In yesterday’s Age, Misha Schubert (a political correspondent) reported that:
Prime Minister John Howard’s welfare revolution has generated dramatic early results in curbing the soaring growth in disability pensions.
Since the overhaul of welfare rules in July, more than 3500 disabled Australians have been put on the dole and forced to look for part-time jobs.
Under the old rules, many would have qualified for the higher-paying disability support pension, which did not compel them to seek work.
Schubert notes that by keeping these allegedly disabled people on the dole, the Government is saving over $100 a fortnight per person:
Disabled people judged able to work 15 to 29 hours a week are put on the dole. They are paid $420.90 a fortnight, compared with the $512.10 disability pension, plus $18.20 in pensioner supplement.
That’s an annual saving, per pensioner of $2870.40, giving a total saving to the government of at least 4.3 million dollars per year. Well, every little bit helps when you’re trying to put away a big budget surplus for an election year.
Workforce Participation Minister [sic] Sharman Stone prefers to look to the benefits to individuals of the changes:
[she] said the early figures showed the welfare-to-work reforms were effective. But how successful they had been in placing disabled people in lasting jobs would take a few more months to emerge.
“International research strongly supports the fact that the best way to overcome an injury or to enjoy a full community life is by regaining employment,” she said.
I’m not sure how being $50 a week worse off helps people regain employment but then I lack Stone’s dogmatic belief that somehow it will happen. No doubt some of that 4.3 million dollar saving is being spent right now on dollying up some evidence that the changes have been successful in placing disabled people in jobs. Evidence that will emerge as soon as Stone tables it in Parliament.
Even if it costs a round million to produce a good set of figures, the Government still comes out in front, financially.
‘I’m not sure how being $50 a week worse off helps people regain employment’
It’s not the reduction in money per se, it’s making receipt of even the more miserly sum conditional on recipients spending a proportion of their week harassing small business people for non-existent jobs. This is what is meant to help them regain employment.
If you want to encourage behaviour - subsidize it.
If you want to discourage subsidized behaviour - reduce the subsidy.
Giving people a bit of tough love to encourage them to get into the work force ultimately will lead to the individuals being financially and emotionally better off.
Sounds like a recipe for maximising Govt intervention and social engineering, Razor.
But, you know, whatever floats your boat.
“Disabled people judged able to work 15 to 29 hours a week are put on the dole.”
How on earth is this judged. “Work” is rather a broad term. Should they be able to file receipts for 15-29 hours, or plant corn in a field?
Surely you cannot argue that the disabled can do every unskilled job available in the job market. Otherwise they wouldn’t be disabled.
How we treat the venerable people in our society is an indication of how advanced we are as a society. Given the way we (on the whole and at government levels) attack the elderly and disabled on a regular basis is not a good thing.
4.3 million bucks hey. That is about 1% of the yearly surplus? About 0.02% of the total budget? You do have to wonder who is next.
On balance, the saving is probably a lot less than $4.3 mill. I didn’t factor in a couple of unknowns, like the wage and salary costs involved in upping the level of scrutiny, costs of reviews of adverse decisions, appeals etc. I think those would eat into the savings at a pretty fair rate.
“Tough love”, Razor? This is more like a governmental golden shower. But as FDB says, whatever floats your boat.
Is this not Labor policy aswell?
Razor’s “tough love” seems more like the convinient marriage of ideology and penny pinching to me. So much effort for such little gain.
In fact it was Labor that moved older people from unemployment benefits onto disability pensions. Partly because they were trying to reduce unemployment levels. Well they wanted to get the official stats down anyway.
Gummo, they’ve outsourced the assessment system. The new (2006) arrangements are called Job Capacity Assessors and are now provided by the same organisations that provide Job Network services. There are further plans to outsource the remainder of the Commonwealth Rehabilitation Service in the next few years. So they’ve probably saved some money there.
Don’t know if I’d describe the Labor Policy as the “tough Love” of the Economic Dry variety. There seems to be a place for training rather than just work because you are cut off if you don’t.
It’s sensible bipartisan policy alright
http://www.news.com.au/story/0,23599,20976777-421,00.html
The notion that 700,000 Australians are truly too disabled to work is ludicrous and the new Labor leader knows that only too well. It’s all hands on deck now with the new realities of reducing reliance on fossil fuels coupled with an aging population. Growing labour shortages demand that we revise our definition of ‘disabled’ and thje retirement age too. Work you bastards work!
The Howard Government has been very ordinary at getting the work mix right and the money saved by targetting the people on disability pensions is small change compared to what savings could be cut from some of the more obvious cases of Government waste.
The rorting of the First Home Buyers Grant which has become a standing joke with the Government refusing to give details of just what it has cost and how widespread the rorting of this system has been would probably save more than attacking the people with a disability.
It may well be the Government itself that needs to do some work and give us some details that they have so far attempted to hide about the rorts in the First Home Buyers Scheme.
Angharad, I’m unsure how the ALP went about shifting older unemployed benefit recipients onto disability. Can you expand? Labor did exempt older unemployed from rigorous activity testing via the Mature Age Allowance.
In any case, what effect would all this have on official statistics, as you claim? Official unemployment statistics are not based on unemployment beneficiary numbers but come from an ABS household survey.
Last I heard one hour of work per week was enough to cut people from the unemployed statitistics even though it is clearly not enough to live on. The trend towards part -time work rather than full - time job creation exacerbates the situation.
If people get cut off benefits without having enough hours of work to support them financially, then it is a joke to claim that any real improvement has been made in that person’s situation.
I fear that this may be happening to people taken off the Disability Pension given the uncaring attitude the Howard Government is renowned for since they have been in power.
Angharad
It’s true that there was a big increase in people on Invalid Pension (now Disability Support Pension) under the ALP, but I think it is wrong to see this as the result of explicit policy to move people from unemployment benefits to disability pensions. Governments have always, I think, been concerned that not too many people should go onto disability payments, because this usually means that they and every one else think of themselves as retired and no longer a candidate for paid work. Indeed, this is part of the reason for making life a little easier for older people on unemployment benefits that Anthony alluded to, to reduce the incentive to claim DSP.
However, while there has never been any explicit policy to place people seen as unemployable (as distinct from disabled) on disability payments, I believe that at times there has been a strong culture to do just this among the variety of people who deal with such people - employment service providers who don’t want difficult-to-place people clogging up their client lists, doctors and welfare providers who want to make their patients/clients lives a little easier and Centrelink staff who also want to do what they think is best for the individual customer.
But while I don’t disagree with the sentiment that people with disability should be encouraged, assisted and possibly even expected to work as much as they reasonably can, I’m not sure that the current solution to that issue is entirely the right one. It’s just that everyone likes to fit people into nice neat boxes and we only have two available - ‘disabled’ (ie DSP) and ‘unemployed’ (ie Newstart Allowance), rather than a third one labelled ‘person with disability who can also work’.
The Govt could save taxpayers even more. Abolish welfare all together.
Backroom Girl,
Interesting comment. Perhaps the very simple solution is to reduce the number of boxes to two - people too old to have work forced on them (Aged pensioners) and people who aren’t currently in full-time work. For whatever reason.
Much of the incentive to shift people from Newstart to DSP would be removed if the Newstart payment were raised to the same level as other benefits rather than being kept at a punitively low rate.
The new rules aren’t about getting people from welfare to work - they’re about keeping people on the lowest rates of welfare payment possible. Getting them into work again is a secondary consideration which only gets lip service from this Government.
Steve
We do actually have an income support system that allows people to combine work and income support. You don’t get cut off payment just because you got (any) job - you actually have to earn enough in that job to disqualify yourself under the income test. So there shouldn’t be any problem with people being cut off payment even though they aren’t earning enough to live on. (There is a value judgement about how much that is, of course - for some people it might, I guess, be more than the income cut-off for payment.)
And while it is true that the ABS counts you as employed if you work as little as one hour a week, I don’t think anyone has ever claimed that this means you don’t need more work. It’s just that you have to draw a line between employed and not employed somewhere and that seems to me to be as good a place as any to draw it.
In any case, I don’t think there are actually heaps of 1-hour a week jobs out there, let alone people who would be happy to take such jobs, so while it is a theoretical possibility I don’t think you need to worry too much about it. In any case, the ABS regularly publishes data on the extent to which people in part-time work want to work more hours - at last count it was about 19 per cent of part-time workers.
The withdrawal rate though for payments when you do any substantial amount of work, though, backroom girl provides little incentive.
On the point about cost saving through shifting assessment and support to non-Commonwealth agencies, much of the cost saved comes from the very poor wages paid both by for profit and not-profit employment services providers. The Church groups are outstandingly bad - evidently some element of “you are doing this for Christ not for money” survives, and the SACS (Social and Community Services) award provides quite a low floor for wages. People working in the job network are often lucky to earn 35k themselves and in many cases are young and poorly qualified and trained. The concern when psychiatric and behavioural assessments and judgements are similarly outsourced, according to people I know who are social workers and psychologists in Centrelink, is that quality will suffer both because of bidding down costs that goes with the contract competition, and the remuneration given to those within the agencies who’ll be providing the assessment and support.
Gummo
I know that seems like the simplest and most obvious solution. It’s just that lots of people would worry if everyone currently on allowance-type payments (which are low at least in part to improve the financial incentive to get back into work) was paid as much as people who are so disabled that they are really unable to work. Not least, I expect, people with disability who reckon they need more money than non-disabled people (including the plain old unemployed) to live on in the first place.
The real problem is that we’ve moved from a situation where most disabled people were clearly not able to participate in the workforce to one where, thanks to medicine, technology, better education and changes in the nature of jobs, a larger proportion of people with disability are able to participate in the mainstream workforce.
Our social security system hasn’t quite caught up with this yet.
I’m unsure what percentage of people on disability support are due to psychological disorders. My worry is that I don’t think a lot of workplaces have caught up with understanding how to provide support for mental illness and quite often it gets lumped in with the rest of the sick leave benefits (if there are any). For instance, bouts of depression are often associated with short term memory loss, poor concentration, lack of appetite and sleepiness. A pep talk with a manager along the lines of “You should eat a square meal and go to bed earlier,” is not going to encourage someone who’s taken the risk of re-entering the workforce that this is something that will help rebuild their self esteem.
I think that’s very true, Carol.
When I was first in the workforce in 1985 I worked with a lovely guy who had schizophrenia. Things like unexplained absences and mood changes from medication and impaired work capacity were all taken into account. But that was only because the workplace itself had a pretty good culture and the particular manager was an understanding bloke. He could just as easily have been sacked in another workplace back then, and I suspect now outside the public sector.
The increased prominence and destigmatisation of depression should and in fact must translate into workplace policy and practice.
“And while it is true that the ABS counts you as employed if you work as little as one hour a week, I don’t think anyone has ever claimed that this means you don’t need more work. It’s just that you have to draw a line between employed and not employed somewhere and that seems to me to be as good a place as any to draw it.”
Sorry Backroom Girl , while I know you are just espousing the established wisdom it doesn’t make it any less absurd. It would be nice to know how many people are actually unemployed rather than a figure that is based on a lie. One hour a fortnight is a crazy measure and ABS household surveys an imprecise way of finding out about it.
The main purpose of this bullshit is to allow politicians to get off the hook.
Backroom Girl:
I think Gummo is suggesting that everyone’s unemployment benefit be the same, with disabled people recieving an additional (totally separate) payment commensurate with the degree and type of their disability.
Clearly, a severely depressed person (while just as unable to work) does not need the same level of extra support as a parapalegic. They do need more than a “normal” unemployed person, but that should not necessarily be part of the same payment.
Expensive, sure. But hey, don’t talk about the surplus. I did once, bbut I think I got away with it.
BG,
I’ve just learnt from a friend that there are three boxes under the new system: people who are judged incapable of working more than 15 hours a week get the DSP; those who can work more than 30 get NewStart and those who are deemed to be capable of 15 to 30 hours week with training get NewStart plus $5.60 pharmaceutical benefits and a free country rail trip from the Victorian government once a year. Seems that on this point our Social Security system is starting to catch up with modern day reality.
Nice try, FDB, but that wasn’t what I was suggesting at all. Good idea though.
What I was suggesting was something more along the lines of raising NewStart to realistic levels so that people can actually focus their attention on doing what they have to (or want to) to get back into work, rather than obsessing over where their next meal is going to come from once they’ve paid the rent.
Oh yeah, I realise you were advocating an increase (as do I) but it seemed like BG thought you were saying that all unemployed people should get the same amount of total welfare, regardless of whether they’re wheelchair-bound or just plain lazy (to take just the extremes).
I would have hoped a lot of people on this blog would unnderstand the Kafka-esque insanity of Centrelink, but it seems many would qualifiy for a Disability Pension themselves, having acquired a Severe Compassion Deficiency.
Just in case you don’t understand what I’m talking about: here’s a real-life story for you to chew over:
My best friend, at 25, has just had an agressive breat cancer cut out of her chest. She has been on 10 months worth of radio-, chemo- and hormone therapy. I don’t know if you have heard this, but chemo and radiotherapy make you rather tired and distractable. She had to take time out from her PhD scholarship (she’s on an APA), and so she tried to get Newstart.
Centrelink told her she would have to go onto normal mutual obligation like any other job searcher, but then reversed their decision after taking some time to work out whether she would be subject to the full-range of mutual obligation, seeing as she does, in fact, have cancer. After more meetings, they decided that she should apply for the DSP.
She was assessed for the DSP by a Centrelink “assessor” who was not a doctor, and rejected. When she challenged this decision, her case was referred to a Centrelink doctor. This doctor is not an oncologist or a physician and never even clapped eyes on her. Instead, this doctor “assessed her case” from letters written by her doctors, and did I believe take the time to ring her GP. On the basis of this ‘evidence’ she was rejected for the DSP. She will now have to re-apply for Newstart.
How can someone with agressive breast cancer be ineligible for the penion? Well it appears that there are three criteria for the DSP. You have to be sick, you have be getting treatment, and you have be “stabilised.”
Because my friend is responding well to her treatment, she is apaprently not stabilised. To quote the assessor, she was told “You are ineligible for the DSP because you are getting better.” This is despite the fact that her treatment involves extremely full-on hormone treatment that will induce premature menopause for the next FIVE YEARS.
So, my talented, intelligent young friend will now be forced to sit through resume workshops and “intensive assistance” simply to gain some financial support during her life-threatning illness.
Observa, think about how YOU would fare with a serious illness that prevents you working before you next issue brainless injunctions to sick people along the lines of “work you bastards work.”
Unfortunately, Ben, I don’t think your friend’s experience is too uncommon. The system is insane.
It does make me angry … of course, you’re right Mark
The converse is also possible that people can get psychological and psychiatric tags put on their records with the same care from doctors as Ben’s friend found and not be able to work in areas that they could before the diagnosis was applied. Usually such people are forced into lower paying employment.
“Observa, think about how YOU would fare with a serious illness that prevents you working before you next issue brainless injunctions to sick people along the lines of “work you bastards work.â€? ”
Thanks for pointing out why your 25 yr old friend is not on a DSP. She can thank her lucky stars she’s not. That’s because she’s getting better. What on earth do you want her to be? Permanently incapacitated for chrissakes? Any scheme that gets her up and going and focussed on life and her future is preferable to being dumped in the hopeless box. So she has a tough hump to get over. Big deal! Thank her lucky stars she lives in this bloody country with decent free medical attention and living support. Stop wallowing in self pity with her and fight the good fight with her.
700,000 working age people in this country too disabled to work at all is utter nonsense, but don’t take my or Howard’s word for it. Take Kevin Rudds.
You’re right to be angry, Ben.
For Chrissakes, observa. You think someone who’s suffering from agressive cancer should be attending “how to write a resume” seminars and interviews on her job search in exchange for $205 a week?
What a heartless world your Australia is.
Observa:
You are right to be concerned about 700 000 people unfit to work. But you are wrong in condoning such an EXPENSIVE, yes, expensive, and counter-productive approach to the problem. Any supposed “saving” of four million dollars is not only illusionary and when all the social costs and hidden costs are factored in, it cannot help but be a NETT LOSS ….. and a nett loss of a h*ll of a lot more than only four million dollars. I roared laughing when I read your post of 8:10pm - not at its callousness but at your lack of understanding of how complex and interconnected an economy really is; have you thought about taking over the federal treasurer’s job at all?.
Just one example to start the ball rolling: as Anthony put it
just think of the cumulative effect of that loss of production - not just on the individual small businesses - but on the whole economy.
If the fools we are paying to run the country put their wacky ideological toys back in the toybox and, for once, tried to manage the economy, we would see more real incentives instead of punishments for those who try to stay in the workforce despite their disabilities or who try get back into the workforce within the limits of their disabilities.
Far too much stick and no carrot at all - a recipe for policy failure if ever there was one.
Ben, I’m not trying to defend Centrelink’s decision at all, but the reason your friend would have been rejected is because DSP has a strict rule about the illness having to last two years or more. The fact that the treatment she’s receiving has an aim of making her well, it would be almost automatic to reject her.
That said, even on the current pitiful rules, she should have been automatically granted Newstart with an immediate exemption from looking for work, or if she has a job to go back to, Sickness Benefit. It isn’t as much, but it’s a start while she works on getting a more permanent source of income.
If they haven’t already granted her a payment, she should go and demand whichever of these two applies, and if they turn her down, go and see your local Senator.
Links for your info: Sickness Benefit and Newstart Incapacitated.
Also Ben, your friend sounds too unwell to subject herself to direct media attention. Such cases still need to be drawn to the attention of the public, as you are doing, as further heartless laws are introduced and implemented. An example of a chance to get the message accross is ‘Faineline’, where I am sure they would look at this government sanctioned form of torture and get the feedback about others who are experiencing this sought of madness. Anonymous tips are ok.
http://www.abc.net.au/melbourne/upload.htm
Ditto what Anna said about Sickness Allowance and the like Graham. I take your point about immediate savings of criteria for Centrelink payments, but govts have to take the ‘big picture’ view rather than wear their heart on the sleeve with uindividual cases that fall between the cracks. Their changes are often to prevent long term haemorraging of the system in response to new emerging realities. One of the new emerging realities is a shortage of labour particularly with an aging population. Our definition of incapacity to work is changing rapidly (retirement included) and many of those (some of those 700,000 DSPs)who have got comfortable with their status quo are uneasy about change. You would expect that. However we should all be pleased that increasingly they are going to feel more wanted. The upshot is we will be much more circumspect about categorising many such people as fuc…, err disabled for life. Also our response to GW (ie more reliance on human energy) will demand a more all hands on deck approach, rather than luxuriating in the fossil fuel squandering past. That will be good for obesity too and for a couple of lazy dope smoking bastards on DSP I know who make up that 700,000 and give the genuine disabled a bad rap, as well as reducing the willing taxpayer pool of funds available to the truly deserving.
But if you really want to take a ‘big picture view’ Observa it is all a storm in a tea cup. Tthe savings made here are chickenfeed compare to government waste in their pet areas and the Pork barrelling that will open the cheque book in an attempt to turn the polls in the Howard Government’s favour.
It didn’t work for the Republicans in the States though and it just might not help Howard here this time either.
Steve:
Absolutely!
Observa:
We pay them to take the big picture view and what do we get from either Lib/Nat Coalition or Labor? Incomptence. Manifest injustice. Damage to the economy - with the best of intentions, of course. Counter-productive policies. Ideological wankery and Heaven knows what else. (NO reflection on the poor devils who have to implement these stupid policies). As for people falling through the cracks: there are so many of these now that it looks like half the floor has rotted through.
The whole system is in need of radical change but it won’t happen because there are a whole lot of bureaucratic empire-builders and rorting professionals who have too much to lose if the system is improved.
And it looks as though the lessons of how the Nazis and Hezbollah used their own welfare systems to gain power have been ignored …. Wonder what political or religious nasties are out there, unnoticed, just waiting for the Centrelink system to implode so they can pick up thousands and thousands of new recruits who have nowhere else to turn..