Senator SIEWERT (Western Australia—Australian Greens Whip) (16:28): I say from the outset that the Greens do not support two aspects of this bill, as we articulated in our dissenting report to the inquiry by the Community Affairs Legislation Committee. There are many reasons why we have some concerns with particular aspects of the bill. Not only does it cut costs at the expense of low-income families and people with disabilities but it has been rushed through this place without adequate time for proper consultation or consideration of the detail. I will go into some of those concerns shortly. We are particularly concerned with schedule 2, which is freezing the indexation of the FTB supplements, and schedule 3, on qualification for the disability support pension. On the supplements, freezing of indexation will impact on 629,000 recipients of family tax benefit and income support. It will impact on additional families on low wages and the working poor. But, although I asked for those figures, unfortunately they were not provided. They were provided in terms of those numbers on income support, which was, as I said, 629,000. So it will be impacting on more families that are on a low income.
Although it sounds, in theory, like not indexing the supplement only amounts to a few dollars a week, it becomes particularly important for those families that are living on low incomes—as I said, not just those on income support but also those on low incomes. These families often use the supplements for large-sum expenses, such as appliance repair, bonds, moving house and car registration. ACOSS pointed that during at the limited inquiry that we had.
I am also concerned about the cumulative impact of this particular measure and other budget measures which the Senate is yet to consider—for example, the changes to the parenting payment for those parents that were grandfathered onto parenting payment (single) under the Welfare to Work measures. One of the measures the government announced in the budget was to change the age of dependants at which parents transfer out of parenting payment (single) and on to Newstart from 16 to 12. That will drop their income $56 a week. If you factor in this measure as well, you start to have an impact on families.
I asked the government on two occasions, first at estimates and then at the inquiry to this bill: what are the calculations for the cumulative impact of all these budget measures on Australian families, in particular low-income families and those on income support? As yet, I have not received that piece of information. In fact, I was quite shocked that the government had not done that calculation. I asked what the overall impact of all the different measures the government wants to implement through the budget measures is, and they could not tell me. So we are extremely concerned about the impact on low-income families of that particular measure. Of course, if you receive FTB A and FTB B you will cop a double impact through these measures. So we do not support that particular measure, and I have several amendments, one of which is to take that particular schedule out of the bill altogether and, if that does not succeed, to try and make sure that the lowest income families are quarantined from this measure. I will talk about that more in committee.
However, our greatest concerns are around schedule 3, which is around changing the process for qualification for the disability support pension. This requires people with disabilities to prove their incapacity to work by participating in training or work related activities, the new definition of that program of support before they are eligible for DIP. We believe this is deeply problematic for a number of reasons. For a start, the method of determining serious disability is an issue. To be determined to have a severe disability is essential for exemption from the lengthy program of support requirement. It is far too narrow. To be judged to have a severe impairment a person must—and I am taking this on my understanding of the ME—be assigned an impairment rating of 20 points or more
under a single, and this is very important, impairment table. This means that a person with co-occurring disorders may not be classified—I say 'may' because they may have multiply occurring disorders where one of them is above 20 points on one table. If that is not the circumstance and they have co-occurring disorders they will not be classified as having a severe impairment unless one or both of the disorders rates above 20 under a single table. As Frank Quinlan, the CEO of the Mental Health Council said in his evidence to the committee:
Several Australian and international studies have shown that people with disabilities such as mental disorders and substance abuse disorders will usually have co-occurring disorders, and a person with co-occurring disorders is likely to have greatly exacerbated negative impacts. A person with two or more moderate level disorders occurring across the tables when combined could result in a total equivalent of a severe impairment, when you combine substance, mental and physical disorders. The current amendment does not allow for cumulative totals across the tables and therefore does not take account of co-occurring disorders.
What this means is that people suffering from a co-occurring disorder will most likely be placed on Newstart and could be unable to meet the requirement for participation in a program of support. It is unclear what would happen to people in this situation. The legislation does not give any discretion to assessors when qualifying people to go straight onto DSP other than if they meet the requirement for serious impairment that I just outlined. The legislation does not give any discretion to assessors when qualifying people to go straight onto DSP other than if they meet the requirement for serious impairment that I just outlined.
We are also concerned about the fact that the legislation does not take into account or give adequate consideration to the episodic nature of some disabilities, such as mental illness and substance abuse disorders. Episodic symptoms can often be misinterpreted as noncompliance. If a person is assessed when they are functioning at a healthy or high level, they will not be deemed to be severely impaired. It is unclear what will happen if they later down the line become unwell and are not able to participate in a program of support. According to the evidence given at the hearing, there was no information provided about the right to appeal or to be reassessed.
During the hearing, FaHCSIA appeared to misunderstand my concerns and simply repeated that not all new DSP applicants will have to achieve 20 points under one table, but rather that the 20-points clause ensures that people with a severe disability are not referred to services where it is unlikely that there will be any benefit. I must say that I knew that already, and that is the problem. It is clear that if the only qualifying factor for severe disabilities is 20 points under one table and there is no discretion to assess this, many people could be placed on a program who would not be able to derive any benefit from it. In fact, it will have even greater negative impact on those people.
The department, in the inquiry, went on to outline other ways individuals might be exempt from the program of support, including participation in employment services or an inability to work for more than 15 hours a week. It is encouraging that the department considers these factors, but they do not provide much reassurance without this being in the legislation. Finally, it has been very difficult to fully evaluate concerns relating to severe impairment when not only are there are revised impairment tables not completed yet, but the process of current review has not been made public. The speed with which this bill is being pushed through indicates the bringing forward of the start date is clearly only a cost-saving measure designed to cut $49 million out of the budget and makes little sense when the very tables designed to be used in implementing the measure have not yet been completed.
We are also concerned that there is a great deal of ambiguity in this legislation around what the maximum amount of time is that a person could wait before being reassessed for disability support. At the inquiry, DEEWR gave evidence that the longest programs could probably go for 18 months. Considering the impact of these measures on people with disabilities, 'probably' is not acceptable. There is no time limit in the legislation, and the length of participation would appear to be at the discretion of the government. It is also unclear what exactly the program of support contains. Some information was provided by FaCHSIA at the inquiry, but no detailed information is in the legislation. Such measures, which have such massive potential impact on vulnerable people, need to be subject to parliamentary review and public scrutiny. They should not be at ministerial discretion.
Essentially, this bill unnecessarily subjects people with disabilities to financial hardship for an extended, undefined period of time. At the inquiry I tried to get some concrete numbers on how many people this measure would impact and then, specifically, on how many would eventually end up on DSP after initially being rejected—because, basically, everybody is going to be rejected when they apply, other than those who meet the criteria that I have already outlined about a severe impairment and 20 points on one table. During the hearing the department stated that 3,000 of the 6,000 people rejected between September 2011 and January 2012 would eventually end up on DSP. This equates to over half the applicants who should be on DSP ending up on Newstart.
I am sorry, but I cannot work out how that helps those people. It will not help; it will actually probably make them feel even worse, because for 18 months or whatever period of time they will have failed in a participation program—but the government will have
managed to save 128 bucks a week for 18 months for 3,400 people. That is what it is about: people who should be on DSP from the beginning who will just sit on Newstart with worse taper rates—and I will come back to the taper rates. The government have acknowledged that taper rates are a barrier to people getting work on DSP. They have made moves to fix that and I congratulate them on that, but they have not fixed it for people with disabilities who are on Newstart.
Figures provided later by the department differed and, despite my trying to find out some more detail, it still was not clear. I could not find where the 6,000 or the 3,400 comes from, because the subsequent figures that we were given in answer to a question on notice was, I think, around 2,900 people who would then go onto DSP in 2011-12. But at the hearings they said there would be 3,400 just in the first period. So I found that a little bit confusing and it has not been cleared up. Perhaps it could be cleared up during the committee process. However, even those figures that we were given subsequently showed that by 2014 over a third of the yearly applicants would eventually end up on DSP. Again, this is a savings measure.
These findings are not surprising, considering the impact of other punitive measures. Six months after the first DSP applicants were put onto Newstart as part of the Welfare to Work reforms, less than one-fifth of them were off income support and in paid employment. We believe it is unacceptable for the government to continue down this punitive path when its effectiveness has not been proven. You are setting people up to fail, and it is not the way you encourage people into work. We believe that these figures indicate that this is essentially a cost saving exercise at the expense of those people with a disability.
Considering that at least one-third of the applicants will eventually be placed on DSP, it seems as if the legislation is setting people up to fail. Eighteen months of trying and not succeeding in training or work related activity could be extremely damaging to already vulnerable people, and we believe it is unnecessarily cruel. People with disability who are placed on Newstart will suffer significant financial hardship as a result of this, as ACOSS made comment on in its submission.
Since the alternative payment, Newstart allowance, is at least $128 per week less than the pension, the bill would deprive the majority of applicants—those with low employment prospects who still have an ongoing need for income support—of additional income to help them meet basic living expenses. At $237 per week for a single adult, the Newstart allowance is inadequate to pay for the essentials of life. Given that most people with a disability face additional costs—for example, transport and medication—and will occur additional costs such as travel costs when participating in a program of support, it is likely that many applicants would struggle financially until such time as they either secure employment or are granted a pension. People placed on Newstart instead of DSP are subject to a double disadvantage. Not only do they receive $128 a week less but also they are subject to the higher taper rates. This barrier to work is ironic considering the government's aim to encourage people with disabilities to engage in the workforce. It is interesting to note, as I said earlier, that this is one of the barriers that has been addressed by the government by lowering the taper rate for those on DSP. Now we have this bill which puts more people on lower payments and higher taper rates. I am really unclear as to how they think they are going to meet the aim of encouraging more people with a disability into work.
Another area of ambiguity in this bill is the role of the job service providers. It was unclear during the inquiry how the providers would be required to contribute to the ongoing DSP qualification assessment process and how and when they would provide information as to whether people were not coping in the process. There will be an increased workload for the providers. Mr Baker from the NDS articulated to the Senate inquiry concern about the fact that the rates paid to people delivering disability employment services had fallen from 4,108 in 2003-04 to 3,621 in 2008-09. I am aware that those budget figures have changed again, but he was saying that he was extremely concerned about whether they would be able to cope with the extra workload and provide quality support. It is unclear how and when reassessment for DSP will take place, and I have ongoing concerns about the assessment process. There is ambiguity about how long a person will have to be on the program of support, what criteria will be used, if and when people will be reassessed to go on DSP and what role the job service providers will play in that decision.
Finally, I greatly object to the way in which this bill has been rushed through this place. It is clearly designed to save $49.7 million at the cost of people with disabilities. There has been inadequate time for community organisations to get involved in this legislation, to express their opinion and for them to consult low-income families and people with disabilities. We are greatly concerned about this. This is a substantial change for people with disabilities, and we are deeply concerned that it is being rushed through in this manner. It is unclear how the government will be ready to roll this out in a matter of months, particularly when you consider the issue of the impairment tables. We do not believe that this schedule should proceed.
As I articulated earlier, I have some amendments that I have circulated. We believe that the bill should be divided and that schedule 2 item 2, which is the
indexation of FBT supplements, should be removed from the bill. Given the way that this process has been rushed through, I believe there would be room to amend schedule 3 to make it more acceptable and to genuinely help people on DSP. This is going to have massive unintended consequences for those living with disabilities. You have rushed this through. It is going to unnecessarily impact on those living with a disability. It will not help them. It will hinder them purely to save $128 a week from somebody who should have been on DSP and is placed on Newstart. There are more creative ways of helping people find work than this.