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Pension overhaul: thousands to lose out

Mon, 08 Aug 2011, 11:09 AM

Sue Dunlevy, The Australian, 8 August 2011

Two-thirds of people who apply for a disability support pension from January will be rejected when they fail an obstacle course of tough new tests designed to rein in pension numbers, the National Welfare Rights Network has said. 

And the welfare rights group said the tens of thousands of people who missed out on the pension were likely to "pose an enormous challenge for employment services".

Using government estimates, the network has calculated the current 41 per cent failure of applications, combined with new measures, will see 96,000 of the 143,000 people applying each year rejected.

The clampdown on the disability support pension comes as the government is also poised to announce a new national disability insurance scheme that will provide new services, support and income for the 360,000 severely disabled.

The Productivity Commission has recommended the $7 billion scheme be funded from general revenue. It would give disabled people the option of receiving money for their care as a lump sum that could be used to purchase services.

The NDIS has the backing of Assistant Treasurer Bill Shorten, who says it should be phased in over five to six years and could free up a part-time workforce of 500,000 carers.

More than 815,000 people are currently receiving the disability support pension, up by 100,000 two years ago, and the government believes that growth is unsustainable.

Julia Gillard told The Australian it was time for employers to get behind her agenda of getting the disabled into jobs and stop thinking it was "all too hard" to employ disability support pensioners. A spokeswoman for Families and Community Services Minister Jenny Macklin said work provided dignity and a sense of purpose. "The government believes we can do better than a lifetime spent on income support for Australians who have some capacity to work," she said.

Currently, 41 per cent of people who apply for the disability pension miss out because they do not meet the eligibility criteria.

From next month disability pension applicants will have to prove they have tried to find work before they can get the disability pension and this is expected to see 18,000 have their claims rejected.

From January, new impairment tables that assess a person's level of disability are forecast to keep a further 38 per cent, or 29,000 applicants, from receiving the pension.

Welfare Rights says it is "110 per cent behind" the government's efforts to assist disabled people into work "where it is a realistic option" and it supports changes to the impairment tables.

However, it warns that when combined, the changes will see tens of thousands of people with disabilities shifted on to the Newstart Allowance, which is just $237 a week, $128 a week less than the pension.

"In the worst-case scenario we could be looking at a situation where just over a third of claims for the disability support pension are granted," National Welfare Rights spokesman Maree O'Halloran said.

The new rules will not just affect new applicants for the disability pension.

Welfare Rights says every year 30,000 people already on the pension have their cases reviewed and 11,400 are now expected to lose their pension under this process.

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