Social Policy Research Paper Number 46: Do residual benefits induce Disability Support Pension leavers to return to income support?

The Disability Support Pension (DSP) is an income support payment for people who are unable to work due to permanent physical, intellectual or psychiatric impairment.

A number of types of assistance are available to help DSP recipients to return to the workforce. These include provisions to ease the decision to leave the pension by allowing former recipients to retain the pensioner concession card (with its associated benefits) for 12 months, and by suspending the payment for 24 months rather than cancelling it.

The aim of this research was to find out to what degree the time limitation of these provisions is a factor in the decision of former DSP recipients to return to the payment after being in the workforce.

Data from the Longitudinal Data Set were examined for any spike in returns to the DSP just before the one- and two-year anniversaries of leaving it. The analysis showed that neither the one-year retention of the pensioner concession card nor the ability to easily resume the payment after two years was a significant factor in the decision to return to the DSP.

The paper was written by Chris Ryan when he was working at the ANU’s Research School of Economics.

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