Locked out of the Disability Support Pension – experiences of Indigenous Australians living with disability on Newstart

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Written by Karen Soldatic & Michelle Fitts from the Institute for Culture and Society, Western Sydney University based on their research paper ‘Why extended time on Newstart is unsuitable for Aboriginal and Torres Strait Islander Australians living with a disability’ published in Australian Social Work vol 73, no 2 (2020)

Since 2011, access to the Disability Support Pension or DSP has been increasingly curtailed through the tightening of threshold requirements. Between 2001 and 2015, the DSP approval rate for applications overall declined 20%, with a growing number of people with disability placed on the much lower Newstart Allowance (renamed Jobseeker Payment in March 2020), the general unemployment income replacement payment. The general unemployment payment (Jobseeker Payment), outside the COVID-19 short term supplements, is a significantly lower payment than the DSP with more stringent requirements to maintain ongoing access to the payment, such as forced participation in work for the dole.

This has had a particular impact on Aboriginal and Torres Strait Islander (Indigenous) Australians living with a disability, who face significant barriers in navigating the strenuous DSP application process and often sort themselves ‘out of’ applying for the DSP. With about one quarter of Indigenous Australians living with a disability, the resulting policy landscape leaves many individuals unable to access appropriate support, further entrenching poverty and disadvantage.

This research draws on interviews and focus groups in four regional towns in three states (NSW, WA, QLD x 2) to examine the experiences of Indigenous Australians who had applied for the DSP, drawing on reflections from applicants, their family members and service providers such as social welfare support services and medical professionals. Four main themes were found related to financial impacts on the lives of Indigenous Australians with disability living on Newstart Allowance – living with severe financial hardship, challenges complying with the DSP application, financial penalties for non-compliance with Newstart mutual obligations and supporting community members for manage financial stress.

Living with Severe Financial Hardship

The low rate of Newstart Allowance meant that participants were often unable to maintain a basic standard of living. Participants reported having to sell their primary mode of transport, having to pawn items in order to pay for essential items (such as electricity) and living on basic items as well as rationing food. Costs associated with managing medical condition could often not be covered by participants. Additionally, the limitation of their transport and living situation made it more difficult to comply with mutual obligations attached to Newstart Allowance.

In order to survive, participants often had to rely on family support:

I probably have 60 dollars a fortnight to live on. Yep. And lucky I don’t have to pay for my food. My kids supply me that…. So, a lot of people don’t have family to help them like that.

(Juliette, living with osteoarthritis, diabetes, hypertension, asthma)

One family member stated she had to work more than full time to cover costs while her partner received Newstart:

I just worked. Sometimes I would have two jobs to make ends meet.

(Jennifer, family member—partner living with kidney disease)

Challenges Complying with the DSP Application

The limited financial resources of living on Newstart Allowance also meant participants were often unable to comply with the DSP application process requirements. This included the inability to pay for medical costs (e.g specialist appointments and reports), identification documentation as well as transport costs to attend medical appointments to collate the necessary medical evidence for their application:

We couldn’t afford to go and do passport [identification required for the application], it was like, go and get a passport. Well … you know, I can’t afford to go and get a passport, I need money for petrol, I need money for food …

(Beatrice, family member—son living with an intellectual disability and attention deficit hyperactivity disorder)

It’s just too far, some days I can’t get to the doctors ‘cause I don’t have enough fuel money.

(Rebecca, family member—daughter living with rheumatic heart disease)

As a result, these costs regularly fall to the applicant’s family members and other services that are not funded to provide this support. If an individual does not have this support, submission of a DSP application can be delayed or deferred indefinitely.

Being Financially Penalised for Not Complying with Newstart Allowance Conditions

Many participants incurred financial penalties from Centrelink because their medical condition or family responsibilities made it difficult for them to comply with their mutual obligations. As one participant stated: “Like in the Newstart, there’s nothing attached like sick leave or anything like that, like a normal job” (Krystal, living with a mental health condition). A medical certificate to receive an exemption from obligations was challenging for participants to obtain as they did not have the financial means to seek medical evidence or were too ill to do so. Employment service providers also breached participants who had missed appointments due to caring responsibilities:

I said my baby brother was sick, and I was at home watching my baby brother. But they said that’s no excuse, can you get a medical certificate? And I said, “No”.

(Richard, living with an intellectual disability, Asperger’s Syndrome, ADD and vision impairment)

Common reasons reported by service providers for why complying with Newstart Allowance conditions and activities was difficult for their client included taking care of family and kin responsibilities and relocating from one town or area to another to find available accommodation:

Constantly moving from one place to another because there is no accommodation support for them to stay at the place and be able to engage with Centrelink and other organisations. So that really, it does affect them in terms of reporting, in terms of, you know, settling down to manage their finance.

(Social welfare service provider)

Supporting Community Members to Manage Severe Financial Stress

Representatives of service providers, particularly social welfare, reported that since the changes to the DSP, service providers were taking on a greater advocacy role for their clients on Newstart Allowance:

And for people on Newstart, um, where before, ten years ago, those people would have been on Disability [Support Pension]. So actually, it doesn’t just affect the person, but it actually spurs on the need for additional supports and services and everything.

(Social welfare service provider)

Service providers supported participants with essential items, including clothing and shoes, as well as haircuts, to meet the necessary conditional job search requirements as well as cope with the severe financial stress of living with a disability on Newstart Allowance.

A small number of nonmedical service professionals, including financial counsellors and employment services, reported that a large proportion of their clients were accessing high-risk financial products, such as loans from payday lenders, to purchase essential items.

Recommendations for Policy and Practice

The in-depth narratives from the regional towns clearly demonstrate that Newstart Allowance is not the appropriate payment to support individuals living with a disability, even at the application stage, due to the costs associated with gathering the medical evidence required. Social security payments, including Newstart Allowance, should be increased to ensure recipients can respond to cost-of-living pressures.

Moreover, community members living with a disability who are applying for the DSP should have access to additional services, supports, and assistance to facilitate their application and while awaiting the outcome of their assessment. Where applicants are forced onto the Jobseeker Payment whilst awaiting their eligibility assessment for the DSP, mutual obligation requirements should be postponed until the final payment pathway (Jobseeker or DSP) has been determined.

Culturally responsive and coordinated support and engagement from Centrelink service centre staff including social workers is required to support Indigenous Australians through the DSP process. As part of a more streamlined, supportive process, Centrelink clients who advise Centrelink of their intention to apply for the DSP should be automatically linked with a social worker. Social workers have the potential to help coordinate financial support for clients to address the challenges described in this study and reduce the number of Newstart Allowance recipients being cut off due to non-compliance.