Australia —
Federal Government plans to reduce the number of
pensioners on disability support may result in more
people being shifted on to cheaper unemployment benefits,
according to a leading economist.
Bob Gregory, a professor of
economics at the Australian National University, said
many of the disability support pension recipients were
men aged over 55 with erratic employment histories who
would struggle to get a job in today's modern workplace.
"People with disabilities can't get
jobs as easily now as they used to," he said.
"The labour market has moved
against them."
He said that previously people with
certain mental disorders could get by in some jobs, such
as stacking shelves in a warehouse. But those jobs were
disappearing; full-time jobs for men were at the 1991-2
recession level and the competition from women and
university students for part-time work was stronger than
in the past.
With the Coalition poised to
control the Senate, it is likely to push through
twice-rejected attempts to tighten eligibility for the
disability support pension. With 673,000 recipients of
that pension, growing at an average annual rate of 5.3
per cent, the government has been under budgetary
pressure to stabilise the numbers.
In a new paper, Professor Gregory
and Lixin Cai, of the Melbourne Institute of Applied
Economics and Social Research at the University of
Melbourne, show the spikes in the number of people
receiving disability pension over the past 30 years
coincided with periods of high unemployment. But once
people were on the pension they did not move off in
better economic times.
The paper, published in the
Australian Journal of Labour Economics, shows that an
increase in the unemployment rate raised the grant rate
of the disability support pension, at least for the next
year, by as much as 23 per cent. The paper says that
"while an economic recession pushes the disabled into the
DSP program, a boom will not draw them out".
Professor Gregory said: "To a large
extent the economy defines who is disabled." Also,
numbers were influenced by policy changes, which
tightened or relaxed eligibility rules.
Half the new entrants to the
disability support pension had a history of multiple
spells of unemployment, and up to two-thirds had been
unemployed for more six months in the period before they
were granted it.
Because the disability support
pension was more than Newstart Allowance, and recipients
were not subject to job search requirements and financial
penalties, "if you were 60 and unemployed almost everyone
involved tried to negotiate to get you on DSP", Professor
Gregory said. He doubted the ability to move many
existing disability pensioners aged 55 to 64 into jobs.
"The major impact [will be] to shift people onto
unemployment benefits. Policy changes are more likely to
affect the inflow."
The president of the Welfare Rights
Centre, Michael Raper, said latest data showed the
disability support pension growth rate at 2.2 per cent in
2003 was the lowest in 20 years.
"It would be taking a great risk to
put people with significant impairment onto Newstart even
in a robust economy. Long-term unemployment is higher now
than eight years ago."
Under the rejected bills disabled
people assessed as able to work for award wages for 15
hours would be ineligible for the disability support
pension. The current benchmark is 30 hours.
