New data on the significant costs borne by disability pension applicants

A Monash University-led survey of Disability Support Pension applicants and recipients has underscored the significant administrative, financial and psychological burdens faced by those with reduced capacity to cope as they apply for payments.

Seventy-eight per cent of the 518 people surveyed reported high or very high learning costs (challenges in figuring out how to apply), 61 per cent reported high or very high compliance costs (challenges in meeting obligations), while 71 per cent reported high or very high psychological costs (stress linked to the process including impact on relationships).

The distribution of costs was inequitable, with the highest costs falling on those with poorer health-related quality of life, the young, and those with lower levels of formal education.

The results were published in the Australian Journal of Public Administration.

The participants completed a survey asking them about their experiences of applying for the disability pension, complying with Centrelink processes, and the psychological impact of applying and interacting with Centrelink.

Most people reported their experiences as being onerous or burdensome. Seventy-eight per cent of people reported high or very high learning costs, indicating they found it challenging to find information about how to apply, were more likely to need help to apply, and may not have understood the application process.

Sixty-one per cent reported high or very high compliance costs, indicating they found responding to Centrelink and undergoing medical assessments onerous. Finally, 71 per cent reported high or very high psychological costs, indicating they found the process stressful, were worried about its impact on their relationships and were worried their application would not be approved.

The Disability Support Pension (DSP) provides financial support to more than 750,000 Australians with permanent physical, intellectual or psychiatric impairments that prevent them from engaging in employment.

The results of the study show that DSP applicants find the application process challenging, opaque and stressful.

Lead author Professor Alex Collie says: “The DSP is designed to provide financial support to people living with serious medical conditions and disability. Our survey reveals the huge challenges faced by these people when they are applying for the disability pension.”

“Most people in this study found the application process stressful. What should be a relatively straightforward administrative process, of applying for government financial support, is having a very significant impact on people.”

DSP eligibility rules have undergone a series of reforms in the past decade, following a spike in expenditure between 2008 and 2011. While these achieved the policy objective of cost reduction, they have also introduced a series of additional hurdles that have effectively transferred the burden of applying for the DSP away from Centrelink, and onto the applicant.

“In recent years we have seen policy changes that mean DSP applicants have to work harder to show they are eligible. Essentially we now ask people to undergo a complex, time-consuming and sometimes intrusive application process when they are really very ill and struggling, and they are not provided with much if any support to apply.”

For many applicants the current process involves gathering complex medical evidence from multiple health practitioners, completing an 18-month work participation or job-seeking program, completing work capacity and disability medical assessments, as well as income and assets tests. The DSP application form is 33 pages long and contains 193 numbered components, and must be accompanied by an additional three forms.

Professor Collie and colleagues developed and tested a new survey tool for the study, which assesses three types of costs associated with interacting with administrative systems such as Centrelink: learning costs, compliance costs and psychological costs. They found the new tool to have scientifically acceptable reliability. Across the board, it showed that greater costs were incurred by people who had recently applied for the DSP compared with those whose application had been accepted.

Professor Collie says: “The government’s data shows that it is now much harder to have a DSP application accepted than a decade ago. This is the result of a deliberate policy choice by successive governments to make the application process more challenging, in order to limit growth in the cost of the DSP.”

“My main concern is that the DSP application process is now so complex and time-consuming that people who need support are not applying, or their applications are failing because they haven’t ticked all the boxes or provided complete information. There is very little formal support available for people when they are applying, so many are left to their own limited resources.

“Our study suggests the need to better understand the experiences of people applying for the DSP.  Applying for government support should not be such a large burden, and we may need to reform the process so it is simpler, more inclusive and more user-friendly. These application processes would ideally be co-designed by the government working with people living with a disability.”

Read the full paper in the Australian Journal of Public Administration titled: The learning, compliance and psychological costs of applying for the Disability Support Pension. DOI: 10.1111/1467-8500.12518

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