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The 'mind-body problem' and proposed DSP reforms

The interim report of the Review of Australia’s Welfare System led by Patrick McClure was released on 29 June 2014. The report contains proposals for significant reforms to the Disability Support Pension (DSP). The reforms would see the DSP reserved for people with a permanent impairment and no capacity to work. Those people with a partial capacity to work would be placed on a lower tiered working age payment and provided with support to improve their employment capacity. The proposals represent an attempt to deal with the perverse incentive for income support claimants to apply for DSP, which has a higher rate of payment and reduced activity testing, rather than allowance payments l... Read more...

Pension indexation: a brief history

In the lead-up to the Coalition Government’s first Budget, speculation has focused on possible changes to the age pension, including adjusting the way pension rates are indexed. Indexation is a complex and important component of the Australian social security system but one that is often misunderstood. The following provides an explanation and brief history of indexation. How pension rates are adjusted Currently, pensions (including the Age Pension, Service Pension, Disability Support Pension and Carer Payment) are indexed twice each year by the greater of the movement in the Consumer Price Index (CPI) or the Pensioner and Beneficiary Living Cost Index (PBLCI). They are then ‘b... Read more...

What’s happening with the McClure welfare review?

The Government is conducting a review into welfare payments, headed by former Mission Australia CEO, Patrick McClure. This post briefly outlines what is currently known about the McClure review, including its objectives, processes and possible outcomes. Late in 2013, it was reported that McClure had been asked to provide recommendations on streamlining and improving Australia’s system of welfare payments. While initially it was thought that the review would examine the entire system, the Government clarified that it would only be looking into working age payments such as Newstart Allowance (NSA) and the Disability Support Pension (DSP). Payments such as Age Pension and the various for... Read more...

Growth in Age Pension receipt: the elephant in the room of the welfare reform debate

The Minister for Social Services, Kevin Andrews, has recently expressed concern at the continued growth in the number of people in receipt of income support payments, and suggested that the welfare system is unsustainable. He has therefore commissioned Patrick McClure to undertake a review of the welfare system. Mr McClure’s previous review led to the Welfare to Work changes in 2006. However a closer investigation of the figures, released by the Department of Social Security, suggests that welfare receipt among those of working age is already declining, and hence the scope to make further large reductions may be limited. However Age Pension take up rates continue to increase. Read more...

Extending income management in Cape York

Legislation introduced into Parliament last week proposes to extend operation of income management in Cape York for a further two years until the end of 2015. This will be the third time income management has been extended in Cape York since it began in 2008. The Government argues that income management is a key element of welfare reform efforts in Cape York, which it says have 'seen improved school attendance, care and protection of children and community safety'.Cape York income managementIncome management refers to a policy under which a percentage of the welfare payments of certain people is set aside to be spent only on ‘priority items’ such as food, housing, clothing, education and hea... Read more...

New Place Based Income Management to commence 1 July

A new form of income management being introduced next week will extend welfare quarantining to selected disadvantaged areas across Australia, targeting people involved in child protection matters and deemed vulnerable to financial hardship.From 1 July, the Government will introduce a new form of income management to communities in Queensland, New South Wales, Victoria and South Australia.   So, how will the new Place Based Income Management operate and how does it differ from existing forms? Why base it in particular areas? What do we know about whether or not it is likely to be successful?  Place Based Income Management will apply in the following Local Government Areas (LGAs):Bankstown, Ne... Read more...

Income management: some answers to key questions

From 1 July 2012, income management will be extended to five new disadvantaged communities across Australia: Bankstown (New South Wales), Logan (Queensland), Rockhampton (Queensland), Playford (South Australia) and Greater Shepparton (Victoria).While the policy of income management of welfare payments has been highly controversial, the specific details of its various forms are not generally well understood. The Parliamentary Library has released a Background Note seeking to address this lack of understanding. It provides a brief overview of the history of income management and responses to a number of key questions about the policy.Questions answered by the Background Note include: what is i... Read more...

Is income management working?

    Much of the debate surrounding income management of welfare payments has related to the question of evidence. That is, is there evidence to justify the policy? Alternatively, is there evidence of policy failure or harmful consequences arising from income management? In other words, is income management working?Income management (also known as ‘welfare quarantining’) refers to a policy under which a percentage of the welfare payments of certain people are set aside to be spent only on ‘priority goods and services’ such as food, housing, clothing, education and health care. Introduced by the Howard Government in 2007, income management has been criticised by some as paternalist a... Read more...

Income management and the Racial Discrimination Act

 In March 2011, the Aboriginal and Torres Strait Islander Social Justice Commissioner, Mick Gooda, is reported to have said that it is likely that some time in the future a complaint under the Racial Discrimination Act (RDA) will be lodged with the Australian Human Rights Commission (AHRC) in relation to income management of welfare payments on the grounds that it discriminates against Indigenous people. If any such complaint were upheld, this would be a significant test of one of the main pillars of the Australian Government’s welfare reform agenda.This raises the question of how the AHRC—the statutory body with responsibility for resolving complaints of discrimination or breaches of huma... Read more...

What's the future for income management in the Northern Territory?

In her foreword to the Government’s recent discussion paper on the future of the Northern Territory Emergency Response (NTER), the Minister for Indigenous Affairs, Jenny Macklin, argued that lack of consultation had caused ‘ongoing anger, fear and distrust among indigenous people’ and that the next stage of the NTER would need to be based on ‘partnership with Aboriginal people’. To this end, the Government plans to consult with Aboriginal people over coming months about ‘what has worked well and where improvements can be made’.Interestingly, the paper does not include income management as one of its ‘eight areas for future action’. Indeed, the paper argues that ‘as income management applies ... Read more...