Planned NDIS Hourly Service Rates ‘Disastrous’

A major Not for Profit disability provider claims the new National Disability Insurance Scheme’s price guide for service providers will prove disastrous for both the Not for Profits and the people with disability that they are trying to support.

CEO of Windgap Foundation, Serhat Oguz, said the rollout of the NDIS would be positive for people with disability who have been eagerly awaiting progress on the scheme, especially with the announcement of the roll out in New South Wales from July 2016.

But he said the current hourly rate on offer for service providers of an initial $41 per hour, would be “disastrous” for the sector, causing many providers to close operations and ultimately impacting directly on people with disability.    

Oguz, who is a services industry business veteran, told Pro Bono Australia News that the assumptions around productivity and imputed corporate overheads used in determining the current hourly rate, were uncommercial and unrealistic.

“The biggest threat to the success of the whole system is the low hourly rate that is currently being offered. When the scheme goes live the transition rate will reduce to what’s called an ‘efficient price’ which is going to be approximately $39,” Oguz said.

Oguz said the NDIS needed to address this discrepancy as soon as possible, otherwise it would face a catastrophe in the sector that would be detrimental to both the Not for Profit service providers and ultimately, people with disability.

Now in its 62nd year, the Windgap Foundation is a Not for Profit organisation that provides services to people with intellectual disabilities, including supported employment, supported accommodation, training, community access and community participation.

Orguz said the the hourly rate covered a number of the highest volume supports such as assistance with community access and assistance with self care which were the larger ticket items in terms of volume that people would be accessing.

“The pricing model, I believe, has a couple of concerning assumptions and two of those are about actual support time and overhead allocation,” he said.

“I think both of those are unrealistic and uncommercial, for example, the assumption that 90 per cent of support workers’ time will be in direct support which basically discards things such as training, meetings, talking to families, processing client records etc, and the hourly rates don’t really address that.”

He said the other concern was the represented corporate overhead rate was too low.

“I think that the hourly rate should be close to $50 an hour and this is probably close to the current level of funding that has been received in the old block funded systems,” he said.

“These are Not for Profit agencies but ultimately they have very low margins and these very low rates will send these organisations backwards.

“I think there is a lot of focus on costs with the NDIS saying ‘let’s get the costs of the scheme low and how do we do that, well let’s give service providers a lower hourly rate’.

“Ultimately I think that will just backfire because two things will happen. Service providers will chose either not to participate in the those particular services or there will be organisations that will not actually be able to continue and will shut up shop.”

He said for those clients with disability there was not going to be as many providers offering the services that they need.

“Ultimately even if there are services provided that do participate in this lower hourly rate there’s going to be cost pressures,” he said.

“(Agencies) will try to cut corners so quality will be fairly jeopardised and also, generally, the people that they will hire will be lower skills people. So you are not going to get people who have got qualifications in disability services because they will be working for organisations that will be able to payer a higher hourly rate.

“My message really is the NDIA needs to move on this and correct the hourly rate before July 2016 when the scheme in NSW at least begins to go live.”