Prime Minister Julia Gillard has made the funding of the long-awaited disability insurance scheme a major election issue by announcing that a new levy to fund the program would be put to the parliament after the election.
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Ms Gillard, Treasurer Wayne Swan and Disability Minister Jenny Macklin confirmed on Wednesday morning that Labor would raise the Medicare levy by 0.5 percentage points to help pay for the National Disability Insurance Scheme.
''I am prepared to be judged by these choices,'' Ms Gillard said.
''I will be asking the nation in September to make a choice too. To endorse this plan, to make sure that we support Disability Care around Australia,'' Mr Gillard said.
The fund, which would be used solely for DisabilityCare, contains a major sweetener for those states yet to sign up for the program, with up to 25 per cent of the money to be available to states in the form of grants to help the states contribution to the scheme.
The levy expected to raise $20 billion between 2014-15 and 2018-19.
Queensland Premier Campbell Newman has already signalled his support for a levy for the scheme, saying on Wednesday that it was the ''right thing to do''.
''Every cent raised will be used for DisabilityCare,'' the Prime Minister said.
The government said Australians earning incomes of $70,000 a year would be asked to pay about $1 a day in an extra Medicare levy to fund the insurance scheme.
The new levy, which would come into effect on July 1, 2014, would raise about $3.2 billion a year - less than half the estimated $8 billion a year the federal government needs to fund the NDIS.
Ms Gillard, who as recently as last December ruled out a new levy to pay for the NDIS, said she had changed her mind for three reasons.
The first was that the government is raising less revenue than previously expected.
The second was that the states and territories would need more support to pay for the scheme – and she promised the states would get a quarter of the money raised by the new fund.
Third, she said she had heard ''loud and clear'' the pleas from disability support groups.
But the Prime Minister has shied away from attempting to legislate the new levy before the election, saying it could be dealt with by the next parliament.
The National Disability Insurance Scheme is not a welfare program but an insurance scheme that would cover the massive medical costs often incurred by disabled people.
Currently, Australians who can prove they are too disabled to work can apply for the Disability Support Pension, but these pension payments do not cover the multitude of associated costs that come with being disabled.
The NDIS has been designed to plug that gap, and help pay for medical equipment such as wheelchairs or for doctors' appointments linked to their disability. The scheme will cost an estimated $15 billion a year by the time it is fully operational.
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There has been media speculation recently that the cash-strapped Labor government would make it harder for people to get the Disability Support Pension, but Minister for Disability Reform Jenny Macklin dismissed that speculation on Wednesday.
''There will not be any further changes to the Disability Support Pension in the upcoming budget,'' Ms Macklin said.
Low income earners will continue to receive relief from the Medicare levy through the low income thresholds for singles, families, seniors and pensioners, Ms Gillard said.
The current exemptions from the Medicare levy will also remain in place, including for blind pensioners and sickness allowance recipients.
The NDIS: what will you pay?
What is the NDIS?
A national scheme to provide insurance cover for all Australians who have a significant and ongoing disability. The scheme would pay for long-term high quality care and support. It would also provide referrals to other services that are required, ensure the quality of services, and encourage best practice care and support.
Who will be eligible?
An NDIS will work with people who have a permanent disability that significantly affects their communication, mobility, self-care or self-management.
Individual support will also be given to people where there is good evidence that early intervention would substantially improve functioning (for example, autism, acquired brain injury, cerebral palsy or sensory impairments), and where early intervention will delay or lessen a decline in functioning (for example, multiple sclerosis and Parkinson’s disease).
Others will be able to use the scheme to get information about what supports they might be able to use in the community and from other government programs such as health, employment support and education.
How many people will be covered?
Around 410,000 people would receive direct funding from the scheme. The scheme would cover existing and new cases of disability.
