1.
Introduction
This paper starts from the
premise that the current Program of Aids for
Disabled People cannot and does not meet the
current levels of eligible demand for equipment
in NSW nor the unquantified levels of unmet need
estimated to exist across the State. A
substantial number of people with disabilities
are being denied the support that they need at
the time it is required.
Some people with
disabilities receive no assistance of any type
from the NSW PADP, RAP or other initiatives. And
of those people considered eligible for PADP
support, the report by Carla Cranny &
Associates observed that:
“The groups
of clients most likely to wait [for
equipment] are:-
- children with
complex disabilities
- adults requiring
complex mobility aids such as electric
wheelchairs and other high cost
equipment
- clients with a high
level of needs requiring several items of
equipment”1
Many people with
disabilities are excluded entirely from support
through the NSW PADP. The status quo of the
current arrangements does not operate in the
interests of people with disabilities as a
disadvantaged group in society. We consider the
status quo to be unacceptable.
2. Crucial
failings
The criteria used to
determine an individual’s eligibility for
support under the current PADP Guidelines are
inadequate. In particular, the requirement that
applicants meet the income test for entitlement
to a Social Security Health Card is unhelpful to
people with disabilities and
inappropriate.
The income test is a form
of service rationing. Its imposition is a tacit
admission by the NSW Government that a budget
limit imposed by Treasury guidelines, rather
than the assessed needs of individuals for
equipment, is the defining characteristic of
flawed entitlement parameters. We believe that
the relatively small number of people requiring
high cost capital expenditure items are
especially penalised.
As it was put in the
report by Carla Cranny &
Associates:
“The key
issue is the size of the available budget and
appropriate targeting within the current
scheme.”2
In this paper, PDC NSW
argues that the current income test should be
abandoned and replaced with the options we
propose later in the paper. Our rationale for
adopting such a view is based on the following
key concerns and observations.
PADP was intended
to meet people’s need for equipment and the
scheme should do just that. As a consequence of
discussions within the PADP Advisory Committee,
NSW Health revised the description of the
programme’s purpose. It states:
“The role of
the PADP is to assist eligible residents of
NSW who have a permanent or long-term
disability to live within their community by
the provision of appropriate equipment, aids
and appliances.”
We believe that the
Government, through NSW Health, should do more
to make it possible for PADP fulfil its role.
The eligibility criteria should be designed to
make goals realisable, not to thwart ambition
(as we believe it does currently).
The current income
test makes no attempt to quantify and/or
allow for the extra costs of living with a
disability. We elaborate on this view later in
the paper. Briefly, we believe that these extra
costs are made up of two components. In the
first instance, people with disabilities have
expenditure on disability related items which
are not required by the population in general.
The very existence of schemes such as PADP and
RAP confirms that such extra expenditure is not
a figment of our collective
imagination.
In addition to disability
related expenditure, however, people with
disabilities face extra costs in the course of
‘every day’ life. Examples help to
illustrate the point:
- Looking forward to
a day off work, a woman who uses crutches
and leg-callipers decides to travel from her
home in Leichhardt to Australia Day
Celebrations at Circular Quay. She cannot
travel by bus, which would cost her $2.30 for
a single journey. The woman hails a taxi and
pays $19 dollars to make the journey along
precisely the same route as the bus. Even if
the woman uses a taxi subsidy docket it will
cost her $9.50 to make this journey, more
than four times the cost to a person with no
disability.
- If the same woman
works as an Office Administrator in a
business in Sydney’s CBD (a not uncommon
employment practice) her costs of travelling
to work 5 days per week, 48 weeks per year
would be $9,120. If she could travel by bus,
purchasing tickets in the most expensive way,
the maximum she could pay would be $1,104 per
year. Even if the woman with disability used
her taxi subsidy entitlement for every
journey to and from work, her annual
travelling costs would be in the region of
$4,560. Regardless of whether the woman
travels to work by public transport (a taxi)
or private transport (she borrows money to
buy a car) her costs of travelling are
substantially higher because of the effects
of disability.
- A young couple with
a child with cerebral palsy who uses a
wheelchair look for a new place to live in a
development in the city centre, chosen
because of its proximity to the work place of
the father (who shares all the caring
responsibilities for the child with a
disability). The first property the couple
look at costs $350 per week to rent but the
second bathroom required by the family is too
small to accommodate a wheelchair user. The
couple find another property in the same
development with two bathrooms that are large
enough for their child’s needs. The cost
of the property is $400 per week because the
bathrooms are larger. The additional cost of
disability in such a scenario amounts to
$2,600 per year.
- A woman with
muscular dystrophy who uses a wheelchair
needs assistance to shower, dress and get out
of bed every morning to make it possible for
her to work in an office next door to her
home. She receives no support with the costs
because she is in full time, paid employment
(Grade 3 / 4 of the Clerical Award). She pays
under the industry average for 1 hour’s
private assistance on each working day. Her
personal support costs are $22 per hour. The
extra cost of living with a disability means
that this woman has to pay $5,280 per year
just to get out of bed in the morning. None
of her working colleagues, who receive the
same rates of pay, bear such additional
costs.
The PADP means test is
incapable of ‘factoring in’ the
reductions in discretionary income imposed on
people with disabilities by their extra costs of
living.
The current income
test works against the NSW Government’s
stated objective to operate a “whole of
Government approach” to disability
services. As was noted in The NSW Equipment
Study:
“Enhancing
equipment provision will compete poorly for
resources … until the role that aids and
equipment play in minimising disability is
better understood by funding bodies
…”3
and
“Failure to
provide adequate equipment for people with
high support needs not only disadvantages
individual clients but can contribute to
increased costs to
government.”4
It is clear to PDC NSW
that the income test not only fails to operate
effectively as a tool for ensuring that
people’s needs are met but it also helps to
keep other Government budgets unnecessarily and
wastefully high. NSW taxpayers and people with
disabilities deserve a better
mechanism.
3. Long term
objective
The long term policy goal
of PDC NSW is to work with all stakeholders to
bring into a being a comprehensive and universal
system of proving aids and equipment to people
with disabilities which supports and enhances a
full range of independent living options.
Ultimately, we believe, such a system will be
built upon 5 key ideas:
- People with
disabilities will have full rights of
citizenship.
- The system will be
needs based.
- Assessment and
provision will be person-centred.
- Eligibility criteria
will recognise the crucial distinction
between medically defined
‘impairment’ and socially
constructed ‘disability’ in which
there is an “obvious link to any
additional costs which might be required to
address the lack of
independence.”5
- There will be no
income test.
In one sense PDC NSW
believes that for PADP in NSW to move forward it
must go ‘back to the future’. When the
Commonwealth’s equipment program was first
introduced (in 1982) it was ‘needs
based’ and there was no income test. We
believe there is much to commend such an
approach.
4. The extra costs of
disability
Before outlining our
proposal in closer details, PDC NSW believes we
should make clear our understanding of the
context of the financial circumstances of people
with disabilities. It is important, we believe,
that all participants in the debate about how to
provide services intended to meet people’s
needs understand the straightforward realities
of the lives of most people with
disabilities.
Generally, people with
disabilities live on incomes that are lower than
the average for Australians as a whole. And
generally, people with disabilities have higher
costs of living than Australians as a
whole.
Income - The
overwhelming majority of people with
disabilities are not in paid employment. 9% of
all people with disabilities are under 16 years
of age.6
34% of people with disabilities are beyond
working age.7
And in the population of people with
disabilities of working age, 47% are not in
employment.8
People with disabilities
are much more likely to be outside the Labour
Force than are Australians in general. According
to the ABS, more than 80% of the population of
working age with no disability are Labour Force
participants. For all people with disabilities
of working age, however, the participation rate
is only 53%. And the more profoundly disabled a
person is, the more likely it is that the
individual will be excluded from the Labour
Force. 60% of people with a “severe core
activity restriction” do not participate in
the Labour Force. For people with “profound
core activity restriction” the exclusion
rate is an astonishing 80%.
In total, at least 70% of
all people with disabilities receive no income
of any amount from employment.
PDC NSW recognises that
income support is principally a matter for the
Federal Government to act upon. However, as the
PADP Advisory Committee considers the crucial
issue of ‘unmet need’ in relation to
the supply of essential aids & equipment, it
must acknowledge and seek to respond to the
realities of the economic circumstances of
disabled people. Ample evidence exists to show
that, generally, people with disabilities of all
ages live on incomes that are below the state
and national averages. At the same time, we
believe, people with disabilities face higher
costs of living than the population in
general.
Expenditure - A
substantial and increasing body of anecdotal
and research evidence exists to support the view
that people with disabilities have to bear
additional, higher costs of living solely
because they are people with disabilities. PDC
NSW hopes that the reality of this situation is
now, at long last, beyond dispute. The much more
important issue for everyone is to determine
what can be done about it.
The NSW Equipment
Study noted the concern of service user
groups that:
“Income
based (Social Security) eligibility criteria
do not take account of the overall costs of
living with a disability. Families with
disabled children and disabled people in /
entering the work force are seen as
disadvantaged.”9
These concerns are
supported by commentary in the Cost of
Disability Study commissioned by the
Commonwealth Department of Family and
Community Services. Although limited in its
scope to DSP recipients the study makes
interesting reading.
The authors of the report
observe that:
“There is a
quite high frequency of some additional costs
incurred by DSP recipients, and the overall
amount does seem to vary by impairment
severity”10
They note (in a specific
reference to aids and equipment) that
“It appears that
people with higher levels of impairment do
[their emphasis] incur a higher
[non-discretionary] cost
…11
The independent authors of
the Cost of Disability Study point
readers towards three other
surveys,12
all of which confirm the view expressed in this
paper that people with disabilities have
additional, higher costs of living than their
Australian peers with no disability. They help
us all to see the bigger picture of ‘unmet
need’.
The most often cited of
the three surveys was conducted on behalf of the
Australian Quadriplegic Association (AQA). In a
1998 survey of 200 adults with quadriplegia,
living in the community AQA found
that
- The median extra
unavoidable cost of disability was $143 per
week or $7,494 per year.
- That people who relied
on the DSP as their sole source of income
spent 59% of that income on non-discretionary
disability related costs (a median amount of
$96 per week or $5,054 per year).
- People who are in
employment spent 23% of their income on
non-discretionary expenses related to their
disability (a median amount of $168 per week
or $8,783 per year).
The findings of the AQA
survey show that, in circumstances that are not
uncommon, people with disabilities employed on
near average weekly earnings can have their
disposable income for use on expenses that are
not related to disability reduced to levels that
would be regarded as below the poverty line.
Read in conjunction with The Equipment
Study, the Cost of Disability Study
and other reports a clear picture emerges of the
true financial circumstances of most people with
disabilities.
The combination of lower
incomes and higher expenditure patterns places
people with disabilities in seriously
disadvantaged economic and social circumstances.
Financial barriers created by the extra costs of
living of people with disabilities re-enforce
social trends and systemic inadequacies, which
further exclude people with disabilities. It is
critically important that the development of new
arrangements for PADP in New South Wales are
designed with service user participation to
break down, rather than perpetuate, the social
isolation and marginalisation common to many
people on low incomes.
5. Proposals to reform
the income test eligibility
criterion
The immediate purpose of
this paper is to propose the revision or removal
of the greatest barrier to access to much needed
aids and equipment for groups identified by
The Equipment Study who wait longest and
have the most complex needs. These
are:
- “children with
complex disabilities
- adults requiring
complex mobility aids such as electric
wheelchairs and other high cost
equipment
- clients with a high
level of needs requiring several items of
equipment”13
The barrier is the current
denial of entry to a needs based system of
assessment because of service rationing
determined by an unfair income test.
6. Lifting the penalty on
children with disabilities
According to Carla
Cranny & Associates, children are
particularly disadvantaged PADP applicants. The
Australian Bureau of Statistics has reported
that 9% of all people with disabilities are
under the age of 16.14
PDC NSW believes that all
children with disabilities, regardless of
parental income, should be eligible for support
from PADP. We believe that to exempt all
children from a parental means test will operate
in the immediate interests of all children with
disabilities and Government services intended to
meet the needs of such children.
We believe there are very
strong parallels between what should happen in
relation to the provision of aids &
equipment and what already occurs with education
services for children. It is commonly accepted
that the state has a duty to provide education
services to and for all children. A number of
different mechanisms for delivering education
have been devised to meet the needs of the
community as a whole at different stages of
educational development. A variety of
arrangements have been put in place to support
parents in exercising choice about their
children’s education.
Whatever arrangements are
agreed for individual children, local
communities and / or other situations, the
fundamental basis of the mutual obligation
shared between the population and Government of
New South Wales is clear. In return for the
payment of taxes (locally and through incomes)
the state makes available an education system
that is intended to meet the developmental needs
of all children. Currently, education provided
by the Government is free at the point of
delivery to all children with a need for it and
whose parents exercise their right to send their
children to a State-funded school.
We believe that the
physical and social development and well being
of children in New South Wales is no less
important than their educational development. We
further believe that in relation to the
provision of aids and equipment essential to a
child’s development the Government should
accept the same obligation as it does in the
field of education. Like access to education,
access to aids and equipment should be free at
the point of provision for all children in New
South Wales.
The benefit to children
of a non-means tested eligibility system is
abundantly clear. More children stand a better
chance of applying for and being provided with
aids and equipment that are vitally important to
their development.
The benefits to society
as a whole of immediate and early
intervention are no less clear. Childhood is a
crucial period in the development of the
physical and social potential of all people.
Supportive intervention based on person-centred
assessment and the appropriate provision of
aids, equipment and services at the earliest
possible date will be repaid by reduced public
expenditure in adult life. The removal of the
income test on childhood physical disability is
an investment by the whole of government in a
more cost-effective future of service
provision.
PDC NSW believes that the
current approach of PADP for children places a
triple charge on parents of children with a
disability. Parents pay taxes; parents also pay
the extra costs of raising children and parents
of children with disabilities bear the extra
costs of disability. Parents pay their dues in
taxes, as do adults with disabilities, yet at a
time of critical need some parents may be asked
to pay once more because of an arbitrarily
imposed threshold above which support becomes
determined by money rather than need. We believe
that the failure to invest in the future of the
children of NSW is immoral. We believe also that
acts of commission and omission that are morally
indefensible ought not to be legally
permissible.
7. PADP eligibility and
holders of Social Security / Health
Cards
We propose no alteration
to the position of people with disabilities who
are already deemed eligible for support through
PADP. People who hold a Medicare Card and are
recipients of designated Social Security Health
Cards are currently eligible for PADP
assistance. We propose that this entitlement
remain as it is.
8. Adults needing complex
mobility aids and/or other high cost
requirements
PDC NSW believes that the
eligibility criteria for PADP must be sensitive
and respond positively to the true financial
circumstances of people with disabilities,
whether in employment or not. As we noted
earlier, this means that all government
mechanisms for determining access to services
must accommodate the reality that the
overwhelming majority of people with
disabilities live on incomes below the average.
All people with disabilities face extra costs of
living with disability.
These circumstances
require at least two fundamental changes to the
operation of PADP. We believe that the
government should accept both changes although
we believe that one is not necessarily dependent
on the other.
The budget available
for PADP should be substantially increased.
PDC NSW has argued elsewhere that an annual
budget of $26 million is needed today to meet
unmet need for aids and equipment.
We make no apology for
raising our concern that PADP is chronically
under-funded. Approximately 65% of all people
with disabilities could be deemed eligible for
assistance under the current arrangements
(inadequate as we believe them to be). It is
clear from the responses to the report by
Carla Cranny & Associates, from
the Equipment Study itself and from the
substantial body of evidence about unmet need in
New South Wales that the current levels of
Government expenditure through PADP are
insufficient.
We believe that the
eligibility criteria must be changed to include
more people whose needs are currently not being
met. We are no less certain, however, that there
is a pressing urgency to improve the quality and
quantity of service provision to people who are
already deemed eligible.
Many people wait for long
periods or receive no service at all because of
cash restrictions imposed from the centre of
Government. For people who are already deemed
eligible for support but who receive nothing or
very little, as a direct consequence of budget
restraints, a debate about the finer points of
eligibility has almost no merit. We need,
therefore, to encourage and promote action by
all stakeholders which is intended to resolve
the problems of existing unmet need as well as
addressing our concerns that a substantial
proportion of the population with needs are
excluded from the system entirely.
The income threshold used
to determine eligibility for support through
PADP should be increased substantially to
reflect the real financial circumstances of
people with disabilities who need aids and
equipment.
Approximately 35% of
people with disabilities resident in New South
Wales receive no assistance of any type with the
provision of aids, equipment and appliance,
regardless of their needs. We are convinced this
is wrong, both for the individuals concerned and
for Government policy. We believe the service
gap should be ‘plugged’. This
discussion paper makes it clear why.
A model for
increasing the income threshold used to
determine PADP eligibility
In devising this model we
have sought to identify independently verifiable
data that can be relied upon by Co-ordinators
administering PADP across New South Wales. In
selecting indicators and measures from data
produced by the Australian Taxation Office we
believe that we have identified an authoritative
source. We assume that no stakeholder in the
PADP will suggest that data from this source is
not reliable.
Additionally, we believe
that selecting indicators devised by the
Australian Tax Office leads to benefits for
service users and service providers when it
comes to understanding and/or explaining how
PADP eligibility operates. The benefits
include:
- The data has been
collected and analysed by the ATO. There is
no additional cost to PADP or applicants to
PADP.
- The income assumed for
PADP purposes in the model below is
automatically linked to rises or falls in
Australian incomes and taxation payments. The
cost of calculation is borne by the ATO, not
NSW Health.
- The cut-off points
used to determine entry to the different
bands of eligibility are directly related to
the known and verified incomes of all
applicants and are strongly correlated with
the income brackets of the population as a
whole. In short, the cut-off points are
fair.
- Applicants do not need
to provide new data about income. The
assessment has been carried out by the ATO
for tax assessment purposes. An ATO Notice of
Assessment would be sufficient
evidence.
According to the
Australian Taxation Office, in 1997 – 1998
the level of the mean taxable income of
individuals across all of New South Wales was
$34,941.15
In the same report, the ATO has shown that the
mean taxable income of individuals in the 10
postcode areas showing the lowest incomes in New
South Wales was $21,759.
The ATO does not analyse
its data on the basis of ‘family
income’. To allow us to apply the concept
of family income to our model for the income
test of PADP eligibility criteria we have used
no less authoritative sources, however. They are
the Commonwealth Government’s Treasury
Department, the Department of Family and
Community Services and the Department of
Education, Training and Youth Affairs. In
determining the levels at which Commonwealth
Government payments are set (including the
Age and Disability Support Pensions) the
income for a couple is set at 170% of the
individual rate for adults. We use this
Government standard as the basis of calculating
the income thresholds for PADP eligibility in
the scheme we propose. ‘Family income’
thresholds are 170% of those set for individual
incomes.
According to the AQA
survey of adults living in the community, the
median capital costs of purchases on equipment,
furniture at work, cushions, seating and other
physical aids reached a combined total
$6,300.16
In the light of these
figures, PDC NSW proposes a new set of
arrangements for determining eligibility. We
propose three tiers of entitlement:
- Full PADP service
eligibility
- High capital cost PADP
service eligibility
- Above average income
PADP service eligibility
- Full PADP service
eligibility
Any person with a
disability with an assessed need for aids and
equipment would be eligible to receive support
as part of the NSW PADP if their taxable income
for the preceding tax year was less than or
equal to $26,759 for individuals or $45,490 for
‘family income’. The threshold has two
components:
- The mean taxable
income of individuals in the 10 postcode
areas showing the lowest taxable incomes in
New South Wales ($21,759 in 1997 –
1998).
- An allowance of $5,000
which acknowledges the extra costs of living
with a disability.
Applicants with dependants
would receive an additional allowance of $1,500
for each dependant person. Income would be
verified by the production of a valid ATO Notice
of Assessment for the preceding tax
year.
People deemed to be
eligible in this income group would be eligible
for support for high cost items and low cost
items. No co-payment would be due by applicants
entitled to this full PADP service.
High capital cost PADP
service eligibility
Any person with a
disability with an assessed need for aids and
equipment would be eligible to receive support
for high cost items only as part of the NSW PADP
if their taxable income for the preceding tax
year was more than $26,759 ($45,490 for family
incomes) but less than or equal to $39,941
($67,899 for family incomes). This income band
is made up of three components:
- The band starts $1
above the mean taxable income for individuals
in the 10 post code areas showing the lowest
taxable incomes in New South Wales ($21,760
in 1997 – 1998).
- The band finishes at
the level of the mean taxable income for
individuals in New South Wales ($34,941 in
1997 – 1998)
- An allowance of $5,000
which acknowledges the extra costs of living
with a disability.
Applicants with dependants
would receive an additional allowance of $1,500
for each dependant person. Income would be
verified by the production of a valid ATO Notice
of Assessment for the preceding tax
year.
People deemed to be
eligible in this income group would be eligible
for support for high cost items only. For the
purposes of the central pool, the definition of
high cost commences with expenditure of $2,000.
For all other purposes, our definition of high
cost items starts at $800. No co-payment would
be due by applicants.
Above average income
PADP service eligibility
Any person with a
disability with an assessed need for aids and
equipment would be eligible to receive support
for high cost items only as part of the NSW PADP
if their taxable income for the preceding tax
year was more than $39,941 ($67,899 for family
incomes). This threshold has two
components:
- The band starts $1
above the mean taxable income for individuals
in New South Wales ($34,942 in 1997 –
1998)
- An allowance of $5,000
which acknowledges the extra costs of living
with a disability.
Applicants with dependants
would receive an additional allowance of $1,500
for each dependant person. Income would be
verified by the production of a valid ATO Notice
of Assessment for the preceding tax
year.
Applications for support
from people on above average earnings would be
considered only when all other applications for
high cost support had been met. People in this
income group would receive support for high cost
items only. For the purposes of the central
pool, the definition of high cost commences with
expenditure of $2,000. For all other purposes,
our definition of high cost items starts at
$800. A co-payment of 20% would be due by
applicants in this income band.
9. Conclusion
PDC NSW believes that the
model we propose is fair and reasonable. It
moves forward the debate about how PADP can
improve its performance to deliver much needed
services to people on below average incomes
derived from any source.
We conclude with a
reminder that PADP was intended to meet need. We
accept that there must be safeguards for all
stakeholders, where tax dollars are concerned.
We are confident, however, that by making use of
systems devised by the Australian Taxation
Office we can be sure that verifiable, accurate
and meaningful data is being used to determine
any and all applicants’ entitlement to
support.
The model we propose has
many benefits, which we believe commend it. They
include:
- ‘Meeting
need’ is strengthened as the core
principle of PADP.
- The eligibility
criteria are broadened to be inclusive of a
wider range of people with needs.
- The income criterion
is clearly based on verifiable and reliable
data.
- The focus of
entitlement remains on people with below
average incomes derived from any
source.
- The extra costs of
disability are ‘factored in’ to the
income test for eligibility.
- No additional
administrative burden and/or costs are levied
on NSW Health or other Government
agencies.
- The new eligibility
criteria are fairer than those currently
operating.
- The proposed
arrangements contribute more effectively to
the development of a whole of government
approach to disability services. More
effective use of PADP for a broader range of
people with needs saves tax dollars
elsewhere.
Dougie Herd
Executive Officer
Physical Disability Council of New South
Wales
February 2000
1.
The Equipment Study,
page 58. ADD & NSW Health,
1998
2.
Ibid., page
70
3.
Ibid., page
63
4.
Ibid., page
64
5.
Cost of Disability
Study, page 16. Department of Family &
Community Services, 1999
6.
Disability, Ageing And
Carers: Summary Of Findings, ABS,
1999
7.
Ibid.
8.
Ibid.
9.
The NSW Equipment
Study, page 29. ADD & NSW Health,
1999
10.
Cost of Disability
Study, page 85. Department of Family &
Community Services, 1999
11.
Ibid., page
75
12.
Ibid., pages 93 -
94
13.
The Equipment Study,
page 58. ADD & NSW Health, 1998
14.
Disability, Ageing And
Carers: Summary Of Findings, ABS,
1999
15.
Taxation Statistics
1997/98, ATO, 1999.
16.
A Survey Of The
Unavoidable Cost Of disability Among 200 People
With Quadriplegia, AQA, 1999
