Job Capacity Assessment
Matthew Thomas
In the context of the 2010–11 Budget, the Government has
two main, related objectives with regard to disability policy. The
first of these is to reduce the number of people in receipt of the
Disability Support Pension (DSP). The second is to increase the
workforce participation of people with disabilities. In keeping
with these objectives, the Government has introduced changes to the
Job Capacity Assessment (JCA) and the work capacity assessment
process more generally. These changes are based upon the principle
that work capacity assessments (and disability employment policy as
a whole) should focus on people’s ability to participate in
paid employment, rather than on their disability.
The JCA was introduced by the Howard Government on 1 July 2006
as a part of its Welfare to Work reforms. Essentially, as its title
implies, the JCA is an evaluation and streaming tool that is used
to identify a person’s ability to work and any barriers that
they may face in gaining employment. As such, the JCA serves a dual
purpose. Firstly, it is used to determine whether a person with
disability should be in supported (Disability Employment Services)
or open (Job Services Australia) employment services. And,
secondly, the JCA is used to assess whether or not a person has the
capacity to work 15 hours or more per week and, thus, whether or
not they qualify for the DSP. The assessment is made using the
Impairment Tables, which are calculated to assist in measuring how
a person’s impairment affects their ability to work. At
present, JCAs are conducted by Centrelink, Commonwealth
Rehabilitation Service Australia (CRS) and Health Services
Australia Group (HSA), all of which are Human Services Portfolio
agencies. Until 1 July 2009, the JCA program was managed by the
Department of Human Services. Responsibility for the
program’s management was then shifted to the Department of
Education, Employment and Workplace Relations (DEEWR).
Under the Budget reforms,
- from 1 July 2010, JCAs will not be conducted for job seekers in
receipt of Newstart Allowance (NSA) or Youth Allowance
(other)(YA(o)) who require a temporary exemption from participation
requirements due to a medical condition. Instead, these
determinations will be made by Centrelink staff.
- from 1 July 2011, job seekers requiring a work capacity
assessment will be appraised through a revised assessment, which
will be conducted by an allied health professional within
Centrelink. From the same date, all JCAs will be conducted by
Centrelink, with the assistance of Commonwealth Rehabilitation
Service Australia (CRS).
- from 1 January 2012, in the most significant change, JCAs will
be based on substantially revised Impairment
Tables—ones that ‘focus more on ability’. New
applicants for DSP who do not have evidence of an inability to work
more than 15 hours per week may be referred to NSA or YA(o) and
offered employment assistance through Disability Employment
Services or Job Services Australia. The Government anticipates that
through their participation in these services, job seekers will
develop skills that will enable them to gain employment of over 15
hours per week, thereby precluding them from DSP qualification.
Alternatively, they will gain evidence for their inability to work
for more than 15 hours per week, and thus the basis for another DSP
claim. See the Disability Support Pension brief in this publication
for analysis of this reform.
The above reforms are likely to achieve the Government’s
twin objectives in the immediate to short-term. In doing so, they
will save a substantial amount of tax payers’ money. However,
it has been argued that if the Government is to achieve its
objectives over the longer term, then this demands more substantive
reform in two key areas.
The first of these is the removal of perverse incentives that
encourage disadvantaged people to strive for DSP qualification and
its associated ‘disabled’ status. These incentives
include the DSP’s: higher rate of payment, its indexation
according to Male Total Average Weekly Earnings rather than the
CPI, its absence of activity test requirements and other benefits
such as the mobility allowance. So long as these inducements
remain, many of those would-be DSP claimants who lack evidence of
an inability to work for more than 15 hours per week will attempt
to achieve just this. As Australian Council of Social Service Chief
Executive Officer, Clare Martin puts it:
... the $120 weekly gap between pensions and
allowances has caused disincentives for people on disability
support payments to move into work. If these payments were
equalised, there would be less need for measures such as the push
to restrict access to the disability support pension.[1]
Following similar lines, Sydney Morning Herald
columnist and reporter, Adele Horin has made the point that in the
absence of changes to NSA—namely, an increase in its level of
payment and/or a loosening of its income test—many people
moved off DSP and onto NSA could end up unemployed, underemployed
or in poverty.[2]
The second area is the provision of sufficient support and
services to ensure that disadvantaged people are able to
meaningfully participate in the workforce. This means support in
post-school education and training as well as in employment itself.
Based on the most recent available data on the level of unmet
demand for disability employment services (and for disability
services more generally) it would appear that there is still scope
for improvement in this area.[3]
It should be noted that there has been a decline in unmet demand
for disability employment services in recent years.[4] This decline should continue with
the Government’s recent (1 March 2010) removal of the cap on
supported employment services. Nevertheless, because of the general
policy shift towards encouraging people with disabilities to move
into the labour market, overall demand for disability employment
services has increased and is likely to continue to do so in the
future.
[1]. J Massola, ‘Tightening of rules to
save $383m’, Canberra Times, 12 May 2010, p. 7,
http://parlinfo/parlInfo/download/media/pressclp/QCOW6/upload_binary/qcow60.pdf;fileType=application/pdf#search=%22tightening%20of%20rules%20to%20save%20$383m%22
[2]. A Horin, ‘Labor turns the screw on
the disabled’, Sydney Morning Herald, 12 May 2010,
p. 12, http://parlinfo/parlInfo/download/media/pressclp/B1OW6/upload_binary/b1ow60.pdf;fileType=application/pdf#search=%22labor%20turns%20the%20screw%20on%20the%20disabled%22
Horin’s observations find support in International Labour
Organisation (ILO) analyses and findings: ‘In the world of
work, persons with disabilities tend to experience high
unemployment and have lower earnings than persons without
disabilities. They are often relegated to low-level, low-paid jobs
with little social and legal security, or segregated from the
mainstream labour market. Many are underemployed. This affects
their self confidence. Many become discouraged and drop out.’
International Labour Organisation (ILO), Facts on disability in
the world of work, ILO, Geneva, 2007,
http://www.ilo.org/global/About_the_ILO/Media_and_public_information/Factsheets/lang--en/docName--WCMS_087707/index.htm
[3]. The Australian Institute of Health and
Welfare (AIHW) has conducted four studies of the level of unmet
demand for services provided under the Commonwealth State/Territory
Disability Agreement (CSTDA). The latest of these studies assessed
unmet demand in 2005. While the AIHW noted that unmet demand for
specialist disability employment services in 2005 was relatively
low, it emphasised that the estimate of around 1700 people should
be regarded as conservative. Australian Institute of Health and
Welfare (AIHW), Current and future demand for specialist
disability services, AIHW, Canberra, 2007, viewed 17 May 2010,
http://www.aihw.gov.au/publications/dis/cafdfsds/cafdfsds.pdf
[4]. The decline in unmet demand is due to two
main factors. The first of these is that government expenditure on
disability employment services has increased in real terms since
2003–04. Australian Institute of Health and Welfare (AIHW),
Disability support services 2007–08: national data on
services provided under the Commonwealth State/Territory Disability
Agreement, AIHW, Canberra, 2009, viewed 17 May 2010, http://www.aihw.gov.au/publications/index.cfm/title/10751
The second is that, with the introduction of the Welfare to Work
reforms in the 2005–06 Budget, an additional 21 000 demand
driven disability employment places was made available over four
years.
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