Think we should reform our disability support pension to be more like the United Kingdom? Think again, economist Tom Westland writes.
Stupidity is an eminently tradeable good. Having received an advance shipment from us some years ago in the oleaginous form of the Crosby-Textor ghouls, Britain is ready to settle accounts, and at interest. Britain would like to offload onto us some nonsense about disability reform, it seems, even though we’ve showed great promise of manufacturing it ourselves.
Hardly had Patrick McClure finished laminating his interim report on Australia’s transfer system than The Australian pronounced it quite the fragrant little peach: just the encouragement the government needed to “enact reform as part of its overarching narrative to move Australia beyond the age of entitlement”. (Am I the only person who thinks this puts it exactly the wrong way around? The narrative, if we have to call it that, should emerge naturally from the policy, not policy from the narrative.)
Move we must, though, and quickly: for we are in danger of falling behind. McClure, not without some point, thinks that the disabled might be better served by a system that encourages those with some ability to work to do so. And the gains, at least according the Oz’s editorial, are almost galactic in scope. “When Britain imposed a tougher medical test on its incapacity benefit, the equivalent of our disability support pension,” we learn, “about 870,000 new applicants dropped out rather than take the test.”
Just about the only thing to be said for this statement is that the Oz’s writers didn’t come up with it themselves. It is, in fact, one of the most disproven assertions in recent British history, having originated in a spectacularly mendacious article in The Telegraph, and a lie that has come in for some — ahem — sceptical attention from the Chair of the United Kingdom Statistical Authority, who has begged Tory politicians to stop repeating it.
The number quoted represents the cumulative total of new applicants for disability support in Britain — not existing recipients — who submitted a claim and withdrew it before it could be assessed. It is therefore not proof of a vast, lucrative sea of ineligible recipients, as TheAustralian has now twice tried to claim. (Many people apply for disability payments and find a in the job in the meantime, or their temporary disability or sickness abates.)
This isn’t just a minor quibble. If the McClure recommendations, whose broad outlines resemble the British reforms — that is, reserving the full payment for those with permanent incapacity, with those capable of work placed in a separate category with support to find employment — are implemented, it seems only fair to examine honestly what happened in the Mother Country.
And to describe the disaster that has befallen the British reforms as “unmitigated” would be to flirt with euphemism. When the LibCon coalition decided to extend to reassess all existing incapacity benefit recipients, it found itself supervising the baroque incompetence of a private-sector “provider”, Atos, which has allowed a vast pile of unprocessed claims to accumulate, has put its assessors on “targeted audit” if they deem too many applicants worthy of full benefits, has told people with degenerative illness they’ll get better, and has been forced to pay out money for refusing to providedisability access for people coming for disability benefit reviews.
Most salient, while the initial rate at which incapacity benefit recipients were assessed as either fit to work or having some future capacity to work seemed promising, a huge number of assessments were overturned on review, and in the past 18 months or so the rate of fit-to-work or benefits-with-work-requirement judgements has plummeted, as the following graphic demonstrates:
Perhaps there are many Australian disability pensioners who can be encouraged to work, and McClure is right that we should help them if we can, but it the endeavour will certainly not be costless (the savings from lower recipient rates may not even exceed the expense) and the potential for undiluted catastrophe in the British style is very real, if we believe the miracle cures and magic potions advertisements of some of Australia’s Very Serious Commentariat.