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  Welfare to Work, Implications for your Patients.

Posted: June 15, 2006 16:36

Concord Seminar: Tuesday May 30th May, 2006.

Yvonne Samuel, Business Support Manager, Area East Coast, Centrelink.
Brian Baker, Disability Support Officer, Area East Coast, Centrelink.

The 2005 Federal Budget saw some radical changes to our Australian welfare system. Yvonne Samuel took us through some of these changes in the first half of the seminar, and the second half of this seminar involved some feisty discussion centred around the case studies presented, with Brian Baker's comments included after each case study. The case studies will be posted separately in the second half of this write-up.

The Federal Coalition Government and Centrelink have published an information pack called "Helping people move into work," (a title chosen by the Coalition government) a copy of which was given to seminar participants and is available from Centrelink for those who wish to obtain one. This information package details many of the changes that are about to take effect on the 1st of July 2006. The package also has sample letters that have already been sent out to many people on Centrelink benefits, including both those who will and will not be affected. There is no doubt that patients will start to express their anxieties and concerns to their treating doctors and other health professional staff.

Yvonne Samuel began by explaining the Federal government/Centrelink rationale for the changes. They state that the aim of the changes is twofold: 1) to increase workforce participation and 2) decrease welfare dependency. They want to decrease the number of working age Australians on welfare (working age being defined as 18-64 inclusive). They state that they are driven by the changing age demographics in Australia; currently 13% of our population are over 65, but in 30 years the projection is that 33% will be over 65. We were told that those aged 15-20 who are not at school or in some other study will be "encouraged into a revitalised Australian welfare system to make it more sustainable" and moved into education wherever possible.

There are several elements to the reform:

(1) Increased obligations for people who are deemed fit to work at least 15 hours per week. (2) Payments and incentives will be changed, including a shifting of some people from DSP (Disability Support Pension) onto, in most cases, Newstart, and in some cases the ability to earn more money working before the Centrelink benefit cuts off. (3) The government states that there will be an injection of money to expand Centrelink services (4) There will be a new "compliance" framework, including the suspension of payments from Centrelink and restoration when the person starts fulfilling their "obligations" again. If a job-seeker does not comply with requirements without good reason, their future payment will depend on "re-engagement" with their service provider. (5) Increased funds to employers to encourage them to employ those with the most difficult job prospects eg those aged over 50.

There will be four main groups of people affected: (1) parents (2) people with disabilities (3) long-term job seekers (4) "mature age customers" defined by Centrelink as being those between 50 and 64 inclusive and deemed to be fit for work.

(1) Parents:

There is a one year transition period so that people currently on a parenting payment will continue to receive that payment until 30th June 2007, as long as at least one of their children is under 16 years of age.

From the 1st July 2007, or when their youngest child turns seven, whichever happens later, parents will have to register with an employment services provider and look for paid work of at least 15 hours per week. They will be transferred onto (in most cases) Newstart or the Youth Allowance, the payment from which is less than the current parenting payment. If there is childcare available from a formal and approved child care provider, then by the government's definition this is "suitable child-care" and the parent will have to accept the job. Principal carers who are on the Partnered Parenting allowance will be transferred onto Newstart when their youngest child is six, and principal parents who are on the Single Parent Allowance may be eligible for Parenting Payment until their youngest child turns eight. Indigenous parents can stay on or join the CDEP (Community Development Employment Project) and may be eligible for a CDEP participant supplement from Centrelink. There are a list of various exemptions and special circumstances that may be considered.

(2) People with disabilities:

People who were receiving the DSP on 10th May 2005 and before will not be affected by the Welfare to Work changes. However, if this group of people do return to the workforce and their job lasts greater than 2 years, and they then lose that job, they will be reassessed for DSP under the new rules and may therefore lose their DSP. People who were granted DSP after 10 May 2005 up until 30th June 2006 may be reassessed against the new rules within two years. They may be given a Job Capacity Assessment. In most cases they will keep their Pensioner Concession Card and still receive Pharmaceutical Allowance and Telephone Allowance. The new rules, from the 1st July 2006, state that a person is not eligible for a DSP if they are able to work for at least 15 hours per week without assistance, or with assistance and training, are able to work at least 15 hours per week independent of support within 2 years. If deemed fit to work for at least 15 hours, people will be transferred onto, in most cases, Newstart or Youth Allowance, which is less money than the DSP.

(3) Long-term Job seekers:

If a person is on Newstart or Youth Allowance and has completed two rounds of "Intensive Support Customised Assistance" they will be reviewed for either a "wage assist" package that will be paid to an employer who employs them, or they will be required to participate in full-time Work for the Dole for 50 hours per fortnight and they must still keep looking for work and continue their usual regular contact with their employment service provider or Centrelink.

(4) Mature age people (defined by Centrelink as aged 50 and over):

People on Newstart and over 50 will have increased participation requirements. Those who are aged 50-54 will now have exactly the same job search requirements as younger job seekers- eg making 10 job search "efforts" per fortnight. They will no longer be able to meet their activity test requirements by doing voluntary and/or part-time work. Job seekers on Newstart aged 55 and over will have an obligation to look for work, and this can include part-time or voluntary work for 30 hours or more per fortnight. All mature age people will be subject to the rules set out below in the new "compliance" system.

New "Compliance" System:

From 1st July 2006, a new system of penalties will come into place for people who do not meet their obligations as defined by the Treasurer in his 2005 budget. The penalty for a third or subsequent failure within 12 months will be eight weeks without income support. An eight week non-payment penalty will also apply for more serious failures to participate. Anyone who now fails to declare their earnings correctly will now have to pay their debt back to Centrelink, plus a 10 per cent "recovery" fee.

This seminar was highly interactive with a lot of concerns about these new changes being expressed by the audience. The onus is definitely now on our patients (Centrelink's "customers") to let Centrelink know as soon as possible if they are unable to meet their job-seeking obligations. Yvonne Samuel told us that people who are medically "fit" but under a lot of stress, can be offered a range of support services such as access to Centrelink's Personal Support Programme (PSP), without their payments being suspended. Whether patients will be willing to divulge their histories of personal distress to a government bureaucracy is yet to be seen. A look through the case studies provided help to illustrate the difficulties to come, such as whether those with very chaotic lives will lose financial benefits as a result of their inability to communicate in the new ways expected. One of the cases presented the already destitute circumstances of some patients. Should patients in these circumstances be unable to comply with the new "compliance" system, then there are obvious risks of homelessness.

Other considerations include the dubious morality of making Centrelink, an organisation that has traditionally been there to provide financial support to those in need, a debt collector, as outlined under the above heading of new "Compliance" System. With dependency patients in mind, this is unlikely to encourage them to let Centrelink know about their situations of personal distress and thereby avoid a two month period without payments. There were a range of emergent issues that were not covered at the seminar such as the difficulties that single parents will face in obtaining child care if they are forced back into the workplace. It was also unclear how the job seeking requirements will pan out for the parents of children with disabilities.

Of further concern are the rights of people who have periodic fitness for work, given the tighter eligibility rules for the DSP. Will our patients with cyclical periods of good mental health associated with an ability to work part-time, but substantial periods of psychiatric disability, be excluded from the security of the DSP? Will the new Centrelink changes themselves become another stress that contribute to emotional distress and subsequent disability, as was mentioned in one of the cases. There are still many unknowns about the implementation of these changes.

This seminar ended with various other issues being outlined in the case studies presented by Dr Richard Hallinan. It is only with the passage of time that we will understand the full effect of these new changes many of which will begin on 1st of July this year.

Written by Dr Jenny James, Daruk Aboriginal Medical Service.



On this web site, Dr Byrne and colleagues have written summaries of many research articles, conferences and other events. These have been written largely to draw attention to peer-reviewed studies which may be relevant to clinical practice and public policy. While all care has been taken to be fair and accurate, readers are strongly advised to read the original publications before acting upon the information for clinical decisions.

Due to this brief form of communication, no responsibility can be taken for errors, mistakes or omissions.

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