Thousands of disability pensioners would be examined by independent doctors to see whether they are still entitled to their pensions, under dramatic changes being considered by Social Services Minister Kevin Andrews.
Mr Andrews, who is overhauling the $15 billion-a-year disability support pension – which he considers the most troublesome welfare entitlement – also said changes to the pension could begin as soon as the budget.
"Potentially we could say, right, back to a certain point we'll just reassess people," Mr Andrews said.
"The question then is how far back would you go in doing some reassessments of them?
"You could probably go back a couple of years," he said, "[but] if someone's been on the DSP for five or six years, the chances of them being assessed again as being capable of working is fairly remote."
Under Mr Andrews' mooted change, disability pensioners who were assessed by their family doctors – before Labor tightened the system in 2011 – would be re-examined by medical experts at the Department of Human Services.
The minister is also considering giving a fixed higher payment for the most disabled pensioners, with lower payments for people with less restrictive disabilities, who might be able to work part-time. The aim, he says, is to catch as many people as possible before they become entrenched on the disability pension.
Having spent several days in New Zealand this week, Mr Andrews said there were many features he would like to borrow from the neighbouring welfare system, which "invests" in people before they become entrenched on welfare.
He said one idea he took from New Zealand was that pensioners suffering "episodic" illnesses such as depression were given monthly or quarterly medical certificates rather than getting two-year "set and forget" pensions. This idea, he said, was particularly important given there were now more disability pensioners suffering from psychological conditions than those suffering musculoskeletal problems.
Mr Andrews said he was concerned the costs of the disability pension would blow out by many billions over the next decade. More than 830,000 Australians receive the pension now. Singles on the pension were paid as much as $766 a fortnight compared with $510 for singles on Newstart. The payment rate had been growing faster than Newstart, which Mr Andrews said provided a "perverse" incentive for people to qualify as disabled rather than unemployed.
Disability Discrimination Commissioner Graeme Innes said the Abbott government was "punishing some of the most vulnerable people in society" by tightening checks on the disability pension.
Regarding the minister's idea to reassess recipients, Mr Innes said: "To effectively move the test back a few years, it just seems a cruel way of penalising people who've been in receipt of a benefit.
"Introducing a quarterly or six-monthly check is just adding more complexity both for the Centrelink system and for people with disabilities," he said.
But he praised Mr Andrews for "his understanding" that the government must intervene earlier and "incentivise" people with disabilities to help them stay in the workforce rather than become reliant on pensions.
Mr Andrews has told Patrick McClure – who is overseeing the Abbott government's review of Australia's welfare system – to "have a good look" at several New Zealand-inspired ideas. Mr McClure has already given Mr Andrews his interim report, which will be made public shortly. His final recommendations are due in August.
The Minister said he did not have specific goals for saving the budget a certain amount of money or getting a certain number of people off the disability pension.
"I don't have a number and I don't have a target," he said. "This is not about targets ... it's about a better system that will actually help people because we think work is the best form of welfare."
Australian Council of Social Service chief executive Cassandra Goldie said she would support any measures by the government to "invest" in disability pensioners to help them return to the workforce.
But she was concerned that subjecting disability pensioners to more regular assessments could end up "exacerbating their mental health condition".
"We don't have a welfare crisis in this area, we have a jobs crisis," Dr Goldie said. "We all want to work on decent reforms which will improve people's pathways back to being well and getting paid work."