The Costs of Disability and the Incidence of Poverty

Both disability and poverty have been the subject of extensive research, although relatively few Australian studies have examined the relationship between them. Most poverty studies make no allowance for the higher needs (and costs) associated with disability, while few disability studies have focused on poverty among the disabled. Yet disability often leads to greater need and this will increase the risk of poverty. This paper uses data from the 1998–99 Household Expenditure Survey to estimate the costs of disability using a ‘standard of living’ approach and uses these estimates to compare poverty rates among those with and without disability. The results imply that where there is an adult in the household with a disability, poverty rates are higher even before allowing for the extra costs of disability. After account is taken of the costs of disability, estimated poverty rates rise substantially where there is a disability present. Taking account of costs that vary with the severity of the restriction associated with the disability is also shown to make a large difference to comparisons derived from conventional poverty research.