The Disability Support Pension (DSP) provides financial support to working age Australians who have a permanent physical, intellectual or psychiatric impairment that prevents or limits their capacity to engage in employment. In 2016–17, DSP expenditure was $16.3 billion for about 760 000 DSP recipients.

The ANAO last audited the DSP in 2015–16. Auditor-General Report No.18 Qualifying for the Disability Support Pension made four recommendations, all of which were agreed by the Department of Social Services (Social Services) and the Department of Human Services (Human Services).

In May 2017, the Joint Committee of Public Accounts and Audit (JCPAA) released its inquiry on Commonwealth Risk Management, which was based on Auditor-General Report No.18. The JCPAA inquiry also examined the implementation of a number of measures that were not examined in Auditor-General Report No.18. The JCPAA made eight recommendations directed to Social Services and Human Services. The recommendations were noted by Social Services and Human Services, with the exception of recommendation four, which was agreed by Social Services. In addition, the JCPAA recommended that the Auditor-General consider the merits of a follow-up audit of the administration of the DSP. The Auditor-General agreed to this recommendation, and this audit implements it.

The objective of this audit was to examine if Social Services and Human Services drive improvements in the Disability Support Pension program using data and information from multiple sources, including agreed Auditor-General and parliamentary committee recommendations. To form a conclusion against the audit objective, the ANAO adopted the following high-level audit criteria:

• Does Human Services provide and regularly update guidance and training for staff and contractors involved in DSP assessment and/or review processes?
• Do Social Services and Human Services effectively select existing DSP recipients for reviews of medical eligibility using evidence-based risk profiles that are assessed for efficacy?
• Do Social Services and Human Services effectively monitor, evaluate and report on program delivery?