Assessing functional capacity instead of basing disability assistance on diagnosis has been tried before. To be fair, the test will need a strong qualitative element.
I’m in Hokkaido, Japan – big brown bear country – when the Government hands down its 2026-27 Budget with savage savings from the National Disability Insurance Scheme (NDIS). My bear-bell’s ringing with alarm at the magnitude of the savings – $38 billion over the next four years.
The harsh reality behind the spin, ‘Securing the NDIS for Future Generations’, is that 160,000 people with disabilities will be excluded from the NDIS by 2030. Individual allocations for social and community support will be cut by 50 per cent. In Budget parlance, that’s a lot of ‘losers’.
It’s quite a brutal mauling of the NDIS, a scheme set up to ensure that people with significant disabilities could participate in society. The NDIS is only 13 years old and the Government has declared this ideal is unaffordable.
The Government has bent over backwards to ensure that its Budget changes to the tax treatment of negative gearing and capital gains tax do not upset the financial arrangements of existing property investors. No losers there. This generation of investors will be ‘grandfathered’, notwithstanding the cost in foregone revenue to the taxpayer. Not so, people with disabilities. Too bad if their support arrangements are upset by the NDIS changes. Quadriplegics, epileptics, amputees, deafblind and Down Syndrome people just don’t have the same political clout as property investors.
People with disabilities have been here before. The sceptre of past Disability Support Pension (DSP) reforms now shrouds the NDIS. Successive governments since 1990 have been preoccupied with curtailing expenditure on pensions for people with disabilities and reducing the number of pensioners by changing how disability and capacity is assessed and who does the assessment. Reviews, resets, new tools, altered thresholds and changed definitions always amount to cuts.
From 1 January 2028, access to the NDIS will no longer be determined by a person’s diagnosis. Instead, it will be based on assessment of functional capacity, with ‘tools and instruments’ yet to be designed and selected. The definition will be legislated; even current NDIS participants will be subject to it. These legal and technical changes are key to restricting access to the NDIS.
NDIS support will be for people whose impairment substantially reduces their capacity to do at least one activity, including mobility, communication, social interaction, learning, self-care, self-management. The draft Bill being considered by the Parliament defines functional capacity as ‘the person’s ability to undertake the activity: (a) without assistance from other people, assistive technology or modifications; and (b) in a context that excludes, as far as possible, the impact of the person’s environmental and personal circumstances’.
The Government argues in the neutral language of science that it is more “objective and consistent” to assess only a “person’s intrinsic ability to undertake an activity” such as mobility or self-care, and disregard the variable “personal and external factors…not attributable to the impairment such as financial means or living arrangements.”
We know, however, that a person’s disability does affect their financial means (through reduced earnings capacity of the person and their carers) and living arrangements. ABS data on income and living arrangements of people with disability show clearly that people of workforce age with disability and the households they live in tend to have substantially lower incomes than those without disability. Some disabilities preclude a person from living independently.
Objectivity and consistency will have differential impacts on people with disabilities and their families depending on their personal circumstances. Every assessment tool has limitations. Measurable and quantifiable functional capacity is only part of the picture; qualitative information completes it.
Past disability reforms
A potted history of pension reforms for people with disability highlights the eerie similarity of these NDIS changes. When DSP replaced the 1908 Invalid Pension in 1991 it yielded savings from tightening eligibility and moving away from diagnosis to function-based assessment with points for different impairments: another attempt at standardisation.
Up until then, a disabled person applying for the pension would get a report from their own treating doctor before being assessed by a Commonwealth Medical Officer (CMO), who was seen as more impartial – that is, less likely to recommend granting a pension. Applicants deemed ‘manifestly incapacitated’ for work would be granted a pension without a CMO’s assessment.
In ‘grey’ cases, social workers employed by the Department of Social Security (DSS) would assess socio-economic factors affecting a person’s capacity to work: age; literacy; numeracy; English-language ability; education level; employment history; geographic location, and so forth.
The CMO’s standard opinion that ‘this person (any person with any disability) could work as a lift operator’ (in a department store) was a source of much mirth and mockery among social workers. As if suitability for a single, by then extinct, occupation meant a person was fit to work!
Social workers’ reports would often mount a case disputing the CMO’s opinion so that the administrative decision-maker could consider all the relevant real-world factors limiting a person’s capacity or compounding their disability.
While doing a relief stint as a social worker in DSS in the remote Kimberley town of Broome in 1988, I was referred a case for a socio-economic assessment. The Aboriginal man applying for DSP had grown up in the nearby Bungarun Leprosarium that institutionalised 1,200 Indigenous people over 50 years to prevent the spread of Hansen’s Disease, which could incubate for up to a decade and cause blindness and disfigurement. The man was in his fifties, English was not his first language, he had never been employed. Predictably, the CMO declared this leper living about 2,000 kilometres from Perth and Darwin could work as a lift operator!
It’s a cautionary tale of the absurdity of stripping the personal and environmental factors from assessments of capacity or incapacity. When the real world is taken into account, it becomes apparent that individual and environmental context intersects with a person’s disability, thus modifying their capacity or incapacity.
Socio-economic assessments were scrapped with the introduction of DSP. Access to DSP was tightened in the 2005 ‘welfare to work’ reforms, which halved the number of hours a person with disability could work (to 15 per week) before being deemed ineligible for DSP, and removed local labour market conditions from assessing a person’s capacity to work.
Then, in 2012, the government cut deeper by introducing new impairment tables for assessing physical capacity instead of diagnosis and, in 2014, government-contracted doctors replaced treating doctors’ assessments. As intended, higher rates of rejection ensued. In the decade preceding the 2012 change, the average grant rate for DSP was 63 per cent; it fell to 43 per cent in the four years following.
My bear-bell’s clanging.
Fiona Carberry
Fiona Carberry was formerly Director of Sole Parent Policy, and Parenting Policy sections from 1995-98 in the Department of Social Security (DSS). She also worked in the Social Policy Divisions of DSS and the Department of the Prime Minister and Cabinet from 1991-1994. She has a Master of Arts (Public Policy) from the University of Melbourne.