Let people on the Disability Support Pension work more and raise the rate to cover the basics
We are currently in a cost-of-living crisis, and the government is failing those who need support the most. People with disability who receive the Disability Support Pension (DSP) are scraping by on dismally low payments, posing a serious risk to their health, safety and wellbeing. The system is highly complex to enter and navigate, and it disincentivises DSP recipients from transitioning to employment.
The recommendations of the Senate Community Affairs References Committee’s ‘Inquiry into the purpose, intent, and adequacy of the Disability Support Pension’ (DSP), which were delivered in February 2022, still need to be implemented to address the cost-of-living crisis for those who rely on the DSP to afford life’s basics.1 Inflation and cost increases have only compounded since the Committee’s Report was delivered. The final report of the Senate Select Committee on Cost of Living in 20242 was disappointing, as it failed to recommend concrete actions to provide greater financial stability for people with disability.
The National Disability Insurance Scheme (NDIS) does not cover everyday living costs for participants. For many people with disability, the DSP is their only source of income. The current maximum rate of the DSP with supplements for a single person is just $572.20 per week. This would be extremely hard to get by on, particularly given the additional costs often incurred by people with disability.
The employment rules and requirements of the DSP are currently too complicated and not well understood by many recipients. This creates significant disincentives to doing any amount of paid employment, which needs to be addressed urgently. The process to apply for the DSP is so lengthy and taxing that many recipients regard gaining access as akin to achieving the ‘holy grail’ and fear losing it if they do any work or attempt to re-enter ongoing employment.
The rates of transition from DSP to employment are currently extremely low. Lifting work restrictions would encourage people to earn income, even in ad hoc or short-term ways. In some cases, with the security of DSP eligibility, a person may be able to build up to ongoing employment where they can suspend their DSP payments – a win-win result. There is nothing to gain for the budget bottom line by discouraging these outcomes through arbitrary work restrictions whereby the person receives the same DSP payment without working at all.
In summary, JFA Purple Orange is calling on all political parties and candidates in this election to commit to:
- Increasing the rate of the Disability Support Pension to enable people with disability to adequately cover the cost of living.
- Changing the rules for receiving DSP payments to remove the disincentives for people with disability to work, particularly by:
- Increasing the income thresholds so people can earn more from employment without impacting their DSP payments;
- Increasing the period for which a person can pause their DSP payments (but remain eligible to restart), and make sure this rule is promoted and understood by people on the DSP; and
- Removing the 30-hour work limit for DSP recipients as recommended by the Economic Inclusion Advisory Committee.3
- Providing the necessary resources for the Economic Inclusion Advisory Committee to comprehensively review the Disability Support Pension (DSP) and supplements to inform future policymaking.
Key Question
Do you commit to raising the rate of the Disability Support Pension (DSP) and updating DSP arrangements to eliminate barriers, disincentives, and penalties for people to earn more income from employment so they can afford the basics during a cost-of-living crisis?
References
2 The report can be accessed at https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Cost_of_Living/costofliving
3 See Recommendation 9 Economic Inclusion Advisory Committee 2024 Report to Government