Measuring the hidden costs of disability in Australia
Australians with disability and their families are well aware that living with disability can be very expensive – and yet our national poverty statistics and indicators do not take account of the hidden costs and earning barriers of being disabled in Australia. In their new article for a special issue of the Australian Economic Review, Sue Olney and Sophie Yates discuss the links between disability and poverty. They also explore why we need to think about using both monetary and non-monetary indicators (drawing on the knowledge of people with lived experience of both disability and poverty) to capture the full picture of inequality between people with and without disability in Australia.
More Australians than ever before are identifying as having disability. The ABS estimates 5.5 million people had disability in 2022, which was a significant increase from 2018. But while research and inquiries indicate that disability can cause poverty, and that poverty can cause disability, we don’t currently have any consistent measures to understand how this manifests in Australia.
On the income side, there is clear evidence that people with disability earn less than people without – in 2022, people with disability had a median gross income of $575 per week, compared with $1055 per week for people without disability. People with disability were more likely to live in households in the bottom two quintiles of gross household income than people without disability (44.8% of people with disability and 24.5% of people without).
There is also evidence that people with disability are unemployed or under-employed at disproportionate rates. Some have partial or variable capacity to work, and can’t find work to suit their circumstances. People with disability are more likely to work part time than those without, and more likely to say they would prefer to work more hours than they currently do. Many have to spend time navigating complex and fragmented service systems to maintain their health and wellbeing, which can restrict their capacity to work (the NDIS in particular can be very time consuming). Carers are also more likely than non-carers to be unemployed or underemployed, which affects household income.
Being disabled is expensive
An assistance dog on a ferry in Sydney Harbour. Image credit: John Robert McPherson, CC BY-SA 4.0, via Wikimedia Commons
But income is only part of the picture – it quantifies the so-called ‘earning handicaps’ of disability. There are also ‘conversion handicaps’ for people with disability and their families, which means thinking about how it can be difficult to ‘convert’ your income into a particular standard of living. Although people with disability and their families have raised this issue in countless submissions to government and in research, there’s no consistently collected national-level evidence about the financial impact of disability on individuals and households. Without that, we can’t know how many people with disability in Australia live in poverty.
People with disability incur extra costs of living for accessible housing, transport, support at home, heating and cooling; they may need to purchase assistive technology, equipment and regular medications; and they may use health and therapy services more often than people without disability.
Research in Australia and internationally has long shown that people with disability need higher incomes to achieve the same standard of living as people without. How big this gap is depends on how the research is conducted, what definitions are used, and what data sources are used. However, the weight of findings is consistent. Looking at recent Australian research, Li et al. (2019) found that households having at least one member with disability needed on average an extra $107 per week of disposable income to reach the same standard of living as comparable households. Vu et al. (2020) found that adults with disability would need to increase their disposable income by 50 per cent to enjoy a similar standard of living as adults without disability (this was lower for those with no work limitations, and much higher for those with severe work limitations).
But we should also note that quantifying what disability currently costs would also not provide a fully accurate picture of deprivation, because people may have expenses that they can’t currently meet. We do of course have individualised disability funding in Australia in the form of the NDIS, which provides funding for many of those with the highest support needs. However, most people with disability are not on the NDIS, and there is very little support available for those outside the scheme. We also know that being on the NDIS does not mean that all people’s disability expenses are met.
All of this means that people with disability are often invisible in poverty metrics until they reach a point of crisis and require emergency assistance.
Multidimensional poverty indicators
While monetary measures are essential for assessing levels of poverty among people with disability, they can’t capture the full extent of deprivation. Some impacts of disability can’t be rectified by individual spending. Also, things like housing, health, employment and disability are inextricably linked. For example, living in insecure, remote or inappropriate housing can worsen someone’s disability, reducing their ability to work and therefore their income, while simultaneously increasing their reliance on healthcare. Therefore, directly measuring deprivation in areas such as health and healthcare access, housing, employment and education can better capture poverty and wellbeing.
The UN's adoption of Sustainable Development Goal 1 to end poverty ‘in all its forms’ is a recognition of the multidimensional nature of poverty. Multidimensional indicators have increasingly been used to identify the prevalence and intensity of poverty among people with disability. When combined with monetary measures, they can show high levels of deprivation among people with disability even in the absence of monetary poverty.
Countries such as Canada and New Zealand, which are both comparable economically and institutionally to Australia, have developed their own multidimensional measures and integrated these into their national poverty frameworks. If Australia is to follow suit, involving people with lived experience of both disability and poverty in the design and oversight of multidimensional measures is critical. Without official national measures of poverty that capture compounding and relative inequality, Australia can’t measure progress on poverty reduction or evaluate the effectiveness of associated policies.
Based on: Olney, S., & Yates, S. (2025). The Costs of Living With Disability in Australia: Accounting for Variable Disability-Related Deprivation in Poverty Measures. Australian Economic Review. https://doi.org/10.1111/1467-8462.70017
Our thanks to editor Melek Cigdem-Bayram for her support and feedback in developing this article.