New aged care chief calls for reforms

Newly appointed chief executive officer of Aged and Community Services Australia (ACSA), Patrick McClure, has called for disability pensions and allowances to be equalised in value so that there is no disincentive to seeking work because of benefit differences.

Mr McClure wrote an opinion piece which appeared in The Australian on 20 April, the day after his appointment as CEO was announced.

He wrote: “The objectives of welfare reform are to provide opportunities for people to participate in the economy through education, training and jobs, and to cut unemployment and a reliance on income support.”

“The present income support system is complex, with many anomalies and disincentives to work. One of the hurdles to participation is the difference in payment levels between pensions and allowances,” he stated.

For example, an individual on disability support pension receives $364 a week (including a pension supplement) compared with an unemployed person on Newstart Allowance who receives $237.

This is a difference of about $130 and a real disincentive for an individual to move from a pension into work. If the job fails, the individual goes back onto an allowance and is $130 a week worse off.

A key recommendation of Mr McClure’s reference group on welfare reform in 2000 was for a single, integrated payment to be introduced through time; in other words – to bring together the payment levels of pensions and allowances.

Mr McClure said he recommends setting the base payment at a mid-point between the present pension and allowance levels, and said this would apply for all new applicants who are entering the income support system.

Another group which Mr McClure said requires special attention are mature-aged workers over 50.

“This group is often discouraged in their job search because of their age and lack of skills, yet many want to continue to work part-time,” he wrote.

“They often have insufficient superannuation savings. The average 50-year-old man at present has $135,000 in superannuation; a woman, $85,000.

“There is a need to provide training subsidies for these individuals to re-skill and remain in the workforce rather than to go on to a pension or allowance. There also needs to be incentives for employers to give them a job.”