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British disability reforms a perfect model of a mess

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 The Australian 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 provide disability 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.

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  • 1
    Monicas Wicked Stepmother
    Posted Tuesday, 1 July 2014 at 3:45 pm | Permalink

    The major hurdle for DSP recipients isn’t a lack of motivation to work, but a lack of employers willing to employ them. Until the Government addresses the SUPPLY of work for people with disabilities, then trying to change the attitude of DSPers is doomed to failure. However, I doubt facts will manage to shake the beliefs of Kevin Andrews et al.

  • 2
    Shaniq'ua Shardonn'ay
    Posted Tuesday, 1 July 2014 at 9:11 pm | Permalink

    What I hate about the statistics quoted around the DSP is that many people on the DSP do work. I do, and I have been at the same job for nearly all of the ten years I have been on DSP. I still qualify because I am still not well enough to work full time but I have managed to double my hourly pay rate so that I get much less from Centrelink (around 150 dollars a fortnight). What do I spend this generous ‘entitlement’ on? Private Health Insurance ($50 a fortnight) and Medications ($150 a fortnight). I work as much as I feel I can, when I was having ECT I’d go into work the next day FFS and I resent being characterized as a malingering bludger just because I have a disability that is not visible.
    According to the ABS around 53% of people of DSP do work, given that the requirements for DSP have been changed from ‘unable to work more than 30 hours a week’ to ‘unable to work more than 15 hours a week’ under Howard I think that’s pretty good.

  • 3
    max steinman
    Posted Wednesday, 2 July 2014 at 10:50 am | Permalink

    There needs to be more news on the UK disaster, the consertive astroturfers in comments have latched onto it as the perfect example of what we should do, this really needs to be debunked extensively and publicly, we can’t let conservatives paint this as a good thing.

  • 4
    Malcolm Street
    Posted Wednesday, 2 July 2014 at 12:22 pm | Permalink

    Thanks for bringing this up. I have a couple of friends in the UK, one of whom is on their equivalent of the DSP, and I’ve been hearing ATIS horror stories for months. Obviously in both countries the disabled are the next soft target.

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