reported that one principle of the social security system was to ensure that households in different circumstances achieve a comparable standard of living. This is an area where the income support system crucially depends on the wider social protection system; as is outlined below, this is particularly the case for those who face high costs because of disability.
One question in the design of social policy is whether the direct provision of services will meet an individual's needs more efficiently and effectively than cash transfers. Transfer payments work best when the costs of different groups are clustered tightly around the average. They tend to be based on an assessment of the average need of population groups (for example, renters, singles or couples). However, transfer payments work less well if used to address costs that are borne unevenly in the population. In this case there is a risk that groups with high needs will be significantly under compensated and groups with low needs will get a windfall gain.
2.3.1 Social assistance in kind
Australia's social protection system is designed to provide assistance as part of an integrated approach to people at key stages or events across the life course. In addition to income support payments and concessions on a range of goods and services such as those provided through the Pensioner Concession Card, Commonwealth Seniors Health Card and Health Care Card, the social protection system encompasses subsidised services such as child care, health, housing, transport, disability and aged care, compensation for work and other injuries, paid sick leave, and other cash and in-kind benefits. These contribute to the overall financial and economic security of pensioners.
Elements of the system are funded by all levels of government through transfers, tax expenditures and funding of community and welfare services. Business also contributes by providing employee benefits such as maternity and sick leave. The non-government sector also plays a role by providing services, as does the public (for example through compulsory levies on motor vehicles to cover compensation payments for road accident injuries).
Transfer payments operate in conjunction with these other forms of assistance to meet the needs of income support recipients. In a number of service areas, individuals may contribute to the overall cost of the service provided according to their ability to pay. Residential aged care services are a case in point. Here the government provides significant funding through the non-government sector's provision of aged care accommodation and services. The individual also contributes, either through paying a proportion of their pension or specified amounts based on their income and assets.
From the data available it appears that these services are well targeted. The ABS estimated in 2003–04 that 29.8 per cent of the gross value of this type of assistance flows to households in the lowest private income quintile (adjusted for household size).
It also appears that these services are a significant component of the total support available to low income households. Chart 14 shows, for those households that receive more than 90 per cent of their income from transfer payments, the value of net private income, transfers and non-cash benefits for households, classified by the main form of income support received by the household. In the case of households in receipt of the Age Pension, for example, the equivalised value of these benefits was $203 per week, which was close to the equivalised value of income support of $247 per week (in 2003-04).
Chart 14. Highly reliant households: components of final income, 2003–04
Both the level and mix of these non-cash benefits vary between the household types associated with these different payments. For example, while older income support reliant households have a very high use of health services, households with some income from the Disability Support Pension have a relatively high use of other welfare services, including disability services. These households, along with single parents, are high users of public housing. Because these data reflect average values of assistance across households, they disguise the much greater diversity in the benefit obtained by different households.
As the population ages, the need for additional health care in the community will increase. One of the most significant needs individuals may have over their lives is the need for, and access to, medical and health services. The timing and scale of the need for these services may be unpredictable for many. Australia, responds directly by providing a universal health safety net, which ensures all Australians can access health and medical assistance without being constrained by their ability to pay.
Another feature of an ageing population will be an increase in the number of people with disability who need access to services and support. Disability issues are central to this review as they cut across the income support population.
2.3.2 Disability related services
Many people with disability have additional needs and associated costs related to their disability. The nature and level varies significantly from individual to individual. They are ameliorated, in part, by services funded by government that respond directly to a range of individual and household needs.
Costs
There is little systemic information available on the dispersion of the costs of disability. The DVA, however, has a unique data set drawn from its population of White Card holders, which provides information on service types by cost and by the level of disability of the card holder.
These data represent the average annual cost of the White Card at each point of the general rate disability pension under the Veterans' Entitlement Act. The White Card provides for treatment and other services for a veteran's accepted service-related disabilities.
Chart 15 illustrates the increases in cost by service type as the level of disability increases.
Chart 15. White Card clients: average expenditure, 2007–08
The data should be interpreted with some caution because they are the product of a complex eligibility system:
- they reflect only the costs of disabilities that have been accepted as being due to a veteran's service—that is, an individual could have more severe disabilities than implied by the level of their service-related accepted disabilities
- access to each program is regulated and capped through business rules, and further services beyond the caps can be approved on the basis of need
- the White Card population is concentrated in older age ranges
- costs are gross and do not include Medicare offsets.
The costs reflect a range of the total costs of disability and not the costs for individuals. These actual costs are much harder to identify and there is considerable debate surrounding them. A recent report undertaken for the United Kingdom's Department for Work and Pensions (Tibble 2005) reports that while research generally agrees on there being extra costs of disability that there is much variance in the findings of different studies of the cost to individuals with little agreement on the size of costs, the costs for specific groups and items, nor the factors that influence the size of costs.
2.3.3 Services example
Services for people with disability are provided through the current Commonwealth State Territory Disability Agreement (CSTDA), the Commonwealth Department of Health and Ageing's programs—including the Home and Community Care (HACC) program—and additional state and territory government funding. As an example of governments' contribution to the costs incurred by people with disability, the disability related services provided through the HACC program and the CSTDA are briefly described next.
Home and Community Care
The HACC program is a joint Australian, state and territory government cost-shared initiative, with around $1.6 billion in funding in 2007–08. State and territory governments manage the day-to-day administration of the program. HACC provides community care services to frail aged and younger people with disability and their carers to promote and enhance their independence at home and in the community. Types of services funded through HACC include nursing care, allied health care, meals and other food services, domestic assistance, personal care, home modification and maintenance, transport, respite care, counselling, support, information, advocacy and assessment. Information on the use of some of these services in 2006–07 is included in Table 4.
| Service type | Number of clients | Total service hours (million) |
Average per client (hours) |
|---|---|---|---|
| Centre-based day care | 74,227 | 8.70 | 117.3 |
| Respite | 34,642 | 2.46 | 71.1 |
| Personal care | 80,028 | 4.32 | 53.9 |
| Domestic assistance | 250,793 | 7.76 | 30.9 |
| Social support | 106,105 | 3.84 | 36.2 |
| Nursing care | 211,498 | 2.83 | 13.4 |
| Allied health | 163,110 | 0.88 | 5.4 |
The majority (92.2 per cent) of HACC clients in 2006–07 received some form of government pension or benefit, most commonly the Age Pension (65.2 per cent), Department of Veterans' Affairs pension (13.5 per cent) and the Disability Support Pension (8.8 per cent).
Commonwealth State Territory Disability Agreement
The CSTDA provides the national framework for the provision of government support to service for people with disability. Under the agreement, all parties are responsible for funding specialist disability services. The state and territory governments have responsibility for the planning, policy setting and management of accommodation support, community support, community access and respite care for people with disability. The Australian Government has similar responsibilities for specialised disability employment assistance.
Total Commonwealth and state and territory funding under the CSTDA in 2006–07 was $4.4 billion. Expenditure per client through the CSTDA tends to be, on average, much higher than HACC expenditure due to the more intensive nature of the services being delivered—for example, supported accommodation services. Table 5 provides information on some of the services funded through the CSTDA by service type in 2006–07. It is not a total list.
| Service type | Total annual cost to government $ million |
Average cost per service user |
Number of users |
|---|---|---|---|
| Accommodation support | $2,088.9 | $55,745 | 37,473 |
| Community support | $519.9 | $5,273 | 98,598 |
| Community access | $525.5 | $9,871 | 53,236 |
| Respite | $255.7 | $8,506 | 30,058 |
| Open employment | $218.8 | $3,678 | 59,478 |
| Supported employment | $171.5 | $8,111 | 21,140 |