Disability support pension recipients: who gets off (and stays off) payments?

There is a close correspondence between disability benefit receipt and labour market outcomes according to this study of centrelink records. Entry to disability support pensions via unemployment benefits is associated with substantially reduced prospects of exiting the pension, while employment during this time is associated with increased success in staying off payments once an exit has been made. ABSTRACT We use Centrelink payment records on Disability Support Pension (DSP) recipients over the period 1995 to 2002 to investigate individual transitions off the payment. Our analysis involves two distinct, but complementary, components. The first component, which can be represented as an \u27entry cohort\u27 analysis, investigates the factors associated with making a transition off DSP. The second component can be interpreted as an \u27exit cohort\u27 approach, whereby we examine the factors associated with sustaining an exit off all welfare payments, given that an individual has in fact made the transition from DSP to that state. Our findings are consistent with the existence of a close correspondence between disability benefit receipt and labour market outcomes: entry to DSP via unemployment benefits is associated with substantially reduced prospects of exiting DSP, while employment during the DSP spell is associated with not only an increased probability of exiting DSP, but also more success in staying off payments once an exit has been made. A further finding of our analysis is that persons who exit DSP due to take-up of employment have a relatively high rate of return to payments compared with persons who exit for other reasons, and indeed exhibit a high propensity to cycle off and on payments