Wednesday, February 2, 2011

In Australia, charge on disabled pensioners funds will net government $2.2 million

From The Herald-Sun in Australia:

Disabled pensioners with trust funds will have to pay up to $45 from their fortnightly payments to the SA State Government.

In a move that will deliver $2.2 million to Treasury coffers, the pensioners will also have to pay a 4.4 per cent charge on their savings when the Government shifts funds that are now managed by Disability SA to the Public Trustee in July.

The Public Advocate has raised concerns about the Budget measure, which was adopted despite warnings of a public backlash.

Funds under the control of the Public Trustee are charged a one-off 4.4 per cent fee on transferred savings, and then an ongoing 5.5 per cent charge on income, which for disabled pensioners can reach $830 a fortnight, or about $45 a week.

The decision will affect pensioners who are unable to manage their day-to-day funds because of the severity of their disability.

Public Advocate John Brayley said the move would take money from "vulnerable" pensioners on limited incomes, who paid most of their pensions to Disability SA for housing and services.

He said it was targeted at a group which "doesn't have much of a voice" to fight back.

"Because of just the huge amount of effort they (the severely disabled) have to apply for daily living . . . they are not really in a position to dispute or fight these sorts of decisions," he said.

Changing the system without a "careful review" and consultation with advocacy groups was an "unbelievable" decision, Dr Brayley said.

He has appealed to the department and the minister to reconsider the decision.

Budget papers show the move, which cuts eight full-time positions from Disability SA, saves the Government about $740,000 a year over the three years, totalling $2.23 million. Five hundred to 700 people are expected to be affected.

"If $700,000 is saved then it should be reinvested in disability services rather than returning to Treasury," Dr Brayley said.

The unpopular move is the latest in a swathe of cuts adopted by the Government after a review by its Sustainable Budget Commission.

David Mallett, whose son Michael has a disability and lives in community housing, said he was saddened the Government was targeting society's most vulnerable.

"They are ripping off the people who should least be ripped off, the people with intellectual and physical disabilities," Mr Mallett said.

"It is to the detriment of all - not only my son but to hundreds of people in community housing who are going to suffer."

The Public Trustee also charges an $134 annual administration fee and an audit fee, but the Government said discounts "might" apply, and the fees, including the ongoing 5.5 per cent charge, are now the subject of a working committee. The disability support pension pays just $658.40 a fortnight, but some in community housing receive about $830 a fortnight.

Many of the clients affected already pay as much as 85 per cent of their incomes to Disability SA for accommodation and food.

Dr Brayley said disabled pensioners used the slim leftovers of their pensions for personal interests. "Like any other person in the community it can be very important to be able to pursue interests, goals, recreation, holidays which people who have already been disadvantaged because of their circumstances should rightfully expect to receive," he said.

He also expressed concern pensioners would receive a lesser service once the management was transferred. He said the current system worked well and complaints were rare.

Opposition disability spokeswoman Vickie Chapman said the move was a "cash grab" that would not improve services for pensioners. "Disability clients will be charged for services which they previously weren't, it is as simple as that," she said.

Families and Community Minister Jennifer Rankine said Disability SA was a provider of disability services, and was "not a fund manager."

"That is the role of providers like the Public Trustee, indeed complaints have been received by families concerned about Disability SA managing their clients' money," she said.

Ms Rankine said her department was working through options available with each affected family before the changes occurred in July.

"A working group is detailing all of the options so families will be fully furnished with the information they need," she said.

Some concessions "might" be considered by the Public Trustee for Disability SA clients, she said.

Dignity for Disability MLC Kelly Vincent called on the Government to reconsider the charges, which she said cut into the average $50 a week of disposable income pensioners had.

"For a person who gets the disability support pension it is normally their only income and any extra fees taken out of that is going to impact on their lifestyle and independence greatly," she said.