Budget overview: How are the injured placed?

15th May 2014

With the Federal budget announced on Tuesday night, commentary has exploded over the media and internet. With the budget cuts targeting $80 billion from health and education over the next decade, the young, unemployed, injured and people living with a disability are likely to carry the weight of the burden. Here, we provide for our readers a short overview of some of the cuts that will affect the injured and people living with a disability, with a focus on health and welfare.


With many injured people seeking rehabilitation, medication and visits to their GP, cuts to the health sector are going to hurt those living with an injury and disability. Increased costs will be borne by individuals attempting to rehabilitate or suffering significant injury with no safety net recognising their unique vulnerability.

With the introduction of co-payments and increases to medication costs, a person could be in a situation where they are hit a number of times with increased costs for a single injury. For example, a broken leg would require a visit the GP (+$7), an X-Ray (+$7), subsequent GP visit (+$7)  and any relevant prescriptions (+$5), plus any additional follow up costs and co-payments.

Co-payments to be introduced
From 1 July 2015, previously bulk-billed patients will be expected to contribute a co-payment of $7 towards the cost of GP visits and out of hospital pathology and imaging services.

While a form of exemption applies to patients aged under 16 years or with a concession card (who will be charged this amount for the first 10 services in each year only), no such exception is provided for people who have been injured at work, on the roads and in the community.

Injured people will be expected to pay out the $7 co-payment per visit, which will also operate alongside a $5 reduction in Medicare rebates, increasing patient costs by potentially up to $12 per visit.

While cheaper than co-payment amounts recommended by the Commission of Audit, there is no acknowledgment of the need for a safety net that recognises reduced costing on the basis of frequency of visits. See the Australian Lawyers Alliance media release on this issue.

State and territory government will also be permitted to charge patients attending hospital emergency departments in instances in which they could have seen their GP.

Medication costs
Co-payments under the Pharmaceutical Benefits Scheme (PBS) will increase by $5.00, and $0.80 for concessional patients.

Diagnostic equipment
In a move to encourage providers to upgrade or replace aged equipment, full Medicare benefits will be paid for services performed on ‘newer or upgraded’ diagnostic imaging equipment only. Services assessed on ‘older equipment’ will only receive 50 per cent of the MBS fee.

Medication charts for public and private hospitals
Paperless claiming for PBS medicines dispensed from medical charts in public and private hospitals will be enabled. The Budget cites that this is to increase the safety of patients by reducing the risk of dispensing errors.


With many injured people shafted onto the Disability Support Pension (DSP) or NewStart payments following expiry of statutory compensation payments, changes to Australia’s welfare system may leave the injured out in the cold.

Already, these payments are inadequate supports: the Greens have been calling for a $50 increase per fortnight to NewStart payments for some time. Recurrent costs of injury rehabilitation means that individuals are already vulnerable while eking an existence on this payment. The tightening of eligibility restrictions could leave some claimants without adequate recourse.

In addition, changes to the age pension will mean significant gaps for people who suffer injury in their later working life, with most compensation schemes ceasing supports at age 65. The gap between provision from these schemes and the age pension could be troubling for many people.

NewStart changes
Changes to the NewStart allowance will particularly affect people under 30 or 35 years of age.
The eligibility age for Newstart and Sickness Allowance will be increased from 22 to 24 years of age, commencing 1 January 2015, leaving individuals short $96 per fortnight. However, current recipients will remain on their allowances.

All new claimants of Newstart under 30 must demonstrate they have been looking for work for 6 months before being eligible to receive the payment (previous work may be considered). After this time, they will be required to work for the dole for 25 hours per week. It is unclear how this may be applied to injured workers.

All claimants of Newstart and Sickness allowance will be required to wait one week before receiving payment, unless the claimant is exempt or the waiting period waived.

Disability Support Pension (DSP)
People under 35 accessing the DSP will have to attend compulsory activities if they have been assessed at work capacity of 8 hours per week or more who have a participation plan. Non-compliance will be sanctioned. Only recipients with a severe impairment and an assessed work capacity of less than 8 hours per week will be exempt.

People aged under 35 who were granted the DSP between January 2008 and December 2011 will be subject to review of their eligibility. Recipients granted DSP before this time or who have a severe impairment with work capacity assessment of less than 8 hours a week will be exempt.

Recipients who travel overseas will receive a maximum of four weeks DSP in one year, cut from 6 weeks.

Age pension
From 1 July 2012, the age pension qualifying age will continue to rise by two months every two years, to gradually reach a qualifying age of 70 years by 1 July 2035.

Veteran’s incapacity payments
Veterans who have been in continuous receipt of incapacity payments as a result of injury or illness for 12 months or more will be required to attend a medical specialist review. We question the intent of this reform, given that it is estimated to save the Federal government $12.7 million over four years.

The income of recipients of the DSP and age pension will now be indexed at a lower rate, according to the consumer price index, rather than the higher rate of wage inflation, from September 2017.

Other changes
Northern Queensland
Federal government funding will be provided to bodies to undertake engineering assessments of strata-title properties in northern Queensland. These assessments will provide information to insurers which will enable them to set premiums. An insurance comparison website on strata-title, home building and contents insurance offerings in north Queensland will also be established. 

This follows on from the insurance chaos after the Queensland floods, in which insurers tried to evade paying out damages claims.
Our overview provides just a snapshot of some of the changes that will impact on individuals struggling to make ends meet following economic losses, pain and suffering and balancing costs of care and support.

Other changes, including the fuel excise, changes in taxation thresholds and superannuation, and education cuts, will also increase the burden on individuals. 
The Federal Budget can be accessed here.

Emily Mitchell was the Legal and Policy Officer at the Australian Lawyers Alliance from 2011 to 2016.  

The views and opinions expressed in these articles are the authors' and do not necessarily represent the views and opinions of the Australian Lawyers Alliance (ALA).

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Tags: Compensation Emily Mitchell