Final Report on RREF 2001 - Department of Health

Part B: Development of Options for a Revised RREF
• Stability. A variable based on take up of one or a combination of benefits is subject to
instability arising from changes to eligibility conditions, and a degree of substitution
between different benefits that individuals can receive; abolition of the Mature Age
Allowance for example diverted beneficiaries to DSP or unemployment benefits. There
is also the prospect of considerable welfare reform in the next 12 to 18 months. The
short term and longer term instability make projection on the basis of a benefit based
variable particularly problematic
• Quality of data. While a statewide data set suitable for use in the RREF would be
available at suitable intervals, there are issues of quality of a data set that has to
combine data from all Centrelink offices, and from different benefit payment systems.
Assembling such a data set involves considerably more computation and hence risk of
error, and would be very difficult for others to replicate.
• Close correlation. The relationship between median household income and the
proportion of residents in each LGA in receipt of DSP and the full rate age pension was
tested by correlation. The result of .79 shows that the population in receipt of benefits
is distributed between LGAs in accord with median household incomes. In making the
choice between median household income or a variable based on benefit take-up, it has
to be remembered that either will serve to rank LGAs from high to low on the basis of
their relative socio-economic status.
⇒ Median household income is the preferred option for the socio-economic indicator.
1 variable remained
These two single variables were both identified in the consultations, and both remain for
consideration as variables for weighting the RREF.
⇒ Koori population to be considered as a need variable
2.4 OPTIONS FOR CONSIDERATION FOR NEED VARIABLES
The process of elimination and selection between alternative variables resulted in identification
of five possible need variables for weighting the RREF in addition to those included in the Base
Populations. The Consultations sought views on these options.
What are the • Have the final range of variables adequately addressed your concerns
options for
about factors for inclusion in the RREF?
variables for • Of the 28 variables identified from consultations for possible inclusion
weighting the for weighting the RREF, 12 have been taken into account:
RREF? 1 1. 7 considered in base population options
2. 5 identified as appropriate for consideration in weighting the RREF:
3. Socio-economic status: Median household income
4. Health indicators: Life expectancy
5. Cultural diversity: Use of a language other than English at home
6. Koori population
7. Location factors: Accessibility/Remoteness Index of Australia
(ARIA)
1 : Residential care shortfall was initially included as a need variable in the Options Paper but the issues raised and
their resolution has been dealt with in Section 1.8
<strong>Final</strong> <strong>Report</strong> July 2001 38