Media Release by The Hon Bill Shorten MP

New residency rules for Disability Support Pensioners

Joint Media Release with:

  • The Hon Jenny Macklin MP, Minister for Families Housing Community Services and Indigenous Affairs

The Australian Government will 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.

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.

Even though only Australian residents can lodge a claim for the DSP, and those on DSP can only be absent from Australia for up to 13 weeks, there are cases of DSP recipients living permanently overseas and flying back to Australia every 13 weeks to continue receiving the pension.

The Government will close this loophole to ensure the system is fair and effective.

An additional rule will be introduced to require Australia to be a DSP recipient’s permanent place of residence. This change will bring DSP into line with other workforce age payments.

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.

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.

These changes have been made possible through a new data exchange process between Centrelink and the Immigration Department that started in 2008.

Centrelink will take a risk-based approach to reviewing the residence status of DSP recipients and will focus on those customers who have three or more overseas trips a year.

The changes 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.

This change 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.

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

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 $100 per fortnight.