Disability Allowance

Please note that information reported below for Disability Allowances combines information on Disability Allowances, Disability Allowances - Telephone Support and the Disability Assistance Programme.

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Eligibility for a Disability Allowance and related programmes

Disability Allowance

A Disability Allowance reimburses people for many types of actual and ongoing regular costs incurred because of a disability. In general, a Disability Allowance only covers costs that are not met or subsidised by other agencies. Income and residency tests apply.

A Disability Allowance is available to people who have:

• a disability that:
  • means they require ongoing help with normal living tasks, ongoing supervision or ongoing treatment from a registered health professional
  • is likely to last at least six months
• extra ongoing costs directly related to their disability.

People receiving ACC support for extra costs related to their disability may receive a Disability Allowance for the proportion of those costs not met by ACC.

Disability Allowance - Telephone Support

A Disability Allowance - Telephone Support (also known as a Telephone Costs Payment) provides a telephone subsidy to people who were in receipt of telephone subsidies as at 31 March 1999 but who would lose their entitlement to these subsidies if they were assessed under the Disability Allowance criteria effective from 1 April 1999.

Disability Assistance Programme

The Disability Assistance Programme provided assistance to people who were receiving New Zealand Superannuation or a Veteran's Pension, but who failed the income test for Disability Allowances due to the 1 April 2000 increase in the payment rates for New Zealand Superannuation and Veteran's Pension.

This programme preserved the entitlement of these people to assistance equivalent to a Disability Allowance. The programme ceased after income thresholds for a Disability Allowance were increased from April 2001.

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Trends in the number of people covered by a Disability Allowance

Please note that information in this section refers to the number of people covered by Disability Allowances received. This information may, therefore, differ from other published information concerning the number of Disability Allowance recipients, because some clients may be receiving allowance covering more than one member of their household.

The number of people covered by a Disability Allowance has increased over the last three years (see table 4.17). This reflects a combination of:

• increases in numbers of allowance recipients receiving New Zealand Superannuation
• the ongoing nature of the costs faced by people covered by an allowance.

Since 2005, around 51% of the people covered by Disability Allowance, or their caregivers, have been receiving New Zealand Superannuation, while around 24% have been receiving an Invalid's Benefit (see table 4.17).

Table 4.17 Trends in the types of pension or main benefit paid to clients covered by a Disability Allowance or paid to their caregivers

Type of pension or main benefit paid to the client or caregiver at the end of June	People covered by a Disability Allowance1
	2004 Number	2005 Number	2006 Number	2007 Number	2008 Number
Unemployment-related benefits2	5,142	3,372	2,661	1,717	1,301
Carer's benefits3	23,470	20,103	18,114	16,961	16,930
Sickness-related benefits4	21,744	21,484	21,515	21,235	19,941
Invalid's Benefit	55,531	52,107	52,191	54,923	58,992
Widow's Benefit	2,793	2,464	2,305	2,043	1,937
Emergency Benefit	2,662	2,914	3,274	3,581	3,109
New Zealand Superannuation	111,830	115,736	118,028	119,919	120,029
Veteran's Pension	3,248	3,520	3,777	4,062	4,301
No pension or main benefit5	4,965	5,134	5,855	6,773	7,055
Total	231,385	226,834	227,720	231,214	233,595

Notes

1. Numbers of clients recorded in SWIFTT as being covered by a Disability Allowance at the end of June.
2. Comprises Unemployment Benefits and Unemployment Benefits - Hardship paid to unemployed people or to trainees, and Independent Youth Benefits.
3. Comprises Domestic Purposes Benefits - Sole Parent, Domestic Purposes Benefits - Care of Sick or Infirm, Domestic Purposes Benefits - Women Alone and Emergency Maintenance Allowances.
4. Comprises Sickness Benefits and Sickness Benefits - Hardship.
5. Includes clients entitled to a Disability Allowance through receiving an Orphan's Benefit or an Unsupported Child's Benefit.

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Trends in the proportion of the New Zealand population covered by a Disability Allowance

Each year since 2004, around 5% of the New Zealand population have been covered by a Disability Allowance at the end of June (see figure 4.8). The stability of this trend reflects the long-term nature of many of the treatment-related costs faced by clients receiving an allowance. Throughout this period, people aged 60 years or over have been significantly more likely than younger people to be covered by an allowance, reflecting the impact of ageing on the incidence of long-term or permanent health or disability issues.

figure 4.8 Trends in the proportion of the New Zealand population covered by a Disability Allowance, by age

Note

1. Proportion shows:
   1. number of people in age group recorded in SWIFTT as being covered by a Disability Allowance at the end of June, divided by
   2. Statistics New Zealand final estimate of the resident population in age group at the end of June.

See table A3.18 for a summary of the SWIFTT data underlying figure 4.8

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Trends in Disability Allowances granted

The annual number of Disability Allowances granted increased slightly in the last year after remaining relatively stable over the previous two years (see table 4.18). Since 2005/2006, the proportion of clients granted allowances (or their caregivers) who were receiving sickness-related benefits or Invalid's Benefits has increased (from 40% to 55%). There was a corresponding decrease in the proportion of these clients receiving New Zealand Superannuation (from 27% to 24%).

These changes largely reflect patterns in the use of pensions and main benefits.

Table 4.18 Trends in the types of pension or main benefit paid to clients covered by Disability Allowances granted or paid to their caregivers

Type of pension or main benefit paid when Disability Allowance granted	Disability Allowances granted1
	2003/2004 Number	2004/2005 Number	2005/2006 Number	2006/2007 Number	2007/2008 Number
Unemployment-related benefits2	7,687	6,256	5,072	4,133	3,718
Carer's benefits3	12,033	10,437	9,692	9,169	9,868
Sickness-related benefits4	19,396	19,375	19,180	19,218	19,802
Invalid's Benefit	12,203	11,895	11,663	13,505	14,894
Widow's Benefit	1,133	896	870	671	730
Transitional Retirement Benefit5	496	0	0	0	0
Emergency Benefit	1,569	1,663	1,767	1,727	1,564
New Zealand Superannuation	22,265	21,360	21,086	20,234	18,979
Veteran's Pension	843	916	961	969	1,081
No pension or main benefit6	6,084	6,491	7,133	8,053	8,228
Total	83,709	79,289	77,424	77,679	78,864

Notes

1. Numbers of successful applications for Disability Allowances recorded in SWIFTT during years ended June.
2. Comprises Unemployment Benefits and Unemployment Benefits - Hardship paid to unemployed people or to trainees, and Independent Youth Benefits.
3. Comprises Domestic Purposes Benefits - Sole Parent, Domestic Purposes Benefits - Care of Sick or Infirm, Domestic Purposes Benefits - Women Alone and Emergency Maintenance Allowances.
4. Comprises Sickness Benefits and Sickness Benefits - Hardship.
5. The phasing-out of this benefit was completed on 1 April 2004.
6. Includes clients entitled to a Disability Allowance through receiving an Orphan's Benefit or an Unsupported Child's Benefit.

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Trends in expenditure on Disability Allowances

Annual expenditure on Disability Allowances has increased over the last two years (see table 4.19) This reflects a return to previous expenditure patterns following the transfer of payments for vocational service fees from Disability Allowances to a non-departmental output class (in 2005/2006). Increases in annual expenditure on these allowances between 1995/1996 and 2004/2005 and between 2005/2006 and 2007/2008 reflect a combination of increases in the numbers of recipients and patterns in the levels of assistance being provided.

The slower increase of expenditure on Disability Allowances in 1998/1999 and 1999/2000 was due to falling average rates of Disability Allowances being paid, combined with ongoing increases in numbers receiving Disability Allowances.

Table 4.19 Trends in annual expenditure on Disability Allowances

Year ended June	Expenditure on Disability Allowances1,2,3 ($m)
1995/1996	146
1996/1997	175
1997/1998	195
1998/1999	201
1999/2000	203
2000/2001	217
2001/2002	231
2002/2003	247
2003/2004	261
2004/2005	271
2005/2006	264
2006/2007	272
2007/2008	279

Notes

1. Expenditure on Disability Allowances in years ended June.
2. Expenditure shown is adjusted to payment periods based on a standard 30-day month and smoothed using a two-month moving average. Disability Allowances are not subject to taxation.
3. Expenditure data in this table differs from, and should not be cited as, MSD's official measure of expenditure on financial assistance provided to clients.

Monthly expenditure on Disability Allowances shows no marked seasonal changes (see figure 4.9). The short-term drop in monthly expenditure on Disability Allowance in early 2005/2006 reflects the impact of the transfer of payments for vocational service fees from Disability Allowances to a non-departmental output class.

figure 4.9 Trends in monthly expenditure on Disability Allowances

Notes

1. Expenditure is adjusted to payment periods based on a standard 30-day month and smoothed using a two-month moving average. Disability Allowances are not subject to taxation.
2. Expenditure data in this graph differs from, and should not be cited as, MSD's official measure of expenditure on financial assistance provided to clients.

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