If the government believes that access to disability support should be wealth tested then it should make that a condition for all age groups.
Just imagine if our two major parties said on the electoral platform – “we pledge an inheritance tax, but don’t worry it will be levied only on the estates of the aged disabled”. Of course they won’t say that … but isn’t that exactly what Labor and the LNP are doing through their ban on over-65s from accessing NDIS? The ban exposes this small group to considerable, sometimes enormous, costs – with the consequence of estates shrunken in comparison with those of the non-disabled – a form of hidden inheritance tax on a narrow slice of the population.
For a self-funded retiree who becomes seriously disabled in their 65th year this hidden inheritance tax could amount to $1,261,400 – $1,564,000 over their remaining lifespan on average, or more in some cases. Kerri-Anne Kennerley estimated the net cost of her husband’s care until his death at 78 at $2,000,000[1].
From its inception the NDIS legislation excluded applications from the disabled who were already over 65 and anyone who acquired a disability after they were 65. But those already covered by the NDIS could retain their supports as they aged past 65 (estimated in the latest NDIS Annual Financial Sustainability Report to reach precisely — wow — 60,987 by 2030).
Both our major parties knew that it was discriminatory to exclude those over 65 with pre-existing disabilities and those who acquire disabilities after 65. They also knew it was a breach of our obligations under the Convention on the Rights of People with Disabilities (CRPD) which forbids just this sort of discrimination. This was pointed out by the Joint Parliamentary Committee on Human Rights in its 2013 Report:
“These exclusions raise issues under various human rights treaties, in particular the International Covenant on Civil and Political Rights, the International Covenant on Economic Social and Cultural Rights and the CRPD, all of which prohibit discrimination on the basis of age.”
As disability advocate Dr Peter Freckleton has pointed out, UN law prohibits discrimination against persons with disability on all grounds (Article 5, Convention on the Rights of Persons with Disabilities).
The Attorney-General’s Department was well aware of these issues at the time of the development of the NDIS. It is clear from documents obtained under FOI that for the department the “preferred option is for there to be scope for a person over the age cut off (currently 65) to seek review to determine whether NDIS supports are better suited to the person’s needs” and failing that “If an age cut off without a review mechanism is used instead, it may be easier to demonstrate that the policy is reasonable and objective if the cut-off age is higher, for example age 75”[2]. This advice was not taken.
Both our major parties have justified this breach of treaty obligations on the basis that the Aged Care system provides adequate supports for disabled people over 65 – but does it? If it does, why are those already in the NDIS when they reach 65 not automatically transferred to aged care?
It is because there are major differences between the two systems. Perhaps the simplest way of illustrating that is to compare the support provided under the NDIS with that provided by Home Care packages. NDIS recipients make no personal contribution and the support provided is open ended, depending solely on the individual’s needs.
On the other hand aged-care recipients are subject to a cap on package totals and are expected to make a contribution assessed on their income. As a result self-funded retirees have to make a contribution, which is deducted from the Commonwealth’s, within the total package cap.
People eligible for the NDIS must have very significant disabilities. The equivalent in the Home Care system is levels 3 and 4. There were 18,000 NDIS recipients over the age of 65 as at September 30, 2021. They received an annual average individual support package of $115,000[3]. An equally disabled self-funded retiree under the Aged Care system on level 3 or 4 receives at most a net $23,000 — $40,800 from the Commonwealth. It’s projected that 43 per cent of Australians at retirement age will be self-funded by 2023[4].
For those who were over 65 and disabled before the NDIS was introduced that could equate to an expected difference over their remaining lifetime of $1,261,400 to $1,564,000. In my case I was disabled by polio in 1948. I was over 65 on the introduction of NDIS. I have been assessed at Level 3, while my wife (spinal tumour in her 70s) has been assessed at Level 4. I say no more.
Why these dramatic differences? Well, NDIS is like Medicare. It is a form of community-wide risk pooling. Income and assets are not taken into account. Like Medicare it is a right, not something provided only to the deserving poor. There is an acceptance that life is very varied (at least for those who are younger than 65) – full of triumphs and tragedies. And that it is a fair thing in a compassionate society to pool our risks around the tragedies.
But it seems that, once we pass 65, the policy assumption is that we are all on a slow glide path to a certain death, progressively losing capabilities as we go, in a more or less even manner. Yes we can acknowledge that age brings with it infirmities and we can help with some of those as a society with an Aged Care program that is “properly” less generous than NDIS because, after all, we all know that we are going to get old and should prepare for it. There is no need for risk pooling any more. Let the costs fall where they will – the old do not deserve the same sympathy for life’s vicissitudes as the young. After all they are going to die sooner or later.
Old age now lasts a long time. And we experience it in very different ways. Far from being the norm in old age, long-term serious disability is in fact unusual. As at September 30, 2021, there were 95,110 people on Level 3 or 4 Home Care packages.[5] That is just 2 [per cent of those over 65.
There is another unspoken assumption behind this discrimination against the aged disabled. It is that those over 65 are well off and should therefore accept a greater responsibility to fund their own disability. Is this so?
The median wealth for the 65+ cohort is not the greatest in the Australian population. That distinction belongs to those in the 55-64 age group who are entitled to receive NDIS support if they incur a disability. In both groups housing is by far the biggest asset class for most people. But what matters more than medians is the distribution of wealth within each age group.
The distribution of wealth across the community is much more skewed than the distribution of income. In each age cohort there are the rich, the comfortable and the poor. You simply cannot assume that someone over 65 is wealthier than someone in a younger age group. To make that assumption is stereotyping and discriminatory.
In each age cohort the long-term disabled are most likely to be over-represented in the poorest deciles of net wealth. This is because their long-term earnings are lower than the community at large. ABS statistics reveal that: “In 2018, the median gross personal income of people with disability was $505 per week, less than half (49.7 per cent) that of people without disability ($1016 per week). In 2015, the median gross personal income of people with disability was $465 per week, less than half (48.9 per cent) that of people without disability ($950 per week)”. Australian Bureau of Statistics 4430.0 – Disability, Ageing and Carers, Australia: Summary of Findings, 2018.
If the government believes that access to disability support should be wealth tested then it should make that a general condition for all age groups. Using age as a proxy for wealth is at best sloppy thinking and at worst rampant ageism.
Of course wealth is not the whole story. The incomes of Australians over 65 are not particularly high by international standards. A quick look at the OECD’S Pensions at a Glance : Income and poverty of older people will show you that Australians over 65’s income as a percentage of population incomes is at the bottom end of the OECD ladder, while poverty for the over 65s is at the top end.
So the over 65s are neither the wealthiest cohort, nor do they have the highest incomes.
Are the aged disabled less entitled to support than (say) the much younger senators Hollie Hughes (autistic child) or Jordon Steele-John (cerebral palsy) who have strong income streams? What is it about being over 65 that makes them less deserving?
In short if we think that vertical equity (that those on higher incomes or wealth should accept a higher obligation to fund their own disability services) is more important than horizontal equity (that those with a like disability should receive the same levels of support) then that should be a general rule.
To have horizontal equity dominant for those under 65 and a form of “bastardised” vertical equity for those over 65 is simply discriminatory. I say “bastardised” because even though the poor elderly disabled might not have to pay towards their support under the Aged Care programs, that help is rationed and capped in a way that it is not under NDIS.
It is time to stop this hypocrisy and purge our contempt of our international obligations under the International Covenant on Civil and Political Rights, the International Covenant on Economic Social and Cultural Rights and the Convention on the Rights of People with Disabilities all of which prohibit discrimination on the basis of age.
I have no objections to an inheritance tax – in fact I think it would be a great idea – but lets levy it on us all, not just on the aged disabled.
[1] https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&ved=2ahUKEwj-yZjy19r1AhUKxzgGHS5RAHQQFnoECAIQAw&url=https%3A%2F%2Fwww.dailymail.co.uk%2Ftvshowbiz%2Farticle-9797541%2FKerri-Anne-Kennerley-spent-2-million-caring-husband-John-fall-left-paralysed.html&usg=AOvVaw140p-4HF9FjsQPBx-y5bVn
[2] Attorney-General and Minister for Emergency Management meeting Jenny Macklin, Minister for Families, Community Services and Indigenous Affairs and Minister for Disability Reform and Mark Butler, Minister for Social Inclusion, Minister for Mental Health and Ageing and Minister Assisting the Prime Minister on Mental Health Reform, October 10, 2012. Briefing Note
[3] https://data.ndis.gov.au/explore-data
[4] ASFA 2019
[5] https://gen-agedcaredata.gov.au Note this number is higher than those over 65 on NDIS because the latter reflects only a very limited aged cohort.
Roger was the longest-serving disabled Departmental Secretary (of Environment and Heritage) in the history of the APS – there have only been two since 1901. He contracted polio in 1948 and uses a wheelchair, leg braces and crutches.
Contributions to Pearls and Irritations
Your contribution will fund quality independent comment and analysis in Pearls and Irritations
Contribute
