Govt won't change disability pension soon

The federal government is concerned about the potential for Newstart allowance recipients to move onto the higher paying disability pension but doesn't plan a May budget crackdown.

Social Services Minister Kevin Andrews says there is a longer-term need to reduce the growing gap between the two payments, which are indexed at different rates.

A Deloitte Access Economics report for News Corp shows the government could save $2.4 billion over four years by limiting the increases in the disability pension (DSP) to inflation.

It argues those on the Newstart allowance could be tempted to move onto the disability pension which goes up each year higher than Newstart.

Mr Andrews acknowledged if nothing was done there would be a growing gap.

"In the longer term the government has to take into account that there is a perverse incentive for people to get onto the DSP rather than Newstart because it pays more," he told the ABC on Tuesday.

He said the government's welfare review being conducted by former Mission Australia boss Patrick McClure will provide ideas on how to tackle the issue.

But any recommendations were unlikely to be implemented in the May budget.

"In the longer term, given the ageing of the population, these are some of the issues we have to address," he said.

Mr Andrews ruled out any increases to the Newstart allowance in the May budget because of the government's adverse financial position.

However, he defended the need for its $5.5 billion a year paid parental leave scheme because it would boost the fertility rate and workforce participation.

"If we don't have workers in the future we won't be able to support the welfare bill."