After 15 years as an adviser to both Commonwealth and State Governments on developing disability policy, Richard gives his final recommendations for equity and justice

1991 recommendations by Richard Llewellyn, Disability Adviser to the Premier of South Australia

Initiatives to flow from the UN Decade of Disability (1981-1991)

The purpose of this paper is to present ideas on disability policy to be considered as initiatives to mark the close of the UN Decade of Disability at the end of 1991. Progress in the disability field, as in many other areas, is often dependent on co-operation between State and Commonwealth Governments.

The ideas presented in this paper are designed to recognise severity of disability or the degree of functional loss or dependency as an important economic consideration in designing income security systems.

The suggestions put forward in this paper respond to questions of equity and independence for all disabled Australians through a collaborative approach from areas of responsibility of Commonwealth and State Governments in addressing disability issues.

Proposed suggestions for progress in disability

For some time, disability has represented the “too-hard basket” and been seen as a “Pandora’s Box” of expenditure. It is my belief that these assumptions are incorrect and should not unnecessarily influence future action, hard decisions and planning. The Intention of this paper is:

  • To suggest a new pension/benefit title and range of component allowances for people with disabilities within the Social Security system.
  • To offer suggestions for the provision of incentives from other government areas to encourage individuals and carers who wish to and are able to remain outside of the pension system and away from disability service providers.
  • To suggest a long term option of amending the Social Security Act to develop a single income support benefit to rationalise the various eligibility criteria and classes of pension.
  • To clarify and suggest disability roles of Commonwealth and State Governments.

Suggested new pension benefit title and range of component allowances

The title “Invalid Pension” is a negative definition encouraging the government and the community to see the people who receive it as non-productive, worthless, in-valid dependents. That title has to go in any meaningful reform program aimed at getting people motivated and seeing themselves as contributors to society.

For purposes of administration, targeting and decision-making, a clear, workable definition of disability needs to be developed. This definition should distinguish between disability and sickness and capacity and incapacity to perform daily living tasks. The Invalid Pension has generated confusion between “incapacity” in a medical context with “incapacity” to work.

Propose Disability Pension to replace Invalid Pension

It is my suggestion that any base income support title should be Disability Pension and Allowances or some other title using disability as the main criteria.

The definitions and title would also need in practical terms to address the current unclear distinctions between people with disabilities and aged persons. For some time, the Australia Bureau of Statistics (ABS) has accepted the terms “impairment”, “disability” and “handicap” based on World Health Organisation (WHO) definitions. Even though the WHO definitions help, they are insufficient. This whole area is unclear in Australian legislation and practice.

Any new system defining disability needs to recognise that the effects of disability are different depending on severity and the individual. The ABS categories of “mild, moderate, and severe” disability may be acceptable benchmarks for these disability levels until more refined functional indicators can be established.

Disability levels need to express functional limitations such as “mobility” or “incontinence” rather than diagnostic conditions. These functional/disability levels should then be the basis for policy and action. The task is to develop a simple functional assessment system to meet that criterion. There are a number of functional assessment systems available.

Extra costs of disability increase with severity

The current pension system makes no distinctions between levels of disability and the cost structure associated with those levels. It is well documented that costs increase proportionally with severity.
A good example of this inequity between pensioners is reflected in statistics of the South Australian Transport Subsidy Scheme. Statistics show that 78% of the 8,000 members have an income below $9,000.

Wheelchair users, of the scheme (severe disability) are expected to meet the special transport costs of an average outing of $10.36. For the disabled person able to use an ordinary taxi (moderate disability) the average cost per outing is $7.24. Compare the inequality of these costs with that of the disabled person with a Health Card or an aged person (mild disability) able to use free public transport.

Unfortunately for severely disabled people these inequitable costs don’t stop with transport. Additional costs continue with items such as personal care, respite, home modification, equipment, equipment maintenance, incontinence requirements etc.

The Social Security system needs to recognise these costs according to level of disability in order to create a more equitable package for people with severe disability. To make new reforms in the current pension system, reflecting economic inequalities according to permanent disability/functional loss, additional income components need to be added to the base income.

The same concept of components relating to level of permanent disability and functional loss will also need to be reflected in any incentive system designed to keep people outside the Social Security structure.

Suggested financial incentives to keep people with disabilities supported

It is well accepted that poverty tends to follow disability. In relative terms, disabled pensioners tend to be the poorest of the poor. I believe people with disabilities want to contribute from as normal a place in the community as possible. Independent action has traditionally been seen as too risky without the “safety net” of Health Card benefits and a guaranteed pension.

The Department of Social Security needs to aim to keep people with disabilities in the community operating at their maximum independence levels. It is also in the interests of the Departmental budget to encourage and prevent any slide by disabled people into more dependent and costly programs.

For most severely and probably moderately disabled people, the pension will realistically remain the major source of income support. Many of these people will also require services to meet their daily needs. How those requirements are met is important to clients and in an economic sense to governments.

It is in Government’s interest to encourage private care of severely disabled persons to avoid far more costly service provisions or institutional care costing between $35,000 to $60,000 per year. A recent strategy in the reduction of child poverty has been to introduce a package of new measures, such as the Family Income Supplement. Disability requires similar compensatory reform concepts for individuals, spouses, families, and carers to encourage their continued independent initiatives and provision of assistance.

Costs of supporting a paraplegic in the community – 1987

In 1987, my Office prepared an unpublished submission to the Commonwealth Treasury Department which established the cost of Commonwealth and State Government pension and benefits paid to maintain a paraplegic living in the community on a pension. At that time the study showed that the cost to the Commonwealth Government in pensioner benefits was approximately $13,000 a year and to the State Government approximately $7,000 for allowances, rebates and equipment provisions.

In today’s rehabilitation thinking a paraplegic would be expected to be in the workforce. However, as these figures indicate, only a very determined person would risk employment and loss of these benefits, unless their starting salary was well above $25,000.

Recognition of disadvantage and lack of support for carers or disabled people

Outside of the Social Security system, there are no taxation or other benefits beyond the Mobility Allowance and the above $1,000 Medical Rebate, to compensate or provide incentive for people with severe disability to be independent. Legally blind persons however, receive a “Means Test” free pension and a number of other benefits and allowances that greatly assist those that are working.

Severely disabled people on a low level superannuation benefit are particularly disadvantaged. Also disadvantaged are those people with severe disability where a spouse or carer are in employment, or where a severely disabled child is part of the family structure. Incentives and positive recognition of these caring roles involving additional cost structures could be recognised by either “Means Test” free pensions, raised taxation thresholds or rebates.

Economic case for governments to address disability costs

The suggestions made to Treasury by my Office in 1987 were that it made economic sense for governments to recognise these factors and to provide incentives which addressed these additional costs within the taxation system or with other measures.

The threshold for taxation for example could be raised to at least $25,000 for people who are working with severe disabilities. The cost to Government in loss of revenue would be a mere $7,800. This level of threshold could be adjusted for other levels of disability in a similar manner.

It should also be remembered that working severely disabled people receive no Medicare Benefits for their independence equipment including wheelchairs etc. in spite of paying normal levies. This is an additional inequity in comparison to people undergoing heart surgery for example, where expensive mechanical valves are replaced as part of the treatment.

Waste of talent through lack of incentives

The Mobility Allowance, by definition, is only available to those people with severe mobility restrictions who are in current employment or undergoing employment-based training. It provides some indication of the numbers of people likely to be involved. Only 12,636 disabled Australians, (0.0008% of the Australian population), were in receipt of the Mobility Allowance of $22 per fortnight in August 1989. There were 976 South Australians, receiving the Mobility Allowance (0.0009% of the South Australian population). We must find mechanisms to activate the wasted talent of people with disabilities who are not yet working.

Recommend one universal income maintenance pension with additional components for disability requirements

In the long term, an effective step may be to amend the Social Security Act and establish one universal income maintenance pension. This pension could be indexed at 25% of adult average earnings. Additional components could then be added to address identified specific inequities. Such a step may reduce administration, assessment costs and considerable confusion within the bureaucracy and the community.


Commonwealth to assume responsibility for disability provision

A charter of the Commonwealth Government is to ensure that all Australians are treated equitably. This paper has suggested that those people with severe disability are not currently receiving equitable treatment in relation to their fellow Australians.

I would therefore propose that these inequities would be best met, more efficiently and probably at the least cost, by the Commonwealth Government accepted financial responsibility for those people with severe and possibly moderate levels of disability.

The states should accept responsibility for those with mild disability and for the normal base service cost of those with severe and moderate disability. The Commonwealth “top up” component to the states of extra cost of service for those with severe disabilities in education, housing etc. could be provided either by additional grants or reimbursement.

The other option would be for the Commonwealth Government to accept direct responsibility for those with severe/moderate disability. My own view however is that the Commonwealth Government is far better at developing policy, providing funding and monitoring through contractual agreements with State Governments for service provision through mainstream outlets.

United Nations Decade of Disability 1981-1991

1991 is the end of the declared United Nations “Decade of Disability”. The Commonwealth Government made significant contributions to the highly successful International Year of Disabled Persons in 1981.

Major reforms in the disability area would be a fitting celebration of the end of a decade which has already brought many changes to the disability area. We look forward to the mooted human rights legislation being drafted, the Disability Discrimination Act and believe that will set the stage for a new era of change and opportunity in Australia for citizens with disabilities.