BLOWOUT IN DISABLED PENSION

Red News Readers,

Nice to see this Howard Government initiative failed!!

Jenny Haines

$3b blow-out in disabled pension

Josh Gordon, smh

February 15, 2009

THE Rudd Government is facing a $3 billion blow-out in the cost of the disability support pension, with new figures confirming earlier efforts to push recipients into paid work have failed.

The Howard government had predicted its 2005 plan to force people from the disability pension into paid work by tightening access rules would cut the number of recipients to 690,664 this year.

But internal Government figures show there are now 736,000 disability support pensioners on the public books - about 45,000 more than expected.

The federal budget is now straining to meet the rising cost of the scheme, which supports people assessed as unable to work because of a physical, intellectual or psychiatric impairment.

The scheme is already over budget by $369 million this financial year, with the blow-out expected to widen annually to create a financial hole worth more than $3 billion over the four years to 2011-12.

Family Minister Jenny Macklin accused the Howard government of squandering an opportunity during a period of strong economic growth to reform the disability support system in a way that would support people with disabilities into the future.

Parliamentary Secretary for Disabilities Bill Shorten said the challenge was to change community and employer attitudes to encourage people to hire workers with disabilities, warning that the scheme had become a "pension of last resort".

"If you've got a mental illness or a physical impairment or a mild intellectual disability, people just don't know how to talk to you," Mr Shorten said.

"So I see the DSP challenge as changing community attitudes and employer attitudes. The average time people are on the DSP is 11 years - it's a pension of last resort for people with an impairment."

It remains unclear what the Government intends to do about the burgeoning cost of the scheme, although suggestions include incentives to encourage employees to hire people with disabilities and extra payments to help people with disabilities meet work costs such as travel.

The rising cost of the scheme has been driven almost entirely by a surge in the number of female disability support pensioners following the closure of other payments, including the phasing out of widow and partner allowances.

Government figures show about 4.5 per cent with working age women are now receiving the pension, compared with about 1.5 per cent in the early 1990s.

The proportion of women receiving the pension is expected to continue rising until it reaches the male rate, about 6 per cent.

A single person on the disability support pension can get a maximum of $562.10 a fortnight, compared with about $449 a fortnight for people on the dole.

The Government's updated economic forecasts, released last week, added a further $101 million to the cost of the scheme in 2008-09 and $166 million in 2009-10.