DEAD ENDS: HOW OUR SOCIAL SECURITY SYSTEM IS FAILING PEOPLE WITH PARTIAL CAPACITY TO WORK

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Dina Bowman, Brotherhood of St Laurence[i]; and Karen Soldatic, University of Western Sydney[ii]

Introduction

People deemed to have ‘partial capacity to work’ constitute an overlooked but growing group of JobSeeker Payment recipients.

The growth of this JobSeeker category reflects over a decade of changes in eligibility criteria and assessment processes for other social security income support payments, especially Disability Support Pension (DSP). These changes have driven a reduction in DSP grant rates and resultant growth in the number of people with limited work capacity due to disability or chronic health conditions living long-term on JobSeeker Payment. 

In 2021, the Brotherhood of St Laurence collaborated with the Australian Federation of Disability Organisations, and Karen Soldatic from the Western Sydney University, to examine the growth of the ‘partial capacity’ category, and what it means for people with disability to be effectively relegated to long-term reliance on JobSeeker Payment. In this article we provide an overview of the project’s key findings and recommendations, as reported in the paper, Dead Ends: How our social security system is failing people with partial capacity to work[iii].

It is clear that we need urgent policy changes to provide people with disability and/or chronic health conditions with appropriate support to open a genuine pathway to employment and enable all those unable to work due to disability or ill health to live with dignity. 

Tightened eligibility and onerous assessment for Disability Support Pension

Access to the Disability Support Pension has become extremely difficult for particular cohorts, with changes that have tightened eligibility and introduced onerous, and often prohibitively expensive, assessment processes. Conditions must now be ‘fully diagnosed’, ‘fully treated’ and ‘fully stabilised’, and claimants must provide detailed medical evidence in support of their DSP claim, often at their own expense. To qualify for DSP, applicants must prove that their disability and/or condition results in a functional impairment that meets a threshold of 20 points or more on a single DSP Impairment Table[iv]. For people with multiple disabilities and/or conditions this can obscure the cumulative effects of multiple conditions and comorbidity.

As a result of the tightened eligibility criteria, a new class of social security recipients living with disability and/or chronic health conditions cannot access DSP, and instead must rely on the lower unemployment payment, JobSeeker Payment, defined as having ‘partial capacity to work’.[v]

The number of people receiving DSP fell from 815,251 in April 2011 to 752,274 in April 2021.[vi] Importantly, the success rate of applications has fallen from 63% in 2011 to just 41% in April 2021.[vii]

JobSeeker Payment and partial capacity to work

In September 2021, 39% of people receiving JobSeeker Payment (JSP) were categorised as having partial capacity to work.[viii]Those living with a psychological or psychiatric disability, or a musculoskeletal or connective tissue condition together accounted for almost 80% of this group, according to data presented to Senate Estimates in 2021.[ix] Over 60% of these people were aged over 45.[x]

Most of those categorised as having a partial capacity to work have been on JSP long-term: 82% had been on JSP for one year or more, and over half for five years or more. Of those with partial capacity to work, most had an assessed capacity of between 15 and 22 hours work per week.[xi]  

Of course, just because an individual is deemed to have a partial capacity to work does not mean that they will find suitable work. Indeed, only 16% of people assessed with a partial capacity to work have earnings from employment.[xii] Many with partial capacity to work are left to languish on an inadequate JobSeeker Payment, living below the poverty line with little reasonable prospect of getting work. For a single person under 60 years with no dependent children, the JobSeeker Payment is $252.70 per fortnight less than the Disability Support Pension.[xiii]  This significant difference clearly impacts upon quality of life, affecting affordability of basic items such as to nutritious food, and appropriate housing; and without pensioner concessions that attach to DSP, access to ancillary healthcare and disability services is compromised.

Obligations and exemptions

Depending on the person’s assessed capacity to work, age, and care responsibilities, activity-tested social security payments carry conditions relating to job search and other activities. Unless granted a temporary exemption from these ‘mutual obligations’, JobSeeker Payment recipients must comply with these requirements or risk suspension of payment and non-payment penalties. 

Data provided to Senate Estimates shows that as at 28 June 2019, just 17% of those with partial capacity to work have an exemption from mutual obligations.[xiv]

People with fluctuating medical conditions can find it difficult to meet their mutual obligations when symptomatic but are often refused temporary incapacity mutual obligations exemptions because their condition is permanent rather than temporary. This can expose people with episodic or fluctuating conditions to suspension or cancellation of payments, and non-payment penalties.

Candice

Living on JobSeeker Payment (JSP), with little guidance about medical evidence required for a DSP claim, Candice first applied for DSP three years ago. She has an intellectual disability, with low literacy and does not know how to use a computer. Up until recently, Candice enjoyed working and she has worked for most of her life. However, a long period in hospital due to kidney disease resulted in her resigning from her job. To meet the preconditions for DSP[xv], Candice was placed on a ‘program of support’. Meanwhile, her only income is JSP. This payment has been cancelled twice when hospital stays prevented her from reporting to her Disability Employment Service (DES) provider. Candice says that her first DSP claim was rejected because she didn’t provide the right information. Candice does not understand why. Her doctor had provided a letter to explain the nature of her condition, but it was not considered suitable evidence. She has since presented at a disability advocacy service for assistance and a new claim has commenced. Candice says that if someone had explained to her doctor what was needed it would have made things easier. Also, having a lifelong intellectual disability, she has not needed to undertake any disability assessments since she was at school.

On the other hand, service delivery experience suggests that mature-age people defined as having partial capacity to work are frequently granted repeated short-term exemptions from mutual obligations, in tacit recognition that they will be unable to find suitable employment. Still, they are condemned to subsist on a lower payment than DSP until they reach Age Pension age[xvi], not least because the federal government’s marketized services program – jobactive – overemphasises compliance, fosters competition between contracted services and has little effective engagement with employers. As a result, those most disadvantaged in the labour market are ‘parked’ rather than actively supported to gain meaningful, long term sustainable employment. 

Reforming income support in uncertain times

Many of the temporary supports that were introduced in the early period of the COVID pandemic have been withdrawn. Mutual obligations are fully reinstated, as is debt recovery, and the challenges identified in the Dead Ends report remain. 

At the same time, the shift towards digital service delivery and engagement has sped up. While online processes can improve access for some people with disability or chronic health conditions, internet access remains uneven across Australia due to inadequate infrastructure and for many, the inability to meet associated costs. Furthermore, the shift to online engagement and the increasing use of chatbots and automated scripts can lead to the provision of generic information and advice without the capacity for much needed nuance and technical specificity. This is particularly important given the technicalities associated with the DSP application process.

Urgently review DSP application and assessment processes

There is an urgent need for reforms to address issues identified in the Dead Ends report for people living with disability and/or chronic health conditions. Key recommendations for federal government action include:

  • Review the DSP application and assessment process, particularly as it relates to applicants having to demonstrate that their condition is fully diagnosed, fully treated and fully stabilised. The process should be based on principles of equity, minimal cost to participants, accessibility of information, transparency and timeliness. 
  • The following steps are needed:
    • Remove the ‘fully’ diagnosed, treated and stabilised criteria, as part of a comprehensive review of the DSP eligibility requirements.
    • Reinstate the Treating Doctor’s Report (TDR) and introduce a Medicare item number to cover the cost of TDR preparation. (Interestingly, the AMA have expressed their lack of support for the reintroduction of the TDR and instead call for ‘clearer and better funding mechanisms to support GPs in compiling/and or summarising the medical evidence to support a patient’s DSP claim’.)[xvii]
    • Develop more extensive community outreach and information dissemination strategies about the DSP to ensure that service providers, medical practitioners and health care providers can support high quality applications.
    • Ensure that all DSP applicants have timely, accessible information, and coordinate communication pathways and support during the application process for individual applicants and their support networks.
    • Implement a timeframe of three months maximum to determine DSP eligibility.
    • Exempt individuals applying for the DSP from JobSeeker Payment reporting and work activities during the process and while awaiting determination. 
    • Offer comprehensive outcome information and support for applicants following an unsuccessful DSP claim. 

Ensure JobSeeker Payment is adequate

Key recommendations include:

  • Take immediate steps to increase the rate of JobSeeker Payment to accurately reflect the costs of living and of job-seeking activities, including for people classified as having partial capacity to work.
  • Provide employment support that enables rather than punishes JobSeeker Payment recipients with partial capacity to work.
  • Invest in best practice, evidence-informed mainstream and disability employment services to better support jobseekers, including those with a partial capacity to work. This new model should focus more on personalised support, skills development and employer engagement rather than on compliance. While digitisation may play a role, it should not be the dominant form of engagement for persons with disability and/or chronic health conditions on JSP.

Access the full Dead Ends report at https://library.bsl.org.au/jspui/bitstream/1/12735/1/Soldatic_etal_Dead_ends_partial_capacity_to_work_2021.pdf

[i] Dina Bowman is Principal Research Fellow at the Brotherhood of St Laurence

[ii] Karen Soldatic is Professor, School of Social Sciences & Institute Fellow, Institute for Culture and Society, Western Sydney University

[iii] Report available at: https://www.bsl.org.au/research/publications/dead-ends-social-security/

[iv] DSP Impairment Tables available at: https://www.dss.gov.au/sites/default/files/documents/05_2012/dsp_impairment_final_tables.pdf  

[v] In March 2020 JobSeeker Payment replaced Newstart Allowance and incorporated seven other payments. See https://www.dss.gov.au/ benefits-payments/jobseeker-payment 

[vi] Data provided to stakeholder engagement meeting by DSS, July 2021, Table 1

[vii] Data provided to stakeholder engagement meeting by DSS, July 2021, Table 2

[viii] DSS Demographic data, September 2022

[ix] Senate Community Affairs Legislation Committee, Estimates, 25 March 2021, p. 28.

[x] Senate Community Affairs Legislation Committee Additional estimates, 25 March 2021, Question reference number: DSS SQ21-000008

[xi] Senate Community Affairs Legislation Committee, Additional estimates, 25 March 2021, Question reference number: DSS SQ21-000008

[xii] As above

[xiii] Excluding the maximum pension supplement of $71.20 and Energy Supplement of $14.10

[xiv] Senate Community Affairs Legislation Committee Additional Estimates Supplementary Budget Estimates – 24 October 2019, Question reference number: SQ19-000307

[xv] For people who have claimed DSP and have scored 20 points or more under the DSP Impairment Tables but have not scored at least 20 points under a single Table 

[xvi] Even for those aged 60+, after nine continuous months on JobSeeker Payment, the rate is only $667.50 compared with DSP $868.30, in July 2021 https://www.servicesaustralia.gov.au/sites/default/files/co029-2107.pdf

[xvii] AMA submission to the Senate Inquiry into Disability Support Pension https://www.ama.com.au/articles/ama-submission-senate-inquiry-disability-support-pension-re-proposed-reinstatement-dsp