Explaining the Growth in the Number of Recipients of the Disability Support Pension in Australia

Abstract

This article shows that one-third of the growth in the Disability Support Pension (DSP) recipiency rate over the last 30 years can be explained by population ageing and increases in the retirement age for women. A wide range of factors is likely to have contributed to the remaining growth, but we argue that the growing attractiveness of DSP compared to other income-support payments has played an important role. Looking forward, population growth and planned increases in the retirement age will both put upward pressure on the DSP roll, which, without major reform, could plausibly hit 1 million recipients within 10 years.