BUDGET 2014: A mixed bag for disability “We need a jobs guarantee, not a welfare guarantee”

Tuesday 13 May 2014

People with Disability Australia (PWDA) has welcomed the Budget announcement that the Federal Government intends to roll out the NDIS on time and in full.

However, PWDA expressed concerns that thousands under the age of 35 on the Disability Support Pension (DSP) will be medically reassessed and may be moved onto Newstart or Youth Allowance, along with changes to indexation to the DSP that will erode the safety net over time.

Many people with disability face discrimination in employment, and PWDA also calls for the Government to fill a dedicated Disability Discrimination Commissioner position from July 2014.

The Government has announced that people on DSP under 35 years of age will be reassessed by an independent doctor except for people who are “severe and manifest.”  People who are found eligible will have to undertake a program of activities to build their work capacity. The pathway for people who are not eligible is unclear but may involve those people going onto Newstart or even the much lower Youth Allowance.  A group of older people with disability over 50 could be supported through wage subsidies of $10,000 which increase over time.

PWDA President Craig Wallace said, “We want to see more people in jobs, not on welfare. PWDA believes that any young people reassessed and found ineligible should be offered a job, apprenticeship or training opportunity rather than pushed onto Newstart or Youth Allowance.  Young people need a restart to embark on a life of opportunity and the Government should provide wage subsidies to them as a first priority.

“We also think a jobs plan should include changes to Disability Employment Services and believe the focus should be on allowing people to purchase economic participation outcomes.

“Reassessing people without jobs to go to, will mean they are tossed onto Newstart or Youth Allowance and into greater poverty. People with disability are more likely to be out of paid employment than other people of working age, with a labour force participation rate of 54% versus 83%. 45% of people with disability are also near or below the poverty line,” said Mr Wallace. “If young people with disability can’t get employment now, what hope will they have if they wind up homeless and unable to afford rent, medication, transport, clothes or GP visits?

“Despite the talk of easy welfare, the reality is that life on the DSP is far from easy.  For example, our figures show a person on the DSP living in Sydney’s inner west moving from DSP onto Newstart would leave them destitute – $200 a week short of cash.” (Attachment A – A Reality Check – Jobs, Newstart and DSP).  People on Newstart live on $255 p.w or $36 per day, while people on DSP live on $421 p.w or $60 per day – so this will mean a loss of $166 per week.  Even worse some people may wind up on Youth Allowance which is even less – $214 a week or $30 a day.

“If we couldn’t get people into work at the height of the boom with a skills shortage, what hope do we have now without a coordinated plan?  The Treasurer says everyone has a part in turning things around, so we call on Government to form a compact with big business to create opportunities and lift people with disability out of poverty.  Let’s create 500 jobs each from top 40 companies within the ASX 100, with Government stumping up to provide the rest to make a dint in the long term decline in public sector jobs for people with disability.

“Beyond participation, PWDA believes that we will always need to retain generosity and a safety net for those most vulnerable including through DSP.  We are concerned that the incomes of those most vulnerable people will be eroded by the new indexation arrangements linked to CPI from 2017 rather than average male wages.

“We congratulate Government on its decision to leave the rollout timetable and funding for the National Disability Insurance Scheme untouched, including addressing an error in the application of the efficiency dividend.  The Productivity Commission said the NDIS would generate a 1% boost to the GDP through greater workforce participation by people with disability and carers. It is the right and decent thing to do.

“Implementing the NDIS and creating opportunity through jobs will require a concerted attack on discrimination and the barriers which people with disability face every day.  For that reason, PWDA notes the decision to reduce appointments to the Australian Human Rights Commission and calls on Government to ensure that a dedicated Disability Discrimination Commissioner is appointed when vacancies occur in July 2014,” said Mr Wallace.

MEDIA: Craig Wallace 0413 135 731
Phone: 02 9370 3100 Toll Free: 1800 422 015 Email: pwd@pwd.org.au
People with Disability Australia Incorporated (PWDA) is a national disability rights and advocacy, non-profit, non-government organisation. We have a cross-disability focus, representing the interests of people with all kinds of disability and our membership is made up of people with disability and organisations mainly constituted by people with disability.
Our vision is of a socially just, accessible and inclusive community, in which the human rights, citizenship, contribution, potential and diversity of all people with disability are respected and celebrated.
Attachment A – A Reality Check – Jobs, Newstart and DSP
  • Government promised  no changes: Tony Abbott:  “I want to give people this absolute assurance: no cuts to education, no cuts to health, no changes to pensions and no changes to the GST” (Insiders, 1 September 2013)
  • DSP no “easy welfare”: even without clothes, a haircut, internet, equipment or jobsearch expenses a person is around -$43 short in an average week.
Reality: What a week on DSP looks like for a person in Sydney’s inner west
 Household Budget
 Rent (based on Ashfield 1 bedroom)
 Electricity, gas, heating oil etc (ABS)
 5 minute taxi ride
 GP Co-payment
 Think that’s bad?  People on Newstart live on $255 per week which
would leave this person short
 -$209 in cash in an average week
  • Ageing is where growth comes from:  Between 2002 and 2012: the total number of people on DSP increased by 26% to 827,000 people.  However population growth meant that the proportion of people on DSP within working age population has remained relatively constant. Nearly half of the increase between 1996 and 2002 was due to ageing – disability increases with age.
  • Our record on disability and jobs is bad:  According to the ABS 4102.0 Australian Social Trends, March Quarter 2012 Report, the labour force participation rate for those aged 15-64 years with disability in 2009 was 54%, much lower than that for those without disability (83%).
  • Public service worst of all: The Australian Public Service is guilty of being a poorly performing employer, with the number of employees with disability more than halving over the last 17 years, from 6.6% in 1986 to 3.1% last year. 
  • Finding 28,000 jobs? We could do it now.  The Government says around 28,000 will be reassessed but not all or even most will likely lose DSP.
  • At most, 28,000 would involve the top 40 companies in the ASX 100[1] creating 500 jobs each plus 8,000 jobs in the APS.
  • There are 166,495 employees in the APS.[2]  Simply raising APS jobs back to 1986 levels by 3.5% would get close with almost 6,000 jobs.