Journal article

Reducing the Generosity and Increasing the Conditionality of Welfare Benefits for People with Disability: "Turning the Supertanker" or "Squeezing the Balloon"?*

Barbara Broadway, Duncan McVicar

Scandinavian Journal of Economics | WILEY | Published : 2021


We compare outcomes of disability benefit applicants before and after a major Australian reform of disability benefits, with two groups of applicants who fulfilled the same medical impairment criteria accepted or rejected based only on application date. The reform reduced the generosity and increased the conditionality of welfare payments by shifting partially disabled claimants from disability benefits to unemployment benefits. This led to increases in the probability not only of switching out of unemployment benefits on to alternative benefits, but also of exiting welfare altogether. However, because those who exited had a higher probability of subsequently returning to welfare, the reform..

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Funding Acknowledgements

This research is based on research commissioned by the former Australian Government Department of Education, Employment and Workplace Relations, and received support from the Visiting Research Scholar scheme of the Faculty of Business and Economics, University of Melbourne. The views expressed in this paper are those of the authors alone.