Financial impact of timely NDIS funding for housing and support
17 August 2022 at 8:32 pm
A focus on short-term budget wins will cost the NDIS billions in longer term support costs, while keeping people with disability living in unsuitable housing, writes Di Winkler.
New research shows getting NDIS participants into appropriate housing can improve their health and well-being, while potentially reducing the overall cost of the NDIS. Research contained in the ‘Budgetary impact of timely specialist disability accommodation payment approvals’ report, produced by the Summer Foundation, shows that well-designed housing is part of the solution to the NDIS’s sustainability issues and the growing cost of support in traditional disability housing.
According to the latest NDIS quarterly figures, $8.8 billion was spent in 21/22 on the daily supports (known as supported independent living or SIL) required by the approximate 25,000 NDIS participants with the highest needs. SIL costs have more than doubled in the past three years and make up close to one third of the entire cost of the NDIS.
In contrast to the money spent on SIL, only $186m was spent on paying for the actual housing: Specialist Disability Accommodation. SDA is the housing that NDIS participants with the highest needs can receive funding to live in.
Yet despite this opportunity to spend a relatively small amount of money on appropriate housing and positively impact scheme sustainability (by reducing massive SIL costs), a second research report by the Summer Foundation shows the multi-billion dollar Specialist Disability Accommodation (SDA) market is at risk because of the National Disability Insurance Agency’s (NDIA) stewardship.
The SDA provider experience report shows there are more than 1,000 vacancies in new, purpose-built homes. The report shows that the vacancies are not due to a lack of demand, but because of issues with the NDIA’s role as ‘market steward’. That includes slow, inaccurate decisions by the NDIA on housing and providing a lack of accurate demand data for example.
These vacancy rates are increasingly concerning investors and providers who build and own the properties. Investors and providers have put more than $3 billion into the SDA market already, but the report shows they are concerned about the viability of the market the way it is currently being run, and therefore hesitant to invest further. This puts the SDA market at risk, impacting the potential for positive outcomes for NDIS participants with the highest needs.
SDA is a piece of world-leading piece policy, but it is being held back by the very people responsible for “stewarding” the market. The principles that underpin the SDA policy and the entire NDIS are insurance principles. Improved outcomes and reduced costs require the application of insurance principles with investment in innovation, housing that is fit for purpose and service redesign.
Instead, we see an approach that appears to be very similar to the old-welfare model. The focus of the NDIA appears to be on reducing short-term up-front costs, which for SDA, means providing slow and inaccurate decisions to NDIS participants.
What this means is that significantly fewer people are spending significantly fewer dollars on SDA than the NDIA’s own figures. Six years after the SDA market was established the NDIA expected to have 28,000 NDIS participants sharing $700 million in SDA payments each year. These were expected to be empowered and informed with money “in their back pockets” ready to make a choice from a range of contemporary housing and support options.
In 2021-22 though, the NDIA only spent 27 per cent of the $700 million budgeted for SDA and less than 20,000 people had SDA in their plans. The majority of people that do have SDA in their NDIS plan are not informed at all on the options. Most people with SDA payments are living in old housing stock without the level of funding that would allow them to move into more contemporary models of housing and support.
While there is much focus on the budgetary impacts of these policies and their implementation, there is a real human cost visible in hospitals, aged care and large group homes around the country. Thousands of people with disability are stuck in these unsuitable places, sometimes for years, while they wait for a decision from the NDIA.
In hospitals alone, there are currently more than 1,430 people with disability who are currently stuck across Australia – despite being clinically ready for discharge. NDIS participants are waiting more than 160 days to be discharged at a cost to the tax payer of at least $1,281 per day.
The main barrier to timely discharge is not a shortage of disability housing – there are more than 3,000 vacancies in disability housing across Australia. This includes more than 1,000 new, purpose-built SDA properties that are currently sitting empty.
Recent research shows that the main barrier to the discharge of NDIS participants is timely and adequate funding for housing and support from the NDIS.
This short-sighted approach to containing costs by delaying and denying access to the housing NDIS participants require is having significant impacts. It is keeping people with disability living in places entirely unsuitable and is potentially costing the NDIS billions in longer term support costs.
