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Half a million more Australians on welfare? Not unless you double-count

The Daily Telegraph and Herald Sun carried an exclusive story on Sunday headed “Half a million extra on welfare”. It was subheaded: NDIS blowing the budget.

The story said the number of Australians on welfare had leapt by 425,000 since 2018, with much of the increase coming from the National Disability Insurance Scheme.

It quoted the Institute of Public Affairs, which published its data on Monday.

Those data are incomplete. Only four of Australia’s income support payments are included: the Disability Support Pension, JobSeeker, Youth Allowance (Other) and Youth Allowance (Student and Apprentice), as well as the National Disability Insurance Scheme, which is not an income support payment.

This means the quoted data cover only about three-quarters of the working-age Australians receiving income support payments and none of the older Australians receiving the age pension.

40,500 more on benefits, not 425,000 more

Department of Social Services figures show the total count of people receiving the four payments in mid-2018 was 1.765 million, climbing to 1.805 million by mid-2023. That’s an increase of around 40,500, or just over 2% in a period in which Australia’s population grew by more than 5%.

The institute presents only a grand total for its (incomplete) list of the number of Australians receiving welfare, rather than a figure for each payment, but it is apparent that all but 40,500 of the claimed increase of 425,000 on welfare must have been in the one extra scheme – the National Disability Insurance Scheme.

But the NDIS isn’t welfare. While it is a very significant spending program, it doesn’t pay cash to its participants or help with their ordinary living costs. It provides services related to their disability.

Including the NDIS leads to double counting

Many NDIS participants most certainly are on welfare. About 70% get the Disability Support Pension. Others may get payments like JobSeeker.

This means the Institute of Public Affairs has counted these people twice.

NDIS logo
The NDIS is designed to get people off welfare. Mick Tsikas/AAP

Rather than being “welfare”, many NDIS programs are specifically designed to get people off welfare and into jobs. The share of NDIS participants on the Disability Support Pension fell from 77% to around 70% between 2018 and 2022.

The NDIS is also able get carers of people with disabilities into employment.

Also, many of the NDIS participants are children. More than 278,000 NDIS participants are aged 14 and below, and another 58,000 are aged 15 to 18. It is simply not correct to add children to the number of adults on benefits.

And the growth in the NDIS doesn’t tell us much about growth in the provision of disability services.

When the scheme was rolled out nationally in 2017, about 70% of the recipients were moved from services previously provided by state governments or the Commonwealth government.

What’s really happening

The table below sets out the Department of Social Services count for the four payments identified by the institute alongside what the institute says is the total including participants in the NDIS.

The institute’s totals are less than the department’s figures in the years leading up to 2018, and much more than the department’s figures from 2019 on.

While much of this is due to the national rollout of the NDIS from 2017, an oddity is that the institute’s totals suggest the NDIS had negative 69,106 participants in 2018, which it obviously didn’t.

As mentioned earlier, if we simply look at the number of people receiving the payments the institute deems important and don’t double-count NDIS participants, the increase since 2018 is about 40,500 rather than 425,000.

But much of even this increase is an artefact.

JobSeeker messed with the figures

In March 2020 the Newstart unemployment payment was renamed JobSeeker and broadened to replace seven more-minor payments that ceased to exist.

In 2018, about 30,000 people received these minor payments. By excluding them from its count before 2020 and including them (as part of JobSeeker) afterward, the institute might have helped create about three-quarters of the apparent increase of 40,100 in the number of Australians “on welfare”.

More importantly, the Age Pension age climbed from 65 to 67 from 2017.

Read more: Australia's 'retirement age' just became 67. So why are the French so upset about working until 64?

The age increase means recipients now continue to receive the Disability Support Pension and JobSeeker until they are 67.

My calculations suggest that had it not been for the increase in the age pension age, the number of Australians on the benefits the institute includes in its numbers would have fallen by more than 50,000 rather than increased by 40,500.

This means the institute’s decisions about what to count and what not to count have masked a decline in the number of Australians on payments.

Excluding the age pension (which the institute wants to do), the share of the population aged 16 to 64 on all other payments slipped from 15.2% to 14.4%.

Including all income support payments, the share of the total population on payments fell from 24.6% to 23.4% between 2018 and 2023.

Including the age pension and all payments, around five million Australians receive some sort of income support. It’s a substantial proportion of the population, but it isn’t increasing.

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