Introduction of legislation for new residency rules for Disability Support Pensioners

The Australian Government today introduced legislation to crack down on people on the Disability Support Pension (DSP) who live permanently overseas but return to Australia every 13 weeks in order to retain their pension.

The Families, Housing, Community Services and Indigenous Affairs and Other Legislation Amendment (Budget and Other Measures) Bill 2010 was introduced into Parliament today.

The legislation will close a loophole that has resulted in cases of DSP recipients living permanently overseas and flying back to Australia every 13 weeks to continue receiving the pension.

From January 2011, only DSP recipients permanently residing in Australia will be able to continue to receive the DSP except under limited and specific circumstances.

This change will bring DSP into line with other workforce age payments.

The Government is cracking down to ensure the system is fair and effective.

Analysis of data from the 2007-08 financial year shows that of DSP recipients who undertook more than three overseas trips, 154 spent less than eight weeks in Australia over the year. Of these 71 spent less than four weeks in Australia and eight spent less than a week here.

This change is expected to save taxpayers around $3 million a year when fully operational.

Currently, to apply for the DSP a person must be an Australian resident, however once granted they can continue to receive the DSP despite moving overseas permanently by returning to Australia every 13 weeks.

This legislation will ensure that DSP residents continue to be Australian residents to receive the pension.

Under the Social Security Act, residence is determined by examining a range of factors, including whether someone owns or rents property in Australia, whether they have assets in Australia, how long they plan to spend away from Australia and whether they have an Australian bank account.

The legislation will not affect DSP recipients who need to leave Australia temporarily, only those who choose to no longer permanently live in Australia.

The 13 week temporary absence rule will remain to allow DSP recipients to legitimately travel overseas for short periods.

The legislation will not affect any disability support pensioner who has portability under an international social security agreement, is grandfathered from changes introduced in 2001 or 2004, or is entitled to portability because they are severely disabled and terminally ill and overseas to be cared for by a family member.

The Government is committed to improving support to people with disability. As a result of pension increases announced last year and indexation, the DSP payment for singles on the maximum adult rate has been increased by around $115 per fortnight.