Speech by The Hon Jenny Macklin MP

Second reading speech Social Security and Other Legislation Amendment (Disability Support Pension Participation Reforms) Bill 2012, Parliament House, Canberra

Location: Parliament House, Canberra

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This Bill introduces two key reforms to the disability support pension announced in the 2011-12 Federal Budget as part of the Building Australia’s Future Workforce package of measures. These are significant reforms – reforms that will, for the first time, introduce new participation requirements for certain disability support pensioners, and allow disability support pensioners to work more hours without having their payment suspended or cancelled.

Other amendments made by this Bill include more generous rules for overseas travel for people with severe disability, and some minor amendments.

The Government is improving support for Australians with disability, to help them into work where possible, while ensuring we continue to provide an essential safety net for those who are unable to support themselves fully through work.

I believe we can do better than a lifetime spent on income support for Australians who have some capacity to work. Many people with disability are great contributors in the workforce, and many want to do more.

This Government recognises that working benefits people in many different ways. It helps boost people’s self-esteem, improves social contact, provides more income, and leads to improved health and financial security. The Government is committed to ensuring that people with disability can access these opportunities wherever they are able to do so.

These reforms introduce new participation requirements for certain disability support pension recipients with some capacity to work and more generous rules for existing disability support pensioners to encourage them to work more hours. These measures will be combined with extra support for people with disability, including more employment services, and support for employers to take on more people with disability through new financial incentives.

Many people with disability want to work if they can, but they may need extra support.

In the first of three disability support pension measures in this Bill, all effective from 1 July 2012, more generous rules are introduced to allow all disability support pensioners to work up to 30 hours a week without having their payment suspended or cancelled. These people will be able to receive a part pension, subject to usual means testing arrangements.

Currently, disability support pension recipients granted on or after the previous Government’s introduction of the Welfare to Work changes on 11 May 2005 can only work up to 15 hours a week before their payment is suspended or cancelled. Recipients granted before this date were ‘grandfathered’ under the Welfare to Work changes and can work up to 30 hours a week before their pension is suspended or cancelled.

Disability support pension recipients subject to ‘the 15 hour rule’ can find it difficult to find work limited to less than 15 hours a week. Many want to test whether they can work more hours but are worried about losing qualification for the Disability Support Pension.

This change will remove the disincentive for disability support pension recipients to take up work or increase their hours if they are able to do so, and will help address the low workforce participation rate of people with disability.

We estimate that this change will encourage around 4,000 disability support pension recipients to take up work, and 3,900 recipients who are already employed to work extra hours.
The Bill’s second measure will introduce new participation requirements to encourage the workforce engagement of certain disability support pensioners who have some capacity to work.

Disability support pension recipients under age 35 with a work capacity of at least eight hours a week will be required for the first time to attend regular participation interviews – engaging with Centrelink to develop participation plans, tailored to their individual circumstances, to help build their capacity.

Participation plans could involve working with employment services to improve job readiness, searching for employment, or undertaking training, volunteering or rehabilitation.

The participation interviews will also help make sure disability support pension recipients are connected to other services and supports they need to overcome barriers to participation, such as drug and alcohol rehabilitation, mental health services and other community services.

While attendance at Centrelink interviews will be compulsory, participation in activities identified in the plan will be on a voluntary basis. There will also be exceptions to the new participation requirements for pensioners who are manifestly disabled or have a work capacity of zero to seven hours a week, or while a pensioner is working in an Australian Disability Enterprise or the Supported Wage System.

In the third measure, the Government recognises that the disability support pension is an essential safety net for those who cannot work. New, more generous, rules will allow people receiving disability support pension who have a permanent disability and no future work capacity, to travel overseas for more than 13 weeks, while retaining access to their pension.

In addition, a disability support pension recipient who has a severe disability and is required to accompany a family member who has been posted overseas by their Australian employer will retain their pension for the period of the family member’s posting. These pensioners will not be eligible for add-on payments such as the pension supplement or rent assistance while they are overseas.

Existing portability rules will continue to apply to disability support pension recipients who may have some ability to work. Other working age payments will not be affected by these changes to portability arrangements.