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Concern over proposal to strip welfare for some psychiatric patients -

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MARK COLVIN: The Federal Government is considering stopping welfare payments to people in psychiatric care who are charged with a serious crime. Those mentally ill people have not been found guilty because they're deemed unfit to stand trial.

Legal aid groups and mental health experts are appalled by the idea of cutting off their welfare.

Bridget Brennan reports.

BRIDGET BRENNAN: The Government wants to make changes to welfare payments for some mentally ill patients. The change is designed to treat psychiatric patients accused of a serious crime in the same way as a person in prison.

The chief executive of Mental Health Australia, Frank Quinlan, disagrees with that idea.

FRANK QUINLAN: The worst thing that this legislation does is equate people who are guilty of no crime, people who may well have been found unfit to plead, people who are in need of state care, it equates those people with people who are guilty of very serious criminal offences and I think the ongoing stigmatisation of that, putting those two things together, is the biggest problem with this legislation.

BRIDGET BRENNAN: Hundreds of mentally ill people accused of committing a serious crime are confined in psychiatric wards around Australia. They're known as forensic patients. Many in rehabilitation still receive disability payments because they're not guilty of a crime, but deemed unfit to plead.

At a Senate committee hearing today, Anina Johnson from the Mental Health Review Tribunal in NSW, explained that those patients are not prisoners.

ANINA JOHNSON: They have never been convicted and for the most part in New South Wales they are not serving any definite period of detention. They're on an indefinite period of detention and on an indefinite order until they can demonstrate to the tribunal, through evidence, that they are safe to progress to the next step. This is the case since medieval times. That someone who has a mental impairment that impacts on their ability to understand right from wrong has for many hundreds of years been determined to be not morally blameworthy.

BRIDGET BRENNAN: Matthew Butt is a lawyer with the National Welfare Rights Network. He's also concerned that the legislation will affect people who don't have a criminal record.

MATTHEW BUTT: The people in psychiatric confinement are people who've been found not to be culpable by the criminal justice system due to their psychiatric impairment, so we're talking major mental health problem, brain injury, all the reasons why the criminal justice system would have diverted them from the ordinary process of conviction and sentence.

BRIDGET BRENNAN: Cath Halbert, from the Department of Social Services, says welfare changes are needed for payments to some psychiatric patients.

CATH HALBERT: The Social Security Act does not exist for the purposes of providing people with income support to support their health needs. Clearly, that's a matter for health.

BRIDGET BRENNAN: But mental health groups are worried the changes will leave vulnerable people with no money when they leave care.

Matthew Butt from the Welfare Rights Network again.

MATTHEW BUTT: They lose their entitlements so they lose income support. People who work in this area have told me and have told the Senate today that that income support was used to support rehabilitation and reintegration, including for example, securing housing. That could potentially delay or prevent their release back into the community, remembering that these are people who should be detained for the shortest period possible, since the primary purpose of their detention is to allow for rehabilitation and reintegration into the community. They're not guilty of a criminal offence.

MARK COLVIN: Matthew Butt from the Welfare Rights Network ending Bridget Brennan's report.