Labour Force Potential of Disability Support Pension Recipients

According to the Australian Bureau of Statistics (ABS) the prevalence of disability among working age Australians is falling, with a commensurate decrease in the number and proportion of people who are permanently unable to work due to disability (Disability, Ageing and Carers Survey 2003, 2009). But growth in Disability Support Pension (DSP) numbers has not slowed. And despite a consistently strong labour market over the last decade, employment rates for people with a disability in Australia have remained low. This dual problem is critical for social and economic policy in Australia. Policies aimed at restraining the growth in the number of people with disability reliant on Income Support (IS) and encouraging existing recipients with some work capacity into (or back into) the labour market are described by the OECD as "win-win": helping to boost inclusion and incomes for people with disability whilst helping to reduce government expenditures and boost GDP (OECD, 2007).

Recent welfare reforms have increased the participation requirements for receipt of IS payments for individuals assessed as having a partial capacity to work. An additional reform, introduced in July 2012 requiring attendance at quarterly then biannual participation interviews with a Centrelink adviser, with the aim of agreeing to a formal activity plan has been introduced for DSP recipients less than 35 years of age and assessed as having a partial capacity to work.

This project will examine the extent of which this latest reform has had short-run impacts on participation in employment services and other forms of labour force participation for those covered, how any such impacts have varied across different sub-groups of those covered, and what might we expect in terms of short-run impacts were the coverage of the reform to be extended to the 35+ years age group.

The final report is currently scheduled to be completed in June 2014.

The Melbourne Institute contact for this project is Dr Sonja Kassenboehmer.