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One million to be on disability pension


One million to be on disability pension

A million Australians will be living on the disability pension within a decade, economists warn.

A University of Melbourne report has predicted a "disability blowout'' and researchers blame an ageing population, the increase in the women's retirement age and strong population growth for fuelling demand for the federal government's Disability Support Pension.

And they claim the DSP is an "increasingly attractive alternative'' to the dole.

Associate Professor Roger Wilkins, of the university's Melbourne Institute of Applied Economic and Social Research, said DSP payment levels had risen faster than the wages of low-skilled workers over the past 20 years.

"Changes to the eligibility criteria of other welfare payments such as Newstart Allowance and Parenting Payment, and the fact that DSP has become more generous relative to other payments, are significant factors in this disability increase,'' he said.

"Demographic and retirement-age factors alone could see the DSP roll reach one million within the next 10 years.''

The research - published today in the September edition of the Australian Economic Review - claims that DSP has become more "generous'' when compared to other welfare payments.

"The level of DSP payments has increased substantially relative to the level of the minimum wage over the period from 2000 to 2011 and particularly from 2008 onwards,'' it says.

In a related article, the university's Professor Richard Burkhauser warns that higher unemployment could funnel "large flows" of unemployed older workers on to disability benefits.

"If the economic winds change, Australia will have a larger pool of eligible disability payment recipients and could be facing a disability blowout,'' he said.

"DSP is not only replacing a greater percentage of low-skilled workers' wage earnings but is an increasingly attractive alternative to Australia's Newstart Allowance.

"... Australia may be one major recession away from the disability blowout now occurring in the United States.''

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