Understanding the cost of disability

Australia needs a better understanding of the cost of living with disability and the inequalities between people with and without disability. Crawford academics Honorary Associate Professor Sue Olney and Senior Research Fellow Sophie Yates argue in a recent article published in the Australian Economic Review that the government needs to develop a multidimensional framework of poverty, as well as using more traditional monetary measures. This will help to build a picture of the personal financial impact of disability on individuals and their families, and its broader social and economic effects.

In Australia, data is not consistently collected on a national level about the financial impact of disability on individuals and households. Without that, we can’t know how many people with disability live in poverty, and what programs or support are needed.

Here's what we do know:

Alternate text for image. Image shows four tiles that contain: 5.5 million people in Australia with disability in 2022 (ABS Estimate). $575 per week gross income of people with disability. $1055 per week gross income for people without disability. 44.8% of people with disability live in the bottom two quintiles of gross household income. See ABS Survey of Disability, Ageing and Carers (SDAC) for more details.

Image shows four tiles that contain: 5.5 million people in Australia with disability in 2022 (ABS Estimate). $575 per week gross income of people with disability. $1055 per week gross income for people without disability. 44.8% of people with disability live in the bottom two quintiles of gross household income. See ABS Survey of Disability, Ageing and Carers (SDAC) for more details.

Disabilities are expensive. People experience lower incomes due to work limitations which are then compounded by additional costs of doctors, specialists, medication, accessible housing, food, utilities, or equipment. This means, according to both local and international research, people with disability need higher incomes to achieve the same standard of living as people without.

Olney and Yates note the National Disability Insurance Scheme (NDIS) does support some people with disability, but the scheme does not always cover all costs associated with care. Most people with disability are not on the scheme and are unlikely to qualify for it.

Countries including Canada and New Zealand have implemented multidimensional measures into their national poverty frameworks, and Australia needs to follow suit. Without it, we fail to capture compounding and relative inequality, and Australia can’t measure progress on poverty reduction or evaluate the effectiveness of associated policies.

To read more about this topic, you can access the full article, ‘The Costs of Living With Disability in Australia: Accounting for Variable Disability-Related Deprivation in Poverty Measures’, published in the Australian Economic Review: https://onlinelibrary.wiley.com/doi/10.1111/1467-8462.70017