Understanding the Disability Support Pension: Pathways onto the Benefit

by Pelin Akyol and Matt Nolan

The Disability Support Pension (DSP) is a major government program that supports many of the most vulnerable Australians. To understand how the DSP attempts to achieve this, we examine how the health and labour market outcomes of recipients evolve before and after receiving DSP.

  • Participants in DSP experience declining health, employment and earnings up to five years before joining the program.
  • The health and employment outcomes of recipients stop deteriorating after receiving the DSP, though their prospects do not necessarily improve.

The typical pathway for someone who eventually accesses the DSP involves a gradual reduction in employment and health. However, labour market re-entry remains low once individuals are on the payment – with the employment rate only rising from 15% from when the benefit is first claimed to 20% five years later.  This compares to an employment rate of 48% five years prior to DSP receipt.