Review head Patrick McClure says 30% of the 800,000 DSP recipients had a mental illness that was only 'episodic' in nature

Mentally ill people could be targeted as one of the groups to become ineligible for the disability support pension (DSP), the head of a government review of the welfare system has suggested.



Patrick McClure, whose interim report was released on Sunday, said people would “not necessarily be better off” under the proposed welfare reforms.

Asked how many people would lose the DSP, McClure singled out people with mental illness, saying 30% of the 800,000 DSP recipients had a mental illness which was “episodic” in nature. Mentally ill people could be moved to a working age payment instead.

McClure’s interim report on the welfare system contains proposals to consolidate 20 payments and 55 supplements into four payments, restrict how some unemployed people spend the dole and reserve the DSP for people with permanent disabilities and no capacity to work.

Both McClure and the social services minister, Kevin Andrews, have refused to put a number on how many people could be removed from the DSP. But the government already has people under 35 who started receiving it after 2008 in its sights for review.

“We haven’t currently set any payment rates and we haven’t yet explored the range of supplements that might go with those base payments, so people may not necessarily be better off, but what we want to do is ensure the system is more efficient and more effective in assisting people into training, education or a job,” McClure told ABC radio.

The proposed working age payment would vary depending on a person’s circumstances so people with disabilities and partial ability to work, single parents and carers might get higher rates than young and single unemployed people.

Andrews said the government was more concerned with medium to long-term welfare reform rather than who should or should not be receiving the DSP.

“One of the pillars Mr McClure put forward is engaging with employers, so this is not just about – as has been suggested by some critics – pushing people off welfare,” he told ABC radio. “This is about recognising the best form of welfare is work but that can be difficult for people and we have to design a better system.”

He said the real issue was the DSP had become a “set and forget” payment even though some people receiving it may have some capacity to work. When asked how many people should not be on the DSP, Andrews responded: “Well everybody who is currently on the disability pension by definition should be getting it, that’s not the issue here, there’s about 830,000 on the DSP and they’ve all obviously qualified.”

He said rather than jumping to conclusions people should engage in the conversation the government was inviting them to engage in. He also addressed concerns the consultation period was too short.

“So in a sense, what Mr McClure has done, and there had been consultation with about 30 of the major groups, is brought together the major issues and now put them out in a discussion paper,” he said. “Most of this has been known if not for at least a few months, then some years now, and people I think are able to make a valid and useful contribution in the next six weeks.”

Labor has signalled it might support proposals to expand income management,

which restricts how unemployed people spend their benefits. The report

singled out young people as a potential group to target and McClure

also listed teenage parents and homeless people as those who

could benefit from it.

“I believe the best income management programs are targeted. For example there's a very good one helping teenage parents being conducted in 10 locations in disadvantaged regions … so that targeting of particular groups at risk [is beneficial],” he said.

“It’s not the be all and end all. It needs to be evaluated to see it gets the right outcome.”

The government has begun a six-week consultation process, which community groups are concerned is too short, and the opposition spokeswoman for families and payments, Jenny Macklin, has sidestepped questions about whether Labor would support reserving the DSP for people with permanent disabilities who have no capacity to work.

“Of course we would support simplification if, and only if, it really is about making it easier for people to understand and not if it’s a cover for the government to make cuts to the disability support pension or the carer’s payment.

“We’ve seen the Abbott government over the past six months demonise people with disability to the extent I now get email after email from people who have disabilities who are so frightened because of the way in which the Abbott government describes people,” she told ABC radio.

Disability advocates have criticised media coverage of the review process, particularly for people on the DSP, with the front page of the Sunday Telegraph singled out on Sunday for having the headline: “disabling rorters”.

When asked directly if there was a case for reserving the DSP for the permanently disabled Macklin responded that it was already difficult to get the DSP.

“People with disability want support to get work where they can,” she said. “If there were all these jobs available for people with disability do you think they would stay living on $20,000 a year if they had an option?

“So many of them would love to work and what we would like to see is more support going to people with disability to help them get work.”

Macklin endorsed income management but said she doubted the government would roll it out across the country because it was an expensive program.

“There’s certainly some evidence that income management can help some very vulnerable groups and it’s certainly been my experience that many people want the opportunity to volunteer for income management, it can help people manage their finances, make sure that their rent is paid for example. As long as there’s plenty of support put around people when income management is made available it certainly can be helpful.”

Andrews has refused to rule any of the proposals in or out, saying the government would consult the community and wait for recommendations before making decisions about how to reform the welfare system.