People with mental illness would not necessarily lose their disability support pensions, the head of the government's welfare review has suggested, in comments that should assuage the fears of those within the mental health and welfare sectors.
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The interim report of the McClure welfare review recommended the disability pension should be reserved for people with a permanent impairment and no capacity to work, while other people with disabilities would receive a different working age payment.
While the report did not define what "permanent" would mean, it said many mental health conditions were "episodic in nature" – a concept that has also been used by Social Services Minister Kevin Andrews.
The proposal has angered mental health experts after the interim report's release in June, including the Royal Australian and New Zealand College of Psychiatrists, who said terms like "permanent impairment" and "episodic disability" created a false dichotomy.
It has also been rejected by Mental Health Australia, with chief executive Frank Quinlan arguing people with mental illness have needs that fluctuate over time.
In an interview with Fairfax Media, Patrick McClure said that the review team had met with a "number of mental health experts" including former Australian of the Year, Patrick McGorry, during its consultation period.
"[The review team] understand that not all people with episodic mental health conditions have a work capacity and a new payments system should recognise this and offer support for such people," he said.
Mr McClure, who is due to present his final report to the government this month, said the reviewers acknowledged that "it is important to maintain an adequate safety net for those who are unable to be self-reliant".
But he said the welfare system had to do more to assist people who did want to work.
Mr McClure said the review team had heard that for some people with "episodic mental conditions" vocational rehabilitation – involving counselling, medication, education and employment – was "appropriate".
The head of the review, who also conducted a similar review of the welfare system for the Howard government, rejected an idea put forward by a coalition of church groups during the consultation period for an independent body to advise the government on welfare payment levels.
Church groups argue the setting of payments needs to be removed from politics. But while Mr McClure said he supported a "common approach" to adjusting payments, he pointed to previous reviews which had found it was most appropriate for government and the Parliament to decide the level of income support as elected representatives.
"This is particularly the case because cash transfers through the income support system represent such a substantial portion of the budget," he said.
